What Is The Spiderchain with Willem Schroe - Co=Founder of Botanix

1
00:00:00,000 --> 00:00:02,720
What is the spider chain?

2
00:00:03,040 --> 00:00:08,920
This is one of those things you might have heard if you've been traversing the new Bitcoin L2 space and

3
00:00:09,440 --> 00:00:11,440
certain names will pop up more

4
00:00:11,640 --> 00:00:13,640
consistently than others and

5
00:00:13,680 --> 00:00:20,600
the spider chain which is something made by botanics labs, which is an L2 with EVM

6
00:00:20,800 --> 00:00:23,160
So it uses the ETH virtual machine

7
00:00:23,880 --> 00:00:27,400
But the spider chain is their way of solving the Pagan

8
00:00:27,400 --> 00:00:33,240
and a head-out process and so I kept hearing about it didn't know enough I had to get on

9
00:00:33,680 --> 00:00:38,720
The best person to talk about exactly that the co-founder Willem Schrow

10
00:00:39,400 --> 00:00:44,280
So that's what we're doing real quick though. Welcome back to build on Bitcoin

11
00:00:44,800 --> 00:00:50,560
I'm your humble host Jacob Brown. You know what we do here. We're talking to the best founders in Bitcoin

12
00:00:50,840 --> 00:00:56,600
We're creating all the best shit on Bitcoin. So as I mentioned today

13
00:00:56,600 --> 00:01:00,760
we have Willem on the show he's the co-founder of botanics and

14
00:01:01,360 --> 00:01:06,920
Most of this is about the spider chain. We touch a little bit on his background. He's a math wizard

15
00:01:07,400 --> 00:01:11,640
but I was really curious because the out of this new L2 space there's a lot of

16
00:01:13,640 --> 00:01:15,160
overlapping

17
00:01:15,160 --> 00:01:20,200
designs they're very similar it's hard to understand where these things are actually different and

18
00:01:20,200 --> 00:01:25,560
And botanics is taking a different design with this thing called the spider chain

19
00:01:25,720 --> 00:01:28,240
Which is like a train of decentralized

20
00:01:29,120 --> 00:01:33,960
Multi-sig there's one way to think about it and so we touch really this whole episode on

21
00:01:34,400 --> 00:01:41,120
The nuances of how this thing exactly works. So if you're curious about that, this is the perfect episode for you

22
00:01:41,120 --> 00:01:49,160
So without further ado, let's jump into this conversation with Willem Schrow the co-founder of botanics

23
00:01:49,160 --> 00:02:08,520
Welcome to build on Bitcoin

24
00:02:11,800 --> 00:02:13,000
Willem

25
00:02:13,000 --> 00:02:14,520
How you doing?

26
00:02:14,520 --> 00:02:20,840
I'm doing good. How are you? Good to be here. I am fantastic good good to have you man. Good to have you

27
00:02:22,240 --> 00:02:24,920
Yeah, we're just gonna jump right in we're talking we're talking L2s

28
00:02:24,920 --> 00:02:28,280
You guys are building one and and Bitcoin

29
00:02:28,840 --> 00:02:32,560
But real quick because I know a little bit about you but not a ton

30
00:02:32,560 --> 00:02:38,600
It sounds like you have a background in like commodities and kind of like the energy space maybe

31
00:02:39,320 --> 00:02:40,160
and

32
00:02:40,160 --> 00:02:44,640
Then you're you have a strong cryptography background, but now you're in Bitcoin

33
00:02:44,640 --> 00:02:49,520
So like give me the 62nd to you are like what we did in the past life and how you end up on Bitcoin

34
00:02:50,640 --> 00:02:57,080
No, it sounds sounds perfect. I grew up in Belgium. So Belgium for most of my life actually

35
00:02:57,320 --> 00:03:00,240
There's a lot of big cryptographers actually in Belgium

36
00:03:00,960 --> 00:03:02,960
And in Bitcoin as well

37
00:03:03,680 --> 00:03:08,680
Then yeah became 13 national championship in mathematics. So it was good in mathematics

38
00:03:08,680 --> 00:03:10,680
That ended up doing electrical engineering

39
00:03:11,760 --> 00:03:16,240
Then start researching in cryptography. So I research in authenticated encryption

40
00:03:16,760 --> 00:03:23,160
It's basically the cryptography where you want to bring together both authentication and encryption in one single algorithm

41
00:03:23,560 --> 00:03:28,440
Which is extremely hard by the way, so research in that broke some algorithms in there

42
00:03:28,800 --> 00:03:31,480
Actually saw Bitcoin in my cryptography classes already there

43
00:03:32,480 --> 00:03:34,760
Then ended up working in chemicals

44
00:03:34,760 --> 00:03:40,600
So something totally different that brought me to Saudi Arabia. So I lived two years in Saudi

45
00:03:41,480 --> 00:03:45,960
then went to Harvard in Boston and then to New York and

46
00:03:46,400 --> 00:03:51,600
Yeah, basically saw Bitcoin in my cryptography classes only put together later the bigger macro picture and

47
00:03:53,600 --> 00:03:56,640
Basically two years ago came up with the idea for botanics

48
00:03:57,040 --> 00:04:04,280
Which like I think one of the first two actually of the Bitcoin layer two is before and there was like the hundreds of them

49
00:04:04,280 --> 00:04:08,320
And the theory there is like still exactly the same. I think Bitcoin is a winning money

50
00:04:08,320 --> 00:04:13,240
I think the EVM is the winning virtual machine and then yeah, I wanted to build a

51
00:04:13,640 --> 00:04:19,240
Layer two EVM on Bitcoin first actually started off wanting to build roll-ups on Bitcoin

52
00:04:20,360 --> 00:04:25,480
Realized different downsides that come along with with roll-ups and so

53
00:04:26,080 --> 00:04:31,840
Went deep into the cryptography. I love decentralization. I'm a decentralization maxi and so

54
00:04:31,840 --> 00:04:34,400
Design what's now called the spider-gim?

55
00:04:35,320 --> 00:04:37,320
very cool very cool

56
00:04:38,600 --> 00:04:40,960
Actually, I would have to get a definition real quick because I've been

57
00:04:42,120 --> 00:04:46,080
Pushing on people to define decentralization and it seems like the

58
00:04:46,440 --> 00:04:52,720
The community at large especially the average kind of like a defi user, which will often comment on these things

59
00:04:53,800 --> 00:04:58,480
They seem to conflate the centralization and trustlessness as like one in the same and

60
00:04:58,480 --> 00:05:03,760
And I'm trying to parse where those things start and stop it's about the deal overlap at some level

61
00:05:03,800 --> 00:05:05,800
But like how do you define?

62
00:05:06,080 --> 00:05:08,920
Decentralization and like maybe if it helps to bracket against trustlessness

63
00:05:09,800 --> 00:05:11,560
Yeah, no, I

64
00:05:11,560 --> 00:05:17,280
Absolutely agree a lot of people call I mean it comes from defi right and it's decentralized finance

65
00:05:17,280 --> 00:05:23,320
But in reality, it's not decentralized. It's trustless. Basically if you have an immutable smart contract

66
00:05:23,520 --> 00:05:26,580
That's not really decentralized. It's a it's a fully trustless

67
00:05:26,580 --> 00:05:30,260
Smart contract really because you cannot change the code there

68
00:05:30,860 --> 00:05:37,420
And so yeah, where I put the decentralization is if a single party and I often think about governments

69
00:05:37,580 --> 00:05:44,260
Because that's where we need to protect yourself from like longer term. What if a government subpoena a certain company?

70
00:05:45,100 --> 00:05:51,100
What can they achieve and if the protocol is not able to protect themselves against it?

71
00:05:51,100 --> 00:05:55,980
I would call it quite centralized and so there is quite a big spectrum

72
00:05:55,980 --> 00:05:59,580
I think in terms of what you would need for certain applications, right?

73
00:05:59,580 --> 00:06:04,380
I think if you want to be the best money out there for the next thousands of years

74
00:06:04,380 --> 00:06:11,060
You need to be extremely decentralized which brings you to Bitcoin extremely decentralized now if you want to go

75
00:06:11,620 --> 00:06:18,780
Beyond that and basically maybe make like an NFT marketplace. How decentralized does that actually have to be right?

