YouSaid · the spoken record

Nic Carter

lines on the record: 158
first: 2021-04-01
most recent: 2021-04-01
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“The counterfactual situation where you raise interest rates, you know, you took your medicine and the economy was healthier. And that's why people like Ray Dahlia point out that you have these long-term debt cycles and we're sort of at the end of one now is because we couldn't take our medicine. We couldn't let interest rates clear. We constantly wanted to ward off any difficulty and we didn't ever want to deleverage truly. And then when the debt crisis happens and it hits, it's horrendously bad.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“I see it. I mean, I think that's the issue with modern central banking really is that the central bank always has an incentive to lower interest rates, and they've been doing that from the 70s towards today on this, well, 80s really, on this slow march down. Because whenever there was a hint of a crisis in the economy or financial asset prices started to fall. Their reaction is okay. We'll inject more capital into the economy. We'll save it. But my view is that these palliative short-term measures cause the buildup of a huge amount of fragility in the long term. And then the ultimate collapse is much worse.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, policymakers don't ever want to incur that short term pain because they have a short term outlook and term limits often.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Creative destruction. I mean, I was critical of the bailouts that happened during COVID. I mean, I generally think that it's healthier for society, for bad firms that aren't making money to fail or be reorganized under the various forms of bankruptcy. And you saw what happens. You see the corporate sector in Japan in the 90s, there was this like slow motion and solvency where basically firms weren't allowed to fail. And the Japanese corporate sector lost competitiveness because bad firms did not fail. And so, you know, the process of actual capitalism for the market clearing didn't occur. So I'm always in support of the free market being allowed to clear for non-profit firms to fail.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, and then you would have had what they thought was a malicious entity in control of a lot of coins. I think the real reason they sort of felt that they had to undo it was because they'd always planned to move to this proof of stake world where your political control over the system is a function of your wealth in the system. And they didn't want this attacker, which would have inherited all this significant wealth to have influence over that future proof of stake version. That's sort of my theory.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it basically demonstrates that there's certain elites at the protocol level that connects specific control over the system. And, you know, a lot of people have lost money in hacks on Ethereum and a lot of contracts have gone south. Huge amount of value. But they didn't get a bailout. And it was just when this specific contract called the DAO DAO was hacked that the leadership intervened. And to their credit, they haven't had a significant intervention or bailout since then. But it did normalize the practice. And I think it weakened the social contract. So I would prefer that you sort of bite the bullet in that situation and you accept the failure of that contract.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Think Vitalik made some mistakes with Ethereum ultimately. I disagree with some of the decisions that were made along the way. There's this infamous case of this bailout where 14% of Ether was lost in the smart contract or really this smart contract that a lot of Ethereum leadership were sort of backing and supporting was hacked. And then the foundation with Vitalik's support chose to make a change to the underlying protocol to undo the hack, right? So to me, that was not the most prudent approach because you're basically violating the core protocol rules in order to undo To bail out a specific contract, which has failed. Granted, there was a lot of Ether in there. But I think that shook the credibility of the Ethereum system. It happened back in 2016, I think. That was one reason why I became disenchanted with Ethereum.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Or the alligator and the teeth cleaning fish or whatever, right? I always wonder why the alligator doesn't just eat the fish. But I guess they're brushing its teeth, basically. Ethereum, it gives you more transactional flexibility. There's much more experimentation happening there. It has this whole decentralized finance element. There's a huge number of Bitcoins that circulate on the Ethereum protocol, right? Because Ethereum is open to other asset types, basically. So I think that's actually accretive to both systems because Ethereum gets to have this good form of collateral Bitcoin on the system, which is good volatility characteristics. And then it's a supply sync for Bitcoins, which are sort of now they're injected into this third-party protocol. And that, I think, reduces the velocity of Bitcoin overall.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“100% 100% Bitcoin has already been tokenized and put onto Ethereum. Many units of Bitcoin, I think over a billion dollars worth. So not only do they coexist, they are actually mutualistic. So they're like two creatures that have this, you know, it's like the rhino and like the bird that pecks the parasites off the rhino's back or whatever. I don't know which is which in the analogy, but.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Takes that completely different tack. Of course, you know, I'm not ruling out that it could take over Bitcoin from a market cap perspective. It's just a very different system. And I tend to think the Bitcoin is the most disruptive one because it's the most equipped to challenge sovereign currencies in the grand scheme.