This is the lightning junkies podcast with your host Chaz cryptic on this episode of the podcast. We have Daniel Goldman and we're contrasting Bitcoin and ethereum layer 2 Solutions. What did you just say? Aetherium? Did you just say etherium on my Bitcoin lightning podcast? How dare you sir this?Is totally unacceptable. I would like to speak to your manager. All that being said, I don't think it's actually a bad thing that we have Daniel on the podcast today my main goal with getting this information on here is not to cheerlead for ethereum or to otherwise promote it or see it as a good thing. The goal of this episode is to focus on the technology as much as possible and try to see what ways ethereum 's different developments can actually assist Bitcoin and not have us actually compromise on our ethos in the same time later on in the episode. We actually get into a lot of those more controversial topics, you know, we get into Bitcoin scaling we get into the block size. We talk about social layers. We talk about the pre mine on ethereum. We talked about quite a bit more as well. So I hope you stay tuned for the entire episode and don't let the click Beatty. Type of bullshit that I no doubt put for this title dissuade you or otherwise discourage you from from listening all the way through. I apologize that I didn't have a show last week and that I was a day late uploading this one. I'll definitely try to do better in the future. I have just fallen behind with the holidays and you know to be quite Frank just the depression has not been super great lately, but I'm powering through the best I can hear so I'm trying something new this month. I still don't have any official sponsors. But I'm going to go ahead and try something here with spark swap spark swap is a service that allows you to use your fiat currency to purchase Bitcoin on the lightning Network directly. I've been using it since since launch and it's the one of two ways that I happen to buy Bitcoin presently. I either using spark swap or I use the cash app personally. My setup is a zap wallet on my desktop paired with spark swap. They Clay opened up a Channel with me when I started using their service. I bought my SATs and within seconds those sites were spendable with either within that sap wallet or within a different wallet that I happened to control. I think spark swap pairs really well with something like fold moon or bit refill because if you're able to save money on things like Amazon using the lightning Network, why not use your Fiat to buy Bitcoin and then immediately spend it. On things you might already be spending your money on just giving you a bigger ability to stack SATs or otherwise save money. If you want to give spark swap a try you can sign up using my link. It's tinyurl.com /ln J spark. Again that URL is tinyurl.com a /l NJ spark in order to stack a hundred thousand SATs for clicking on this. Link you just need to buy $15 worth of bitcoin and you're good to go. Just a quick disclaimer. I also get paid out a hundred thousand SATs as well. But if you want to support the podcast to this is an easy way to do that and be able to sign up for a good service that I genuinely use unlike if anyone out there ever has any questions on bitcoin or the lightning Network or just wants to start using it for the first time don't ever hesitate to reach out to me. I would be happy to give you resources. Sources to learn more or directly give you recommendations based upon my experience with Bitcoin in the lightning Network. I think it's been long enough. Let's go ahead and jump into this episode so we can get on with you yelling at me on Twitter about it. Okay. I would like to go ahead and welcome Daniel to the lightning junkies podcast. How are you doing today? Daniel? I'm doing well. Thanks for having absolutely, you know, I had you join me on the podcast here. Very last minute have been even, you know, taking any notes or written up anything. We're just going to do this by the seat of our pants. And I think we're going to have a decent amount of information come out of this the main reason why We're going to have you on the show here I think is to analyze the various different Layer Two Solutions out there. Maybe not exhaustively but some of the bigger ones and try to compare and contrast to the lightning network with a Bitcoin here before we do all that. I wanted to just do the the basic, you know podcast he type thing and just get your general background made before even getting into Bitcoin or crypto generally. Actually, I did math in philosophy it just as an undergrad. I think I'm some level I Was preparing for for the Advent of cryptocurrency. I guess. Yes, I was a developer and I think it was in 2011. Although I'm not totally sure a good friend of mine. We were having lunch and he mentioned this thing called Bitcoin and what's I think probably unusual is that for me? I was like instantly sold in that conversation. Like if we had audio of that conversation, it would probably be kind of embarrassing because I was just like immediately just swallowing everything especially like sort of the political Applications I thought this was like potential for you know, an exciting opportunity to explore some of these kind of crazier out there voluntarist ideas. So even before I really understood how it worked. I was sort of just like mentally make me feel like in the gaps and you know, we just like talked about it all day into the night and I think he's in that night. I was like already, you know, I think we had like a dinner with some family friends. I was already like almost evangelizing it honestly over the years. I sort of followed what was going on in the space from a distance. I did buy some fairly early. Obviously, it's not as much as I wish and not as early as I wish. If as as usual, but I did get some and yeah, I sort of followed I was interested but I didn't cross that line into being fully obsessed then in part because this is something I think people kind of forget or don't talk about but sort of at the time before the big, you know, the more recent of my recent boom and interest in these past few years. It was really a lot harder to get good information, especially if you're interested on a technical level 3 2017, I would say you there just wasn't as much available in terms of resources. There's Isn't as much written about it and you know, the sort of media coverage was always very shallow very big. So if you wanted to get a more of a technical understanding you kind of have to dig into like Bitcoin talk threads and things like that, which if you weren't, you know, it was a bit of a it could be a bit intimidating and I just didn't at the time krait cross that line of obsession. Unfortunately if I could go back obviously, I would push myself. I mean yes, I kind of followed it from a distance and you know generally would tell people about it and sort of evangelized, you know, friends and family and you know, whoever was Unfortunate enough to be around me all the time. Eventually. I actually, you know to be honest once knocks happened. I sort of embarrassed to say this now but at the time I thought like okay that's going to be just a drastic setback for many years and I thought it would take a very long time to recover in terms of just having a decent enough public perception to make any grounds, which was semi true, but I did not think things would fire up again that quickly so that surprised me so I sort of probably lost track of things around then it was really what got me back into it and eventually got me sort of fully into it. In a way that I can get into is around probably late 2016 the same Trend actually who tipped me off to bitcoin was like, you know, there's this thing called aetherium now and you should look into it you sort of less less technically minded than I am. So you kind of wanted me to look into it I started digging in and I was just like what the hell is this? And what are they talking about? And I couldn't quite understand what they've meant when they're talking about this a currency but this platform on top of it and you could build things so digging into that. I became very very intrigued and that kind of inspired me to dig back into Bitcoin and kind of learning about both in parallel decline in ethereum and understanding the technical trade-offs that are there and the trade-offs that were made with Bitcoin somehow. That's what sort of sent me down the rabbit hole initially. I particularly got very interested in some of the scaling debates going on and kind of be oh, I don't know the sort of broader philosophical implications of the scaling debates, I guess and yeah at a certain point on hold down that line, I just kind of became obsessed. And somewhere in there actually with this the same friend and and a third friend. We started a small business basically doing a client-based work technical Consulting technical due diligence in the kind of cryptosystems like that. We have a lot of fun and you know manage to pay the bills so I can't complain but I think being more directly in the world full-time like that. I what you inevitably see and what we certainly saw is that, you know to be very blunt the majority of the projects out there in the things going on or just kind of Bullshit and you know that's sort of pretty quickly just changed the way I Saw the space in general and eventually it just it just started wearing us down because it was like, especially when you do client base work, you have to like cast a very wide net and then most of our conversations were just like, okay. No, we definitely can't work with these people or if we are going to move forward. It's just going to be us convincing them not to do what they want to do. No, you don't need a blockchain. And do you know what that means and know you should do an icy. Oh and you know what that means at this point, you know, I sort of work more independently. Are doing software development Consulting a lot of the same things, but basically our only get directly involved in things that are more directly aligned with my interests. I would say and my main interest at this point are with layer to scalability as you said on the on the Bitcoin and ethereum side with you know, all the cards on the table. I am one of the people one of the increasingly few people. It seems that it was sort of interested in kind of optimistic about both Bitcoin and ethereum and yeah soppida happy to get into that as well. But I guess that's a general overview. I guess. The only other thing is, you know, I also write With our company, we had a company blog and I've published just independently at the Block as well and I read on generally on like technical matters and touch on some of the broader issues. Yeah. Okay, I'll lots of unpack there. So we'll definitely jump into quite a few of those topics here. That was a lot yesterday. Yeah, if you interrupt me at any point, I can ramble sometime. Oh sure. You know what honestly I feel like maybe that's one of my less good skills. There is just being able to jump in. I tend to let people just ramble as much as they want to okay. I'll keep that in mind. Okay. So the main thing that I wanted to jump back into here first was so it sounds like your primary interest in Bitcoin. Etherium Etc was the technology portion. Is that right? Yeah, I would say so would you say that the economic, you know piece attached to bitcoin or just less interesting or just less kind of geared towards your you know, previous career stuff like that. I wouldn't say that I would say, you know, I would say, you know, the things that I feel I have a good understanding of and that I And a focus on or the technological developments, but I also think that one of the things you realize and I think more and more people have realized this in this space is that well, first of all, when you're talking about quote unquote this technology, if you remove the economic Factor all together, like what some of these I don't know proprietary blockchain projects that essentially stops making any sense. So I you know, I guess what I'm getting at is I think the economic factors are sort of inseparable from the technical ones and I would say even more broadly the sort of bags. Don't even know what word to use but the philosophical or moral and even political considerations are sort of inseparable from the technical ones as well. Just part of what makes this stuff. So interesting to me, I think so. No, I mean I'm definitely interested in analyzing these things as economic systems to but I would say like I definitely have more of a technical background an economic one to be honest. A lot of what I know about finance and even economics