Latest / Monero Talk / Tail Emission And Demurrage w/ Peter Todd #Monerotopia23

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Tail Emission And Demurrage w/ Peter Todd #Monerotopia23 · Monero Talk

• 1 00:00:01,720 --> 00:00:24,359 [Applause] 2 00:00:07,840 --> 00:00:27,880 [Music] 3 00:00:24,359 --> 00:00:30,679 next up guys we have Peter Todd uh very 4 00:00:27,880 --> 00:00:32,520 honored to have Peter Todd although I 5 00:00:30,679 --> 00:00:35,680 did have to pay a little extra for his 6 00:00:32,520 --> 00:00:38,440 presence uh full disclosure H but he 7 00:00:35,680 --> 00:00:41,160 allowed me to pay a m Monero but only 8 00:00:38,440 --> 00:00:43,320 half in Monero he required that I say 9 00:00:41,160 --> 00:00:45,960 the other half using 10 00:00:43,320 --> 00:00:48,719 Bitcoin let me get to it but actually 11 00:00:45,960 --> 00:00:52,640 using Bitcoin lightning and he uh he 12 00:00:48,719 --> 00:00:56,000 forced me to do this so through coer I I 13 00:00:52,640 --> 00:00:57,719 have adopted Bitcoin lightning um and I 14 00:00:56,000 --> 00:00:59,239 got to tell you man it was it was a pain 15 00:00:57,719 --> 00:01:01,039 it was a pay in the S I'm not going to 16 00:00:59,239 --> 00:01:04,600 lie it was a pain I had to pay I had to 17 00:01:01,039 --> 00:01:07,240 pay like eight four four or eight bucks 18 00:01:04,600 --> 00:01:09,040 to open up a channel and then my first 19 00:01:07,240 --> 00:01:11,159 transaction ended up being more 20 00:01:09,040 --> 00:01:15,640 expensive than a typical Monero 21 00:01:11,159 --> 00:01:18,040 payment but um he's a good sport uh 22 00:01:15,640 --> 00:01:20,759 actually Peter Todd is the reason I kind 23 00:01:18,040 --> 00:01:22,079 of really first got into Monero uh back 24 00:01:20,759 --> 00:01:24,600 in the day I would I would listen I 25 00:01:22,079 --> 00:01:27,159 heard him on various podcasts talking 26 00:01:24,600 --> 00:01:29,240 about the lack of fungibility in Bitcoin 27 00:01:27,159 --> 00:01:32,119 the lack of privacy potentially right 28 00:01:29,240 --> 00:01:34,000 that these ideas is and uh being on the 29 00:01:32,119 --> 00:01:37,399 lookout for other Solutions and he would 30 00:01:34,000 --> 00:01:39,159 mention and talk about Monero and uh 31 00:01:37,399 --> 00:01:41,720 that's kind of what led me down the the 32 00:01:39,159 --> 00:01:43,439 Bitcoin rabbit hole but without I mean 33 00:01:41,720 --> 00:01:47,719 the Monero rabbit hole without any 34 00:01:43,439 --> 00:01:47,719 further Ado Peter Todd take it away 35 00:01:48,119 --> 00:01:51,320 guys thank 36 00:01:52,240 --> 00:01:58,640 you all right so speaking of fees I mean 37 00:01:56,240 --> 00:02:00,680 really what this talk is about is how to 38 00:01:58,640 --> 00:02:02,759 go and pay miners 39 00:02:00,680 --> 00:02:04,960 and you know if I'm going to talk about 40 00:02:02,759 --> 00:02:07,560 how to go pay miners like we really got 41 00:02:04,960 --> 00:02:09,039 to go talk about you know what is a role 42 00:02:07,560 --> 00:02:10,679 of proof of work mining I mean why do we 43 00:02:09,039 --> 00:02:13,080 have this you know I mean is it about 44 00:02:10,679 --> 00:02:16,080 issuing new coins well first of all go 45 00:02:13,080 --> 00:02:18,879 say straight off mining is not about 46 00:02:16,080 --> 00:02:20,959 making new coins the fact it does is 47 00:02:18,879 --> 00:02:22,720 purely an implementation detail you know 48 00:02:20,959 --> 00:02:25,360 the reason why we have mining why we 49 00:02:22,720 --> 00:02:26,760 have proof of work is to make the chain 50 00:02:25,360 --> 00:02:28,879 hard to 51 00:02:26,760 --> 00:02:30,879 rewrite every single block that gets 52 00:02:28,879 --> 00:02:33,319 created it's a so with some provable 53 00:02:30,879 --> 00:02:36,840 work that's done which ultimately traces 54 00:02:33,319 --> 00:02:39,480 back to energy usage and you 55 00:02:36,840 --> 00:02:40,959 know as blocks are created that things 56 00:02:39,480 --> 00:02:42,159 that are deeper down in the chain are 57 00:02:40,959 --> 00:02:45,120 going to be more and more and more 58 00:02:42,159 --> 00:02:47,560 expensive to go reite you know I mean I 59 00:02:45,120 --> 00:02:49,879 personally um run open time stamps which 60 00:02:47,560 --> 00:02:52,239 is time stamping service and in my case 61 00:02:49,879 --> 00:02:53,640 with open time stamps I mean there's 62 00:02:52,239 --> 00:02:56,120 times when you might go reference a 63 00:02:53,640 --> 00:02:57,879 block like four years ago which is had 64 00:02:56,120 --> 00:03:00,080 the client output of like 10 nuclear 65 00:02:57,879 --> 00:03:02,159 power plants running continuously to you 66 00:03:00,080 --> 00:03:04,280 know go and rewrite 67 00:03:02,159 --> 00:03:05,680 but the bigger question is all right 68 00:03:04,280 --> 00:03:07,480 that's all well and good well how do we 69 00:03:05,680 --> 00:03:08,840 go pay for this I mean where does that 70 00:03:07,480 --> 00:03:13,480 money come 71 00:03:08,840 --> 00:03:15,799 from and this is block rewards um for 72 00:03:13,480 --> 00:03:19,680 Bitcoin um don't know how well you can 73 00:03:15,799 --> 00:03:21,159 see this but the yellow line is overall 74 00:03:19,680 --> 00:03:24,680 rewards and the green line is what 75 00:03:21,159 --> 00:03:25,840 they're worth in US Dollars and if you 76 00:03:24,680 --> 00:03:27,920 look at that yellow line you can see how 77 00:03:25,840 --> 00:03:30,560 it goes like down down well that's of 78 00:03:27,920 --> 00:03:32,720 course the famous big coin subsidy 79 00:03:30,560 --> 00:03:36,400 having where it started off at 50 coins 80 00:03:32,720 --> 00:03:39,360 and it dropped 25 and 12.5 and yeah now 81 00:03:36,400 --> 00:03:42,280 it's at 6.25 and it'll drop yet again in 82 00:03:39,360 --> 00:03:43,439 the long run on bitcoin that subsidy 83 00:03:42,280 --> 00:03:46,480 goes to 84 00:03:43,439 --> 00:03:49,879 zero now economically of course what 85 00:03:46,480 --> 00:03:52,519 matters is how does a subsidy reflect 86 00:03:49,879 --> 00:03:54,079 real value in US dollars is a reasonable 87 00:03:52,519 --> 00:03:55,439 you know reasonable approximation of 88 00:03:54,079 --> 00:03:57,079 that and it's kind of gone up it's kind 89 00:03:55,439 --> 00:04:00,840 of gone down it's a whole 90 00:03:57,079 --> 00:04:03,560 mess but the notable thing is well if 91 00:04:00,840 --> 00:04:04,799 it's if all of this if the subsid is 92 00:04:03,560 --> 00:04:07,640 going to go to zero eventually you have 93 00:04:04,799 --> 00:04:10,040 to go pay for everything with fees and 94 00:04:07,640 --> 00:04:13,040 here's the chart of the block 95 00:04:10,040 --> 00:04:14,599 fees and they've gone up some enormous 96 00:04:13,040 --> 00:04:18,120 spikes before but for most part block 97 00:04:14,599 --> 00:04:19,639 fees been fairly low and if you have a 98 00:04:18,120 --> 00:04:21,560 proof word currency and you're only 99 00:04:19,639 --> 00:04:23,080 paying it with fees this is potentially 100 00:04:21,560 --> 00:04:26,520 Troublesome because you always want to 101 00:04:23,080 --> 00:04:28,840 have some reason to go create a new 102 00:04:26,520 --> 00:04:30,840 block first of all because you want new 103 00:04:28,840 --> 00:04:33,759 blocks to keep on happening and second 104 00:04:30,840 --> 00:04:35,440 because there are also cases where 105 00:04:33,759 --> 00:04:36,960 miners might want to reorganize a 106 00:04:35,440 --> 00:04:40,160 blockchain like let's suppose for 107 00:04:36,960 --> 00:04:42,680 example there's a bunch of high fees and 108 00:04:40,160 --> 00:04:44,199 then there's no more fees well a minor 109 00:04:42,680 --> 00:04:46,039 coming after the high fees might say 110 00:04:44,199 --> 00:04:47,840 hang on a second I'd much rather go 111 00:04:46,039 --> 00:04:50,199 reorganize the chain and get those fees 112 00:04:47,840 --> 00:04:52,520 for myself and as it turns out only big 113 00:04:50,199 --> 00:04:54,440 miners can go do this profitably and we 114 00:04:52,520 --> 00:04:56,919 don't want that we want anyone who's 115 00:04:54,440 --> 00:04:58,560 mining to have roughly equal chances of 116 00:04:56,919 --> 00:05:00,080 earning money with a given capital 117 00:04:58,560 --> 00:05:02,880 investment you know know that's what 118 00:05:00,080 --> 00:05:05,199 keeps Mining decentralized and frankly 119 00:05:02,880 --> 00:05:07,320 that's just as true of Monero too I mean 120 00:05:05,199 --> 00:05:09,320 Monero say what you wants but the proof 121 00:05:07,320 --> 00:05:10,639 of work the fact is Monero still has 122 00:05:09,320 --> 00:05:13,479 these kinds of incentives with mining 123 00:05:10,639 --> 00:05:15,360 pools and you know regardless of how the 124 00:05:13,479 --> 00:05:16,800 proof of Works calculated there's this 125 00:05:15,360 --> 00:05:19,280 kind of 126 00:05:16,800 --> 00:05:21,240 incentive now recently of course on 127 00:05:19,280 --> 00:05:22,199 bitcoin if you've been following things 128 00:05:21,240 --> 00:05:24,800 you may have heard about all the 129 00:05:22,199 --> 00:05:27,800 incription stuff where people are paying 130 00:05:24,800 --> 00:05:30,039 tons and tons of money um I I believe 131 00:05:27,800 --> 00:05:31,639 current something like 10 million 132 00:05:30,039 --> 00:05:36,280 in the past couple months to get 133 00:05:31,639 --> 00:05:37,840 inscriptions mined and you know for a 134 00:05:36,280 --> 00:05:39,440 Minor's point of view this is great I 135 00:05:37,840 --> 00:05:41,520 mean for the first time in bitcoin's 136 00:05:39,440 --> 00:05:44,000 history as of today we might finally 137 00:05:41,520 --> 00:05:46,639 have a block that sort of organically 138 00:05:44,000 --> 00:05:48,560 has more transaction fees than block 139 00:05:46,639 --> 00:05:50,440 reward this has happened in the past 140 00:05:48,560 --> 00:05:52,080 before but usually for things like well 141 00:05:50,440 --> 00:05:54,280 someone did a weird auction a couple 142 00:05:52,080 --> 00:05:56,520 weeks ago where for highly technical 143 00:05:54,280 --> 00:05:58,680 reasons it created a ton of fees there's 144 00:05:56,520 --> 00:06:00,639 