A New Era Of BTC Utility: BRC20s, Ordinals, and CoreDAO Explained

Transcript

welcome back to the rollup High Roller Community as always nothing on the rollup is to be ConEd as Financial advice we are just an Educators in the defi space toss us a quick like give us a share a repost send it to a friend who may want to watch this and finally give us a sub or a follow it means the world to help support credibly neutral educational content in def5 we're here to educate Empower and enrich you and let's jump in what's going on guys welcome back to the rollup I remember after the ethereum merge proof of stake everyone was like such a good idea because proof of work doesn't scale unless you have tons of transaction fees you have now a BL blossoming I mean

ordinals the most undervalued nfts in the market they're going to the okay none of that today we're gonna have some fun we're gonna have some education we're talking with Rich of cord out today one of the coolest biggest communities in Bitcoin utility um Rich welcome welcome thanks for having me really excited to chat with you guys here today yeah man I think to start would be great to kind of understand like your your core uh kind of thesis and and kind of principles as to your journey through crypto and kind of how that's LED you into into working uh deeply with uh cordal and um you know some of your personal thesises amongst uh the space

and kind of how that's LED you here happy to give you the the crypto Rabbit Hole story um so first got introduced to to bitcoin as part of this like directed reading thing during college had this professor is about computer security and he told us about the Byzantine General's problem this cool thing called Bitcoin this is like 2011 I wish I went all in at that point I did not I was like oh there's money in the computer kind like the Zoolander thing right like didn't didn't fully get it and then in 2013 cycle came around I was like oh I get this this is actually like this amazing Freedom preserving technology for unstable governments Dynamic currencies like all of that really came into Vogue and I was just sucked in at that point really kind of

true to the the Bitcoin ethos started to get involved in the space to trade altcoins like really started to to kind of go all the way in around 2016 2015 somewhere in that range I heard about ethereum and that really clicked the original like digital oil versus digital gold piece and that was where I said hey this is what I want to spend you know the the rest of my career on and then by the 2017 cycle I was you know fully in found my way to to coinbase I was there for three and a half years leading money movements engineering that was a ton of fun have amazing War Stories really enjoyed it when it was a much smaller company and then as it scaled like crazy you know I kind of phased out of that I'm much more of like a zero to one product Builder

but met a lot of amazing people and again got to launch a bunch of assets and do a lot of cool stuff over over there move trillions of dollarss to that that was pretty cool I don't know if I'll get a chance to do that again um essentially in early 2022 I had heard about this this project core from from a friend it was this team of Engineers work on this novel consensus mechanism they've been working on it for a little over three years at the time and they needed someone to to help shape the organization and to help kind of really spur the movement help build the organization and I said hey this sounds like a zero to one thing again get to work with this amazing team and just play you know a small role where it's this Global glute group of contributors

and that was really kind of we were Off to the Races we did this you know large uh this large uh Community Building effort to really ensure that the holders were the users of the chain and then there was a large like infrastructure building phase and launches throughout 2023 and now we're leaning in super heavy to our novel consensus me Satoshi plus and all the utility that we unlock for Bitcoin and Bitcoin holders so super fired up and lots more to do and I'm sure we'll double click on all sorts of that yeah there's a million different directions we could go I wna I want to like lean into the background like your personal experience a little bit working at coinbase which obviously is a centralized institution now working for

like a a decentralized dow what's the difference in your experience couldn't be any more different uh and again there's pros and pros and cons um what what's nice about like the centralized business is you've got clear reporting structures there's a lot of playbooks that that are in place there's like these vast sums of knowledge that you can pull from and there's a lot of like having been there done that that is super useful as as you scale organizations and that's some of like the the secret sauce of Silicon Valley people always talk about you know like replicating Silicon Valley elsewhere and that's impossible because there's so many people there that you can pull from that have some experience

that you can bring over tweak a few things but the playbooks still works and that's one of the reasons of of really the magic underlying there on top of like the entrepreneur Innovative Spirit you know all that sort of thing but it was very structured coinbase of itself was was more of like a forward leading company in terms of how it thinking and how it was thinking it was remote first from very early on the idea was all about convicted decision- making high ownership all that sort of thing so still very different than like your your Facebook or your Google but still very much a centralized institution where you had reporting lines the ability to you know organize meetings at routine intervals all that sort of thing if you flash forward to the Dow the da is a