76
00:06:18,780 --> 00:06:20,280
And so

77
00:06:20,280 --> 00:06:27,900
You certainly come into this in into this spectrum. I think why I'm building the spider-chain for example is because I believe the

78
00:06:27,900 --> 00:06:33,620
Financial system that we're building like with DeFi and that you've seen already the primitives on Ethereum

79
00:06:33,620 --> 00:06:39,020
I think that needs to be decentralized. I think the financial system cannot run on a central

80
00:06:39,540 --> 00:06:44,660
Roll-up. We don't want one country in the world to basically rule the financial system

81
00:06:44,660 --> 00:06:51,340
Ideally, this is open permission as for anyone in the world and so that means you need to have at least a few thousand

82
00:06:51,740 --> 00:06:58,620
Notes that basically control the whole system and you cannot have like 10 or 5 or even 15

83
00:06:59,460 --> 00:07:01,460
and that's a little bit what

84
00:07:02,020 --> 00:07:08,320
Yeah, what goes into like very centralized or like very decentralized and different applications will need different

85
00:07:08,780 --> 00:07:10,780
level of decentralization

86
00:07:10,780 --> 00:07:16,960
That's helpful. So yeah, just to quickly like make sure that mental models are magic here for people

87
00:07:17,780 --> 00:07:23,500
It sounds like the way to think about trustlessness is kind of a pass fail. It's a yes or no or a boolean in

88
00:07:24,060 --> 00:07:26,560
Programming so it's it's either trust or search not

89
00:07:28,420 --> 00:07:33,460
Decentralization though is there's no central point of failure. No central point of like entity of control

90
00:07:33,460 --> 00:07:40,540
But it's a spectrum and so like 10 people kind of centralized a thousand much more

91
00:07:40,740 --> 00:07:44,420
but I think people could also get messed up is that if something has

92
00:07:45,140 --> 00:07:49,140
10x the people that are contributing is it 10x more secure?

93
00:07:49,140 --> 00:07:55,020
It kind of has like a fall off as soon as it be implied. So I want to make sure like does that track?

94
00:07:55,860 --> 00:07:56,980
correctly

95
00:07:56,980 --> 00:08:03,900
Correct, correct. Exactly. Okay, cool. Sounds good that think we can we can go deeper and so two years ago

96
00:08:03,900 --> 00:08:05,900
you're you have this idea and

97
00:08:06,900 --> 00:08:11,380
Back then there was no L2 season yet like Bitcoin O2's

98
00:08:11,380 --> 00:08:14,860
There was only a few of them. It definitely wasn't cool to build here yet

99
00:08:14,860 --> 00:08:17,540
like L1 and Lightning were still like the darlings and

100
00:08:19,380 --> 00:08:21,940
So yeah, talking about like the initial idea to

101
00:08:21,940 --> 00:08:26,780
Build a scaling solution and like what you saw as gaps in the market

102
00:08:27,500 --> 00:08:30,660
Yeah, no, I basically I'm a big Bitcoiner

103
00:08:30,660 --> 00:08:36,100
I believe this world absolutely needs Bitcoin and I saw it the whole crypto industry and

104
00:08:36,500 --> 00:08:42,140
What I saw happening very interestingly is I saw a lot of applications reach product market fit

105
00:08:43,380 --> 00:08:50,100
Actually, I still remember Michael Saylor at some point said that what made him realize that Bitcoin is not going in ways because once it's reached

106
00:08:50,100 --> 00:08:55,660
Like a hundred billion dollar market cap. He said there's not a single asset or company

107
00:08:56,260 --> 00:09:00,500
In the world that went beyond a hundred billion dollars and then went back to zero

108
00:09:01,500 --> 00:09:03,500
and so I

109
00:09:03,620 --> 00:09:10,380
Saw the same thing happening with the applications outside of Bitcoin. You add a lot of different applications a lot of those which product market fit

110
00:09:10,780 --> 00:09:14,700
I mean, there's billions of dollars of applications that have been made

111
00:09:14,700 --> 00:09:20,140
That have survived multiple cycles. They're still there people are still using it

112
00:09:20,140 --> 00:09:22,640
it solves an actual use case in the world and

113
00:09:23,020 --> 00:09:27,140
So I saw that but they were not built on Bitcoin and I was like, okay

114
00:09:27,140 --> 00:09:30,300
How does that make sense and can we actually do that on Bitcoin?

115
00:09:30,300 --> 00:09:34,140
And I started seeing a difference between a theorem the asset and the

116
00:09:34,620 --> 00:09:39,100
EVM the virtual machine basically realized the EVM as virtual machine is

117
00:09:39,100 --> 00:09:45,660
Is what powers all these applications not a theorem the asset and so you can basically bring the EVM to Bitcoin

118
00:09:45,660 --> 00:09:49,860
And that's what I realized and so that's what I wanted to do is like, okay

119
00:09:49,860 --> 00:09:52,740
But how then you're coming to the next question, of course

120
00:09:52,740 --> 00:09:59,940
How the hell do you bring an EVM to Bitcoin and can be Bitcoin be the native currency on the EVM?

121
00:10:00,620 --> 00:10:06,220
Now, of course, you already saw Binance chain Avalanche and a few waters use actually or even optimism

122
00:10:06,220 --> 00:10:14,460
Use different tokens as a native asset of the EVM. So I realized you can use Bitcoin as the native asset on the EVM

123
00:10:16,100 --> 00:10:17,620
Yeah, and

124
00:10:17,620 --> 00:10:21,340
So I wanted to bring EVM to Bitcoin EVM is account model

125
00:10:21,500 --> 00:10:28,580
Bitcoin is UTXO model makes things very very hard because you cannot immediately map from UTXO to account model in the other way around

126
00:10:28,580 --> 00:10:33,820
and so I try to figure out how to actually do this and of course

127
00:10:33,820 --> 00:10:37,100
the most obvious solution is like wallops or Ethereum and

128
00:10:37,900 --> 00:10:44,420
That moment more and more people were thinking about how we do wallops on Bitcoin. I think that's still still fully

129
00:10:45,220 --> 00:10:47,980
Unclear, I don't know exactly how we're doing it

130
00:10:47,980 --> 00:10:51,900
It's like this is mixes with bit with like a bit VM

131
00:10:51,900 --> 00:10:58,940
Which is like a hybrid between like an optimistic our roll up with some like if you then put in a zk very far

132
00:10:58,940 --> 00:11:04,620
So you have like a mix of different trust assumptions quite different models than what you have on on Ethereum

133
00:11:05,260 --> 00:11:08,900
But yeah, basically I wanted to bring the EVM to Bitcoin in very short

134
00:11:10,020 --> 00:11:17,980
Short answer. Basically, I realized someone told me today. What we're trying to do is the opposite of rep Bitcoin. So rep Bitcoin broad

135
00:11:19,500 --> 00:11:25,660
Bitcoin as an asset to the new tech right and the new tech is like the EVM virtual machine smart contract applications

136
00:11:25,660 --> 00:11:32,500
What we're trying to do is the opposite bringing the tech to virtual machines the EVM to the Bitcoin the asset

137
00:11:32,500 --> 00:11:34,900
And I think that's way more valuable. I

138
00:11:35,580 --> 00:11:38,700
Love it. I love it. It's also it's striking that

139
00:11:39,580 --> 00:11:44,820
Especially back in 2022 when you started and I've been here since 2021. So I'm a newish bit corner, but um

140
00:11:45,660 --> 00:11:48,420
The dominant narrative was like Bitcoin not crypto

141
00:11:48,420 --> 00:11:55,060
Time chain not blockchain all these things and they were trying to artificially make them clearly separate and

142
00:11:55,740 --> 00:11:57,740
a big one too was

143
00:11:58,180 --> 00:12:01,260
EVM is ETH. They just are the same thing and

144
00:12:02,380 --> 00:12:07,900
So you're you're kind of awareness to be able to not throw the baby out the bathwater be like these things are useful

145
00:12:07,900 --> 00:12:11,340
Even though they are just trading, you know poop coins most of time

146
00:12:11,340 --> 00:12:15,860
They don't have that much utility the fundamental structure of it can be very useful

147
00:12:15,860 --> 00:12:22,060
Which I think is it's the dominant narrative now or quickly becoming that is like

148
00:12:22,460 --> 00:12:28,060
Define that coin is going to be absolutely huge, but it's like it was contrarian for a long time

149
00:12:28,300 --> 00:12:31,060
It was very contrarian. No, believe me. I was right there

150
00:12:31,100 --> 00:12:34,580
It's actually because I was at Harvard and I was the only bit corner there

151
00:12:34,580 --> 00:12:40,380
And I was trying to convince everyone and Bitcoin was the only thing that had value and everyone else was trying to convince me

152
00:12:40,380 --> 00:12:43,540
That all the rest had value but Bitcoin didn't and I was like wait

153
00:12:43,540 --> 00:12:51,780
Like let me actually like sit down with them and like see what value do you see and actually did they kind of convince me like okay?

