Is BIP444 An Attack on Bitcoin? | Rob Hamilton

30:13Now, what can be done as a counter to this is what's called a URSF, user-rejected soft fork. You effectively, what you could do is just pick a block after the UASF activates, find a block, and say, we're checkpointing so that for this to be on my blockchain, at block height 101, you have to have this block hash. And this block hash violates the 444 rules. So you effectively then, if a URSF were to happen, that would permanently split the network. But to even put forward a URSF, you'd have to actually see a threat or a real credible demand for the UASF to begin with and a reason to want to reject it.

30:51And I haven't, to be transparent, I haven't seen the support yet from anyone. So as it stands right now, do you just think this will never happen? As of today, with the information I have, I don't see this happening. That's my personal opinion. I have tried gauging interest. And so the last time a UASF that wasn't, a contentious UASF was proposed was back in 2017. This was called SegWit2x. It was basically a compromise with UsegWit and doubling the block size, right? It was a couple of things. And with SegWit2x, what U had happened was there was a lot of speculation on if this was going to happen or not.

31:39And then Bitfinex listed a futures market for what the price of this UASF token would be worth. It ultimately fizzled out. There was like, what people would do, just to be clear, is if you had one Bitcoin on Bitfinex, you'd have one Bitcoin and you'd also get this future and you'd be able to sell that future and buy more Bitcoin. Right? And that was a strong signal because the miners are not going to want to mine on a blockchain where the token is worth less than the other chain. If you have a split and you have to figure out which is Bitcoin, the miners are more likely to build on the one that's going to make them more money.

32:16And if everyone's selling a UASF fork, they're not going to, even whatever reasons, they're not going to want to mine for$0.10 on the dollar. So I've been trying to suss out. It's also just an expression of economic demand. You may hear the term economic nodes. It doesn't matter that you have 10 ,000 nodes spun up on AWS. is how much throughput and how much validation is that node processing? So the nodes at Coinbase, way more important because those nodes are validating millions of Bitcoin in the UTXO set from everything they custody and have on their exchange. That is inherently more important than someone who just spun up a node on AWS and doesn't have any funds tied to it, right?

32:56And the expression of a futures market is the ability for economic actors to say, what do they value more? Miners can still choose to mine on whatever chain they want, but it gives them price information because the proposal of a user-activated software brings market uncertainty. You don't know which side's going to win. You don't know what's going to happen. Are people going to sell early because they're not sure? Like, it provides a lot of instability, just uncertainty of Bitcoin as a network architecture. And that's usually what Bitcoin's prided on, is like, TikTok, next block, every 10 minutes block's going to happen.

33:29And only in these kind of consensus fights do you have this uncertainty? And the futures market is a way to try and price that uncertainty. It also gives an option for, if you are a believer in this user-activated soft fork, the only way today that you can buy UASF Bitcoin is with the futures market, because it doesn't exist on chain yet. So if you buy Bitcoin today, you are buying economic support for both chains. Because remember, in that block height 100 activation, let's say in block 99, you have 10 Bitcoin, and there's a chain split, you get 10 Bitcoin on each side of the chain split. So if you buy Bitcoin, you're giving economic expression to the entire network.

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36:47And if you're looking for the ultimate vip experience with exclusive networking plus premium food and drink then grab the whale pass and the whale night party even include surfing so you know i'm going to be there tickets are on sale now use code wbd to get 10 off at checkout on all past types the website is mina.b.tc and use code wbd for 10 off yeah so i was quite new to bitcoin in 2017 like i got i got in in 2016 but i was pretty light touch and i was just following along sort of the tail end of the box size wars. And it wasn't really until Bitfinex launched that futures market and you could actually see where real demand was that I felt any kind of confidence in which way this was going to fall.

37:27And I find it funny that I've obviously seen you on Twitter trying to build these futures markets and trying to sort of goad people into betting you. People are calling it like fiat games, but I think people either forget or don't understand that this was a really important dynamic in 2017. I think it's a thing that people in Bitcoin do. where the term fiat, I get it sometimes with insurance. Insurance is fiat. It's like, well, insurance predates fiat by thousands of years. Sorry, like this predates fiat currency as a concept. You can't just call things you don't like or don't understand to be fiat.

37:59That's not how the etymology of words even mean anything, right? The futures market too, I think this is a really important point. I'll hammer it home again, is that the only way today you can economically express interest to want to signal to miners that this is the chain that has more value, before the fork happens, is a futures market. If you buy Bitcoin today, you are economically supporting both sides of the chain. If you want to actually short the non-UASF chain and economically signal and support the UASF chain, is a futures market. And miners, at the end of the day, are profit maximizing.

38:39That's just baked into being selfish and maximizing. that's just how Bitcoin works and if you're going to actually want to try and meaningfully sway your voice and consensus that's an important thing because otherwise what you're going to have happen is like when Bitcoin Cash forked off which is unrelated to the futures market but UASF was going to activate and so Bitcoin Cash forked off people just took their Bitcoin Cash chain sold it and bought more Bitcoin so like avoiding the futures market doesn't solve the problem if the chain split happens people will freely economically transact in their own self-interest, whether you like it or not.

