Citadel Dispatch

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support dispatch: https://citadeldispatch.com/donate  ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
EPISODE: 101
BLOCK: 789547
PRICE: 3733 sats per dollar
TOPICS: Mempools, Transaction Fees, Scaling in Layers, Mining Pools, Block Size Limit, Incentives

Read More: High Fees? Bitcoin is Working As Designed + Bitcoin Transaction Fees and UTXO Management

Wiz on Twitter: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://twitter.com/wiz
Simon on Twitter: ⁠⁠⁠⁠⁠⁠https://twitter.com/softsimon_
Steve on Twitter: https://twitter.com/hunicus

nostr live chat: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://citadeldispatch.com/stream⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
nostr account: ⁠https://primal.net/odell⁠
youtube: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.youtube.com/@citadeldispatch⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
podcast: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.podpage.com/citadeldispatch⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠
stream sats to the show: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.fountain.fm/

(00:23:29) Pain points and improvements in the high fee market

(00:35:56) Transactions being purged from mempools

(00:41:19) Importance of wallets with RBF and CPFP features

(00:41:39) RBF (Replace-By-Fee) feature

(00:42:19) Limits and use cases of RBF and CPFP

(00:46:06) Efficiency of RBF in high fee markets

(01:18:39) Comparison between Bitcoin, Lightning, and Liquid

(01:19:30) The potential of Fedimint and its advantages

(01:26:11) Discussion on the reasons for stale blocks

(01:33:07) The possibility of mempools never clearing again

(01:37:08) The rise of out-of-band transactions and its implications

(01:43:56) Announcement of a big event on May 19th

[00:00:39] ODELL:

Happy Bitcoin Saturday, freaks. It's your host, Odell, here for another Citadel Dispatch,   the live   interactive   show focused on actionable Bitcoin and Freedom Tech discussion.   We have a great group of guys   here at the Bitcoin TV Studios at Bitcoin Park for today's   show.   But before we get started, I want to thank all the listeners for continuing to support the show.   Dispatch is audience funded without ads or sponsors,   and it's made possible thanks to the gracious donations   from all of you.   I really do appreciate it.   It means the world, and it's just pretty cool seeing all the donations come in.  

Couldn't do it without you guys.   The easiest way to support the show is through podcasting 2.0 apps, like Fountain, Breeze, Podverse,   .fm,   and others.   You simply search Ciddle dispatch,   press the subscribe button,   load up your wallet with Bitcoin, and then you choose how many sats per minute,   you think the show is worth, and those sats get streamed directly,   to my node,   as you listen.   Podcasting 2.0 also has a feature called boostograms,   where you're able to attach   a message to a set amount of sats.   I read the top 4 boostograms from the last show every episode.   Before I do that, I also want to say you can also support the show through citadel dispatch.com/donate   through lightning or on chain Bitcoin.  

We're a Bitcoin only show here, so the only way to support the show is through Bitcoin.   I do know it's a recession. I do know it's a   bear market kind of. I think we're almost out of it.   So if you can't spare Bitcoin, you can also support the show by just searching for it and subscribing   for the show on your favorite platform or on all the platforms. Every podcast app,   YouTube, Twitch,   Twitter,   Rumble, Bitcoin TV.   You just search ciel dispatch. All the links are at ciel dispatch.com.   And then last but not least, yeah, sharing it with friends and family, it it really does go a long way.   Leaving reviews helps.  

But then, also, we are very unique here that we have a live interactive audience that gets piped in   through YouTube, Twitch, and our matrix chat. Our matrix chat is 247, 365   chat focused on Freedom Tech.   You can find that at sildispatch.com/chat.   So participating in the show is huge.   I consider you guys all cohosts, so thank you for constantly coming into the live show and   joining us. So with all that said, I just wanna read the last   top 4 boostergrams from last week.   Well, not last week. It was a little bit ago, but last episode. We have at nakamoto   6102   with 60,000 sats saying, thanks for the discussion. As a prosecutor and regular listener to the show, I can say the culture within prosecutor offices is changing. Bitcoin and open source tools are important and used mostly by law abiding citizens.  

I don't know anything about Roman's case beyond what was discussed.   Even assuming the charges are true, decades in prison is more time than many murderers will serve. I hope there's justice in this case.   I agree with you, Nakamoto 6102.   We have at fadedflage   with 56,789   sat saying, don't worry about the audio quality. I found episode 100 both riveting and terrifying.   Cheers to that.   We have at eric 99,   50,000 sats saying, stay humble, stack sats. Really great advice, eric 99. Appreciate the support. And then we have at stimmy with 50,000 sats saying, free Roman. Free Roman is right. Cheers to that. So with all that said, I have a highly relevant conversation lined up for us today.   We have the mempool.space   team here in the studio,   here to talk about mempools, talk about transaction fees,   and talk about their project, the mempool open source project and, the mempool dot space   instance that they host.  

As you freaks are probably aware, if you've used Bitcoin,   at all these last 2 weeks, mempools have been running hot. There's been a backlog of Bitcoin transactions. Transaction fees have been high as a result.   Bitcoin is working as designed. It is beautiful to watch,   and I think this conversation   could be very helpful to people that have just experienced that maybe for the first time if they weren't around in 2017.   So with all that said, I wanna introduce our great guests.   We have Wiz here. How's it going, Wiz?  

[00:05:22] Wiz:

Good morning, Matt.   I'm very happy to be here as always.  

[00:05:26] ODELL:

Pleasure to have you as always.   We have Steve here. How's it going, Steve? It's great, Matt. Thanks for having me. Cheers to that. And we have Soft Simon. How's it going, Simon?  

[00:05:37] Unknown:

Going well. Thank you for inviting us and being in the studio this time.   It's fun being in the studio. Right? Yeah. Oh, yeah.  

[00:05:45] ODELL:

And then we also have a live studio audience. He's shaking his head at me, but he has a mic here, and he might speak   at a random point throughout the episode. If you have any anything to say, feel free to say it at any time. He's just shaking his head at me. He's not very happy with me saying that.   I guess before we get started, I mean, it's a nice Saturday morning here in Nashville.   I know Wiz and Steve have been to the park before, but but, Simon, like, what are your thoughts on on Bitcoin Park?  

[00:06:16] Unknown:

Great place. Nashville is so beautiful   as an American   city compared to, like, New York and Miami, those places   I've visited as well.   And just, yeah, coworking space for for Bitcoiners. It's an it's an amazing idea. So a little bit a little bit more than just coworking now. Right? Yeah. It's a meet up space, meeting space, what I've seen so far, and it's  

[00:06:38] ODELL:

been cool. It's weird. I, like, kind of it's like a social club mixed with co working, and then we have all the events in the event space. Then we have this ridiculous podcast studio that's completely overkill,   that hopefully will take more advantage of, have a better setup. Wiz Wiz is actually   besides his love of   all things mempools   and running servers, he also really loves audio and video stuff, so he actually gets kinda mad at me about how my setup is here.   Well, I'm not a professional podcaster, but Neither am I, Aaron.   So so, boys, where should we   where do you wanna start here? We got a very active audience.  

Mempools have been running hot. Do we do you wanna start should we start talking about mempools first, and then we'll go to your project? Or what's a mempool, Simon?  

[00:07:31] Unknown:

Yeah. Sure.   What do people wanna know, you think?  

[00:07:35] Wiz:

What is the what is on people's mind right now? Well, maybe let's start with, introducing the project for those who are not familiar.   Like, what is mempool space?   Yeah?  

[00:07:47] ODELL:

Yeah. What is mempoolspace,  

[00:07:49] Wiz:

Wiz? Alright.   Mempoolspace is a website that   SoftSimon first created in 2018.   And sometime in 2019,   I messaged him and said, let's make an open source project out of this. So in mid 2019, we   cofounded the the mempool open source project   on GitHub and   Twitter and and made all the accounts, and we switched the mempool dot space website to our,   servers.   And   that's around the time we started to work on it and build it from   the original version, which was just the blocks, component, which you see on the mempool space website,   visualizing the mempool as projected blocks,   and then   slowly   adding more and more functionality until it was a full blown block explorer.  

And then about   2, two and a half years ago, we incorporated   it into an actual start up.   So now Mempool Space is a company funding the development of the Mempool open source project.   And we added a mining dashboard. We added a lightning explorer. We added   all kinds of really cool functionality, which I'm sure we'll get into on the show. And the concept is to   help the Bitcoin community transition into a multilayer ecosystem   and also   support,   very easy one click   installation on a number of Raspberry Pi devices and and installations like Umbrel and Raspberry Pi Blitz. So you can go to the Umbrell app store and click install and have your very own instance of the mempool space website running on your own hardware.   So we vary against trusted third parties, and and,   we're very much for self sovereignty, and we're very much for the Bitcoin community to support them on this project.  



[00:09:33] ODELL:

Awesome. I mean, anyone who's been watching still dispatch should be well aware of mempool.space   because it is live on your screens right now. Like, that is every   every dispatch has a live view of mempool.space.   I consider it essentially   the home page of of of Bitcoin. It's, like, it's the place where you can you can see what the current status is of the Bitcoin network, your Bitcoin transactions. As you said, you've added now the lightning dashboard and the mining dashboard, so you can see status updates there. But it's also incredibly cool that you can also self host it and use it with your own Bitcoin node,   so we don't have to actually trust you to be giving us relevant,  

[00:10:12] Wiz:

giving us honest information. Right? Yeah. You shouldn't trust us. You should run your own instance of the Mempool open source project on your own hardware, trusted third parties or security holes,   and we wanna make it easy for everyone to do it. Because if if mempooled out space, got attacked, or censored, or went down for whatever reason,   you can always rely on your own locally self hosted instance. Right.  

[00:10:37] ODELL:

So, I mean, we have some interesting questions here. So that that's the mempool.space,   project and the mempool open source project as a just a quick overview.   But,   I think it's   it's important for us to take it back a step and and and talk about what are mempools,   and why are they important?  

[00:11:00] Unknown:

Yeah. So   it's the core   feature of the Bitcoin network   that there's a block every 10 minutes, and there's a scarce block space.   Before   up till 2017, it was 1 megabyte, and now it's up to 4 megabytes depending on what kind of data you put in. But the mempool is where all transactions   end up before they get confirmed on the blockchain.   And the mempool   right now is this   fee market or block space   market for space in the blockchain. So all all transactions are competing to get,   into the next block, and the miners   follow incentives,   economic incentives. They always pick the most,   economically   good   transactions for them. I mean, the highest fee. The highest fee. Usually, it's the highest fee, but there's a lot of complexity to that because there can be a lot of relationships   in in the transactions. Like, if you include a low fee, you can also get this high fee. So there's a lot of complexity   in how they pick the transactions, which is what we are working   on very hard on on on figuring out.  

But,   yeah. So the mempool is   basically where your transaction end up before it's getting confirmed.   And when you're setting out a transaction on onto the Bitcoin network, it's starting to spread out along the p to p network of Bitcoin nodes   around the world until it reaches a node that it's owned by a miner, and the miner,   grabs transaction from from their own Bitcoin node. Right? And this is also   why they're not all mempools are the same because there's   lag and delay in propagation, and the the mempools are using completely different rules. For example, there's   the memory size limit, which is default on, I think, 300 megabytes.  

But obviously, we have a much higher limit so that we can show more transactions. You have no limit. Right?   Yeah. We have a limit that we keep raising. It's like raising the dead ceiling. You you just keep raising the dead ceiling. Yeah.   So so my point is that   not all the mempools are the same. So you can have 1 transaction showing up on 1 mempool, not the other.   So,  

[00:13:21] ODELL:

I mean, it gets a little bit confusing because   I'm gonna nitpick here a little bit. Sure.   It gets so the way I look at mempools are that it's it's essentially a a waiting list to get into   into the Bitcoin blockchain. It's our like, if you're international, it's a queue to get into the Bitcoin blockchain. It's like you're waiting to get into a busy restaurant.   But instead of it being sorted by who gets there first, it's usually sorted by who's paying the the most in transaction fees. So we have this dynamic   transaction fee market,   that is a proper free market. It's it's it's people bidding to get into this scarce block space,   and then miners are economically   incentivized to essentially try and include the ones that make them the most money.  