154
00:12:51,780 --> 00:12:56,700
I this actually has has potential this like actually has a future benefit

155
00:12:56,700 --> 00:13:02,740
And so you had these two camps that were like fully separate and maybe as funny history

156
00:13:03,180 --> 00:13:08,760
Turns out maybe the right answer was like right in the middle. That was the gap in the market basically

157
00:13:09,100 --> 00:13:11,100
Yep, love it. Okay. Let's

158
00:13:11,100 --> 00:13:13,100
Uh

159
00:13:13,100 --> 00:13:17,620
Deep dive into what you guys are actually building and I want to brag we're talking a lot about the spider chain

160
00:13:17,620 --> 00:13:22,740
So people listening last round to that word. We're gonna deep dive into why that's so important here soon

161
00:13:22,740 --> 00:13:24,740
but first give us the high level of

162
00:13:25,580 --> 00:13:27,580
What is botanics?

163
00:13:29,540 --> 00:13:35,300
As the company so botanics labs is actually the company the spider chain is that is a technology that we're doing

164
00:13:35,300 --> 00:13:41,920
And yeah, we're basically a layer to EVM fully running on Bitcoin. So we're not connected to any other chains

165
00:13:43,260 --> 00:13:51,020
Everything runs on Bitcoin. Bitcoin is a native currency gas fees are in Bitcoin. We'll bring you Bitcoin yield

166
00:13:51,900 --> 00:13:55,420
And we're hoping to bring all the applications of Ethereum back to Bitcoin

167
00:13:56,140 --> 00:13:58,140
There you go. Okay, and I'm

168
00:13:58,140 --> 00:14:05,820
Maybe maybe first point to declare declared on L2 running on Bitcoin and L2 is a buzzword that don't people want to fight over

169
00:14:06,060 --> 00:14:11,020
What does assume it extends Bitcoin in some way, but when you say running on Bitcoin versus

170
00:14:11,780 --> 00:14:15,900
If you look at root stock there's some similarities there. It's EVM. It's Burge mind

171
00:14:16,940 --> 00:14:19,780
So we say L2 running on Bitcoin clarify a little bit

172
00:14:20,900 --> 00:14:25,500
Yeah, depends on how deep you want to go into technology and naming

173
00:14:25,500 --> 00:14:30,980
What I mean by that is that we don't have any other asset in the whole technology stack

174
00:14:30,980 --> 00:14:36,500
I don't think we need another asset in there. I think Bitcoin is the the best time asset is the best asset

175
00:14:36,620 --> 00:14:38,620
Can leverage the proof of work?

176
00:14:39,220 --> 00:14:41,220
So yeah, we were not

177
00:14:41,220 --> 00:14:46,220
Connected to or dependent on any other chain in that sense like we don't have any risk

178
00:14:46,460 --> 00:14:48,980
If any other chain would go down for example

179
00:14:49,420 --> 00:14:51,740
got it, okay, and then

180
00:14:51,740 --> 00:15:00,300
So, yeah, the the big innovation we want to touch on is the spider chain because it for for people to think about the

181
00:15:00,580 --> 00:15:04,260
The two big difficult things in Bitcoin is that you could do a sidechain

182
00:15:04,460 --> 00:15:08,700
Which is like a different environment and maybe has different consensus mechanism

183
00:15:08,700 --> 00:15:14,620
You can do all kinds of fun stuff over there, but given Bitcoin script. You can't peg trustlessly

184
00:15:15,300 --> 00:15:17,580
You can you could send it that way. It's totally fine

185
00:15:17,580 --> 00:15:23,060
You could pick a destination I just split it up and you send it off but getting it back and you controlling those funds

186
00:15:23,060 --> 00:15:28,580
Has not been possible to date. So there's all kinds of clever designs trying to solve that peg mechanism

187
00:15:28,740 --> 00:15:30,260
so

188
00:15:30,260 --> 00:15:35,340
Yeah, I want to make sure that we have this clear the EVM is the sidechain piece

189
00:15:35,340 --> 00:15:39,420
We can do the execution and all the fun stuff and the spider chain is this kind of bridge

190
00:15:39,780 --> 00:15:44,420
That connects the sidechain if you will and the L1 is that correct?

191
00:15:44,980 --> 00:15:46,820
Yeah, correct

192
00:15:46,820 --> 00:15:48,820
so basically

193
00:15:49,340 --> 00:15:54,500
Just to clarify also thing that wallops are sidechains area they run the same thing as like an EVM

194
00:15:54,500 --> 00:15:57,540
They have their batches and they've got their block producers

195
00:15:57,940 --> 00:16:05,540
It's just a different trust model and the spider chain is indeed what we call the two-way to two-way bridge

196
00:16:06,860 --> 00:16:10,180
Yeah, I actually am very skeptical on it on trustlessness

197
00:16:10,180 --> 00:16:15,340
I think that's a goal people want to achieve but in my mind it's almost impossible

198
00:16:15,340 --> 00:16:20,780
from a just an informat information theory standpoint, I think

199
00:16:21,660 --> 00:16:25,260
And we haven't seen it today. I don't think there's anything today that is

200
00:16:25,940 --> 00:16:29,100
Drutlust even even in theory. We don't have to get

201
00:16:29,740 --> 00:16:31,640
Okay, that's a

202
00:16:31,640 --> 00:16:38,220
What definitely touched back on that later because I think it opens up a question to of like trustlessness which which typically implies like

203
00:16:39,100 --> 00:16:43,220
cryptography-based things and just like pure code execution and then there's this other side of

204
00:16:43,220 --> 00:16:46,060
Economic security and there's a dance there

205
00:16:46,620 --> 00:16:48,780
But we'll put a pin in that for now. Let's um

206
00:16:49,300 --> 00:16:52,400
So we'll assume, you know, and this what good

207
00:16:53,180 --> 00:16:57,180
Yeah, you want to go jump into the spider chain, right? Yeah, exactly

208
00:16:57,180 --> 00:17:02,660
So so we're gonna make sure that the the main thing on the spider chains. We're gonna talk about this this peg mechanism

209
00:17:02,660 --> 00:17:04,020
We're gonna assume

210
00:17:04,020 --> 00:17:06,020
Once you can solve this peg mechanism

211
00:17:06,220 --> 00:17:10,620
There's like a Disneyland place where you can do all kinds of magical stuff and it just works

212
00:17:10,620 --> 00:17:16,260
And so the botanics out of that we're gonna suit we have pair we have ways to think about that already

213
00:17:16,260 --> 00:17:21,220
So that's cool. The peg piece is the big part that you guys are innovating on

214
00:17:21,940 --> 00:17:23,340
and

215
00:17:23,340 --> 00:17:31,320
I think my audience has a pretty good pulse on the state of this so like you have two of two or lightning your federations and then

216
00:17:31,940 --> 00:17:37,580
Like with stacks coming online now with the SPTC. There's like these different or TBTC for example

217
00:17:37,580 --> 00:17:39,620
You have these like collateral backed threshold ones

218
00:17:39,620 --> 00:17:44,500
How does the spider chain fit into those

219
00:17:45,140 --> 00:17:49,380
Current paradigms and then this kind of give us an overview of what the spider chain is

220
00:17:50,700 --> 00:17:51,820
Sounds good

221
00:17:51,820 --> 00:17:59,260
So the spider chain is is a little bit like a mix of the ones you've mentioned and consider it more of a mix of the lightning network

222
00:17:59,900 --> 00:18:01,900
Together with federations

223
00:18:02,180 --> 00:18:08,940
And it's very similar like a fediment is also a bunch of different federations where people can like launch their own federations

224
00:18:08,940 --> 00:18:12,380
And it's a little bit similar to that in essence

225
00:18:12,900 --> 00:18:20,360
Spider chain is what they call these series of decentralized multi sticks and in essence everything is often a multi-sig

226
00:18:20,360 --> 00:18:23,940
And so the lightning network is a two out of two multi-sig

227
00:18:23,940 --> 00:18:28,620
And so very cool the whole lightning network when you look from a very high level perspective

228
00:18:28,620 --> 00:18:34,900
Is this whole network of two out of two multi-sig between all different people and you call them channels?

