Thanks everybody, it's great to be here in Amsterdam, it's my first time to the Netherlands
and you know I just went by the Anne Frank House earlier today and it was really a stark
reminder of the danger that we can get into when we allow power to be concentrated in
the hands of a few so-called authorities and I went by the Dutch Tulip Museum and I saw
the dangers and the power that can be caused by speculative bubbles and you know maybe
it's just me and maybe I have this bug in my brain that I see bitcoin everywhere but
Amsterdam has been a wonderful place, I've got to meet some of the bitcoin start-ups
while I've been out here and it's great to see that you have a thriving start-up scene.
So when I first became interested in bitcoin I probably spent several months devoting my
life to it just trying to put all of the pieces of the puzzle together and after years of
doing that now I devote a fair amount of my time trying to distill all of that and save
a lot of other people the same rigors that I had to go through so that they can understand
it and now some people call me a bitcoin expert but from my perspective I'm still a novice,
I'm still learning things every day and I have yet to find the bottom of the rabbit
hole that is bitcoin and in fact the esteemed Andreas Antonopoulos once said I wrote a book
that answers the question of what is bitcoin, it's 300 pages long, it was obsolete the moment
it was printed and has to be corrected and updated every few months just to keep up with
the changes, words to live by I suppose.
So this is a game that's never going to end for us.
So out of curiosity how many of you believe that you have a decent understanding of what
bitcoin is?
Show of hands, we have a few brave people in the back, alright this guy up here thinks
he knows a thing or two about bitcoin too, we'll get to hear from him.
So I've maintained a list of educational resources that you can spend months devoting your time
to trying to ingest all of this information but at the end of the day you'll only be
chipping away at the tip of the bitcoin iceberg and in fact Milton Demires posted this chart
a while ago that I thought was perfect and depending on how long you've been in this
space you're going to fall somewhere along this continuum.
I'm not really sure what the time units there are, I think at least in my case this is several
years over here in which you may be deluding yourself about how much you really understand
bitcoin.
We'll go into some details about why I believe that is the case and it's not just a phenomenon
that I ran into.
So one challenge of understanding this system is that it's multifaceted cross-disciplinary
system that's constantly evolving and this is a little chart from Ferdinando Amitrano
in Italy where he really hit a key point that I'll be delving into and that is bitcoin is
not just a technology, it is in fact a technology that is representing something even less tangible.
It's a living protocol as he said that emerges from this melting pot of ideas and contributions
from all of the people in the world who think that this is an interesting project that's
worth working on.
Now you might be thinking to yourselves surely somebody understands what bitcoin was, right?
I mean what about that Satoshi guy?
I mean he created the system, right, but in my research I found that even Satoshi did
not fully understand what he built with regard to bitcoin and its security model and all
of the game theory behind it.
They actually ended up fixing a multitude of bugs in the first few years of bitcoin's
existence.
For example, did you know that in the first year or so of bitcoin's existence anyone could
spend anyone else's transactions and their coins?
To my knowledge this didn't actually happen because the bug was caught fairly early on,
but there was a problem with the opreturn opcode which would allow you just to do an
optrue and then opreturn which would evaluate to true and allow you to spend any inputs
that you wanted.
That's just one example.
Satoshi also fixed a major consensus flaw when he changed the consensus algorithm from
looking at the longest chain to the most weighted chain which has the most proof of work around
it.
Interestingly enough a lot of people still refer to bitcoin as being the quote unquote
longest chain as the correct fork, but it really comes down to which chain has the most
proof of work.
He also, as I'm sure you're all aware, set the block size limit.
So originally this was only limited implicitly by the network message size which was like
32 megabytes and he soft forked it down to 1 megabyte.
In fact there is a bug currently in the bitcoin protocol that a lot of developers have to
work around.
If you've ever gotten to the level of writing your own raw opcheck multisig transactions
you ran into an issue where you had to actually put in a duplicate meaningless op zero simply
because there's an off by one bug when executing the script which requires you to have this
dummy value in there otherwise your multisig script will not work at all.
And of course who could forget a number of years ago the infamous bitcoin bug which allowed
someone to create 184 billion bitcoins out of thin air.
Obviously that didn't last very long before it was fixed.
But my point here is that bitcoin did not really follow a code is law type of mindset
at least in the early days.
It really followed the idea that Satoshi's vision was law and changes were made as necessary
to correct that when misunderstandings in the current code were discovered.
Now I think that this distinction is particularly relevant for a couple reasons.
One Satoshi stopped contributing to bitcoin years ago and two bitcoin has no real formal
specification like some other cryptocurrencies like Ethereum.
So I would make an argument that in fact once Satoshi stopped contributing and was essentially
a benevolent dictator then it really comes down to all of us.