But it gets a little bit confusing because so many people in this space, even people that focus on mempools all the time, constantly say the mempool.   Now there is no the mempool.   Right? Every node, every Bitcoin node is running their own mempool,   this own waiting list that they're keeping locally.   And and so it's important to realize, like, we have a question in the chat. How many mempools are there?   And you can think about it that pretty much everyone that is running a node,   has their own mempool. Now not all of these mempools are necessarily economically relevant.   The most important mempools might be the miners' mempools,   because they're the ones actually creating the transaction. And then, obviously,   your guys' mempool   is held in high regard because we all tend to go and check mempool.space.  

But that's your mempool. It's not the mempool. Right?  

[00:15:00] Wiz:

Yeah. There's the mempool open source project, and there's the official instance of the mempool open source project, mempool.space,   which a lot of Bitcoin projects   do integrate with in some way, shape, or form, like wallets and exchanges and mining pools all   integrate with us. But at the end of the day, if we disappear, Bitcoin would continue operating just fine.   Just another mempool.  

[00:15:25] Unknown:

Just another mempool. But but the mempool queue you're talking about, it is it's what we are trying to visualize. When you go to mempool space, what you see to the left, the blocks, the yellow blocks, currently they're yellow because they're the color is indicating the level of the fee. Green is the lowest. You guys do a great job with the color. Yeah. So what you see at the left are the blocks that are waiting to get confirmed. Yeah. We can see it on your shirt. You have it on your shirt too. Yeah. That's a that's a special green block edition. So the green here is the very low fee.  

[00:15:57] Wiz:

Yeah. So the mempool open source project   is kind of like our passion project.   I mean, Simon and I have   had had many passionate arguments over the years about what features to add or what colors to use or what, you know, you know, placement of this pixel here or this thing. And,   fortunately,   now that the mempool is full, you know, we're getting a lot more people using it and a lot of, people contributing it. It's it's really taken off.  

[00:16:28] ODELL:

Yeah. I mean, when the mempool is empty, nobody really cared. When mempools are empty?  

[00:16:32] Wiz:

Oh.  

[00:16:33] ODELL:

I feel like it's it's important not to keep saying the mempool because it confuses people. Like, it it sets us back.   It's important to make it very clear that there's many mempools, and I have narwhaltacos,   ride or die freak, and great name in the live chat saying,   that I should go fuck myself because I called his mempool irrelevant.   I need to just   be clear here. Your your mempool is not irrelevant.   The most important part about your own mempool,   is being able to, on your own,   make a calculation on on what fee you should be paying.   Now   Bitcoin Core doesn't have the best fee estimation strategy, and we could talk about how the mempool open source project does fee estimation   and how mempool.space   does fee estimation.  

But if you're running   your own mempool instance,   with your own node and your own mempool,   you're able to make   very educated   decisions on what fee you should choose. Right? Because that is something that people take for granted in,   low transaction   environments. But as soon as you start to see sustained high fees,   it becomes very important and can be very expensive mistake   to figure out what is the right fee that I wanna pay for a transaction. Right? Yeah. The  

[00:17:48] Wiz:

the term transaction fee is actually a little bit   confusing, I feel. It should it's it's more like a bid   for space in the Bitcoin blockchain.   And whenever miners are considering which transactions to include in the next block, they're going to   essentially look at the the market of bids and take the highest bids, the highest bidding transactions.   And nowadays, you can actually increase your bid   by our by using RBF or CPFP   or other methods,   and the   miners are constantly looking at this. So when Matt says   if you're just, an individual pleb at home running, like, your own mempool, it's irrelevant. What I think he meant was that   in terms of the actual market for demand   in the Bitcoin blockchain,   the the most   economically relevant mempools are the ones   operated by the mining pool operators   or any exchanges   or wallets. I mean, essentially, anybody who uses the the node   makes that node, trusted.  

And so if an entire exchange   is using a single node, then that node is very economically relevant. Your own mempool is relevant to you. Right. It's not necessarily.   Yeah. So if if you make I want the freaks to get stuck on that. Like, you should have your own mempool. Oh, yeah. You should be using your own mempool. But your node is for you. Yeah. And if you change your mempool configuration   to have a larger mempool or smaller mempool or if you   filter out some transactions from your mempool or if you turn off your mempool entirely,   only the people using that node would be affected or or care about those changes.  

It's it's kind of interesting now, like,   recently, we've seen some certain types of transactions where people   are filtering them out from their mempool. Yeah. And it's kind of silly because if nobody's using your node, then   filtering out transactions from your mempool is not gonna be   noticed,  

[00:19:43] ODELL:

by anyone, and nobody would care. Right? Oh, someone just brought that up. Like, are you talking about or disrespector?  

[00:19:48] Wiz:

For example, I mean, you can turn off your mempool. Like, nobody's gonna care. Right? Like, you're only hurting yourself.  

[00:19:54] Unknown:

Yeah. You're gonna get inaccurate fee estimations   and inaccurate.  

[00:19:59] ODELL:

Yeah, you know, the as much data as possible. Yeah. If you're if you're just ignoring transactions on your own node,   that's a that's a relay level thing. Right? And those transactions can just be sent to miners directly or sent through someone else's node. And what happens is you get an incomplete picture of the queue, so you don't know what fees to pay. Right?   Yeah. It's kind of like  

[00:20:21] Wiz:

I it's it's a bit silly because, obviously, you you can't filter out the Bitcoin blockchain, and those transactions are making into the blocks. So  

[00:20:29] Unknown:

what are you really accomplishing by, you know, turning off your mempool or filtering out? Saving some memory on your computer. You're kinda putting a mind folder on your face too. Right? Like, you don't really know what's going on. Right. You're gonna end up saving those those those things that you're trying to avoid when the blocks are confirmed anyway.  

[00:20:44] Wiz:

I don't know. Yeah. Maybe you don't care about the mempool. You just care about the blockchain. So then you'll save some I mean, if if you if you wanna be able to do one set per v by transactions, just delete your mempool. Okay. Great. Your mempool's empty. You can make one set per v by transactions, but nobody's going to   accept them. Right? You want as much data as possible so you have the most accurate view of of what everybody else's node is doing.   Right.  

[00:21:11] ODELL:

Steve, you got something to say? Or   No. I'm good. No. I thought I saw you raising your mic.  

[00:21:17] Unknown:

Well, actually, before, I was gonna say that I think you covered it already, but the   when you run a node on the network, even though it may not be economically viable in the form of being a node that's used for mining, you are still helping propagate transactions to miners. Right. So  

[00:21:33] ODELL:

Right. You're helping the relay network, the global relay network sending these transactions around to from node to node to node to node, and then eventually to a miner's node.   I also I think it's important to mention that Narwhal Taco said that his mom says his mempool is the best one ever, and I support her in that.   That's great. But,   so, I mean, we've had a   very high fee market Mhmm. These last this last week,   week and a half. At one point, I think the next block together the next block was, like, 400 sats per byte or something like 500.   500. So 6 100. You look a little bit broken inside, Simon. 56100. No. I don't mind. And how many outstanding transactions do we have? It was like It was 500 k, I think. I think 560,000,  

[00:22:19] Unknown:

something like that. And the last record I checked from 2017   or 18 early 18   was 250,   something like that. But they were larger transactions. True. No. This,   this was back in 20. Yeah. So it's Like, 2017, I felt like Yeah. So the difference now, it was we had so many tiny transactions. Right. So it wasn't because they were all in the token, shitcoin transaction. Yeah. So they're like dust and they're very small,   but this put a lot of strain. But the number of transactions. Right? Yeah. So it it put a lot of strain on our infrastructure and a lot of   other Bitcoin infrastructure, which we saw gave   very, which caused various   disturbances. I mean, we had an increase of stale blocks or orphan blocks, for example. Yeah. So let's let's talk about this because, I mean, the way I  

[00:23:05] ODELL:

part of the reason that I'm so bullish on Bitcoin is that I consider it an antifragile   system. So I I think it it gets stronger under pressure when people start to see the pain points. Yep. And we start to start to fix those problems because those pain points become obvious and there's strong incentives to fix them. So what were the pain points?   You know, what are the takeaways? Like, how do we improve   going forward?  

[00:23:30] Unknown:

We've seen in the past, like, 17 when we had the first three really huge backlog Right. Of transactions   and high transaction fees,   How the years after that, 2018, 1920, how exchanges   changed and prioritized   different techniques to optimize   for for the blocks based market, like batching transactions,   Segwit   support.   And I think we've seen the same thing in this time. And just we, ourself,   this mempool   was a real stress test for us. We saw how stuff started to slow down, and we had to pass and optimize. So we're much more prepared now for the next   wave than we were, like, a months ago.  

And, you saw various actors like Binance. They tweeted that they're gonna   prioritize   at lightning support. And   so you have had these consequences. Right?  

[00:24:26] ODELL:

Right.  

[00:24:29] Unknown:

The batching was the big one. Yeah. In 2018, I think batching was the huge one. And I remember the  

[00:24:36] ODELL:

I remember Coinbase specifically. They were in a situation where they were not doing, like, any kind of real UTXO management in 2017,   and a bunch of their transactions like, people   it's important for I think it's important   for people to realize that on chain Bitcoin transactions,   the fee is not set by the amount of Bitcoin you're sending. It's not set by the amount of money you're sending.   It's set by the amount of data that's being transmitted. So you can have a very small UTXO, a small Bitcoin   unspent transaction output,   that is gonna use the same amount of fee as some as a as a UTXO that has much more Bitcoin in it. And as a result, that fee starts to creep up in percentage, right, as a percentage of the transaction. And you have a situation where some of your transactions might not be economically spendable   because the transaction fee will be so such a large portion, if not the entire portion,   of the amount of Bitcoin you have. So you need to have proper UTXO management   in order to handle that situation. Now we have lightning now that we didn't have in 2017,   and the dichotomy that people don't realize, I think, and it's it's hard to wrap your head around, just lightning,   Those transaction fees are bet based on the amount of money you're sending, not, like, size and data. So that's actually on Lightning, that is more comparable to what people are used to, I think. Like,   you know, Western Union robs you, but you understand that it's a percentage of the amount of money you're sending. Right? Like, Western Union might charge you 10%   of your $100, and, like, that it it scales with how much money you're sending. That's how Lightning works. But on chain,   it's it's how much data you're sending across the network. Right? Yep.  

But what's really interesting here is,   I I think most of   the most of the exchange market has realized that at least in like, these professional   custodial wallets, essentially. Like, they realize that they need to have proper UTXO management to a degree. I mean, Binance consolidation transactions weren't confirming. They were having some issues. It seems like everyone goes through the same mistakes,  

[00:26:39] Wiz:

and a lot of people are using even,   custodial wallet providers  

[00:26:44] Unknown:

who have figured it out. But But it's interesting to see how many players in the Bitcoin space   that think that we're gonna have low fees forever. Mhmm. So they build their whole infrastructure around low fees. And then when   the fees just   rise   gets raised a little bit,   They get   hammered and,   their service just stops working.   And But then they learn their lesson because they touch the stove. Yeah. Because I think everyone in the system have understood very early on, like, oh, shit. The the fees are gonna get really high. Like, when we start building the mempool, we knew that this is gonna be super relevant because the mempool is gonna be full. Everyone's gonna check what's the fee, where's my transaction.  

[00:27:25] Wiz:

Yeah. Everyone,   shout out to Catan. Everyone seems to think that they can always do a one sat per v by transaction and just wait.  

[00:27:34] Unknown:

But that's not the case. I'm almost surprised   that it's been this slow and that we had   empty blocks going for the past. Yeah, we've definitely been wrong. Because the block space is so scarce, it's like the scarcest resource in the world, right? Isn't it? Besides time.   Right. Okay.  

[00:27:51] ODELL:

Do you wanna get philosophically?  

[00:27:52] Unknown:

So you can you can store anything on the blockchain, like NFTs or your   anything. You can store anything, and it's gonna   be,   locked in forever in this database. It's gonna outlast   all of us. Oh, yeah. Yeah. Just that concept should be super valuable,   but still  

[00:28:09] Wiz:

Bitcoin has introduced 2 forms of digital scarcity, and most people only think about one of them. Obviously, everyone knows that there's only gonna be 21,000,000 Bitcoin. Wait. Really?   Sorry. Continue. But, the second thing is that the space in Bitcoin's blockchain is is equally scarce. And  

[00:28:26] ODELL:

whenever you need to And why is block space scarce?   Well, why does it have to be scarce? Why can't we just have, you know, unlimited block size? Let me tell you. It's related to the cost of operating a node.  