229
00:18:34,900 --> 00:18:42,780
It's beautiful and so if you park that idea, but then think bigger and you want to recreate that whole network of decentralized multi-sig

230
00:18:42,820 --> 00:18:45,820
that's what we're trying to do with the spider chain and

231
00:18:46,140 --> 00:18:53,740
How in essence it works is like you create this series of bigger multi-sigs and anyone will will be able to

232
00:18:53,940 --> 00:18:58,300
Permissionally participate. That's how you scale to like 10,000 or 100,000 nodes

233
00:18:58,300 --> 00:19:03,220
And so in essence for example if you start with one single multi-sig

234
00:19:03,220 --> 00:19:10,420
You will randomly choose a hundred participants out of the 10,000 and they will secure one single multi-sig and

235
00:19:10,740 --> 00:19:11,860
Then you do that again

236
00:19:11,860 --> 00:19:18,180
You create a new one and you again randomly choose a hundred participants out of the 10,000 and they will secure a multi-sig too

237
00:19:18,180 --> 00:19:22,620
And then you create a third one and then a fourth one and a fifth one and a sixth one

238
00:19:22,620 --> 00:19:28,300
And you keep creating these like sub federations or decentralized federations

239
00:19:28,300 --> 00:19:35,020
And after a while you have this like whole network of decentralized multi-sig where anyone can participate in where anyone can join

240
00:19:35,900 --> 00:19:40,820
And or anyone can fully yeah fully joining the network and that's how you create a

241
00:19:41,620 --> 00:19:43,620
permissionless decentralized layer tool I

242
00:19:44,260 --> 00:19:46,260
See okay, so it's a

243
00:19:46,460 --> 00:19:53,740
To compare it against a federation as we typically understand it a federation is like you choose the people that are gonna be part of that

244
00:19:53,740 --> 00:20:00,100
And there's like a brand reputation piece there. So like on liquid is you know, it's 70 whatever entities and

245
00:20:01,260 --> 00:20:04,620
You just know okay because they're big names we trust them

246
00:20:04,620 --> 00:20:11,740
But I can't go and join it unless I get approved by you know the the entities that choose that in this paradigm

247
00:20:13,380 --> 00:20:20,020
Anybody can join as needed and become part of that sider set. That's that's one of the big fundamental differences. Yeah, so

248
00:20:20,020 --> 00:20:23,460
Maybe let's clarify federation for example liquid

249
00:20:25,540 --> 00:20:31,780
15 fixed you cannot join you can only trust that these 15 are very well chosen

250
00:20:31,780 --> 00:20:36,300
I think today liquid is a dynamic federation. So every every once in a while

251
00:20:36,940 --> 00:20:40,940
Someone can leave someone else can join. It's a dynamic federation

252
00:20:41,580 --> 00:20:47,820
And what the spider chain enables is basically the permissionless protocol where anyone can join in

253
00:20:47,820 --> 00:20:52,460
scalable up to like 10,000 or 200,000

254
00:20:53,460 --> 00:20:55,460
got it, okay and

255
00:20:56,220 --> 00:20:58,220
So anybody running

256
00:20:58,260 --> 00:21:01,820
Good, it's more network actually than a federation

257
00:21:02,460 --> 00:21:04,260
got it and

258
00:21:04,260 --> 00:21:06,260
every person part of that

259
00:21:06,300 --> 00:21:08,300
network is

260
00:21:08,300 --> 00:21:12,260
also running a Bitcoin node and a botanics note

261
00:21:12,260 --> 00:21:18,780
Correct. So you will both run botanics node to EVM you run the spider chain basically

262
00:21:19,180 --> 00:21:24,940
Tracking all of these different or network of multistakes and you run a Bitcoin node. So it's a little bit heavier

263
00:21:24,980 --> 00:21:28,580
It's more more or less hardware requirements like Ethereum

264
00:21:29,300 --> 00:21:35,220
So way more heavier. It's it's not really designed for every person to run a node in the world

265
00:21:35,220 --> 00:21:40,460
Even though you can but it's more designed like a theorem where every company in the world can run a node

266
00:21:40,460 --> 00:21:42,460
And then that's how I think how it should be

267
00:21:43,100 --> 00:21:47,900
Basically, how I think you scale Bitcoin is Bitcoin on the base there can be run by every person in the world

268
00:21:47,900 --> 00:21:52,140
And that's absolutely needed for a second layer for a financial system

269
00:21:52,860 --> 00:21:58,580
Doesn't make sense that every person in the world needs to run that but every company in the world can run that so well

270
00:21:58,580 --> 00:22:01,660
We'll be more like an Ethereum where anyone can join

271
00:22:01,780 --> 00:22:08,140
But the hardware requirements and the stake in requirements are that high that it's more suited for like institutions and

272
00:22:08,140 --> 00:22:10,460
Companies in the world to run that

273
00:22:11,220 --> 00:22:19,180
Okay, and and to join the network I run these two nodes and then I'm just locking up BTC or what's that process look like?

274
00:22:19,940 --> 00:22:27,180
Correct. So you will lock up BTC. So your signal to the rest of the network look I want to join as a full node as a staker

275
00:22:28,180 --> 00:22:32,620
Basically, I guess when we haven't mentioned all these ten thousand nodes you come together in a proof of stake

276
00:22:32,860 --> 00:22:35,260
So each one of those stakes Bitcoin

277
00:22:35,260 --> 00:22:40,780
And that secures the EVM. So if you want to join as a full node, you basically

278
00:22:41,380 --> 00:22:46,500
Stake Bitcoin and then you get recognized by the rest of the network and you will get accepted

279
00:22:47,540 --> 00:22:49,540
Okay, and is there a

280
00:22:51,500 --> 00:22:53,500
Minimum for that how do you

281
00:22:53,900 --> 00:22:58,740
How do you pick like being eligible to be elected like part of the network?

282
00:22:59,300 --> 00:23:02,820
Yeah, there will be a fixed a fixed staking amount

283
00:23:02,820 --> 00:23:07,460
What we're playing around with right now is thinking about five Bitcoin

284
00:23:07,900 --> 00:23:12,900
Basically that goes into the security model of of the spider chain, which is actually quite unique

285
00:23:13,820 --> 00:23:16,760
It's it operates as an over collateralized

286
00:23:17,940 --> 00:23:19,900
Bridge, but it's actually under collateralized

287
00:23:19,900 --> 00:23:24,140
You don't need to full collateralization and that's a big breakthrough actually of the spider chain

288
00:23:24,140 --> 00:23:26,140
You don't need more

289
00:23:26,140 --> 00:23:32,660
Security as stake than what's actually in the bridge because you split this up into this network of multi six

290
00:23:32,660 --> 00:23:37,260
And that's where you get the the multiplicator and the breakthrough of the spider chain

291
00:23:38,780 --> 00:23:44,980
So yeah, right now it would be around like five Bitcoin, which yeah, of course is already a big quantity

292
00:23:45,700 --> 00:23:47,700
Yep. Yep, and

293
00:23:48,060 --> 00:23:51,220
So it's a proof of stake chain, but when people think about that they think of

294
00:23:51,220 --> 00:23:56,740
Tokens I think of inflation. That's like the benefit you lock up. ETH you get ETH

295
00:23:56,740 --> 00:24:01,900
I'm assuming in this case you lock up Bitcoin and you're gonna get transaction fees as they pass through the network

296
00:24:01,900 --> 00:24:04,220
Is that the benefit to be a validator?