has climbed from being in the space, which would probably horrified someone who's in the traditional Science World, I guess. So, yeah, that's more that's the technical stuff is more what I felt. Photographer but definitely interested. Okay, that definitely makes a lot of sense there. You know, what was the favorite part of Bitcoin or the favorite part of the theorem that really kind of pulled you in at the end of the day maybe finally in 2016 where you finally said, you know what I need to actually jump into this thing. Yeah. It was probably the probably some of the scaling debates and particularly these questions around layer to the scalability which one which I'm sure will get into, you know, I mean on a fundamental I'll level obviously I sort of want to see I want to see Ben Cohen succeed and I want to see aetherium succeeded because I sort of think having this this kind of parallel Financial Universe of where people can sort of transact anonymously or pseudo anonymously and we can have these disintermediated layers. It could be a very positive thing and all sorts of ways and it seemed like the technical challenges to get there. We're going to be these very big obstacles. And yeah, I mean there was this sort of again this kind of political level interest but I also just found the technical questions to be interesting on a more academic level particularly around scalability and I think weighing into those debates. It was clear that there's a lot of fascinating work being done, but it was also clear that a lot of people sort of Dipping their toes in it didn't understand some important things and things were being may be misrepresented or overemphasize or under emphasize and things like that. And I don't know it's just sort of how my brain works that when I see people like me, Thinking I have this impulse to like way and then try to clear things up, I guess so, I think a lot of this stuff I've written to sort of has that motivation of just trying to help people better understand it. Yeah slightly vague answer but hopefully that gives you some sense. Yeah, it definitely does. So the next piece that I wouldn't you know, I want to touch on here is okay. So we kind of mentioned Bitcoin be kind of mention aetherium. When was the first time you actually used a operational layer to system and for this particular example sample, I would prefer something that does not you know, that might technically count like a coin basis like off chain, maybe not a layer 2, but I prefer like an actual like protocol. So in this example, you know, first time you use lightning the first time you used any other layer 2 protocol not necessarily A just off chain database sort of thing. Sure and yeah, I'm sure I'm happy to get into that distinction between off chain earlier to I'm not sure he'll dig deeper into that. I think so. Surely be I think it's fair to say that the first ever mobile lightning payment was I was present for and it was like almost not on my phone. So this was at a lightning conference in Berlin and was with Renee picquart was writing that mastering or you know gets involved in this mastering lightning but coming up we got connected cuz I'd written something about lightening and he had an odd set up and at this bar in Berlin, I'm blanking out on the name now, but it's a famous one. They accepted crypto very early. I decided the coin very early room 77. Yes. Thank you. So yeah there he had he had a node setup kind of custodial lightning node. Although he was running it himself so that I guess the question is where was he running a bit of may have been Honor on a third-party service and yeah, we tried to do it on my phone. It didn't work. But only because my phone was shitty at the time. I'm kind of Crash not it was not it was not the fault of him or the tacit. Yeah. I saw that happen in action, which was pretty cool. I just I say that partially to establish some same Bitcoin credit creds because I'm sure some people have just stopped listening when they heard it there. Erotica, I've also used I think that that may have been the first time somewhere in there. I use is that the desktop wallet and purchased a few things with lightning and it is very cool. When you see it in action that sort of gut feeling you get when you see how fast it is is is pretty awesome. So yeah, I was both that sort of it was exciting having sort of been reading about this stuff and thinking about it academically to finally use it but also when you use it, you you realize there's a lot of a lot of work to be done on the ux side particularly in just setting it up. It's definitely even as a you know, as a developer who sort of had some experience with devops and things like that, you know, it's hard to imagine somebody without that background going through this although it is getting better. But I yeah, I've definitely used it. I don't want to note at the moment a landing know but for the I did so I do know what that's like a travesty. Unfortunately. You will be ejected off the podcast starting now, I figured yeah. I was waiting just to be clear this was The at the lightning hackathon last year. This was in 2018. If I'm not if I have that right? Yes 28. So yeah, so two years ago, technically, I forgot it's a 2020 - that's right. Did your adventures into off chain / Layer Two Solutions stop there? No, in terms of stuff. I've used I haven't really used any of the side chain stuff, but I have sort of messed around with things. On the ethereum side, so some of the some of the channel and Channel network setup. So this was I guess they're originally calling themselves counterfactual. I think now they're just calling himself State channels. Generally. They have had some tech that I've sort of done some development with and just kind of played around with it also the connects wallet and there that's one of the Network's that's live. I've used that which is pretty cool. I am definitely interested in plasma and I've written about it and I've messed around with things but that was sort of strictly test net stuff. That's still farther from - production-ready most certain land. Other than that that's the only I would say like layer to earlier to related Bitcoin thing I've done is the is the Lightning Jack in São Paulo and things like that. Yeah a few other things on the ethereum side that I've that I've directly Miss. Okay. Let's go ahead and jump in into those a little bit. They're the side chain project that has the X Dy token that allows you to send your, you know die basically off chained people and its really fast Etc. Is that right? Oh, yeah, so that's that's actually a different one that I've also used them. So that is yeah. That's more of a federation. Added sidechain thing got it, which is called X Dy and that's yes, that's more of a trusted Federation. I had to use that as well. Now that you mention it. No, but the one I was referring to was counterfactual / State channels. That's a that's a Channel network project. So that's more of a trust with layer to a system as again, we can talk more about that distinction. Okay, so maybe since I don't know what the hell you're talking about here, you'll go ahead and let me know so sure. Yeah, so I guess the you mentioned this kind of off Chan layer to distinction and it sounds like by the way, you framed it. I kind of use those terms the same way. Think about it the same way it's always kind of tricky because you know, there's no single there's no single Authority out there to Define these things for us. Right? So people use the terms differently. So for some people layer to they would use that to be very broad even to include things as you said like having the money on coinbase or something for other people. It's a little more narrow but I use it for more than Heroes. So I guess yeah, we can start with let's just say as you said off chain is generally anything that doesn't involve using the base layer directly. So probably we don't have to go into the scalability issues. I think probably your listeners are pretty familiar with that. But you know in short using the base chain means everything has to be validated by everybody running a node and everybody in the future who thinks up and it has two validated as well. And you know, in other words every update has to be Global and that's just a very inefficient way a very inefficient way to do things as far as like software engineering principles are concerned. Yeah. So the idea is to make this more efficient. Okay. Let's just offload some of this work other places. I'm very Broad and that first distinction between sort of layer 2 and other off chain protocols. We can make by drawing this line between those which require additional trust assumptions in those that don't so requiring additional trust assumptions. The simplest version is just resting a third party like using coinbase. Okay, that's off Chan other words sorts of trust assumptions in the you might use our as we mentioned things like side chains x i the liquid side chain and so on where we have a federation I should say a Federated sidechain in particular where the just assumption there is we're relying on you know, and I'm an honest majority or not a super majority of the Federation. I think things like State Chains would be in this category to which I think you did a whole show on stage. And so if people want details I can listen to that but my understanding if I remember correctly is that in those cases you have a side chain like mechanism whether this operator and there is a scenario where the you know, you end up having this kind of multisig setup where you actually give your private keys or give one side of the private key. So the operator and there is the scenario where Operator can collude with other members in theory and steal your funds essentially. I think it's sort of difficult and involves some coordination. And I also think there's this nice property where if they you have like fraud evidence. So if they do it, it'll be very obvious to somebody else to a human being looking but you can't actually do anything within the protocol. So the fact that there's some additional trust assumption there. I would say puts it kind of on that side. And then yeah, I'm on the other side the things that I would call layer to our systems that any system that we can transact somehow. It's more efficient. An using layer 1 to be very broad. Some of the data is kept off trains. Some of the work is kept off trans something like that, but we are not taking on any additional trust assumptions Beyond just the base layer itself. Obviously the base layer has to keep working the records at the base layer fails layer 2 is going to be in trouble too. So we take on those and then there might be some more work you have to do there might be some inconvenient things. But every all of that is dependent on software that you yourself control and you yourself were up there might be additional security assumptions. Let's say but you're not trusting any Channel third parties so that's sort of the space that I'm interested in and where I think that's amazing lightning certainly Falls in that category. And then there's this other kind of families of constructions that you've alluded to that are going on on the etherium side that I think are are interesting as well. And there's sort of interesting discussions about to what extent those are possible there might be possible in the future on bitcoin. Yeah, so that's I guess that's the first key distinction. We should make taking on trust assumption. I think Matt Correll is the one who give that definition of you know relies on security of the base layer and software that you yourself run and I kind of like that. I think another way to sort of think about it that we can kind of circle back to is to get more specific about trust assumptions. You're not relying on any assumptions about I guess about data availability. So that's kind of what it all comes down to and it's this took me a while to grasp But ultimately I trust assumption means that you're relying that someone else won't withhold data from you. So yeah, I guess like within that layer to category, I guess the first split we can make is between channels and these other things we can call them like Non-custodial side chains or trustless side chains and that's where some of the plasma stuff comes in with channels. So lightning is in this category. I think a nice way to formally make draw this line formerly to find those is the parties that are participating in a channel which is often just often just two parties, although in principle. It could be could be more than two things like Channel factories and so on every party involved sort of has to give full