Jimmy Song on The Blockchain Revolution Myth

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Interview location: Oslo
Interview date: Wednesday 29th May, 2019
Company: Jimmy Song Consulting
Role: Bitcoin Expert Witness

The Blockchain Revolution: decentralising the world and taking power away from the elite. Five years on, there is not a single, notable example of a successful breakthrough application of a blockchain outside of money. Arguably, there is not a single breakthrough application of a blockchain outside of Bitcoin.

While some may point to Ethereum as a success, but now the ICO bubble has burst, even the fundraising use case has done nothing but create more failed blockchain projects. Ethereum’s struggles highlighted with growing discontent amongst developers and Consensys shopping for a $200m fundraise while cutting staff and failed projects.

Why has blockchain become a thing? Why do “experts” continue to push the technology, looking for a problem for the blockchain solution? Are people disingenuous, are they filled with hopium for their bags held, or are they straight up scammers?

In this episode, I talk with Bitcoin OG, Jimmy Song about the myth of the blockchain revolution. Jimmy Song explains what a blockchain is, why the only real use case is for money, the problem with Ethereum, and why Gigameg blocks won’t work.

TIMESTAMPS

00:05:23: Introduction to the Oslo Freedom Forum
00:07:16: Touching on the lack of Blockchain education in the mainstream
00:09:58: Exploring what a Blockchain actually is
00:13:17: Delving into why people are using Blockchains and their advantages over databases
00:18:04: Touching on the perfect conditions that led to Bitcoin’s immaculate birth
00:21:00: Discussing why Blockchain speed is not an important factor in Bitcoin
00:25:27: Exploring the solution is Ethereum trying to solve and how does the technology scale?
00:29:22: Discussing the potential success of Samson Mow’s upcoming STO on Bitcoin’s side chain Liquid
00:33:52: Delving into Jimmy’s thoughts on how Ethereum plays out in the long term
00:38:40: Touching on how to cut through the waffle in the mainstream Blockchain hype
00:40:59: Discussing Peter’s recent update on court proceedings with Craig Wright
00:42:59: Explaining the difference between UK and US freedom of speech laws
00:44:44: What Peter is required to do to win the trial against Craig Wright
00:46:48: Exploring the bigger picture and potential strategy that Craig is trying to implement
00:49:14: Discussing gigameg blocks and why they are terrible for the network
00:51:59: Delving into Jimmy’s recent book and the background to writing it
00:56:42: What is coming up for Jimmy over the rest of the year
01:01:30: Final comments 

 

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TRANSCRIPTION

Peter McCormack: Morning Jimmy.

Jimmy Song: Morning Pete.

Peter McCormack: So we're here in Oslo at the Freedom Forum. How have you found it? Because like me, you go to a lot of conferences.

Jimmy Song: Yeah, I do and most of them are Bitcoin conferences. I'm finding this one a lot of fun in many ways. First of all, they know how to party! I don't know if you've been to a lot of the late night stuff, but it's lot of fun. Not to say that Bitcoiners don't know how to party, but it's a different kind. The male/female ratio is a lot different at these things.

Peter McCormack: Very different.

Jimmy Song: There's people from all over the world, not necessarily just whoever happens to be within a 500 mile radius. I'm actually going to the talks, which is different because I don't know about a lot of human freedom issues and there's some that I vehemently agree with, others that are vehemently disagree with. So it's been great.

Peter McCormack: What I also found quite interesting, is that a lot of the talks were quite short and left you with just very key points to take away rather than a huge discussion where you have to go away and do your research, you just kind of got the impression, "okay, China's bad. A lot of people are living under authoritarian regimes." You've got these very key takeaways and I thought that was quite useful.

Jimmy Song: Yeah an it's a lot different than say a technical talk or an ICO presentation or something like that. One feels a little too complicated, another feels too snake-oily. Here, they drill down their message and make it much easier for you to swallow and understand. There's definitely subtleties to all of these issues and if you talk to some of these presenters, you get that. But I like how they distill the message in a way that that's easily swallowable, at least at first glance.

Peter McCormack: I'll tell you another good thing, because we obviously spoke in advance about doing this interview, about the myth of the Blockchain. You wrote your article on Medium and it's very good timing actually, it's a stark reminder coming to this because there's been a lot of Bitcoin talks, but at the same time I've had people come to me and saying, "oh, so you work in Blockchain" or I met somebody who's working on a project, she said, "we've got a Blockchain project, Blockchain for good!"

So I found myself reiterating that you need to be very careful about what you think a Blockchain can do. I guess I'm not as firm as you in terms of my kind of maximalist approach to Bitcoin, but at the same time I'm pretty much there. But it's been stark reminder that there's so many people when they come in at the edge, they have this broad cryptocurrency market to navigate and try and understand, which is very hard.

Jimmy Song: Yeah, it is very hard. This is one of the things that your podcast obviously is trying to help people navigate. I had breakfast this morning with a bunch of the freedom fellows and these are basically activists all around the world. They basically kind of won like a scholarship from the Human Rights Foundation and part of what I wanted to do was teach them about Bitcoin and financial freedom and they're often working in oppressive regimes.