39:18You want the futures market to exist because you want to avoid a messy breakup and a chain split and a divorce if it could be clearly economically signaled ahead of time. UASFs are a market uncertainty event. Futures markets bring price certainty to that, right? It's not gambling. It's interesting too, because as I've said here, I have very high conviction that it's not going to happen. So for me, I don't view it much as gambling. I view it as a certainty. And I've been very publicly transparent for... There are a lot... And this is the other thing too with a market signal. A lot of people will posture on Twitter, especially in the world and day now of like large language models and like the asymmetry of people can kind of like with a couple of lines of code make a really big social imprint.

40:04The LLM tokens can't actually participate in the futures market because you need Bitcoin, right? So actually having Bitcoin is how you actually express this. I built an on-chain futures market, which we don't have to get into, but it uses Taproot and it uses OpNotIf, and you have different time locks. So you can, without a custodian, trustlessly verify and express an on-chain futures market, and I totally open sourced it. So anyone can go run off and have fun building on it. And the reason that works is because if Bitcoin, as we know right now, is to continue to exist, then those coins get frozen.

40:40That's correct. So the way the on-chain contract works is that to simplify it, there's two main spending paths. You have a spending path which violates the rules of BIP444 and that expires, let's say, in May. And then you have a path that follows the rules of BIP444 that, and I'm sorry, I know it's not officially called that, but it's just very catchy memetically to call it that. So if the UASF, the side that the UASF is not enforced, and that expires in May, and then the side that enforces the UASF expires in June. Now, if you think the UASF client's going to work, you don't care that I can spend the money sooner, a month before you, because those will be consensus invalid, because I have an opt-not-if in there.

41:25So it's a way you can actually on-chain, trustlessly, finalize and settle, knowing that you can actually express your interest. And you also can imply odds, right? So my initial proposal was, I'll put up one Bitcoin, someone else puts up one Bitcoin, and then you have a 50-50 odds. I could put up two Bitcoin and you put up one Bitcoin, which then means you only need to be ripe 33 % of the time, right, mathematically for it to express. No one has taken me up on it yet. There's been a lot of, well, that's gambling. And to that I say, I'm very highly confident and I want to be able to sell the UASF coins today.

41:59I would love to lock in a sell today. I don't want to have to wait to get on an exchange and move UTXOs around then and deal with all the uncertainty of block production. I just want to sell them today. And so I'm trying to pull the demand forward, which I think a lot of the people who are on the side of the UASF aren't a fan of because this is an important piece. If you promote, you want to do a UASF and you put all this effort and put it on the developer mailing list and on a BIP and you're trying to get miners to activate and trying to do an update. If the effort fails, you haven't lost any Bitcoin.

42:34you get to kind of like asymmetrically attack the networks, like the resources, the time and resources of people to try and coordinate a hostile, contentious, user-activated soft fork. But then if it all fails and no one minds on it and like just everything just stops and you come back with your tail between your legs back onto the main chain, you haven't lost any Bitcoin. So it's something that anyone, so the futures market is actually putting an economic cost saying, oh, you really believe this is going to happen? Let's do it. So the proposer of the BIP, Dathan Ohm, has agreed in spirit, but not formal details on doing this with me.

43:07I haven't found anyone else though. And I think that's a very weak economic signal if no one else, because I'm willing to. And inbound, people have, I haven't asked for it. People have come to me saying, hey, I have 30 Bitcoin, 50 Bitcoin, 100 Bitcoin I'm willing to put into this bet. So I now have an order book of people that want to sell the UASF fork chain and I can't get any market liquidity on the other side of the bet, which actually shows you that like, at least with Bitcoin Cash, you were able to sell it for like 0.25, 0.2, 0.1. I don't even think you're gonna be able to sell it for 0.001.

43:41Like there's just no economic demand on the other side looking for this chain at all. So you're just basically trying to get people to put their money where their mouth is and bet on the future of Bitcoin. But like you've had, so Dathan said he'll do it in principle. Have you had anyone else or is it literally just him? Because I know you called out Mechanic and Luke as well, I think. Yeah. And then they blocked me on Twitter. okay interesting um so if this doesn't go through as a soft fork what do you think they're gonna do do you think they will hard fork or do you think they'll just come back tails between the legs and try something else it's an interesting question i could see both possibly happening um luke for a long time has championed the idea of a hard fork to change the proof of work algorithm to remove the centralization of mining he hasn't expressed fire the miners right this He's been a long-held, I would say, heterodox, sorry, unorthodox opinion that Luke's had compared to other developers, but that's something he's always thought would be kind of like the real nuclear button.

44:43Would require a hard fork, though. The problem, you would have to basically fire the miners because otherwise, if you're using the same chain, you're just another Bitcoin Cash or Bitcoin SV where you're using the same hashing algorithm and very trivially, people can just reorg and attack the network. And that's not a great place to be. So is it possible? Yeah. I don't know what they're going to do though. It's interesting because I've also heard rumors. I don't know if these are true before. I just want to caveat that though, that there's like the ocean legal team are going around to other miners trying to kind of legally warn them against supporting the current Bitcoin chain.