consent for every for every state update you have to get unanimous consent. So when we update a lightning Channel, you're making this payment the parties kind. Interactive both effectively sign off on the latest payment and one way shape or form and that's when it's considered battle, right? So, yeah, so that that gives us lightning there's different Channel constructions. The one that's using lightning now is like hundreds of channels or at least something kind of like them something like what came out of the lightning white paper, even though it may have been modified a bit where effectively what you do is you say, okay, we're going to keep making these updates we agree on the latest State and then, you know, presumably eventually we're going to sort of cash that out at the end sort of like updating a bar tab or something. The challenge is guaranteeing that only that latest 8 gets cached out and with Boone dried two channels. What you effectively do is you say anytime I make a payment to you. I also give you the ability to invalidate the last one. So if I settle with an old Channel I try to claim, you know claim funds that sort of aren't the last line on the balance sheet. You have this you have this preimage of this hash. This key that lets you just clam all of those funds. So you kind of punish me by just taking all the funds in the channel and that's that's that's one approach. There are other approaches that sort of get you the same results, but are ideally better in some ways. So on bitcoin there's there's this this proposal called L2, which I'm sure you've talked about it at some point the idea with L2 instead of sort of having these these relocations of Old State you can sort it as use the latest state. So if I try to cash out an Old State you can just update it to the latest one so in so this is arguably nicer in a few ways because now I don't need to sort of maintain all this data for all the old I'll say it's only need the latest one. So that's less of a burden and it also means you don't have punishments anymore, which is arguably better this way if there's a bug in the software if there's an honest mistake, you won't get punished for it. It'll just sort of fast forward to the late state. So this is this is sort of already one of the one of the little one of the splits and one of the things that where the tech diverges from the Bitcoin and ethereum side is with L2. So it's currently not possible requires some some new outputs and at least the initial Proposal with L2 required Sig hash no input which Which from what I've seen it's actually a little trickier than maybe it first appeared is various problems with it and it's kind of a kind of a whole debate going on. And from what I've heard in my tit. Just there's a chance that it doesn't quite happen at least with some cash. No input and there may be other ways to get into things. But the point is it requires some protocol change but this style of channel will you just update to the latest state that is possible on a theory on my reading and in fact the project I mentioned State channels counterfactual is is effectively doing that where you have these channels you can just agree on the latest. State and you just have sort of a nonce associated with it this number that just gives incrementing. So if we have agreed on state 30 state bird is the only valid one and the details we can have anything the involved in the details those damn half and just be a payment. It can be some some weird smart contract sort of thing. So that's one example where you know the sort of flexibility of the base layer actually does directly give you some more power to do these Channel constructions, which is interesting. Of course, the trade-off is flexibility on the base layer has a lot of other downsides on layer 1 and that's that's a whole other debate to be had at the base. Like idea of channels and even within channels we can talk about various other mechanisms that exist in this area where you can do do a certain things ways of handling liquidity differently ways of routing sort of differently that the that the scripting lets you do. Does that make sense so far. Anyway, I don't want to keep her. Yeah, that was those quite a bit there. So we're gonna have to go back through, you know, some of what you said here. Yeah. The first thing that's in my head here is you know, I've definitely heard of you know, Plasma on ethereum and that whole idea, you know vitality. I think has been you know, pumping that idea for years. If I'm remembering correctly. I've always just generally never cared enough to actually go research it intensely. You know, I know it's a thing. I know it kind of exists. I know it's not in production and the same way that lightning might be it's still kind of early Etc. Do you want to kind of let the listeners know a cow plasma works the kind of give them a general idea sure the first of all I would say, you know not caring enough to really dig into it is Perfectly reasonable there's a lot going on in the crypto space and that you know, everyone can't follow everything and especially if you're in the Bitcoin World totally reasonable to focus on bitcoin things. One thing that I'd generally push for is, you know, if I do have if I do have some evil agenda here, it's not to us not to sell bitcoiners on ethereum Tech but to just sort of show that these constructions in and of themselves a are interesting and they're kind of worth wanting so I just welcomed more discussion about, you know, Kandi's constructions be ported over into bit. And like I said, you know to what extent are they possible and so on which again not every sort of specialized knowledge and not everyone has to do that. But there are a small handful of researchers who sort of try to bridge the gap from one side and the other and yeah, I just kind of think there should be more more cross-pollination there and so on. Yeah, okay. So as far as plasma goes, so on the one side, we have Channels with so channels require unanimous update the idea of plasma is essentially we don't have that requirement. That's the first thing to understand so we have all these off chain transactions and you can transact on This in this plasma system without all the parties involved sort of having to sign off on every update. So what this sort of looks more like is we have these transactions off chain, they kind of get bundled together hash down into a block route that route gets put on chain and the idea of just with that that's enough to preserve this this trustless layer to a property. So just from how I described it there. You can see this sort of starts to look like its own blockchain this this this plasma system. We you know, we're forming blocks and we're just publishing them these the roots of the block line. And so we can think of it as a side chain. I kind of try to avoid the term side chain because that's one of those terms that's used so vaguely and so differently by different people it just kind of seems meaningless at this point. I often Point people to for Jorge skull for you. I think that's how you pronounce his name as a paper for has this essay called something like my living room sofa is a side Chen and I think he's basically right is living room sofa is the side chain and it just it just it's a little too vaguely defined but we can just sort of say a sidechain. Okay, you sort of know it when you see it. You have the system that's like there's a layer 1. There's a mansion a side chain is sort of dependent on layer one that listens for updates on it. You can see you can deposit things on the side chain, but layer one kind of doesn't care what's going on in the same chance something like that with plasma. We're doing that sort of thing. But we want to do it non-custodial. So what this means in practice is again, we have somebody producing blocks. Let's just call and the plasma operator for now and it can we can imagine it's centralized from levies for the moment. We can come back to that. But so it's entirely centralizes a single party in control, but we want to be a centralized but non-custodial sort of Idea, so the operator publishes these blocks on chain are published as rather just America roots of these blocks on chin and then off chain sort of gives all the users enough data that they are guaranteed to maintain the custody of their funds so that so in other words, you have the ability to prove ownership of your funds at any point and the complexity comes in with withdrawals. Obviously you sort of do these games where you build back and forth proving so, you know, so you might say something like your your eggs, Sitting with your funds so you withdraw your claiming. Yes. I own these here and then someone else might say no here's proof that you spent them since then, you know, then there might be like a response to that of some sort. So you have this sort of this interactive game to prove ownership. It's a little hard to explain the details just out loud like this without a whiteboard or something, but that's where a lot of the real plasma mechanism is in is in that exit game of how can we guarantee that even in the worst case scenario? You'll always be able to prove ownership of your clients. So yeah, so I mean there's a key difference is there with lightning or with channels in general the One is you do need this operator needs to interact with the main chain regularly. So every you know, you need a main chain transaction sort of finalizing this block. So it's sort of like a sort of like a transaction compression mechanism or something like that. So you need you need these regular interactions. So what that means is you don't get instant transactions with plasma, right? Because you need to wait for these these block routes to settle on the Mansion. So for instant transactions, you need channels this kind of No Way Around that it's sort of a tautology but some of the upsides the plasma is well, first of all, the scalability there is cool because in theory no matter how big the plasma blocks are. All you need is this constant side route. This constant sized route on the mansion in the optimistic bias and the pessimistic case you have to do some Merkel summer Clear Proof stuff, but that's still up just like log of the number of transactions. So there's some really strong scalability potential there and also you don't necessarily have the same sort of liquidity from requirement that something like lightning does so with lightning you sort of have you sort of lock up this capital and channels and that Capital is sort of collateralizing these payments directly. So this you know, you run into some possibilities of routing limitations where you have to find a path of liquidity. Also, you need inbound capacity to receive things and things like that. So that's one of the upsides plasmas. You don't have to deal with those things. But yeah, I mean these various is various trade-offs involved. So, you know, I've written about I mentioned a wrote something for the block about plasma and speaking more generally. It's like I think it's a really valuable construction and I think it's very cool. But I think it's also fair to say that it's a little more it's trickier and more complex. Maybe Than People initially realized and so there's a lot of the sort of this game of you know, I think the way I described it in that face is it's like, you know trying to push a carpet into a room slightly too small for it where you kind of fix one thing and something else pops up. So some of the problems involved to give a give a general sense. Are you have this you end up having to manage a lot of data even as a user because you sort of and the size of this data you have kind of grows over time. You need some sense of the history of what's going on on this. Chance so that you can guarantee you'll be able to withdraw. So that's one of the some of the optimization work is minimizing that and then the initial construction. Do you mentioned the initial white paper which was italic and Joseph Kane was one of the co-creators of lightning actually in the initial construction. There's actually a much bigger problem, which is you can have a scenario where you're sort of forced where everybody on the plasma train is forced to exit onto the Mansion, which is a serious pretty much a deal breaking issue. Actually. That's like when people talk about plasma now, they're referring to like plasma cash, which is an Of construction which avoids that but yeah, there's a lot of I don't know there's a lot of little things to solve there. But I guess one sentence version is like non-custodial side shame that sort of with plasma plasma. They understood their thanks for going into