The Future of Bitcoin with Jeff Garzik

Transcript

you're still very much on top of the current narratives and trends that are happening and sort of the es and flows you're not a Boomer yet you're not a cryto boomer I appreciate you saying that I often feel like a salty crypto Boomer GM what's up guys welcome to another episode of the rollup today a very special episode we get to chat with Jeff garik Jeff is working on Hemi the new Bitcoin L2 that is marrying ethereum and Bitcoin and bringing the best of Both Worlds together Hemi announced their $15 million fundraise today led by binance labs and big brain Holdings we are really really excited to share this episode with you guys because Jeff is a true Bitcoin Legend working with Satoshi

back in 2010 and now working on the future of Bitcoin and ethereum hope you enjoy today's episode first a word from our sponsors [Music] cartey is your home for app specific rollups at the Forefront of developing new tools and platforms that enhance the capabilities of blockchain Technology ctei enables applications that are flexible and built to scale build on a full Linux environment and use traditional software libraries but in blockchain development go to cy that's

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rollup today we're speaking with Jeff garik about a new project that he's working on the origins of working with Satoshi or early hard Forks Bitcoin idealism and the the just like what brought us here I mean there's so much to talk about Jeff uh you're calling in from close to us we're both going to Singapore so welcome in and thanks for being with us on this on this awesome Friday thanks for having me looking forward to it what better place to start than the beginning and and you were there um so without rehashing some of some of the great uh short form interviews that you did very very recently and and talking about some of your interactions with Satoshi maybe you could you could kind of guide us through your origin story um what were

you doing how how old were you and and yeah what what were you doing when you ended up finding Bitcoin um it it was pretty uh I would say an easy seat to jump into because it was a familiar form factor what does that mean I had been uh I was I would guess early 40s late 30s uh agewise I have been working in open source since the early 90s I downloaded the first uh Linux kernel when Lena tvz was still at the University of Helsinki in the in the early 90s um I uh got pulled out of Georgia Tech uh before graduating by CNN uh local here in Atlanta to build the

first CNN.com website with a number of my Georgia techies uh and you know a glimpse into the the early early Tech side uh I was one of the people that put on the Georgia Tech Student newspaper on the web when that was like a thing you know we we were before MIT and putting our student newspaper on the web and that caught the attention of CNN and CNN hired a bunch of uh Georgia Tech web monkeys this was before CNN.com was even registered at the Domain registar uh we put CNN on the web and that was my first uh real experience with mass open source on Linux it was uh a a familiar picture to anyone who's

been working in open source there's a benevolent dictator uh that was lenus tval or in Bitcoin Satoshi Nakamoto and the way he worked was if you want to change the software you email patches to lenus and in those days uh there were not a whole lot of developers now they're well over a thousand working on the Linux kernel and so that was my entree into Linux into open source and into the just show up meritocracy which Satoshi uh helped ful extended so Linux uh it was very much if you have an idea you generate a patch you test the

software and then you send those software changes to a Linux kernel mailing list and uh they would get reviewed uh not only by the project leader but by others in the community you respond uh you know you take feedback you make revisions there's kind of a software cycle feedback Revis post feedback revised post and so that was the basic open source cycle um I worked on uh Linux until about uh 2010 when I hopped over to bitcoin and that open source cycle was pretty codified at that point I was in Linux when lenus invented git the uh source code control system

that everyone uses now through GitHub as well as open source and it didn't change the open source flow development flow too much it was still you make a bunch of patches those are now called G commits you uh push those to a branch and it saves us a little bit of email but at the end of the day you're still emailing lenus hey I have these get changes I'd like you to pull so that was the workflow uh that was kind of my my upbringing was deep deep open source uh I just uh you know I I was fortunate enough to grow up in an upper middle class background but uh my dad was pretty poor and he uh he was se he was a

self-taught uh mathematician uh he was a a self-taught computer engineer computer programmer and uh he really uh gave me that ethos of uh just you know show up self-learn and do you know don't wait for someone to give you a list of things to do figure out what you want to do and do it and so I took that with Linux I was I was very successful eventually working at Red Hat as a software engineer purely based on my open source contributions to the Linux colel and I I was pretty well known in the the Linux space in 2010 when I saw a blog post on news for nerds website.org it

was uh very popular uh in those days uh if you if you and your open source project got mentioned by this website uh there was the slash effect which is essentially a ton of people ton of traffic would come look at your website and if you were a a poor open source developer with just a an ec2 instance or a Home Server it would it would promptly fall over and uh uh immediately get taken off the web just by virtue of popularity uh so.org sl there was a post Bitcoin a decentralized currency uh which I was uh being a a Sci-Fi reader sci-fi lover um

I had been waiting for and expecting Bitcoin uh again uh jumping back in the time machine to the early uh mid 1990s I read uh among other things a science fiction series Shadow run it was a kind of DnD D but set in a cyberpunk future was the story and inside this story they talked about something called cred sticks where characters in the story would transfer Japanese Yen from one person to another anonymously in a decentralized fashion simply by handing kind of a flash drive in modern lingo to another person and that just stuck with

me for decades I knew that dentalized currency not controlled by the government was something that was valuable it was something that was real and duee to my knowledge and Technology I knew it was coming I didn't know when what decade what year but I knew that it was inevitable so I saw this in July of 2010 on slash org Bitcoin a decentralized currency immediately clicked it was open source immediately downloaded uh the thing that's great about open source is uh metaphorically it's like a car with a hood that's open if you're a mechanic if you know what you're doing you can inspect the guts you can convince yourself that is it