45:22Um, yeah, so those are rumors I have heard as well. I'm actually pulling it up here. Um, on the mailing list, I'm pulling it up right here. Um, so on the mailing list, if you give me a second, I think the, someone had made a, a comment to that effect that, uh, that someone was, you, like someone at Ocean or people associated with Ocean were actually talking to mining pools. I have never sat in on any of those conversations. So it's, I don't work at a mining pool, so it's just speculation on my part too. Um, but that is my understanding of it, that there's been a pressure. And to be clear, the pressure hasn't been for the UASF.

46:19The pressure up to this point, from my understanding, was just not running core version 30. So I don't know if that's changed anything with this proposal, but it's something I would say is relevant to keep in mind. Yeah, not a good look, I don't think. I mean, who knows if that's true, but if it is, certainly not a good look. Sorry, I have the exact quote now. Greg Maxwell on the mailing list said, another issue which you have not mentioned is that prior to you making this proposal, Dathan, I received minutes from a meeting which noted that Ocean Mining was the true author of this proposal and would be presenting it under a false identity in order to conceal their involvement.

47:00So that is what Greg said, and Dathan's response was, you've fallen victim to some false rumors. Though I'm in direct communication with some Ocean employees and that BIP was originally drafted by one of them. I am not affiliated with Ocean in any way. So take that for what it is. Okay. And I also know that Mechanic has come out and outright denied that and said that this isn't anything to do with Ocean. So, I mean, I don't want to get too far into the speculation because we just don't know. There's something that Mechanic said in one of his videos that I found strange and I want to see if I'm misunderstanding this.

47:43But he was talking about the transactions that can be included and have been included because of V30 now. And one of the examples he used was some AI-generated porn video of a Bitcoin dev being put on chain. And I think Marathon, with a pool that mined that block, well, they included that transaction. And he said that if this was still going through Slipstream, they would have refused that as a transaction. Again, who knows if that's actually true, but that's a claim that he made. But that seems very counter to everything he's trying to do with Datum and Ocean. The idea of being policing how miners organize their block templates?

48:28Yeah. Yeah, I agree. If the entire, from my understanding, with Ocean and decentralizing Bitcoin mining and the actual template generation, right? So for those that aren't familiar, the way Bitcoin mining pool works is you usually have one node at the mining pool that organizes the block, and then they send the block headers to all the miners. You don't need the full block on your ASIC. The ASIC actually doesn't even look at the full block. It just looks at the header of the block, which has all of the commitments to all of the information that's relevant for doing the actual mining hashing operation.

49:04you the mission with Datum and Ocean would be the problem is that you have one node that organizes like let me just take like Mara's like 5 % of the hash rate so 5 % of the hash rate has one node doing all of the work for it Mara's probably a little different because they have their own mining pool and they own all of their own infrastructure you and I cannot go sign up to use Mara's pool it's all their own internal stuff so maybe like a foundry that's at 25 % roughly of the network would be a better example where you have a bunch of people that are mining or Antpool, which is like 17%. So you have like Antpool, you have a bunch of people that go and organize transactions, but like all of the mining at Antpool, there's like one Antpool node that's actually organizing the block templates.

49:48And the idea would be if you're making block, if you're trying to decentralize it, you wouldn't want to be emphasizing and celebrating choke points of kind of the block space market. Kind of contradictory to the whole mission. I'd generally agree with that, but I'm quite sure if Mechanic was on the pod, he would have his own colored ad on that. I mean, if you want to come on the pod again, Mechanic, you can do. I want to know, can we get a little bit think boy for a minute? Why do you think this sort of culture war has both come to Bitcoin in such a meaningful way over the last couple of years and then seems to just be accelerating at this point?

50:26I think there is a mix of earnest concern that, and earnest is from their perspective. Like, I would say Luke earnestly has consistently held this perspective and position in Bitcoin for a long time. And you have a lot of people cargo culting, following him, not fully understanding second, third order ramifications. things um myself and many other people disagree with luke um the i think a lot of people were aimed to bitcoin after the block size wars so they've been reading about it almost like hearing like like oral history passed down by a fire of like this is what we did to take the bitcoin network we ran the nodes and we ran the client and the bitcoin bugle actually put out a funny article which was uh bitcoin plus plus gettysburg so gettysburg i know you're not from america but gettysburg is a like i know civil war yeah so doing like civil war reenactments of like battles and i think that's what's happening is we're kind of having like we're doing a live action role playing of like the block size war we're gonna like everyone's just trying to like rally together and reenact it like like a muscle memory thing but it's it's mostly people who were not here in 2017.