decentralized organization there's people from all over the world that bring a variety of different skill sets and it really gives core and other you know projects like it the ability to pull from the best and the brightest from wherever and I'm a huge believer in remote work and leaning into that hardcore I think is not only very true to the crypto ethos but just like the forward-looking ethos and then other kind of differences from that piece it's amazing you get 24-hour coverage right like it's it's very easy to have people that are in the places where you're trying to be Grassroots in all these different pieces and that's really special that's one of the things I love about crypto is there's six billion people in the world that crypto can really help on a day-to-day basis that are suffering from from some sort of either it's inability to access a

banking system or unstable currencies like you name the different problems that crypto solves but being able to actually get boots on the ground in those areas is super duper important to help kind of spread that message and what this technology unlocks um but yeah it's not without it's trade-offs right uh having having no structure is is difficult and we're still you know as an organization still trying to figure out how to navigate those and learning from Best Practices but it's also fun because you're on the frontier setting a lot of these best practices but those are some of the uh the most enjoyable phone calls that you know I have is when I try to go to learn from people that have you know maybe been there a few years prior to us so very different like a day-to-day basis but ton of fun like the Larry Bird of Cordo see uh

See you're you're a big fan um from Boston always always always Larry Bird over Magic Johnson for anyone cles spicy takes um yeah I mean just the entire realm of of of what work is has shifted which is which has been really interesting to see especially for our you know kind of this upcoming generation of people that are involved in crypto um you know for us to hear your story Robin I kind of got in 2016 2017 to even just be able to chat with people from you know 2011 is it's an honor and it's it's it's a rare breed these days which is which is quite

interesting and I feel like that early stage uh interest and kind of early adopter kind of has also propelled some of your journey to kind of be focused on bitcoin as as it it was the thing for for you know the longest time and I kind of brought up in the beginning how um you know proof of work was uh you know is is a model that has been pushed against in terms of its long-term security but as as I also said um and something that a lot of the ogs of Bitcoin now are realizing is like well if you just get some activity on the Chain then a lot of those concerns are basically like they're kind of rendered useless so I'm curious like how excited you are

with regards to like just ordinal and uh BRC 20s and you know what cordal is doing like like is this is is what you guys are building as well as um this kind of activity on bitcoin is this like the is this gonna uh save Bitcoin in the long term like what's your thought on like on this on all the activity because it's quite new right in that past like six months just curious like what your thoughts are um to all the activ so super excited to put it uh to put it bluntly but I think it's good to just maybe take a step back and explain the problem um so one of the the beautiful Parts about Bitcoin is it has this uh this unchangeable monetary policy where every four years the rewards get cut in

half and then eventually it has to sustain purely on transaction fees but even a few Cycles from now there is doubt on whether or not the the system itself is sustainable because of that very difficult uh raction right like having your rewards cut in half every four years is something you have to deal with either by the Bitcoin price increasing or by transaction fees offsetting that and what we've seen since the beginning of last year is when it really started but about six months ago you're right is when it like kicked off really in Earnest was like inscription fever ordinals really coming into the spotlight BRC 20s and I couldn't be any more excited to see Bitcoin back in in in Vogue again it's exciting to build on bitcoin for the first time really since

2017 and really that at that point it was like probably one more divisive times in Bitcoin which was the block size Wars right and and it's awesome to see this this come back into the light and to see all this this Bitcoin development really taking off core is is very excited about this as well because with Bitcoins very limited capacity in in expensive fees Etc go down those those different things you have the ability or will shortly have the ability to actually swap over things that you meant on bitcoin and vice verse and I think we're going to see btcy and BR CI really kick off uh in the next six months I think this is going to be the biggest story for for crypto for at least the next year but I think in Beyond Bitcoin has roughly like a

trillion dollars of trap liquidity today that needs to get unlocked you need an evm compatible chain to unlock this with the right scalability properties Etc and core is really hoping to do that by providing offerings from you know your full Bitcoin dgen or soon to be Bitcoin dgen all the way to your your passive uh your passive Bitcoin hold older and then core also has a very special relationship with Bitcoin where because of this this monetary policy long-term sustainability question is out there core rewards Bitcoin miners for helping to SEC secure the core Network it provides this exogenous block reward to bitcoin miners of which one out of every two Bitcoin miners are just south of that is actually currently delegating to core and that helps smooth out those

rewards over the 81-year emission cycle of core so there is this additional security budget expansion that core helps back to bitcoin with because a healthy decentralized secure Bitcoin helps secure and decentralized core Andy and I bring up this uh this question sometimes um with all the new consensus mechanisms that are coming up on ethereum like we were kind of like framed the question of like well what settlement network is stronger than ethereum and the only answer is Bitcoin um because the cost of corruption is is uh the only one that's higher than ethereum so it let like let's talk about Satoshi