decentralized or is it just a shame is it uh you know false advertising or not the great thing about open source is if you have the knowledge you can prove all that to yourself you don't have to trust an authority uh someone else telling you oh I I heard about Bitcoin is decentralized I was able to inspect it myself look at it myself um I kind of went into it with uh a bit of a an egotistical attitude of oh it can't be open it can't be decentralized there's no way it's got to be just five servers in an AWS data center somewhere surely but I looked I read the open source I

studied it I started uh CPU mining on my laptop and immediately generated 50 BTC on my measy little laptop uh with CPU mining but it was real it was it was real it was uh it was brilliant it was a uh in computer science terms when you're uh coordinate a distributed cluster of computers there's usually a leader election protocol that chooses one of the computers to be a leader and all the others Follow the Leader and this was brilliant it was choosing Bitcoin protocol was choosing a a leader based on this new proof of work meth

that I had never heard of before but I could see that it guarantees that almost unlimited up time anyone uh you know a minor in h Bitcoin terms anyone who's elected a leader I.E the minor who finds the Bitcoin hash that uh matches the difficulty in the Bitcoin protocol they publish that block they're the leader but anyone can join at any time it's a permissionless network anyone can leave at any time and Bitcoin automatically self- balances and self- adjusts so this was far better than some five server in a server closet kind of distributed

computing relationship to me this was not only proving my initial skepticism wrong but it was also realizing a new paradigm in distributed computing something that could scale out to as it has thousands of nodes and not have to suffer from tight coordination problems like you would in current distributed computing where you got to elect a leader and then you have some transactions and everyone shares those transactions in a coordinated way through the leader and if the leader drops out you got to have another leader election all of that complexity was beautifully just wiped Away by the

Bitcoin protocol so I I downloaded it I tested it I did some CPU Mining and because it was open source you could do what I did in Linux and so I just fell immediately into that pattern of well here's a benevolent dictator Satoshi Nakamoto doing an open source project so what do you do you you make changes and you propose changes you send patches and I sent patches to Satoshi and Gavin and uh you know my first one famously and I I'll talk about that in a second was uh utterly rejected but uh other patches were uh were accepted and merged and eventually I was

the the third most prolific Bitcoin core developer in the early days in terms of commits so what was that first patch uh the first patch was I did a quick calculation the uh transactions per second at the time it was six to seven Bitcoin transactions per second was all that the the block size could do at that point and I did a calculation I I already love Bitcoin I thought to myself I want to make Bitcoin successful I thought to myself so let's turn this seven transactions per second into 4,000 and that's that's got to be that matches PayPal PayPal was like 4,200

transactions per second and so I said uh you know BTC has got to be at least to the level of PayPal so one line patch to the block size was literally my very first patch to bitcoin you were the first big blocker it would obviously break consensus it was obvious rejection material and I got a uh you know I was I was a newbie at that point and I got a lesson in consensus protocols and uh you know other uh other details you know every single node has to verify every single block so blocks cannot be infinite in size Etc but uh that was also my introduction to Satoshi and they

uh he she they uh very graciously uh explained why this wouldn't work as well as some of the other denisons and then that was my outree into Bitcoin Bitcoin core and the the discovery of Bitcoin yeah I found it pretty interesting that uh Satoshi on that form never ever talked about anything in the person personal life it was always just responding to your comments about technicals but also being like gracious about it and not being kind of like uh you know arrogant and then you know you push some hard Forks right you push some updates Satoshi eventually updated some of those and accepted them um and so you know you kind of made your early mark on the

space um and then as you kind of said in those interviews soosi just kind of slowly you know he would respond once in a while and then once in a while and then he kind of just he kind of just disappeared in the days of of Jeff garic contributing to Patches to bitcoin core as a Bitcoin developer just kind of dwindled down yeah that that's exactly right so toosi was always very humble never uh no no bragados uh confidence in uh the system that Satoshi built but uh you know would never uh you know protected anonymity very well would never reveal anything about uh personal life or I just got up

and drank some coffee and now I'm away can can deal with some changes anonymity shell was almost perfect for some reason Jeff you had this thesis though that it's that SOI was this news reporter Which is far different than like Craig Wright or some of these other kind of rumors that you hear in the rumor mill or even Roger ver um you know I thought that was particularly interesting that you had this kind of insight into uh you know your best guess um I think for the community it's it's for the better that it's always been Anonymous um but I thought that that observation and prediction was particularly interesting yeah it was uh I don't know that they were a newspaper reporter it was a uh Palm Beach Florida county

sheriff who uh got into a motorcycle accident and uh after that accident uh self-taught themselves computers computer security and uh that seemed like uh and the they died shortly after Satoshi kind of moved away from Bitcoin in early 2011 2012 time frame and so that uh that kind of uh roughly fit the profile and time frame and that was my best guess but uh I really don't have any hard evidence and I haven't seen uh you know the only thing I do these days is kind of debunk Satoshi claims no Elon Musk is not Satoshi you know no

alfy is not Satoshi or the US government or the CIA no the CIA is not Satoshi that sort of yeah man you guys were printing so much Bitcoin from uh gpus you thought that you you may have been I mean violating some stamps act because what was Bitcoin at that point um you know who knows what what you know kind of what was going on there and I just remember seeing forms um where you could where there was like faucets where it was just like all right come you know claim your daily batch of Bitcoin on the form and you know I I remember you talking about how it was almost part of your job to go out there and actually spread the currency the coins as a as a

medium of exchange as something that people should care about you know you tried to pay in things obviously early on but one thing that suck out was kind of like um the idea of you actually going and buying Bitcoin from the Market when when it was uh either like pre-trading on that first exchange or a little after and and actually just giving it to people as you could to kind of spread um spread the spread the you know the coins around to kind of facilitate this decentralized network of of kind of asset holders um and just looking back on that now it seems so funny to kind of just like put that into into perspective of ETFs and um all these different things that are happening yeah I mean you uh we magicked a mon into existence and in the early