51:48So I think there's a bit of like a social status game. I've also seen I'm rebelling against the system. Bitcoiners are naturally disagreeable and rebellious to begin with. That is being focused internally around the governance of how Bitcoin works. And they were already discontent with how Bitcoin was working. And then version 30 gave them an opportunity to make this not about how Bitcoin technically works, but about a governance issue. So those meanies at core are doing things that are destroying Bitcoin as money and we need to take back the network. So I think it's a lot of that. And it's also just like social cloud bait engagement too.

52:25You post this stuff, you get a lot of eyeballs, a lot of attention. It's kind of just like, you know, the price is flat, it's trending down a little bit. This is just something to keep everyone occupied. Like genuinely, like I don't view it as a big credible threat. I haven't seen a single mining pool come forward with it. I haven't seen a single business come forward saying they're running the UASF client. Like, this is not like, yes, you write code and you release the code for a UASF, but you have to actually have the miners and the economic actors of the network agree with it. Otherwise, you and I, Danny, could write a UASF tomorrow.

52:59That doesn't mean it means anything, right? And I just haven't seen the commensurate demand to actually facilitate a successful UASF. Maybe it's worth getting into what is actually needed on their side to do this, because we've not really talked about that. Like, obviously, the Luke and mechanics of the world running this isn't enough. What do they actually need? They need hash rate and they need economic actors to enforce this. For example, if Coinbase's node, just to be blunt, if Coinbase's node isn't running this, they're going to accept whatever block has the most hash rate and work. Now, if Coinbase hypothetically came forward and said, we want to support this effort, all of a sudden now you have 2 million plus Bitcoin that are saying, we will not accept the other fork, which is a meaningful thing.

53:47You would want businesses to come forward and say that they want to support this effort for the economic demand that they're signaling for. You're going to want a reasonable set of nodes across the network that are also running this to make sure the transactions propagate. That is an important part of this. And you need hash rate. Because the miners are the ones that are actually spending the capital to advance the state of the Bitcoin blockchain. and if no one's going to build on your fork, you're going to fork and then you're going to stagnate because instead of having 100 % of the hash rate blocks every 10 minutes, you get 1%, which means that it'll take you six hours to find a block instead of 10 minutes.

54:25So you would want this to all happen without there being... This is actually a really important point too. You want this alignment and agreement prior to the activation, which is why you would want signaling. You can signal with your node. Miners can signal that they're going to support this. And the reason why you want that is, let's say this happens for 40, 50, 60 blocks. Is Coinbase going to roll back their chain six, seven hours and all those withdrawals? Because they're not going to be able to... Absolutely not. Right. Right. We've had chain splits before. Back in 2013, there was a bug where the Bitcoin network was down for like 30, 40 blocks.

55:04And we were able to reunify the chain. But like, Bitcoin's a lot bigger now. And so, like, I think it's very unlikely. Bitcoin wouldn't die, to be clear, if this happened, right? If you're holding Bitcoin, you're holding it for, like, 10 years, like, deep cold storage, this action doesn't impact you at all, right? Even if there is an old reorg, it doesn't bother you at all. Just the funds that are moving during this reorganization. So, they need hash rate, they need economic support, and they need that now. Because they're

55:39incredibly fast. That's very, very aggressive. Usually at least a year is given to try and organize these things, let alone they're not final with the code yet. The actual final activation client code isn't totally done. So like they're not... Miners and businesses and like the DevOps teams at these companies aren't going to be like, oh, here's the code. Let me just load it up into my cloud infrastructure real quick and get running, right? They're going to want to look at what code are you actually changing, which is a problem too, because this... UASF client is based on top of a Nots build, which means you can't cleanly patch on this feature into Bitcoin Core, which is where all of the real economic demand is running.

56:21So that's additional engineering friction. And one of the big criticisms of Nots being that the code isn't reviewed properly, so essentially you have to go through and review every single line of code. Yeah, exactly. Exactly. So they need support and they need it now. They need hash rate support, They need business support. They need a futures market. They need people who are actually willing to put Bitcoin up on the other side of the bet to signal that they want to buy the UASF coin and sell the non-UASF coin. And they need all three of those for this to be successful at this point. Because otherwise, if they miss any of those, the chain's either going to stagnate or the chain's going to go and people are just going to market dump it.

56:57And then the miners are going to switch back over to the other chain because it's not going to be worth it to them anymore to mine it. Because they only get three Bitcoin per block for mining it in the block subsidy. and if everyone's, like it activates and everyone on the UASF chain is moving coins around just to sell them, to crash the price, the miners aren't going to mine there anymore because the three Bitcoin is going to be worth 0.03 Bitcoin or whatever, right? So they need all of these things to actually, they need a futures market, they need mining support and they need economic no business support.

57:27Just on this sort of, this is an impossible question to answer, but as a kind of directional answer, how many of the people who have been sort of very vocally supportive of Knott's, do you think are also going to be behind this soft fork? Because I've definitely seen some that have been very big Knott's proponents say they're not in support of the soft fork. Yeah. I think that a lot of people who were supportive of Knott's because they disagreed with the software governance of Bitcoin Core are not in favor of a UASF. So it's already, you're starting from a, because no one who is, people who are not running Knott's are fine with things as is.

