Meet the Wrath of Satoshi

What Wright Actually Said At the Future of Bitcoin Conference on June 30th

This is a continuation of In Defense of Craig Wright - Part I

I am just a nobody watching from the sidelines. I do not take a position on the segwit debate. But, I can see that Dr. Wright’s comments could use some interpretation for people who do not have the context of where he is coming from. I think it is difficult for him to explain complex things to people who don’t already have a strong background in that field, a problem common to scientists and mathematicians.

Here again is the link to a transcript of Wright’s lecture, made by someone who has a very low opinion of him. Wrights words are indented. My comments are not.

https://gist.github.com/harding/b7067d2943706e2e3d3f7aab539a67c5

Alright. So, first of all, what's this about. Anyone know their manga?

We have the genesis of a new century. So, that's what that's about. This is genesis of a new century.

Now current problem: we have seven (which is really four) sort of issues:

We have this little tiny scaling issue. Which is nothing. See that whole screen? That whole screen is payments. See that little pixel there? That's Bitcoin. That's what we are right now. We are right down there---that little tiny pixel is Bitcoin.

We are nothing. We like to think we're something right at the moment. We are not. If we want to be something, we need to scale and radically. Not offchain. Not moving some of the security into sidechains and splitting the model. We need to, right now, today, start scaling.

In two thousand and nine, we had more scalability than we do right now.

Ok, so Wright opens his lecture by pointing out that Bitcoin has not come nearly as far as he thinks it should have in eight years, and has even gone backwards in terms of scalability.

Problem. We have this idea; we have things that are being said; we have people changing the story; we have a lot of 1984 doublespeak. We have people telling us what we should believe. People lying to us about what shou... what everyone wants to think [sic].

He is referring to the mainstream media which defends the mainstream financial system of central banks and fiat currencies.

And we're going to change that narrative. Not because we want, well, an idea that someone has of an idea. But because we want scientific truth; we want evidence; we want facts; we want more.

What we need: we need the unseen. Everyone know, our famous little economist/journalist from France: "the seen and the unseen". Bastiat, who.... People considered him not an economist. In France, the philosophers said he was not an economist because he says things that are so obvious.

The seen and the unseen. We are seeing Bitcoin; we are not seeing the entire system. The entire system is everything we are competing with---which will crush us.

He is saying the empowered players in the mainstream economy will use every opportunity to try to capture or contain Bitcoin.

We have other things that we're trying to build into the system that will crush us. When we split Bitcoin into millions and millions of pegged systems. When we add inflation. When we create these sidechains that, by the way, are patented and are controlled and happened to be owned and happened to be managed and monitored. Then we give away the security model.

He is saying the greatest enemy to Bitcoin is the developers adding so many features that they lose sight of the original purpose and break the security model, allowing Bitcoin to be captured and defeated by outside interests.

If 100% of everything mines Bitcoin and controls Bitcoin, that's a security model that is hard; that no government can take over; that no company can take over; no one takes over. Bitcoin can scale. Right now.

The strongest security model, he believes is to be found in the most widespread adoption of Bitcoin and the largest number of miners.

[Slide showing tweet from Peter Todd: "How could a capacity upgrade do that? There's no upper limit to demand, and the Bitcoin protocol doesn't scale.]

What is it. Well we can't do that. There's no limit on demand. Good! I don't want a limit on demand. I want every person on this globe using not altcoins not whatever else; I want them using Bitcoin. I don't some bullshit argument about "oh, people will use it and it will be bad".

Very simple; very easy: good! When every single person on this globe pays for their cup of coffee---pays for their whatever they want---every day using one single central currency (and I'll say central; one distributed central currency) that is not controlled, that is hard money.

That's what Bitcoin is about: hard central [un]controlled, no one can change, money.

Not sure if he misspoke “controlled” or if the transcriber made an error. It is clear from the context that he meant “uncontrolled”. By hard, he means hard to attack. By “central” he means only one cryptocurrency to rule them all. No alt-coins, just Bitcoin.

The problem is central banks inflate. Who here actually knows what the genesis block message was about? Who's read the Times page? [Audience reply inaudible.] What happened in the page? What was being discussed? [Audience inaudible.]

Several times in this lecture Wright refers to things that the early developers of Bitcoin could know. Yes, someone could also read the Genesis block and pretend to know it. But given the context of everything else he says, I believe he is speaking from experience and memory. Here he is referring to the Newspaper Headline that Satoshi mined into the Genesis Block, and he is telling us why that was chosen.

They were considering buying the toxic assets. The government was saying, "the naughty banks who we've just given billions to refuse to change their business model and risk their money again, and if they don't do it, we're going to buy them and nationalize them." So, great, we're going to incentivize banks further to make crappier loans. What a great thing.

So the original Satoshi, even though he said almost nothing about economics or political theory in the Bitcoin papers and emails, did, by choosing this message for the Genesis Block, leave an artifact of his political beliefs like a foundation dedication stone in a building.

[Points to alleged Peter Todd quote.] No upper limit to scale. Good!