early days it did you know for the longest time it didn't have a price there was no exchange uh famously uh there was the uh the Bitcoin Pizza that was uh gave it you know some initial value two pizzas for like 10,000 Bitcoin or something outrageous like that and but there was no value and so you have to do things that continuously establish a spot Market continu ly prove that it has value it's tradable it's liquid and in the the early days uh you know Sira July August September 2010 it literally had no value we were there uh when it

first got a a 01 you know one penny value later on in 2010 we held a dollar parity party when Bitcoin hit a dollar um and uh I famously gave way developer bounties I would buy again on on the earliest Bitcoin exchanges uh mount gox in particular uh there was also another one that was even earlier that was run by some pit Anonymous individual Dustin dollar uh and so that was the very first Bitcoin exchange I used I don't even remember the name I just remember who ran it but uh I bought uh using a software engineer salary at Red Hat uh

15,000 B coin in order to pay someone in Bitcoin to develop some Integrations on websites uh modify some website shopping carts to accept Bitcoin which was pretty radical at the time you know you accept uh you know credit cards which is the norm and then if you were on some of the radical libertarian webites there would be P Unix which was a gold backed uh centralized ized uh but deregulated currency there was Liberty reserve which was eventually busted by the feds and those were the only credit card

Alternatives that were hard money at the time and so I paid 15,000 uh it was 10,000 and then 5678 Bitcoin uh Bitcoin was just so plentiful in those days you could just kind of roll roll your fingers across a keyboard and give them a bunch of Bitcoin so that uh that was the early early days I uh another story I gave my best friend from high school a little bit later uh 60 Bitcoin and he huddled for almost 10 years and so he hled that straight into being a millionaire and real estate and and all he he bought a

uh what did he buy in somewhere in North Carolina he bought a pawn shop as well so just with here here's some toy money he held on to it and uh it became a worth a million dollars or almost a million dollar but but early on it wasn't so easy to get people to accept it something that has no value and and you kind of described this as pushing a boulder uphill um to try to evangelize it around the economy and try to proliferate Pro uh into some of the existing uh Financial system and then you also mentioned that that in hindsight now it's essentially at its apex and now this Boulder almost has a foregone conclusion and can run downhill

and so I'm curious why do you think we've reached that Apex and and how do you see Bitcoin progressing now that it is almost it's Lindy enough some would say that it it'll it'll stick around and and sort of fulfill its its Destiny what do you think its Destiny is yeah starting from the the other side of that range it was in the earliest early days uh we didn't know if Bitcoin was illegal there was something called the Stamp Act which uh Andy just mentioned that uh it was a question of even is minting Bitcoin illegal is holding Bitcoin illegal and as we fast forward uh even three years from there

there was uh in March 2013 some key us regulatory uh rulings that gave Bitcoin a lot of regulatory Clarity uh but you know I literally didn't know if I was going to get arrested for building Bitcoin and and you know again I'm kind of jumping around in time uh 2023 there was a tornado cash developer was arrested for just developing software for developing tornado cash they didn't participate directly in elicit transactions they built software that did and uh that was what we were worrying about in the earliest days is is there just some risk developing software that other people are using so

that was the kind of pushing the boulder uphill moment is you just kind of have to do a gut check and say I think this is right and uh keep building and you know keep uh doing the right thing uh There Was You Know March 2013 was a big regulatory Clarity moment many nations uh notably Japan was an early mover into in Bitcoin a currency specifically not a commodity and not a security and so other nations taking positions that this thing is real this thing's a currency uh that gives it staying power there have been a number of uh court cases and precedents establishing that it's you

know it's property and it's real and it can be adjudicated and all the all of the the meat space kind of things that had to happen in order to to make it pretty clear that normies can actually hold use spend Bitcoin those have all happened so check check check uh so all good there um the uh Bitcoin ETF was uh I think one of the the biggest uh regulatory Clarity moments uh the SEC was forced into it by court cases uh if anyone uh listening follows any of the legal and Regulatory stuff but uh finally uh judges said these these ETFs are not breaking the

law you got to got to register them and and that's what they did and that was the kind of the final uh point in which I think Bitcoin I know a lot of our our libertarian listeners are like ah why why do we need government approval and stuff like that but uh you know real world real life if you want average folks to use this stuff there has to be a way to adjudicate it just like everything else in our life and there is now and it's pretty clear how all of that functions and uh so from that standpoint as well as a technical standpoint of uh moving out of the legal and Regulatory realm this blockchain has

been ticking along this blockchain as some people call it it's uh you know whatever the market cap is a one trillion doll hack Val you hack Bitcoin and there just billions are waiting for you and it hasn't been hacked in uh you know in a chain destroying way so uh it survived what I call Darwin's trial by fire um you know or as lenus tval the inventor of Linux calls uh the best test lab in the world the real world the internet and so it's uh Bitcoin is legally pretty bombproof technically bomb proof uh it has uh been on the scene and working and ticking away

regardless of economic conditions regardless of technical or regulatory conditions and so to me I I'm a student of History I love history uh I love uh taking the The Long View The hundred-year View uh you know looking back uh 10 years uh it is the you know if I was going to vote for what crypto is most likely to be here in another 10 years it's going to be Bitcoin that's going to be the top on my list uh no question about and it's for all those reasons for technical legal macroeconomic but also it's uh been on the scene and hasn't been hacked in that uh significant amount of time and so