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“A charismatic leader, Vitalik. And Ethereum has this policy of hard forks. So in Bitcoin, hard forks are extremely rare. In Ethereum, it's the default way to change things. So it's a much more adaptive system and it changes more frequently. But that also means that it's sort of they're incurring more risk when they introduce those changes. There's much more complexity. Ethereum is smart because they sort of understood Bitcoin as the top dog when it comes to a sound money, a digital gold type thing. And they went for all of the different trade-offs. They wanted to be more of a platform. They wanted to have more complexity at the transactional layer. They wanted to take on more risk in terms of changing the protocol. They wanted to change more quickly. They wanted to make the monetary policy more mutable. So Ethereum”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“It's certainly possible. Yeah, I'm not ruling it out. Ethereum leadership is sort of wise enough to understand that they shouldn't compete with Bitcoin on those most profound qualities. Like, Ethereum doesn't really aspire to be more sound from a monetary perspective than Bitcoin. In fact, the Ethereum leadership are sort of constantly tweaking the monetary policy. So they went for a completely different trade-off, right? They also don't compete to be as decentralized from a governance perspective, right? Because there's leadership. There's an ETH Foundation.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Be challenging too, and people have tried to do airdrops where they distribute coins to a large number of people. It basically doesn't work. Most people don't care about the airdrop. So it's hard to have an equitable distribution. I think the conditions of Bitcoin's launch were so lucky and favorable that they're very unlikely to be replicated. I do think it's going to be real challenge to ever have a new competitor that's as decentralized, as leaderless, as dispersed, sort of distributed as Bitcoin is has its credibility. I don't know how you could overrule it on those important features.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“It would be hard to because if you have capital and resources, I mean, if it was a proof of work chain, you'd just have people that would invest a ton of money in mining, for instance. But most new blockchains, cryptocurrencies, are just sold, basically. They're issued in token offerings kind of thing.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Because how could, you know, a Silicon Valley investment firm own 30% of the money supply that doesn't make sense? That's just so oligarchical, right? It's unbelievable. So Bitcoin by contracts is very bottom-up thing. Was the early enthusiasts, people that were really excited about the technology, they're the ones that obtain those early coins. And so there was a real element of fairness and just an organic nature to its launch, which would be incredibly hard to recapture today. Let's say Satoshi came back and they said, okay, I made Bitcoin 2.0. I'm going to release it. There'd be the most aggressive land grab ever by gigantic pools of capital to sort of get favorable allocations of the new system, right?”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“That's right, George Washington could have been a king, probably if he'd wanted, and Satoshi could have been Jerome Powell if he'd wanted, and Satoshi could have held on to power indefinitely, but chose to leave. The other thing is that Bitcoin circulated for a long period of time from january two thousand nine to about July 2010 without really having a financial value. So there weren't really any marketplaces. It didn't have a value. And so that gave it this really great distribution, you know, among a broad set of stakeholders. And there were no venture funds or hedge funds, you know, trying to aggressively buy up all the supply back then. Now, when you have new cryptocurrencies launched, they're like aggressively pre-mined and some gigantic Silicon Valley Venture Fund is going to own 30% of it. And so it's sort of impossible to conceive of how that could become a global.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Finds this monetary technology and releases it to the world and pays the price. They never took advantage of their filthy lucre. You know, they never recognize any of the 50 billion dollars that they made from Bitcoin, right? And Satoshi also didn't assign themselves any privileged access to the coins. Satoshi could have just written in the code i own 10 of the coins. But they didn't. They just mined in the open free market competition like everyone else. It's just that Satoshi is an early miner to support the network, accumulate a lot of coins for sure. But they didn't have any privileged special access. So that's one thing that's extremely special about the launch is that we'd have a founder that was truly committed to the monetary protocol and didn't seek either recognition or financial spoils and then also left. You know, if Satoshi left in 2010, 2011 and has”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so obviously Bitcoin was born in the depths of the financial crisis, which gives it a nice historical element. But that was kind of a coincidence, honestly. We know that Satoshi had been working on it earlier in 2017. The really special thing about Bitcoin was that it was launched anonymously by an entity that did not seek any glory or credit for what they did and apparently never monetized it at all. So they never really moved any of their coins. Satoshi sent one test transaction to Halfini, who was one of the earliest Bitcoiners. Aside from that, as far as we know, Satoshi never spent any of their coins. So you have this wonderful Promethean quality whereby it's almost self-sacrificial. I mean, it's like this borderline, godlike figure in terms of their restraint.