[New slide.] Economic game theoretic systems. This is what Bitcoin is about. It is economic.

Timing models; one vote per CPU. This is a republic; it is not a demagoguery. It is not where people get to yell and scream and lie. And very soon we're going to change that narrative. Very soon people are going to discover that when you start lying and when you troll, there are consequences.

This comment about Bitcoin being a republic not a demagoguery brings to mind the alleged fake Satoshi email from 2015 saying that two developers should not be able to turn the entire system without achieving consensus with the rest.

So. What is a node? A node is not every little tiny Raspberry Pi running everywhere. The machines running Bitcoin in 2009 were bigger than every single Raspberry Pi. The machines Hal [Finney] ran. The machines Bear [Ray Dillinger] ran. Everyone else who joined this thing at that point had bigger machines running these damn things [sic]. And now we have this idea that we can't run it on a little tiny insy winsy insignificant machine.

Who cares? What is more important: you having a copy of the block chain, or you having money that no one can manipulate. Honestly, start thinking. These whole utopian ideas of how you spend money are wrong.

Basically saying that expecting full Bitcoin nodes to run on tiny machines is unrealistic and unnecessary.

Economic fundamentals matter. Lightning doesn't work because nobody spends that way. I don't go over to [store name] and ask them to take a bag of carrots and give money. That's the bi-directional models. They don't work.

I don't go down the road in some big co-op, and go, "well, I've just made a box of widgets; how 'bout you give money for it and whatever else." Barter never really existed. Ever.

Wright is poking a stick at the fact that many of Bitcoins developers and promoters of various blockchain ideas really have not tested them in real markets. Blockchain projects in general are very heavy on theoretical high-falutin ideas that have not been tested and grounded in the real world of how people interact.

What we have now is a system that changes everything. Our new generation, our new genesis, is the creation of the first ever hard money. The first money that allows for freedom.

Gold was never hard because we never had it. When Nixon took America off the gold exchange standard, which wasn't a gold standard, do you know how much of that gold was actually there? [Inaudible audience responses.] About five percent. So they didn't actually have the gold they were backing their currency with.

Wright attacks the gold standard, but his argument is refuted by the reality that silver was the money of the masses for most of history, and they did in fact have it. But I digress….

[Side, SPV and merchants]

So SPV and merchants. Merchants give a [inaudible]. When you go and you pay a merchant they care that they get the payment. They're the ones who want zero-conf; they're the ones who know what they can and can't risk. When you pay a merchant, you don't care that your payment has or hasn't been accepted straight away. You care that you've handed the payment over and you've walked out the store with the goods, and you've got a receipt.

More than that, who cares? You're not going to want to sit there and validate that the merchant actually got paid. Really, you don't care.

His point is that the discussions concerning merchant payments and confirmations ignore the fact that it is the payee who needs the confirmation more than the payer, because the payee is the one letting you walk out the door with the goods.

So what we need: we need to move these silly ideas that we need split Bitcoin into little bits so that everyone can own their little bit of Bitcoin. "Everyone wants segwit" - 1984 segwit. Everyone does not want segwit. Everyone is being cowed.

1984 is a reference to Orwell’s book on the big government dystopia. He’s basically saying that the claim that “everyone” wants segwit is unverified propaganda that serves certain interests.

I'm sure everyone has seen the fun media about myself and my family. Well, here's the thing for you: I do have those degrees. That so-called PGP key to Mr. Maxwell, I would say, because the Australian tax office approached Blockstream and asked them about my affairs and dealings in May 2015.

The people involved in the tax office have been arrested. So, my taxes issues are zero. But there are some issues for other people about to come, because when you lie and when you say things that aren't true, there are consequences. And we're going to make sure that these consequences are going to hit these people hard.

Not sure what triggered the digression to defending his reputation. Some people and journalists have claimed that Wright put fake degrees on his linkedin page. Others have referenced the fact he was attacked by the Australian tax authorities at the same time he got doxed as evidence he is an evil person. He is saying that is not true, and in fact the agent(s) at the tax office that persecuted him is now in jail and the case against him has been dropped. (I have no confirmation of that, just explaining what he is talking about.) He is saying that those who have libeled him are going to be sued in the near future.

[Side, SegWit is NOT scale. Line chart allegedly comparing "Bitcoin vs SegWit"]
Segwit is not scale. That [points to one line] is what get with a block size increase; that [points to other line] is what we get with segwit. If you have a 4 meg block; if you have a 16 meg block; you multiply it by 4. That is not scale. What you do to scale is increase the throughput, and you get more for a 4 meg block than you do any time that you have this split system that needs to be run that you can't really delete if you're a merchant or a financial organization.

Saying "oh, well, you can keep it," where the hell is the actual benefit of deleting that you can't delete?

Merchants and financial organizations are required to keep transaction records for seven years in most countries. He is saying that segwit doesn’t actually reduce the problem, because these organizations have to store the data anyway.