that's kind of what I mean by The Boulders now rolling downhill to me getting seeing all the challenges that we've met and passed and succeeded in the past 13 14 years I think that uh you know it's kind of bitcoin's fight to lose at this point definitely I mean we've seen the a lot of attacks a lot of nation state China's banded it like five times I Robbie and I were there in 2017 for the segwit hard Fork the China ban the Roger ver days I mean I don't know if you've had any personal interactions with Roger ver but for a second there when Bitcoin cash came out there was there was some

some discussion in the community whether or not not this was the new Bitcoin and then I think once we saw like bsv and all these different variations of Bitcoin cash like experiments SP spin out it was quickly it was quickly uh understood that okay like uh you know the original is the original for a reason here um which I think is why it's particularly interesting that that you were able to make so many changes in the early days because now those changes just are kind of you know they don't really happen I mean we can we're going to talk a bit more about kind of the the the change in the political landscape of Bitcoin and some of the technological stuff here in a bit but I think this kind of like osificante cycles each time you were you're kind of

questioning whether or not this was going to come back and whether or not like we Bitcoin was going to stay and you know you were looking at legal things you're looking at uh adoption at Mount gaau at all these different things right but now it does feel like that we're just kind of at this like metaphorical Apex of adoption and from here I think it's about it starts to get into like nation states and starts to get into like how how we can think of this as gold how we can get this to be on nation state balance sheets how we can really distribute this across billions of people like how we can get this this this asset in the hands of billions is I think one of the most important things coming up it's not so much let's establish this to me it's like let's get this this asset into as

many hands of as many people as possible and and further uh kind of make sure that it's something that is is around for a long long time and you know I tend to agree with a lot of the points that you made there uh and just from kind of like the way that we're thinking about it here as well oh absolutely and uh I think that El Salvador uh and some of the other smaller countries are leading the way with putting it on nation state balance sheets um you know the uh the Bitcoin ETFs were definitely a new stage in regulatory Clarity uh but I do think that uh technically it's very very difficult to get in changes now um I'm uh pessimistic on opcat op CV

and some of the others actually getting in uh I think that I would score it is unlikely you know everything is a probability scale it's not a yes or a no a definite uh in or out but I I score it as uh improbable or unlikely welcome aboard on our journey into the singularity this is the endgame road map for fra and fraxel the new L2 out of the fra ecosystem that is totally based on fractal scaling fractal is a modular L2 blockchain built by fracks with modular and fractal scaling in mind fractal scaling is based on the mandal BR set of

fractal images and it explains how l2s become l3s and the entire app chain life cycle goes through its Evolution the fra ecosystem is made of some of the top builders in the space and has stemmed from its OG days of the frax stable coin it is now in the LST space the LRT space and this fraxel L2 joins the existing Suite of fra products including fra Swap and fra lend you can see fra fairy the bridge to go from any chain arbitrum optimism or main net into the fra main

net Bridge your tokens and bring your FRA assets into the fractal ecosystem join today to get the best out of fraxel you are still early join today take part in our Expedition into the singularity is that to everything Jeff to not just OPI to any further changes are you saying that you believe at least your thought is that the future of the Bitcoin network is to be untouched it that's the way it's trending right now um I don't think that there is uh motivation or interest uh sufficient to uh you know integrating uh uh something like opcat or op

CV uh across the entire network at this stage and there's it's less about the technicals you know you know we get we get debate specific technicals of opcat I was I was around the early days when opcat was in uh before it was you know going back to early early uh Bitcoin history uh but it's it's just a matter of any change at all is uh incredibly difficult to uh get in and so I just score any change at all is uh improbable could you could you unpack a little bit more the the landscape now as far as the decision-making power in Bitcoin because when you were there and you were submitting changes some some

were approved some were rejected But ultimately you emailed patches to Satoshi and he said yes or no now it's a much much more complicated process and so even if there is technical appetite for something like opcat or some some other change you know why is it so difficult for people to agree on on any change it's an excellent question I would say that uh Bitcoin uh to take vitalic description as a veto Ury um there's a lot of misconception about the bip Bitcoin Improvement proposals and you know if I get a a bip into the bip repository surely that

means I have a a path into Bitcoin and you know it's a flat out no it doesn't uh it's ultimately uh there's just ingrain conservatism across the uh uh the the code in general the consensus code in particular the miners that are deploying the consensus code uh the block Builders uh specifically are not even Bitcoin core these days they're custom built at Bitcoin Miners and those would all have to be updated and then validated so there's uh just a a a heavy heavy weight against any change at all and that's just table Stakes that's just the

atmosphere and uh there's no there's literally no this is how you get a consensus change in process and there that's actually intentional is if there's a process and we see this all the time in nation state bureaucracies if there's a process there are rules to the process if there are rules to the process people will game the rules and people will try to you know get around the rules and oh I'm this special person so surely my Fork should go in because I am the bip editor you know just making up an absurd example and so there's there's even been a uh institutional resistance to having

a process by which consist consensus changes are upgraded and introduced because if you have that then he you know there'll be a long line of people at the door trying to get you know every Tom Dick and Harry's change in so it's a unique governance environment there's no road map that uh you know I follow steps 1 2 3 four and I'll get my change into Bitcoin and that's that's kind of intentional so that's uh that's just the the table Stakes uh that uh exist and again that's why I score uh upgrades is improbable but uh as uh I've said about ethereum ethereum uh to jump over to

ethereum and ethereum scaling they've uh long talked about this process called sharding which uh ethereum High priests in the ethereum high priest Tower would uh invent a magical technology that magically scales etherum well what happened in real life l2s in in real life you don't wait for computer science uh Geniuses to come up with a computer science genius solution you know in the real world you're pragmatic you just got to get things done and in the real world Bitcoin and ethereum fees rewinding The Time Machine maybe a year we're pretty dog on high relatively speaking and as as we've said since the