[00:28:38] Wiz:

So we wanna keep the cost of operating nodes as low as possible so that you can literally just use a low powered Raspberry Pi device and keep the number of nodes out there as high as possible to avoid centralization. Keep it as accessible as possible to use your own node. Right. In theory, I mean, you could even run a a   full note on your phone. Right? If the the phone has enough space. There are a lot of misconception  

[00:29:00] Unknown:

around why we can't raise the   block size,   which is causing a lot of conspiracy theories about various player trying to keep   Bitcoin crippled or whatever.   But,   and some people refer to that. We we have higher   we have low cost hard drives today. It doesn't matter if we have   20 megabyte to 200 megabyte blocks, and Internet speeds are higher. But if you get that,   what's   what Wizz was mentioning is just operating the node also including   downloading a node from scratch, verifying the the box from scratch. Right. Verifying all the changes. If you're onboarding a new merchant to Bitcoin, setting up the Bitsy Pay server, setting up the node, it shouldn't take more than   a a couple of days to sync the blockchain and get up to speed.  

If we just increase the block size from, let's the current 2 megabytes to 20 megabytes and just let it grow,   in just 5, 10 years, it's gonna it's gonna take a month   just to download and verify it. And then everyone's using trusted third parties because Yeah. To interact with the Bitcoin network So that's the dangerous part, and there are people like Luke Dash   that   claims it's already too high today. We should reduce it because the way it's growing right now and just this okay. I'm mentioning the word ordinal,   transaction You can mention it. Thing. We've seen in the past months have increased the blockchain by, I don't think,   10, 20 gigabytes Right. Of just this kind of   So that's why we have the block size cap. That's why there's a lot Yeah. And I it's great to see that they're had to pay this much of fees, and I saw they burned, like, 600   Bitcoin support. Security of the Bitcoin network. Yeah. As they should. So absolutely. So I'm glad that they're not paying, like, not paying anything and just paying 1 set per vByte and not allowed to just fill up the blockchain.  

So they have economic disincentive   to use   worthless stuff, so they actually It has to be worth it to them Yeah. To Bitcoin. So so, hopefully, it will be more   towards value transfer in the future, I hope.  

[00:31:04] ODELL:

It's an economic incentive to be more efficient using scarce block space. But, Simon, I wanna unpack this a little bit because,   well, first of all,   to interact with a Bitcoin node, to interact with the Bitcoin network, you need to use a Bitcoin node. And if you're not using your own Bitcoin node,   you have to trust someone else's node, and you're trusting them with you verifying the rules of the network, verifying your transactions, and also your privacy.   So it's it's absolutely integral to the system that that it's accessible to use your own node. And we see in shitcoin land all the time   that,   they have not prioritized this, so most people are using someone else's node. And and different shitcoins have different levels of centralization along that   axis or whatever that that trade off balance, but we see, like, heavy, heavy centralized centralization in Chiccoin land. And the problem is once you go down that path, you can never really come back from it. Yep. Now, Simon, me and you went back and forth on Twitter.  

The the common misconception   straight up is that it's a question of storage. It is not a question of storage,   at all. Storage is cheap.   That is not the bottleneck.   Now I said the bottleneck is is bandwidth. You said, like, actual data transmission.   You said Internet speeds are very high. Like, that's not the bottleneck. The bottleneck is actual validation,   verification of of of transactions. It's it to me, it's a combination of both. Yeah. I agree. And I would say the number one reason on the bandwidth side is because   you wanna be able to use a node through a tour, I think. Mhmm. So it's like, okay. Our Internet might be great at Bitcoin Park on ClearNet. Our you know, the Internet, you know, might be great in Tokyo,   Nashville, New York, like, all these great cities or whatever.  

But,   but but the problem is is if we are in an   environment,   some people, some places in the world, it might be a crime just to run a Bitcoin node, and they they should be able to run a node, in my opinion,   privately, where they're not doxing that they're running a node, to their Internet provider, their government, or whoever they're worried about. Right? Yep. And Tor has horrible bandwidth,   restrictions. Right? Like, it's just a very   high latency network   that's just it's hard to transfer large amounts of data through it. Right? So that's where I kind of come out from the bandwidth side. Yeah. I agree. Probably a combination too. Like, if you have if you have low enough,  

[00:33:28] Unknown:

block size, you could sync it from your phone as well over 4 g or something and Yeah. And also in developing countries with lower unit speeds. Right.   Yeah. So I agree on that point as well.  

[00:33:40] Wiz:

Yeah. But recently, we saw the the CPUs   becoming   bottleneck for very computationally expensive transactions   and also for   transactions in the mempool   when there's so many of them, like over half a 1000000 transactions in the mempool. The CPU,   and and we haven't we haven't even talked about the mempool   size limit. We we only mentioned the block size limit so far. Right. But the mempool size limit is also very relevant because a lot of people want The 300 meg default.   Right. A lot of people   want to increase the size of their mempool   so that they can   hold lower fee transactions.  

But the trade off of that is the increased   CPU load on the node that's that's running this larger mempool, And it's not a linear it's a nonlinear,   scaling. So the more transactions you have,   the more that your CPU has to analyze the relationships between all those transactions. And so   doubling the amount of you the size of your mempool from 300 megabytes to 600 megabytes   doesn't just require 2 x CPU, but but much more. Not exponential, but not linear. More like log or something. Yeah. And and so it depends on the what transactions are in the mempool. So it's not In mempools. Yeah. Right. In your mempool. Yeah.  

[00:34:55] Unknown:

Yeah. You can have these large clusters   of CPFP,   child pay pay for parent transactions.   That has so many relationships. And as the mempool grows and you have more of these clusters that   integrate together. And when you run the calculation   to get the most profitable block,   it requires a lot of resources.  

[00:35:14] Unknown:

It can also be detrimental to have a bigger mempool than the default size because when   or if transactions are purged   from,   most nodes with a 300 megabyte default limit and you keep them, then when those transactions are rebroadcast, then your node won't,   like, propagate  

[00:35:34] ODELL:

them. Because it already sees the transaction. Yeah. So let's let's talk about,   transactions being purged. Right? So I have,   mempool.space   up right now.   You have a larger than average mempool, but you as a result, you tell people what, you know, what,   key level gets purged on a default mempool. Right? We run 2 nodes. So one node has a very large mempool, and one has a default 300 megabits. Run way more than 2 nodes. Right? Per server. Yeah. So I've seen the list of nodes. It's pretty crazy. Right. But, I mean, like, within one server, we have a big node and a small node. And   this way, we can determine which transactions have been purged from the default 300. Okay. So right now, it's at 7.34   sats per byte.  

Anything under that is getting purged. That number was way higher. At one point, it was, like, 50 sats per byte this week. Right. So what happens   what happens when a transaction gets purged from the mempool   mempools?  

[00:36:32] Unknown:

Well, it depends on which mempools. Yeah. It's I was trying to answer this question the other day, and it's a very complex one. Because   what happens at first, it obviously gets kicked out from all the mempools that run default,   limit. Right? But then it's the question as when the mempools,   goes down again,   how does it get back to the mem to the to everyone's mempool? Does it get rebroadcasted?   Depends on   who's sitting on that transaction if they make a   rebroadcast.   So usually, I think it's the wallet that actually orig originally created the transaction that will try to rebroadcast, and it can depend on the wallet. And sometimes you have to do it   automatically. I saw in Electrum, for example,   that I've been using   that your transaction is just changed to it just says local. Like, this transaction just exists locally in your wallet all of a sudden instead of actually on the remote mempool on the server that I'm connected to. So I have to, like, reprog rebroadcast it myself or I'm not sure if it's Yeah. Depends on the wallet implementation. I think Bitcoin Core will automatically rebroadcast it. Yeah. There's also random people on the Bitcoin network that will just rebroadcast transactions. They, like, hold a larger mempool. Like, we do that some But we can see that when we had a fee spike and then it goes down, that after a few hours, we suddenly see all these transactions just because someone's rebroadcasted. Yeah. Just getting rebroadcasted.  

But we also have people who are   complaining that their transaction got just disappeared and it never got rebroadcasted, and they asked what happened with that transaction. So there are cases when it does not get rebroadcasted.  

[00:38:07] ODELL:

Well, I think it's important to realize that if you send a transaction that is too low of a fee and it gets dropped from most mempools,   it's not like   you can lose your Bitcoin. It just   it it it's and it's not that it gets sent back to your wallet. It never left your wallet. Yeah. But you'll you'll essentially see that Bitcoin back in your wallet, and then you can   either rebroadcast if you know what you're doing, or you can just create a new transaction at whatever fee rate you wanna do. Right? Right.  

[00:38:34] Wiz:

Like, I think it's like, people start to get freaked out. They're like, did I just lose my Bitcoin? Like, you don't lose your Bitcoin in that situation. It's kind of the opposite of getting confirmed. Right? It's the opposite of getting mined into a block. You've just been that transaction has just been, I think the the UX of this whole issue is a little bit underdeveloped because we didn't have this problem in the past.  

[00:38:55] Unknown:

So Bitcoin   core or or the consensus rules isn't really made for this kind of scenario where your transaction just disappears and gets kicked out. And then   so hopefully,   in the coming years, we'll see more of this kind of support from   from core. Well, Bitcoin infrastructure in general. Bitcoin Core  

[00:39:14] Wiz:

as a wallet, will handle everything   quite well. But   it's My wallet's my wallet. Nobody really uses Bitcoin core as a wallet. Everyone's using There's, like, a dozen people.   It's like an app on your phone, and whoever developed that wallet app that you're using   didn't   have, you know Yep. To implement. They didn't implement all of these, nuanced   things. So it's only really, like, the OG wallets that that took, you know, a lot of time. Mhmm. And that's I think BlueWallet handles it really well  

[00:39:44] ODELL:

Yeah. On your phone   for a mobile wallet. Because, like, they have the   they have integrated RBF features. They have integrated,   child pays for parent   features.  

[00:39:56] Unknown:

Yeah. I checked I checked Spire wallets. I was playing it around recent the past few days,   and,   it has when you right click on a transaction, you have you can RBF it. You can see PFP. Yeah. Sparo who can cancel it. It's the same with Electrum.   But in the past, you had a lot of wallets who did not care about upgrading the unit, the Segway to RBF, all these  

[00:40:17] ODELL:

good features that are super important in this kind of fee environment. You need to be able to bump your transaction. Right. I mean, I had Sergei on the show for Bitrefill, and, like, we all live in a bubble. Right? We think, like, people are using Sparrow. We think people are using, like, Blue Wallet. We think they're using all these top of the line wallets,   But, really, the overwhelming majority of people are using, you know, like, Binance's Trust Wallet and just Blockchain Dot Infos wallet, like, just the shittiest wallets,   that don't have any of these real features set up. And then they get in these in these high few environments, they get really fucked over.  



[00:40:53] Wiz:

Yeah. That's that's true. The oldest wallets that were first to market  

[00:40:58] Unknown:

that just have a ton of users, it's so sad. They, like, care the least about their users. Well, they also get, like, a little bit ossified. Right? They get kinda stuck in their ways because they have so many users. Yeah. We host have so many new great wallets, so much new innovation like Sparrow Wallet Yeah. That just blew everything else out of the water, and  

[00:41:16] Wiz:

hopefully everyone will. Yeah. Shout out to Craig.   Thanks for making such a great wallet. I mean, I don't own Bitcoin, but if I did, I would use Sparrow Wallet. Yeah. Yeah. I use Sparrow, but it's always in testnet mode.  

[00:41:29] ODELL:

You said that so nonchalantly.   Let's talk about,   child pays for parent.   Let's talk about RBF. What are they? What are the different trade offs? Why should people care?  

[00:41:39] Unknown:

Sure. So RBF is a great feature   that allows you to replace an existing transaction   that's in the mempool   as long as you Memples. Increase the fee.   So   if you're using a Bitcoin wallet like blue wallets, green wallets,   Electrum, Sparrow, all these wallets, you make a transaction,   it's falling behind in the mempool queue   in one of the mempools.   If you wanna increase the fee, you can just click RBF   and, the fee the mempool the transaction is replaced,   and you don't pay any extra because you can replace, like, as many times   you want Right. Virtually. There's a limit to it, but   you can replace it. What is the limit?  