Each transaction requires more bandwidth. It's very simple: it takes more. The answers you've been given about how terrible all this is: run multi-threaded systems; stop arguing that it needs to be put on Raspberry Pis so that they can lie to you and tell that it needs to be moved off to other systems. It doesn't.

One of the things we, yes, we patent---I'm not afraid to say that. Unlike Greg [Maxwell?] and whatever else, we will choose what we do with our technology. That's not bad. I created things, I get to choose. My choice. I will put some out free. We will put some out otherwise. Our choice.

Here is the voice of Asperger Satoshi coming through again. He is frustrated that his invention is in danger of being diverted from its course. He is apparently filing patents in order to give him more control, and to do more things beyond Bitcoin, but related to Bitcoin.

But, at the end of the day, scale needs to happen---and it needs to happen now. And it's not quadratic due to these other problems they're saying.

[New slide, looks like screencap of GitHub showing a some lines of code in Bitcoin Core.]

Here's a thing no one's talking about: this quadratic scaling issue. It's added to Bitcoin. It is added. Follow the codebase. It is easy to fix. I know several, [such as] Bitcrust, Bitcoin Unlimited, and our team independently picked this out and fixed it. Our team did it in about three hours. That's sure scalability.

He is saying that someone added this quadratic scaling code after Satoshi left, but that it can be fixed, and that three different dev teams have come to the same conclusion on that.

Doing multithreading about putting things off to [unknown term; sounds like "Xeon fi cards"]... any idea how many sigops we can achieve now? Anyone? Five hundred thousand per second. That's scale. And yes, that's a $20,000 machine.

Quite frankly, I don't care about Raspberry Pis. If you have been in Bitcoin since 2009 and you can't afford a $20,000 node to help this network, piss off. [Audience applause.]

He is saying that Bitcoin nodes should be powerful specialized machines. The cost of $20,000 is not high enough to prevent decentralized mining.

And I will say that one again, if you will not do this; if you will not help this network; and if you will not take this thing that has given you financial sovereignty, you financial freedom, you financial independence, and help other people by spending a little bit of money on a decent network, fuck off! [More audience applause.]

Dr. Wright is clearly not impressed with the idea of using Rasberry Pi to run Bitcoin nodes!

[New slide, Scale is quadratic due to code flaws. Shows a diff with two added lines, one removed line in mempool management.]

That's it: O-2 [sic; slide says O(n^2)]. Poor code. Shit code. That's why we need competition. That's why, not just Core, anyone should be release their own and compete fairly.

He points out a bug introduced by Core, and shows how it can be fixed, and says that is what causes the scale to be quadratic [instead of exponential]. He is calling for competition in developing Bitcoin rather than a central authority. This is relevant, as he is not arguing that Satoshi should dictate the code. He is arguing for a free market competition in code development. This somewhat seems at odds with his earlier comments about patents, though.

If you make a better solution and you put it out to market, you compete fairly. Through competition, because people use your product. Not because you're cowed into... DDoS attacks or anything like that. Not because of all of that.

Bitcoin Unlimited found the flaw as well. Some of these thing that Unlimited have been doing [are] very innovated.

[New slide, Moore's Law is our friend]

At the end of the day, Moore's Law [is] our friend. The smallest transistor---well, I'm probably being superseded already, but I've got a paper coming out on this, and the editors picked out a mistake because I said a 2 nanometer transistor and it turns out there's now a 1 nanometer transistor.

When all this happened, people were arguing that because of quantum tunneling, this is impossible. "At six nanometers, it will never be done." Guess what? It's been done.

So stop this, "oh, we can't do it" and "oh, everything's bad" idea. The reality is we need to start being optimistic, positive, and build. Allow competition. Allow free access to code. Allow people to actually start competing. No building little walled bloody gardens.

[New slide, The original method was flood Control]

[Note: the following seems to be about transaction fees.]

Bitcoin... I've got lots of people saying this is bullshit. It's in the code: flood control. It worked. Why? Because of the value of it. It didn't work way back then, and people could've done these things, and Hal and Bear go their way and put this bloody cap in there.

Quite frankly, I'm disgusted with half the community. Anyone know who Bear is? Bear is Cryddit; that's his name on Reddit and whatever else. Bear was the third person involved, properly running nodes and whatever else. You can look up who he is; he's a friend of mine. So…

Here is another reference from his experience as Satoshi, relating who the first Bitcoin developers were in the order in which they came into the project.

One of the things that happened to him. He came on and started talking. Mr. Maxwell, others, ripped the shit out of him and he's gone back to being curmudgeon like I like being. He doesn't talk; he doesn't get involved anymore---and he's a shit hot coder. Better than anyone I have met in any of the core areas, by far, and he's no longer involved. Not because his ideas are shit but because people didn't like what he was saying; made death threats against him; added things against his family.

That's got to change.

Dr. Wright is quite unhappy with bullying by certain people in the Bitcoin development community, which he believes has driven away superior developers.

Flood control works. If you are getting a big block and someone's paying you to put transaction in there because we want 5 billion people using this, which miner is going to turn it away? If you get paid a little tiny amount per transaction, then you buy another hard drive and you take it.