very beginning you can't put every coffee on a single blockchain you just can't and so macroeconomic again that's why you see l2s rollups ZK uh those sorts of uh aggregators are uh spilling over traffic from the ethereum and Bitcoin l1s onto you know kind of a secondary Road that's settling back to the L1 and so this was just a you know it was a natural process again I try to be Mr macro look at the top down macroeconomics it was uh one of my favorite analogies the champagne

waterfall that you see in h hotels and weddings the L1 at Bitcoin is the champagne glass at the very top once it fills up traffic is going to spill over into the next layer of uh champagne glasses and that's l2s analogously and so what we're seeing today is uh to kind of circle back to scaling and the probability of hard Forks soft Forks Etc l2s are doing what soft forks and hard Forks used to do is you can add as uh you know uh we're going to talk about later uh Himi has done you can add bite codes to your script language and add

new functionality roll that out and it's economically connected to bitcoin it's uh technically connected to bitcoin but it's a different chain and if that chain explodes Bitcoin is not also going to explode so there's a lot less risk for L1 and so the pressure is kind of off Bitcoin to upgrade even opcat or opcv or some of these because l2s exist you know one of the things we often said in the early days was uh you know okay Bitcoin can afford to wait Bitcoin can afford to let others go out experiment succeed or fail and

then those that have passed Darwin's trial by fire you can look at integrating that you know in the early days we said we can integrate it back into Bitcoin these days we say okay we can put that in a you know a Bitcoin rollup or some other L2 yeah and and that that brings up a a really good point because you were obviously around when ethereum launched uh did you participate in the in the pre-sale or anything or no no cool wish I had yeah wish I kept more of my Bitcoin wish I'd uh participated in in the eth pre-sale uh all that good stuff I think you did all right um and

so and so we have this ethereum kind of spins up what was your initial impression of like okay programmable smart contracts um you know and and kind of in relation to bitcoin and then kind of over time now what has been your uh what what can the Bitcoin ecosystem really learn from the way ethereum's kind of gone about scaling the L1 with these rollups and l2s and I think this probably a good segue into Hemi and kind of the Bitcoin scaling landscape yeah in the early days the the reaction was uh more of uh this takes some pressure off of people trying to shove everything into Bitcoin that that was kind of the very first

reaction was uh Bitcoin was you know and is still is the granddaddy of all the crypto blockchains the the strongest and most secure of all the blockchains and so naturally the economic incentives were such that if you're a developer you should put something you know put your own change into Bitcoin and uh there are tons of ideas uh on the Bitcoin talk forums and elsewhere about what changes should go into Bitcoin and the first uh reaction was uh you know more of relief of uh these guys can go off they can experiment and we can uh let Bitcoin remain as it is so uh that that was one

of the reaction um you know the the the Bitcoin Maxi reaction there's always been kind of a a a May I'll call it a negative strain uh in my personal view uh of Bitcoin maximalism and it was uh a very the very stringent uh anything that's not Bitcoin must die and so you you saw a lot of that uh you know anything that's not Bitcoin is a poop coin uh type of uh analysis and it was just automatic there's no these guys are doing something really interesting and decentralized storage or these guys are doing something interesting in self-

sovereignty it was just uh blanket negativity and I I never ever subscribed to that I uh saw a lot of really smart people working on really fantastic ideas and I'm I'm absolutely the last one to to throw shade on uh that kind of honest genuine uh research it was you know in those days it was not I'm going to you know roll out an Ico after getting tons of VC money you know these were all researchers again in in University dorms you know or coming home after work and working on their idea on their spare time and it was it was just very very honest uh well intention decentralized

protocol research and I absolutely encourage that so that was that was very nice one thing that uh I still point out to this day as a difference in uh Bitcoin and ethereum ethereum added self Sovereign contracts meaning a contract itself can own a balance in Bitcoin you just have a set of script rules that unlock a utxo and it's slightly different you can't on natively on bitcoin send Bitcoin to an address and like you know some program programmable autonomous stuff happens and it could in ethereum and that was uh both from a self- sovereignty standpoint as very

very interesting to me you know ultimately to me I'm I'm in it for the freedom I'm in it because this is a freedom technology that's self-empowering self- Sovereign you don't have to uh you know answer to a bank director uh who has an opinion over your money and whether you can have your money it's directly and 100% within your control and uh ethereum as well as Bitcoin had that self- Sovereign property but I I love robots I love autonomy I think about all the the stuff that they're talking about now with AI agents I wrote about that a decade ago and ethereum made that a little bit

easier a little bit more possible again with uh the simple fact of uh contracts can hold balances and kind of self actuate autonomous and so that was you know the building the Sci-Fi future type of perspective ethereum was uh checking that box a little bit more so that was that was kind of the early days early thoughts uh but uh as it uh evolves and where we are today um Bitcoin still the most bomb proof still the most likely to succeed blockchain ethereum I call it the Grand Central Station of cryp is uh if you're going to hop a digital asset from one blockchain to another um

the likelihood is you're probably going to be using some ethereum based technology the Bitcoin based technology for that doesn't have the tvl that uh ethereum based technology does if you're you know going a doing a cross chain Dex with the uh singular exception of thorchain which is awesome you're probably going to be using an ethereum cross Chain Bridge hopping over to an L2 or even hopping from ethereum to bitcoin you might go L2 ethereum Bitcoin that sort of thing and so ethereum is that other anchor and that's why we at Hemi call it uh Bitcoin the king and ethereum the queen of crypto is they both have