I was telling them, "well if you need to get your money over to your operatives, then Bitcoin might be a pretty good choice," describing some of it and then somebody raises their hand and they're like, "hey, so there's this Blockchain project that one of my friends told me about and I can blog something and it'll be on the Blockchain and it'll make sure to pay the author every time somebody reads it" or something. I'm like, "oh God!'

I just straight up explained that most of these things are scams and whether the creators know it or not. There's a tendency for the word 'Blockchain" to be used to sell almost anything, like "oh, you have this problem? Yeah, Blockchain will solve it." It's become this like panacea for everything!

Peter McCormack: Well, this is where one of these Twitter arguments started, whereby I was trying to make a point to people that I always try and think of... I don't try to think of the people already in, who understand it and there's a lot of people who know better, who still believe in other cryptocurrencies and other Blockchain based projects. But I was trying to say, "look, people coming in, this is really hard to navigate."

You could tell somebody about Bitcoin, they could go to Coinbase and they're going to see Bitcoin and Bitcoin Cash and they've got no way of knowing that Bitcoin is true Bitcoin and Bitcoin Cash is nonsense. I don't think we've still crystallized a way of explaining this simply to people, why they should focus on Bitcoin and why they should forget about Blockchains.

But you've done an article about it. So let's approach it from the simple angle first. Imagining somebody, this is the first podcast they've ever listened to. First one, tell them what a Blockchain is?

Jimmy Song: Well, Blockchain is a really a very specific set of technologies that basically power Bitcoin. When you think about Bitcoin, well assuming that somebody that's coming in, that doesn't really know what Bitcoin is, the easiest way that I've found to explain it, is explaining it as decentralized digital scarcity. Now, those words might seem a little bit intimidating, but if you think about centralized scarcity, it's just scarcity that's controlled by a central party.

So Mickey Mantle Baseball cards, Chanel handbags and concert tickets are all centralized scarcity, it's issued by somebody and for all you know, they can issue more without needing your permission. They're also a big source of knockoffs, because it's relatively easy to produce and try to imitate at a much lower cost than their actual value relative to that scarcity.

Now, decentralized scarcity is something like gold or in the past, something like salt or wampums, that were used by native Americans in America. Those are all things that sort of occur in nature and in principle, you don't need anybody's permission and anyone can try to go gather some of that stuff. Turns out to be hard because it's actually scarce, it's actually rare and you can't just produce anymore of it.

What Bitcoin is, is it's decentralized digital scarcity. We don't really know that was even possible, because everything on the digital realm, there doesn't seem to be something that's really kind of natural, kind of like gold, wampums or salts that you can grab. But it turns out math is actually natural and that that's the brilliance of Bitcoin and what Satoshi created. So when you're thinking about Bitcoin, you really have to think in monetary terms and the things that are important in monetary terms are that it doesn't really change.

You want predictability, you want a stable base. I call it sort of the base layer of civilization. You want that to be stable, not moving or changing around all the time, otherwise you'd destabilizing everything else. Second, you want to be very careful with it. It has to be absolutely solid technology because if anything is broken or exploitable in it, then people will take advantage of it.

So that's what the Blockchain stack is. It's a particular set of technologies that makes coordination expensive and building on it relatively easy, because it's so solid and doesn't change very often. When people are talking about the word "Blockchain", they don't seem to really get that that's what the purpose is. They seem to sort of impute on it whatever qualities that they want.

Peter McCormack: So why do you think people are using Blockchains? Not just the term, but actually building Blockchains, whether it is decentralized or whether it is permissioned Blockchains or corporate Blockchain. Why do you think people are doing this? I don't believe in every instance it's just a marketing term. But why do you think people believe they've got something different than just a database?

Jimmy Song: Well first of all, it definitely is a database and it's a subset of a database, it's just arranged in a particular way. The word Blockchain comes from, a chain of blocks, every block points to a previous block. So it's literally a link list of blocks from a computer science perspective and all of that has data that's verifiable and so on.

The reason why the word Blockchain has sort of taken on a life of its own, is because right around 2014, 2015, a lot of people were noticing Bitcoin. Especially the rise in late 2013, brought a lot of media attention and a lot of people were looking at it and suddenly people were saying stuff like, "well, I believe in the technology, but I don't believe in Bitcoin."

That was a way to sort of distance themselves from sort of a seedy reputation that Bitcoin had. You have to remember in October of 2013 was was Ross Ulbricht was arrested and the Silk Road was taken down. It was also when a lot of people went to Bitcoin on Backpage.

That's the seedy magazine in the US and a lot of other things that were associated with Bitcoin that were sort of not for kids as I would say. So a lot of people wanted to get... They were trying to figure out what made Bitcoin special and they came to the conclusion, "oh, it must be the technology."

I kind of blame a lot of Silicon Valley and people like Don Tapscott for this, he wrote the book, "The Blockchain Revolution" and he made the case that Blockchain is going to change everything, that it's this magical thing that will make everything perfect somehow and that vision got basically sold to everybody. It took on a life of its own very soon afterwards. I think that's how it happened. I don't know, it's hard to say what went on in the minds of MBAs everywhere. But that's what it seemed like to me.

Peter McCormack: Was there ever a time yourself where you thought a Blockchain could do more than just Bitcoin?