This is capitalism. It is competition. It is brutal and ruthless and it works. If you can't keep up, bye-bye.

He’s saying that miners just need to buy bigger hard drives and put more transactions in each block. If your machines are underpowered, invest more money.

Segregated Witness, typical problem right now in this bloody industry. Scientific method: it doesn't exist. We just tell people, "this is what you're going to do." When you want a scientific process, you come up with an idea and then you test it.

He thinks that code changes like segwit should be tested and shown to be effective with real numbers in the field, instead of being forced upon the community by strong opinions alone.

Removing incentives. What incentive is there to be a miner of a little bit of a shitcoin settlement for everything else when you're getting money from everyone?

How does Coke make money sugar water? They do it because volume. They don't make huge profit because charging you 99% of the can. They make a fraction of a cent on every can, but they sell a lot. Miners what to make money, then velocity matters. Velocity of money scales the price. If you increase use, you double right now bitcoin, and velocity formula tells you that you 2 times .94 with the inflationary amount times the value.

If you scale 100 times, price from velocity alone increases 94 times. What miner will not take a hundred times the block size if they one hundred times the fees? Any miner here [want to] say, "piss off, I don't want a hundred times the amount of value from bitcoin"? No? Ok.

He is saying it makes more sense to increase blocksize in order to reduce transaction fees and process high volume.

Overall, every time we split into sidechains, we take away a little bit about what secures the network. Every time we do that, it becomes less secure. Every time we create an altcoin, less secure. Every competing option that takes something from the overall network makes this one, once in a lifetime, once in any part of history, experiment less viable.

Here Dr. Wright is revealing himself to be the patron saint of all Bitcoin Maximalists. There is only ONE BLOCKCHAIN TO RULE THEM ALL.

Bitcoin differs in that it's the only scarce good that has truly existed. Gold wasn't. Gold has been manipulated, changed, et cetra. Gold has been flooded. After the Spanish came and discovered the Americas, or rediscovered really, there was something called the rain [or reign] of gold and the rain of silver. Ships, big galleons, would come in and deposit all the silver and gold they'd taken, and within weeks it was all gone.

No industries were built, just luxuries. And that's the difference. As soon as you start inflating things, soon as you start changing it---allowing sidechains---then, well, you take everything that matters away.

He is saying that sidechains are a form of inflation that will devalue Bitcoin itself.

Selfish mining: a lot of these problems started because of that. We got a paper coming out soon. It's gone through editing and all the rest. There are several versions because my mathematical version is going to scare the shit out of everyone because I actually happen to be a mathematician; a scary word that.

Basically it's flawed premises. Bitcoin is not a Poisson model; it approximates a Poisson model. When we have these little diagrams that people like to do for queuing models, well one you would need to use a negative binomial to be right there---but that's even wrong. They're only correct if you have no deviation; if no one defects.

The Poisson is only approximate if everyone is doing what the are meant to do and never changes. So we're releasing the actual mathematics and how things work in Bitcoin, which some people will understand and those who don't can put it into a computer program and a computer can simulate it. Then we start getting all these things correct.

He is correcting the notion that Bitcoin is a Poisson model, and saying he has a paper coming out that corrects this error.

Now, the model. Emmons [?] deleted every aspect of any code he ever wrote for his model, but luckily I have some. I kept it and archived it for him because, well, he would never want the fact that he missed all these things lost to posterity.

Inside joke between two coders.

Now, when you create a model in science, you test it. You don't test your model; that's what we're all doing right now and we're testing our model. That just tells you you have a model. Who cares? If you can't run it on Bitcoin, who cares?

This is confusing because he is switching between subjects (probably pointing at the two pictures segwit vs Bitcoin/nChain model). He is saying segwit has not been thoroughly tested, but that nChain has a rigorous testing of their model.

One of the things in Slack channels I've been doing at the moment is I've been incentivizing people to do things I've already done. There is a selfish miner test run on VMs going on at the moment. Real VMs, real tests, real whatever else. And I'm funding it. That doesn't mean it's not independent. I have said you get paid, because I've put it in third-party escrow, either way. I've put bitcoin up to pay for all the VMs and all the testing and all the code, and it will all be public. So it's not just my math; I'm getting it independently verified by other people in the community. Over and over.

So he is paying for third parties to test out nChain’s scaling model on virtual machines, but by escrowing the payment he is not influencing their findings. They get paid whether they confirm his model or disprove it.

So, Turing completeness. I've had a lot of shit about this one. Guess what: you're all wrong, it is. What you're not going to get is that you've missed it.

There are actually, we have what is called a decider in Bitcoin. It follows some of the predicate logic of Gödel. Gödel, back around the time of Turing, wrote a lot of mathematics around the idea of predicate systems. If you're a mathematician, you would know this shit, but not everyone is. So Bitcoin a 2-PDA. Now, 2-PDA, all those little squiggleys, unfortunately once again, they're from a paper that is coming out. Those little squiggleys actually mean that it is Turing complete.