that for me. So you're kind of going into some of the reasons why you know, maybe it's still an a kind of pre Alpha state would you say I would say at this point I think like the research has project has progressed a lot and I think there's a better understanding of like what it can and can't do or sort of What approaches are dead ends and things like that? I would say there's still certain things that aren't necessarily entirely solved, but you might just say that's okay. It's good enough, but the worst case scenarios aren't you know, worst-case scenario might just be a user has to store a lot of data at one point or so, but it's not yet. I would say it's not like a hundred percent solved. The issue is even with sort of research questions in place. Again, this more crab academic level implementation is difficult. So that's still that's still going to take more time. So some of the, you know, some of the focus like A lot of the projects that we're doing plasma things have shifted gears or at least shifted emphasis and focus on some some alternative constructions. Keep seeing this like the new the new kind of buzz word hotness is like optimistic roll up, which is a related construction, but it's sort of solves some of these tricky things and that's one that is it's a lot simpler as one of its benefits and it's definitely, you know, it's easier to reason about it something we can do now. It doesn't quite have the same scalability benefits as plasma. So happy too happy to go into that. Basic feeling about plasmas. I think it's a very powerful construction. I hope it's not abandoned because I think the potential scalability benefits and throughput are are pretty awesome there. But yeah, it's probably safe to say that it was like hyped a little too strong too soon. And there were you know additional problems kind of emerged over time that that slowed things down and certainly the also just say this the original white paper. I don't recommend reading it. It's pretty weird because it's like it's very long and there's section. As in it that are like very out there and kind of speculative maybe this send their stuff. They talk about another like no one's pursued like this idea of like nested plasma chamber, which is kind of crazy. So I think it had like the seed of some some ideas that were worth pursuing and there but a better place to start is I mentioned plasma cash but there's a Giorgio this constant top Alice. It's his name. It's a Greek name something like that who's a layer to scalability researcher kind of focusing on the etherium space and he does a lot of great work the key. Keep it together a plasma cash white paper if people are interested. I would I would start there because that gives you a good starting point as for what what paths have been pursued. But yeah, that's kind of where I think it stands now and I think it makes sense that at least for the short term people are shifting to this this roll-up stuff, which we can get into if you want something that you mentioned before was the concept that kind of alluded to that eventually, maybe something like plasma can make it over to bitcoin, you know, the Long-standing idea in Bitcoin land I think is that you know, if Bitcoin wins and end up eating all other, you know, crypto technology. Everything else will kind of fold in to the Bitcoin in some way. So you kind of mentioned that plasma might be able to make it over to bitcoin want to kind of just lay out how how that might work or what that might look like and if any big changes but need to happen Etc sure. So again, I'll mention him again not to keep dropping his name, but this researcher, Georgia system, Georgie SK. He's looked into this specific question and he spoke he gave a talk about this exact question at a time. One of the Bitcoin conference has recently. I forgot which one I don't think he's published it yet, but hopefully he does what it comes down to so yeah, is this possible Anya it's definitely not possible. So the question is what would have to change what protocol change would decline need to support something like plasma and more importantly, of course, it's possible to change the protocol. I know what you want. Right, but is it a sort of limited and conservative enough change that it would sort of you know, Be acceptable to bitcoiners essentially because as you say with Bitcoin if there's yeah, there's both the sense that hope you know, I think with like hardcore bitcoiners have the sense that it will eat all this technology, but also that it's the most conservative so there's a bit of a trade-off to be had there. Okay. So as far as plasma so he's the he's the guy to look at you should really watch his talk a lot of this. I'm just repeating his findings, but you need at least a few things and then one of them to me is like very uncertain that guy this would actually work but one thing you definitely need to be able to do is verify Merkel crew. Roofs on chain because this is this is just how you show inclusion or exclusion of trend of these plasma cash transactions within the block there is an opcode and it's op cat that lets you do this basically do is like string concatenation, but interestingly it was actually removed from Bitcoin already and there was some there was it was considered a bit risky. There was some little loophole some exploit you could do with it. So they took it out. So that would be the thing to look into is is there a way to bring back off cat and I think being able to verify Merkel groups on train would be useful. All sorts of things even some of the more steak Shane related constructions and things like that. So so that's one thing you also need. So I guess the fundamental difference between Bitcoin and etherium has to do with this notion of State the state of Bitcoin. So to speak is the set of all UT EXO's, right all the unspent transactions and what you can do with that on bitcoin is is more limited right on a theory that have this more generalized notion of state and it's hard to Define what we mean by state but you know, The current state of affairs, whatever it was I getting that right. Okay. So in the case of Bitcoin and in order to do something like plasma cash you kind of eat you effectively need to be able to mutate some state or at least do something like that with Bitcoin you have these UT EXO's and essentially all you can do with the you T XO is a transaction spends it and creates new UT EXO's or inhales. It doesn't write the the scripting comes in. That's a fine what the rules are for that and those you know, that's where you can do this Bitcoins great stuff, but you can't you can't actually mutate. UT Excel, you can just sort of consume one and create another so for plasma cash for these exit games. I mentioned you have to do you have to essentially have the state evolved to do that on bitcoin you'd need some sort of covenants. And this is another proposal that has all sorts of use cases and comes up in a lot of Bitcoin Tech or any any like you txo this Chan. So what covenants let you do broadly speaking is you can specify the rules of how to spend a you T XO and within those rules it says when you create a new output, it's sort of carries over some of the old rules with it. So in other words, you're not literally mutating state, but you effectively are I don't know if that makes sense. But the point is you would need something like that in order to handle these to handle these changes covenants are a complex topic and I'm not an expert in this but I think the debate around them is how do you introduce something like that without just adding all sorts of weird loopholes and complexity because you could start to do weird recursive tricks with covenants were now suddenly you can do these almost like denial-of-service sort of attacks where suddenly these transactions become way way harder to validate. Wanted and so that's an interesting area of research but you need some version of covenants for for plasma. And I would say the last part in this is where it gets a lot trickier and really should talk to Georgia because I think he may have figured out some cool beta handle this but you kind of need a way to reinstate directly which again with Bitcoin the design decision is that you can't do that you can spend transactions or not, but you can't like get information about transactions without spending them and you sort of need to be able to do this in order to read these He's a flock roots of the of the plasma chance. And if they're young they're stored in the state and state is the part that you can just read directly be a smart contract in Bitcoin. Again, there's the design decision where you can do that so you can't just allow that if you just allow that that has all sorts of other implications and it might just be like Bitcoin devolves into ethereum and that's certainly not something that cleaners want to understand that whether there's some limited way to get that so that you can read block Roots if there's a way to do that that would be required as well. So yeah, look for look for Giorgio's here if he hears this Maybe this can be considered some some peer pressure for him to publish this but I certainly welcome more discussion around this because I think this plasma stuff is very cool. And I think you know different hopefully, you know, these different cryptocurrencies different communities can find their find their ways of benefiting from it not to get to Kumbaya, right? Absolutely. I do appreciate you can a laying that out there for me. So as far as I know too much there isn't too much usage of layer 2 Solutions on etherium something. Thing that has come up quite a bit in 2018 2019 was the etherium people have something called defy pulse which would compare, you know, there are different defy projects or whatever against lightning and very often they be like look look at you guys. There's you know, you know 500 BTC in WPT see but there's only you know, how we're much and lightning you guys are falling behind, but then if you look at Are you know the etherium lightning or plasma or any of the stuff? I think it's plasma is not even operational yet. And I think the ethereum lightning is not operational. Do you have any insight into any of that? Sure? Yeah. So first of all, I mean, I agree at least with your implication there, which is that that is a very silly comparison the idea of comparing D5 whole for something like lightning. This is not at all Apples to Apples. Also the D5 pulse. I think they're they're metric was like the amount of capital locked in defy. And what does that I don't even know what that means. It's not really so it gives you a vague sense of activity there, but certainly it's not comfortable to lightning. So yeah, I don't really take that very seriously. And yeah, I mean I do say the things too if we want to compare the two of them all things to compare would be the more some of these channels and channel networks that are going on on the barium which exists but certainly lightning is getting more use than them still the ones to look at. So there was Raiden which is something very similar to lightning. In fact, the name is sort of a little in jokey reference to lightning there which is live, but very limited use case last night. Checks and that is like strictly payment channels. I think the one to really look at is connects, which I think I mentioned earlier which they're doing really good stuff. And again I've used ideas that and that is there was sort of at some point that was sort of like a universal standard that was agreed upon this this like State Channel standard and ethereum sort of the equivalent of like the bolts back and lightning I guess so there are sort of complying with that and within that and that yeah, they have a system that's you can transfer your transfer you through but also here at 80/20 stuff like die. With Canucks, so it's definitely being built out. It's getting some use but not on the level of lightning and we'll see how it plays out. And yeah as you say the plasma stuff, I mean there are implementations out there. There's stuff on Tessa and there's some great teams working on it and I think we will see stuff happened, but I think it's definitely fair to say that it was harder than was anticipated and it's taken longer than was anticipated and probably will be seeing sooner than plasma will be seeing some of this roll-up stuff happened because that's just sort of easier. Adult yeah, I mean the etherium layer 2 is stuff. It's it's happening things are moving forward definitely not as much use as Lightning, but but we'll see. I look forward to both of them growing and I think I'm also very interested in some of the possible possible