singular properties within the crypto universe that are not going to be dislodged in the next 10 or 20 years in my opinion yeah there there's fascinating developments in AI um in the machine economy we've heard about a smart contracts deploying AI agents and then of course AI agents holding a balance and potentially transacting with the with those coins um and and you mention provide a link to you guys I wrote about that in 2013 11 years ago and now it's finally coming true absolutely we'll we'll give that a read and and so we've been talking about sort of l2s and and and Hemi I think is coming into the fold now as well and so

there's a few other things between between proof of work proof of stake um also uh the you know you were you were a very very early on Bitcoin miner um and now we've seen Bitcoin mining Trend in more of a centralized Direction and so I think there's there's maybe two motivations and and would love to hear more you know we've got ort of this this darwinian trial by fire uh that has led to to bitcoin being at the place where it is now um and then solving the Bitcoin uh security budget um I'm curious if you if you know that's one of the motivations for building Hemi the L2 also I'm I'm sure there's some uh some

ideological motivations as you were one of these early on bitcoin evangelists spreading it literally hand like buy your own bare hands um if if you think Hemi and l2s are now with modern technology as it goes are the the best method for further evangelizing Bitcoin into more people into more hands um and using it for more of Commerce um so so let's let's dive into Hemi and and could you could you kind of speak to the motivation behind Hemi um and and then we'll get into a little bit more of how Hemi Works sure well just to uh Define H for the audience it's h is a at h.x YZ uh H is a modular Layer Two protocol for

scaling security and interoperability we like to say that it's powered by both Bitcoin and ethereum and uh to to get a little bit into uh you know normally I'm I'm Mr North Carolina I try to be humble but I got to brag about our project uh I think that uh given the plethora of out there right now him is the network for what's next after the current CR of l2s I I like to play chess I don't claim to be a Grandmaster or anything close to that but I think uh him is five or 10 chess moves ahead of uh the rest of the uh scaling in competition um some of the motivation that uh came to us uh with h

is that looking at the the current crop of ethereum layer 2 protocols they're all photocopies of optimism or something very similar arbitrum Etc which is essentially uh you photocopy ethereum but onto a new chain period end of story you can use metamask with it you can Bridge digital assets but you're basically doing a 100% the same stuff you can do on ethereum except cheaper lower fees and that's what the vast majority of photocopies are right now it's just kind of we built I like to use the road analogy of uh you know if ethereum is a

four-lane road if Bitcoin is a four-lane road what do you do when it gets congested and that's where l2s come in and l2s naturally shed traffic onto alternate roads that uh are lower fees or in him's case have addition capabilities so in ethereum land we we were kind of disappointed and uninspired with they they photocopied gu they photocopied evm called it a day and uh on the Bitcoin side it was somewhat similar it was very uninspired they took the evm over in ethereum and they staple gunned it onto a Bitcoin anchoring system or a Bitcoin rollup system so

again you're using metamask you're doing all the same defi things that you can do on ethereum on ethereum l2s but it's anchoring into Bitcoin and uh what I wanted as a Bitcoin developer was was Way Beyond that and so that's what we did with uh him and specifically uh to get into it a little bit him embeds a Bitcoin node a full Bitcoin node inside an ethereum net such that uh we have what we call an hvm it's uh starting with an evm fully Backward Compatible with metamask and all your existing smart contracts and then we add Bitcoin

capabilities to that virtual machine such that when you're programming smart contracts you can read what's coming on the Bitcoin chain not the Hemi chain you're you're on the Hemi chain you can see Bitcoin chain events and you can send out Bitcoin transaction s from the Hemi virtual machine and from the smart contract l so for me as a Bitcoin developer with my developer hat on this is opening up a whole new Vista beyond what Bitcoin script can do remember Bitcoin bomb proof the most secure blockchain on the planet Bitcoin script

bomb proof the most secure script on the planet but it's again it's very limited it doesn't have self- Sovereign contract address addresses and some of the other uh uh capabilities that the evm has and so from a Bitcoin developer perspective I can come on to Hemi and the Himi hvm and I can program Bitcoin chain apps so that's something that uh I could I could never do just with playing Bitcoin the expressiveness of evm married with all of the chain Bitcoin chain security so that was that was one big uh change that we did uh versus uh the other 100 or 200

l2s out there there there's at last count there were 83 Bitcoin l2s that we were aware of and uh you know 50 or 60 ethereum l2s and none of them can do this and the second major change we did was uh using uh proof of proof mining or pop mining something that uh our CTO Max sanche has invented and first deployed as a prototype a couple years ago in a blockchain called Vera block uh back in Bitcoin history and the way proof of proof works is it uh does not use merge mining it uses normal Bitcoin

transactions to Anchor the Hemi chain into the Bitcoin L1 main chain and so we call that super finality and uh we contrast that it uh takes uh 12 confirmations or about two hours uh the fraud proofs in the optimism system over on the ethereum evm side takes seven days to challenge and then resolve and using Bitcoin pop Mining and super finality we bring that seven days down to two hours on average for our full uh full chain security so those those are the

technical uh uh really crown jewels and some of the Special Sauce that him has but philosophically as uh Himi is an abbreviation for hemispheres philosophically Himi is about bringing together the king and queen of crypto Bitcoin and ethereum uh we have uh tunnels everyone else calls these Bridges we have a non-custodial tunnel from H to bitcoin uh right now it's an over collateralized uh type of scenario but we're moving to bit VM vaults in our version two tunnel and we similarly have non-custodial tunneling from ethereum to now combine that with the uh the hvm which can talk