I'm not going to explain that to you right at the moment. I'm going to say that... any recognize what that is? That's a Wolfram 110. Anyone know what a Wolfram 110 is? It's the simplest Turing-complete system. That's in Bitcoin. It was running until a few months ago. We had PSOs in Bitcoin, running. Unfortunately they starved to death---fees.

He is saying that he had a small Turing Complete computer running on the Bitcoin network for a long time but it recently couldn’t do their tests because of overly high transaction fees.

So we had the first self-evolving in Bitcoin, that ran for two years. There are people that know about these now; that's why I'm mentioning them. They've been discovered. It's not just me. They're dead! Because they can't afford the fees. And I'm not going to fund a thing requires $3.00 every bloody block to keep running, it becomes expensive very quickly. When it's low fees, all sort of things can run. So, these are there.

Aside - I recently sent a $10 Bitcoin transaction to a kid I had just introduced to Bitcoin and set up his phone for it. I was shocked to see the transaction fee at $2.50! That’s a 25% transaction fee! The original Bitcoin.pdf paper by Satoshi talked about microtransaction. Obviously, the skyrocketing transaction fees kill the possibility of microtransactions, or even reasonable small transactions. Wright’s tone is that he is annoyed and disappointed by the Core development leadership which has allowed this to happen.

IP to IP transactions. Does no one look at the old code any more? We keep saying, "this is not meant to be there." The market database in Bitcoin allowed IP to IP transactions. There was a reason for these. The whole idea is to have a merchant-type solution. I should be able to go up and just tap something, and I don't even give a shit whether my transaction has settled properly. All I care about is going up to the merchant, and the merchant will propagate my transaction.

Why will the merchant propagate my transaction? Because they want to get paid. Merchants are not going to sit there and go, "well, maybe at the end of the month I'll run all this shit." They won't, because you will double spend. Merchants have the incentive to ensure that zero-conf works right now. Why? Because they want to be paid!

He is saying that Core dev keeps ripping out stuff from the original Bitcoin design saying “this is not meant to be there.” Again, we are hearing annoyed Satoshi, dismayed at seeing his brilliant creation screwed up, because the Core dev did not realize why that stuff had been put in there. (To be fair, Satoshi could have documented the code better. It’s at least half his fault, if not two-thirds because he bailed on the project.)

It's very simple. Economics makes this work. It is not security toys. It is not any of these little fluffy bits of crap that we say are really security the network.

I've work in the security industry for a long time. I've been a pariah in that industry for a long time because I, way back when, have said "economics matters". I'm on Richard [Bell-something]'s site as Security Clown because I put a risk algorithm that every takes a little bit out of context and says, "you know where that risk algorithm is used right now? When you have two-factor and you get SMS and other updates to your phone for Internet banking, that's that algorithm." So my fluffy little piece of crap algorithm happens to be running on banks globally.

So he can call me a clown all he wants. Quite simply, I got paid for it, I don't care.

He says he invented the SMS two factor authentication method use by banks and most websites today.

Wallets to merchants. We need to start building better wallets. I cannot do frontends to save myself. I'm a good low-level coder; I can do library code, things like that. Other people can do other things; my frontends suck.

Now, here's the thing, we've had eight years, and you know how good our frontends are in Bitcoin? They suck. All of them. I don't care who gets offended on this one; every one of our bloody frontends right at the moment, our wallets, suck. We need competition in that. We need people making really shit-easy ones.

He is very right about this. The evolution of Bitcoin wallets was painfully slow. It clearly was not a priority for a long time. That is not Core’s fault, but it does reflect badly on the broader Bitcoin ecosystem.

When I started DeMorgan in Australia before I moved out here, the thing I gave to our staff and what I want: my grandmother has to be able to use this. My grandmother has to be able to just make a payment. She doesn't use computers, although I mean, my grandfather before he died was one of the earliest users of computers in Australia with Melbourne IT and other things he did. My grandmother stays away. She's 96 and she's not going to change. But she needs to be able to use money.

The early days we had poker nodes in Bitcoin. We had merchant databases in Bitcoin. All of this has been stripped. It shouldn't be in the main core protocol. Wallets need to be developed independently. Why? Because that's how they compete.

I think he is saying it is important to keep the core clean, and to build all the other imaginable functions into wallets by independent developers competing.

We don't want one, we want a world-using Bitcoin. That's simple. We want it secure. And we want it able to be used between many people.

Replaceable transactions versus replace by fee. Replace by fee is the biggest piece of shit every created [audience applause]. And I'm to say that very nicely because that's not actually what I feel about it, but I've been told that I'm not allowed to say my true feelings, so I'll put it lightly that it's complete utter shit.

Haha! Asperger syndrome Satoshi says it like it is.

Replaceable transaction: when you hadn't broadcast something to the network and you were negotiating a payment channel, that was valid. Why? Because you're negotiating. When you send it to a miner and you allow a miner to start playing with it, zero confirmation doesn't work.

Risk is not perfect. Every system---every one---is probabilistic. There is no single system ever created that is not probabilistic in security.