also been a few times when people have 145 00:05:58,680 --> 00:06:03,199 accidentally said very very large fee 146 00:06:00,639 --> 00:06:05,560 transactions but today might be the 147 00:06:03,199 --> 00:06:08,919 first time we actually flip that subsidy 148 00:06:05,560 --> 00:06:11,199 versus fees organically if you will on 149 00:06:08,919 --> 00:06:12,639 the other hand I mean that particular 150 00:06:11,199 --> 00:06:14,919 view of inscriptions was something a 151 00:06:12,639 --> 00:06:16,520 couple months ago this is what 152 00:06:14,919 --> 00:06:19,360 inscriptions look like today and it's a 153 00:06:16,520 --> 00:06:21,039 completely different Market yes this 154 00:06:19,360 --> 00:06:22,800 particular way of doing inscriptions is 155 00:06:21,039 --> 00:06:25,960 driving fees but you know will this be 156 00:06:22,800 --> 00:06:28,599 true in six months maybe maybe not I 157 00:06:25,960 --> 00:06:30,919 mean we just don't know how these things 158 00:06:28,599 --> 00:06:32,960 will go drive is you know will this lead 159 00:06:30,919 --> 00:06:35,360 to sustainable demand will it not 160 00:06:32,960 --> 00:06:37,639 honestly I don't know and I think as 161 00:06:35,360 --> 00:06:39,360 I'll argue on later it would be much 162 00:06:37,639 --> 00:06:41,919 better to go and have a system where you 163 00:06:39,360 --> 00:06:43,759 didn't have to go and do all you know 164 00:06:41,919 --> 00:06:45,319 have all these arguments and one way of 165 00:06:43,759 --> 00:06:47,039 doing it of course what monero's done 166 00:06:45,319 --> 00:06:49,680 which is a tail 167 00:06:47,039 --> 00:06:50,800 Mission so tail mission is kind of 168 00:06:49,680 --> 00:06:53,520 interesting 169 00:06:50,800 --> 00:06:55,879 because in many ways it's the simplest 170 00:06:53,520 --> 00:06:58,560 possible way to pay for mining security 171 00:06:55,879 --> 00:07:01,160 every block you create some coins out of 172 00:06:58,560 --> 00:07:04,879 thin air it's a fixed amount fixed 173 00:07:01,160 --> 00:07:06,919 amount forever and the math of this 174 00:07:04,879 --> 00:07:09,599 interestingly converges to a stable 175 00:07:06,919 --> 00:07:12,440 monetary Supply you know tail emission 176 00:07:09,599 --> 00:07:13,599 doesn't actually mean that the money 177 00:07:12,440 --> 00:07:16,360 supply is 178 00:07:13,599 --> 00:07:18,879 unlimited and why really comes down to 179 00:07:16,360 --> 00:07:20,800 people lose money like there are coins 180 00:07:18,879 --> 00:07:23,199 in existence which are lost the private 181 00:07:20,800 --> 00:07:25,479 keys for them are lost and absence of 182 00:07:23,199 --> 00:07:27,639 cryptography breakthrough which calls 183 00:07:25,479 --> 00:07:29,960 into question everything those coins 184 00:07:27,639 --> 00:07:31,759 will never move again in why this 185 00:07:29,960 --> 00:07:34,440 happens well I'll start off with a more 186 00:07:31,759 --> 00:07:36,319 mathy version of it I mean let's suppose 187 00:07:34,440 --> 00:07:38,120 you have you know the function n of T of 188 00:07:36,319 --> 00:07:40,720 your coin Supply and it starts off at 189 00:07:38,120 --> 00:07:43,000 some number and then you know you can go 190 00:07:40,720 --> 00:07:45,919 model as a slope K and you can take your 191 00:07:43,000 --> 00:07:48,159 derivative of it now that's a simple 192 00:07:45,919 --> 00:07:52,000 thing with lost 193 00:07:48,159 --> 00:07:55,599 coins mathematically what's interesting 194 00:07:52,000 --> 00:07:58,599 is the derivative of the coin 195 00:07:55,599 --> 00:08:00,879 Supply includes a certain percentage 196 00:07:58,599 --> 00:08:02,800 Lambda of all the coins out there the 197 00:08:00,879 --> 00:08:05,560 know Lambda being your lost coins rate 198 00:08:02,800 --> 00:08:07,960 so as that goes up you have your lost 199 00:08:05,560 --> 00:08:09,680 coins and you know you can do some math 200 00:08:07,960 --> 00:08:11,400 on it I mean frankly I use Wolfram also 201 00:08:09,680 --> 00:08:14,319 to figure this out but long story short 202 00:08:11,400 --> 00:08:17,759 is in the long run it converges to K 203 00:08:14,319 --> 00:08:19,039 Over Lambda why well you can go take 204 00:08:17,759 --> 00:08:21,319 notes on this but I think there's a much 205 00:08:19,039 --> 00:08:24,240 simpler way to look at this imagine you 206 00:08:21,319 --> 00:08:26,479 have a hose in a bucket and the bucket's 207 00:08:24,240 --> 00:08:30,039 got a hole in the 208 00:08:26,479 --> 00:08:32,080 bottom if you do this and put water into 209 00:08:30,039 --> 00:08:34,800 that bucket at a fixed 210 00:08:32,080 --> 00:08:38,399 rate because the amount of water coming 211 00:08:34,800 --> 00:08:40,120 out of that bucket varies by the level 212 00:08:38,399 --> 00:08:43,120 in the bucket it will eventually 213 00:08:40,120 --> 00:08:43,120 converge to stable 214 00:08:43,720 --> 00:08:48,600 equilibrium if you want to try it go 215 00:08:45,839 --> 00:08:50,399 ahead get a bucket put a hole in it it 216 00:08:48,600 --> 00:08:51,920 this this actually works and the math is 217 00:08:50,399 --> 00:08:55,800 exactly the same the reason why this 218 00:08:51,920 --> 00:08:59,800 works is because the pressure pushing 219 00:08:55,800 --> 00:09:01,160 coins out is the same either way 220 00:08:59,800 --> 00:09:04,240 if you don't want to believe me well 221 00:09:01,160 --> 00:09:04,240 like I say go try it 222 00:09:04,279 --> 00:09:08,600 yourself and I think what's interesting 223 00:09:06,839 --> 00:09:10,959 about this is when I describe this 224 00:09:08,600 --> 00:09:13,880 phenomenon to people how the actual 225 00:09:10,959 --> 00:09:15,160 monitary Supply converges one of the 226 00:09:13,880 --> 00:09:17,360 common questions get well how do you 227 00:09:15,160 --> 00:09:19,880 know if the coins are lost I mean 228 00:09:17,360 --> 00:09:21,480 certainly the how do you know I mean 229 00:09:19,880 --> 00:09:22,839 some coins May might not really be lost 230 00:09:21,480 --> 00:09:24,839 maybe the private keys are and well I 231 00:09:22,839 --> 00:09:27,040 think this gets down to what modeling 232 00:09:24,839 --> 00:09:28,600 really means you know when we talk about 233 00:09:27,040 --> 00:09:31,600 modeling these things you got to 234 00:09:28,600 --> 00:09:32,720 remember where using math to better 235 00:09:31,600 --> 00:09:35,279 understand a 236 00:09:32,720 --> 00:09:37,279 system if we do our math properly it 237 00:09:35,279 --> 00:09:39,760 doesn't matter the details of exactly 238 00:09:37,279 --> 00:09:41,920 what coins are lost at not you know we 239 00:09:39,760 --> 00:09:43,519 have a a system might not be a physical 240 00:09:41,920 --> 00:09:46,600 system but it's still a 241 00:09:43,519 --> 00:09:48,720 system and We Know It behaves by rules 242 00:09:46,600 --> 00:09:50,720 and in our case one of the rules set in 243 00:09:48,720 --> 00:09:53,399 stone is look inevitably coins will get 244 00:09:50,720 --> 00:09:54,720 lost I mean frankly in this room I'm 245 00:09:53,399 --> 00:09:56,279 sure if we put a hands for you know how 246 00:09:54,720 --> 00:09:58,839 many people have accidentally lost a 247 00:09:56,279 --> 00:10:00,320 coin everyone in this room pretty much 248 00:09:58,839 --> 00:10:03,519 is going to have to put up their hand 249 00:10:00,320 --> 00:10:06,399 like it happens and as long 250 00:10:03,519 --> 00:10:08,120 as you have new coins being created and 251 00:10:06,399 --> 00:10:09,880 coins being lost this is what will 252 00:10:08,120 --> 00:10:12,200 happen in the long run you will have a 253 00:10:09,880 --> 00:10:14,640 stable monetary supply of course the 254 00:10:12,200 --> 00:10:17,680 numbers won't look stable you know the 255 00:10:14,640 --> 00:10:19,760 number of coins in existence will appear 256 00:10:17,680 --> 00:10:22,600 to rise indefinitely but the economics 257 00:10:19,760 --> 00:10:25,279 don't work that way the economics do 258 00:10:22,600 --> 00:10:27,880 work PE people who lose coins they are 259 00:10:25,279 --> 00:10:31,040 out of the money supply so I think this 260 00:10:27,880 --> 00:10:31,040 is interesting but 261 00:10:33,399 --> 00:10:37,240 if you do this well how do you actually 262 00:10:35,399 --> 00:10:38,839 do this I mean how how do you go change 263 00:10:37,240 --> 00:10:42,040 this well in monero's case it's pretty 264 00:10:38,839 --> 00:10:44,880 simple Monero Community as a whole was 265 00:10:42,040 --> 00:10:46,200 willing to do hard Forks um I I would 266 00:10:44,880 --> 00:10:47,800 know I to my head how many hard Forks 267 00:10:46,200 --> 00:10:52,399 Mon's done but I think it's like four or 268 00:10:47,800 --> 00:10:54,120 something five higher 10 yeah I mean how 269 00:10:52,399 --> 00:10:55,880 many were how many were actually real in 270 00:10:54,120 --> 00:10:58,360 the sense they really need it or like I 271 00:10:55,880 --> 00:11:01,959 I I I don't know the details on this but 272 00:10:58,360 --> 00:11:03,680 you know search L more than one and you 273 00:11:01,959 --> 00:11:05,440 know in bitcoin's case of course that 274 00:11:03,680 --> 00:11:08,639 number is a lot less but Monero you were 275 00:11:05,440 --> 00:11:10,800 willing to go do a hard fork in uh the 276 00:11:08,639 --> 00:11:12,920 hard Forks that made tail Miss Mission 277 00:11:10,800 --> 00:11:14,519 happen somewhere in the code you just 278 00:11:12,920 --> 00:11:15,600 said well rather than making the number 279 00:11:14,519 --> 00:11:17,440 go down we're just going to make it 280 00:11:15,600 --> 00:11:21,399 constant as of this block height or 281 00:11:17,440 --> 00:11:21,399 however the heck it was done very very 282 00:11:23,720 --> 00:11:29,639 simple 283 00:11:26,600 --> 00:11:32,120 now mono had an easy time impl this so 284 00:11:29,639 --> 00:11:34,480 now you really got to ask 285 00:11:32,120 --> 00:11:36,680 well if you do this what are the 286 00:11:34,480 --> 00:11:39,440 economics I mean what do what does this 287 00:11:36,680 --> 00:11:41,160 loss coin stuff really mean well you 288 00:11:39,440 --> 00:11:43,480 know of all the ways to go pay for 289 00:11:41,160 --> 