Jimmy Song: Yeah, so I worked for a couple of years, trying to make a Blockchain work. But what I realized is it's kind of an impossibility. The best you can do is something federated and that's essentially what the Liquid side chain by Blockstream is doing. I think in that particular case, the tradeoff makes sense because it's still centralized, it's federated, but you get all sorts of privacy properties as a result in that tradeoff. So you lose decentralization, but you also gain privacy almost completely.

So the only choices if it does ever become a choke point, then the entire thing has to be shut down. You can't selectively, sort of band transactions or something like that. So that's one aspect of it. But really I did try for a couple of years, trying to make something work based on "Blockchain technology."

What I found and I did study a lot of the other tech, including something like IBM Hyperledger, is that you almost always end up... Like if you want to make money, you're going to need some centralized component and oftentimes you need that anyway, just because of the regulatory requirements and compliance requirements.

So in the end it's like, "well then why are we making this really slow, expensive, hard to maintain and hard to upgrade database, if we're going to have a centralized point of failure anyway?" So in the end, I tried to make it work and it just didn't. I do understand the perspective where people are coming in and getting excited about the possibility. They just haven't worked it out yet. They haven't come to the realization, "well, okay, this can't work!" That's the key thing.

Peter McCormack: So it's only good for money and only because for money, in the instance of probably Bitcoin?

Jimmy Song: Yeah, at least that's the conclusion I've come to. It's possible you could use it for something else, but...

Peter McCormack: Well we had the Microsoft announcement, that seems very interesting.

Jimmy Song: Yeah, so I think the way they're doing it is they're anchoring on the Bitcoin Blockchain. So it turns out that building something decentralized is really, really hard. People throw around the word decentralization, like it's something that you can just kind of conjure up very easily, but you have to remember that Bitcoin kind of had an immaculate birth.

It was the first and a Satoshi kind of disappeared. Those two facts are not common in anything and the first is certainly not true of any other cryptocurrency afterwards. The second is not true of almost every other coin. I think Monero might be the only one where the creator has disappeared, something like that.

Peter McCormack: And perhaps Grin.

Jimmy Song: Arguably, a lot of the people are still at least around. But creating decentralization where there's no single point of failure, especially from a development perspective, ends up becoming really, really difficult. You can see this in projects like Ethereum where you have Vitalik basically having the last say. He's kind of benevolent dictator for life and this is the case for almost every open source project. It's very hard to have software that's upgraded in a coordinated way, that's decentralized.

Because Satoshi left, what you have in Bitcoin core is a ton of people that are doing things at kind of a consensus level. The one developer that tried to take the title benevolent dictator for life was Gavin Andresen and a lot of developers did not like that, because they knew what a threat that would be to what Bitcoin was. So in many ways, when you look at something like Bitcoin Cash, what's happened is, well they still have to deal with the coordination problem and they centered that around Amaury Séchet, so he's now pretty much benevolent dictator for life for BCH.

Of course Craig Wright didn't like that, so now Bitcoin SV, he's the benevolent dictator for life in Bitcoin SV. People act like decentralization is easy to achieve. I really haven't seen it in anything but Bitcoin. So Blockchain technology could be useful if you can also achieve decentralization with it. It's one of the requirements, but it's not a sufficient condition and that's something that I think a lot of people don't really get yet.

Peter McCormack: But people will say, Jimmy that, "Bitcoin is myspace! It's slow. It's got a seven transactions per second limit." What is your answer to that? Because there are Blockchains out there which are faster, that can hold more data. So let's start with the speed. Why is 10 minutes important?

Jimmy Song: Well for the coordination aspect essentially. So you need every node to be sort of in sync with what the current state of the ledger is. Obviously, if it wasn't, then one node might be saying, "okay, this payment is good." Another might be saying, "it's not." That coordination is an essential part of the ledger and an essential part of the decentralization.

If one is saying one thing and another is saying thing another, you have a problem. You need to be able to resolve who's right and proof of work is actually the way you're supposed to do it. If one has more proof of work, then you decide, "okay, well that's a nicely objective standard." Almost every other consensus algorithm that I've looked at, it's either really subjective, requires trust or in which case it's not Byzantine fault tolerant, but there's all sorts of problems with these consensus algorithms.

Not necessarily because they don't work, as if you have the right assumptions, of course they work, it's just that they're not decentralized in any way. It's just, "well most of us think that it should go that way..." None of those kinds of consensus algorithms ever survived something like what happened with 2x, where the businesses were like, "oh, we're going to go this way."

In any scenario where you had something other than proof of work, the businesses would have one. So when I think about the transaction speed and things like that, honestly, I don't pay attention to those criticisms that much, because in a way they're solving for something that's not really a problem right now.

Peter McCormack: But it's a term people will be sucked into. Someone new might come in here, "oh, but Bitcoin is slow and it's not scaling and we've got this other Blockchain that's fast!" So how do you convince them that these aren't important factors?

Jimmy Song: Well, so I ask what's the value of Bitcoin? This gets into a much deeper topic, which is what is money and what's the utility of money? This is a really deeply philosophical and almost like, at a core, human question. I've thought about this quite a bit and, and really if you don't come to the conclusion that the main value is as a store of value, that it can store value in an effective way over time, versus almost anything else.

If you don't come to that conclusion, you probably shouldn't buy Bitcoin. I'm not even sure you should buy any other cryptocurrency, because if you're using method of payment, almost everything is better and there's all sorts of other things that are way more convenient, way faster and way easier to use. If you go to China, there is WeChat, you can pay everyone with WeChat or whatever. 