directly again to the Bitcoin main chain you can imagine assets not only uh resting on Hemi and we'll have tons of tvl and a lot of interesting WRA Bitcoin and Bitcoin defi uh type of things on the Himi chain but you can go from ethereum trigger something on Himi that automatically generates some transactions than Bitcoin or the other way around you know an ordinal or Rune uh you know is transacted on bitcoin that's monitored by a hemis smart contract which could then push out a digital asset onto the ethereum main chain so uh we are are own chain and you'll do plenty on the Hemi chain but

it opens up some really fantastic Vistas for going through Himi to ethereum or through Himi to bitcoin as well as just doing some really interesting uh Bitcoin apps on Hemi itself I think one of the applications that has the potential for Mass adoption that we've already seen is one of the most widely adopted are stable coins and using Bitcoin and ethereum as collateral for stable coins um and Hemi sounds like it's able to interact with both the Bitcoin and the ethereum blockchain in such a way that you could collateralize Bitcoin and or ethereum and create a stable coin uh based on those forms of collateral and

so when you're thinking about the application ecosystem on Hemi what are some of the things that you you're particularly excited about being being built uh is anything being built right now or how how are you planning to stimulate this ecosystem uh to really catalyze it and get it off the ground oh that's I I could answer I could take two hours answering that one question alone there's there's so much uh being built so uh right now we have our incentivized test NET LIVE and uh there's uh test BTC being uh pushed to pop miners uh we have just to throw some quick stats uh we had 23,000

pop miners since July with about 5 to 10,000 unique active per day uh that's a lot of Bitcoin testet traffic uh 4,600 eoas on testnet uh 2,700 smart contracts deployed so people are already testing it uh we've got a number of uh familiar uh uh folks in the crypto ecosystem that we're going to start rolling out announcements for that they are deploying on to Hemi I can't uh I'll get yelled at if I name those right now but uh we have a a notable crop of uh dexes and lending markets and uh lrts and lsts and that sort uh getting deployed onto

Himi just on day one people are knocking down the door ready to do a deployment as soon as we uh launch mained in Q4 so uh there there's definitely a lot of activity um you know what it what excites me the most um again that's that's a long answer as well uh you brought up stable coins one of my uh kind of stock lines is that so far the crypto industry has produced two killer apps number one Bitcoin number two stable coins and we're still searching for what are the next killer apps after that so the rest of the crypto industry is is in the middle of that Darwin trial by fire um I

look at crypto blockchains as well as crypto tokens from a macroeconomic perspective always reasoning from first principles the uh cost of digital asset creation is zero and there's that's that's great you know from a freedom standpoint anyone can launch a token and that's what we want with freedom you know it's a permissionless network anyone can launch Smart contracts that's what we want from a freedom perspective from a supply and demand perspective this means that there are millions of tokens out there and mathematically 98% of those are going to be worthless just power loss says 95 98%

of those are going to be worthless 1% is gonna H you know they they have some staying power they're not wowing people and the final 1% that's the ones with really Innovation real value real use cases killer apps uh that sort of thing we're seeing that with blockchains too the cost of blockchain creation is zero it literally reminds me of late 2010 early 2011 when Litecoin was launched change a couple constants and you have a brand new blockchain it was brilliant at the time uh I I salute Charlie Lee then and now um and you can launch an L2 almost with a click of a button probably

with a literal click of a button yeah literally like I think they advertise one click that's that's right that's right and it's hilarious and that means which is good we're big fans of this by the way this this encourages Innovation but the same power law applies that's exactly right supply and demand is 98% of those chains are going to go nowhere and uh you know the remaining 2% is where the Innovation the power the interest the users uh apply and so we're we're kind of swimming through that molasses right now in the crypto industry L2 wives and obviously I think uh himy is gonna swim ahead of back and and swim to the top of the Heap uh but I

I think users are right now uh and I got to put on my networking hat here going back to my Linux Journal days uh right now users are dealing with some of the rough edges of the crypto user experience and so I think uh we're going to have to have a user experience Evolution to keep up with the other evolutions and unlock more use cases and so I'm most excited about uh some of the wallets that make that cross chain experience not only easier but kind of disappear I feel like where we are right now with digital assets it's kind of the 1970s internet is I'm going to send this

upload over a modem to another node and then I'm going to use this other protocol through an x25 line to send this to another node that's kind of how digital assets pop from chain to chain to chain right now a user has to clicky clicky a button and then have to wait and then oh I'm on this place not this place and it's very clunky if you're again think five or 10 chest moves ahead in networking we have this thing called routing and routing makes it invisible where the servers are you just type in CNN.com into your web browser your web browser talks to routers invisibly and brings you brings

up that web page A lot happened behind the scenes where your network packet in Florida had to go bounce bounce bounce to CNN servers and then bounce bounce bounce back to you in Florida to view that web browser analogously that's where we are in L2 land right now is you kind of have to metaphorically tell your web browser digital assets move here and then they move here and then they move here and that's a a clunky clunky user experience so I'm excited about the smart wallets the new wallets that are coming out not today but tomorrow next month next year that are going to make this entire L2 explosion cross chain experience super

seamless and so that's really going to open up I think a lot of new users into the crypto industry and a lot of new use cases for average folks which I'm again I'm not in it for the crypto libertarian anarchists I'm in it for the eight billion people having the freedom that crypto provides and so to me I I love working on the backend I love talking about hashes and crypto protocols but it's it's got to unlock freedom for humans at the end of the road or the journey was maybe less optimal than it could have been so I'm excited about the smart wallets I'm excited about AI use