00:11:47,240 mining security I think what's 290 00:11:43,480 --> 00:11:50,680 interesting about this lost coin stuff 291 00:11:47,240 --> 00:11:51,680 is I mean to give you an example like 292 00:11:50,680 --> 00:11:53,760 the 293 00:11:51,680 --> 00:11:55,639 bitcoin's price subsidy where it gets 294 00:11:53,760 --> 00:11:58,079 cut in half every time that's a very 295 00:11:55,639 --> 00:12:00,959 arbitrary thing you know these Cuts in 296 00:11:58,079 --> 00:12:02,639 half they don't directly map to any real 297 00:12:00,959 --> 00:12:05,040 world 298 00:12:02,639 --> 00:12:06,760 economics and real world economics is 299 00:12:05,040 --> 00:12:09,360 what is a Bitcoin worth you know what is 300 00:12:06,760 --> 00:12:11,360 a Monero worth saying that the subsidy 301 00:12:09,360 --> 00:12:14,079 will just cut in half every four years 302 00:12:11,360 --> 00:12:15,680 is just an arbitrary thing and you know 303 00:12:14,079 --> 00:12:17,399 for technical reasons arguably it was a 304 00:12:15,680 --> 00:12:19,519 terrible idea because having the subsidy 305 00:12:17,399 --> 00:12:21,519 suddenly get cut in half can result in 306 00:12:19,519 --> 00:12:23,600 cases where miners suddenly go bankrupt 307 00:12:21,519 --> 00:12:25,240 and they can't make blocks for uh for 308 00:12:23,600 --> 00:12:26,760 any amount of money and you know make 309 00:12:25,240 --> 00:12:29,440 blocks properly for any amount of money 310 00:12:26,760 --> 00:12:32,240 so it's it's a weird thing to have but 311 00:12:29,440 --> 00:12:34,959 more importantly it's arbitrary but with 312 00:12:32,240 --> 00:12:37,680 tail emission because in the long run 313 00:12:34,959 --> 00:12:40,120 tail emission converges to loss 314 00:12:37,680 --> 00:12:42,600 coins the economics really say that we 315 00:12:40,120 --> 00:12:45,160 will send the amount of money to 316 00:12:42,600 --> 00:12:47,040 miners equal to the amount of money 317 00:12:45,160 --> 00:12:49,320 people lose by 318 00:12:47,040 --> 00:12:50,959 accident and remember tail emission is 319 00:12:49,320 --> 00:12:54,120 inflationary in the sense that if not 320 00:12:50,959 --> 00:12:56,639 for this your coins would deflate in 321 00:12:54,120 --> 00:12:58,519 value because as coins get lost everyone 322 00:12:56,639 --> 00:13:01,480 else's coins become more valuable the 323 00:12:58,519 --> 00:13:04,360 two just happened to go cancel out now 324 00:13:01,480 --> 00:13:06,519 will miners make enough money well let's 325 00:13:04,360 --> 00:13:08,800 go back what what is the purpose of 326 00:13:06,519 --> 00:13:12,240 proof of work security it is to defeat a 327 00:13:08,800 --> 00:13:15,279 51% attack and also to go keep mining 328 00:13:12,240 --> 00:13:17,920 decentralized now I hate to say this but 329 00:13:15,279 --> 00:13:20,199 when it comes to defeating 51% 330 00:13:17,920 --> 00:13:23,240 tax that's a really difficult thing to 331 00:13:20,199 --> 00:13:26,000 model we we really don't know I mean how 332 00:13:23,240 --> 00:13:29,120 much money does the US governments have 333 00:13:26,000 --> 00:13:32,399 budgeted killing Bitcoin I don't know 334 00:13:29,120 --> 00:13:34,160 none of us know certainly it could I 335 00:13:32,399 --> 00:13:35,600 mean US government could decide to kill 336 00:13:34,160 --> 00:13:37,560 Bitcoin by just launching all the nukes 337 00:13:35,600 --> 00:13:40,000 and killing all life on this planet you 338 00:13:37,560 --> 00:13:41,279 know that is one way to kill Bitcoin but 339 00:13:40,000 --> 00:13:43,639 they're probably not going to do that 340 00:13:41,279 --> 00:13:46,160 because that is too much collateral 341 00:13:43,639 --> 00:13:49,040 damage on the other hand I mean if the 342 00:13:46,160 --> 00:13:50,800 proof of work security was Zero I might 343 00:13:49,040 --> 00:13:53,320 go kill Bitcoin just for fun it'd be 344 00:13:50,800 --> 00:13:55,759 kind of cool do a 51% STX see all this 345 00:13:53,320 --> 00:13:59,399 Bitcoin stuff done so obviously there is 346 00:13:55,759 --> 00:14:00,880 a range there where you where you have 347 00:13:59,399 --> 00:14:02,360 enough money to defeat your likely 348 00:14:00,880 --> 00:14:05,120 attackers and you certainly don't want 349 00:14:02,360 --> 00:14:07,680 to have too little and I think an 350 00:14:05,120 --> 00:14:10,480 argument with tail emission is well we 351 00:14:07,680 --> 00:14:13,560 got to pay something let's go pay 352 00:14:10,480 --> 00:14:17,160 something that's big enough that is not 353 00:14:13,560 --> 00:14:19,720 zero and also small enough that's not 354 00:14:17,160 --> 00:14:22,480 unaffordable the rat of lost coins might 355 00:14:19,720 --> 00:14:23,600 not be enough to keep attackers away but 356 00:14:22,480 --> 00:14:24,880 it's certainly is something that's 357 00:14:23,600 --> 00:14:27,639 affordable because that's the money you 358 00:14:24,880 --> 00:14:30,600 lose by accident if you stop losing it 359 00:14:27,639 --> 00:14:34,120 by accident I mean it'll it'll adjust 360 00:14:30,600 --> 00:14:34,120 but that is what it 361 00:14:35,839 --> 00:14:43,959 is now can Bitcoin add tail Mission well 362 00:14:40,320 --> 00:14:46,160 for a technical perspective yes it could 363 00:14:43,959 --> 00:14:48,639 I mean Bitcoin can in theory do hard 364 00:14:46,160 --> 00:14:50,320 Forks if everyone agrees to it early in 365 00:14:48,639 --> 00:14:52,320 bitcoin's history there's actually an 366 00:14:50,320 --> 00:14:55,560 example of probably the Ultimate Hard 367 00:14:52,320 --> 00:14:58,360 Fork which is the Bitcoin white 368 00:14:55,560 --> 00:15:00,880 paper it made the mistake of saying 369 00:14:58,360 --> 00:15:04,240 theit Bitcoin blockchain is defined by 370 00:15:00,880 --> 00:15:06,160 the number of blocks more blocks wins 371 00:15:04,240 --> 00:15:08,639 that's rule got baked into Bitcoin 372 00:15:06,160 --> 00:15:10,120 version 0.1.0 and that rule is 373 00:15:08,639 --> 00:15:12,480 completely 374 00:15:10,120 --> 00:15:14,920 busted you know the chain selection has 375 00:15:12,480 --> 00:15:17,120 to be work the most work not the number 376 00:15:14,920 --> 00:15:19,000 of blocks and sure enough Bitcoin in 377 00:15:17,120 --> 00:15:20,920 very early history arguably did a hard 378 00:15:19,000 --> 00:15:22,320 Fork to go fix this because that was 379 00:15:20,920 --> 00:15:24,839 just totally busted it was a terrible 380 00:15:22,320 --> 00:15:27,320 idea Bitcoin also did a few other hard 381 00:15:24,839 --> 00:15:28,759 Forks that were often a lot of the stuff 382 00:15:27,320 --> 00:15:31,519 were things that we only realized 383 00:15:28,759 --> 00:15:33,399 recently going back in the old git repo 384 00:15:31,519 --> 00:15:35,040 history and like looking very carefully 385 00:15:33,399 --> 00:15:38,040 at things sat Toshi changed without 386 00:15:35,040 --> 00:15:40,360 telling anyone so certainly in early 387 00:15:38,040 --> 00:15:42,440 history when like barely anyone was 388 00:15:40,360 --> 00:15:44,000 involved there only you know probably a 389 00:15:42,440 --> 00:15:46,839 couple hundred notes yeah you could get 390 00:15:44,000 --> 00:15:49,040 away with the stuff pretty easily now 391 00:15:46,839 --> 00:15:50,519 well an example of why it's hard to do a 392 00:15:49,040 --> 00:15:52,639 hard Fork now is you have things like 393 00:15:50,519 --> 00:15:54,720 start n Labs who sell little 394 00:15:52,639 --> 00:15:57,279 self-contained Bitcoin boxes that a lot 395 00:15:54,720 --> 00:15:59,199 of people use and there's no easy way to 396 00:15:57,279 --> 00:16:00,839 convince those people to go and upgrade 397 00:15:59,199 --> 00:16:02,319 their software to what you think is this 398 00:16:00,839 --> 00:16:04,560 new fancy version of 399 00:16:02,319 --> 00:16:07,319 Bitcoin they could with enough 400 00:16:04,560 --> 00:16:08,839 convincing and you know all this tail 401 00:16:07,319 --> 00:16:10,319 emission stuff is probably something 402 00:16:08,839 --> 00:16:12,839 that's for Bitcoin at least is only 403 00:16:10,319 --> 00:16:14,360 relevant maybe 10 years out you know if 404 00:16:12,839 --> 00:16:16,880 I do enough these talks maybe we'll 405 00:16:14,360 --> 00:16:20,480 convince everyone 406 00:16:16,880 --> 00:16:23,519 but I I I don't have my hopes up let's 407 00:16:20,480 --> 00:16:25,480 put it that way and currently the only 408 00:16:23,519 --> 00:16:27,959 set in stone reason why Bitcoin 409 00:16:25,480 --> 00:16:31,880 definitely needs to hard Fork is in the 410 00:16:27,959 --> 00:16:34,199 year 2 32 or 2130 whatever it was where 411 00:16:31,880 --> 00:16:36,399 literally the time field in blocks rolls 412 00:16:34,199 --> 00:16:38,639 over because it's 32 bits and when that 413 00:16:36,399 --> 00:16:40,560 happens Bitcoin ceases to work and yeah 414 00:16:38,639 --> 00:16:42,880 they'll have to hardw workk then but 415 00:16:40,560 --> 00:16:45,440 that is well passed when mining rewards 416 00:16:42,880 --> 00:16:47,680 effectively go to nothing so who knows 417 00:16:45,440 --> 00:16:50,040 what'll happen but there's another way 418 00:16:47,680 --> 00:16:51,920 to do it which is 419 00:16:50,040 --> 00:16:54,839 diage 420 00:16:51,920 --> 00:16:59,319 now what is inflation well inflation is 421 00:16:54,839 --> 00:17:01,319 a tax on savings I own money it's being 422 00:16:59,319 --> 00:17:04,079 inflated away 423 00:17:01,319 --> 00:17:06,600 thus monetarily speaking I am losing 424 00:17:04,079 --> 00:17:08,160 money in proportion to the inflation 425 00:17:06,600 --> 00:17:12,120 what's demage well we just do this 426 00:17:08,160 --> 00:17:14,120 directly we say that well if you have a 427 00:17:12,120 --> 00:17:18,799 transaction if you have money on the 428 00:17:14,120 --> 00:17:21,480 Chain over time the value that goes down 429 00:17:18,799 --> 00:17:23,760 and a lot of people kind of assume that 430 00:17:21,480 --> 00:17:25,760 demage couldn't be done without a hard 431 00:17:23,760 --> 00:17:27,959 Fork because certainly like you need to 432 00:17:25,760 --> 00:17:29,120 make the values change somehow right 433 00:17:27,959 --> 00:17:30,880 well 434 