That's way more convenient and way more transactions per second. It's certainly centralized, but so are all these other cryptocurrencies, so like it doesn't really matter. You have to learn what is the value you actually see in Bitcoin and if you don't see the store of value, value, then it's going to be hard for you to understand why transactions per second are not important.

Now there are people like Roger Ver going around saying, "oh, we can do X transactions per second", except it doesn't matter if there's like nobody wanting... You can make a really wide lane road, but nobody wants to go where you're going, so it doesn't really matter!

Peter McCormack: Okay. So let's look at Ethereum because you've obviously got your bet with Joe. One of the things I've often thought about and I've raised a number of times is, how can so many people be wrong? How can there be so many developers interested, so many investors interested, so many people building things and then they be wrong? That's the first thing I think of.

The next thing I think of is when I look at it myself, just trying to be as objective as I can, I just keep thinking, what solution are you providing that anyone cares about? And how can this possibly scale? So it seems kind of obvious to me, but at the same time, how can so many people be wrong?

Jimmy Song: I mean a lot of people have been wrong about a lot of things. This has been true throughout history about a lot of different things including scientific breakthroughs. There's a particular view of scientific history which says that you need a bunch of people to die off first before you make some progress. I think the germ theory, like at the time, there were a bunch of older doctors that just refused to wash their hands.

They just didn't believe in it and it took them dying off before, germ theory really caught on. We know germ theory is right, how could so many of those people be wrong? Well they were stubborn, they were prideful, I don't know. There's probably sociological reasons, they're probably reasons related to their status or position or whatever. But for whatever reason, it's very possible for a lot of people to be wrong.

We also know that the Wright brothers were a very independent shop with a very tiny budget. At the same time that they were doing something, there was a whole government funded effort to try to make man-made flying machines and they were spectacularly unsuccessful and they spent way too much money. They had a lot more press, but they were all wrong.

A lot more people went towards that. But I mean, rightness and wrongness and how many people are in each crowd, they don't necessarily correlate. We tend to think they have to because we're so used to a democracy. It's kind of, majority means that it's right, kind of a relative thinking, but that's not how truth is arrived that.

So that's one part of the question which is about how could so many people be wrong. As far as the actual things that Ethereum provides, you're absolutely right. There's nothing really that Ethereum provides, other than a platform for ICOs and really that's launching other scams as far as I can tell.

Peter McCormack: I would [Inaudible] for stablecoins as well.

Jimmy Song: Yeah, it could be and you could do a fully back stablecoin. I still don't understand why they need to be on any sort of Blockchain. You can do the same thing from a freaking website with and a centralized database just fine, because you need to look up how many coins here or there or whatever. I guess people like having the infrastructure in place already and sort of the pseudo regulatory dodging that you can kind of do with that.

But that's sort of a legal murky area. As far as ICOs, the killer app on Ethereum is the ability to launch ICOs and ICOs are just a way of printing your own money. So it's the ability to create money printing machines and the ability to then print money at your own leisure, which is essentially what people have been doing.

Peter McCormack: Okay. So the fair question here then would be, Samson, who I'm going to be speaking to, has just announced his project and he's going to be launching an STO on the Bitcoin Blockchain.

Jimmy Song: I think on Liquid, right?

Peter McCormack: Yeah, do you see that as having the same problems or different problems?

Jimmy Song: So, he's doing it on Liquid... So security tokens are kind of weird and I speak from my first experience as a Bitcoin developer being on the color coins project, which is essentially kind of like, at least when I was developing it, I was always thinking security token-ish things or bonds or something like that, the stuff that was backed by something. ICOs on the other hand, they're backed by nothing. I never thought that would ever take off, because why would you buy something that's backed by nothing? I don't know.

Peter McCormack: People are still doing it.

Jimmy Song: I guess I underestimated the marketing brilliance of the Vitalik and friends, but that's essentially what it's become. But security tokens, I can see a platform like that working. The regulatory hurdles though are what make it very kind of iffy for me. If it is a security token, then there's a company that backs it.

But at the same time, how our regulators going to look at that, especially if it's on Liquid? The assets are confidential, the amounts are confidential, you have no idea who you're sending it to. Everything is private! That's not something that regulators generally like, especially with respect to ownership of companies and things.

Peter McCormack: Just going back to Ethereum, how do you think it plays out long term? You obviously have your bet. Just say you were to lose your bet, would you at that point say, "okay, there is a good argument here now that you haven't considered" or could you lose the bet and still consider yourself as being right?

Jimmy Song: I mean it's entirely possible I get sybil attacked in some way, shape or form. It's going to cost whoever sybil attacks me a lot of money. But it's possible someone does that. So yeah, I very well could lose and have it not be detectable and...

Peter McCormack: Not even a sybil attack. Just say there is some breakthrough and there's a take up of these decentralized apps, whether or not they make sense. Could you consider yourself being in the wrong or do you think you can lose and still be in the right?

Jimmy Song: I think I can lose and still be in the right. Maybe the market was irrational for a while and a centralized service that does the exact same thing, does it cheaper, better, faster and I'm proven right ultimately. But if there are five things like that, then mad respect. Maybe I was wrong and I'm very open to that possibility. I don't think I am! But if Ethereum devs do it then, then go for it. But prove me wrong guys. That's kind of my challenge here.