297
00:24:04,820 --> 00:24:10,420
Correct. You lock up Bitcoin and you get Bitcoin that comes from the gas fees that are in Bitcoin

298
00:24:10,900 --> 00:24:15,940
So it's actually in your mental model. Think about Ethereum on the base layer

299
00:24:16,460 --> 00:24:19,420
I mean with ultrasound money theoretically

300
00:24:19,420 --> 00:24:22,540
there should be zero inflation and so

301
00:24:23,180 --> 00:24:27,220
On botanics there's also of course we cannot create new Bitcoin

302
00:24:28,220 --> 00:24:34,220
So there's zero inflation, but all the transaction fees and the gas fees accrue back to the stakers

303
00:24:34,220 --> 00:24:39,780
And this can be a lot when you think about Ethereum I think last year they had five billion dollars of gas fees

304
00:24:41,700 --> 00:24:44,940
Yep, makes sense and you mentioned earlier something about

305
00:24:44,940 --> 00:24:51,380
If there's a hundred people who are sampled out of a bigger subset a thousand or whatever it is

306
00:24:52,780 --> 00:24:55,100
What's the significance of that? Why is that relevant?

307
00:24:55,980 --> 00:24:58,940
Yeah, basically one single multi-sick is then

308
00:25:00,060 --> 00:25:04,900
randomly a subset of a hundred participants out of the ten thousand and so

309
00:25:05,740 --> 00:25:11,580
The reason for that is there's multiple reasons for it, but the beauty of it is like you get the scalability

310
00:25:11,580 --> 00:25:19,700
So suddenly now you have this one single multi-sick all those hundred participants will basically stake five Bitcoin

311
00:25:19,980 --> 00:25:21,980
so theoretically

312
00:25:22,380 --> 00:25:27,980
There is at least 500 Bitcoin at stake net single multi-sick, right now if you create

313
00:25:28,660 --> 00:25:33,420
hundreds or thousands of these multi-sick multi-sicks your theoretical

314
00:25:35,380 --> 00:25:38,300
Collateralization massively goes up because you basically

315
00:25:38,300 --> 00:25:43,420
Yeah, multiply the number of multi-stakes that you have times

316
00:25:44,180 --> 00:25:45,980
the amount of stick

317
00:25:45,980 --> 00:25:50,700
In a single multi-sick and so that can go way beyond than what's on the spider chain

318
00:25:51,140 --> 00:25:53,140
So that's a that's a cool thing

319
00:25:53,220 --> 00:26:01,780
The second cool thing is like if you randomly choose those hundred you basically have zero control on like who's gonna be in that subset

320
00:26:01,780 --> 00:26:05,420
And so trying to attack this network becomes almost impossible

321
00:26:05,420 --> 00:26:13,540
If you have a hundred thousand nodes you cannot control in which in which multi-sick you will be in and so the amount of things

322
00:26:13,540 --> 00:26:16,260
You can do as a participant is actually very limited

323
00:26:16,620 --> 00:26:19,060
So it protects you massively against the tax

324
00:26:21,500 --> 00:26:23,500
Excellent excellent

325
00:26:24,140 --> 00:26:27,780
And is that number so we're using a hundred and a thousand or whatever

326
00:26:27,780 --> 00:26:33,060
But is it some thresholds or is like ten percent of the subset or like how do you guys pick that number?

327
00:26:33,060 --> 00:26:35,260
That's that's pure theoretical

328
00:26:35,260 --> 00:26:42,340
Basically once you go signing for big multi-sicks we use frost so frost multi-sicks if you

329
00:26:43,180 --> 00:26:47,380
If you go the the signing time to sign such a multi-sick goes up

330
00:26:48,140 --> 00:26:53,380
Exponentially in the sense that if you would have a frost of a thousand participants

331
00:26:53,780 --> 00:26:57,460
That basically takes you I don't know probably like a minute or something

332
00:26:57,940 --> 00:27:01,700
If you take a hundred that's probably doable in a few seconds

333
00:27:01,700 --> 00:27:06,460
If you take ten thousand, I don't know that becomes like extremely extremely hard to do

334
00:27:07,300 --> 00:27:14,260
So every the more participants you have the more constantly you need to gossip all different sub keys to each other

335
00:27:14,500 --> 00:27:20,900
Through all these participants to get up with the final signing key and so a hundred is this nice tradeoff in the middle

336
00:27:21,220 --> 00:27:28,060
Where you can actually be fast enough, but it's also big enough because if you make it too small you run into like liveness risks

337
00:27:28,060 --> 00:27:32,340
Like what if if you make a multi-sick of size three for example

338
00:27:33,100 --> 00:27:40,780
And two people are offline then one and so at a size of hundred you can basically have enough people or let's maybe think

339
00:27:40,780 --> 00:27:47,060
There's a blackout in the world or something right some some country gets gets fully

340
00:27:48,340 --> 00:27:54,300
Partitioned from like the electricity network or even a state or something like does your network still continue to operate?

341
00:27:54,300 --> 00:27:57,740
I mean theoretically a lot of people actually in the Bitcoin space have this

342
00:27:58,220 --> 00:28:05,380
Golden golden star of a one out of an assumption right theoretically you can run the spider chain with a one out of an

343
00:28:06,260 --> 00:28:11,340
Assumption I mean that's totally possible. The only problem is if one of your nodes goes down

344
00:28:11,340 --> 00:28:16,340
Then I mean you no longer have that assumption and so it's often this this tradeoff between liveness

345
00:28:17,540 --> 00:28:21,500
And security when you can of course ignore the liveness part

346
00:28:21,500 --> 00:28:26,420
But yeah you in reality I mean you can ignore that in theory in your white paper

347
00:28:26,420 --> 00:28:30,420
You cannot ignore that in reality when you're when you're building production protocols

348
00:28:31,260 --> 00:28:33,260
right

349
00:28:33,900 --> 00:28:35,300
how

350
00:28:35,300 --> 00:28:37,500
three minutes like the five BTC limit and

351
00:28:38,620 --> 00:28:41,740
It's open membership so it can grow over time. How often are

352
00:28:42,460 --> 00:28:48,580
These multi-sinks can spot up like if it isn't like yeah these are rounds is it daily?

353
00:28:48,580 --> 00:28:56,220
Yeah, these are rounds is it daily like how often can the network kind of like evaluate and then grow or I can join?

354
00:28:56,740 --> 00:29:01,260
Yeah, initially we were thinking of every every ten minutes

355
00:29:02,260 --> 00:29:04,580
Now there is a lot of interactivity

356
00:29:05,460 --> 00:29:09,060
between spinning up a new a new multi-sink and so

357
00:29:09,940 --> 00:29:14,500
The thinking where we're right now is basically do that every day or every week

358
00:29:14,500 --> 00:29:22,180
And if you go to every week that's still extremely secure what you need to do then is increase the increase the staking size

359
00:29:23,020 --> 00:29:28,060
So you have that same balance that is there if you spin up in a multi-sink every week for example

360
00:29:28,060 --> 00:29:31,180
That basically means you'll have to put your staking size so like

361
00:29:32,220 --> 00:29:34,460
Like maybe 20 Bitcoin or something I

362
00:29:35,300 --> 00:29:37,300
See and is that thinking?

363
00:29:37,980 --> 00:29:39,500
Go ahead

364
00:29:39,500 --> 00:29:41,620
Well, I'm just thinking I'm thinking of no time like

365
00:29:41,620 --> 00:29:48,980
as a designer of a protocol the things that you are you're watching for the amount of

366
00:29:49,500 --> 00:29:55,700
BTC potentially locked which is the incentive to to try and gain the system and then how

367
00:29:56,860 --> 00:30:02,980
Decentralized or how much threshold those multi-sinks should be that's the question of how often you guys might think about spinning is up, right?

368
00:30:03,220 --> 00:30:03,740
Yeah

369
00:30:03,740 --> 00:30:08,820
I mean you want real reliability in the protocol and if you have if you have every ten minutes

370
00:30:08,820 --> 00:30:15,540
It basically means every ten minutes you have to do a signing protocol between this hundred and like the more activities each of these or

371
00:30:16,060 --> 00:30:22,340
Async activities as you call it the more async activities these notes will have to do

372
00:30:22,820 --> 00:30:27,460
The more risk of them of like being stuck somewhere in the in the protocol

373
00:30:28,060 --> 00:30:30,060
And so you need to like I mean

374
00:30:30,540 --> 00:30:32,540
Servers are not ideal

375
00:30:33,020 --> 00:30:35,020
Operating system things go wrong

376
00:30:35,020 --> 00:30:40,020
You can never predict a lot of different things and so you need to come up with like

377
00:30:40,620 --> 00:30:46,540
What if you start signing a frost multi-sink and in the middle of your signing process you get stuck?