00:17:29,120 --> 00:17:33,200 curiously enough there's a way to go do 435 00:17:30,880 --> 00:17:34,760 it in a softwork where it's just 436 00:17:33,200 --> 00:17:36,640 backwards compatible now remember 437 00:17:34,760 --> 00:17:39,720 Bitcoin has transaction fees when er has 438 00:17:36,640 --> 00:17:42,679 transaction fees too well you can do a 439 00:17:39,720 --> 00:17:44,520 rule where you take the sum of all of 440 00:17:42,679 --> 00:17:48,760 the inputs of the transactions all of 441 00:17:44,520 --> 00:17:51,559 your VI times the time they've been in 442 00:17:48,760 --> 00:17:53,880 existence sum all of that money up all 443 00:17:51,559 --> 00:17:57,400 of that Bitcoin days destroyed if you 444 00:17:53,880 --> 00:18:01,120 will and multiply it by some tax 445 00:17:57,400 --> 00:18:03,600 rate and that's your tax for that block 446 00:18:01,120 --> 00:18:05,039 that's your demarrage tax and you can do 447 00:18:03,600 --> 00:18:07,520 something kind of clever which is say 448 00:18:05,039 --> 00:18:09,440 well now Bitcoin miners have to have an 449 00:18:07,520 --> 00:18:13,520 output in their 450 00:18:09,440 --> 00:18:16,080 coinbase equal to that amount and that 451 00:18:13,520 --> 00:18:19,039 output goes into a pool of funds that 452 00:18:16,080 --> 00:18:20,240 all miners can spend from over time so 453 00:18:19,039 --> 00:18:23,640 you're 454 00:18:20,240 --> 00:18:25,640 taking your demage tax putting it into a 455 00:18:23,640 --> 00:18:28,200 pool and then miners spend out of that 456 00:18:25,640 --> 00:18:30,440 pool and every single thing I said can 457 00:18:28,200 --> 00:18:32,679 be implented by adding new rules to 458 00:18:30,440 --> 00:18:34,960 bitcoin that make previously valid 459 00:18:32,679 --> 00:18:37,799 blocks invalid and that's the key thing 460 00:18:34,960 --> 00:18:41,120 if you're running a Bitcoin 461 00:18:37,799 --> 00:18:43,440 node without demage implemented you all 462 00:18:41,120 --> 00:18:45,360 your node sees is for some reason miners 463 00:18:43,440 --> 00:18:47,840 gave away money that's all they would 464 00:18:45,360 --> 00:18:49,640 see which makes a totally valid block 465 00:18:47,840 --> 00:18:52,080 and thus backwards 466 00:18:49,640 --> 00:18:53,840 compatible now will miners implement 467 00:18:52,080 --> 00:18:57,080 this I don't 468 00:18:53,840 --> 00:18:59,000 know it's it's really hard to go say 469 00:18:57,080 --> 00:19:01,200 they certainly could from technical 470 00:18:59,000 --> 00:19:02,799 perspective and because we don't need 471 00:19:01,200 --> 00:19:05,280 the whole world of Bitcoin upgrade at 472 00:19:02,799 --> 00:19:06,000 once this is much more feasible to add 473 00:19:05,280 --> 00:19:07,600 to 474 00:19:06,000 --> 00:19:10,640 bitcoin 475 00:19:07,600 --> 00:19:13,720 and if your tax rate is low enough for 476 00:19:10,640 --> 00:19:13,720 the most part people are going to 477 00:19:16,360 --> 00:19:22,960 notice because I mean what's the cost of 478 00:19:18,559 --> 00:19:26,760 security let's say you have a 1% tax 479 00:19:22,960 --> 00:19:30,039 over 50 years that works out to be 64% 480 00:19:26,760 --> 00:19:32,360 0.5% over 50 years that works it be 28% 481 00:19:30,039 --> 00:19:34,679 by the time we get down to like 0.1% 482 00:19:32,360 --> 00:19:37,039 it's like 483 00:19:34,679 --> 00:19:40,039 5% and of course Bitcoin transactions 484 00:19:37,039 --> 00:19:41,600 already pay transaction fees so other 485 00:19:40,039 --> 00:19:43,159 than very large transactions you 486 00:19:41,600 --> 00:19:44,760 probably wouldn't notice any of this and 487 00:19:43,159 --> 00:19:46,640 because transaction fees change over 488 00:19:44,760 --> 00:19:49,559 time Bitcoin wallets are actually very 489 00:19:46,640 --> 00:19:52,280 resistant to or very resilient in the 490 00:19:49,559 --> 00:19:53,720 face of changing transaction fees if I 491 00:19:52,280 --> 00:19:56,559 go send you money and the transaction 492 00:19:53,720 --> 00:19:58,080 doesn't confirm Bitcoin wallets have a 493 00:19:56,559 --> 00:20:00,000 you know at least decent ones have a way 494 00:19:58,080 --> 00:20:01,960 to to replace that transaction with one 495 00:20:00,000 --> 00:20:05,400 sending even more money to 496 00:20:01,960 --> 00:20:06,799 fees and if miners Implement demage 497 00:20:05,400 --> 00:20:08,200 that's probably what will happen and 498 00:20:06,799 --> 00:20:10,480 this will just naturally work its way 499 00:20:08,200 --> 00:20:12,679 out and the only times this will really 500 00:20:10,480 --> 00:20:13,799 be noticed is you know people moving say 501 00:20:12,679 --> 00:20:17,080 a million dollars worth of bitcoin 502 00:20:13,799 --> 00:20:18,600 around then the then the fees over say a 503 00:20:17,080 --> 00:20:20,640 month or two of holding it start to add 504 00:20:18,600 --> 00:20:23,679 up but for most part you know this can 505 00:20:20,640 --> 00:20:25,240 all be implemented backwards compatibly 506 00:20:23,679 --> 00:20:27,480 and maybe looking at this from a 507 00:20:25,240 --> 00:20:28,720 different perspective I mean I like to 508 00:20:27,480 --> 00:20:32,600 point out 509 00:20:28,720 --> 00:20:34,600 if you can't afford you know 5% over 50 510 00:20:32,600 --> 00:20:37,039 years the time you're likely to hold 511 00:20:34,600 --> 00:20:38,880 your coins if all you do you know is 512 00:20:37,039 --> 00:20:41,760 start working when you're like 25 and 513 00:20:38,880 --> 00:20:43,799 live to your 75 I mean what are you 514 00:20:41,760 --> 00:20:46,039 doing with your life like certainly 515 00:20:43,799 --> 00:20:48,200 you're willing to pay 5% to keep your 516 00:20:46,039 --> 00:20:51,919 coin secure you know even if all you do 517 00:20:48,200 --> 00:20:53,880 is hoddle you do have an incentive make 518 00:20:51,919 --> 00:20:56,039 sure coin continues to run you know the 519 00:20:53,880 --> 00:20:57,840 value of your coins are based on the 520 00:20:56,039 --> 00:20:59,080 fact that you can make a transaction now 521 00:20:57,840 --> 00:21:01,320 sell sell those coins and everything 522 00:20:59,080 --> 00:21:03,520 will work fine you know in the case of 523 00:21:01,320 --> 00:21:05,600 the lightning Network I mean it's even 524 00:21:03,520 --> 00:21:06,840 more critical for Bitcoin mining proceed 525 00:21:05,600 --> 00:21:08,760 in orderly Pace because if I have a 526 00:21:06,840 --> 00:21:11,720 lightning Channel certainly you know I 527 00:21:08,760 --> 00:21:13,840 can go send you a Satoshi with but a 528 00:21:11,720 --> 00:21:16,880 Satoshi worth of fees I mean I can do 529 00:21:13,840 --> 00:21:18,600 all this great stuff but the only reason 530 00:21:16,880 --> 00:21:21,000 I can do that is because if my 531 00:21:18,600 --> 00:21:22,480 counterparty decides screw me over I can 532 00:21:21,000 --> 00:21:23,400 do an onchain transaction to get my 533 00:21:22,480 --> 00:21:26,120 money 534 00:21:23,400 --> 00:21:28,559 back lightning is absolutely dependent 535 00:21:26,120 --> 00:21:30,880 on mining working continuing work and 536 00:21:28,559 --> 00:21:33,559 just proceeding in a normal boring base 537 00:21:30,880 --> 00:21:35,919 so yeah lightning channels should in 538 00:21:33,559 --> 00:21:38,400 theory welcome this yes it means you'll 539 00:21:35,919 --> 00:21:40,559 spend a little bit of money but you know 540 00:21:38,400 --> 00:21:43,600 it is what it is we're much better off 541 00:21:40,559 --> 00:21:45,320 if this type of security always exists 542 00:21:43,600 --> 00:21:46,720 and and you know and when you talk about 543 00:21:45,320 --> 00:21:48,000 the backwards compatible version where 544 00:21:46,720 --> 00:21:50,120 you're just taking a tax when 545 00:21:48,000 --> 00:21:53,000 transactions are 546 00:21:50,120 --> 00:21:56,080 spent because you average this out over 547 00:21:53,000 --> 00:21:57,760 time it doesn't matter that you know 548 00:21:56,080 --> 00:21:59,159 maybe some people will go not pay the 549 00:21:57,760 --> 00:22:02,039 tax for a while other people would pay 550 00:21:59,159 --> 00:22:05,200 it sooner overall it'll just result in a 551 00:22:02,039 --> 00:22:05,200 steady income supply for 552 00:22:06,240 --> 00:22:11,320 Miners and another argument I'll make is 553 00:22:08,760 --> 00:22:13,600 well if we're talking about you know 5% 554 00:22:11,320 --> 00:22:15,880 over 50 years do you really think the 555 00:22:13,600 --> 00:22:17,760 Bitcoin price is going to be that stable 556 00:22:15,880 --> 00:22:19,600 over that period of time I mean that's 557 00:22:17,760 --> 00:22:22,720 the graph for just the past five years 558 00:22:19,600 --> 00:22:22,720 and it's up like 559 00:22:22,919 --> 00:22:28,640 250% you know the fact is the cost of 560 00:22:26,880 --> 00:22:31,000 inflation for Bitcoin right now and 561 00:22:28,640 --> 00:22:33,840 right now it's about 1.5% monetary it 562 00:22:31,000 --> 00:22:36,320 it's just a total wash economic shifts 563 00:22:33,840 --> 00:22:39,480 in the value of a coin matter far more 564 00:22:36,320 --> 00:22:39,480 than this tiny little bit of 565 00:22:44,760 --> 00:22:50,000 tax do you love coffee and Monera as 566 00:22:47,480 --> 00:22:52,720 much as we do consider making gratuitous 567 00:22:50,000 --> 00:22:54,840 dorg your daily cup pay with Monera for 568 00:22:52,720 --> 00:22:57,039 premium fresh beans and if you like what 569 00:22:54,840 --> 00:22:59,440 you taste send a digital cash tip 570 00:22:57,039 --> 00:23:02,320 directly to the gu all and Farmers that 571 00:22:59,440 --> 00:23:05,780 made it possible proceeds help us grow 572 00:23:02,320 --> 00:23:08,910 this channel gratuitous and 573 00:23:05,780 --> 00:23:08,910 [Music] 574 00:23:12,200 --> 00:23:17,520 Monero so as for Bitcoin you know should 575 00:23:15,720 --> 00:23:18,960 the supply be changed well I'm not the 576 00:23:17,520 --> 00:23:21,320 only person who goes and thinks this I 577 00:23:18,960 --> 00:23:24,880 mean Andrew pller is another well-known 578 00:23:21,320 --> 00:23:26,880 uh Bitcoin Dev and uh you know at tab 579 00:23:24,880 --> 00:23:29,279 comp fiz it two years 580 00:23:26,880 --> 