interoperability between them between the channel networks and also between these other side chains and trustless side chains across different Trends. I think they can complement each other kind of as a kind of philosophical question here for you. Do you think lightning on bitcoin or Bitcoin on lightning? Has earned its first mover advantage and now Bitcoin on lightning is going to be you know, the number one off chain solution earlier to solution out of the entire crypto space. Is that going too far? I don't know. I'm sort of, you know, I would say maybe but I'm sort of still agnostic to that. I guess I think it's less. My instinct is it's less dependent on sort of layer 2 Tech enlightening than it is on bitcoin itself, right Bitcoin itself. Obviously as a first mover advantage. And there's the question of you know, whether that will hold up and whether that will retain its monetary premium. I don't know. I'm not good at making predictions. I mean, yeah, I mean obviously it's probably from from talking about this that I'm sort of very interested and in some ways optimistic and bullish about some of these other Layer Two constructions. I think that there's a place for them. So that is where etherium can sort of carve out its territory, but I don't know I tend to not really see these things as in this zero-sum battle so much so, I don't know and I yeah either I don't particularly care. What's the plan fair enough? I've used a theorem in the past. I've sent here see 20s around I've done, you know, all the all the nonsense you might do with ethereum, but I guess at this point in time. I just don't care like I keep going over there is fine stuff that excites me and none of it really does, you know, lightning stuff excites me there seems to be stuff actually going on. Obviously. I'm in my bubble over here. So, you know, maybe I'm missing all kinds. Of really fun stuff happening on ethereum. I honestly don't think so. But do you think you know talking about aetherium here, you know, maybe the biggest thing that I still have a problem with and I think a lot of bitcoiners have a problem with is the original launch of ethereum and a lot of the negative things that I think happened there primarily the pre mine that the etherium founders or whoever gave to themselves. Essentially. Do you have any particular? Yin about that kind of contrast versus Bitcoins fairer launch Etc. Yeah. I mean it does it does sort of make me uncomfortable as well. I kind of go back and forth about how much it truly matters. I will say this so the etherium that if you're in foundations Priya mind if I'm not mistaken and the being around 10% of the supply which is a lot there was sort of another chime in this is I guess I already said something controversial. It depends what you consider the pre mind versus presale and so on but what I'm getting at is there's this other junk that was sold in it. It right to these early investors if information does come out that part of that like a significant part A really of any part of that sale to other investors was just sort of circling back directly to the ethereum foundation. That would be pretty serious and that would be pretty bad. So I certainly welcome more transparency on that even as is I guess the part that I go back and forth on here is to what extent like to what extent initial allocation matters to the future of the network to the future of a you know, This like digital asset monetary Network and I'm not sure it's definitely not ideal. So I do agree with a lot of these criticisms. Like I'm not you know, I don't know. I'm not someone who's just gonna like some DieHard of helium defender or anything but as far as initial distribution, like in practice what actually happens here is sort of the question does wealth just sort of stay concentrated in these little silos or does it kind of circle in relatively quickly. I'm not sure empirically it seems like it's more of the ladder, you know, I think Like the initial distribution of Bitcoin might be as Fair as it can be any of them out. Of course you're going to end up with there's sort of arbitrary element to it right about who Minds early and things like that. So, I don't know. I'm sort of getting a wishy-washy rambling answer because I don't really have a great answer for that other than yeah things like the premium definitely makes me a bit uncomfortable. It's not ideal and I've just welcomed more transparency around that generally. I just don't see it as a deal-breaker and I like my general feeling about etherium is it seems to me? Me that and this is something I think some bitcoiners Miss. Is that even though, you know, there's certainly a lot of bullshit going on that has gone over the years and the ethereum space but like, you know, frankly that's true of anything and this crypto space if you just sort of focus on the good there is a lot of real interesting work going on that is a direct result of the technology itself, which is to say having the flexibility on the base layer means that more Protocols are possible. So a lot of these interesting protocols essentially the layer to stuff which is what I'm interested in can sort of use a theory Tack to actually come to fruition, which is I think cool and it's sort of like seems worth it to me, even though it has a bunch of other complications. There's this sort of complications on the social level. Let's just say that you alluded to at the spring of my own and the ethereum foundations role and even metallics role. There's of course technical complications and things like that. It just it seems to me like it's a it's a messy experiment that's worth doing I guess would be the like very diplomatically. Well, here's here's the question. I would ask I think and I think the reason why with even the pre the Prima land itself becomes more of an issue is how etherium fans or ethereum folks like to promote very often. I see on Twitter that a theorem people will be like ethereum is sound money that seems counterfactual to the you know, what what Bitcoins kind of model of what sound money is that you don't you don't have a pre mind you don't, you know, do all these things that effectively gives power to a small group of people, you know you That might make the argument that Satoshi had a effective pre mine or post mine or you know, something like that because no one else was around. So it's the same thing and I don't agree with any of that. So do you think there's a kind of ideological Gulf there that you know, both Bitcoin in aetherium folks kind of ideologically want similar things, but kind of live in different realities trying to get to the same place. It's kind of yeah, there's something to that. I mean, I think yeah, I did. First of all, it's interesting in the past like a year or so. There was this growth of like a Serial maximalist which didn't seem to exist before but there yeah, there is the small group of very vocal people who are you know, they're sort of like almost mirroring some of the strategies of the more. I don't know the more like harsh and local Bitcoin maximalism. I'm just certainly not in that camp is is the short is the short answer and you know, I'm I'm I tend to be pretty critical of a lot of things about a theory of myself and criticize some of those Are those clams I think that specific line you mentioned is yeah the idea of this sort of angle this like argumentative strategy that ethereum is sound money and so far as Bitcoin is doesn't really make sense. The pretty mind is one wrench into that. Another one is just the fact that the monetary policy has changed over time and is likely to again so that you know, the sort of miners reward has decreased to be of these forks and and you know, once there's a switch to proof of stake. I think there's still some uncertainty as to what the exact schedule looks like in terms of Supply so that Is a clear difference and if you don't want to Define sound money in this way of having a strict and predictable Supply. I mean, it's just it doesn't even really seem debatable. But that's definitely Bitcoin as ethereum beat in that way. So yeah, I don't see any argument there. I think just like tactically if you're just going to be a die-hard a theorem Defender which again I'm not but what I would say to those people a better tactic is like, you know, we're just sort of not ready to commit to a strict Supply schedule. So like yes, it's more fast and loose but in general it's a theorems more facts than list, right? There's more of a sense of like we're still experimenting. We're still getting it right. There's going to be a pretty drastic change to the technology itself soon with this, you know, charting and proof of stake and things like that, you know, it's sort of in a phase. It's sort of still evolving and that's like part of the identity of ethereum is that at least relative to bitcoin. It's a little more we're willing to be more experimental or something like that. Whereas Bitcoins more we want to sort of already push really hard towards being relatively speaking set in stone and conservative. So I guess what I'm saying is like, you know, The words I think like having both of those exist only when trying to be so diplomatic, but exercise I'm doing that having both of those existing seems good to me. I think the coin has a very important place in this in this area has an important place and having the more conservative sort of monetary assets. Let's say that sort of has these these monetary properties that you described and having one where we sort of push the technology of cryptocurrency and crypto economics and and you know, this new cryptography was snarks we have this currents where we Sort of experiment with that and this other direction which also necessarily means that yeah, the monitor the the nature of the money itself is going to revolve to the you know, if that makes people uncomfortable that I mean, that's fine and you know, you don't have to like it or you don't have to usually don't have to own any I'm more of the I would more lean into that the try to make this silly argument of like Assyrians more, you know, it's more the Austrian money or something. It's just it seems a little bit silly on it. So you had kind of mentioned the idea that a theory Um has you know change their monetary policy in the past and one of the rebuttals to that I've seen is so as a Bitcoin they fix their buffer overflow bug. Do you think that's a fair rebuttal or is that total bullshit? No, I don't think that's equivalent. No. So basically I don't I don't know that's equivalent. I think if sort of taking this aside from like the Bitcoin Versa theorem debate, I guess I do think that these there is a bit of nuance in there. That often doesn't get that doesn't get addressed. So, you know, yeah, Fixing something like the buffer overflow or fixing the more recent, you know, don't worry. I can see the E. I guess it was last year that could have led to inflation. What sort of going on there on the Bitcoin side is the in a very indisputable way the particular software instantiation doesn't reflect what is effectively this social contract that Bitcoin is have about what it is, right? There's there's no one who actually thinks that you should be able to, you know, double stand within the block and inflate the supply that's indisputable. We can just say that So updating the software which like is technically a hard Fork. There's a sense that that is different than updating the software to say well after the doll heck let's say right to actually change the state or to change the inflation. Like I don't think those are the same that all the tricky part and I'm curious sort of what your thoughts are on this to me. Is that one thing I think about often and sort of struggle with the the fact that that was possible the fact that you know, there was this potential inflation bug in Bitcoin. And you know, this patch was released and it worked the bug wasn't exploited. The fact that that's possible is actually really important. You could even go a step farther and say if it wasn't possible to do something like that and you know, you can just focus on those two examples we mentioned the corn would be dead by now, right and to me I sort of when I think about Bitcoin when I think about it security model, I just think we need to include that in it and what I one of the things that I see with a lot of people some people I should say certainly not all Them but some people in the Bitcoin space there's a resistance to even mention that and there's this sense of you know, the social level is totally separate from the protocol and the whole point of Bitcoin is to eliminate that social level and there's no Bitcoin