There's some kind of limit to prevent spam. So you have to increase Otherwise, I could just keep RBF ing, like Yeah. And just   increase once you have high limit? Is there a limit for There's a limit to how much you have to increase at at certain amount of fee. A minimum increase. So I can't do, like, 1 sapper bite and then 2 sapper bites and then a sapper bite. I think not. So   so RBF is a is a good one, but it's only possible if you are the one that created the transaction  

[00:42:51] ODELL:

that you're the one that signed the original transaction. I send a transaction to you, and then I can  

[00:42:57] Unknown:

bump the fee at a later time. Yeah. But if you send me a transaction and it's waiting or you I made a withdrawal from an exchange if if I would use, like, trusted custodians like Coinbase, and I have a transaction. Well, like, I'd say I pay you. I pay you, but I use 10¢ per byte. It's not getting confirmed. It's getting there. And suddenly, I'm I urgently need   to have this You want the Bitcoin. Yeah. I want the Bitcoin.   Then I can use I can't use RBF because I didn't create the transaction.   And but I do I can use,   CPFB. Child based repair. Yeah. Child based repair for payments, which means I take this transaction you sent,   which is and  

[00:43:36] ODELL:

I spend the same coins again. You take the unconfirmed transaction and you spend from that in a new transaction. Exactly. So   what's happening the child transaction is is spending. Right? Yeah. So easily  

[00:43:48] Unknown:

explained. Like, you send me some coins. I spend the same coins again   and in a new transaction, which will will be the child transaction. And let's say you sent me with 10 sets of eBite. Right. I'm sending a new transaction which is 100 sets of eBite,   and the miners will look at this and say, oh, if I combine these two transactions   If I confirm both at the same time. Then I'll get this juicy 100 set of vbyte transactions. So you call it on mempool.space, you do really cool. It's effective fee rate. Effective fee rate. So the effective fee rate is the calculation of so together, these two together, they are calculated as probably maybe, like, 50 sets of v byte in the in the There's some kind of action that happens there. Yeah. So there's an algorithm the size of both transactions. Exactly. So they combine it combine the size, how much fee   per byte per both, and the and the they will be ordered in the mempool   according to that, and the and the and the miners will  

[00:44:42] Wiz:

pick that one to earn that high fee. So if the sender of a transaction wants to increase  

[00:44:48] ODELL:

the fee rate Yeah. They use RBF. Or they could use 50. They could use child pays for parent too if the Yeah. They can. Sender has the option to do both if they have change. I hope I wish people to make their mice can do CPFP. No. Not if they have changed. Yeah. But that's what I'm saying. Sender has changed, they can But if I can send CPFP  

[00:45:04] Wiz:

I cannot CPFP it. Only the recipient of one of the outputs of a transaction can CPFP it. But sometimes the sender is a recipient of 1 Mhmm. Most situations because they have changed. Depends. Like, if if,   you I don't know, withdrawing from exchange or something,   you couldn't use RBF. But if you're if you're if you're like, say I'm sending to a 3rd party,   So I'm the 1st party. The exchange is the 2nd party. Say, I'm sending to the guy sitting on the sofa here.   If I send him a transaction,   I control neither the private keys   that the exchange is sending.  



[00:45:36] ODELL:

Only he can bump it with CPFP because I don't not getting one of those changes. Right. But if I send for my own Sparrow wallet to you, I can use CPFP or if I have change If you have change. And most of the time you have change, I can use CPFP or RBF. But there's no reason for me to use CPFP because   it's way less efficient because you have to send another transaction. But some time I'm trying to sell it to you only was If you're the recipient, then you're If you're the recipient. Yeah. But if you're the sender, you've, like, RBF is preferable because it's way more efficient. Right? You end up paying less in fees. Yeah. Imagine all of these are super high in the network. If it's $10 or $100,  

[00:46:11] Wiz:

you don't wanna see if you PMP another $100 just to get it confirmed. If you But it requires all of the key signers who sign the original transaction to sign off again on the replacement, which not not always possible, right, depending on the use case.  

[00:46:27] ODELL:

Right.   I mean, the cool thing about RBF to me is it makes a more efficient transaction fee market because   people forget until we have high fees,   that there's many times you're in a situation where you pay you could go to mempool.space.   It could say your next block fee, which is just an estimate,   and then you you put that fee because you wanna you wanna get confirmed in the next block. And maybe blocks come in a little bit slower. Maybe   Binance decides to dump a bunch of transactions into mempools or something, and it starts to run away from you. It's like, okay. 25 SaaS per byte is next block, but then you're waiting for 6 weeks because it runs away from you. So then what happens in a non RBF scenario   is you you see 25 sets per byte as the next block,   estimated fee. And so instead, you pay 60 just to make sure you're in Mhmm. And you overpay.  

But because of RBF, you can actually be very deliberate, and you can you can do that. And then worst comes to worst, you can start bumping it up, and it makes a way more efficient transaction fee market. Right? But you can only bump it up by a minimum of, I think, double or something like that. So it's not  

[00:47:30] Wiz:

Yeah. It's maybe not double, but there's there's, like, a a minimum increase amount. So it's not like you can just go from 11 sats, 12 sats, to 13 sats. You have  

[00:47:39] Unknown:

to go a bit How much man wants this? Maybe we can, mention the call so that we just We have a caller.  

[00:47:44] Wiz:

What? We have a caller. This is a  

[00:47:47] Unknown:

mystery man from Nashville on the line. So I think it's a very specific situation to your point, Matt, where you might, as the sender, want to see PFP,   and that's if the transaction,   ID needs to stay the same.   So if you were to replace by fee, the TXID would change. So it's very And why would you want the TXID to stay the same?   Well, it's a good question. Sometimes there's very specific   use cases where you need that TXID to stay the same because the recipient   is acting on that specific TX ID, and they're not looking to update. So it's Oh, that's interesting. It's a good point.  

[00:48:20] Wiz:

Or if the change of the original transaction has already been spent, you're now destroying all the child transactions   too, right, when you RBF it, the parent. No one wants to destroy children.  

[00:48:32] Unknown:

I wanna mention the new feature on mempool space we just shipped, which is the RBF   visualizer.   Mempool.space/rbf?   Oh, that's a secret URL. No. Not I'm not thinking about I'm not talking about We'll edit it out before we go live. Okay. Cool. I'm talking about   when you're viewing a transaction, you can see the full history of the replacement transactions.   So in the case of someone send you a transaction ID and said, hey. Here's your transaction. And then they actually replaced it, and this transaction is deleted, and there's a new transaction, TXID. Right? Right. But we'll still keep the old one. So if you open the old one, you'll just there's just a banner saying This was replaced by this transaction. By that one. And you even now see the,   like a history graph. You can click through the whole history to see how it's yeah.  



[00:49:20] Wiz:

It's really cool to see multiple transactions  

[00:49:23] Unknown:

replaced by a single transaction. Yeah. That's a bit cool. I don't know who's doing those or how to do those, but we have those.   I mean, most wallets, they will just bump one transaction. Right? So how do you'll see, like, literally a 100 transactions in the mempool replaced by a single batched transaction that batches them all together. With RBF. Which is Really? Because they're using custom software for that. Yeah. That's like an exchange or something. Yeah. Exactly. Because what you can do with RBF is actually changing the inputs and outputs. That's why there's an option in in in, like, Sparrow Wallet where you can cancel a transaction.   So you're placing your transaction  

[00:49:58] ODELL:

and changing the outputs to pay back to yourself. Yeah. Blue Wallet has that too. You're not really canceling the transaction. You're just replacing   So calling it cancel is just like UX. It's very helpful UX because that's what people think of it as.   But you're not you're not really canceling the transaction.  

[00:50:15] Unknown:

Maybe you should start talking a little bit about the full RBF. That's like another can of worms thing. I feel like the full RBF,  

[00:50:21] ODELL:

argument or debate is completely over as soon as high fees came into the picture. Right? It's like Well, the whole business model of accepting 0 Conf transactions  

[00:50:30] Wiz:

is kind of,   you know, sketch to begin with. And maybe there are some businesses that can manage that risk and   evaluate whether they want to accept a certain zero comp transaction based on limits or   amounts or fee rates that were used, or maybe they have some other,   criteria they can use to filter them out. But in a very, very high fee environment, when the mempool is very congested, it becomes Mempool.   You know? When I say the the mempool, I'm referring to my mempool. Fair enough.   But, when it when it's very congested, like,   when is that 0 comp transaction gonna get confirmed?  

You're taking a huge risk if you ship some goods or services on a zero comp transaction at that point. Right? Right.  

[00:51:18] ODELL:

I mean, it was never secure.   Right.  

[00:51:21] Wiz:

It's just during that time when the mempool's completely empty, you can have a higher   feel like the people listening at home are gonna start drinking every time someone says thumb and pool, and Matt corrects them.  

[00:51:36] ODELL:

But, yeah, 0Conf is is not secure, and you probably shouldn't do it. But if you want to, that's your decision. What what was the full RBF debate? Should we talk about it? Simon wants to talk about it. Does Steve wanna talk about it?  

[00:51:49] Unknown:

Well, I was just we could. I'm I'm curious, like, practically how it how it works right now, because you don't need, like, every note on the network to have that flag turned on. Do you guys have it turned on? We do not. Why not? Not.  

[00:52:01] Wiz:

And follow the default of the coin core.   I mean, it's  

[00:52:06] Unknown:

personal bank. Asked Merch the other day, should we enable full RBF? And he said no. I called Merch the other day the premier mempool influencer.  

[00:52:15] ODELL:

Do do you agree with that statement? Pretty much. Yeah.  

[00:52:18] Wiz:

But I I think we want the mempool space website to be as close to default mem, Bitcoin core as possible. Right. Yeah. But, like, the default should be full RBF, and it's just not because of politics.   That's But that'll tell you that. Throw your dick around.  

[00:52:35] ODELL:

I got I got a bad look. I was in, when was that RBF debate? It was happening in in the fall.   I said 2 things at Austin Bittdevs while the debate was happening,   that angered some people. The first was,   you all forget that   we're gonna have high fee markets. You're all sheltered in your very low fee market environment. And as soon as high fee markets happen, we're gonna need RBF, and it's super important.   And then the second thing   was,   that it doesn't really matter,   as much what individual node runners are choosing just because it's a flag that's a toggle to turn it on or not. What really matters is what do the large mempools that are very connected to a lot of people choose And the miners. And what do the miners choose? And I specifically said I was like, you guys can debate all day long, but it really comes down to what Wiz and Simon decide.  

[00:53:29] Wiz:

And they got people got pretty mad about that one. I mean, that's just the reality. If if there's one mining pool with a decent amount of hash power that has full RBF enabled Yeah. Then can you securely accept 0 conf transactions? No. Right? I mean, it it's kind of like the end of the debate.   As you said, there's no point in really debating it because if you turn   on full RBF on your home Raspberry Pi node, does anybody care? Does anyone trust your   mempool   for does dude mining pools, like, get transactions from your little Raspberry Pi Well, we're kinda seeing it with this or disrespectors thing. Right? It's like,  

[00:54:06] ODELL:

I I I I respect the fact   that individual   Bitcoiners   want to   do something that they think is right,   and and feel like they're making actionable change. But it's important to realize that these relay,   anything that's done on the relay network side  

[00:54:29] Wiz:

does not change any consensus rules. Well, Bitcoin is very censorship resistant. If you censor transactions on your node, they're just gonna get relayed through other nodes that aren't censoring those transactions.   You would literally have to have,  

[00:54:41] ODELL:

like, near a 100% of nodes. Like, I mean, you remember when Luke early days was, like, his his mempools were filtering based on, like, what  

[00:54:51] Wiz:

or something?  

[00:54:52] ODELL:

Yeah. He was, like, no gambling, no porn, no but but in in no e campsites.  

[00:54:57] Unknown:

Case of the full RBF thing, it's a consensus thing. If everyone just changed their mempool config to enable full RBF, it's gonna be much more popular and used and worked. But it but as long as there's one miner,  

[00:55:08] Wiz:

who's, you know, not even connected to the Bitcoin network, they could just be mining directions that are directly, mining mining transactions that are directly   sent to them regardless of full RBO. Yeah. Like, they're not even using the p two p network.  