58:04because that's the client they're running. They're fine running the default client of Bitcoin Core. The people who would run NOTS, that would be your contingent that would be willing to fork over this, and that, I think, is going to fracture. There's no way to directly tell or know at this point. Once there is a final UASF client, you will be able to run that and signal to the network. I'm not just a NOTS node, I'm a UASF node. But again, I think a lot of people who for whatever reason have their own disagreements of how Bitcoin development is going are not going to be okay with the UASF. So that's to be seen on where that lands.

58:44I find it really interesting. The thing that is most interesting about this is kind of the psychology of the people that have been stirred up by all this drama. Do you think it comes down to people thinking they're more important to Bitcoin than they are? Like obviously running a node matters, but it matters to you far more than anyone else. Running a node only matters for you. It's a selfish endeavor to run a node. The node, you run a node, presumably because you are sending and receiving Bitcoin. That could be once a year. It could be once every five years. It could be once every five minutes.

59:22You're running a node because you're validating transactions. You are validating that the blocks that are being found and the transactions that are in those blocks are following the rules of consensus. everything after that, the influence in what your node has very quickly compresses to almost nothing. And if it wasn't that way, it would be almost like a proof of stake of proof of AWS, who can spin up the most nodes on the network to do voting. Bitcoin's not a democracy. Bitcoin is anarchy. It is rules, not rulers. And the rules are consensus. Which is why I think at least, to your point on people believing they're more important, I think they would just misunderstand the role their node has.

1:00:08It is a supreme guardian of the rules of the network. Beyond that, it can't influence much outside of it. By design, to be censorship-resistant money, you necessarily, because if I could run stuff on my node or a bunch of my buddy's nodes and actually put serious pressure on how the network gets organized, then I'd be able to censor transactions, right? So it's just kind of like the asymmetry of Bitcoin as a decentralized permissionless network that you have these properties. So I think maybe it's a little bit of education and enablement for people to understand what their node's actually for.

1:00:43I will say that the UASF effort is at least consistent. A UASF is how a node can boss the rest of the network at the consensus level. So in that sense, it's ideologically consistent and it is necessary but not sufficient to actually change Bitcoin. I want to bring up a tweet I saw um i've actually i pulled this up on the show i did with marty and hodl and eric casein um but this is from bit pain and i think this like this really summed up kind of one of my big concerns about this whole thing um okay this is the part that i think is the most relevant it's once you grant the state that you can take efforts to mitigate illegal illicit material they'll start demanding it including for money monetary transactions they don't like and if you've accepted that you have a community-wide moral imperative to censor you don't have a leg to stand on it's all over and like to me that's the big concern here is like if if this kind of like c-spam narrative c-sam narrative um gets any real traction then how long until some government agency start saying we have to um censor these transactions right i agree i agree with that base premise is that if you start providing this moral layer in which how bytes are encoded into Bitcoin blockchain of being acceptable or not acceptable, it's a very slippery slope that doesn't require much leaps in imagination to do that.

1:02:13Now, to steel man from my understanding, the other side of the argument is that this is not about you. We are not gating the moral use of Bitcoin as money for monetary transactions. We are morally gaining non-monetary use cases. And they would argue that they're drawing a line at monetary versus non-monetary, that we will moralize and push out all the non-monetary stuff, but everything that is monetary will be held. I would still put forward that you have now moved Chesterton's fence and made moral any part of the argument. To even introduce a moral caveat to the argument is now moving of the boundaries and how Bitcoin has worked up to this point.

1:02:55And I think you're regressing in ceding ground to people who would want to attack the network. Yeah, and I don't even think the money, sort of non-money transactions don't even matter in this. It's that you're proving that you can do something. Yeah, I think Mr. Hoddle had a really good tweet where he said the most bullish thing is a failed UASF attempt to show how censorship-resistant Bitcoin is. But even if some of the most predominant developers who also happen to be CEOs of binding pool protocols, right? Like, could be seen, you know, having this big effort to be able to push the scale and having them fail would be pretty bullish for the censorship-resistant kind of resiliency of Bitcoin as a protocol that can't be cajoled and pressured using these, like, legal framings and moral framings.

1:03:41It's interesting, because probably for over a year now, the Knot side of this argument have been claiming that Core and you and Shinobi and all these people have been like attacks on Bitcoin. Well, Shinobi is Bitcoin Core, but yes. He's Bitcoin Core and he's Adam Back. But they've been claiming that you're like an attack on Bitcoin. Do you think this poses the risk of actually being an attack on Bitcoin? I mean, a UASF is an attack on the network by design. And attack because it's challenging the existing consensus rules. Right? Like, now, to be charitable for the other side, they would frame this as, we are applying a hot fix to the network.

1:04:26This is like an emergency patch, which is why they say that usually you have a year plus for UASF, we're doing this in 90 days or less, because this is actually an emergency hot fix. This is not an upgrade, right? This is like an emergency security patch. you are attacking the network that's what you're doing you're saying i am you're threatening to orphan miners you're threatening to reorg the chain you are threatening to change the rules which everyone had previously agreed upon you could say i am doing it for good or i must do this now because the actual attacker is core in version 30 but from a consensus level it is an attack.