Community, right? There's no and I think that's like that's half true. Right it is indeed true that the point of Bitcoin is to minimize that level without that you know, I mean, I think what makes have articulated this pretty well and that social scalability. I say this is sort of what it all comes down to isn't if not have to do this kind of bureaucratic. Decision making process as much but I kind of think in a way that sa lot of people mentioned that and it was very influential. It was almost like to influential for its own good because the social scale ability you get from Bitcoin is not infinite nor. Do you want it to be like we need to actually be able to do these changes on a social level. So I don't know if I even even mentioning the phrase Bitcoin community and makes a lot of people just like gristle and cringe but to me that is an important thing. There are Decisions to be made and it's not just about fixing these concrete bugs. There's you know, there's going to be sure our signature was gonna be Taproot. There's changes the protocol will make when they have to do something for Quantum resistance at some point and let's just acknowledge the fact that like, they're human beings that have to make these decisions and to me that has to just be a part of how we think and talk about this. But yeah. Anyway, I don't know. I'm curious what your thoughts are on all of you know, typically I'm not the one answering questions on the podcast here. So, please yeah and tracks are gonna be forgive me here, but It's kind of a tough one. Yeah, I mean, I don't mean to put you on the spot obviously, but I guess like it's just it seems to be this Gap and I will say this that I think maybe just by necessity this this discussion is more aetherium communities more amenable to this type of discussion Again part of its just pragmatically by necessity because these sorts of social level changes happen much more frequently and often and ethereum. Yeah. I just think that is something we have to consider. I think I'm passive I'm saying that right? I don't mean to keep name-dropping. By the way, but he's sort of spoken. I think very eloquently about this and he is one of the people I see as taking this seriously and yeah, I just think it's not totally black and white and you can sort of have you can have both and you can acknowledge that we want let's say governance that's a scary word. But you know this decision making process to be minimized and to be strict and in most of Syrian people would say that that is the goal eventually to they just think like we're not there yet or something you wanted to be minimize, but you actually don't want it to quite be at zero. And yeah, I don't know. I haven't sort of settled on the right way to think about this but that is something I sort of restless. Oh, yeah. I just think it's like a double-edged sword. I'm probably not technical enough and not I feel like I would need a lot more kind of thought and preparation to really answer that as well as I would prefer. Yeah. It's very difficult. I guess. I don't necessarily Envy the ethereum folks that have a larger attack surface or a, you know, just more complicated protocol that you know you Have all these different ways of potentially breaking stuff of being able to steal stuff through their smart contracts like the happy with the Dow if let's say something similar to happen with Bitcoin. So rather than you know a buffer overflow bug that happens to the protocol itself. So yeah, let's imagine that billions of dollars were was stolen off some exchange and one particular Bitcoin developer was involved and you know, they're very upset. They really want to try to get their money recovered. So they they try to you know, get everyone on bitcoin Twitter to agree with them to you know, some kind of hard Fork to reverse this because oh my God, this is the biggest loss amount of funds ever. I don't think anyone would listen to this person to be like up top shit. Your money is gone, you know, we're not going to help you do anything and now you're ostracized because you're trying to you know change something with in Bitcoin hard for Work, you know by itself is a big thing, but you're trying to change transactions around and no go fuck yourself. Do you think this is probably the the accurate thing that would happen here. That seems like yes that the scenario you described I think is entirely easy to imagine. So I think yeah, I think that's right, like any any situation any situation equivalent to the Dow Hag on bitcoin is certainly a lot less likely I would just I mean one thing I would throw in I think it's certainly less likely now to happen on ethereum than it was then. It's certainly still it's still more within the realm of possibility. I guess that sort of situation though. I mean, so yeah, I think that's true that sort of situation I think is less of what interests me and less of what I find tricky then so the situation of again just reversing what is effectively a valid transaction less interesting to me then again, just fixing what is unanimously agreed to be a concrete bug right which has happened. So the Queen's capable of doing this obviously and I think that's good and also some of these just more General Network upgrades that we might desire like I mentioned Nora In Taproot and maybe some privacy upgrade in the future. I don't know whether there be weather ever be a reason why a bug could not be fixed. Like is there a you know, where that social layer or that social aspect just evaporates with there ever be a reason why that happens. That's a good question. And it's almost what's tricky about. This is in some weird way. Like if there's some wild out their dream of let's say a decentralization that takes place that would kind of prevent it right like if there's no way If the people mining or you know more to the point running nodes are so like distributed and far and wide that we actually can't coordinate any upgrades anymore. This would be impossible what I say, that's a dream. It's like I don't know how many people would even describe that as an ideal. But I think implicitly some of them do and that's where I just go like, I don't think that's quite the ideal we want. I think the the trickier with like I think the way we see it is actually pretty similar. I don't even know if we totally disagree I would just say like I agree with you you don't want this. Whatever you want to call this the sort of softer social level to be able to make arbitrary changes. But clearly we want some changes to be able to happen. And I think it's it seems to me it's sort of healthier for the Network's future and it's more it's just better to just sort of acknowledge that and be able to think about it directly then to just deny it what scares me more is just denying that that happens at all when again, of course it does there's upgrades that are being talked about right now. If you sort of deny it then it seems that there's a risk of okay. Well what's actually going to change about Bitcoin and and who is going to decide it's almost like if there's this unacknowledged power vacuum things can that's where governance capture can take place and just to be clear. I'm not suggesting. I'm certainly not suggesting any like I'm chained governance mechanism. I think that's the worst idea and all of this. I'm not even suggesting a more like formalized governance mechanism, but it does it just sort of concerns me when I see people who just get angry if you ease and try to sort of point this out or try to direct attention to these to these questions. It seems like an important thing to be able Altar to be able to talk about I don't think anyone's really figured out how to do this. Right because it's because it's tricky but this is probably something that was like, I think even a few years ago. This was harder to see and four years ago. It was easier to just sort of brush all of this off and say, you know, that's not what we do. We don't you know, we don't make decisions as an on this on the social level, but that's clearly a part of these things. I think that's okay. I don't think that sort of destroys the value proposition. I think it'll matter moving forward and I mean one of the interesting examples that I just mentioned is The interesting examples to me is this idea of privacy on layer 1. I don't know where you stand on this but I and more and more I just think I mean again the projects I care about are Bitcoin and ethereum certainly more than any others. But I I follow some of what's going on in these privacy coins as well. And I think I'm very interested in the technology itself and I'm increasingly of the mindset that privacy and we just need better privacy on layer one and I'm a little concerned that with both Bitcoin and a theorem that just doesn't really seem to be you know on the Not so to speak the general ethos and both is like will have privacy layers. We can have layer two things. We can have, you know side chains or mixers and things like that and that's all well and good but I'm sort of nervous that that's not quite enough. This is just like a fundamental thing that we want to preserve his privacy and having it be sort of opt-in might just lead to some very bad results. So and I think there's a lot of bitcoiners who are sort of of that mindset to there's a lot who very much aren't but I could see this debate really I could see this being A sort of the next big debate with in Bitcoin. Yeah. I'm just curious to see how that plays out and that I mean that is one example, where if the inertia is just look we're not going to change the protocol. So we're not going to change the protocol. That is a I could see some changes in that regard that are potentially beneficial to like to see happen. I don't know it'll be interesting to see to see how that discussion happens moving forward. I would like to kind of bring up a contrast here and some yeah some examples. So I'm sure you're aware of Of I'm not sure if it's considered a layer 2 or off chain solution or not, but Matt from it's basically the ethereum / Bitcoin guy. That's building TBT. See? Yes, Matt Luann. Yeah, I think so. He's the same gentleman that I can remember at what particular conference but at a conference he kind of threw out the idea of adding like tail inflation to bitcoin, I think and who he was he was very popular. Her for that one. Yeah. Oh, that's right. I remember that that Twitter drama of the day. Yes, I forgot. That was him. Yeah. And so I mean even though I feel like there's a good trillion good arguments against it. I mean it was in retrospect. It's probably a good idea that people bring this stuff up sometimes even if it's no it's a horrible idea. Stop is the response because I it's as good to talk about and it's kind of understand where we are in the world, but I feel like it's very related to the to see aspect that you kind of mentioned the you know, let's add tail inflation or let's add privacy, but I'm sure as you're aware of the biggest trade off with privacy on the base layer is auditability and the one thing that I happen to be a huge proponent of and I think a lot of people that are into Bitcoins Austrian traits is a predictability of future Supply that I should be able to just pick a random date, you know twenty five point three years in the future, you know pick a time of day and it'll be approximately that amount of Bitcoin in the future on that time and date, you know, not exactly there's variance, you know, whatever but it'll be basically correct and I don't know what other cryptocurrency can really claim that you know sure other ones can make some amount of similar claims, but I feel like Bitcoin is still the gold standard when it comes to that kind. Of predictability. Do you generally agree with that that the the the tension there is very difficult to overcome that I don't I want privacy, you know, if there was a way to get you know Monaro or confidential transactions or some similar privacy enhancements on bitcoin, that'd be great. But I would practically want to guarantee which I don't think is possible that audibility is in. Intact, I think there is good ways to make it very unlikely that it's affected. But I again, I'm not super technical in the Privacy Arena. But as far as I know, there's not a strong way to make that, you know near zero percent. Yes, I think I think that's right. That is that is the tension right? And that's what it's going to come down to is any Any increase on chain to privacy will in some way decrease audibility almost by definition for right? So there's going to be a trade-off there and there's certainly some trade-offs that I don't expect or even want that coin to make in that