cases there's a lot of AI noise and aib Bs and let me put a AI on my pitch deck or white paper to to resuscitate it but there's some real AI stuff that uh crypto can do today GPU marketplaces inference marketplaces that decentralize the open open AI type model and uh moving up into uh AI agents which again uh I I wrote about 10 years ago and and now in 2024 we're finally getting to the point where coinbase is tweeting about build this uh AI agent in Python that can actuate real crypto so uh you know getting back to my science

fiction background uh you know early 90s story is coming full circle of robots can hold crypto balances and autonomously help their owners you know program or schedule things or whatever that task is it feels like that robotic autonomous yet private and free future is so close it's just around the corner and that's one of the other things uh that excites me there's plenty of defi stuff I can talk about people are finally getting into defi Innovation again uh there's a lot of of Bitcoin specific Innovation that excites me there's specific uh BVM Vault type technology rollups uh bringing privacy

to bitcoin on the ZK side um really I could go on and on and on on what what excites me it's uh after uh a number of years of kind of slow Innovation Pace it feels like uh the gas tuttles on again Jeff for for someone who's been around such a long time you you're still very much on top of the current narratives and trends that are happening and and sort of the es and flows that that we're seeing in the market and and in crypto Twitter as well yeah you're not a Boomer yet you're not a crypto Boomer yet you have not reached Boomer status which is awesome I appreciate you saying that I often feel like a salty crypto Boomer um I got so I got I got one more

I guess more so philosophical question about Hemi and and Bitcoin in general uh and then I think Andy may have some questions too as kind of close up um I'm I'm curious I think curious if you agree but I think we have maybe one more uh stage in this trial by fire for Bitcoin which is and it's far out but it's the year 2140 and maybe sooner as the block uh subsidies uh Trends to to zero um we're gonna have to figure out how we can how we can uh pay miners for the Bitcoin security and so one thesis that I've heard is that l2s will increase the transactions through the Bitcoin Network

generate more fees that that can compensate miners so that they don't need the block reward I'm curious if this was you know part of the the motivation to to build Hemi and generally what is your do you think this is an important piece uh for maintaining the Bitcoin security through miners welcome to the ignition Mantle's newest campaign to liberate the growth power of Bitcoin fbt TC ignition has officially begun with a total token supply of over 2,000 fbtc with a tvl of over 150 million right now you can go on the fbtc website to see all of the featured campaigns saking opportunities and liquidity pools where you can utilize

fbtc onchain today for some of the best yields available on l2s the ignition Sparkle campaign can be found at fbtc docomo dampa yeah ultimately I'm I'm positive and optimistic in that particular direction I know that it's a a fear or a worry that when the the block rewards uh go away that the the security budget won't uh compensate but I do think that the the L2 tide lifts all boats um the l2s are paying block fees just like everyone else this is the Bitcoin settlement scenario that I described and the uh l2s

are paying L1 for security just like uh I used to describe as an average Bitcoin user when you send a Bitcoin transaction to someone else a simple transaction you're paying a cloud service for security and just just uh in as uh then as in today's settlement uh type configuration you're paying for security and I don't I don't see that change so I I see the L2 space as very additive to bitcoin very specifically bringing usage bringing features back to bitcoin and the Bitcoin community and encouraging people to build Bitcoin Centric features

on l2s that they like him is doing that they can't build on bitcoin itself so it's extending Bitcoin and you're going to pay for that service and that service uh I I think the uh the difficulty algorithm and uh similar attributes of Bitcoin are beautiful because they're self-balancing you don't have to have a committee at the Federal Reserve say oh whoops we raised the rate too high now let's raise the rate you know very low and it's full of kind of human interactions the the self-adjusting Bitcoin difficulty is at the core of that self-balancing sec picture as well and so I think that uh

Bitcoin will continue to be the most strong uh secure blockchain you know t plus 100 years uh you know into that 20 2140 time frame if we haven't all gone to Quantum Computing at that point and uh as a result uh it creat stickiness that pulls people towards the center towards the L1 in terms of both features as well as I need this security so I'm going to continue contributing to L1 security so I think it's a a virtuous cycle that uh will ensure bitcoin's longevity and not the reverse awesome makes perfect sense

um Andy do you have any other questions yeah just coming to a rep um you know because you guys are going to be working on hem for the rest of you know the the year into the coming years is there any other personal projects that you're working on that you're particularly excited about um or kind of uh repositories that you're contributing to that you're excited about um it's it's primarily Hemi and uh all the all the offshoots of Hemi uh there's uh for example I have a an a Sci-Fi entertainment project that's a s project that's going to be riding on that's uh one of my passion projects um

I work on uh an open source project that I created called posix utils which is kind of rewriting a blockchain operating system in Rust and uh I enjoy that uh but uh my my kind of you know my retire project is something I call tribes and uh it gets to kind of the social angle of uh bringing people back together after modern industrialized societies have atomized extended families down to nuclear families then nuclear families down to single parents and uh we need to get back to our biology our DNA we're a herge species we function best when

we're with other people when we're learning from other people when I'm a parent and when children can learn from uh others in their peer group and social group and so just uh thinking about how uh it's a crypto project how to bring people back together you know fighting isolation is uh to me the the problem of the century the solution of the century and so uh creating kind of virtuous tribes optimistic tribes and bringing people together is uh that I it's the solution the grand The Grand Design the grand project and uh I think crypto has a role for that so you'll you'll

probably hear more about that uh next year I imagine awesome that's that's super awesome well Jeff thanks you for coming on it's been a pleasure sharing insights about your early days with Satoshi into kind of your vision for Bitcoin and scaling and Hemi and everything in between um it's really been an awesome conversation and uh looking forward to Singapore hope to see you out there and uh thank you for your early contributions to the space thanks for having me on everyone check out h.x YZ follow us _ XYZ on Twitter and uh enjoy and build and protect freedom