1:05:07Now, we've done it well before. Like, technically, we did it with Taproot and with Segwit, right? We made changes to the network. We said, hey, we're going to make some changes and do some new things. Those things were non-controversial. They also were non-controversial because everyone who disagreed forked off with Bitcoin Cash. So a chain split in like a UAS, like this is almost kind of like a divorce, like it starts socially. And people that were around in 2016 as the block size wars were heating up would have kind of described this like escalating kind of like social tension in general. And then ultimately it ends in a divorce and you have a chain split.

1:05:41And then the people who are on that don't fork off, they have better consensus on like activating Segwit, right? Bitcoin Cash forked off before Segwit activated because they didn't want to do that. So ultimately at a governance level, this is how disagreements within the anarchy system, which is Bitcoin, get resolved. People self-select, run different software of their own choosing, and opt out of rules or rule changes. So it is an attack. Like, doesn't mean it's necessarily a bad thing. I'm just saying that like, if you're changing the rules of Bitcoin, you are doing an attack on the network.

1:06:13And, you know, depending on what side you fall on, maybe it's justified and maybe it's not. We need the, are we the baddies meme here? If you had to kind of predict what happens next then, what do you think will happen? You don't think this soft walk will happen. So what do you think will happen to the vocal supporters of that? And I'm really talking about kind of the mechanics and the loops of the world. Do you think we'll see rage quits? Do you think they'll come back to Bitcoin and change the messaging? Or do you think even if this doesn't happen, they'll try something else? If I had to guess, I believe they are going to fork off.

1:06:54because I believe they put a lot of time and effort and reputation on this framing. It is... And do you need hard fork that? Maybe. Well, we'll start off with the UASF. They may, after the UASF, say, okay, we also need a hard fork because we need to change the mining algorithm or the difficulty adjustment or any other odd number of things. I know for sure they're going to do the UASF, though. I take them at their word and believe them that they're going to do this.

1:07:25Now, from there, I would welcome them back. I would love, maybe a controversial opinion, I'd love for the Bitcoin Cash people to come back over and just have one big happy family again. Right? Like, there's so much we agree upon. I would rather us be together. But at the end of the day, you can't force or control who people associate with, and that's their own decision. Now, for the larger future, Like, them as people, I don't pretend to understand how Ocean's business or governance or any of those things work. Like, I don't, like, they could attempt and sail and just everything keeps on going back to where it was before.

1:08:09It could happen. I don't know, right? That's much more of a question for them because they would be able to more to finally say how they're going to act. and if we got the uasf um do you think there'll be a ursf do you think there'll be a rejection of that and because with the reorgs being the i guess prime issue there well so here's the thing is that you would be able to pretty quickly understand is that even a threat because after like five blocks ten blocks you're not going to have to worry about anything because you'll see where the hash rate is. You'll see where the hash rate is and you can run a node on each chain so you can see I'm at block height 100 and you're at block height 105, right?

1:08:51And you can just sit on the node and see what block are they at. And I think as an actual heuristic, like with the actual like this is over, this is my personal theory. But after 100 blocks, this is an important thing about how Bitcoin works. When a miner finds a block, they have to wait 100 blocks before they can take that Coinbase output and spend it. And once you get to a point that miners are now able to withdraw funds that they've mined on this chain, they're not going to reorg themselves out of money. So after like 18 hours, if there's not a serious split in hash rate, I don't see it as likely to have a rollback.

1:09:32And then at that point, you don't need to do a URSF because it's fine. Exchanges could just pause withdrawals for X-Blocks. That's a great way an exchange can protect itself. They can say, hey, for the next X blocks, we're going to hold off on withdrawals because there's network uncertainty. So that's a way of doing it. If you're transacting in Bitcoin and they're moving forward with this, don't do a large Bitcoin transaction until the dust gets settled. Or just wait for more confirmations. Instead of six, which is an hour, maybe wait a day. And then I think pretty quickly the dust would settle after that.

1:10:08But I think it would be way premature to do a URSF when no one's in the futures market. No one believes in the futures market that this coin's going to be worth anything, the UASF coin. None of the miners have signal support for it. None of the business have signal support for it. I can't even find one Bitcoin of liquidity on the other side who wants to bet on the UASF coin. And I have at least 100 that wants to bet against it. I think it's way too premature to do a UASF or even think about it. You might have pissed someone off enough today to get that one Bitcoin of liquidity. I will happily take...