[00:55:21] ODELL:

They can mine whatever they want. Right? And that's kind of the Yeah. But was it it was years ago when, like, Peter Todd   showcased this by double spending Coinbase. Yeah. I remember that. And then got banned from Coinbase.   Because at the end of the day, I mean, RBF could be considered like legal fraud.  

[00:55:41] Wiz:

I remember doing a demonstration.   There was this   Bitcoin ATM in Tokyo somewhere that would dispense cash on 0Conf.   And, yeah,   in the high fee environment, that didn't, go well. So you just bankrupted them? Or No. I mean, I Demonstration?  

[00:55:58] ODELL:

I mean,  

[00:56:00] Wiz:

every it's a small community. Everybody knows everybody. Like, it's more of a demonstration   at a meetup type presentation, but  

[00:56:10] Unknown:

you have to realize it's 0 confidence. We can edit that with that. 0 confidence that's been going on for many, many years.   Just most from the big blocker side have never understood that. If it's not confirmed in blockchain, it's not secure. It can be replaced.   You can just yeah. There's so many ways. It's a very naive approach. Exactly.   It's like it it feels good. It shows up in your wallet, and they wanna feel like it's confirmed, but   it's just in the memo.   And we have   something called the blockchain to solve   this problem of, double spending.  



[00:56:43] Wiz:

Bitcoin fixes this. Yeah.  

[00:56:46] Unknown:

Blockchain. To play devil's advocate, you could say that   the choice to accept 0Conf,   you know, is at the end   up to that recipient. And if if they think that they can manage that risk, why shouldn't they?   So if if you're dispensing cash from an ATM at 0 comp,   that's a high risk,   and probably, eventually, you're gonna get wrecked. But until you do get wrecked, you're probably making some money, and maybe the trade off is is there. And as long as you don't get wrecked too badly, it will refill allows your comp, and they do some kind of analysis of They do, like, a fraud analysis. Or Yeah. And if it's a very low amount, then it's, like, worth worth it. So I don't think And there's I I I think there's one thing if you're talking about businesses,  

[00:57:26] ODELL:

but it becomes very obvious when you talk about individuals. Like, if if Wiz paid me 0 comp, like, I would completely   be fine with that. Right? Because Wizz is my close friend, and if if he wants to commit fraud against me,   then, like, maybe we won't be close friends anymore after that. Right? Like,   that is that is completely up to the user, and it's important in Bitcoin in general that we have user choice.  

[00:57:47] Wiz:

Right. But it's But you have to understand the risks. Yeah. It's it's like if to go back to the ATM, if you're dispensing cash or or shipping some You're a fucking idiot. Gold coins on 0Conf, then, yeah, you're gonna get wrecked pretty quickly, and that's for you to decide. And you can manage that risk to some degree if you know how much risk you're exposed to at any one time, how much  

[00:58:06] Unknown:

value is in those zero comp transactions that you've treated as though they were confirmed.   Because if if you're only exposing yourself to a small   amount of value being at risk at any given time,   even if that all immediately gets double spent and you lose   $10,000,   that might actually be small in comparison to the amount of value that you've accessed. So with Bitrefill,   it might be that them having 0 comp for many years has made them slightly more attractive than their competitor,   which has ended up with them making more money than they ever have at risk at any given time. Sure. But when we're educating newbies, newcomers to Bitcoin,  

[00:58:42] Wiz:

I think it's very important to tell them yes. 0Conf is not secure. Don't trust it.  

[00:58:47] ODELL:

You know, verify that it's Well, there's risk. There's a trade off. Right? Sure.  

[00:58:52] Unknown:

Mhmm.  

[00:58:54] ODELL:

What else do you wanna talk about? You wanna talk about nobody use the liquid?  

[00:59:00] Wiz:

I thought we were talking about mempools.  

[00:59:02] ODELL:

I mean, you have a liquid tab on   the mempool.spiz.  

[00:59:06] Unknown:

It's a separate website, liquid.net.  

[00:59:08] ODELL:

You you wanna talk about   no. I mean, can't you just click the tab on the top?  

[00:59:13] Wiz:

It links to a different website. Okay.   So on the mempoolspace website, we have the mining dashboard, the lightning dashboard, test net signal. Should we talk about lightning?  

[00:59:24] ODELL:

Sure.   Like, what are your thoughts on lightning, and   how how do you think about it from both a user on the network, and how do you think about it from an operator of the mempool.space   business? Because, I mean, you guys just added the lightning, I mean, just what was it? 8 months ago or something? Inriga and The lightning dashboard. Something like that. Yeah. And we shipped it for the Raspberry Pi users about a month or 2 ago. Because, I mean, lightning is supposed to be  

[00:59:48] Unknown:

Mhmm. The solution here for a bit refill or something. Right? For us, launching the lightning explorer was a good step, and people can self host and it visualizes the graph that they're seeing from their lightning node. Right? But from a from recently, from an operational perspective,   we have been more most been focusing on the on chain because   who who is checking the lightning's,   dashboard on memphispace? It's probably only people that are running actively   a lightning node.  

[01:00:16] ODELL:

Well, what I think is interesting about how you did lightning   is   and people, I I think, consistently fail to realize this. At the end of the day,   Lightning   is a protocol   for interoperable   batched on chain payments.   It it is based in on chain. Like, it is anchored in on chain Bitcoin and either person in that channel.   And I I get into arguments with people that there is no lightning network.   It's really just all these interconnected payment channels, and people might have a different   different network than other people. It's not like one global   in in practice, it kinda becomes one global network, but it's it's not necessarily that. It's it's all these different payment channels.  

And it's kind of interesting how you guys do it on on mempool.space   and and the mempool open source project   because it becomes very apparent, I think,   in that you can't really have a good picture of lightning   without having a strong foundation in on chain. And and you, like, you can choose lightning nodes, and you can see their channel closes and their channel opens. And, like, what are those on chain transactions  

[01:01:27] Unknown:

that are essentially those payment channels that make the Lightning Network. Right? Right. We we have built a very strong connection where you can see from which UTXO's open and closed channels  

[01:01:39] Wiz:

and and that Yeah. I think we kind of,   reinvented the concept of what a Bitcoin Explorer is by implementing multiple layers   and having them all integrated   tightly together.   For example, in the past,   there was only really blockchain explorers,   and   that's because the mempool wasn't really relevant at that time,   and layer 2 wasn't relevant at that time. So everyone just focused on the blockchain. But the blockchain is actually just one layer. The way I like to think about it is   mempool is kind of like layer 0 when you first broadcast your transaction.   Okay. And after it gets mined into the blockchain, you're in the layer 1 blockchain. Okay. And if that transaction was funding a lightning channel,  

[01:02:20] ODELL:

you're now in layer 2. And what layer are you in if you're one of the dozen people who use Liquid?  

[01:02:25] Wiz:

Well, that's debatable. Merch says Liquid is not a layer 2 network. It's a side chain, but layer 2 is kind of like a buzzword. I mean, it could mean many, many things. Yeah. Is a custodial Cash App wallet layer 2? You know, it it's That's layer 3.   What's layer 3, Simon?  

[01:02:44] Unknown:

Layer 3 are the apps you build on top of the layer 2.  

[01:02:48] ODELL:

Well, so I have a question. So, I mean,   so if you ask a mainstream Bitcoin influencer on Twitter,   why,   like, when when Bitrefill so Bitrefill,   is is one of the most dominant,   dominant is one of the most successful Bitcoin businesses. Right?   They do very good business.   Their, you know, their main business is selling gift cards and selling phone top ups, and,   and they heavily rely on 0 comp transactions. And   and one of the cool things that Sergei does at Bitrefill is he opens up his payments   information. Like, he like, it feels like almost once a year,   he goes on stage or comes on dispatch, and it's like, this is the breakdown of my payments, and he accepts shit coins. He accepts Onchain, he accepts Lightning.  

He has, like, this little UX   survey ish thing when you're paying to ask what wallet you're using. So he has, like, some detail on which wallets people are paying from. And I I said earlier, like, it was like a lot of people are paying with, like, Trust Wallet, which is a horrible wallet and a horrible name for a wallet because you shouldn't trust a wallet. But,   so   so the answer so when so when Bitrefill came out and said,   you're gonna make our fraud detection much more difficult with 0 confirmation,   and a lot of our users really like 0 confirmation. And and if you if you allow mempools   mempool operators,   to relay these transactions when they're not signaling RBF,   it makes our fraud situation much more difficult. The mainstream Bitcoin influencer would say,   just use Lightning.  

That is what Lightning's for. You have instant settlement.   You have a a direct amount that is happening. You don't have to deal with that zero confirmation risk.   In a high fee environment, we heard the same thing, just use Lightning. Now   why   but but if you ask Sergei and he gives you the payment breakdown or whatever,   lightning is is tiny. Like 5%.   People more people are using Tether and Ethereum and all this shit than they're using lightning.   Now,   like, as as as responsible big corners, like, what do we take away from that?   Like, what are, like,   is is lightning the end all be all? Like, what is what is what are the conclusions that we should be taking away from this? In a sustained high fee environment, lightning is probably,  

[01:05:15] Wiz:

going to become a very, very popular tool much more than 5% of the payments. But in the past few years, when we were just   one sat per vByte,  

[01:05:24] Unknown:

then sure. He was probably getting the majority of transactions with 0 conflag. But at the same time, when the fees are very high, that's very costly to open and close channels.   So   Yes.   It might  

[01:05:42] ODELL:

halt some adoption because it's too expensive to So the the way I look at Lightning is I think it has proven itself as a interoperable   payment protocol   for large custodians. Like, that use case has found product market fit. It works. You have professional node operators, like Wallet to Satoshi and,   Bitfinex   and, you know, all these different custodial operators   that manage these channels and make the payments relatively seamless for their users. But, of course,   trust third party third parties or security holes. They can rug you at will.   You already have to trust them with your privacy.  

You know, maybe Chow Me and eCash, like, these Fedimints or Cashew. Like, maybe they help that situation a little bit because they can still rug you at will,   but they can see your privacy.   But I don't know necessarily if the product market fit has been found on the freedom oriented side using it in a freedom way.   And I think part of that is not only   that high fees mean   channel creation is more expensive, because that's   a fine trade off, I think. Like, if I can make one transact like, the whole idea is, like,   if I make one transaction that opens a 10,000,000 sat channel, and I pay my 500 sats per byte, I can then make 1,000 and tens of thousands and hundreds of thousands of transactions to and from That's the ideal but scenario. The real the real burden   on Freedom Oriented Sovereign Lightning usage,   because I think everyone,   just like we forgot that fees could get high, just like we forgot that FTX could rug people because, like, Mt. Gox took a while,   I think people   are are in this complacent phase because while the satoshi has just been running a custodial wallet for fucking years, that every custodian either rugs you or gets shotgun KYC ed and forced KYC ed. Like, that is going to happen.  

So then why don't we have more freedom oriented   sovereign tools for using Bitcoin,   mightening?   And I think the bigger burden is how do you do mobile,   like, easy UX? Like, people need convenience.   It doesn't matter how many podcasts you have. It doesn't matter how many YouTube hours videos you have. Like, no one's gonna watch a 2 hour BTC sessions video Mhmm. Before they they use this money. And so, like, you need the convenient tools on mobile,   and   it's not easy.   Like, lightning takes all these trade offs   to maintain its censorship resistance. It's not easy to necessarily use that in a freedom oriented way on a mobile phone, and it's not easy for developers to implement that. Right? Like, there's a reason Trust Wallet, I mean, besides being a completely shit wallet, and I keep going back to it just because so many people use it.  

They don't even give you there's not even HD Wallet. They just give you a fixed What? On chain address,   let alone have lightning enabled. Like, they don't have lightning enabled.   And that's what Sergei will say to you. It's like, okay. You can tell me all these things about lightning, but if, like, my user is paying from Trust Wallet, like, they're not gonna use Lightning. Right?  