Peter McCormack: How do you think Ethereum does play out though?

Jimmy Song: The way I see things play out, they'd been trying to move to proof of stake for many years and that's always been the big argument for Ethereum is, "we're not going to waste all this electricity. We're going to move to proof of stake" and things like that. Right now, there's a lot sort of fragile pieces around Ethereum. We know Infura is what everyone uses as their full nod, because nobody wants to run their own.

Peter McCormack: Hosted on Amazon!

Jimmy Song: Yeah, it's hosted on Amazon and I'm told that costs ConsenSys a lot of money to keep it up. So in a sense, there's multiple central points of failure. If Amazon ever bans ConsenSys from hosting infura, that'll knock off a ton of Ethereum developers from being able to develop on it. There's also, Vitalik, if he decides to hard fork in some fashion, that seems utterly unfair to everybody, then that that might cause a giant exodus. I'm not sure.

There's also regulatory central point of failure. If these ICOs are security tokens or whatever, are declared illegal in some fashion, then that's a giant risk as well. There's multiple points of failure here and my guess is that at least one of them, in some way, breaks and that's the end of it. Or they try to revive it, but some sort of prolonged downtime or prolonged litigation or like some contentious thing that causes a lot of people to leave or I don't know, maybe it loses interest very slowly, but I don't see it succeeding. I really don't.

Peter McCormack: So probably a long slow death or something catastrophic?

Jimmy Song: I guess that covers just about every way it could die!

Peter McCormack: Yeah, well because I think about it and I just think how can this play out and what might happen? One thing I've been hoping for and waiting for, is somebody at some point to turn around and go, "do you know what, we were wrong. Everyone else was right who'd said about this. These Blockchains are nonsense. Bitcoin is the only use. We were wrong. We were sorry." I'm waiting for someone to do that and it just doesn't seem to be coming.

Jimmy Song: You got to remember that a lot of these guys that have created these coins and stuff, they're kind of celebrities at this point. Vitalik is known throughout the world. I mean, you look at their follower counts, they're way more than any Bitcoin person, even Andrea Antonopoulos.

Part of that is that they've built sort of a celebrity around being the creator of the coin and they have not only a financial stake in it, although Charlie claims not to, but I would also say that I own no Litecoin, if I was Charlie. I would also claim that I have no Bitcoin either, just as an offset. But not only financially, but there's also an emotional attachment to your creation and it's kind of like admitting that your baby's ugly. I really don't think that that's going to happen.

Peter McCormack: I'll be interested to see how it plays out. All right, so if you were going to leave somebody with a final thought on Blockchains. Jimmy, somebody is meeting you at an event and said, "I've got a Blockchain project", or "I've heard about these Blockchains", what would you just say as a close it off? How do you close out the argument?

Jimmy Song: So I would say most of the time when people are talking about Blockchains, they don't know what they're talking about and Blockchain has become sort of this blank canvas onto which you can solve anything. Generally, the pattern is this; you're an industry X, you have some giant pain point and somebody that knows something about Blockchain says, "oh, Blockchain can solve that."

For music, it's like, "oh, make sure that the artists' gets the rights" or whatever, for healthcare, it's like, "well make sure that the doctor sees all of the relevant patient information without violating HIPAA, at the right exact right time without any loss of privacy and compliant with all the laws" and all that stuff. Or you might be a lawyer and it's like, "well, you could make up perfect smart contract that will execute everything at the exact right time with the right decisions and you don't have to litigate anymore" or something.

It's always like, let's take the biggest problem and the biggest costs and lets remove them. Doesn't that sound like it's a little too good to be true? How can one technology that's made for me to be purposefully kind of slow, hard to upgrade and very distributed, it's supposed to be decentralized, how can that solve all of those problems? Shouldn't you be just at least a little bit skeptical? 

This is exactly what snake oil salesman used to do, "oh, it'll cure your cough! It'll cure your syphilis! It'll cure your nose bleed!" Whatever ailment you had, somehow snake oil would solve it and that's kind of the word Blockchain has taken on. Whatever problem you happen to have in your particular industry, it's going to be solved with Blockchain. You should be skeptical of claims like that and you shouldn't be taken in by these hucksters. That's what I would say.

Peter McCormack: All right, well there are two other things we can talk about today. I'm going to let you choose. We can talk about toxicity in Bitcoin, because that's been talked about a lot recently. Or we can talk about Craig Wright?

Jimmy Song: Oh we got to talk about Craig Wright, because he loves you and I'm as curious as everybody else!

Peter McCormack: Okay! So obviously I put out a tweet today, just to explain the update on the legal situation. So I've spoken to lawyers and I'm in a position whereby if I don't have pro bono support that to file the initial defense will cost anything up to £50,000.

Jimmy Song: Wow. Just the initial?

Peter McCormack: Just the initial defense. Then if we don't go through mediation and agree some form of compromise or agreement, and if it went through as a full defamation case, then the cost could be anything up to £500,000- £750,000 and then if you lose, it's £1.5 million because you have to cover their costs. So there's options. 