378
00:30:46,780 --> 00:30:54,340
Okay, what do you do then right and so these are the actual realities you have to face when actually building the protocol

379
00:30:55,060 --> 00:30:59,020
Which is different from like the the reality on the on the white paper

380
00:30:59,500 --> 00:31:01,500
Got it. Okay

381
00:31:01,500 --> 00:31:09,100
And then this is a kind of a left turn, but it's cool something to touch on you when you talk to should know be you mentioned something about

382
00:31:11,060 --> 00:31:16,020
Generating a random number is actually somewhat difficult in computer science like a provably random number and

383
00:31:16,980 --> 00:31:23,140
One of the beauty of the things that you guys are doing is you're leveraging Bitcoin in a unique way because it's just this really giant

384
00:31:23,820 --> 00:31:25,820
heavy random number generator

385
00:31:25,820 --> 00:31:32,420
You're using that to pick the subset of this of the multi-sink so like explain that a little bit have fun

386
00:31:32,420 --> 00:31:37,220
That's super interesting. Yeah. Yeah, I think there's actually in the in the in the spire chain white paper

387
00:31:37,220 --> 00:31:39,220
There's been a few breakthroughs

388
00:31:40,060 --> 00:31:44,420
That no one else has come up with I think this this model of like

389
00:31:45,020 --> 00:31:50,020
Splitting this out over a series of multi-stakes. It's quite new the second one is indeed this random

390
00:31:50,020 --> 00:31:58,620
Number generator and also for like the Bitcoin staking. I think before us you just had to stake chain white paper of Robin that no one actually

391
00:31:59,380 --> 00:32:01,940
Really continued on so we had that as well

392
00:32:02,500 --> 00:32:10,180
But to focus on the random number generator a random number is extremely hard to generate go talk to anyone who is designing

393
00:32:10,500 --> 00:32:17,420
Cold wallets or even a hot wallet or like Casa to actually come up with a random number for your private key. It's not easy

394
00:32:18,300 --> 00:32:19,380
and

395
00:32:19,380 --> 00:32:21,380
proof of stake protocols

396
00:32:21,380 --> 00:32:23,380
massively use random numbers

397
00:32:23,540 --> 00:32:29,740
For a bunch of different things basically also to decide who's gonna build the next block right in proof of work

398
00:32:29,740 --> 00:32:32,220
That's easy because everyone does it and the one with

399
00:32:33,060 --> 00:32:38,780
With the biggest amount of luck or like most energy basically finds a little bit the block the fastest

400
00:32:39,180 --> 00:32:40,460
but

401
00:32:40,460 --> 00:32:44,000
In proof of stake protocols you basically decide, okay

402
00:32:44,000 --> 00:32:50,800
Now we need a random number and that's John is a side who's gonna build the next block and so random numbers are really hard and actually in

403
00:32:51,640 --> 00:32:53,960
The crypto industry outside of Bitcoin

404
00:32:54,080 --> 00:33:00,160
There's been a bunch of different startups a lot of different companies have found different ways to create this

405
00:33:00,720 --> 00:33:03,120
VRFs or verifiable random

406
00:33:04,120 --> 00:33:12,080
Random functions even chain link has a has a big program on that and we came actually to the realization like if you look at

407
00:33:12,080 --> 00:33:19,600
Bitcoin what you do is you spend 10 minutes of energy and all these miners do is they actually flip through random numbers

408
00:33:20,000 --> 00:33:22,400
Trying to find a random number that fits

409
00:33:23,360 --> 00:33:26,800
That fits the block hash where you're enough enough trailing zeros, right?

410
00:33:26,800 --> 00:33:32,160
And so you are absolutely sure that the number that comes out of it is a random number

411
00:33:32,960 --> 00:33:34,400
That's almost like perfect

412
00:33:34,400 --> 00:33:38,400
And the only thing that a miner can do is is what's called a withholding attack

413
00:33:38,400 --> 00:33:44,480
They can choose to say like oh this number works. I can get the Bitcoin blocker award

414
00:33:44,720 --> 00:33:46,720
But I don't like this random number

415
00:33:46,960 --> 00:33:53,720
So that's the only power that they would have but beyond that this number that comes out of the Bitcoin block hash

416
00:33:54,080 --> 00:33:59,160
Is a provable random number and it's probably the best random number in the world. I

417
00:33:59,880 --> 00:34:05,320
Don't think you there's any better random number you can generate and that's not in some type of way

418
00:34:05,320 --> 00:34:12,480
Gameable knowing if you know the hardware if you know if we're using the weather or if you're using temperature or any other thing

419
00:34:12,480 --> 00:34:14,480
This is probably one of the most

420
00:34:15,160 --> 00:34:18,440
One of the best random number generators in the world

421
00:34:18,440 --> 00:34:24,000
I love it. I love it. It's such a it's simple when you hear it, but it's so underutilized

422
00:34:24,000 --> 00:34:26,000
I love the elegance of that

423
00:34:27,040 --> 00:34:29,560
Cool so cup one other thing on

424
00:34:29,560 --> 00:34:36,000
On the decentralized piece because it's you have a five big you see limit currently, which is a pretty big number

425
00:34:36,000 --> 00:34:39,480
you know it's at current prices like three four hundred thousand maybe and

426
00:34:40,680 --> 00:34:43,480
So for the normie that's gonna be inaccessible

427
00:34:43,760 --> 00:34:45,760
So like it moves into

428
00:34:45,840 --> 00:34:52,800
Medium-sized entities are going to be secure in the network and acting kind of like market makers or something to like a yield on their Bitcoin

429
00:34:52,800 --> 00:35:00,840
How do you think about that and I do second questions I do see pools being a thing because pools are a big thing on a like a Lido

430
00:35:01,280 --> 00:35:08,160
Do you think we'll see but tags fools pretty early on so that I can you know put in a thousand bucks and and get transaction fees

431
00:35:09,160 --> 00:35:12,840
100% I actually think it will probably play out very similar to lucky theorem

432
00:35:13,760 --> 00:35:19,880
Where you have pools which means if you as at home as a normie you can join one of these pools

433
00:35:19,880 --> 00:35:23,920
You don't have to run the hardware the pools will do that and you can get part of the yield

434
00:35:24,480 --> 00:35:28,400
Now you can question how how important how decentralized is that?

435
00:35:29,120 --> 00:35:31,080
And I think that's a very fair question

436
00:35:31,080 --> 00:35:36,440
I think for the thing that we want to do a decentralized layer that can run the financial system in the world

437
00:35:37,360 --> 00:35:42,080
That's sufficiently decentralized and so I do think you will see pools

438
00:35:42,080 --> 00:35:48,280
And I think that will see you will see that actually very early on actually we will start with 15 different full nodes

439
00:35:48,280 --> 00:35:50,280
so 15 different

440
00:35:51,800 --> 00:35:53,800
Sequencers or block producers and

441
00:35:55,360 --> 00:35:59,240
Most of these are actually gonna be pool operators from a theorem so very professional organization

442
00:35:59,240 --> 00:36:04,400
I know how to do it and that's basically how we're also in the initial phases are going to scale

443
00:36:06,080 --> 00:36:08,120
The network and so yeah, you'll have that from the beginning

444
00:36:08,120 --> 00:36:12,640
But I think it's better than having a one single one single node

445
00:36:13,520 --> 00:36:15,520
Yep, makes sense

446
00:36:15,520 --> 00:36:16,520
Okay

447
00:36:16,520 --> 00:36:21,520
We covered a lot. I think that's a pretty good baseline on spider-chain

448
00:36:21,520 --> 00:36:25,120
Is there anything that I missed that we should for sure cover on spider-chain?