1:10:40You name your... You give me the coins. I will very happily, I can fill probably, just on my inbound interest, hundreds of Bitcoin. And if it actually gets serious, there could be more. It's going to be interesting. It's such a mess, man. I'm looking through the BIP right now. There's been a lot of discussion on the mailing list, as well as the repo of people kind of talking through about this. Version 30 being now the largest node implementation. I'm looking at Clark Moody's dashboard at 10.76%. It's hard to say

1:11:21where this support's really going to come from. I don't know. Like, I'm thinking to the game theory. I talked about chain splits, talked about futures contracts, talked about mining, game theory, and reorgs. I think it's been a good high-level summary of all of the latest pieces, but it's moving fast, too, which is also just a... As of this afternoon, Dave Denome was saying that he was going to maybe change the activation height, which it's really tough because once you start changing it, people take you less seriously because you'll just move the deadline again. And so I think it's not... Like, that's a signal of weakness.

1:11:58So they're trying to figure out what they're going to do next. I would guess they're going to move that backwards, not forwards. Yeah. All right. I've also, I'm not allowed to, there's a telegram room where they talk about the fork and the opportunities. I have been banned from talking about prediction markets in there and talking about futures markets because I've been trying to find someone. So if they are trying to stifle the economic demand to express pro BIP444, pro UASF Bitcoin, I think they understand that there is an economic demand there. So I think that kind of seals it. The money talks at the end of the day.

1:12:35You can do long debate threads, and you can do long kind of esoteric hypothetical what-ifs. A futures market is actually the market-finding mechanism for resolving this, and the fact that they're trying to choke the liquidity so no one can express pro-444 UASF sentiments, it's not looking good for them. I saw you did start a prediction market as well. Was that on predicts? Yes, I did. I did start a prediction market. I just tried to look at it, but it says the website's like temporarily down. They are. So as a funny note, I had never used the website. Everyone was refusing to reply to me. So I went and made my own prediction market on Predix, P-R-E-D-Y-X.

1:13:15I have no affiliation with them. It is entirely custodial, just to be clear. Entirely custodial. I went and set up a prediction market on the likelihood of this UASF activating and being the most chain, like the most built chain. and the percent is currently at 2%. Oh, damn. When I checked a few days ago, was it like seven or something? Well, then I go in there, and I put hundreds of dollars in and bid it down. So I currently have put up 2.5 million sats to win 2.8 million sats. So those are the odds, like implying the size of the odds here. And so I go in there every day, and I just bid it back down because I'm pretty convinced it's no.

1:13:56So if you annualize it, I'm getting like a 30 % yield on that Bitcoin as long as the custodian doesn't rug me. So I feel pretty confident. That's where the yield comes from. And I haven't found... Well, it's just making a bet. I'm just... I have high confidence in it. So Predixite was fun, though. I'd never used that before. And so then I made a prediction market on will Luke or Mechanic acknowledge a prediction or futures market to be legitimate that is in motion because they refuse to legitimize. They just call it a big bet and I'm a liar. They won't elaborate further. So I made a prediction market on will they legitimize a prediction market?

1:14:28Yeah. and then I made a prediction market on like will Luke and Mechanic acknowledge a prediction market as legitimate because they just say but what you're doing is right that's at 14 % so there's 14 % on that I did a prediction market on when they would actually release the code which already resolved they released it on November 7th so that already resolved I made a prediction market will Dathan Ohm still do the on-chain futures contract bet with me because I'm not sure if he's going to that's currently priced at 19 % well that's free money for him well that's what I said it's free money for you buddy I've been having fun with this idea of trying to constrain prediction markets as like gambling or it's just information finds a signal in a way and it's just one of these things that I've been having fun since no one will take me on the trustless non-custodial auditable one to make my own market elsewhere with different risk trade-offs but I just want to price some risk it's all insurance baby I'm just pricing risk that's a perfect segue to talk about Anchor Watch Rob you're such a pro um how are things going Anchor Watch doing great yeah everything going great at anchor watch um a couple people have asked all of these changes and do not impact us at all we use pay-to-witness script hash and there's no restriction on what we're doing as it relates to this uasf so our customers are not impacted won't be an issue at all um but it's been going well heading into the end of the year we're looking to be launching some new vault variants and product offerings as well as uninsured custody um around year's end so keep an eye out for that.

1:15:54Can you talk about what they look like yet or is that still under apps? I'm happy to. There'll be versions where customers only have to hold one key where additionally with uninsured you'll be able to set it up in a way where we co-sign with you but then it goes to your self-custody and then a year later if you lost your key we can help recover it later. Right? So there's never the only way that we could act to move funds without your permission is because the funds haven't like you lost your key and you haven't been able to move funds for a year. Also setting up multi-institutional custody, just kind of finding new ways to be able to meet customers where they're at with their own preferred custody key model and being able to, you know, meet people where they want, you know, right?

1:16:41At the end of the day, we want to be able to help people secure their Bitcoin however they see fit and being kind of a tool to help empower them to do that. You know this BIP, different BIP now, that Jesse Posner and someone else from BitKey has put forward, which is basically a way of, as far as I understand it, you can explain how this actually works, allowing collaborative custody, but where you as the person they're collaborating with can't actually see the Bitcoin transactions they're doing if it's not including your key. Is that something you'll be able to implement? And maybe if I've explained that badly, maybe you should reframe it.