Does any here know what Alan Turing was before he became famous as a cryptographer? He was a Bayesian statistician. In the early days, statistics and Bayes theory and things like that were the core of creating risk-based systems. Right now we seem to have forgotten that. We seem to have forgotten that we cannot ever get a perfect system.

Again, showing hints of the brilliance and depth of the real Satoshi.

We don't drive around in tanks. We drive in cars. We fly. Anyone here done something stupid like bungee jumping or jumping out of a plane? Yes. I've pushed our kids out of the plane too, and not because they gave me the shits either.

Australian sense of humor.

What we need are payment systems. We need merchants who give a shit. Merchants will do these things. If we start doing unlimited block size strategies where we just allow things to grow, our cost goes there [points to line chart]; Visa's cost goes there [points to other line]. We can run cheaper than Visa on our network right now. We can scale bigger than Visa right now.

And here is the thing that they're lying to you about: the bloody bullshit from people like Luke [Dashjr?]. What they really want to destroy is corporate. Companies. That's what they fear. Companies do not act together. Companies are people.

You can own shares; you can start a company; you can control a company. You can compete. But if you can't compete, buy and let someone else do it for you. Companies aren't evil; some companies are; some aren't; some people are; some people aren't. It is always about the incentives, and at the end of the day, this is our incentive: if we have 100,000 nodes and we have that because of merchants, we have a system that is more distributed than Bitcoin right now or any other system, and we can actually do that right now if we get away from the idea that every single person needs to run a bloody Raspberry Pi, and [we] start scaling, then we get real financial sovereignty for everyone.

Not manipulated money; not altered money. Really, hard, free currency. That's what this is about. Whenever you here someone who is an anarchist or a socialist---and I'm not going to get into the debate about a anarcho-capitalist type thing, that's a different thing altogether, but I mean a social-anarchist or whatever else---the issue is their anarchist because they're not the ones in power. That's all they want. They don't want your freedom; they want control.

He is complaining that certain Bitcoin devs are pushing anarcho-capitalist ideology over basic network performance.

What we have is not running your node. That is a myth. What we have is we scale. We scale big. Then no one stops it. No government stops it. No company takes control. We scale, we win.

He’s saying that if we remove the barriers to scale, and scale big, that Bitcoin will become too big to stop.

So, if we look at this little Moores Law bit, we have storage grows. At home, I'm one of these evil people who actually invested a lot electricity-sucking power away and doing the best to ensure that I take all that electricity and make heat and help global warming because at home I've got several petabytes of storage. And that's my home.

And each of these people who say, "we should not be part of running this out big," who have been there for a long time. Again, time to wake up and actually supporting the network and piss off. We want to scale big time.

Now, what we need to do. Moore's Law is going to continue. Like it our not. To paraphrase a quote from Greg [Maxwell?], "if we just rely on Moores Law, that's not a real scaling solution because we haven't done anything."

Who cares? It works! If other people create systems that make our life easier, why is that bad? If we scale a thousand times in ten years, that's good. Over time, it will get bigger and bigger. It will get used more and more. As Peter [Todd] is so afraid of, there is no top. And if there's no top, good!

He’s saying that the cost of storage will go down faster than the size of the blockchain grows, so don’t worry about it. Specialist nodes can store the blockchain and mine it, that’s ok.

The faster, the higher, the velocity of money, the more it's worth. Linear growth. Who cares? We have number of Bitcoin transactions. If we scale, we go past Visa; we go past Mastercard; and we get to a point where we exceed all global transactions. Then we succeed.

When we get, in this number of years [chart goes to the year 2040], way past everyone else, we win. There is no "attacks of centralization" or anything else like that. It becomes too big. When it's small, it's easy to stop; it's easy to manipulate; it's easy to control. When you add sidechains; when you add other things that take away from the core of the network, you steal the security model; you steal the value. When you do this, that's what destroys Bitcoin.

This is basically his argument against segwit. He thinks it is a rabbit trail that will destroy the security and integrity of Bitcoin.

We have an unlimited block strategy. Stop thinking short-term. We're not. I am here not for the short term. Like it or not, you're not getting rid of me. We're going to be here twenty years. And it's very simple: we'll help create, release, and aid with code development that is not going to be taking from the Core system. We will scale radically.

Ok, this is the most significant thing he said, and these are fighting words. Wright is saying that nChain is basically going to fork Bitcoin if necessary but they are not going to follow Core any longer.

And if you don't want to come along? Stiff shit. I don't care---I'm not going to be nice like Jimmy [?] wants. It's very simple: you're with us, or you're against us. And if you want to be against, that's your problem. We're going to compete, but we're going to compete by growing the value, and we're going to make this grow rapidly because when it grows, that's where the value happens.

He said several times in the lecture that he believes in competition rather than dictation. So, he’s sayign nChain will be release new Bitcoin client code and the market (miners) is going to have to choose who to go with nChain or Core.

Connection: we want easy connectivity, easy use. We want people to be attracted to using it because it is safe and secure and simple. And flow: we want an exchange of value, all those things that make economics work.

