1 00:00:00,120 --> 00:00:02,680 But the challenge that we're facing on the Bitcoin Defy side 2 00:00:02,760 --> 00:00:05,000 is that there's technical limitations. 3 00:00:05,200 --> 00:00:09,400 You have Bitcoin and Defy today, but since Bitcoin only exists on 4 00:00:09,400 --> 00:00:12,080 Bitcoin, and if you want to use it in another chain that has 5 00:00:12,080 --> 00:00:14,200 Defy, you have to deposit it into that chain. 6 00:00:14,200 --> 00:00:16,600 And it's the same process as depositing to an exchange or 7 00:00:16,600 --> 00:00:18,920 another chain, right? You give it to someone who will 8 00:00:18,920 --> 00:00:21,720 safe keep it and then unsure that when you're withdrawing 9 00:00:21,720 --> 00:00:23,880 from that chain or platform that you get your Bitcoin back. 10 00:00:24,000 --> 00:00:26,560 Since we are so limited in what we can do in Bitcoin scripting 11 00:00:26,560 --> 00:00:29,480 language, bridging deposit custody logic has always been 12 00:00:29,480 --> 00:00:32,520 centralized so far. So I think the the biggest gap 2 13 00:00:32,520 --> 00:00:35,000 gaps here are UX to making Bitcoin more accessible. 14 00:00:35,240 --> 00:00:37,920 Because honestly, if you're an ETH user and you want to use 15 00:00:38,000 --> 00:00:39,720 theorem and defy, it's super easy, right? 16 00:00:40,160 --> 00:00:41,680 Use the protocol, you have aggregators. 17 00:00:41,680 --> 00:00:43,920 If all the tools are there, if you want to use Bitcoin, you 18 00:00:43,920 --> 00:00:47,040 have to 1st pick a bridge, understand the risks you have to 19 00:00:47,040 --> 00:00:50,320 deposit your Bitcoin from Bitcoin O1 into that bridge and 20 00:00:50,320 --> 00:00:52,000 then like all the interfaces look different. 21 00:00:52,000 --> 00:00:54,680 So you have this hurdle. So that is like the key concept 22 00:00:54,800 --> 00:00:56,600 of bit VM. There is no like virtual machine 23 00:00:56,680 --> 00:00:59,080 per SE involved. It's a way to defro proof some 24 00:00:59,080 --> 00:01:02,120 Bitcoin for the ever now. And that allows us to make this 25 00:01:02,120 --> 00:01:05,360 gigantic jump from the multi state bridge where if three out 26 00:01:05,360 --> 00:01:08,120 of five Cyanus collude, your assets are gone to bit VM. 27 00:01:08,120 --> 00:01:10,480 It's a bit more sophisticated in terms of how to describe 28 00:01:10,480 --> 00:01:12,960 security, but let's say we're 50 operators in bit VM. 29 00:01:13,040 --> 00:01:15,600 Even if all of them colludes, they cannot steal. 30 00:01:15,600 --> 00:01:18,840 As long as somewhere in the network there's one person to 31 00:01:18,840 --> 00:01:21,240 trigger a challenge, makes a transaction and says wait a 32 00:01:21,240 --> 00:01:24,880 second, these guys are trying to steal, your assets are safe. 33 00:01:25,280 --> 00:01:27,200 Welcome to Epicenter, the show which talks about the 34 00:01:27,200 --> 00:01:29,960 technologies, projects and people driving decentralization 35 00:01:30,080 --> 00:01:33,080 and the blockchain revolution. I'm Brian Crane and today I'm 36 00:01:33,080 --> 00:01:36,760 speaking with Alex A, who is the Co founder of Bob. 37 00:01:37,400 --> 00:01:41,440 Bob stands for Building on Bitcoin and it's you know, it's 38 00:01:41,440 --> 00:01:47,520 one of the most most far advanced and most interesting 39 00:01:47,720 --> 00:01:51,800 Bitcoin layer 2 Bitcoin defy projects. 40 00:01:52,120 --> 00:01:56,760 So I'm excited to speak with Alex A today to talk about Bob 41 00:01:56,760 --> 00:01:58,840 and talk about Bitcoin and Bitcoin Defy. 42 00:02:00,280 --> 00:02:03,160 Now just before we start the conversation with Alex say we'd 43 00:02:03,160 --> 00:02:05,920 like to share a few words from our sponsors this week. 44 00:02:07,640 --> 00:02:10,759 If you're looking to stake your crypto with confidence, look no 45 00:02:10,759 --> 00:02:14,640 further than Chorus one. 