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“We wouldn't need cryptocurrency as much. The other thing would be if a completely superior design for a new sort of state-independent monetary system emerged, but it's really hard to even imagine how that would come to emerge. And there's good reasons to think that Bitcoin, the conditions of its launch were extremely favorable and hard to replicate.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“namely the dollar, like the dollar being the main one. It seems like we're going in completely opposite direction with most people seem to be noticing the stirrings of inflation in society. You might have noticed it too. It's showing up in commodity prices, lumber prices, and food, obviously in financial assets, and it'll show up in consumer prices generally soon. But so that would be one way for Bitcoin to basically become irrelevant. It's a dialectical thing. Bitcoin is held in opposition to the established monetary regime. If they completely reform themselves and the dollar becomes super sound once again and the Fed stops tinkering the way they constantly do, then”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. I think for that to happen, one of two things would have to obtain, one of two things would have to happen for Bitcoin to just be irrelevant, basically. Either central banks totally clean up their act and stop engaging in rampant money printing, which I don't expect that to happen anytime soon. I mean, it looks like we're normalizing this new regime of inflation, you know, pro-inflation to sort of remediate the debt issues we have. So that would be one thing that would make Bitcoin cryptocurrency much less relevant is if everyone becomes totally assured of the soundness of sovereign currencies, basically.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“And that was part of the block size debate. I mean, the miners, when we implemented segraded witness in 2017, the miners just didn't want to do it. Eventually, the users, the regular folks running nodes, rebelled and basically said, look, we're going to implement this whether or not you do it. And it was a threat to the value of Bitcoin because if this threat had gone through, it could have split Bitcoin and it would have been really messy. So the miners sort of capitulated. So I think the current consensus is that miners do not have unilateral control over Bitcoin and that governance is more poised between people that run nodes, developers and miners. It's sort of a triumvirate where neither of them has total control. So that's my current model for control in Bitcoin. I think if you asked a miner, they would tell you they didn't feel the”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“That's the flip side of a large portion of the blocks being mined in China due to this energy feature which I discussed, which is that there's a lot of Chinese miners for sure. Now the question ultimately is what degree of control do miners have over the Bitcoin system?”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“In all these provinces, and so miners set up shop there because they could mine Bitcoin with the excess energy. They could monetize this thing that otherwise was going to go to waste. So, you know, there's things like that which, you know, I think mitigate the reality. Bitcoin is not really rival with our consumption of electricity. It's not depriving anyone of electricity. It's mostly these stranded assets that are going into supporting the Bitcoin network.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Is that Bitcoin will buy energy that's otherwise being wasted, basically? So it will buy so-called stranded energy assets that would not make it to a population center. And in fact, most energy produced ultimately does not sort of make it to your socket in your wall. And so this is why so much Bitcoin is mine in China, for instance. It's not because, you know, Chinese industrialists had a special affinity for Bitcoin. It's because the Chinese grid had a massive overabundance of energy, and particularly in four provinces, Situan, Yunnan, Inner Mongolia, and Zhangjiang. So in those four provinces, those are all pretty distant from major population centers. So because of that, you can't really transport the energy that easily. And so huge amounts of energy are curtailed or basically.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“There's a lot of mitigating factors if you think the Bitcoin is potentially a useful system, which is Bitcoin consumes energy in a very peculiar way, which virtually no other industry does, which is that Bitcoin is a geography independent buyer of energy, which is not how we humans typically consume energy. Like we need energy to be produced near to population centers, and we need it to be produced at the corresponding to the peaks and troughs of our consumption, right? Because we have to 100% match the demand and the supply at all times, right? Otherwise, we have blackouts. So Bitcoin doesn't care about any of that. It just buys energy on a constant basis. And so indifferent to where it's being produced. And so the consequence of all that.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“So I can totally, you know, get into the details of Bitcoin's energy mix and things like that, but that's at a high level what the debate is. It's this normative question. Like, does Bitcoin have an entitlement to consume any of the world's resources? And that's actually where the debate should end much of the time, because a lot of people fundamentally dispute the validity or usefulness of Bitcoin as a system. And so, of course, they're going to consider the energy usage illegitimate.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. So, I mean, it's not like a new criticism, but Bitcoin is consuming more energy than ever. The price rises, the electricity consumption rises. And so. We've heard renewed belly aching over this for sure. I mean, if you don't believe that Bitcoin is useful, then you're inclined to think that all the energy consumption is a waste. So that's, you know, it's something that's sort of unrebuttable if you fundamentally contest the validity of the Bitcoin system.