And as contrived as it may sound I think that we are all Satoshi now.
So to get a little bit better idea of how little bitcoin is understood you can look
at some metrics.
And you can see here that like the academic interest in bitcoin continues to grow.
That last number is actually probably a lot higher because I pulled it at the very end
of last year.
But there's a lot of meat to be discovered still inside of this system.
And I think that as the years continue going on more and more revelations will be discovered
about the potential applications of this protocol.
Satoshi once said that the core design of bitcoin was set in stone and that other implementations
would be a menace to the network.
People often take this quote along with many others to fallaciously argue that the bitcoin
protocol must evolve in one way or another.
But as we've seen Satoshi actually had to make a lot of changes to bitcoin early on
as the various developers were exploring the code and discovering edge cases.
And today there are over half a dozen different bitcoin implementations which as far as I
can tell are not disrupting the network all that much.
We've even seen that a single implementation can be a menace to itself and can cause consensus
failure when low level machine differences happen.
A good example of this was actually the 2013 Berkeley DB chain fork.
So recall my earlier description of bitcoin as this melting pot of contributions.
I think it really took hold once Satoshi left his pet project that he had been working on
privately and released it out into the world.
In those first few weeks when bitcoin launched it also gained its first collaborator, Hal
Finney.
He was one of the few people who really saw the promise of this technology.
Finney actually released a number of emails with the Wall Street Journal, private emails
between himself and Satoshi and they're a very interesting read, you can Google them.
And you can actually see Satoshi's surprise as Hal manages to find several bugs that Satoshi
had not anticipated even though he had quote unquote tested it heavily.
So since bitcoin is definitely this evolving protocol, how do we describe it?
I think that Charlie Lee actually did a really good job when he basically said that it's
like the definition of a word.
No one, even your favorite dictionary does not actually have the power to define a word.
It is this amorphous thing that slowly gains consensus over time and may in fact change
over time as the rest of the world changes in response to it.
So I pose to you that bitcoin's strength comes not from being the embodiment of some
dogmatic beliefs about immutability or decentralization or some other buzzword, but rather from collaboration
and from the community.
And it's this process of taking collaboration and using it to determine the human consensus
which can be very noisy and messy, but I think it's the governance model within which we
have to work.
And from a philosophical standpoint, I believe that this is really the embodiment of voluntarism
and voluntarism and mutual cooperation are really the only aspects of this system that
are truly set in stone.
So an interesting result of this is that while we can describe bitcoin as a trustless system,
in the sense that if you're operating a fully validating node, you don't need to trust any
other nodes in the system, at a meta level there's actually several forms of trust involved.
For example, almost none of bitcoin's users actually read and understand the software
of the protocol itself.
They are trusting various developers to be careful not to introduce flaws in the implementations.
And it appears to me that the fact that only a few people have a deep understanding of
bitcoin's technical operations results in those with less understanding of the protocol
to then have to decide which experts they trust.
And as a result, when experts clash on various opinions, the crowd divides, it takes sides
behind whichever experts they deem their arguments are most compelling.
And unfortunately this results in politics sometimes being injected into the decision
making process.
As Shaolin Fry, an anonymous developer, recently noted, we should actually strive to avoid
politicization of proposed protocol improvements.
And to be clear, I don't mean that that means that no one is motivated by political ideals,
but rather that the direction of this system should not be driven by politics in which
one group is forcing their ideas upon another.
I think that one of the problems that we're seeing a lot recently is this idea of voting.
And voting generally means that some sort of political process is running where a majority
vote gets to decide and have their will imposed upon the other people.
But I think that we should instead be striving for a system of permissionless innovation
wherein participants can signal to one another that they want to interact in a specific way,
regardless of what other participants are signaling.
So we end up having with this clash between different ideologies.
And it's because of this root fundamental human consensus that we're trying to figure
out how to code up.
As a result, significant portions of participants have taken their ideologies and almost developed
them to the point of dogma or religion.
And it makes it very difficult for us to engage in civil, political, and intellectual discourse.
Now one reason that I believe that it's easy for people to do this is due to the lack of
a specification, lack of clear objectives of what Bitcoin really is and what Bitcoin's
goal should be.
For example, Satoshi described Bitcoin as a peer-to-peer electronic cash system.
But even this simple description can be interpreted in many different ways.
Peer-to-peer provides no context around how many peers that there should be or how expensive
it should be to be a peer on the network, while cash provides not very much context
around what the speed or cost of transactions should be on the network.
So you can find a variety of perspectives and interpretations of things like the US
Constitution or the Bible or the Koran.
And so can the writings of Satoshi Nakamoto be interpreted and debated.
The projection of individual perspectives on Bitcoin has led to a fracturing that we
can see easily in a number of different political, philosophical, and religious systems, and
now in Bitcoin as well.