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Cool. 73 00:03:44,360 --> 00:03:47,440 Well, thanks so much Alexei for for coming on. 74 00:03:48,880 --> 00:03:50,320 Thanks for having me super excited. 75 00:03:51,960 --> 00:03:55,760 I always find it interesting to start with, you know, sort of 76 00:03:55,760 --> 00:03:58,840 your crypto, your personal crypto journey like how did you 77 00:03:58,840 --> 00:04:01,880 get into crypto and how have what have? 78 00:04:02,160 --> 00:04:04,800 Yeah, absolutely. So it's been 10 years for me 79 00:04:04,800 --> 00:04:06,880 since I kind of, you know, went down the rabbit hole with 80 00:04:06,880 --> 00:04:10,720 Bitcoin research. I started with Namecoin and that 81 00:04:10,720 --> 00:04:13,760 was kind of my first love in the space. 82 00:04:13,760 --> 00:04:16,200 And I got really excited, not just about, you know, Bitcoin, 83 00:04:16,200 --> 00:04:20,079 the sense of, of money and payments, but about censorship 84 00:04:20,079 --> 00:04:22,200 resistance and how we can build a better Internet. 85 00:04:22,200 --> 00:04:23,720 And Namecoin was the first altcoin. 86 00:04:23,720 --> 00:04:26,120 It tried to create a decentralized DNS so your 87 00:04:26,120 --> 00:04:28,160 websites can't be censored. You don't have to ask whether 88 00:04:28,160 --> 00:04:31,640 you can buy a domain. And from there, it turned into a 89 00:04:31,640 --> 00:04:33,800 bit of a random walk. I spent some time working on 90 00:04:33,800 --> 00:04:36,440 Namecoin, looking at merge mining then because Namecoin was 91 00:04:36,440 --> 00:04:39,360 the 1st blockchain that inherited Bitcoin security at 92 00:04:39,360 --> 00:04:43,240 the same like at the same time and spent like a lot of time 93 00:04:43,240 --> 00:04:45,440 looking and into kind of these kind of designs. 94 00:04:45,960 --> 00:04:48,960 Wrote the 1st paper on merge mining and like the good things 95 00:04:48,960 --> 00:04:51,960 and the bad things about it. I spent some time on Lightning. 96 00:04:52,240 --> 00:04:55,040 Never was a too big fan. It always felt a bit too 97 00:04:55,040 --> 00:04:57,840 complicated to me for the end users of all, of course, it is a 98 00:04:57,840 --> 00:05:03,080 very great interesting protocol and essentially after the block 99 00:05:03,080 --> 00:05:07,040 size wars personally also came to the conclusion like Bitcoin 100 00:05:07,040 --> 00:05:10,000 is very hard to change. We probably will not do this 101 00:05:10,000 --> 00:05:11,840 very often. There is no there's no chance 102 00:05:11,840 --> 00:05:14,440 that Bitcoin will have native L1 for contracts the same way that 103 00:05:14,440 --> 00:05:18,320 Ethereum has them. So let's figure out how we can 104 00:05:18,920 --> 00:05:22,680 unlock D5 or like more use cases for Bitcoin without changing the 105 00:05:22,680 --> 00:05:24,760 core protocol. So start looking at bridges, 106 00:05:24,760 --> 00:05:28,680 side chain designs, and that's ultimately what led to US 107 00:05:28,680 --> 00:05:31,360 building Bob and the reason we're building Bob and the 108 00:05:31,360 --> 00:05:36,120 reason for for this, I guess pursuit of something that's 109 00:05:36,120 --> 00:05:38,600 previously was considered the Holy Grail, no longer 110 00:05:38,960 --> 00:05:40,600 impossible. Now we actually have a blueprint 111 00:05:40,600 --> 00:05:44,320 to achieve this. But the pursuit of Bitcoin defy 112 00:05:44,400 --> 00:05:47,120 has always been driven by the fact that look, Bitcoin started 113 00:05:47,120 --> 00:05:50,520 this whole thing, right? It it's, it's the thing that 114 00:05:50,520 --> 00:05:53,480 kicked off this revolution in finance that we have the 115 00:05:53,480 --> 00:05:55,360 centralization. We are trying to build a better, 116 00:05:55,360 --> 00:05:56,760 more transparent financial system. 