[01:08:46] Unknown:

I think the the Lightning has these problems that you need channels. You need income and liquidity to receive and all that. And Oh, yeah. The receive side is fucking pain in the ass. Yeah. But I think I think that the mobile wallet that sold   everything like this the best is still the Phoenix wallet.   Phoenix is awesome. Because it just does everything automatic, but it's still you just back up seed words just like a regular wallet. If you make an on chain deposit, it automatically   swaps into a channel, and then you can start spending lightning. So Right. So I have so onboarding is super good. You you launch the wallet, you back up your seed words, you make an on chain deposit, you can make a large one,   and that one opens a channel, and then you can start spending, like, thousands of payments for a long period of time. And they also let you if you need to receive on lightning,  

[01:09:33] ODELL:

you can start your Phoenix Wallet experience   by receiving a lightning payment from someone, and they'll open a channel on demand for you.   I love Phoenix. I have a getting started guide for Phoenix at we run btc.com/phoenix.   It is fantastic wallet.   One of the cool things about Phoenix, which I really appreciate from their team, is if you go to their their website,   they list all the trade offs very clearly in, like, human English, not, like, bullshit.   And it's important to realize, though, like, even on Phoenix,   you don't have you don't have good privacy Right. From Phoenix.  

And Phoenix, as a result, it's not you're not just trusting Phoenix. Their servers could get compromised,   or they can get compelled by governments. They can get a gun put to their head the good old fashioned way and say, give us your information.   So you don't have good privacy. And then second of all   and it's a taboo subject. We, like, can't really talk about it as Bitcoiners,   but I like talking about the taboo subjects.   And it goes back to this idea of what is custodial and what is not custodial.   And I think, like, the relationship you have with Phoenix   and Async, which is the parent company Phoenix, they have their own lightning implementation.  

There it is not and there's so much nuance here, which makes it difficult. It's different than using a light wallet on on chain where, like, you're just giving up your privacy and verification, and maybe they could specifically double spend you. But it is self custody very easy.   On on Phoenix, I wouldn't call it pure self custody. Like, there is a there's a trust relationship there. They can rug you.  

[01:11:09] Wiz:

But only why to rug you. Right? Like, the when the HTLC is in transit or something like this. They They can rug you while you're receiving it. They're basically receiving it, and then 2 seconds later, they open the channel to you and send the funds to you. But But they're also like You would realize that right away. Like But the only node you're connecting to is their node. Right? Right. And and your app is usually offline.   Right. Like, the I'm pretty sure they can steal your money if they want it. Well, because, like, your phone could be off or out of signal or something, and so then they would save it for you. And then whenever your your phone came back online, it would connect to their server, and then you would receive the phone. It's like a trust minimized It's a good trade way. And and  

[01:11:46] Unknown:

when using this wallet, you're using their LSP and their Yeah.   What is it called? The trampoline router. So you're talking about it. They are keeping the graph of the lightning network. This is why when you make a payment with Phoenix, it usually goes,   confirm, like, within just one second. Their graph in there. Right? Because you're just   outsourcing   this stuff to their server.   And like you said, you can't you can't connect it to any other node. It's reliant on the server. But you still own the keys, so you can close the channels and get it on chain if you want to if their service got raided by Yeah. If they go out of business or something like that. Yeah. Something like that.   But, but if they wanted to actively attack you, they can promise to your money. But the alternative to Phoenix is like a more self costed where you actually control where you open your channels and stuff, and I would recommend, Blix Wallet. Blix is awesome. And they just got the grant from   Human Rights Foundation   to to develop. It's just been a one man team. Hammersmith.  



[01:12:41] ODELL:

Get him a grant from OpenSets too. Oh, yeah. They have a shit. I felt bad because he put an application in and  

[01:12:48] Unknown:

Oh, yeah. Yeah. I saw The application was lost.  

[01:12:51] ODELL:

Yeah. That was So I told him to resubmit. We had a bad couple of months at Open Sats where  

[01:12:56] Wiz:

applications were getting lost. We just got that huge, donation from Dorsey.  

[01:13:00] ODELL:

Yeah. And part of that was so Open SaaS is a 100% pass through, so we don't take a cut like most nonprofits do of donations.   So we have a separate operations budget,   that people have to donate to specifically to fund operations.   And so Dorsey not only funded us for Noster development,   and funded us for Bitcoin development to our general fund, but he also funded our operations fund directly, so we were able to bring Gigi on full time.   And so now we actually have someone full time getting paid that lives in like, anyone who knows Gigi. Like, he was born for this role.   And so, like, now all of our processes will be way more efficient, and I'm very excited about it. But, anyway, I had to tell Hampas to reapply. Yeah. But his wallet, it works  

[01:13:44] Unknown:

similar to, to to Phoenix. It also has an LSP,   and it can do this automatically. But you can turn that off, and you can do it all manually and open a channel   to whichever node you want and you get this more full manual.   So that's a it's a good wallet if you are more advanced.  

[01:14:01] ODELL:

Well, it's cool because it has the balance. You can do both. Right? Exactly.  

[01:14:04] Unknown:

And it's very,   cutting edge on the features. It was very early on how supporting all the,   what is it called, the PHF   stuff  

[01:14:14] ODELL:

where you The hosted channels and stuff like that. All that stuff and the lightning address, you can have an address book and pay to people's email address. Yeah. He did a pretty cool trade off balance with how he implemented lightning address on mobile.   Yeah. I I like the idea in general of tools   that kinda grow with the user Mhmm. Where, like, you you have a very easy UX that maybe is has higher trust trade offs in the beginning,   and then you can grow with it. Right? I think, Craig does a really good job with Sparrow on that,   but more tools like that so that a person doesn't have to watch a 2 hour video,   before they get started with Bitcoin. They can   enter as a as a as a new corner,   and use it in very basic ways and then kind of grow with the wallet. Right? And maybe have, like, different UX things that pop up. It's like, did you know this or whatever?  



[01:15:05] Wiz:

Yeah. Lightning is cool and wallets that can do both on chain and Lightning in a Oh. Non custodial way. I'm guilty of making more on chain transactions the past months than lightning transactions  

[01:15:16] Unknown:

because of various reasons how lightning works. Well, if on chain is cheaper, that that's the correct decision. Right? But it's not just because it's cheaper. It's because   maybe I'm having my coins in a wallet that is offline.   Lightning, it has to be online. It has different trade offs. So  

[01:15:34] ODELL:

yeah.  

[01:15:34] Unknown:

On chain is awesome. Yeah. On chain is really good when the fees are low. Scale, though. Yeah. That's It's just amazing. Like It's too bad it doesn't scale. Like, I you can receive offline.  

[01:15:44] ODELL:

Like, it's just so  

[01:15:46] Unknown:

powerful. You can do multi sig. You can do  

[01:15:49] ODELL:

Like, I   and people, like, always take it the wrong way. It's like, I run 5 lightning nodes. Like, if you donate to dispatch, like, it's reliant on my Lightning node Mhmm. Receiving your transactions or whatnot. Like, I'm   I'm reliant on Lightning. I love Lightning. Lightning's great.   But if you use Lightning extensively,   you really start to appreciate  

[01:16:10] Unknown:

what we take for granted on chain. Oh, yeah. It's just so simple. So it's a bit sad that in a few years from now, we won't be able to use on chain anymore.  

[01:16:20] ODELL:

No. You can. It'll just be more expensive. Oh, alright. I just have to pay is not going away. To pay the market. Well, that's the cool part. You can always use it. Right? You can always use it. You have to pay the market. Right? You have to bid high enough. Yeah.  

[01:16:32] Unknown:

We need to add more blockchains,   and we start and when that one fills up, we just add another one and another. No. No. No. You move up the stack. Are you advocating for shitcoins?   No. I'm talking about side chains that keep the Bitcoin   denomination,   like lbtc on liquid.  

[01:16:49] ODELL:

Are you shilling liquid? Yeah. So, like, why why should people care about liquid? No one uses it.  

[01:16:55] Unknown:

Well, if everyone start using it,   it's not gonna be like nobody's using it anymore. Right? I think they're I'm using liquid, but I have no one to use it with. So I think the main reason why  

[01:17:05] Wiz:

nobody uses liquid is because the Bitcoin   memphis fee market space market has been, like, you know, basically free for the past couple years since 2021. So what are the trade offs of liquid?  

[01:17:17] Unknown:

The trade offs of liquid is that It's a custodial side chain, and you're trusting the federation not to rug you. But yeah. Exactly. But it's it would be something, like, in between   the self custody and the Cash App. The Cash App, you see your Bitcoin balance. You don't know if it's there. They can rug you. But with the case of liquid, you can actually audit how much coins are in the Liquid Federation.  

[01:17:39] Wiz:

Yeah. It's much better than trusting a single custodian. A single custodian. Yeah. And it's a fully auditable. Because most things like Cash App,   sure, they can ship prove how much Bitcoin they hold, but they can't prove how much liabilities they have. But with Liquid, it's,  

[01:17:55] ODELL:

fully auditable both. You can So why don't people use it though?  

[01:17:59] Wiz:

Because Bitcoin is so cheap to use on chain. Why would you make the trade offs if you don't have to? I think it's a network effect thing.  

[01:18:06] Unknown:

Exchanges has been reluctant to to add it, so it's hard to get it,   to to buy it, to exchange, to switch Yeah. Nobody has really built the infrastructure. You can't pay anywhere with it. So if there's no infrastructure and you don't even most people don't even know it exist exists. So I think, beefsteak Josh accepted it for beefsteak tickets.  

[01:18:26] ODELL:

Yeah. And he knew whenever someone paid with liquid, it was one of the people at the stable.  

[01:18:31] Wiz:

I wonder who that could do. I I actually made, like, a serious push for him to join the Liquid Federation as member. But,  

[01:18:38] Unknown:

But but the the good thing about Liquid is that it's exactly like Bitcoin, but it's 1 minute block time, and it's always,   by default, confidential transactions so you don't can't track and trace. Right. I think the most,  

[01:18:50] ODELL:

obvious And you you can so you can be offline. You don't have to do the channel trace. And, like, a lot of the pain points that we see with lightning and   ivy environment liquid doesn't exhibit. They don't want to be able to implement on mobile. Yeah. But no one uses it.  

[01:19:04] Wiz:

And it's just an interesting case study. I mean, as as,  

[01:19:09] Unknown:

Sergei said, nobody's really using lightning either though. Right? I think it's different. Cortex is not using liquid. Liquid is just check on. On shame Bitcoin is for your, like, cold storage.   Lightning is for the for the payments, the zaps on on Aster and all that tiny micro transactions.   Liquid, I think, is more for the apps like HODL HODL.  

[01:19:30] ODELL:

You have this lending stuff. I think Liquid had its opportunity,   couldn't find product market fit. It's not gonna fucking happen. And, just wait until the fees are a a 1000¢ for fees. Like   like so I think   I think the Fedimint,   I think I think the Fedimint trade off balance   is a way more compelling balance, and we're gonna see it kind of   basically put the nail in the coffin for liquid.   Because pediments, first of all, is very easy to spin up competing pediments that are interoperable with each other, which was always been a pain point on liquid because it relies on the HSMs.   True.  

So we've only had one liquid network. You haven't had multiple. And then second of all, from the core premise   and from the builders that are building these different front ends and and building out the Fedimint open source protocol   is this idea that   you make it very easy to to go between   lightning and the individual settlements and on chain bitcoin and the individual settlements. And for whatever reason,   and I'm not trying to disparage,   you know, the people that worked very hard on on liquid,   the priorities were mismatched. And I know it's it's painful to hear if if you've been working on liquid, but it's Yeah. At the end of the day, like, the biggest priority should be   going from on chain Bitcoin and Lightning   between the federations.  

And that was it was never made a priority. It's a pain in the fucking ass to switch between   liquid and bitcoin. Mhmm.   And and Fedimint's at their core,   like, they've fundamentally   came up with this concept of the   of the Lightning Gateway. So it's, like, the the federations aren't even handling   that swap process. It's a free market for Lightning Gateways to kind of,   handle that swap process. So it means   that anyone who's using a Fedimint wallet,   can easily send to other Fedimint wallets, but also can easily pay any lightning invoice, can easily pay any on chain address Nice. And vice versa. And that was always the big   I mean, it just it was weird because, like, liquid I   it was just   it's just they never   they never, like, realized why it could be useful. It was always like, okay. Like, maybe it's exchange transactions for traders,   but, like, then they can just use extremely large lightning private channels if they wanted to because Oh, yeah. The custodians could do that. Lightning can make And so there was there was never any end user tooling that happened. Like, it was never like, even to this day, it's just not easy to use as an end user. Yeah. It's more for the members to use, I think, between each other.  