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, honestly, I'm not sure exactly how it works, and they might have that built in, but just generally speaking, institutional scaling is a model for scaling, right? Where you could have banks holding Bitcoin and they issue notes against Bitcoin. And those are your payments. the base layer is the settlement layer.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“That's my vision. That's my theory. And, you know, you can do it in a permissionless and a permissioned way. Like Coinbase is a big Bitcoin exchange. They provide scalability. They're a financial institution. You know, you can settle up internally on their own database. And then, you know, periodically settle to Bitcoin.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Toshi coins, we touched on that early in the episode. What if Satoshi returns and sells all of their coins? So, we don't know for sure how many coins Satoshi actually mined or produced because there's a degree of probabilistic analysis that you would do. There's a few thousand blocks that were mined by what we think is a single entity in sort of 2009. And so if you add them all up, you get to about a million. So people think that Satoshi mined a million coins and then they're worried that Satoshi would return and market sell all the coins. Thus crushing the price of Bitcoin.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“And today, Bitcoin settles $10 billion a day, and the vast, vast majority of it is completely legitimate. It's just a useful alternative system. But back then, a huge fraction of all Bitcoin transactions were related to the basically illicit marketplaces.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Road classic, classic situation. So, I mean, that was the Darknet Marketplace set up by Ross Albrecht in the early days of Bitcoin. That's one of the first killer apps for Bitcoin was being the payments network behind this Darknet marketplace. And where you'd go to buy drugs and things. And so that became associated with Bitcoin. If you remember the press coverage from back then. But over time that faded and it became less of a critique.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yes, but incremental is the word, right? We're not going to get an order of magnitude enhancement, either privacy or scaling, but we will get a considerable enhancement. But privacy and scaling are actually two sides of the same coin because you get more transactional privacy by removing data from the ledger. So that there's less metadata for people to surveil and analyze. And that's also how you scale by compressing and being really space efficient with transactions. And the more parsimonious you are, the more economically dense each bite that everyone has to retain on the ledger is. And so those are very closely allied concepts.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“In order to permission a spend, that would be more efficient in a byte sense than ECDSA, for instance. So it's pretty incremental. And then toproot is all about having transactional conditions that are sort of withheld from final entry onto the blockchain. So it's kind of a way to have more private conditional transactions on Bitcoin. So both of them, I would say, are incremental changes.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“So it's been long enough that we now trust it, you know, kind of in cryptography. It's meant to be Lindy, you know, it's sort of, you want to test it over time. And then it's considered safe to use. So Shnor has been around for long enough that we've decided to rip out ECDSA and insert Schnor, which is just a different signature scheme, which is more efficient. And it has better properties. Like if you want to do a multi-signature transaction where many people collectively sign.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“We basically all agree that we should. It's a meta question what's the valid way to implement new changes to Bitcoin? What's a way that is scalable in the long term and will last and people will consider credible? Even if this one isn't controversial at all. So that's where we're at. We're basically debating over how do we implement this change that we all want to get a feeling of how slow Bitcoin governance is and how deliberate it is, everybody collectively wants the change, but we haven't fully agreed on how we're going to put it into Bitcoin. So it's the classic sort of Bitcoin situation. But what it is, is I mean Schnorr is an alternative signature scheme. I think it was encumbered by a patent. And it had only just been unencumbered when Satoshi created Bitcoin, I believe. It's a better signature scheme than elliptic curves, which is what ECDSA, which is what Bitcoin uses.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, I mean, it's a huge deal because the last time we tried to make a change to the protocol, we had a whole civil war over it. And it was incredibly difficult to get Segwit activated in 2017. And it took all this brinksmanship and threats and all these campaigns. And it was this whole thing. Luckily, I think things have quieted down in those much more consensus that Schnort toproot is a good change to Bitcoin. Everyone generally supports it. But everyone kind of has PTSD over the last time when we tried to change Bitcoin. And so we're sort of really dithering over how we actually want to implement it. So it's taking forever because we're trying to set the protocol for how do you change Bitcoin itself. And all of our assumptions went out the window last time. So we're trying to reset and decide what is a legitimate way to institute a change to Bitcoin. So that's actually the big question right now. It's not, should we implement these changes?”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, schnor and toproot, that's the first new protocol upgrade since Segwit in 2017, which was what laid the groundwork for Lightning to be developed, basically. And Schnortoproot is really the first protocol change in three almost four years now. So we're very excited about it.