117 00:05:57,560 --> 00:06:01,360 But to do anything with Bitcoin other than payments, you are 118 00:06:01,360 --> 00:06:03,480 forced to go back to centralized providers, right? 119 00:06:03,480 --> 00:06:08,240 We we have centralized exchanges dominates Bitcoin holders mainly 120 00:06:08,240 --> 00:06:10,920 keep the Bitcoin and if they do something like trading or 121 00:06:10,920 --> 00:06:12,840 borrowing lending, they go to centralized providers. 122 00:06:13,160 --> 00:06:17,000 There is a subset of users that use Bitcoin and D5, but it it's 123 00:06:17,000 --> 00:06:19,800 all backed by centralized bridges, which is fine because 124 00:06:19,800 --> 00:06:21,800 we didn't have to better technology so far. 125 00:06:22,400 --> 00:06:25,640 But what always bugged me about this is it just makes no sense, 126 00:06:25,640 --> 00:06:27,040 right? Bitcoin is is the biggest 127 00:06:27,040 --> 00:06:29,120 digital asset out that has the biggest community, the best 128 00:06:29,120 --> 00:06:31,680 distribution. But what we're what it kind of 129 00:06:31,680 --> 00:06:34,040 feels like sometimes is that we're taking this new thing and 130 00:06:34,040 --> 00:06:35,840 then we're kind of plugging it back into the traditional 131 00:06:35,840 --> 00:06:38,040 financial system. Same with ETFs, right? 132 00:06:38,040 --> 00:06:40,480 It's both cure and curse. Yes, it's great because you have 133 00:06:40,480 --> 00:06:43,240 more distribution and you have people getting access to Bitcoin 134 00:06:43,240 --> 00:06:45,560 that would never have bought it otherwise because they know 135 00:06:45,560 --> 00:06:47,240 pension funds and like it's great. 136 00:06:47,600 --> 00:06:50,200 But at the others, on the other hand, if in five years, 10 years 137 00:06:50,200 --> 00:06:52,960 from now, we have to go to the bank and ask them, hey, can I 138 00:06:52,960 --> 00:06:55,640 use Bitcoin, then for me it's no longer Bitcoin, right? 139 00:06:55,640 --> 00:06:59,200 So that's why we're really pursuing this vision of creating 140 00:06:59,200 --> 00:07:02,640 a system that allows us to access Bitcoin and use it and 141 00:07:02,640 --> 00:07:05,760 define it as centralized matter, unlock use cases like trading, 142 00:07:05,760 --> 00:07:08,960 borrowing, lending more advanced products, be it even micro 143 00:07:08,960 --> 00:07:11,880 payments, be micro loans against Bitcoin to borrow stables. 144 00:07:12,280 --> 00:07:14,800 But that should be possible without asking permission of a 145 00:07:14,800 --> 00:07:17,800 centralized provider, because it is possible on Etherium and 146 00:07:17,800 --> 00:07:21,320 Salon and other chains, but it's not possible for Bitcoin, and 147 00:07:21,320 --> 00:07:24,600 Bitcoin is still bigger and will remain bigger than everything 148 00:07:24,600 --> 00:07:26,400 else combined for the foreseeable future. 149 00:07:28,720 --> 00:07:32,400 So I think you've talked a lot about like why Bitcoin Defy is 150 00:07:32,400 --> 00:07:35,000 so important and I totally agree with you. 151 00:07:35,920 --> 00:07:39,600 But why has it been so hard? I mean, it's been so many years 152 00:07:39,600 --> 00:07:45,080 and it still feels like it, you know, very little is, is working 153 00:07:45,080 --> 00:07:50,480 in his life today. Well, I mean, there's there's 154 00:07:50,480 --> 00:07:52,680 multiple challenges with D Phi, right? 155 00:07:52,680 --> 00:07:54,880 Even D Phi, Ethereum is still hard to use. 156 00:07:54,880 --> 00:07:58,800 I mean, we saw CZ from Pine admit that's totally fun. 157 00:07:58,800 --> 00:08:01,040 So I admit that they've never used D Phi before. 