[01:22:03] Wiz:

I see. Okay. Which is fine. I mean, you you know, if it it's I'm not saying that you should use liquid for   all use cases. It's just another tool in the cypherpunk arsenal.   If you if the right tool for your use case and threat model is Fediment or Lightning or Liquid or On Chain or Helly's and 0Conf, like, if that's for you, great. But you want as many tools as possible. Yeah. I agree. You wanna be able to evaluate   which one to use. That's kind of like the whole point of the Memplo open source project too is that we wanna help you migrate to this multilayer ecosystem where you can pick, should I open a lightning channel? Should I just do on chain? Should I use Fedimint?   So it'll be interesting to see what Fedimint   eventually, you know, after that integration with Lightning and and Swaps and everything comes out with. But at the end of the day, it's a custodial   solution. Right? Right. I mean, someone said in the chat, like, oh, liquid is a shitcoin. Well, what does that make Fediment then? That's even worse of a shit. Is is, Bitcoin on Cash App a shitcoin? It's a multi they're both they're multi sig custodians. Right. That's what I'm saying. But it's it's like if you're gonna say liquid is a shitcoin, then what is  

[01:23:09] ODELL:

what is a Fediment? Or what is the a custodian. So it's kind of,   Bitcoin on Cash App is a shitcoin?  

[01:23:14] Wiz:

It's a custodial   IOU system. Right? And if your threat model is and use case is okay with that, then great.   But if you want more privacy or security, then use a different tool for the job like on chain. Right?  

[01:23:30] Unknown:

Well said.  

[01:23:32] ODELL:

Cortic also said Federman is all third party shitcoinery in disguise.  

[01:23:36] Wiz:

But shitcoinery But just printing money out of thin air. Right? Like, a custodial service is different. Well, you can print money out of thin air and then you can start your service.   Yes. But that's why it's Liquid is fully auditable, so you can't.   Right? That's kind of the whole point. Right.   Whereas Fedimint, I don't know if you can verify the supply as easily. Well, can you even with confidential transactions? Yeah. Because you the the LVTC is, always auditable.   Right?  

[01:24:05] ODELL:

Like, you always know what the supply is, and you always know When, like, new ones get minted or whatever? That's Right. All the pagans and pagouts cannot be blinded. Otherwise, then you wouldn't be able to That part doesn't even but so on phenamin, you don't have like, there's a trade off. Like, you can actually, like,   federation operators   as currently designed   will be able to do, like, a soft rug pull where they're inflating supply and you won't be able to tell. Yeah. That's   Yeah. Which is, like, a clear trade off. The difference is, though, is, like, you can do that on Wallet at Satoshi right now. Mhmm.   And for whatever reason,   you know, all these design decisions, like, way more people use Wallet of the Satoshi than they use liquid.  

Right? And it's because it's convenient. It's convenient. It's usable. It can pay a lightning invoice. It can pay an on chain address super easy. Liquid never figured that out. And Fedimint's at the core are gonna offer that, so you get, like, the convenience of something like Walletistoshi,   where you never have to manage the Lightning channel. You never have to really understand how, like, transaction fees work and stuff like that. The the wallet handles all that for you.   And then the trade off is   you can get rugged at at any anytime, but   at the very least, at least that rugging,   is a multi sig custodian that is competing with other multisig custodians.  



[01:25:21] Wiz:

Yeah. And I think that's a very good You have privacy from the custodians. If you're like President ChamonixCash. If you're a total newbie to Bitcoin and the fees are very high, maybe this, Fedimint Wallet is a good way to get started, and you just teach them, like, yeah, you don't keep a 100% of your net worth   on Fediment or Lightning or liquid. You probably keep 90 plus percent in a cold storage, multi sig. On chain. Right. On chain. And, you know, whatever you keep in your pocket just walking around money, maybe, like, 1 or 2% of your money is gonna be in lightning channels or liquid things or or Fediment things. Like, you if you do get rugs, that's,   you know, okay because you only lost 1 or 2% of your stack. Right?  



[01:26:08] ODELL:

Yep.  

[01:26:10] Unknown:

So we spoke about liquid. We spoke about lightning. We spoke about sediment. I mean Are there any other layer to things? I don't the isn't the definition of shitcoin just an a token that's competing with Bitcoin? That's completely unnecessary. But if you use liquid or Fedimint, you're just using a   a,   a IOU of Bitcoin. Right? Yeah. So you're still tracking against Bitcoin and, hence, there's it's not a shitcoin.   The hump and dump tokenomics. Yeah. I mean, I refuse to use any other chain, like, what I don't know what they're called, but they have an own token that is just made for pump and dumping. But if you use liquid, it's completely honest because there's nobody there just dumping on you and earning fees.   It's just just l b to c. It's just pegged Bitcoin.  



[01:26:54] Wiz:

But there could, in theory, be be an exchange rate between   on chain Bitcoin and liquid bit Bitcoin. Right? Yeah.   Currently, it's like a one to one peg or maybe they take a 1% fee to to swap it or whatever. I think swap that's what swap services do. But Right. So should be able to you can peg in and peg out without fees. Right? Yeah. But I think it's fair to say liquid Bitcoin is not Bitcoin. It's an IOU for Bitcoin, and there could exist,   an exchange rate. I mean, we've seen Tether kind of go off the $1 peg or something. Though. Right. Rarely. Yeah. But Tether's usually very, very trustworthy. But, like, other coins, just what was it? You know, some shitcoin Luna thing was supposed to be pegged, but Yeah. Because Terra. Yeah. I don't understand. Well, Terra was backed by Luna, the shitcoin. I know. The shitcoin. I'll go with my little naval coins. Yeah.   Anyway yeah.  



[01:27:44] ODELL:

I wanna talk about I wanna pull it back for a second. So we had a high fee environment.   We saw a lot of stale blocks. Mhmm.   What like, what are your thoughts? Like, why do we have so many stale blocks? And so the idea of stale blocks is   miners 2 different mining pools are basically   their most recent Bitcoin block,   is is a different block. Right?  

[01:28:14] Wiz:

What's when 2 mining pools solve a block at the same block height at around the same time? So they have 2 different And it becomes a race. The tip the tip of the network is a different tip. Right. And so   if you   propagate your block faster and another mining pool mines on top of your block, then you win.   And the longest chain wins or the the chain with the most work wins, so the other block becomes a stale block and not part of the Bitcoin blockchain.   But why was that happening so much? Yeah. I think we spoke about this on our HR a little bit. Yeah.  

[01:28:49] Unknown:

But basically  

[01:28:51] Wiz:

Get block template looped. Due to  

[01:28:53] Unknown:

so many   transactions in the mempool, like 500,000 Mempool. And 400,000 transactions, something   made the whole algorithm of calculating the most profitable block got slowed down   to I don't know, up to, I don't know, 10, 20, 30 seconds,   which just slows down the whole process of when they're they're mining on this block height. But while they're just calculating the next block, there's a block found somewhere else. Right. But they're still   just trying to calculate the block height, and then they're sending this to the mining machines, and they start mining on the old block. It's just all these delays because of the Right.  

[01:29:30] ODELL:

Just slow everything down.  

[01:29:32] Wiz:

So when the mempool on the mining pool operators node is empty,   it's very fast to generate the block template, which they send to the miners to   work on and and try and solve the next block. But when the mempool of the mining pool operators node is full  

[01:29:50] Unknown:

and has half a 1000000 transactions, it can take 30 or 60 seconds to generate the block template. But you can also say that the miners were ill prepared for this scenario. They they could it would have been   it would not have happened if their the mining infrastructure   had better performance or maybe they had to run a smaller  

[01:30:08] Wiz:

block and maximum input limit so that they don't have this full 500 k transaction to to calculate. Yeah. So they they upgraded to faster hardware or they optimized some code. I mean, some mining pools implement their own get block template Yeah. Algorithms.   So   it's not an easy,   you know, simple to say that this was the problem. I'm sure every mining pool had their own reasons why they had a lot of stale blocks, but they learned from I mean, they lost a lot of money. So they they left that money on the table, and now they're gonna go back and optimize all But the incentives work. They lost money, so now they have to figure out their shit. Right?  

[01:30:43] Unknown:

Yeah.   But it's just what we had to do the past few weeks. We had to optimize ourselves. You have to do? So the mempool space,  

[01:30:50] Wiz:

software is constantly running the get block template algorithm to visualize the mempool as all of those projected mempools. Mhmm. And we have   a very large mempool,   and we also have a lot of advanced features in our software like the the audit functionality and making sure everything is, Audit functionality is expected block versus actual block. Right. So we have a lot of stuff going on in our code,   and   our our get block template loop also took a very long time to run. And so   the excellent team of Shadowy Supercoders   optimized the code very, very quickly. And so, for example, when the mempool in our nodes hit 200,000   transactions   and it started to slow down, you know? I'm like, alright. Come on, guys. Let's optimize the code.  

And sure enough, within, like, hours, you know, Mononaut and Simon had had all these emergency patches to make it run faster. And then once we deploy those, everything started running smoothly again. But then the next day, they said, oh, it's not 200,000. It's 300,000.   Alright, guys. Let's go. We need some more optimizations.   And then it, you know, kept doing, like, 300,000, 400,000, 500,000.   Yeah. And we we added more servers into production. We had, like, turned off some other service, you know, like, got rid of some dev server. We just threw everything we had at it. And the Electrum service started crashing. Well, then we had patch bugs in elect in Electrum. So, you know, so we kept the site up and running, but it took the whole team,   you know, working long hours. It was interesting how some of the infrastructure was just not built for this scenario. That's true. Built to handle. I mean, Blockstream dot info was down for a while too because, we run the same Blockstream Electris fork,   and, we had a patch very, very quickly, like, within minutes even.  

And, we sent it to them, but it took them a while to, I guess, merge it and deploy it. And so   it was kind of, crazy to see, like, yeah, even,   you know, Blockchain with all their smart people, like, there was this bug and and the website went down. But, fortunately,   we were able to prevent downtime.  

[01:32:48] Unknown:

Yeah. But I'm I'm glad it happened now. It's not a bull market, it seems like. If if it wasn't for this ordinal stuff, the mempool would probably be empty by now. And,   but when the actual bull market hits and everyone's just forming in doing bid transaction, we   all the infrastructure is gonna be more ready.  

[01:33:05] ODELL:

So do you guys think mempools will ever clear again? Or  

[01:33:09] Unknown:

Good question.  

[01:33:11] Wiz:

I think it's gonna clear some Just delete your mempool dot dot. There. Your mempool is cleared. No. No. No. I mean, do you think do you think your mempool will ever clear again? I think so. I think it would clear I could clear it right now if I wanted to.  

[01:33:22] ODELL:

You wanna bet? I'm looking to bet I'm looking to bet you. You said already down a lot. Right? Since, it Hoop. Oh, I thought you're testing me about my bets. I am down a lot of my bets, but I keep doubling down.   Exactly. I pay more on I paid way more on transaction fees than I've lost on these bets. Well, if you just  

[01:33:40] Wiz:

pay pay the bet as one sat per v bite, then it'll never get confirmed. Well, that's why Marty is  

[01:33:47] ODELL:

Marty's a hypocrite because he he wants me to pay him in lightning even though he's   there we go.   So, I mean, I think I mean, I I don't even fucking know.   Eventually, mempools will never clear again. Right? Right. I agree. Eventually, there'll be a permanent backlog queue. I agree. And I I would say to the people that say, like, oh, then Bitcoin's unusable. It's your classic meme, like, it's too crowded. Nobody goes there. Yeah. Like, good restaurants have a line. Like, get online. Mhmm.  

[01:34:18] Unknown:

Yeah. What's the debate?  

[01:34:21] ODELL:

Well, there's this new theory that mempools always will clear eventually.  

[01:34:25] Unknown:

What?   No.  

[01:34:29] ODELL:

This is what We have that sounds very bearish, like like you said before. We have, like Couch man wants to respond. Yeah. That's super   caller?  