So option one is, don't contest it and if you don't contest it, I will be subject to the £100,000, possibly a bit more, to legal fees and I'll have a default judgment against me that'll probably say I can no longer call Craig Wright a fraud and a liar. So there's that. The benefit to doing that is he doesn't have his day in court and doesn't get to say, "oh look at judge agreed. We are Satoshi." Even though that wouldn't be proven. 

The second one is to represent yourself, which does come with a number of benefits in that you save costs, but also you are able to speak directly to a judge and just highlight how you're being bullied and intimidated by billionaires. The third one is have council to support it. But anyway, so right now it's just a number of choices. I'm going to fight it. I'm not going to walk away! It's just number of choices to do it and just figuring it out. So yeah, that's where we're at man.

Jimmy Song: Wow! I guess this is why people bring libel suits and things like that. It's sort of upping the stakes and if you don't have nuclear weapons at your disposal, it's kind of hard to fight back.

Peter McCormack: Yeah and we don't really have good freedom of speech laws in the UK. It is one of the things I do admire about the US now actually.

Jimmy Song: So tell us what that actually means?

Peter McCormack: So the burden of proof is reversed in the UK. So if this lawsuit was in the US, Craig Wright would have to prove he is Satoshi to win the case. Whereas in the UK, for me to win the case, I have to prove he isn't. I don't think it's binary. I think it's more of a burden of proof and I think we have enough evidence there. I was talking to somebody this morning and they said, "well, there is nobody in this industry who has been proven as a liar and a con man more times than this person".

He tricked Gavin potentially, I mean, I don't know what happened there. I also turned round to them early on, because they're suing me for £100,000, I said, "I'll sell everything I own. I probably can pull together £250,000. I'll give you that if you just sign a message with Satoshi's keys."

Jimmy Song: Or you send $1 worth of Bitcoin! That is very compelling. So I'm not sure how a judge would react to something like that. How do they use information like that?

Peter McCormack: I don't know. I've not been in this position, but if you want the world to believe you are Satoshi. You want the world to believe that because you want to push your technology and your agenda forward and you also want to win a case where somebody is defaming you and that person is turning around saying, "do the one thing that we know would certainly give a lot of credence to your claim. Sign it."

Not only are you going to prove to the world what you're trying to say and you're going to get a higher payout that you want in the court and you're going get everything you want! So why wouldn't you do it?

Jimmy Song: So that's a credibility thing. So for the audience and for my benefit, what is the statement that he claims is libelous? Is it Craig S Wright is a fraud or Craig S Wright is not Satoshi, because those are both different.

Peter McCormack: It's both.

Jimmy Song: Okay. So you'd have to prove the opposite for both?

Peter McCormack: Yes, but they're kind of tied aren't they? But the fraud thing is quite broad, because obviously he's had various other legal situations. So he had with the Australian tax office, where he made his claim based on having some super computer, I can't remember the full details right now.

Jimmy Song: He also claimed to have a doctorate from a university and the university came out and said, "no you don't." So that I mean, probably is a slam dunk on the fraud thing, because if you're misrepresenting yourself, that's pretty much fraud? But the other one, is not Satoshi, that seems a little harder.

Peter McCormack: Well it's harder because you're trying to prove a negative. But if you're talking about reasonable doubt, I've been bookmarking everything and I've gotten hundreds of articles and situations where he is consistently proved himself either as a liar or unable to provide the proof that people want, that he is Satoshi. Why not just sign the keys? I still don't understand. What's the argument not to sign the keys?

Jimmy Song: Well I kind of wish I knew! I guess he could argue something like, "well I lost them" or something and there's no way you can prove that he didn't or something like that.

Peter McCormack: But he's never claimed that he's lost them? That would be suddenly convenient.

Jimmy Song: The fact that he went back and edited his old blog post. That to me is just... Man! All the other other cringey things that he does, like sign the fake signature article that I wrote about a while back. It's just so obvious that he's trying so hard to prove something or deceive enough people or something like that.

Peter McCormack: Well, I think the worrying thing about it all is, well there is a couple of things. Obviously the abuse of the court system and the bullying and intimidation. I think we need a better system to not allow this. One thing I've read quite concerning recently is, you know he registered this copyright?

Jimmy Song: Yeah. You think that's related to this case?

Peter McCormack: I think everything's related. It makes me laugh how consistently amateur it is though. Calvin Ayre comes out and says, "oh, we've got another piece of great evidence that Craig is Satoshi, that we'll be releasing this week." He releases the fact that he registered the copyright and then everyone comes in and says, "well, anyone can do this! Anyone can register it!"

Also he paid $800 to get it expedited and then we had a statement from the Copyright Office saying, "we don't investigate these." So again, it was so amateur, but there was another article that came out that said that he will be pursuing people who misuse the copyright. What I think is concerning is here, could he go to Coinbase and Kraken and sue them for using his copyrighted Bitcoin? What's that scenario?

Jimmy Song: Good question. I mean maybe they can sort of gang up and come to the UK. Maybe he sues Blockchain.info. I think they're based in the UK. So maybe they can come to your defense with them and maybe split the cost or something. I don't know.

Peter McCormack: See, this is the problem. It's so obvious that he's operating some form of long con. It's so obvious that he isn't Satoshi. He can't code. His moronic ideas around what Bitcoin should be, that its government friendly, enterprise friendly, which is completely antithetical to everything I've learned about Bitcoin. Yet by having deep pockets or having the support Calvin Ayre's deep pockets, he can intimidate and bully people.