plus here like the consensus mechanism of cordal does it like what is the interconnectivity with the consensus network of Bitcoin is it one one to one it like with cost of corruption you mentioned like it has its own it has its own like validator set could you kind of like give us like the quick and dirty on Satoshi Plus for sure so Satoshi plus is the hybrid of delegated proof of stake and then also delegated proof of work and on the delegated proof of stake side you've got the core holders the core holders delegate to validators in the network on the other side you have the Bitcoin hash delegates which are largely the largest mining pools in Bitcoin that as they

produce blocks they add a little bit of data to the op return field and by doing that they' get this trustless relay process that brings that data over to the core Chain by an actor called relayer and by getting getting that over that is the other part of the algorithm for how these validators get elected it looks at your relative hash relative to your relative stake in early Q2 Bitcoin staking is going to go online as well where you're able going to be able as a Bitcoin holder to non-custodial stake your Bitcoin to add another variable to this equation to help core further extend its security budget and that again is not live yet will be coming here soon but it' be a way to make Bitcoin a yield producing asset and a productive asset they were having to leave the the Bitcoin chain and to think

about the the security properties as of now you can look at it as like deos is here Satoshi plus is in the middle and then Bitcoins over here to the side over time there's this like several research streams into how to get closer and closer but there are tradeoffs with the different performance characteristics that the chain has I'm I'm coming to this realization and I I want this to be an accurate understanding but please poke holes in this analogy that that I'll draw like I can layer is now like pioneering reaking where you have eth in a in a validator you can restake that and extend like that eth to secure another network is that like a similar like like mental model or like a similar

design to what's happening here where Bitcoin miners are now like kind of like Reed like reaking their Bitcoin in a sense like they're now using that that that hashing power that they're using in a Bitcoin minor they're now using that same hash power to secure a proof of stake Network almost like reaking with Bitcoin in some in some ways yes and this is a question I I get fairly frequently it's not technically reaking because there is no staking you know on on bitcoin but like synonymously yes it's that like you're you're reusing that same budget we're applying it soly differently though than like a like a

Babylon if you will where the the idea is that this is securing like the core blockchain itself versus like a world of other blockchains right which is like kind of where that analogy slight slightly breaks down a little bit what I would say is that there is no reason that core can't start to do that in the future as well core and Satoshi plus is very focused on like a multi-chain ecosystem and we think we'll see more and more Satoshi plus chains that come online that will bring that part of the vision to a reality it's not it's only the primary focus but yes and the other piece of the a part of the analogy that you mentioned is it's not only giving the the Bitcoin holders uh the the ability to like restake in this case but also the miners which is this nice

additional property but yes like that that is a good kind of like rough idea and I think what's important about this is that it's it's natively on the Bitcoin blockchain it's not like there's no extra security assumptions from taking you know your Bitcoin off of the chain and so that is appealing to a lot of kind of those OG bitcoiners who are like well the reason why I'm here and why I like this is because it's hard money in a sense right and so it's like that property of not not needing to take that off you know that's a that's a very powerful uh tool for that community so as a former Bitcoin Maxi way back in the day uh yes you're you're 100% right um I

I think that the way to think about it is like people View and I think this is like in acccurate view of all ecosystems but they look at all of the participants homogeneously and that's just not true it's not true in ethereum it's not true in core it's not true in Bitcoin you've got these very different actors that represent very different views and that will never go away like I think that's actually a real sign of Health right is to have like differing views and having talked with many many people you know that that are in the Bitcoin Community for for several years there's a lot of folks that you're 100% right like they never want to get involved with anything that ever leaves the Bitcoin chain and that's totally fine there there needs to be product offerings for those people that's a totally valid view point

Bitcoin is perfect digital gold and making that digital gold year yield bearing is really exciting and I think that for for a lot of folks that that's totally true I also think we're seeing this emergent group of folks who want to soon lend out their ordinal and then take that money into like a levered brc2 trade on a perex that's coming soon as well but those aren't the same people and and I don't think but sorry to interrupt I just I just bum Bamboozled by the genery over here in the bull market we're in here for like six months and we're flipping wow and so and so um then cord out is a key part of this of of this like kind of ordinal

brc2 um combination where does this all kind of tie in um you know so a lot of our listeners very evm focused let's say we're trying to get involved with brc2 with ordinals with cordal like how does cordal fit and then how does one kind of start to get involved so this is definitely forward-looking so like with with that caveat I think what you'll see is a lot of like the minting activity and that sort of thing will stick on bitcoin at least short term but I think a lot of these pieces will start on bitcoin and then start to move elsewhere some of that will come to core some of it will come uh to other places but I think a common pattern that we'll see not far from now is you'll Min an inscription or an ordinal like something that you know