[01:34:37] Unknown:

Is it guaranteed   that mempools will never clear again at some point? Nothing is guaranteed. I don't think it's guaranteed. So there's at least a possibility  

[01:34:45] Unknown:

that Mempools will close. There's no guarantee. 2 scenarios. Either it's gonna it's gonna be useful and popular in the future, and it's gonna be super crowded,   super high fees,   or it's gonna   die. Nobody uses it, and then the mempool's gonna be empty. Choose 1. Speak 1.  

[01:35:02] Unknown:

I would say maybe it's, maybe guaranteed is the wrong word, but maybe, eventually,   you can be reasonably sure that you can at least get your transaction unstuck. So even though the mempool will never clear, you can at least Mempools.   Mempools will never clear, then you can at least get your transaction out of the mempool when you want.  

[01:35:23] Wiz:

Matt loves to say mempools and mandibles. Those are like his Mandibles drink. Wait.  

[01:35:35] ODELL:

Do   what do you guys think about, like,   transaction fee insurance   or something like that? Like, do you think I'll, like, be able to, like   I, like, I wish right now if I could just lock in 5 sets for for vByte   for the rest of my life.   If someone wants to take me up on that, like, I'm really double down on my bet to the point where, like, I just want I will pay you,   like, a 1000000 sets right now, but if you're a miner, you have to confirm my transaction at 5 sat for for for the rest of my life until I die.  

[01:36:08] Wiz:

Yeah. Futures markets on Like, I would do that in a heartbeat. Is not gonna happen. Right? Because the market is too real time, and why would they  

[01:36:16] ODELL:

sell blocks you know, their future block space? Because they can get the 1,000,000 test now and opportunity cost. Right? It's like,  

[01:36:23] Wiz:

time value of money, Wiz. But they they probably get way more than that in the future. Right? And how do you know they're even gonna be around? They're always gonna clear.   How do you know they're even gonna be around in in 6 months when you need to get your transaction confirmed? What if they're just unlucky and they don't mind any blocks?   Like, that doesn't really work. Right?   The only thing you can do is set a bid for your transaction.   And if that's not high enough, you can increase your bid.  

[01:36:48] ODELL:

All I know is is, like,   when this happens, it's gonna be the most expensive told you so ever because I'm gonna have to be paying the transaction fees.  

[01:36:56] Wiz:

Everyone has to pay the transaction fees. There's no free lunch.  

[01:36:59] ODELL:

I know, but I   yeah. Okay. Oh,   what?  

[01:37:07] Wiz:

I guess we can announce the announcement. What's the announcement? May 19th  

[01:37:11] ODELL:

in Miami at the Bitcoin market. Pulling a Justin sign? You're not saying what the announcement is? We're gonna announce something  

[01:37:17] Wiz:

related to your question. It's pretty big. Is it?  

[01:37:20] ODELL:

I mean, I don't know what it is,   but if I did, it's a pretty big announcement.  

[01:37:26] Wiz:

I think it'd be cool.   There might be a third way to increase your bid on that space in the blockchain.  

[01:37:33] ODELL:

It'd be cool if you could, like, pre buy   transaction inclusion. Like, I would just be aping in right now to   pre preconfirm transactions.   Well, it's already kind of happening with the,  

[01:37:46] Wiz:

with, like, the Inscryption guys were doing it. Right? They would pay some   mining pool. Like, in a total   backroom deal Out of band. Right? Out of band, they would say, yeah. We'll just give you a Bitcoin to mine our turd of a JPEG into this block.   Right? And the miners, like, if I get it. If you're a small mining pool, that's, like, very large, bonus.   So it's a free market   and,   happens quite often. In fact, if you look at the mempool space audit tool, like, if you click on any mined block,   we'll actually   show you, like, a diff between what we were projecting to be in that block and what actually got mined in the block, and those blue colored transactions are usually very large. And   I don't know what the few market looks like now. I haven't checked in the past couple days, but there's a lot of, just added transactions.  

And those are essentially,   like, just this opaque,   dark net market of,   people who need their transactions  

[01:38:41] ODELL:

accelerated and mining pools who are willing to do it for them. Well, let's talk about out of band real quick before we wrap,   because, like, I mean, we have been talking about it,   both on the record and off the record for years now, but,   it's recently   it's recently entered   mainstream consciousness, at least in, like, the   enthusiastic Bitcoin community,   because of these NFTs. Right? So,   out of band transactions are instead of, you know, sending your transaction through the mempool relay network   and and relaying amongst   Bitcoin nodes,   you send the transaction directly to a mining pool operator,   and you say, I will pay you this fee, and nobody's mempool see that transaction.  

And it's become quite common in NFT land,   but it will be very com in a sustained IP market, I expect it to be common   regardless, not just for NFTs.   And how should people think about that? I I know you have your audit tool, which   kind of gives you this idea of of which transactions might be out of band and which might not be because just as it's not economically it does not make sense based on mempool vision that there would be,  

[01:39:52] Wiz:

those transactions included. I think the main reason that   the Inscription   should coiners are using out of band payments to have their transactions mined is simply because   there are standard rules for transactions   that   allow them to be propagated on the Bitcoin peer to peer network and   included in every node's mempool. And   some of the transactions are so large, they're just way too big to be broadcast and propagated.   And so the only way to mine a 4 megabyte JPEG into a block is to manually send it to the miner and have them included out of band. And  

[01:40:30] Unknown:

It seems like the core developers like Merx sees a big issue with more and more transaction being treated out of band instead of using the actual Bitcoin network as it's   supposed to, like the actual  

[01:40:41] ODELL:

mark block space market. But the the bulk better if if it was all over the store. Fee estimation. You can't figure out estimation if everything's happening in backdoor deals. At the end of the day, like, a centralized  

[01:40:53] Wiz:

marketplace is always gonna be more efficient than a decentralized marketplace. Right?   And so you're probably gonna see more and more out of bands,   transactions,   fees   in the future, especially in the sustained high fee environment. Like you said, people are gonna make deals to   do whatever.   And,   if you have good relationships with the mining pool,  

[01:41:16] ODELL:

then you can, do that. What does that mean? I was just I was giving you a peace sign to a logo too because it says it's a beautiful studio.   It is.   Yeah. I mean, I think there's gonna be many many different types of shenanigans   that unfold when, Shenanigans.   I mean,   if we're right about Bitcoin and billions of people are using it, like,   fuck your models. Like, you have no idea what's gonna happen.   Like, people are gonna just be surprised about how everything   changes, and you're all too bearish. Everyone's too bearish.   Yeah. And I will take pie on my face because,   last time fees rose I'm being much more conservative this time because last time fees rose, I had Wiz on, and I said,   Bitcoin fees are designed to pump forever.  

And then I   got chat on for about 2 years or a year or something  

[01:42:14] Wiz:

until the Bitcoin fees Yeah. The problem is that everyone has a high time frame. Forever. Everyone's only looking, oh, 5 minutes later, it's empty. You're wrong, man. But, like, no. You gotta zoom out and on a long enough time frame. Yeah. It's never gonna clear again, and there's gonna be huge It's never gonna clear again, all caps. Let's fucking ship it. I mean, it's not like, Satoshi designed Bitcoin to have the block subsidy go to 0, and the miners only being paid by transaction fees. Right?  

[01:42:40] ODELL:

I mean, the block subsidy in   in purchasing power terms, like, in the amount of cows you can buy has only gone up.  

[01:42:48] Wiz:

How many cows can you buy with the current block subsidy? A lot of you can buy a lot of cows. A lot more cows than you could 4 years ago. That's true. When the block subsidy was 50 Bitcoin,   that was only about $1,000 of Bitcoin   or so. So it's only $50,000.  

[01:43:04] ODELL:

Yeah. How many cows is that?  

[01:43:06] Wiz:

Like, 50 cows? Yeah. Something like that. Right? Sixty cows? But now How much is it? How much is it? But now if it's, like, 30 k of Bitcoin 1,000. Even though it's only 6 Bitcoin, it's, like, 80 cows.  

[01:43:16] ODELL:

I'll let j pleb, all caps, never will clear again, mandibles. Cheers.   Let me see. Well, anyway, Freaks, I'm looking forward to the crazy times ahead.   I advise you all not to be too bearish.   This thing might just catch on.   And, I wanna thank our guests for joining us. This has been a absolute pleasure. Before we wrap up, should we finish up with some final thoughts?   Let's start with Couchman. Couchman, do you have any final thoughts? Couchman.   Stay humble. Stack sets. Oh, great advice.   Simon, final thoughts.  

[01:43:57] Unknown:

Run Mehul.   Run Bitcoin.  

[01:44:00] ODELL:

Great advice. Thanks, Simon.   Steve, final thoughts.  

[01:44:04] Unknown:

Visit Bitcoin Park in Nashville. It's been an absolutely epic week here. And, if you haven't been, you should make a first visit. And if you have been, you should come again.  

[01:44:14] ODELL:

Cheers to that. I will say every time I'm feeling a little bit of burnout,   hanging out with big corners in person, shaking hands, and chilling just really gets me going.   Definitely. I can't believe that some of my closest friends are just, like, Internet friends that I met through the Internet   and then afterwards met in person, which I never thought I was gonna be that person. But But that makes sense because if you're just,   talking with everybody on the Internet, you're naturally gonna meet people that you're most aligned with out of the, like, the largest community in the world the whole world. You're not just be picking people based on geography. Right. Like, your local neighborhood is not gonna have that good of a selection. Well, anyway, freaks, come visit Bitcoin Park. And if you don't wanna come visit Bitcoin Park, focus on building up your local community. Strong communities strong communities,   will get us through the hard times. It's important to, neighbors helping neighbors. I had someone accuse me on Nostra the other day that that was socialism.  

Helping train your neighbors how to use Freedom Tech is not socialism.   It is logical prudence.   Consider it. Wiz, final thoughts.   We're going to announce something really cool on May 19th. Such adjusted stuff. See you all in my ass. At 1 PM   on the open source stage. The open source stage. What is the open source stage? Sounds awesome.  

[01:45:31] Wiz:

Well, will there be a livestream?  

[01:45:33] ODELL:

Oh, well, I mean, are we gonna do a pirate stream again this year? I didn't know about it last year. It was just a happened coincidence.  

[01:45:39] Wiz:

Yeah. That's that's actually really funny how that went down. And I think, like, we walked there and, like, what? There's no livestream? Alright. Let's alright. You'll get a camera. Let's get Internet connection. Get a ladder. Put it up.  

[01:45:49] ODELL:

And You know we gave a 150,   free open source tickets,   to open source contributors,  

[01:45:56] Wiz:

this year. What was the project that had the most?  

[01:46:01] ODELL:

I don't know. The Nostra projects. We had a bunch of Nostra projects. A lot of Nostra projects came in pretty hot.   There was a couple projects that were, like   they didn't get a deal through, like, they were in the middle of negotiations with the sales team and then just kinda, like, aped into the open source ticket project, the the open source ticket contributor side. So it was, like, a little bit   questionable.   There was my favorite one,   my favorite one, and shout out,   to Finch, rider die freak,   his GitHub   username I won't talk to the exact username, but his GitHub username for   his open source ticket   was,   making commits for a free open source ticket for Bitcoin 23,   and it did it right after the last conference, which is exactly what we I mean, the idea is to encourage open source contributors.  

But, like, his his username was, like, literally, like, I'm doing it for the ticket.   But, yeah, I mean, that's that's what we want. The more open source contributors, the better. That's what makes this movement strong. Shout out to all the open source contributors out there.   I appreciate you guys. Thank you for for contributing your time and your money.   Huge shout out to our guests who joined us.   Huge shout out to all the freaks who joined us in the live chat. I appreciate you all.   I know,   dispatch runs on, like, this intermittent schedule.   If you join our live our our our group chat on Matrix,   you can stay up to date there. If you follow me on Noster,   it's really easy. Odell.xyz/noster.  

You could find out there. I might get banned on Twitter eventually, but I'm I'm on Twitter. I tell people on Twitter,   subscribe in your favorite app. You'll get notified.   I wanna do more of the in person one. So it's gonna be   kind of, like, sporadic situations   making all this cool shit happen.   Visit Bitcoin Park.   It is this is great to chill with Bitcoiners,   and,   don't overthink shit.   Stay humble, stack stats. I love you all. Thanks, guys.