Jimmy Song: Isn't that so frustrating that despite all of the ideals about democracy or whatever, we really still kind of live in an oligarchy. The people that have the money, get to set the rules or get a tremendous advantage over those that don't. That's kind of what I'm hoping Bitcoin changes, but unfortunately the systems are set up so that the rich people always have their thumb on the scales.

Peter McCormack: Well actually kind of relevant to what we spoke about earlier, because what they are pushing with their Bitcoin Satoshi's Vision is the gigameg blocks! We've talked about this already. What is the problem of having a gigabyte block? Is it doable?

Jimmy Song: Can you transmit a gigabyte? Yes. Is it good for the network? Absolutely not. They already had a very large block that caused a fork very quickly.

Peter McCormack: Is this because it can't propagate quickly enough?

Jimmy Song: Yeah and you need the 10 minutes in order for stuff to propagate. Once it's propagated, then you can make sure that every node can check it. If it doesn't meet the requirements of consensus, then it needs to get rejected. But if nodes can't really do that, then it's a problem and you end up, especially like with something so large, just the bandwidth requirements to go from one node to another, given the current bandwidth speeds, just doesn't work. But their position has been, you don't really need more than six nodes in the world or something ridiculous like that.

Peter McCormack: Do you think there's any chance Satoshi himself could have screwed up and gone with on chain scaling and believes so?

Jimmy Song: Yeah, I don't think what Satoshi thought really matters at this point. We have the Bitcoin we have now and we know the limitations that has right now. We know what bandwidth we have right now. Who knows, maybe there's a fast fibre optic technology that can be laid underground that's really quick and we have like terabit speeds tomorrow. In which case, yeah, maybe we can do something that's kind of a soft fork that increases block size on chain.

I don't know. The point is, from an engineering perspective, we've optimized pretty well on where things are. But even that might not be exactly the optimum optimum. Luke Dashjr thinks that blocks should be smaller, just given all of the different restrictions that we have with hardware and things like that. 

But those things can improve and it's possible in the future we might be able to do something, but that's not a conversation we need to have right now, because things are always changing and people tend to sort of project linearly and that's exactly the wrong way to think, when you're thinking about technological improvements.

It's almost always like orders of magnitude improvements with some interesting technology nobody thought to apply and that's where innovation happens.

Peter McCormack: It'd be great to finish up just to find a little bit about your book as well, because we talked about it the other day, because you've gone through the process of writing a book and there's quite an interesting story behind that, where you were saying about concentration. So what was the background of writing the book and just how much work went into it?

Jimmy Song: So I started the book, I think December 2017, right at the height of the bubble. That was when I think I signed the contract with O'Reilly and I had an editor that was keeping me accountable. She really kicked my ass! I tried to write at least a little bit, like a paragraph a night or something, but then there was like a whole month where I just didn't do anything and she would just be like, "Jimmy, what's going on? You need to write more!" Eventually, I went on that cruise, THAT cruise...

Peter McCormack: I always call that the ugly old goat cruise!

Jimmy Song: It was an interesting cruise, an ugly old goat was indeed there. But basically I stayed in my room that whole time and just wrote and called room service for coffee and tea. I think I went out of the room once a day to go to the steak restaurant and ate steak with my friends and then came back and wrote some more. That's pretty much all. I got a significant amount of work done during that cruise. I think I wrote like four or five chapters while doing that. So it is possible to get it done. The hard thing is sort of time-boxing it.

As most writers have told me, it's not the writing that's hard, it's sitting down to write that's hard. It's sort of forcing yourself and getting started on the process and being willing to stare at a blank page and feel terrible that you haven't written anything! Just sort of motivating yourself to get it done, that's the hard part. But if you can get there and you do accomplish something, it's kind of nice! There's a definite sense of accomplishment about it, so highly recommended, if you can manage, but it's not for everyone.

Peter McCormack: What was that story though you were telling me about, that you have that thing where you get... It's almost like a work buddy?

Jimmy Song: Oh yeah, focus! The focus buddy! So after the cruise, I still needed to complete like four or five more chapters. So what I ended up using was a website called Focus Mate. Basically it's a very simple idea. You book like an hour slot, you have to have a webcam and there's somebody on the other side. They need to get work done too.

At the beginning of the hour, you just tell each other what you're going to work on and at the end of the hour you just ask how much progress did you make on what you said? So it kind of forces you to get started. It's that process of looking at a blank page and doing something and it's an efficient way to time-box and that website definitely worked for me. I used it for a good month and a half and the people on the other side, it was interesting!

There were actually a lot of other people that were also writing books, but there were also grad students writing their dissertation. There were people that were coding, there were people that were trying to knock out a newsletter or something like that. But yeah, it definitely worked for me!

Peter McCormack: Is it not weird at all?

Jimmy Song: It is a little weird because you see their face on the screen and you're supposed to be watching them too. But you just see their eyes just kind of glancing down at their keyboard and back up, like you would expect someone working on a computer. But yeah, it was pretty effective.

Peter McCormack: So what's the book called?

Jimmy Song: "Programming Bitcoin". My publisher's O'Reilly. It's available on Amazon. I think it's currently like $40.