00:23:31,320 ago he said quite clearly like it's a 581 00:23:29,279 --> 00:23:34,240 scary change to the system as the 582 00:23:31,320 --> 00:23:35,480 subsidy goes down and you know I myself 583 00:23:34,240 --> 00:23:36,840 I've said this for a long time and 584 00:23:35,480 --> 00:23:38,960 Bitcoin should have had some kind of 585 00:23:36,840 --> 00:23:41,440 Perpetual inflation you know this case I 586 00:23:38,960 --> 00:23:43,520 said 1% but you know he can quibble on 587 00:23:41,440 --> 00:23:45,000 the exact amount I mean I think banero 588 00:23:43,520 --> 00:23:47,600 did the right thing in fixing this 589 00:23:45,000 --> 00:23:49,240 problem but you know with all that said 590 00:23:47,600 --> 00:23:51,960 I also should point out the other thing 591 00:23:49,240 --> 00:23:53,400 Andrew folster said which was uh you 592 00:23:51,960 --> 00:23:55,880 know he hates being on panels with 593 00:23:53,400 --> 00:23:58,400 podcasters because they worried to uh 594 00:23:55,880 --> 00:24:00,240 trick me in saying something stupid and 595 00:23:58,400 --> 00:24:01,799 uh I should go leave with uh something 596 00:24:00,240 --> 00:24:04,200 you can quote me on which is kittens 597 00:24:01,799 --> 00:24:05,520 aren't adorable you know they'll make be 598 00:24:04,200 --> 00:24:09,279 real 599 00:24:05,520 --> 00:24:09,279 popular so thank 600 00:24:10,520 --> 00:24:16,559 [Applause] 601 00:24:13,520 --> 00:24:18,640 you that was fantastic man well worth 602 00:24:16,559 --> 00:24:22,400 being forced into used the Bitcoin 603 00:24:18,640 --> 00:24:22,400 lightning um any 604 00:24:23,520 --> 00:24:29,559 questions thank you Peter for this talk 605 00:24:26,200 --> 00:24:31,679 um so with the the be uh applied only 606 00:24:29,559 --> 00:24:34,799 when there's a transaction or would that 607 00:24:31,679 --> 00:24:38,679 be applied when people don't move their 608 00:24:34,799 --> 00:24:40,480 Bitcoin uh well in the soft Fork version 609 00:24:38,679 --> 00:24:43,559 your only option is to do it when you 610 00:24:40,480 --> 00:24:45,440 spend the coin um there's no there's no 611 00:24:43,559 --> 00:24:47,320 there's no way you can do it at a soft 612 00:24:45,440 --> 00:24:49,279 Fork where you take the value from coins 613 00:24:47,320 --> 00:24:51,159 that haven't been spent and one of the 614 00:24:49,279 --> 00:24:52,640 interesting things about this is since 615 00:24:51,159 --> 00:24:55,240 it would only apply to coins that get 616 00:24:52,640 --> 00:24:58,080 spent in this case the demarrage tax 617 00:24:55,240 --> 00:25:02,279 rate would actually apply to roughly 618 00:24:58,080 --> 00:25:03,679 speaking the economic um monetary Supply 619 00:25:02,279 --> 00:25:05,039 cuz coins that have been lost and just 620 00:25:03,679 --> 00:25:07,480 never move they'll never get the tax 621 00:25:05,039 --> 00:25:09,720 supplied so you can actually go and say 622 00:25:07,480 --> 00:25:11,799 well of the whole economic Supply we 623 00:25:09,720 --> 00:25:13,919 want say take maybe you know 0.5% per 624 00:25:11,799 --> 00:25:16,039 year or something so it it's it's 625 00:25:13,919 --> 00:25:17,799 interesting how you can do that um now 626 00:25:16,039 --> 00:25:20,760 in a hard Fork absolutely you could 627 00:25:17,799 --> 00:25:23,279 apply it to the raw number but 628 00:25:20,760 --> 00:25:24,679 accounting wise demage sucks you know 629 00:25:23,279 --> 00:25:26,600 nobody wants to have accounting where 630 00:25:24,679 --> 00:25:28,520 the value where the numbers themselves 631 00:25:26,600 --> 00:25:30,600 go down you know it's annoying to deal 632 00:25:28,520 --> 00:25:33,159 with in protocols like lightning there's 633 00:25:30,600 --> 00:25:35,559 no reason to do it other than to make it 634 00:25:33,159 --> 00:25:37,000 implementable so in a hard Fork yeah 635 00:25:35,559 --> 00:25:38,480 You' never do it that way you just go do 636 00:25:37,000 --> 00:25:40,320 it with tail Miss Mission or you know 637 00:25:38,480 --> 00:25:43,480 something else that inflates the 638 00:25:40,320 --> 00:25:43,480 currency thank 639 00:25:44,120 --> 00:25:47,600 you all right who 640 00:25:47,720 --> 00:25:52,520 else uh thanks Peter two quick questions 641 00:25:50,480 --> 00:25:54,880 number one does this then assume with 642 00:25:52,520 --> 00:25:57,080 the demor I'll call it a proposal but 643 00:25:54,880 --> 00:25:59,080 with with demage compatibility it 644 00:25:57,080 --> 00:26:00,760 assumes that something like confident 645 00:25:59,080 --> 00:26:03,159 confidential transactions would never be 646 00:26:00,760 --> 00:26:04,799 adopted then the base layer um and then 647 00:26:03,159 --> 00:26:07,799 second 648 00:26:04,799 --> 00:26:09,840 um what's I mean so the demarrage is 649 00:26:07,799 --> 00:26:12,159 effectively then just an additional fee 650 00:26:09,840 --> 00:26:14,039 then on the per transaction basis when 651 00:26:12,159 --> 00:26:17,919 you're talking about what would be 652 00:26:14,039 --> 00:26:19,559 backwards compatible so is this um to 653 00:26:17,919 --> 00:26:21,640 what extent do you think that this 654 00:26:19,559 --> 00:26:24,399 provides a further incentive for mining 655 00:26:21,640 --> 00:26:27,039 security as opposed to just miners 656 00:26:24,399 --> 00:26:29,760 hypothetically hyping hiking higher 657 00:26:27,039 --> 00:26:32,399 direct Fe fees on 658 00:26:29,760 --> 00:26:35,640 transactions well I mean so so I should 659 00:26:32,399 --> 00:26:38,320 speak to fees in general like fee the 660 00:26:35,640 --> 00:26:40,480 fee Market in Bitcoin is a very 661 00:26:38,320 --> 00:26:42,720 competitive market um it's very 662 00:26:40,480 --> 00:26:44,159 difficult for miners to go hike fees 663 00:26:42,720 --> 00:26:46,640 because they'll be outbid by other 664 00:26:44,159 --> 00:26:49,840 miners who go who go take fees at lower 665 00:26:46,640 --> 00:26:51,159 rates so you know fees on bitcoin are 666 00:26:49,840 --> 00:26:52,880 really what they are there it's the 667 00:26:51,159 --> 00:26:55,279 supply of people willing to pay at the 668 00:26:52,880 --> 00:26:58,159 given amount and miners don't have much 669 00:26:55,279 --> 00:27:00,399 control of this other than you know one 670 00:26:58,159 --> 00:27:02,600 way you can go and portray a soft fork 671 00:27:00,399 --> 00:27:04,520 for demarrage is colluding together to 672 00:27:02,600 --> 00:27:06,440 go add a new type of feet I mean that's 673 00:27:04,520 --> 00:27:08,960 that's one way you can go describe this 674 00:27:06,440 --> 00:27:12,279 and I I don't think that that view of 675 00:27:08,960 --> 00:27:14,320 it's necessarily wrong but going back to 676 00:27:12,279 --> 00:27:16,120 confidential transactions I mean first 677 00:27:14,320 --> 00:27:17,760 of all I'll say I think Bitcoin 678 00:27:16,120 --> 00:27:21,120 implementing conf confidential 679 00:27:17,760 --> 00:27:24,000 transactions on the Bas layer is very 680 00:27:21,120 --> 00:27:27,799 unlikely um it can be done as a soft 681 00:27:24,000 --> 00:27:29,600 fork with some very careful work but 682 00:27:27,799 --> 00:27:32,320 ignoring that ignoring the technical 683 00:27:29,600 --> 00:27:35,360 complexity I think the bigger issue is 684 00:27:32,320 --> 00:27:36,720 that Bitcoin is extremely valuable you 685 00:27:35,360 --> 00:27:38,360 know you're looking at a system that 686 00:27:36,720 --> 00:27:40,679 right now market cap is probably like 687 00:27:38,360 --> 00:27:42,960 half a trillion dollars the unfortunate 688 00:27:40,679 --> 00:27:44,600 reality is cryptography isn't that 689 00:27:42,960 --> 00:27:46,640 mature 690 00:27:44,600 --> 00:27:48,320 and if you implement something like 691 00:27:46,640 --> 00:27:50,960 confidential transactions you're 692 00:27:48,320 --> 00:27:52,440 dramatically increasing the risk of a 693 00:27:50,960 --> 00:27:54,880 technical failure that destroys the 694 00:27:52,440 --> 00:27:56,840 currency because if you have inflation 695 00:27:54,880 --> 00:27:58,720 and that's uncaught with componential 696 00:27:56,840 --> 00:28:01,399 transactions it's very difficult to deal 697 00:27:58,720 --> 00:28:03,039 with this you know zcash as an example 698 00:28:01,399 --> 00:28:05,240 had inflation bug and absolutely could 699 00:28:03,039 --> 00:28:08,559 have killed zcash there's no doubt about 700 00:28:05,240 --> 00:28:09,720 it Bitcoin has had inflation bug and 701 00:28:08,559 --> 00:28:12,080 there's no way it could have killed 702 00:28:09,720 --> 00:28:13,960 Bitcoin as any idiot with a calculator 703 00:28:12,080 --> 00:28:16,039 can go add the numbers up and say oh 704 00:28:13,960 --> 00:28:18,440 yeah obviously that transaction was 705 00:28:16,039 --> 00:28:21,200 bugged obviously we should go fix it by 706 00:28:18,440 --> 00:28:22,799 just not allowing overflow obviously the 707 00:28:21,200 --> 00:28:25,440 thing to do is just roll back a couple 708 00:28:22,799 --> 00:28:27,080 blocks and you know go forward I mean 709 00:28:25,440 --> 00:28:30,600 it's it's just so much easier from a 710 00:28:27,080 --> 00:28:33,120 technical perspective to deal with this 711 00:28:30,600 --> 00:28:35,799 now if we're talking 20 years in the 712 00:28:33,120 --> 00:28:37,360 future maybe the world's programing 713 00:28:35,799 --> 00:28:39,440 Community would have more confidence in 714 00:28:37,360 --> 00:28:41,840 this and might say it's worth the risks 715 00:28:39,440 --> 00:28:44,080 but you know would we add confidential 716 00:28:41,840 --> 00:28:46,440 transactions Bitcoin right now I would 717 00:28:44,080 --> 00:28:48,679 argue against it purely on the basis of 718 00:28:46,440 --> 00:28:49,880 this is a really risky thing because if 719 00:28:48,679 --> 00:28:52,120 Bitcoin 720 00:28:49,880 --> 00:28:53,840 dies you lose all that perer work 721 00:28:52,120 --> 00:28:55,799 security and there's no guarantee that 722 00:28:53,840 --> 00:28:58,799 you'll ever get a Bitcoin bootstrapped 723 00:28:55,799 --> 00:29:00,960 again you know you could easily have 724 00:28:58,799 --> 00:29:03,120 easily try to bootstrap Bitcoin again 725 00:29:00,960 --> 