1:17:13No, no, no. So at the highest level, I'm just explaining how most, if not all collaborative custodians work today. is maybe I give you a key, you set up a wallet. This would be like an Unchained or a Casa or a long list of many others. Or a BitKey. Or a BitKey. Of course, yeah. So the BitKey team, they worked on this. The BitKey team was a lot working on the BitKey team. The way it works today is the service provider to be able to help you transact and maybe load up the app and see the balance, they have to see all of the transaction data. So you give them what's called an output descriptor. This output descriptor is like the full body of all of the metadata for the wallet.

1:17:55The trade-off here, though, is that the service provider can see all of your transactions and knows all of your deposit addresses and knows every time you use a transaction. This new BIP would allow us to basically do a key exchange. And by default, I can never see your on-chain activity. But if you need me to sign to help you out, you can then reveal information to me that allows me to use my key to sign your transaction. So it allows for better default privacy. I mean, that seems like a massive upgrade because the big trade-off with any kind of collaborative custody is the privacy one. Like if this is removing that, that's probably pretty huge for you.

1:18:29No, I think it's a massive upgrade in thinking about the user experience and kind of the privacy trade-offs when it comes to self-custody, but having someone able to help you in the event you need help. And so your default happy path could be just using your own keys. And the service provider would never be able to understand or define anything about how you're using Bitcoin. Not because they're hiding it. It's because they actually don't know. So I think that's a very good just like first principle basis of kind of like improving the custody model for sure. I think it'll take some time for it to get into the ecosystem.

1:19:01Ideally, we'd want to have hardware wallets supporting this so you can interoperate with it. You'd want to be able to even use it with Bitcoin Core. Like you want to get a reasonable proliferation of like the wallet and software to adopt this. But I think in a time like realistically, two years from now, maybe we'll start seeing it more widely adopted. But definitely keeping an eye on that. Very cool. I'm bullish on that bit, less so on BIP444. We're going to get a lot of hate for this, Rob, but I think it's an important conversation. I'm glad we managed to go and get into it. Anywhere you want to send anyone apart from Anchor Watch before we close out?

1:19:35Yeah, I guess I'm Rob1ham, R-O-B, the number one H-A-M on Twitter. I'm Rob at Primal.net on Noster. If you are a big proponent of this UASF, in my pinned tweet, I talk about the importance of futures markets. I've been tweeting out a lot about the actual on-chain contract. You can start looking at the code and understanding, asking questions, getting audited. I would love to be able to facilitate more market making. And what's great about it, too, is it's peer-to-peer. I'm not just two individuals putting money together into a Bitcoin transaction. And that code is fully open. anyone can go run off and do this you don't need to involve me at all um and i would encourage you if you're interested and you want to kind of uh if you have high conviction in this uasf working um hit me up on twitter and um we can talk about going through the code and getting something set up love it man it's um it's we will definitely get some hate from this it's interesting whenever you talk about either core 30 core in general um bitcoin knots like the amount of comments i get is unusual.

1:20:42I think there's probably a lot of bots. My favorite, and since I am an avid follower of the 40 hours per week podcast program that the Bitcoin Bugle does, I'll get YouTube subscription notifications when you come out with a new show. And it's wild that within three minutes of a show being uploaded, you'll get multiple comments. Like people who have obviously not watched it. It's always the first comments that I get come through on a video are always about knots, pretty much. Right, which makes you question how much of this is organic versus real user interest, which is why the futures market is beautiful, because a bot can't put up Bitcoin in a trustless, non-custodial smart contract.

1:21:23But they can run LLMs all day and just kind of astroturf the ecosystem. This will be a fun test when you upload this with my name as a key line hit and your podcast. The amount of random unrelated comments that are going to show up within the first hour of people who definitely didn't watch it and they don't comment on anything else and they have no actual user footprint or anything um it'll be very interesting to see yeah the comments are like definitely come in before they could have watched any of the video but but we'll see it's all good it's all fun and games um everyone missed the part at the very you gotta you gotta just giggle you gotta giggle giggling is free giggling is legal and it's good for the soul you gotta be doing some giggling um i'll let you get back to everyone will have missed this at the very start of the conversation, but you're not LARPing on Twitter today.

1:22:09You're actually LARPing. Yeah. So Lisa Nifty Nay is here at Bitcoin Park for there's a Bitcoin Veterans Summit, and she was doing a LARP, the live action role play of how the Bitcoin network works. If you ever get an opportunity to go check one out, I would highly recommend it. It's a lot of fun. But Danny made me abandon a room full of veterans on Veterans Day to go do this podcast. and so they were none too happy about it. And right after I get off this call, I'm going to go run downstairs and host BitDevs. So I'll get a little bit of redemption there. There you go. I'm sorry to all the veterans out there, but this conversation was great, Rob.

1:22:45Thank you, man. And I will, I'm sure we'll speak soon. We were going to do a show totally different on the Hero's Journey of Bitcoin, but we'll have to park that one and we can do that next time. Absolutely. Sounds like a plan. Thanks, Danny, for having me. Thanks, mate. Bye.

1:23:05Thank you.