has value that sort of thing on bitcoin it will then get hash time locked over in like a trustless transaction over to core or again like another ecosystem and from there it can either get wrapped or it can get traded on amm you'll have all this kind of opportunity but I think having a lot of that minting process on bitcoin at least short term is is something that we'll see but I do think it will move over into the evm not far from now there's actually several cool projects on core now that are actually starting to build solutions for for that world but I think that's where you'll start to see is a lot of this activity will start on bitcoin whether it's Bitcoin itself or these mints and then it will all come over and start to engage in btcf and then how are you guys thinking

about like the transaction fees on bitcoin is it like a oh doesn't matter if they're a lot it's not supposed to be a chain that you use a ton or if that is it like a problem and then similarly how does how does and do the transaction fees on bitcoin affect cordal um kind of how are you guys thinking about that as as as well so I think a problem is is a tricky way to characterize it I think it's by Design in a lot of ways and I think that's good I think more and more of this activity again will start on bitcoin but will then move off to cheaper places to transact except for maybe some mints and that sort of thing you're looking for like ordinal theory that only exists in like utxo chains so I think some of that will stay forever

but I do think Bitcoin fees will continue to increase and that will a lot of the pieces that do not have to be on bitcoin will move off and I think that's where we see a lot of these like pure on bitcoin Solutions like in theory they they work really well but then the fees make it unsustainable and they'll have to they'll have to move elsewhere when it comes to like long-term fees and that sort of thing the the Bitcoin fees themselves do not actually impact the core fees and that again is where it has its own unique consensus but that is nice core can have cheap fees and you don't lose any of the value there core is also doing a bunch of research into local fee markets and local fee markets I think are pretty hot in in crypto right now popularized by the folks at at

salana but now is kind of starting to look into evm Avalanche is doing some work there as well but that's one of the biggest areas we think will unlock kind of the original vision of Bitcoin which was Bitcoin is money Bitcoin is gold is still a totally fine stopping point don't get me wrong but Bitcoin as money kind of some of like the original more bcash kind of thesis back in the day has a lot of life but no one's really unlocked it yet and that's another piece that that core hopes to really help bring to the market yeah yeah I think um I think uh the the paralized uh virtual machines is going to be I mean it's forcing the hand of those who don't like the like the evm the evm doesn't have paralyzation

baked in so it's it's a little bit problematic it can't really compete with you know the Salas and the sees and the you know etas of the world but you know the the other argument is kind of like about the decentralization and things but that's kind of a conversation for a different day um but I find that I find that quite interesting that that that's something that you guys are pushing on and and are you know trying to focus on um as well or at least thinking about um another thing that I'm curious about is about the cord out ecosystem so obviously the community is quite uh active and quite um you know accessible and vocal and they're almost like a whole another set of validators M themselves social validation Social Capital but within the actual cout ecosystem itself what are your plans for

2024 um and perhaps we can even look back as to how it's grown and the current state and um kind of what what you have in mind for sure so 2023 was really about getting the initial ecosystem in place and getting the info providers like all the different pieces that need to be in place for a healthy healthy functioning ecosystem and a reason that that took you know a year one it's it's hard to go find the the best Partners to go work with but two core was closer towards a fair launch and that was really important where we have this deep tie into Bitcoin to have the early users be the owners of the chain participating in governance and also helping to secure the network so that was very much by

Design but with that you didn't have as much of the kind of like classic VC style news stories and that sort of thing that kind of brings in a lot of those like early info providers you have to actually go track them to your chain with the usage metrics and all that other sort of thing and now we're really looking to scale in the network and ecosystem is we looking to scale into 2024 and there's going to be somewhere around between 50 and 75 daps that will launch here in the next two months which we're really excited about as like a organ as like a ecosystem if you will and we think that's only going to pick up this idea of unlocking Bitcoin utility is really appealing because there's so much potential liquidity there and you know the conversation that