00:29:05,720 and all all that happens is to get 51% 726 00:29:03,120 --> 00:29:07,960 stacked over and over again like it's 727 00:29:05,720 --> 00:29:13,080 just I don't think it's worth the 728 00:29:07,960 --> 00:29:15,600 risk uh but hang on but I will say 729 00:29:13,080 --> 00:29:18,000 there's probably a way to do demarrage 730 00:29:15,600 --> 00:29:21,159 with confidential transactions that 731 00:29:18,000 --> 00:29:23,200 certainly only leaks the total amount of 732 00:29:21,159 --> 00:29:25,799 input and there may be an even more 733 00:29:23,200 --> 00:29:28,200 clever way to do it where for instance 734 00:29:25,799 --> 00:29:30,279 you provide a proof to min errors that 735 00:29:28,200 --> 00:29:32,440 then they're able to collectively prove 736 00:29:30,279 --> 00:29:34,880 yes the total input to this block was 737 00:29:32,440 --> 00:29:37,279 this without revealing individual 738 00:29:34,880 --> 00:29:39,840 transactions because a Nuance I didn't 739 00:29:37,279 --> 00:29:42,000 cover in my talk was that the reason why 740 00:29:39,840 --> 00:29:45,200 you would make a softwork rule be there 741 00:29:42,000 --> 00:29:48,279 must be an output with a value equal to 742 00:29:45,200 --> 00:29:50,039 the sum is that in case transactions 743 00:29:48,279 --> 00:29:52,399 where one transaction is paying for a 744 00:29:50,039 --> 00:29:55,000 previous one you actually want fees to 745 00:29:52,399 --> 00:29:56,720 be flexible you don't want to say every 746 00:29:55,000 --> 00:29:59,000 transaction has to pay this amount of 747 00:29:56,720 --> 00:30:00,840 fees for the demage you say well 748 00:29:59,000 --> 00:30:02,799 collectively it has to pay however you 749 00:30:00,840 --> 00:30:04,880 figure out how to go do it that's fine 750 00:30:02,799 --> 00:30:06,840 so you know long story short is there 751 00:30:04,880 --> 00:30:08,120 may be ways but I don't think the tech 752 00:30:06,840 --> 00:30:12,080 risk is worth 753 00:30:08,120 --> 00:30:15,279 it uh so my question is is the demor is 754 00:30:12,080 --> 00:30:17,760 the soft Fork demage text opt in for 755 00:30:15,279 --> 00:30:20,320 transaction 756 00:30:17,760 --> 00:30:22,360 authors well I mean right now you can 757 00:30:20,320 --> 00:30:25,760 opt into demage but just paying more 758 00:30:22,360 --> 00:30:28,559 money you know it only has a purpose if 759 00:30:25,760 --> 00:30:30,880 by opt in if if it's something that is 760 00:30:28,559 --> 00:30:34,679 applied to everyone so the reason I 761 00:30:30,880 --> 00:30:37,240 asked this is if it's opt in then miners 762 00:30:34,679 --> 00:30:40,240 who don't enforce the demage attack will 763 00:30:37,240 --> 00:30:41,559 have a competitive advantage over minor 764 00:30:40,240 --> 00:30:44,279 that's why it has to be done as a soft 765 00:30:41,559 --> 00:30:45,679 Fork where the majority of hashing power 766 00:30:44,279 --> 00:30:48,720 collectively agrees we're going to do 767 00:30:45,679 --> 00:30:50,960 this and ideally a soft Fork where you 768 00:30:48,720 --> 00:30:52,440 know the signif at least significant 769 00:30:50,960 --> 00:30:54,720 percentage of node Runners agree that 770 00:30:52,440 --> 00:30:56,880 this is a good idea too and you know I 771 00:30:54,720 --> 00:31:00,159 should point out historically soft forks 772 00:30:56,880 --> 00:31:03,200 and Bitcoin coin have been things where 773 00:31:00,159 --> 00:31:06,039 by the time the softwork actually 774 00:31:03,200 --> 00:31:08,919 activates certainly a strong minority 775 00:31:06,039 --> 00:31:11,880 and probably a super majority of actual 776 00:31:08,919 --> 00:31:13,720 nodes doing actual economic transactions 777 00:31:11,880 --> 00:31:15,559 have upgraded to the new rules and 778 00:31:13,720 --> 00:31:17,519 decided that blocks that do not follow 779 00:31:15,559 --> 00:31:20,240 these rules will be 780 00:31:17,519 --> 00:31:21,600 rejected I see it's hard for me to keep 781 00:31:20,240 --> 00:31:23,480 track of the different difference 782 00:31:21,600 --> 00:31:26,559 between soft and hard forking because we 783 00:31:23,480 --> 00:31:28,080 only we only do hard Forks well you know 784 00:31:26,559 --> 00:31:30,360 you you guys have a lot more flexibility 785 00:31:28,080 --> 00:31:31,760 because monero's tiny I mean Bitcoin is 786 00:31:30,360 --> 00:31:34,519 a very different 787 00:31:31,760 --> 00:31:37,360 animal so what would you say is the best 788 00:31:34,519 --> 00:31:39,880 argument then against this demage 789 00:31:37,360 --> 00:31:41,159 approach this potential of adding this 790 00:31:39,880 --> 00:31:43,519 to bitcoin what would be the best 791 00:31:41,159 --> 00:31:46,519 argument against doing it I 792 00:31:43,519 --> 00:31:48,399 mean so what I think one argument 793 00:31:46,519 --> 00:31:50,600 against it would be why don't you just 794 00:31:48,399 --> 00:31:53,679 go do tail Mission and do a hard Fork 795 00:31:50,600 --> 00:31:55,919 but I think the broader argument is 796 00:31:53,679 --> 00:31:59,120 regardless of exactly what approach you 797 00:31:55,919 --> 00:32:00,600 you use tail Mission De whatever is why 798 00:31:59,120 --> 00:32:02,480 are you going to take all this risks 799 00:32:00,600 --> 00:32:03,880 potentially splitting the community and 800 00:32:02,480 --> 00:32:05,639 creating a whole bunch of social media 801 00:32:03,880 --> 00:32:09,039 drama over something that may not be 802 00:32:05,639 --> 00:32:11,519 needed now what I would say to that is 803 00:32:09,039 --> 00:32:14,399 well Bitcoin inflation rate right now is 804 00:32:11,519 --> 00:32:15,600 like 1.5% it's roughly 10 years till 805 00:32:14,399 --> 00:32:18,799 it's about 806 00:32:15,600 --> 00:32:21,000 0.1% that's sort of the time frame when 807 00:32:18,799 --> 00:32:22,360 this type of thing should be implemented 808 00:32:21,000 --> 00:32:23,799 maybe in 10 years we're going to find 809 00:32:22,360 --> 00:32:25,840 pretty strong evidence no no the feed 810 00:32:23,799 --> 00:32:27,960 Market really did develop what you know 811 00:32:25,840 --> 00:32:30,399 there's always a reason to mind block 812 00:32:27,960 --> 00:32:32,480 this isn't a concern that would be great 813 00:32:30,399 --> 00:32:34,880 I hope that happens but I would like the 814 00:32:32,480 --> 00:32:36,200 community to be ready so you know I 815 00:32:34,880 --> 00:32:37,799 think that's your strongest argument 816 00:32:36,200 --> 00:32:40,120 against it thank 817 00:32:37,799 --> 00:32:41,960 you uh thank you for the talk I'm 818 00:32:40,120 --> 00:32:44,519 thinking about the lightning Network so 819 00:32:41,960 --> 00:32:47,120 the demor uh solves the bookkeeping 820 00:32:44,519 --> 00:32:49,320 problem on chain for sure but if you 821 00:32:47,120 --> 00:32:51,360 have lightning aren't then older 822 00:32:49,320 --> 00:32:53,200 channels a bit more fractional Reserve 823 00:32:51,360 --> 00:32:55,480 compared to newer ones and how would you 824 00:32:53,200 --> 00:32:57,159 solve it in the lightning Network well 825 00:32:55,480 --> 00:32:58,840 keep in mind I mean lightning already 826 00:32:57,159 --> 00:33:00,919 has this issue where the value of a 827 00:32:58,840 --> 00:33:03,760 channel depends on the fees required to 828 00:33:00,919 --> 00:33:07,279 go close it and for the most part 829 00:33:03,760 --> 00:33:08,840 lightning has not gone and put much like 830 00:33:07,279 --> 00:33:10,200 I should say lightning implementations 831 00:33:08,840 --> 00:33:12,639 have not gone and put a lot of effort 832 00:33:10,200 --> 00:33:14,919 and keeping track of this um lightning 833 00:33:12,639 --> 00:33:17,240 channels do get occasionally closed 834 00:33:14,919 --> 00:33:19,639 because the estimated fee rate to do 835 00:33:17,240 --> 00:33:21,559 certain things has gone up too much and 836 00:33:19,639 --> 00:33:22,760 the two sides don't agree that the 837 00:33:21,559 --> 00:33:24,559 channel should remain open and they 838 00:33:22,760 --> 00:33:25,480 close on that basis and this this is 839 00:33:24,559 --> 00:33:28,200 something that's implemented 840 00:33:25,480 --> 00:33:30,960 automatically now if you were to go do 841 00:33:28,200 --> 00:33:33,440 this with demage well obviously since 842 00:33:30,960 --> 00:33:34,799 the amount of money it takes sorry 843 00:33:33,440 --> 00:33:36,679 should say since the amount of money you 844 00:33:34,799 --> 00:33:39,279 get when you close the channel would 845 00:33:36,679 --> 00:33:41,559 diminish over time above and beyond fee 846 00:33:39,279 --> 00:33:44,679 changes well the obvious way to go do 847 00:33:41,559 --> 00:33:47,559 this is take advantage of the fee change 848 00:33:44,679 --> 00:33:49,720 code and say well on top of estimated 849 00:33:47,559 --> 00:33:52,639 fees we know that the value is going 850 00:33:49,720 --> 00:33:55,720 down and just rebroadcast our estimated 851 00:33:52,639 --> 00:33:58,519 value of the channel so that the total 852 00:33:55,720 --> 00:34:01,200 amount takes us into count now if you go 853 00:33:58,519 --> 00:34:03,240 with a number like say .1% you know per 854 00:34:01,200 --> 00:34:04,519 year realistically a lot of this just be 855 00:34:03,240 --> 00:34:06,480 papered over because it really doesn't 856 00:34:04,519 --> 00:34:08,800 matter that much but certainly if you 857 00:34:06,480 --> 00:34:10,639 tried to demage it like 50% per year 858 00:34:08,800 --> 00:34:13,399 you'd be utterly insane not to take this 859 00:34:10,639 --> 00:34:14,440 into account and between the two options 860 00:34:13,399 --> 00:34:17,359 I'm going to argue for something like 861 00:34:14,440 --> 00:34:18,879 0.1% or five you know 0.5% that's a 862 00:34:17,359 --> 00:34:21,280 that's a much easier thing to deal with 863 00:34:18,879 --> 00:34:21,280 counting 864 00:34:22,359 --> 00:34:28,520 wise online question all right uh reum 865 00:34:26,440 --> 00:34:30,119 has asked 866 00:34:28,520 --> 00:34:32,159 how much can you prevent miners from 867 00:34:30,119 --> 00:34:36,159 undercutting each other accepting low 868 00:34:32,159 --> 00:34:38,200 fee transactions do you or orphan all 869 