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. I mean, the flaw with lightning is really that you, you know, and this can be remediated in a number of ways, but you have to sort of pre-fund these channels. So it's a weird concept to have to inject liquidity into a channel in order to accept a payment. So I'm sure those user experience problems can be solved, but it's still in a state of relative immaturity. So we'll see.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, they used to be able to. I haven't made a new edition recently. They're very scarce and very special. They're like physical NFTs.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Works. I use it when I initially sold those dice. I sold them on Lightning. I was one of the first merchants to use Lightning back in the day. The first edition of the Dice.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“The other thing lightning proposes is saying, okay, well, now that we have channels established, What if we interlocked a number of channels together? So if you and I have a channel and me and my buddy have a channel, my buddy can now pay you because you have a relationship through me, basically. And so Lightning is this network, this overlay network that sits on top of Bitcoin and allows people to transact in a much faster and less frictional way without the need for Bitcoin's kind of slow periodic settlement assuming that everything sort of goes well.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, layer two, you could say. And basically the intuition is it's kind of like opening a bar tab. So you go to the bar and you might drink a dozen beers over the course of the night, maybe half a dozen. And, well, I guess nobody goes to the bar these days, but let's say you did. You open a tab, and at the end of the night, you settle up once. You're not necessarily paying each time you get another beer. So it's the same idea. You're opening a channel, an ongoing relationship with your counterparty. And so Lightning has you open a channel with a counterparty and you're sort of sending back and forth these cryptographic commitments saying, you know, I agree to send you some Bitcoin, but you don't necessarily settle each time you make a transaction. So you can do hundreds of thousands of transactions in a channel.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“So, lightning is one potential payment solution built on top of Bitcoin, where you have different assurances, different transactional assurances, but ultimately it's very proximate to the base layer. So if something goes wrong, you can always basically settle to the base layer.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Do not require those strong assurances of final settlement. There's one exception which is physical cash. With physical cash or with open dime, a cash like product, you actually are getting final settlement. But online, most online banking transactions, most P2P digital wallet transactions in the dollar system, they're not really final at all.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Most of the time you're not getting final settlement when you do a transaction, and oftentimes that causes there are pluses and minuses on the plus side of huge efficiency if you use a credit network like Visa. But it's in the name credit, right? Visa is extending you credit. They're kind of guaranteeing your reputation to the merchant, but fraud happens all the time, right? There's always fraud because you have this reversibility, right? And so you can engage in fraud against a merchant. If you have a final settlement, there's no possibility for fraud. So that's one reason merchants kind of like accepting Bitcoin because once you receive an inbound Bitcoin payment and you deliver some good or service, you know, that payment can't be reversed. But frankly, most of the transactions we undertake on a daily basis”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“But if you wanted to buy coffee, you could do it on a second layer. Lightning would be one way. There's a bunch of side chains now. Or you could use a more centralized solution if you wanted.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“You've decoupled the payment, the financial message, and the settlement. Those are distant concepts. And the settlement happens on a deferred basis. So that's how you get scalability. Is you have lots and lots of messages, but they don't settle for a long time. They might settle on a net basis, on an end-of-day basis. But so that's really how it works. And then you have FedWire where your average transactions in the millions of dollars, and there's only a few hundred thousand transactions a day. It's sort of an interbank settlement network. So that's my vision for how I think Bitcoin will develop too. Bitcoin itself on the base layer is this slow moving high assurance final settlement network where if you're sending money to the other side of the globe, to someone you don't trust where you want that payment to be final in a short period of time, and both counterparties know it's final, then you would use that.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source
“Really, how all payment systems scale blockchain or otherwise. And I think a lot of people don't understand this, is that there is no equivalent to scaling at the base layer in the regular payment space. That totally doesn't happen. All of them are built on layers. So Visa is like the fifth layer in the payment stack that ultimately depends on these utility scale settlement systems like FedWire, chips, ACH, basically interbank settlement systems. So you've got these slow moving but high assurance settlement systems. FedWire is probably the number one, you know, like when you send a wire, that's using the FedWire system typically. On top of that, you know, you have banks and then you have payment processors. And then you build up these layers and layers and layers. And then you have these fast payments, you know, Venmo PayPal, credit, debit, visa, you name.”
2021-04-01 · Lex Fridman Podcast · #173 – Nic Carter: Bitcoin Core Values, Layered Scaling, and Blocksize Debates · IDENTIFIED FROM THE TRANSCRIPT · source