449
00:36:26,520 --> 00:36:33,520
Yeah, I think what a lot of people often forget is what we're doing with the spider-chain is extremely unique in the world of layer 2s

450
00:36:33,520 --> 00:36:35,520
I don't think there's a single

451
00:36:35,520 --> 00:36:41,520
layer 2 that is actually fully aiming to be decentralized it comes at a cost

452
00:36:42,520 --> 00:36:47,520
Like I do think there's a there's a big world for wallops that are very centralized and trustless

453
00:36:48,520 --> 00:36:52,520
Because they can go to 0.1 second block times. We cannot do that

454
00:36:52,520 --> 00:36:58,520
If you want to be decentralized, you need all these nodes to talk to each other to gossip messages to the to each other

455
00:36:58,520 --> 00:37:02,520
You have this peer-to-peer network that is operating and it comes at a as a kind of a

456
00:37:02,520 --> 00:37:05,520
Cost of throughput and so it also has it benefits

457
00:37:05,520 --> 00:37:10,520
But I think people often forget that most of the wallops we actually see are

458
00:37:10,520 --> 00:37:12,520
Central databases that where you

459
00:37:13,520 --> 00:37:17,520
Produce hashes on which generate a zk proof which you can then verify

460
00:37:18,520 --> 00:37:21,520
To make it more trustless, but it's a very different

461
00:37:23,520 --> 00:37:24,520
Yeah, design spectrum

462
00:37:24,520 --> 00:37:27,520
And I think that's the best way to think about the spider-chain

463
00:37:27,520 --> 00:37:32,520
We go for that decentralization while others go for like the high throughput

464
00:37:32,520 --> 00:37:34,520
Trustlessness very cool

465
00:37:35,520 --> 00:37:40,520
Okay, I think we can we can come back up for air then away from spider chain and

466
00:37:41,520 --> 00:37:45,520
Hope you just mentioned something that's interesting because I hang on to words

467
00:37:45,520 --> 00:37:47,520
I'm like, do I rock that does that make sense?

468
00:37:47,520 --> 00:37:50,520
You mentioned this I don't understand roles very well

469
00:37:50,520 --> 00:37:54,520
But you mentioned a centralized sequencer that's trustless

470
00:37:54,520 --> 00:37:59,520
And so the way I hear that is you have like an entity like coin base who's sequencing things

471
00:37:59,520 --> 00:38:05,520
But I as an end user can force a transaction in and as long as they're being a good actor

472
00:38:05,520 --> 00:38:09,520
It will get included. Is that the way to think about trustless but centralized sequencing?

473
00:38:11,520 --> 00:38:16,520
More so how I think about wallops is indeed trustless but centralized

474
00:38:16,520 --> 00:38:21,520
In essence, there's a single party that runs the database right can be coin based

475
00:38:21,520 --> 00:38:26,520
In the example of base actually they run this back end database

476
00:38:26,520 --> 00:38:30,520
People can send in transactions you update the database or the state machine

477
00:38:30,520 --> 00:38:38,520
And then you create a ZK proof or you do it optimistically where you post to the base layer

478
00:38:38,520 --> 00:38:43,520
And you can have a challenge period and so basically what the trustless means

479
00:38:43,520 --> 00:38:45,520
It's trustless within like

480
00:38:45,520 --> 00:38:50,520
Yeah, not fully trustless because of course you always take trust assumptions

481
00:38:50,520 --> 00:38:57,520
But basically what I mean by more going trustless is that you trust that these people cannot steal

482
00:38:57,520 --> 00:39:05,520
If they would be able to steal then you can indeed like submit a challenge on the base protocol

483
00:39:05,520 --> 00:39:10,520
And you can yeah you can enforce it they cannot steal from you

484
00:39:10,520 --> 00:39:15,520
Another way I think what you were more referring to is the censorship resistance

485
00:39:15,520 --> 00:39:21,520
And so one unfortunate thing of centralized operators is they're not censorship resistant

486
00:39:21,520 --> 00:39:25,520
Like any of the wallops will always be able to censor you

487
00:39:25,520 --> 00:39:32,520
What you can do is you can progress transactions by submitting transactions on the base layer

488
00:39:32,520 --> 00:39:35,520
So transactions get enforced on the second layer

489
00:39:35,520 --> 00:39:40,520
However you're still censored from using the second layer now you have to use the base layer to do something

490
00:39:40,520 --> 00:39:44,520
And so basically you get excluded from a whole economy potentially

491
00:39:44,520 --> 00:39:51,520
And so unfortunately the centralized actors won't ever have the censorship resistance

492
00:39:51,520 --> 00:39:57,520
But you can still have the more trustlessness that you can trust that they don't steal any money

493
00:39:57,520 --> 00:39:59,520
Does that make sense?

494
00:39:59,520 --> 00:40:00,520
It does

495
00:40:00,520 --> 00:40:05,520
It's very convoluted and it's very confusing but yeah it's a different thing

496
00:40:05,520 --> 00:40:10,520
The way I hear it so yeah the censorship resistance piece is helpful

497
00:40:10,520 --> 00:40:15,520
It sounds like the thing I was getting crossed is like they can't steal

498
00:40:15,520 --> 00:40:18,520
Because you have your private key as long as your private key isn't leaked

499
00:40:18,520 --> 00:40:21,520
The way that the cryptography works they can't steal any funds

500
00:40:21,520 --> 00:40:25,520
So like you're good there that's the way you can do it

501
00:40:25,520 --> 00:40:32,520
Going back to what you said earlier it was like a sideline but you were like I don't only think the trustlessness

502
00:40:32,520 --> 00:40:38,520
Kind of like North Star that everyone's saying is going to yield we think it's going to yield

503
00:40:38,520 --> 00:40:45,520
Which is kind of a fiery comment but I'm curious like how do you think through that when you say that comment

504
00:40:45,520 --> 00:40:49,520
Yeah, yeah so

505
00:40:49,520 --> 00:40:54,520
A lot of people in the industry believe or often have this idea

506
00:40:54,520 --> 00:40:58,520
Rollups have been sold as like this full end game

507
00:40:58,520 --> 00:41:03,520
Like it's fully trustless and I think it's possible

508
00:41:03,520 --> 00:41:07,520
And we have unlimited scalability and it comes at zero cost

509
00:41:07,520 --> 00:41:11,520
And that is not the reality and there's a few things that play into that

510
00:41:11,520 --> 00:41:15,520
I think the censorship resistance is a little bit more than that

511
00:41:15,520 --> 00:41:21,520
And there's a few things that play into that I think the censorship resistance is one

512
00:41:21,520 --> 00:41:23,520
That's one obvious cost

513
00:41:23,520 --> 00:41:30,520
I think the less obvious cost and it's still open to debate is what I call the bug risk

514
00:41:30,520 --> 00:41:36,520
So what if a bug is found in this immutable rollup

515
00:41:36,520 --> 00:41:39,520
What if you can no longer upgrade the rollup

516
00:41:39,520 --> 00:41:48,520
And to use a Bitcoin comparison what if you make a ZK verifier in a certain UTXO

517
00:41:48,520 --> 00:41:54,520
And now a bug is found in what's behind that UTXO you can never really change that anymore

518
00:41:54,520 --> 00:41:59,520
And so the only way to do that is kill the whole rollup and move that to something else

519
00:41:59,520 --> 00:42:02,520
But how do you do that? Who decides that?

520
00:42:02,520 --> 00:42:05,520
And do they have any powers at that moment to like steal something

521
00:42:05,520 --> 00:42:08,520
And so you always come back to a little bit of consensus

522
00:42:08,520 --> 00:42:15,520
I don't believe a fully trustless layer 2 is possible without consensus

523
00:42:15,520 --> 00:42:24,520
And so the rollups if they find the bug risk right now how they do it is they are of course a multi-sig

524
00:42:24,520 --> 00:42:29,520
And so they can upgrade the smart contract by using this multi-sig

525
00:42:29,520 --> 00:42:34,520
And so I mean every layer 2 has a different multi-sig size

526
00:42:34,520 --> 00:42:36,520
But that's the basic trust assumption

527
00:42:36,520 --> 00:42:44,520
For example if you have a 6 out of 9 that basically means all you need to steal all the funds on the layer 2 is a 6 out of 9 multi-sig

528
00:42:44,520 --> 00:42:47,520
And so you suddenly have this majority assumption

529
00:42:47,520 --> 00:42:52,520
And so longer term are we actually going to be able to move away from that?

530
00:42:52,520 --> 00:42:55,520
Are we actually on Ethereum than in Ethereum land?