00:34:36,159 --> 00:34:40,960 blocks well again I mean what I'm 870 00:34:38,200 --> 00:34:42,919 talking about is a demage soft fork and 871 00:34:40,960 --> 00:34:46,480 a soft Fork means that we now have this 872 00:34:42,919 --> 00:34:48,200 new rule that blocks must conform to and 873 00:34:46,480 --> 00:34:50,320 in this case the rule is you know you do 874 00:34:48,200 --> 00:34:54,359 your sum of inputs times this tax rate 875 00:34:50,320 --> 00:34:56,480 all and in a soft Fork if miners try to 876 00:34:54,359 --> 00:34:57,599 undercut it it's not that we're you know 877 00:34:56,480 --> 00:34:59,839 that they're undercutting is that 878 00:34:57,599 --> 00:35:02,640 they've created an invalid block and 879 00:34:59,839 --> 00:35:06,000 since it's an invalid block it'll just 880 00:35:02,640 --> 00:35:08,560 get ignored and that's that now if 881 00:35:06,000 --> 00:35:10,880 miners do this in the Bitcoin Community 882 00:35:08,560 --> 00:35:13,440 as a whole disagrees you certainly could 883 00:35:10,880 --> 00:35:15,640 be in a situation where a small 884 00:35:13,440 --> 00:35:17,760 percentage of miners are producing 885 00:35:15,640 --> 00:35:19,839 invalid blocks and people see you know 886 00:35:17,760 --> 00:35:22,680 one confirmation on their transactions 887 00:35:19,839 --> 00:35:25,599 but in general I mean frankly this is 888 00:35:22,680 --> 00:35:27,320 why for at least large transactions 889 00:35:25,599 --> 00:35:29,119 advice has always been 890 00:35:27,320 --> 00:35:30,960 one you know one confirmation isn't 891 00:35:29,119 --> 00:35:33,560 really enough you really should wait a 892 00:35:30,960 --> 00:35:35,400 little more and you know for starters I 893 00:35:33,560 --> 00:35:37,000 mean it's normal for every once in a 894 00:35:35,400 --> 00:35:39,480 while for two blocks get created at the 895 00:35:37,000 --> 00:35:42,560 same height you know sometimes you even 896 00:35:39,480 --> 00:35:44,320 get um three you know even get like two 897 00:35:42,560 --> 00:35:46,280 block deep chains because you just out 898 00:35:44,320 --> 00:35:47,640 of luck two blocks get created at the 899 00:35:46,280 --> 00:35:49,720 same height another two get created at 900 00:35:47,640 --> 00:35:51,440 the same height certainly by the time 901 00:35:49,720 --> 00:35:54,480 you get to like 10 confirmations it's 902 00:35:51,440 --> 00:35:56,119 incredibly unlikely other than you know 903 00:35:54,480 --> 00:35:59,680 weird technical failures like the 904 00:35:56,119 --> 00:36:02,400 inflation bug in was it 2012 or so but 905 00:35:59,680 --> 00:36:04,319 you know small small numbers of reorgs 906 00:36:02,400 --> 00:36:06,160 do happen on occasion and that's just 907 00:36:04,319 --> 00:36:08,319 how it is and it would it would go up in 908 00:36:06,160 --> 00:36:11,200 this case but I suspect if miners 909 00:36:08,319 --> 00:36:12,880 actually do the softw workk the miners 910 00:36:11,200 --> 00:36:16,359 who disagree with this will quickly just 911 00:36:12,880 --> 00:36:18,839 quit Bitcoin or adopt the new 912 00:36:16,359 --> 00:36:20,640 rule taxing the the value of a 913 00:36:18,839 --> 00:36:23,079 transaction are you concerned that this 914 00:36:20,640 --> 00:36:25,280 with further disincentivize transacting 915 00:36:23,079 --> 00:36:27,240 on layer one and moving 916 00:36:25,280 --> 00:36:29,560 to um 917 00:36:27,240 --> 00:36:31,520 Layer Two and so on without having the 918 00:36:29,560 --> 00:36:32,400 security of layer one well it doesn't 919 00:36:31,520 --> 00:36:35,280 though 920 00:36:32,400 --> 00:36:37,440 because Layer Two you know all layer two 921 00:36:35,280 --> 00:36:39,480 systems depend on layer one a lightning 922 00:36:37,440 --> 00:36:41,839 channel is a layer two system but the 923 00:36:39,480 --> 00:36:43,440 value of the Bitcoin tied up in that 924 00:36:41,839 --> 00:36:45,960 lightning channels dependent of the 925 00:36:43,440 --> 00:36:48,000 value on layer one so there is no 926 00:36:45,960 --> 00:36:50,040 difference whether or not I hold my 927 00:36:48,000 --> 00:36:51,920 Bitcoin on layer one or Layer Two 928 00:36:50,040 --> 00:36:53,680 because they all go back to layer one 929 00:36:51,920 --> 00:36:56,040 you know I personally have quite a bit 930 00:36:53,680 --> 00:36:57,240 of money tied up in lightning channels 931 00:36:56,040 --> 00:37:00,000 and all those light lightning channels 932 00:36:57,240 --> 00:37:02,079 are onchain Bitcoin transactions the 933 00:37:00,000 --> 00:37:04,200 only you know all lightning is doing is 934 00:37:02,079 --> 00:37:06,359 having this very clever system of 935 00:37:04,200 --> 00:37:07,760 lightning of you know transactions that 936 00:37:06,359 --> 00:37:09,200 aren't actually put on chain and 937 00:37:07,760 --> 00:37:11,560 carefully arranged with incentives and 938 00:37:09,200 --> 00:37:13,640 all this but they're still transactions 939 00:37:11,560 --> 00:37:15,400 you know there's still money on chain 940 00:37:13,640 --> 00:37:17,839 you know and even in custodial wallets 941 00:37:15,400 --> 00:37:19,440 like wallet of Satoshi where you are 942 00:37:17,839 --> 00:37:22,119 trusting wallet of Satoshi with your 943 00:37:19,440 --> 00:37:23,640 balance if demage is implemented they 944 00:37:22,119 --> 00:37:25,800 too would eventually have to say well 945 00:37:23,640 --> 00:37:27,880 actually your balance goes down over 946 00:37:25,800 --> 00:37:29,760 time because we know that it will cost 947 00:37:27,880 --> 00:37:32,640 more money to actually move these coins 948 00:37:29,760 --> 00:37:33,720 on chain you know it's there really is 949 00:37:32,640 --> 00:37:36,319 no difference between layer one and 950 00:37:33,720 --> 00:37:36,319 Layer Two in the 951 00:37:40,440 --> 00:37:44,560 scenario the most exciting thing that is 952 00:37:42,680 --> 00:37:47,000 happening in entire crypto right now is 953 00:37:44,560 --> 00:37:49,440 ordinal BTC is more exciting than 954 00:37:47,000 --> 00:37:52,119 ethereum at this present moment everyone 955 00:37:49,440 --> 00:37:53,960 is converging around BTC everyone is 956 00:37:52,119 --> 00:37:57,040 becoming a utxo 957 00:37:53,960 --> 00:37:59,680 developer so instead of imposing a 958 00:37:57,040 --> 00:38:02,560 mandatory system of Taxation within 959 00:37:59,680 --> 00:38:04,920 Bitcoin why not gradually increase the 960 00:38:02,560 --> 00:38:07,280 productive capacity of minor of 961 00:38:04,920 --> 00:38:10,319 entrepreneurs to keep on growing an 962 00:38:07,280 --> 00:38:11,960 onchain economy as we are witnessing 963 00:38:10,319 --> 00:38:15,440 right now in the past four 964 00:38:11,960 --> 00:38:18,160 months it is very profitable to have 965 00:38:15,440 --> 00:38:20,160 this onchain economy it's very simple 966 00:38:18,160 --> 00:38:23,000 Bitcoin people like to be able to go 967 00:38:20,160 --> 00:38:25,200 rent full nodes you know full nodes are 968 00:38:23,000 --> 00:38:27,160 how you go and validate yourself that 969 00:38:25,200 --> 00:38:29,760 your Bitcoin is real I mean 970 00:38:27,160 --> 00:38:32,920 full nodes or why well I mean full nodes 971 00:38:29,760 --> 00:38:34,119 or why implementing tail emission is so 972 00:38:32,920 --> 00:38:36,520 difficult on bitcoin because you got to 973 00:38:34,119 --> 00:38:38,160 get everyone to agree now if Bitcoin was 974 00:38:36,520 --> 00:38:39,760 you know bsv and there were like less 975 00:38:38,160 --> 00:38:41,200 than a dozen full nodes out there yeah 976 00:38:39,760 --> 00:38:42,720 it'd be pretty easy to add tail Mission 977 00:38:41,200 --> 00:38:44,280 pretty easy to do all kinds of things 978 00:38:42,720 --> 00:38:46,640 the market is giving you a solution 979 00:38:44,280 --> 00:38:48,760 though so why not work with the market 980 00:38:46,640 --> 00:38:52,520 in that solution instead of imposing 981 00:38:48,760 --> 00:38:56,560 mandatory taxation taxation is 982 00:38:52,520 --> 00:38:58,440 theft taxation's consensual theft in the 983 00:38:56,560 --> 00:39:00,839 case of Bitcoin we do have taxation we 984 00:38:58,440 --> 00:39:02,599 have a 1.5% inflation rate everyone 985 00:39:00,839 --> 00:39:04,200 holding Bitcoins agreed to it in the 986 00:39:02,599 --> 00:39:06,440 case of Monero you know you have your 987 00:39:04,200 --> 00:39:09,240 tail emission which I mean I think on 988 00:39:06,440 --> 00:39:11,319 the numbers Wise It's like 05% monetary 989 00:39:09,240 --> 00:39:13,200 inflation assuming no lost coins it's 990 00:39:11,319 --> 00:39:14,680 probably like you know rough so a bit 991 00:39:13,200 --> 00:39:15,680 bit less than that assuming loss coins 992 00:39:14,680 --> 00:39:17,680 or bit sorry a bit more than that 993 00:39:15,680 --> 00:39:19,599 assuming loss coins you know you all 994 00:39:17,680 --> 00:39:23,599 bought into this by choosing to buy 995 00:39:19,599 --> 00:39:25,240 Monero it is it is what it is but the 996 00:39:23,599 --> 00:39:27,359 fact of the matter is as long as people 997 00:39:25,240 --> 00:39:29,640 wants go and be a ble to easily run full 998 00:39:27,359 --> 00:39:31,560 noes that is incompatible with 999 00:39:29,640 --> 00:39:34,640 increasing block size you know we fought 1000 00:39:31,560 --> 00:39:36,280 this battle Bitcoin before and The 1001 00:39:34,640 --> 00:39:39,040 Winning Side was yeah we're going to go 1002 00:39:36,280 --> 00:39:40,359 and impl lightning and if it means that 1003 00:39:39,040 --> 00:39:42,599 people can't go and necessarily do 1004 00:39:40,359 --> 00:39:45,079 ordinals the way that they want to not 1005 00:39:42,599 --> 00:39:48,560 my problem you know I personally have 1006 00:39:45,079 --> 00:39:51,599 worked um on something called RGB 1007 00:39:48,560 --> 00:39:54,560 through my you know C seal proof martial 1008 00:39:51,599 --> 00:39:56,079 ideas and so on and long story short is 1009 00:39:54,560 --> 00:39:59,680 I've worked with a team who are creating 1010 00:39:56,079 --> 00:40:01,440 way to trade tokens on bitcoin with 1011 00:39:59,680 --> 00:40:04,040 effectively unlimited scalability you 1012 00:40:01,440 --> 00:40:06,480 know with one