direction the obvious thing to bring up with busy cash in this case, which you know, I think ZK Starks are really cool and awesome. But you know, there was literally an inflation bug and that is a direct result of the complexity of this, you know, kind of crazy moon math cryptography that they do so that's certainly crossed the line of anything. I would expect to happen on bitcoin. And what I would say though, and this is definitely getting into like unpopular opinion territory is you know, when you talk about predictability of supplies, obviously having a having like a supply is just necessary for any scarce for any resource of value, right? It has to be scarce having predictability of Supply. I mean, yes, I think Bitcoin has that stronger than any than any crypto currency and acknowledge that that is like part of the core value proposition, right? The unpopular opinion part to me is I would say that like we can consider this fix apply inaudible T to be fundamental to what Bitcoin is I actually think privacy has to be considered fundamental as well because at a certain point, you know, ultimately what this is about is disintermediation and autonomy. And in the extreme case where privacy is like totally lost, you know, which is a silly scenario to imagine but let's just say every single bit foreign contraction transaction is linked to an individual and there's no way to use it privately just this nightmare scenario. That is to me fundamentally breaking it in the same way that you know, an inflation plug is fundamentally breaking it so There is a trade-off there, but I just don't see it as absolute in One Direction. And yes, it is true that any change in privacy. I think implicitly is going to be unless audibility but I think the trade-off doesn't just go a hundred percent for me. Now again, I think something like zika should be out of the question something like that that level of zkf starts at least like until maybe in the future when that cryptography is just very ironed out that will change but certainly not now but other potential privacy Solutions you get what you get. No guarantees of things like total Supply audibility things like the Mumble Mumble protocol comes to mind again. There's a trade-off there, but you can you can audit I mean and that example, I believe I'm not a sort of privacy specialist either so I don't want to speak totally out of turn. But in that case you actually can get information about the total Supply because you effectively see a brock rewards and then you can see that each transaction doesn't spend more than it received which does to some extent give you a guarantee. But again, it is a privacy solution which means more stuff is handled either. With encryption or off-chance. Oh, yeah, that's another thing. I'm sort of torn about and you know, I see I see this sort of come up in Bitcoin circles and I see that even bitcoiners are torn about this. So I'm interested in seeing how it how it plays out. But I have to say more and more. I'm like whatever happens we should really move towards doing better than we're doing now and I think this is true Bitcoin and ethereum basically equally but yeah, you know, I start of the fact that the minority opinion does concern me a little because I don't want these things to turn into, you know surveillance tools. That would be a very sad. Entered office agreed. I don't necessarily see it likely that privacy is going to be 100% broken or get to that extreme point a great but I that makes a lot of sense though that if if we do even approach there then yeah, it's going to be hard to care about the supply at that point because as the supply might be potentially be be useless, right? So the biggest is kind of still talking about privacy and then let's go ahead and since written since we are a lightning podcast here to kind of bridge that Gap. Gap a little bit. So let's say that we don't ever really add privacy to the base layer. We're kind of stuck with what we have now for forever. Do you think that the player to ever could serve as a sufficient privacy Shield kind of get what we want or is it just a okay tool but still we're going to need something beyond the yes. I mean again, that's why I think ultimately as far as layer 1 chain is I'm increasingly for at least, you know, discussing ways to improve privacy on Or one layer to a privacy is a very interesting topic to me and something I'm sort of looking into more and more. I think that something like lightning in this I think this also applies to other Layer Two Protocols of the I guess the devil's in the details there but let's stick with lightning. I think one of the cool things about lightning is in in you know in a very obvious way you get this nice privacy benefit, which is basically that, you know, if you want if you're interested in your transactions being private, which you probably should be, you know, if your options are either record this transaction on a an immutable Ledger that's very very public and very hard to change forever or don't you know not doing that is is obviously beneficial. So so that's one of these cool kind of free benefits you get from from something like lightning is less things recorded means means more privacy. What I will say on the other side of it though. There's certain ways. Where there is this privacy downsides to lion and this is I think an interesting area of research and sort of understanding this and improving it where I guess my general intuition here is Obviously you get better privacy on the base layer because there's less going on on the base layer. And for most people most of the time that will be an improvement because that's that's the thing you care about most is if I'm sending you money, I don't want you to be able to like look at a block Explorer, you know, see what I was doing on Saturday or whatever the the way that privacy can Leak with something like lightning is on this network layer because with lightning, you know, you have this sort of additional overlay Network on top of Bitcoin, which is kind of already and overlay Network and there's a certain there's a certain push and pull. Here where you the more that you have privacy on the lightning layer, the there's a trade-off there where the harder it becomes to communicate with other notes, right and this makes things like getting snapshots of the state of the networks that you can do peer Discovery and Route becomes a little bit harder. So in one way shape or form and the devils in the details again, but in one way shape or form, if you're using lightning, you have to kind of advertise your location, right so that you can establish these connections and make channels and if someone's really out to get you and really Nothing the network carefully there is there's various ways privacy complete you also another sort of intuitive way to see this is when you're in a lightning channel in some sense. What you're doing is reusing an address, even though of course, the transactions aren't falling on chain. Someone can sort of identify aspects of this and connect more things to you than maybe they otherwise could so I almost wonder if you know for really really extreme privacy cases, like if you're I don't know like a fugitive or something where you know, people are really carefully looking out to get you if you really know what you're R doing on layer 1 privacy might be better really know what you're doing me and you know, you know how to use you know, how to use mixers, you know about address or use and linking transactions and all this stuff. Whereas for most people most of the time layer 2 is going to be better the other thing to say about as far as layer to privacy and I think some of this is implemented enlightening now, you may know more about this than I do because I'm not totally up to date but you can do things like onion routing with lightning similar to what Torah does. We're at least some of the data that you're sending around has these levels of encryption where the different hops along the way don't really see the desk. Asian things like that. And again, I think I think in some of the main lightning implementations they're doing that already, which is great. But even there it's a little bit at the very least. It's more difficult to do like doing something like onion routing is more difficult to do enlightening than with actual than this car. Let's say simply because without I don't want to get too into the technical leads again, and this is again privacy isn't my main focus but with something like Torah what you can essentially say is you don't really care in some sense. You don't care how the data gets to where it needs to go. But you care about is that it gets there. So if I'm logging onto a site we have these these nodes in the Tor Network. They kind of pass it around and mix it up and ends up where it at its destination, you know in HTTP request. Let's say and then you know this data ends up finding its way back to me. I don't really care how it gets there. I just care that it was mixed up enough that I have this privacy on some level enlightening. You actually do care about the path because you need this path of liquidity along the way. So that's another place where there's only so much you can really obfuscate with something like onion routing. So yes, I think it's a really interesting. Challenge and I am I wouldn't rule out the fact that like maybe they're actually is just maybe there really is a solution to this that involve some fancy cryptography. That's definitely a really interesting area of research. But that's where I think it stands now is privacies definitely an improvement with lightning but it really really extreme cases. There are there are network level privacy leaks that are that are worth considering. Okay? Yeah, definitely. So just to quickly summarize if your nation states after you lightning may not be good enough at that. At this point I think so, I think so. I think that's probably the yeah in case any in case anyone who's like wanted by the FBI is listening. That's probably the official advice. We should give them. All right sounds good. Alright, so hopefully they're listening rhetoric - yeah, sorry gone. Well, right. So I have a couple more questions. I kind of want to get through them kind of quickly here just because I think I have three or four more and I've already had your like an hour and a half. Wow, really? Really that's your by okay. Yeah. I got better place. So we kind of touched on like hard-working for privacy on the base layer. So and we kind of touched on you know hard working for maybe like a tale of mission on bitcoin on the base layer and at the very beginning of the podcast you had kind of went into the scaling debate and we haven't even touched that yet. You know, we've already had an hour and a half without even really going into that but without really going into the history of it because I don't think we have time do you think we'll ever see a block size hard? Fork on bitcoin whoo, interesting you just trying to get me to say something controversial here. Let's see if I had to bet now I would say yes, I think it will happen eventually, but certainly not any time soon. I and I'm not in before people attack me. I think you know, that's not that you know, I've talked to hardcore bitcoiners to sort of say say a similar thing where it's something that can happen sort of slowly over time as as Hardware improves and so on. It also by the way, it might just take place more in the form of a soft Park. Here's where the semantics get kind of tricky but you know segwayed in some sense was a block size increase increase as a soft Fork. I think if you go too far in that direction of doing everything with extension blocks, it gets kind of you get this kind of spaghetti code problem where it gets hard to reason about keeping these implementations up to date. So I think at a certain point it's actually better to do it as a hard Fork that's definitely not a popular opinion. But um, I if I had to bet I would say yeah, it'll happen down the line very incrementally but at a certain point it probably will just make sense and it's hard to imagine that not being I was gonna say it'll be uncontroversial that's hard to imagine at this stage. But I do think it'll happen. What do you think not to keep turning it on you? I'm just curious. No, it's fine. I honestly think it'll happen. I mean, I'm not going to put any kind of date or timeline on that because I think that would be absurd to think about it that way. Yes. Yes. Yeah. I mean ultimately it's right. It's the debate really comes down to Like block size is sort of the shorthand for how difficult is it to run a node? Right? And so it's