158 00:08:01,360 --> 00:08:03,720 Etherium Foundation is using D Phi for the first time, right. 159 00:08:04,040 --> 00:08:09,280 So you can see that it's still, you know, a process and D Phi 160 00:08:09,280 --> 00:08:11,080 has not yet reached mass adoption. 161 00:08:11,280 --> 00:08:14,160 Bitcoin has, however, as an asset. 162 00:08:14,200 --> 00:08:17,520 So I like, you know, and then the subset of people who are 163 00:08:18,000 --> 00:08:20,400 Bitcoin holders and use D5 is actually quite big. 164 00:08:20,400 --> 00:08:22,720 I would argue everybody who is using D5, right, also has 165 00:08:22,720 --> 00:08:24,840 Bitcoin. But the challenge that we're 166 00:08:24,840 --> 00:08:28,240 facing on the Bitcoin D5 side is that there's technical 167 00:08:28,240 --> 00:08:32,039 limitations, right? You have Bitcoin and D5 today, 168 00:08:32,240 --> 00:08:34,679 right? But since Bitcoin only exists on 169 00:08:34,679 --> 00:08:37,760 Bitcoin, and if you want to use it in another chain that has D5, 170 00:08:37,760 --> 00:08:39,520 you have to deposit it into that chain. 171 00:08:39,520 --> 00:08:41,880 And it's the same process as depositing into an exchange or 172 00:08:41,880 --> 00:08:44,840 another chain, right? You give it to someone who will 173 00:08:45,000 --> 00:08:48,040 safekeep it and then unsure that when you're withdrawing from 174 00:08:48,040 --> 00:08:50,080 that chain or platform that you get your Bitcoin back. 175 00:08:50,600 --> 00:08:53,760 And on Bitcoin, well, since we are so limited in what we can do 176 00:08:53,760 --> 00:08:57,520 in Bitcoin scripting language, this bridging deposit custody 177 00:08:57,520 --> 00:08:59,440 logic has always been centralized so far. 178 00:08:59,840 --> 00:09:02,160 And you ultimately have multi signatures. 179 00:09:02,160 --> 00:09:05,240 So you have three out of five signers or even if it's like 30 180 00:09:05,240 --> 00:09:07,520 out of 50, doesn't matter. You have a set of users that 181 00:09:07,520 --> 00:09:13,160 controls your Bitcoin and that means that you're you're taking 182 00:09:13,160 --> 00:09:15,800 quite big hits in terms of on the security assumptions. 183 00:09:15,840 --> 00:09:19,640 It's no longer self custodial, it's no longer risk free. 184 00:09:19,640 --> 00:09:22,040 You instantly have the centralization bridge risk. 185 00:09:22,400 --> 00:09:25,480 And I think the bridge hacks over the past years have just, 186 00:09:25,600 --> 00:09:28,280 you know, scared a lot of people from participating in this. 187 00:09:28,720 --> 00:09:31,400 Arguably, there's still a pretty big D5 market for Bitcoin, 188 00:09:31,400 --> 00:09:33,960 right? If you look at WBDCCBTC growing 189 00:09:33,960 --> 00:09:36,560 quickly, you have Bitcoin LS, DS emerging. 190 00:09:36,720 --> 00:09:39,480 So there is clearly demand and people always are looking for 191 00:09:39,480 --> 00:09:42,360 creative ways to get the best of both worlds. 192 00:09:42,360 --> 00:09:45,320 So like, you know, optimize security to the extent possible, 193 00:09:45,320 --> 00:09:52,120 but then still make it usable. So I think so far it's been 194 00:09:52,120 --> 00:09:54,720 these two things, right? D5 is still early per SE. 195 00:09:54,720 --> 00:09:58,840 The UX isn't great. Bitcoin's user base is huge, 196 00:09:58,840 --> 00:10:00,440 right? 300 million plus users. 