And these individuals are fostering tribalism, they're polarizing their perspectives and
drawing party lines and applying litmus tests to newcomers and perpetuating propaganda.
Debates continue to break down and people retreat within their echo chambers.
So as a result, today Bitcoin debates often devolve into fallacious assertions and name
calling where one party assumes the other to be either ignorant or malicious.
And it's unfortunate because people often end up talking past each other under the assumption
that they're right and the other person is simply wrong.
And it's troubling to me to see the ossification of perspectives into these dogmatic beliefs
that degrade the quality of discourse.
Because there is no single correct approach to viewing Bitcoin, there are rather this
multitude of perspectives of what it is.
And I'm not saying that we all have to agree with each other or that we even have to participate
in the rhetoric that's going on, but rather I would say that you seek what I am calling
the Tao of Bitcoin, and that is that Bitcoin is going to follow its own path, that you
realize you have no control over its future, though you are certainly welcome to give your
input and try to find this meat space consensus.
But at the end of the day, Bitcoin doesn't need you to defend it.
Rather, on the other hand, you defend your own perspective of Bitcoin by running a fully
validating node, which is essentially automating and extending your own human beliefs.
The rules to which you are agreeing will be enforced by your node, and you can then worry
about what everyone else's rules that they're agreeing to at a separate level.
But it's that automation, I believe, that really gives power to this system of self-sovereignty.
So an alternative title to this talk, I suppose, could be how to gain a bit of humility in
Bitcoin, because I think that we should all be more humble when discussing it, rather
than confident that our understanding of the system is superior to other people who are
participating in a discussion.
And you can achieve the Tao of Bitcoin by accepting that Bitcoin is on its own path.
There's no need to be frustrated if your vision does not align perfectly with those of others.
I believe that Bitcoin will naturally converge upon the least common denominator of human
consensus, and by that I mean that which is beneficial to, or at least not harmful to,
the greatest subset of participants in the system.
And I will continue upon my own quest, my own quest to consume as much information as
possible about this system, but I have long given up the goal of understanding Bitcoin,
because the faster I run towards this finish line, the further it moves away from me.
And while some people in this space are more confident than others about the direction
that it's headed in, the truth is we're all blazing new trails and learning more as we
move forward.
So I want you to realize that you don't understand Bitcoin, and that's okay, because neither
does anybody else.
Based on the fact that you do not know Bitcoin, but how do you, what do you think will happen
in August?
How much trust do you have in this system which doesn't go anywhere which we understand,
but still I would like to hear your perspective.
Yeah, it's weird that we have these conflicting incentives both to want to follow our own
path of what we think the short-term vision for Bitcoin should be versus the possibly
even greater incentive to all stick together.
And I gave a talk in Arnhem a few days ago where I was making a case that yes, there
may be irreconcilable differences like fundamentally that it would be better for us to split, but
I believe that our long-term vision, our long-term goals for this system are in fact the same.
So I believe it would be a terrible idea for us to split because that would make it much
harder for us to reconverge later on once we all achieve the technical hurdles that
we want.
I believe that with respect to this August, I think there is a very good chance, I'm very
confident that we will avert any disaster forks.
I know there's like six or seven different possible scenarios, all the game theory works
out a number of different ways, but as a bitter pill it may be to swallow with like SegWit2x.
I believe that maybe the compromise that everyone loves and hates just the right amount to get
us a few months further into the future where we can then, once again, begin arguing about
hard forks and other potential improvements.
So this August 1st deadline is coming up, but I'm cautiously optimistic.
Thank you.
There's one question here in the back before we break.
I don't really have a question, but I'm mostly having a statement right now.
Because when you first asked like who here feels like he understands Bitcoin, I was just
like raising my hand.
But then the arguments you made make me realize that while I do understand Bitcoin, I understand
my own perspective of Bitcoin and I'm free to do the perspective as I desire.
Exactly.
And so your perspective of Bitcoin, then you can worry about how it overlaps with everyone
else's perspective.
And I think that's really what all this argument is about, right?
About what is Bitcoin or what should it be for the majority of us?
And that's why I think like finding a least common denominator amongst such a diverse group
of participants all around the world, it's a very messy process.
Eventually, maybe we'll find ourselves finding a solution to other things that help us as
a society go and be better at making decisions together.
Because one thing the blockchain can help us at least in my perspective is to make decisions
together.
Yeah, definitely.
I mean, it could be really weird where if we actually manage to solve the fundamental
problems that we have in this community of finding consensus, then perhaps those processes
could actually be ported over to governments and other systems of governance to improve
them.
It would be pretty funny to see Bitcoin software eating the governments in that standpoint.
Thank you very much.
Thank you very much, James.