I think should be had is Bitcoin is currently you know like four times bigger than ethereum or something roughly in that nature if Bitcoin really leads this next cycle does that expand and then also just in raw numbers if it's a trillion dollar asset today roughly does that get to three four trillion if some percentage of that comes into defa there's no reason that shouldn't be the biggest asset by tvl and I think we're kind of going to start to see on core and other chains this race to become like the Bitcoin powered X because being the biggest L like borrow lend for Bitcoin is going to be huge right and and I think we just haven't really seen this but take bar lend and go like eight times more dend I think that's where this cycle is going to go but I that that's been a real big

appeal and then the final piece is just the the core audience is really large so for these projects that want to come launch you actually have real users that can go use your network and that's been a real challenge for many builders in the space across every ecosystem right it's like there's only so many users in crypto there's only so much air drop farming and Shuffling from like X to Y and my my personal bet is that this is the cycle where we do cross over as like an entire uh entire industry into like more mainstream adoption and cor is here to help very cool um I'm curious on your thoughts about ordinals like um yeah I mean or even that first and

also like what what's the nft situation like on cordal so I'll take that in reverse order um the nft situation on cordal right now is pretty nent however that ties into the first question around ordinals once the htlc comes online which should be an early Q2 we think that's really going to start to spin up Beyond just like the native core uh nfts that are already in place we think there is desire to to get more utility out of these things uh when I when I think about ordinals what's my personal opinion super cool uh why do I think it's it's super cool you have provable scarcity with ordinal Theory right like that to me is is more interesting on a fundamental level than like a x out of

10,000 mint and that sort of thing obviously that's like kind of losing some steam on ethereum and that sort of thing but I think having the proof B scarcity there via the utxos is quite interesting I also think we're we're seeing some like kind of more novel things where people are going to like the first trans action that Satoshi s to hinny or whatever and trying to get utxos from that and like turning them into nfts so I I think there's some really cool stuff um that's kind of emerging there because you get to use the utxos which historically are very limiting but are kind of a new design space in nft lab so you so it's funny because we have provable scarcity with smart contracts

the the but the issue with the nft landscape is like this idea where your jpeg is is hosted on like AWS so you own this token on chain but they don't pay their AWS bill then um well you lose your image which is kind of a kind of a weird one but we W di too deep I just I just strongly feel that that that the the level of nft community within a uh ecosystem is directly correlated to the amount of actual great Builders Community usage um attention and all of it it's it's such a weird correlation but I've seen it time and time again where it just continuously happens um as we kind of come to a close here I just

would like to yeah just really get our our hands dirty as to how our community can get involved on core what are some of the great opportunities there for yield um you know how can we if we have funds on rollups or if we have funds on centralized exchanges or Bitcoin how you know how can we access Cordell um you know and take advantage of of you know kind of everything that's going on there yeah so there there's several different ways to get to get involved so one is core is supported by many different centralized exchanges out there that offer on and off ramps uh into the ecosystem core also has a bridge that was uh done in concert with layer zero so it's very easy to go back and forth from polygon arbitr eth main

net like pretty much any evm chain so it's very easy to get to get on and off when you when you get into the ecos system there's various providers that you can do stuff with like sushi Swap and and that sort of thing and the idea as of right now is like core is pretty early a lot of this stuff is going to spin up in February and March of this year and it's good to be early uh to ecosystems is probably the the wink wink that I I can say on that one um but there there's a lot of cool stuff that that's coming in the not distant future but there's also lots of great projects to to play around with now we've got several of these launches in uh in q1 and Q too with the hash time lock to bring over all these things from Bitcoin

our trustless uh bridging solution from Bitcoin and then also the Bitcoin staking that we think will bring a lot of potential interested builders in the ecosystem to help unlock you know all that trip trap Bitcoin utility so bunch of stuff to do now ton of stuff to do month or two from now so we're still early it's good to be early in crypto coming from an OG would not fade would not fade rich last question um are you Satoshi I wish I wish uh not for not for the monetary reason which this is going to sound like I like such a purist

answer though uh but it would be for just like the good that he that Satoshi this group of people like brought to the world I think when we look back on this century and the greatest invention of this Century it's hard to like Fade to use your tur Andy like the next like you know 75 years but I think it's going to be very hard pressed to find something that does as much good for the world as Bitcoin did and like you can go into Ai and like all these other amazing things or whatever which are like amazing technical Marvels and that sort of thing but I think hard provably scarce money is probably gonna be the imtion of the century I mean it's like yeah it's a zero to one it's like a zero to 10 it's just it's something that you have in

innovators and then you have people who think of completely changing something that is so entrenched and it's just yeah it's magnificent so I guess if you're not Satoshi then you're either Craig or Roger um and um maybe you're friends with them um I remember the good old bch airdrop back in the day the OG airdrop on Kraken um and yeah I mean dive deeper into the into the Bitcoin topics I think we'll save some of the bigger blocks and the uh decentralization conversation for another time I really appreciate your time rich and coming on and kind of sh sharing a lot of insights and um you

know really excited to see where we can go with cordal and guys we are still early it is good to be early in crypto thank you Rich thanks for having me