197 00:10:00,440 --> 00:10:02,920 Not all of them know D5. Most of them actually probably 198 00:10:02,920 --> 00:10:05,000 don't know what D5 is. They probably don't know what an 199 00:10:05,000 --> 00:10:06,640 EMM is. They probably don't know how if 200 00:10:06,640 --> 00:10:11,400 it works and then but how like so if you look at from like from 201 00:10:11,400 --> 00:10:14,520 that angle, OK, yes, like not, not like the percentage of 202 00:10:14,520 --> 00:10:17,240 Bitcoin holders that actually use D5 is probably not as high 203 00:10:17,240 --> 00:10:20,400 as it should be. But then if you look at the D5 204 00:10:20,720 --> 00:10:25,040 user base and compare like that to like, if you basically look 205 00:10:25,040 --> 00:10:27,600 at, OK, how many of them actually have Bitcoin or how 206 00:10:27,600 --> 00:10:30,080 many of them have used Bitcoin in D5 using one of these 207 00:10:30,080 --> 00:10:32,560 wrappers, that percentage is actually going to be very, very 208 00:10:32,560 --> 00:10:35,960 high because the almost everyone is a Bitcoiner at heart. 209 00:10:35,960 --> 00:10:39,240 I would say everyone has Bitcoin just like a lot of Bitcoiners 210 00:10:39,240 --> 00:10:40,800 have Ethereum and other assets, right? 211 00:10:41,760 --> 00:10:45,280 So I think that the biggest gap, 2 gaps here are UX and making 212 00:10:45,280 --> 00:10:47,840 Bitcoin more accessible. Because honestly, if you're an 213 00:10:47,880 --> 00:10:50,440 ETH user and you want to use Ethereum and D5, it's super 214 00:10:50,440 --> 00:10:52,280 easy, right? You just you use the protocol, 215 00:10:52,280 --> 00:10:54,400 you have aggregators. If all the tools are there, if 216 00:10:54,400 --> 00:10:56,360 you want to use Bitcoin, you have to 1st pick a bridge, 217 00:10:56,640 --> 00:10:59,760 understand the risks you have to deposit your Bitcoin from 218 00:10:59,760 --> 00:11:02,880 Bitcoin O1 into that bridge. OK, Most bridges, like 219 00:11:02,920 --> 00:11:06,520 especially on the rapid EC side, the biggest of the ones you 220 00:11:06,560 --> 00:11:09,120 either, you know, if you want to actually mint the Bitcoin 221 00:11:09,120 --> 00:11:11,560 yourself, you have to go to a merchant, they'll KYC you, 222 00:11:11,560 --> 00:11:13,960 there'll be a minimum deposit. It's there's going to be fees. 223 00:11:16,160 --> 00:11:18,000 And then like all the interfaces look different. 224 00:11:18,000 --> 00:11:21,640 So you have this hurdle of like, OK, it's actually not easy to 225 00:11:21,640 --> 00:11:24,440 just get your Bitcoin into Defy. And then that's also something 226 00:11:24,440 --> 00:11:27,640 we've been working to fix, just like make it super easy for an 227 00:11:27,640 --> 00:11:30,480 existing Defy user to access their Bitcoin that's maybe in 228 00:11:30,480 --> 00:11:33,720 the Ledger and they haven't used so far, but not want to actually 229 00:11:33,720 --> 00:11:36,400 experiment with it. And at the other end, it's of 230 00:11:36,400 --> 00:11:40,120 course the security challenges with so far all the bridges have 231 00:11:40,120 --> 00:11:41,880 been centralized. Yeah. 232 00:11:41,880 --> 00:11:45,080 So let's talk about the bridges. I think that is absolutely one 233 00:11:45,080 --> 00:11:47,520 of the most important topics. I mean, you pointed out right 234 00:11:47,520 --> 00:11:51,880 today the vast majority of Bitcoin that's held somewhere 235 00:11:51,880 --> 00:11:54,080 else at what I think first of all is probably held on 236 00:11:54,080 --> 00:11:58,480 Ethereum. And then of that, the vast 237 00:11:58,480 --> 00:12:04,480 majority is in WBTC, which is big Go version of Bitcoin and 238 00:12:04,480 --> 00:12:07,360 then Coinbase's version of Bitcoin, CBBTC. 239 00:12:08,080 --> 00:12:11,760 So but let's let's ignore that part for a moment. 240 00:12:11,760 --> 00:12:13,720 I'm curious about the other part, right? 241 00:12:13,720 --> 00:12:18,960 That's more in, in some kind of on chain decentralized way, like 242 00:12:18,960 --> 00:12:22,080 what's the status there? What do you think are the best 243 00:12:22,080 --> 00:12:29,520 solutions and which ones would you trust or prefer? 244 00:12:32,120 --> 00:12:35,000 Well, I think trust is, is perceived, right? 