Peter McCormack: When are you're doing "Programming Ethereum"?

Jimmy Song: Not going to happen! "Programming Wallet" would be the next one if I wrote another one.

Peter McCormack: But this is for anyone who wants to get into programming Bitcoin? So you have to be intermediate levels or beginners?

Jimmy Song: So you have to know some Python, but that's all you have to know. You don't have to know anything about Bitcoin. The book teaches you all the math you need, all of the digital signature algorithm, transaction construction and blocks and verification and network programming. All of that is covered.

Peter McCormack: Cool, what else is coming up for you, Jimmy?

Jimmy Song: Well I am going to be at Breaking Bitcoin and Amsterdam. I'll be a Bitcoin 2019 in San Francisco. I'll be doing BitBLOCK Boom in Dallas in August, Scaling Bitcoin in September, HoneyBadger in Riga.

Peter McCormack: I think I'm doing all but one of them, maybe two.

Jimmy Song: So I'll be seeing you at a lot of them!

Peter McCormack: A little bit more warmer weather though!

Jimmy Song: Yeah, it is really cold here by the way, oh my goodness! I love the sunlight. Sunset is at 11.30.

Peter McCormack: Yeah and then it starts getting light at 3!

Jimmy Song: It's surreal but it's actually late May and it is cold.

Peter McCormack: This is like October for me. So yeah, it doesn't matter. I still came out in a t-shirt today!

Jimmy Song: Well, me being from Austin, it's a little odd.

Peter McCormack: Do you know what, I was in Austin again recently. I really starting to enjoy that place, I love it.

Jimmy Song: Yeah it's a great area!

Peter McCormack: Where did I go for barbecue? I've been to a place just outside Austin, it's got huge pit. But it was about a 20 minute drive out.

Jimmy Song: Oh, that's still one in Dripping Springs. Why can't I remember the name? Yeah, I know what you're talking about.

Peter McCormack: Austin's got a really vibrant scene now?

Jimmy Song: Oh yeah, totally. Especially with barbecue!

Peter McCormack: Barbecue and Bitcoin!

Jimmy Song: That's kind of what we do sometimes, like I get a bunch of Bitcoiners together and we just eat meat and talk about Bitcoin.

Peter McCormack: Well we did that. I did that with you!

Jimmy Song: Yeah, that was at the steak restaurant, The Tomahawk. But we do it at people's houses and everyone brings their own rib-eye and you're eating rib-eye and talking Bitcoin. What could be better than eating rib-eye and talking about Bitcoin?

Peter McCormack: Did I ever tell you the story when I was a vegetarian, when I stopped?

Jimmy Song: No way?!

Peter McCormack: So it's to do with the podcast. I've told it before, so if anyone's listening and heard it, sorry! So my third episode was with Jameson Lopp and I emailed him and said, "I want to do this interview." He said, "yeah." I said, "can I come out and do it with you in America? Can you take me to shoot a gun?" As I had never shot a gun and he was like, "yeah!" So anyway, I get to his house and there's guns everywhere.

He's got them all out, which is the first time I'd seen the guns and I was a vegetarian, almost vegan at the time. Anyway, so we do this interview, we got all the guns in the car and he's like, "oh, we're going to go for lunch" and he takes me to this like barbecue hut. I didn't have the guts to turn around and say "I'm a vegetarian!" So yeah, I ate meat and that's the day I stopped! So it was Bitcoin!

Jimmy Song: I actually used to be vegetarian but I stopped like seven, eight years ago.

Peter McCormack: It was good for me actually. I did a whole year of vegan with my mum when she was sick. I would say it's probably the best I felt. I felt really healthy, I was really fit.

Jimmy Song: Have you tried Carnivory?

Peter McCormack: No.

Jimmy Song: So try that for a month and see, because I think the best I felt as a vegetarian was when I did the raw diet for a month. So that was interesting because nothing cooked above a certain temperature and I had this mental clarity. I felt very similar with the carnivore diet, which was kind of surprising.

Peter McCormack: But you only eat once a day?

Jimmy Song: Usually once, or twice a day at the most. I ate twice yesterday because we had the dinner thing and then... Oh my goodness, the breakfast buffet here is amazing, isn't it?

Peter McCormack: I've missed it every day!

Jimmy Song: Oh God, no way! So we're in Norway, so they have all this like smoked salmon and dried salmon, but they also had like dried beef, like Bacon, they had liver pate, which I usually hate, but this actually tastes really good. The eggs are really good quality and you could tell because the egg yolks are like super yellow, so they have a lot of nutrients and stuff!

I was just gorging on meat, cheese, salmon, liver, I think it's like one of the most nutritious meals that I could have had because you get Omega 3s and all the different stuff from the organ meat and stuff like it. It was really good.

Peter McCormack: Did you get your whale meat?

Jimmy Song: I haven't. I want to try whale steak. But everyone kind of looks at me weird when I say I want some whale steak...

Peter McCormack: Because we prefer certain animals over others.

Jimmy Song: Yeah, they do look cute!

Peter McCormack: All right Jimmy. This was great, great to have you back on. Appreciate it and yeah, I guess I'm going to see you all year!

Jimmy Song: Might be doing more of these, I don't know!

Peter McCormack: Yeah, definitely. Thank you.

Jimmy Song: Thank you!

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