transaction per block you 1013 00:40:04,040 --> 00:40:09,240 could easily have a you know a couple 1014 00:40:06,480 --> 00:40:10,640 billion transactions per second how do 1015 00:40:09,240 --> 00:40:12,280 you do that well you make big Merkel 1016 00:40:10,640 --> 00:40:13,400 trees and Merkel trees and Merkel trees 1017 00:40:12,280 --> 00:40:15,680 you know and this is could be a whole 1018 00:40:13,400 --> 00:40:18,000 another talk but that is the Bitcoin 1019 00:40:15,680 --> 00:40:19,920 approach to this we accept that the base 1020 00:40:18,000 --> 00:40:24,000 layer is always going to be somewhat 1021 00:40:19,920 --> 00:40:25,920 limited and the tradeoff is that when we 1022 00:40:24,000 --> 00:40:28,160 when we need to do more transaction per 1023 00:40:25,920 --> 00:40:30,359 second more interesting things we throw 1024 00:40:28,160 --> 00:40:32,160 software at it frankly lightning is 1025 00:40:30,359 --> 00:40:33,800 really complex like the fact that 1026 00:40:32,160 --> 00:40:35,680 lightning works at all is a miracle of 1027 00:40:33,800 --> 00:40:37,480 software engineering but you throw 1028 00:40:35,680 --> 00:40:39,359 enough smart people at it and you can go 1029 00:40:37,480 --> 00:40:41,359 get it to work and Bitcoin accepts that 1030 00:40:39,359 --> 00:40:42,319 trade-off if you don't like it have 1031 00:40:41,359 --> 00:40:45,000 another 1032 00:40:42,319 --> 00:40:47,040 currency we have time for a few more 1033 00:40:45,000 --> 00:40:49,319 questions um and then we're going to do 1034 00:40:47,040 --> 00:40:52,359 our proof of work vers proof of stake 1035 00:40:49,319 --> 00:40:54,880 panel which Peter will be on so I think 1036 00:40:52,359 --> 00:40:57,240 we'll take a little break so he can uh 1037 00:40:54,880 --> 00:40:59,480 get some water but yeah a few more 1038 00:40:57,240 --> 00:41:02,560 questions just to round it out geonic 1039 00:40:59,480 --> 00:41:05,720 and then Artic there's an online 1040 00:41:02,560 --> 00:41:07,160 question um theemerged soft Fork doesn't 1041 00:41:05,720 --> 00:41:09,480 fix the problem of the circulating 1042 00:41:07,160 --> 00:41:11,720 Supply eventually going to zero via lost 1043 00:41:09,480 --> 00:41:13,720 coins to fix that issue would you prefer 1044 00:41:11,720 --> 00:41:14,599 tail emission hard fork or a demerge 1045 00:41:13,720 --> 00:41:17,760 hard 1046 00:41:14,599 --> 00:41:21,440 Fork well keep so so the question there 1047 00:41:17,760 --> 00:41:23,920 is basically in the long run the supply 1048 00:41:21,440 --> 00:41:26,440 of actual coins in existence that are 1049 00:41:23,920 --> 00:41:28,920 tradable goes to zero as people like 1050 00:41:26,440 --> 00:41:30,960 assuming a fixed supply of coins the 1051 00:41:28,920 --> 00:41:35,119 supply will eventually Trend towards 1052 00:41:30,960 --> 00:41:37,119 zero because people go lose coins now I 1053 00:41:35,119 --> 00:41:40,400 wouldn't call that a problem that really 1054 00:41:37,119 --> 00:41:42,400 needs to be fixed and the reason why is 1055 00:41:40,400 --> 00:41:44,160 again the rate of lost coins the 1056 00:41:42,400 --> 00:41:46,800 absolute number of coins that are lost 1057 00:41:44,160 --> 00:41:50,160 per second is a function 1058 00:41:46,800 --> 00:41:52,680 of How likely people are to lose a coin 1059 00:41:50,160 --> 00:41:55,760 and the total supply of coins that are 1060 00:41:52,680 --> 00:41:58,240 not lost well as that total Supply goes 1061 00:41:55,760 --> 00:42:00,760 down that rate the absolute rate also 1062 00:41:58,240 --> 00:42:03,560 goes down it has to if there's a 1% 1063 00:42:00,760 --> 00:42:05,119 chance of losing a coin per year you 1064 00:42:03,560 --> 00:42:08,680 know whether or not there's 21 million 1065 00:42:05,119 --> 00:42:11,160 coins or one it's still a 1% chance and 1066 00:42:08,680 --> 00:42:12,960 that's why it's a curve the only thing 1067 00:42:11,160 --> 00:42:15,640 limitate like the only technical reason 1068 00:42:12,960 --> 00:42:17,640 you care about this is eventually the 1069 00:42:15,640 --> 00:42:19,559 supply gets so low that divisibility 1070 00:42:17,640 --> 00:42:21,359 matters you know and for that we're 1071 00:42:19,559 --> 00:42:24,000 talking probably hundreds thousands of 1072 00:42:21,359 --> 00:42:25,839 years out in the future I'm not frankly 1073 00:42:24,000 --> 00:42:27,400 I'm not care I don't care about planning 1074 00:42:25,839 --> 00:42:30,000 that far 1075 00:42:27,400 --> 00:42:32,680 like I'll be very I I think we'll be 1076 00:42:30,000 --> 00:42:34,880 very lucky if computers exist 5,000 1077 00:42:32,680 --> 00:42:37,599 years into the future and you know we 1078 00:42:34,880 --> 00:42:39,880 can even like be be here with you know 1079 00:42:37,599 --> 00:42:41,599 electric lights like that implies you 1080 00:42:39,880 --> 00:42:43,359 know human civilization survive that 1081 00:42:41,599 --> 00:42:44,880 long I also think it'll be quite lucky 1082 00:42:43,359 --> 00:42:47,240 if bitcoin's the thing that exists that 1083 00:42:44,880 --> 00:42:49,839 long I mean I'm willing to plan on like 1084 00:42:47,240 --> 00:42:51,640 100e time Horizons but you know 5,000 1085 00:42:49,839 --> 00:42:55,040 years come 1086 00:42:51,640 --> 00:42:56,760 on my next question deals with planning 1087 00:42:55,040 --> 00:43:01,599 over roughly 1088 00:42:56,760 --> 00:43:03,720 a um 15year Horizon so since the um 1089 00:43:01,599 --> 00:43:06,680 Bitcoin paper was written and you can 1090 00:43:03,720 --> 00:43:09,520 technically verify this uh Nelson's law 1091 00:43:06,680 --> 00:43:12,079 which is the ability of a um home or 1092 00:43:09,520 --> 00:43:13,800 small business um bandwidth that you 1093 00:43:12,079 --> 00:43:17,400 would get a home or small business in 1094 00:43:13,800 --> 00:43:20,480 United States um has increased roughly 1095 00:43:17,400 --> 00:43:23,160 by a factor of 350 times it's actually 1096 00:43:20,480 --> 00:43:25,720 faster in the developing world so my 1097 00:43:23,160 --> 00:43:28,280 question to you is this at what point is 1098 00:43:25,720 --> 00:43:31,400 it reasonable for a coin like Bitcoin to 1099 00:43:28,280 --> 00:43:33,920 actually increase that block size in 1100 00:43:31,400 --> 00:43:36,079 order to allow some growth because 1101 00:43:33,920 --> 00:43:38,880 obviously as far as I can see the 1102 00:43:36,079 --> 00:43:41,720 ability to run a node today at 350 1103 00:43:38,880 --> 00:43:45,119 megabytes per block will be comparable 1104 00:43:41,720 --> 00:43:47,160 to one megabyte back in 2008 1105 00:43:45,119 --> 00:43:49,119 thanks so the argument there is 1106 00:43:47,160 --> 00:43:51,400 basically bandwidth increases mean that 1107 00:43:49,119 --> 00:43:53,480 you can do a block size increase and 1108 00:43:51,400 --> 00:43:55,359 right away I'll point out well we don't 1109 00:43:53,480 --> 00:43:57,960 care about raw bandwidth we care about 1110 00:43:55,359 --> 00:43:59,920 sensorship resistance badwi you know we 1111 00:43:57,960 --> 00:44:02,280 we very much want it to be possible turn 1112 00:43:59,920 --> 00:44:06,200 a Bitcoin not over tour and tour is not 1113 00:44:02,280 --> 00:44:08,040 gotten faster like Rob andwith has also 1114 00:44:06,200 --> 00:44:11,000 all this stuff all this stuff goes back 1115 00:44:08,040 --> 00:44:14,440 to cost of storage of computes and so on 1116 00:44:11,000 --> 00:44:16,599 and the fact is mors law is dying like 1117 00:44:14,440 --> 00:44:18,920 you just got to go look at the cost per 1118 00:44:16,599 --> 00:44:22,280 transistor and it is not decreasing like 1119 00:44:18,920 --> 00:44:24,480 it used to you know the cost for storage 1120 00:44:22,280 --> 00:44:26,680 is kind of looking kind of shoddy like 1121 00:44:24,480 --> 00:44:29,359 it's just not decreasing like it used to 1122 00:44:26,680 --> 00:44:34,079 there are limits to computation 1123 00:44:29,359 --> 00:44:37,400 and I will not make the bet that in 15 1124 00:44:34,079 --> 00:44:39,599 years we see dramatic decreases in the 1125 00:44:37,400 --> 00:44:43,200 cost of bandwidth cost of storage and 1126 00:44:39,599 --> 00:44:45,000 the cost of compute you know we've had 1127 00:44:43,200 --> 00:44:48,839 incredibly good run we've been very very 1128 00:44:45,000 --> 00:44:50,880 lucky but the how computers are built is 1129 00:44:48,839 --> 00:44:53,040 getting to things where feature sizes 1130 00:44:50,880 --> 00:44:54,760 are on the order of atoms you know 1131 00:44:53,040 --> 00:44:56,880 nobody knows how to make a transistor 1132 00:44:54,760 --> 00:44:58,280 smaller than one atom 1133 00:44:56,880 --> 00:45:00,520 I mean what would what would it even be 1134 00:44:58,280 --> 00:45:02,920 made out of and yet our transistors are 1135 00:45:00,520 --> 00:45:04,480 countable numbers of atoms already and 1136 00:45:02,920 --> 00:45:07,319 realistically we'll probably run into 1137 00:45:04,480 --> 00:45:09,599 problems before that I mean it's just 1138 00:45:07,319 --> 00:45:11,400 not a good bet and the fact is the 1139 00:45:09,599 --> 00:45:14,200 Bitcoin Community is quite happy to go 1140 00:45:11,400 --> 00:45:16,079 on with the way it is now will the 1141 00:45:14,200 --> 00:45:18,240 discussion look different in 100 years 1142 00:45:16,079 --> 00:45:20,960 maybe maybe it will in 10 years but 1143 00:45:18,240 --> 00:45:22,839 until it does no one's going to change I 1144 00:45:20,960 --> 00:45:25,040 am very willing to take the counterparty 1145 00:45:22,839 --> 00:45:26,720 to that bet and this is why I'm holding 1146 00:45:25,040 --> 00:45:29,240 Monero 1147 00:45:26,720 --> 00:45:31,160 well go for it all right Monero market 1148 00:45:29,240 --> 00:45:32,920 caps a lot less that's that's a good 1149 00:45:31,160 --> 00:45:35,280 good line to wrap it up on I I got to 1150 00:45:32,920 --> 00:45:38,000 take advantage of that one 1151 00:45:35,280 --> 00:45:42,200 Peter huge round of applause for Peter 1152 00:45:38,000 --> 00:45:42,200 Todd thank you man thank 1153 00:45:45,350 --> 00:45:57,880 [Music] 1154 00:45:54,880 --> 00:45:57,880 you 1155 00:46:01,620 --> 00:46:05,570 [Music]