We want to remove the block cap; we want to have a non-segwit pool---and we're going to announce that too. We're going to create a pool that will not run segwit. [Audience applause.] We will build up a non-segwit pool and we will fund it, and if we see segwit transactions, we'll reject them. That simple.

He is focused on usability for the end user, and makes it clear that not only will they release code, but the group behind nChain has enough capital to deploy a mining pool, and that mining pool will not process segwit transactions.

This is basically a declaration of war against Core. But it is not Craig by himself. It is Craig with Jon Matonis and all the other people and capital behind nChain (many of whom are associated with the online casino business in Antigua).

So, I talked about a cartel. I'm not going to run the cartel, but we're going to reject segwit transactions. So if someone else runs it, I don't care. But I don't accept segwit; I'm not going to. And we're going build a pool that doesn't do that. And anyone who wants to join in that, great.

If we see segwit, we'll reject it. Out of hand. Full stop. And we can do that---you advertise both parts of the chain, so we will watch for segwit transactions (not pay-to-script-hash generally---segwit) and anything segwit, bye-bye. Which means you're slower. Because we will take at least 20% of the market, and we will do that, and we will build that pool, and it's coming very soon, and if you want to be slower, run segwit.

Now he is more specific. They have enough capital and processing power to grab 20% of the mining market right off the bat. If other miners start coming over to nChain’s side that number will rapidly grow.

[Audience question, hard to hear, "Will that require a hard fork..."]

I don't need to include it [segwit]. I don't to hard fork. I, as a miner, choose. People don't choose what I do as a miner. I can reject a block any time I want. It is about time that the miners started realizing their role in this industry. The miners set the rules. Not every user. Not everyone out there.

So, he’s saying this can be done without a hard fork. Basically, segwit can be ignored by the miners. However, if segwit miners do the same to nChain’s transactions, that looks like a hard fork to me.

Network distribution. You're all wrong. Giant node versus outlying wallet. These [points to slide] are connectivity graphs. What we have in Bitcoin is, as we get more and more connectivity, we get more and more reachability. This is how it actually works. What we have in Bitcoin is not all these other things where people are talking about "power-law", "scale free", et cetra. They are not Bitcoin because Bitcoin was always economic.

Any node gets more connectivity over time. That is part of the protocol. The bigger your node is, the bigger the number of connection pools. If you run a Raspberry Pi, you are cutting yourself off from most of the network. In graph theory, it is not how many vertices, it is the edges that matter. It is the connectivity between the graph that matters. So, you're all getting it wrong.

Very simple: you don't do node count. Node count is shit. It has zero relevance. Read the mathematics. Zero.

That [points to slide labeled "semi-complete ring"] is Bitcoin. That is the actual model of Bitcoin. Those gray areas in the middle, that is the connectivity between the main nodes. It is that dense. There's a distance in bitcoin of d = 1.32.

Later this year, I'm not sure how we're going to do it, but we're going to start releasing data. I'm not sure how because we have petabytes.

[Points to another slide with same title] That is also part of it. It is bigger than a small world model. It is not anything that people are talking about. It is not a mesh. You send one transaction in 2.3 seconds, once it hits the network, 99.98% of the hash power has your transaction.

It can take 25 seconds to get to 99% of the network, but it's the hash power that matters. Who gives a rat if your little Raspberry Pi gets it late? You're not going to put it in a block any way. If you don't have it in a block, it isn't part of Bitcoin. That's drilling into that network.

This is what people think it is. This is what Lightning is. It's a mesh. Lots of little hops, central nodes, et cetra.

Red balloons in Bitcoin: a group of Microsoft mathematicians went over and did the mathematics behind sybilling and other things. Any network with a distance of three plus can always be sybilled. Mathematically proven: always. Every time you do it.

That---Lightning---can have eighty hops. Not eight, eighty. That means it is always vulnerable to attacks. Not sometimes. Always. It is mathematically proven. Read the paper; read their results.

Bitcoin doesn't get sybills because it has a distance under three. What we end up, with this, Bitcoin... the problem, people don't get the difference in words. Bitcoin is "highly centralized" because it has "high centrality". That Lightning mesh is more of what we are arguing is centralized. In mathematical terms is more distributed than any network globally has ever been. It has less chance of ever being hijacked than anything that has ever been created.

There's a recent paper on routing in Bitcoin. It's wrong. Not because you can't hijack ASNs but because there are so many links. You can knock a node off and attack an individual, but you don't need to take over an ASN to do that. Now, what they also failed to say is, if you did that attack, you would take over 99% of commercial Internet providers. You would take over every military network on Earth. You would take over all of the telecomms' links. And do you think attacking all these core routers and doing that will be allowable just because it's Bitcoin?

I mean, honestly forks, to attack these routers and take over the core BGP systems. Well, not going to happen. Yes, ISPs can make you part of the... they can prune you. Uses your phone, use 3G. Whatever. Multi-home.