531
00:42:55,520 --> 00:43:00,520
Are you actually going to be able to deploy this in a immutable smart contract?

532
00:43:00,520 --> 00:43:05,520
Because what if a bug is found? How are you going to do that?

533
00:43:05,520 --> 00:43:09,520
That's it, game over, everybody loses their funds in the whole world

534
00:43:09,520 --> 00:43:12,520
There's not a single developer in the world that wants to do that

535
00:43:12,520 --> 00:43:15,520
And it's also might not be good as a world where you want to move to

536
00:43:15,520 --> 00:43:17,520
So you kind of want to have that upgradeability

537
00:43:17,520 --> 00:43:24,520
And so actually the road that Arbitrum is taking is I think where all the different rollups are going to eventually

538
00:43:24,520 --> 00:43:32,520
You can see let's make a vote with all the ARP tokens to upgrade the smart contract

539
00:43:32,520 --> 00:43:37,520
And so now let's say two-thirds of all the ARP tokens can decide, can vote

540
00:43:37,520 --> 00:43:39,520
And now we can upgrade the smart contract

541
00:43:39,520 --> 00:43:41,520
And so you still don't have the trust license

542
00:43:41,520 --> 00:43:47,520
Because if you can reach two-thirds of all the ARP tokens and buy a huge amount of ARP tokens

543
00:43:47,520 --> 00:43:49,520
You can suddenly steal a lot of money

544
00:43:49,520 --> 00:43:53,520
And so either way you always look at it or you turn it

545
00:43:53,520 --> 00:43:59,520
There's always this corner or this flip side of a thing you won't be able to solve in the long term

546
00:43:59,520 --> 00:44:10,520
And so that's why I say I don't believe this full trustless Nord star is actually achievable from a practical standpoint

547
00:44:10,520 --> 00:44:15,520
Now another thing that people often say is that we can introduce a delay

548
00:44:15,520 --> 00:44:17,520
I can multi-sig plus a delay

549
00:44:17,520 --> 00:44:20,520
But then you still have a bunch of different attack factors

550
00:44:20,520 --> 00:44:22,520
What if actually your bug is found?

551
00:44:22,520 --> 00:44:26,520
Then you have a window of that delay that people can abuse it

552
00:44:26,520 --> 00:44:30,520
Or if someone wants to maliciously upgrade

553
00:44:30,520 --> 00:44:32,520
All they need to do is wait a bit

554
00:44:32,520 --> 00:44:34,520
Just hide it long enough and then wait

555
00:44:34,520 --> 00:44:39,520
And so yeah, there's always this reality that plays into role of it

556
00:44:39,520 --> 00:44:41,520
Super interesting

557
00:44:41,520 --> 00:44:45,520
You've seen this in small regards on a lot of the DeFi projects

558
00:44:45,520 --> 00:44:48,520
Well some will have admin keys to upgrade

559
00:44:48,520 --> 00:44:50,520
Others are perfectly immutable

560
00:44:50,520 --> 00:44:54,520
And when you're playing with millions of dollars that's interesting

561
00:44:54,520 --> 00:44:56,520
If you get hacked for example

562
00:44:56,520 --> 00:44:59,520
But using the word practical very deliberately

563
00:44:59,520 --> 00:45:04,520
Which is like at the lowest level of the stack if Bitcoin had this kind of bug and it was perfectly immutable

564
00:45:04,520 --> 00:45:07,520
It would be a shit show to the nth degree

565
00:45:07,520 --> 00:45:09,520
That would be bad

566
00:45:09,520 --> 00:45:12,520
And that's the benefit of consensus

567
00:45:12,520 --> 00:45:15,520
Like we had that bug in Bitcoin in 2018

568
00:45:15,520 --> 00:45:19,520
Bitcoin Core upgraded, everybody upgraded, their node and boom it was fixed

569
00:45:19,520 --> 00:45:22,520
If it's immutable then it's game over

570
00:45:22,520 --> 00:45:25,520
Got it, okay, that's super interesting

571
00:45:25,520 --> 00:45:29,520
Okay, well this has been a fascinating combo, thank you Willem

572
00:45:29,520 --> 00:45:32,520
Last question of the day, what are you most hyped about right now?

573
00:45:32,520 --> 00:45:37,520
It could be in Bitcoin, it could be what you're building or just broadly

574
00:45:37,520 --> 00:45:39,520
What are you excited about?

575
00:45:39,520 --> 00:45:43,520
I'm actually super excited to actually see this world running on Bitcoin

576
00:45:43,520 --> 00:45:47,520
Like I want to see the whole world running on Bitcoin actually playing out

577
00:45:47,520 --> 00:45:51,520
You see governments, you see politicians coming in

578
00:45:51,520 --> 00:45:55,520
You see everybody like this whole group of Bitcoiners like expand

579
00:45:55,520 --> 00:46:01,520
And I'm very excited that we actually now can start building these applications that we've seen actually on Bitcoin as well

580
00:46:01,520 --> 00:46:04,520
I think Bitcoin is the perfect money ever

581
00:46:04,520 --> 00:46:07,520
And then when I look at Ethereum and DeFi

582
00:46:07,520 --> 00:46:11,520
That is a better, more fairer, more equal financial system in the world

583
00:46:11,520 --> 00:46:15,520
Where you have tokens that are 24x7 that are better stocks

584
00:46:15,520 --> 00:46:17,520
You have decentralized exchanges

585
00:46:17,520 --> 00:46:21,520
That are better than the stock exchanges where anyone in the world can buy them

586
00:46:21,520 --> 00:46:23,520
Where you can borrow against your Bitcoin

587
00:46:23,520 --> 00:46:29,520
This is slowly starting to look like a world that would be incredible to live in

588
00:46:29,520 --> 00:46:33,520
So I'm super excited, I really hope we can bring this to life

589
00:46:33,520 --> 00:46:39,520
And I often say this to my team, like what we're actually building as this decentralized layer

590
00:46:39,520 --> 00:46:44,520
To actually power a global financial system with Bitcoin as the money

591
00:46:44,520 --> 00:46:49,520
And that's just massive or incredible when you try to think about it

592
00:46:49,520 --> 00:46:52,520
Yeah, it just drives me every day

593
00:46:53,520 --> 00:46:57,520
That is a fantastic way to end the show

594
00:46:57,520 --> 00:47:01,520
So, happy for you guys are building, it's super interesting

595
00:47:01,520 --> 00:47:04,520
Well, thanks so much for coming on the show today

596
00:47:04,520 --> 00:47:05,520
Thanks, Diego

597
00:47:05,520 --> 00:47:09,520
Thank you for listening this far into the episode

598
00:47:09,520 --> 00:47:18,520
If you found it enjoyable, please do like, subscribe on whatever platform that you're listening on

599
00:47:18,520 --> 00:47:21,520
YouTube does me a huge favor to like and subscribe

600
00:47:21,520 --> 00:47:24,520
Find me on Twitter at JakeBlockTrain

601
00:47:24,520 --> 00:47:28,520
Show me some love, I reply to every DM

602
00:47:28,520 --> 00:47:34,520
And if you are a Bitcoin builder that is kind of at the forefront of building new use cases

603
00:47:34,520 --> 00:47:42,520
Whether it's L1, Lightning, Stacks, Rootstock, Rollups, Ordinals, BRC20

604
00:47:42,520 --> 00:47:43,520
I want to talk to you

605
00:47:43,520 --> 00:47:49,520
So when I'm not doing this podcast, I am the sourcing partner at the Bitcoin Frontier Fund

606
00:47:49,520 --> 00:47:54,520
Where we invest in Bitcoin startups at the earliest stages

607
00:47:54,520 --> 00:47:59,520
Give you access to whatever you need, whether it's legal, product, fundraising help

608
00:47:59,520 --> 00:48:00,520
As well as capital

609
00:48:00,520 --> 00:48:04,520
So, love to talk to you, you can hit me up again

610
00:48:04,520 --> 00:48:07,520
Find me on Twitter at JakeBlockTrain

611
00:48:07,520 --> 00:48:10,520
And shoot me a DM, I'll read everything

612
00:48:10,520 --> 00:48:11,520
Love to talk to you guys

613
00:48:11,520 --> 00:48:40,520
Alright, peace