that and then also this debate of like this whole process of making decisions and hard for us. We don't want to be too fast and loose but yeah, I mean at a certain point if if Hardware improves enough that it becomes a lot easier, I think it just it'll be a lot less controversial. So yeah, absolutely. So let's move on from that particular mind field and move on to a different one. So you contribute to the block and on bitcoin. Twitter or on quote unquote crypto Twitter. The block is very controversial, you know. Yeah the main dude over there gets into all kinds of Twitter drama Etc. I'm not going to get into specifics because I don't really care all that much. Sure. Do you think that that's true that the block gets into a lot of you know, kind of bullshit talks and debates on Twitter. Yeah, you know, it's funny. I mean first of all, I want to make it clear I have contributed like as an independent consultant. Rid of the block I'm not I'm not a member or anything, but I'm not trying I'm not trying to like I'm not trying to send Ram myself from them or anything. But you know to be perfectly honest. I I've seen exactly what you're talking about. I see these that they get there's a lot of animosity directed towards the block and I genuinely I honestly don't understand it. I don't know this it's just feel it feels very weird to me. It's like they're picked as targets for some reason and maybe partly, you know, I've seen the head of the block Mike dude is you know, he, you know either I'm only like talks a lot of shit and gets into things but I don't really get the source of this animosity. I have to say, you know, the reason I wanted to contribute to them is I do have a lot of respect for the work they're doing you know full disclosure. I know some people they're sort of friends with them, but I they're definitely very critical of the space at large I guess but there seemed to be critical in the right way is to me there's a few no corners there, but I you know, they a lot of what they say, I agree with and I don't know I just I honestly don't really get it. Yeah, I mean it just I don't they Seem that different than another outfit other than maybe more critical and maybe take shots, but I almost feel like I'm missing something like there was some big something happened that I missed and then I do occasionally get you know, I get associated with them. So I get sucked into this stuff. But all I can say is I think they publish a lot of good things and I respect what they do. And if yeah, if I'm missing if there's some reason I should associate with them. I'm happy to hear it but I it's all a bit of a mystery to me to be to be frank. Alright, let's go to move on from that because Cuz I don't think we need to talk about that too much. All right at the very beginning of the podcast you had mentioned. I believe in college you had taken philosophy. Is that right or majored in philosophy or am I okay math and perfect as it so I never went to college for philosophy but philosophy has always been a very big interest of mine. You know, we're going to let's touch on that very briefly before we close out because I'm planning on creating a second podcast. Bling here in the next couple months and it's going to be primarily related to kind of philosophy not just philosophy but it's kind of those kinds of Concepts and then also kind of touching on things like atheism religion psychedelics and how it might, you know, change your brain State and a bunch of other kind of interrelated things kind of within the kind of philosophy world. You know, what's your maybe biggest? First most interesting thing that you keep coming back to or something that you that interested you in college that kind of just keeps, you know coming up sure. So I guess for me, I mean, like I said, it was a double math and philosophy major. So I did focus on some of that overlaps is you know, this is not gonna be something we can get into briefly of course, but you know, so some of the like 20th century analytical philosophy philosophy people like victim Stein Bertrand Russell, so I'm very interested in things like philosophy. Language and logic and where that overlaps with things like set theory as far as I guess some of the less wonky stuff. I like a lot of the empiricists. I think um was one of my favorite thinkers to read back in college. Certainly. He definitely has like a what I like about human without getting into it, you know, the specifics of his views that I like. He's also just has a relatively low tolerance for bullshit I think and he's fairly readable and strike straight forward and makes coherent. Events. So yeah, I don't know. I mean I could certainly I can certainly nerd out about Philosophy for a while. So I'm interested to hear hear what you do about that. I guess one thing I would add as far as I'm trying I'm sort of fishing for some some connection here between those things. I mentioned in the crypto space and I think one of them and this gets very abstract, but in terms of things like logic and theory of language, you know, I'm also interested obviously in programming language Theory and as it relates to scripting and smart contracts and formal verification, it's interesting. This is a place where some of this Very out there, very abstract thinking actually has practical applications. Yeah, that's a that's a very difficult topic. But those are those are some of the things I'm interested in. Yeah. Well, absolutely David Humes a very good one. I think just a throughout one of my favorite quotes ever and I'm sure you're already aware of this quote, but I just love it so much a wise man proportions his belief to the evidence and a big part of my personal philosophy that I like to kind of bring to bitcoin is that Kind of kind of skeptical evidence of driven belief system that I'm not going to take on beliefs that are, you know, just coming out of thin air or you know, very little kind of circumstantial evidence except ra yeah and I try to approach things that way too, you know, it's easy. There's a lot of you know, there's a lot of a lot of emotions a lot of tribalism in this space and especially on crypto Twitter, which is its own sort of nightmare and a I do my best to try to sort that out and I think a lot of the people that I respect in this space are people who are willing to go against the narrative willing to sort of think for themselves. And you know, I'm certainly not perfect in that regard, but I try to do it I try to sort of take that same approach that's sort of the only way to stay saying I think absolutely well I think maybe we'll have to have you on the floss if he podcast which the the working title for now is what is real what I would love to be on and yeah, I'm remembering now I saw you. Posting a bit about about psychedelics and so on. So that's another another interesting topic. I mean, I'd be happy to go into looking forward to seeing that second podcast. I hope you hope you did. Alright, so I think that's pretty much the end of the podcast. You know, we're Emma closing out. The final question I had is do you have any other kind of thoughts on you know layer to off chain Bitcoin Theory mm, you know the state of the the universe the state of crypto the state of Bitcoin the last you know, 10 years I said, right. Dry how more complicated kind of get this question for you? Yeah, let's restrict it a little I'll know. I'll keep it to Prudhoe. How about that? I'm Gonna Keep it to layer 2. Yeah, like I said if there's the sort of General thing I'm interested in doing and interested in sort of seeing happen more and more some of these some of these divides get bridged even if just at least on a technical level. So if there's people who are who are interested in some of these these these Layer Two constructions that are going on in this area, but there's interest from the Bitcoin side. I would just say, you know, this has nothing to do with being nice. Aaron supporter for liking aetherium or or anything like that. I just sort of Welcome more more technical discussion and more more cross-pollination on sort of getting this thinking in line. So yeah, I mean if anyone is interested in this or you know, feel free to reach out I'll just name drop a few other people because I feel like I mentioned Georgio's but some other guy to know in this regard is Dan Robinson. He's another researcher who does things across many different projects has made some great contributions. Is pressed which I mentioned these people because I just feel like you know, I've learned a lot from them and it's only fair to mention the people in ripping off even even though I'm increasingly I've seen Eric Wall Make some noise on this topic. He's definitely a bit corner but has an interest in some of this ethereum Tech. So yeah, I just sort of hope to see more of that happen and feel free to reach out if you have any any insights in any of this stuff. Yeah. I think I think I think we've covered a lot. So maybe we can leave a bat like I'm still thinking several questions. In my head here and I'm like sorry. I just asked them anyway, and I'm like, I'm gonna stop we'll save it. We'll see you for the second podcast about that. Absolutely. Do you want to let everyone know how people can find you on the Twitter dot-coms sure. You can find me at @d Zach 2/3 on Twitter. And from there. There's a link to my have a sub stack where you can just follow things that I write in various places having written lately, but I should have a few pieces coming out soon that are on the back burner so perfect. Well, I really appreciate Joining me on the lightning junkies podcast Daniel. Thanks a lot of fun. Boom that was the 18th episode of the lightning junkies podcast. Are you ready to crucify me? Should I run for the hills? Should I practically delete my Twitter and never return? I think that episode was pretty even-handed and did a pretty good job of examining the objective reality as close as we can possibly get I think and was pretty fair overall and I don't think I have anything in here that's going to get me killed but I Guess we'll see after you guys actually listen to this thing. Either way. I would really enjoy any feedback you had on this particular episode if you think this is a terrible place for me to go or if you thought this was actually positive episode that really did a good job of showing you the lay of the land or early attempted to just a couple quick reminders. If you wanted to go ahead and ship in any money into keeping the podcast active you can do so using Bitcoin or Bitcoin over lightning at crowdfund Dot. Lightning Junkies dotnet you can also do so by going to tipping dot mean it's really sad that bottle pays no longer existence. So that option is going to get taken off I guess but we also have Ellen cast as well where you can pay per episode to listen to the podcast episodes using the lightning network. If you want to support the episode, please go ahead and chip in some Bitcoin sign up for spark swap if you already have into using my link or Ahead and leave a review on whatever podcast service you happen to use. The best thing you can do is post about this podcast on your Twitter and help spread the word. So more people can, you know get me being all monotone and dorky into my microphone here with that being said, I think we're done here. I will see you on that lightning Network, sir, sir. I will see you see you see you will know lightning. See you. See you. You see you in London network network network whoop. Okay, I'm done. I'll see you in like Nene.
This is the eighteenth episode of the Lightning Junkies podcast. On this episode of the podcast, we have Daniel Goldman talking about Bitcoin and Ethereum layer two constructions. He spends the first half of the podcast laying out the first layer two constructions, nuances of the various constructions and more! The second half of the episode, we generally contrast Bitcoin, Ethereum, and talk about Lightning at various points too. We talk about:    Background and Bitcoin  Understanding Bitcoin/Ethereum   First Lightning Transaction   Layer 2 on Ethereum   Contrasting Different Layer 2 Solutions   Contrasting Different L2 Constructions   Porting over Ethereum L2 to Bitcoin? Plasma/Plasma Cash   Plasma on Bitcoin? Layer 2 Usage on Ethereum   Raiden   Lightning First Mover Advantage on Bitcoin? Ethereum Premine   Social Layer? Privacy   Privacy vs Auditability   Privacy on Layer 2   Blocksize Increase   The Block   Philosophy (David Hume)  Daniel's Twitter: https://twitter.com/DZack23 Daniel's Substack: https://dzack23.substack.com/  Georgios Konstantopoulos's Twitter: https://twitter.com/gakonst  If you want to stack 100k sats, sign up for Sparkswap! 