So, it is a semi-complete ring. It is actually bigger than a small-world network. These transaction graphs people keep doing are not Bitcoin. They are how economics works. When you have a transaction graph of transactions going from party A to B to C to D, that's how people spend money, not how nodes connect. Have we not thought about that? You can't model Bitcoin looking at how transactions flow between addresses. You look at the connectivity from the nodes.

There are 1.2 million edges just over on the Bitcoin network right now. The entire UASF pool has 36,500 edges. Any idea what effect they have? Well about 0.3%. They can point three percent the network as they isolate themselves and do nothing.

As I said, I have no idea how the hell we're going to get it out. We're going to start doing something to get... Jimmy and others will have others will have fun trying to arrange this, I've just got shitloads of data. There's petabytes. I have no idea how the hell we're going to distribute it; that's other people's problems---I'm good at making those.

So we have data going back to January 2009. It's been captured since then, right down to network dumps and the works.

Another early Satoshi knowledge reference. He is saying he has network data on Bitcoin in addition to the blockchain itself going back to the Genesis that allows him to prove he was there from the very beginning. This is the “petabytes of data” that he is saying he intends to release later this year.

Scale, growth, and vision: we need to scale! We need real leadership. There should be no king in Bitcoin; there will be no king in Bitcoin. We are a community, and it is time we start acting like one. There are a few things happening. And they'll become very public very soon, but Jimmy and things will get really upset if I start talking about them now. So blame Jimmy. Everyone, that's Jimmy.

Jimmy is probably the CEO of nChain or something.

Ok, we need sustainable operations; we need innovations; we need to attract companies. Not like Luke [Dashjr?] and his, "oh, we want to keep away these companies." We need to attract companies. We want banks to use Bitcoin. And if you don't, then I don't care---I'm going to make it happen.

Very simple: you don't like it, find an altcoin and compete with me. Split off Bitcoin and compete with me. And we're going to compete hard.

Coopertition [sic; portmanteau of cooperation and competition]: you can help us, you can try to harm us, but at the end of the day, I want fee-based controls. I want people to use Bitcoin as much as you want them to. We want this global. I don't a few geeks using Bitcoin. I want my grandmother buying her gum or whatever else on Bitcoin. When that happens, when some small individual who doesn't matter to most of us uses Bitcoin, it succeeds.

I was Ghana a few years ago. In Ghana, you see these half-built houses. And people are proud of them. Any idea why people have all these half-built houses? Well, no bank mortgages, but it's also saving. They go out there every now and again; they buy a bag of cement, they buy some more bricks; and they build another wall.

They can't sell the house until it's finished. But it's an incentive. They can then invest and save. Right now, they can't use a bank. They can't hide money, because it'll be stolen. They'll be extorted. Bitcoin means that they have a real alternative. It is proper financial sovereignty. Not because they run a bloody node, but because they have their keys.

One of the things we have coming very shortly, it's in our first lot of patents coming out, we have a split key system so that exchanges and wallets and whatever else will never have control. You and the other part can use a type-1 Bitcoin address and no one has control. The exchange cannot steal your money. They will never, ever be a Mt. Gox on this. [Audience applause.]

You can't cheat the exchange either. They will be happy can't lie; you can't cheat; you can't steal. Between all of that, then we don't need trust. Right now, we are building systems that are just like we had before. So, yes, we some new code and new things coming out, and that will enable you to have split keys. Not because you've got a USB key or whatever else or whatever hardware wallets are out there, but because you can have a shared key infrastructure where both you and the exchange both act together.

So, fee structures, I'll talk to people about that if they want later, but the idea that we want something that scales. We want innovation, development, profitability---profit does not go down to zero. Profit goes to the innovators; those who create. If you make something that is better---a faster ASIC, a faster wallet, as faster sigop---get paid for it. That's what Bitcoin is really about; it is not socialist, it is libertarian. That is capitalist, not crony-capitalism, not getting money from government: capitalism with people competing.

So we are going to add structures so that DDoS doesn't happen. In case people don't know, my past is with casinos for a long time. I've done a lot of things back from [inaudible]. I setup the first Internet casino that had a license. That was me and my company. And we were attempted to be DoS'd and attempted to knocked and attempted basically screwed by everyone who wants to take money and extort us for many years. Whether it's poker, whether it's gaming, or whatever else. And it's controllable and stoppable, and we're going to ensure with what we're setting up that miners and other know how to run a proper network without being knocked off the damn network.

Future: we want to increase revenue streams. Everyone, and I mean everyone should be making money here. We want to ensure that we have transaction and custodial-based revenue. Not us---everyone. This is a big, big potential industry. This is something that is global in nature. We are getting there.

we're nearly at Ten. Ten years. We should be competing with Visa now. Not later, not whatever else. Now!

It is coming up on ten years. That is one thousand times the scale, and we are not growing. Thirty billion dollars is not big. Thirty billion dollars is piss-ant.

[Points to screen.] That dot there is Bitcoin. When that dot there is everything, we have succeeded, and only when it is everything.

Thank you. [3:21:16]