245 00:12:35,000 --> 00:12:38,440 There is no, it's subjective. It's it's user by user. 246 00:12:38,440 --> 00:12:40,000 Everybody has a different notion of trust. 247 00:12:40,000 --> 00:12:43,280 And that's also something Bitcoiners have learned. 248 00:12:43,280 --> 00:12:46,160 If you look at lightning, for example, right, Yes, you can use 249 00:12:46,160 --> 00:12:48,480 itself, you can operate it yourself, but most people trust 250 00:12:48,480 --> 00:12:51,280 a provider then themselves with managing their keys and like 251 00:12:51,280 --> 00:12:54,440 managing the little set up. You have a lot of institutions 252 00:12:54,440 --> 00:12:59,560 that will just not care about a minor security improvements and 253 00:12:59,560 --> 00:13:02,560 hence will prefer to using a custodial solution with an 254 00:13:02,560 --> 00:13:05,160 institutional custodian where they just know the business that 255 00:13:05,160 --> 00:13:07,920 has the Bitcoin. But maybe stepping us like 256 00:13:07,920 --> 00:13:10,520 taking a step back, as mentioned, right, if you want to 257 00:13:10,520 --> 00:13:12,920 use Bitcoin on another platform, whether it's a centralized 258 00:13:12,920 --> 00:13:15,440 exchange, Ethereum or Bitcoin layer two, you have to deposit 259 00:13:15,440 --> 00:13:17,680 it into that platform, you're giving up custody. 260 00:13:17,840 --> 00:13:20,760 That's just how it works, right? You're always losing custody. 261 00:13:21,000 --> 00:13:23,400 And the biggest question of bridging is how do I get the 262 00:13:23,400 --> 00:13:25,440 Bitcoin back? Like if I'm unwrapping what I've 263 00:13:25,440 --> 00:13:27,960 sent it to you, Brian, and then you want to unwrap and get you a 264 00:13:27,960 --> 00:13:30,360 get the Bitcoin back that you've purchased on Bitcoin O1. 265 00:13:30,680 --> 00:13:33,560 How do we enforce that? And then the ideal case, right? 266 00:13:33,560 --> 00:13:36,080 If you look at chains like ecosystem like Cosmos and Polka 267 00:13:36,080 --> 00:13:40,400 dots, which specialized like in being interconnected with each 268 00:13:40,480 --> 00:13:42,840 other, having these chains interconnected, what you do 269 00:13:42,840 --> 00:13:45,040 there is you have two chains that verify each other. 270 00:13:45,040 --> 00:13:49,240 So when I'm minting, when I'm locking my Bitcoin to let's say 271 00:13:49,320 --> 00:13:52,240 Bob, Bob as a chain will verify that the Bitcoin has been 272 00:13:52,240 --> 00:13:54,440 locked. And then when I'm withdrawing, 273 00:13:54,440 --> 00:13:57,200 so I'm burning the rapid TC on Bob and I'm getting them on 274 00:13:57,200 --> 00:14:00,160 Bitcoin. Bitcoin should verify like, Oh 275 00:14:00,160 --> 00:14:03,680 yeah, whereas you're burning this on Bob, here's your Bikram 276 00:14:03,680 --> 00:14:06,000 backlack and you should have a smart contract on Bitcoin that 277 00:14:06,000 --> 00:14:09,280 manages the custody of the assets while they're bridged. 278 00:14:09,840 --> 00:14:13,200 Now the problem is that Bitcoin just so far could not do that. 279 00:14:13,640 --> 00:14:16,120 And what you then had is you were, we were emulating this 280 00:14:16,120 --> 00:14:18,040 smart contract logic that you could build let's say on 281 00:14:18,040 --> 00:14:20,240 Ethereum or in Cosmos shades or in Polka dot and other 282 00:14:20,240 --> 00:14:23,040 ecosystems with smart contract logic on Bitcoin went to 283 00:14:23,040 --> 00:14:24,760 emulated using a trusted third party. 284 00:14:25,280 --> 00:14:27,640 And they were trying to distribute that trust as much as 285 00:14:27,640 --> 00:14:30,600 possible, where Bitcoin totally has many keys. 286 00:14:31,040 --> 00:14:33,640 And then you have systems like TBTC, which in public, right, 287 00:14:33,640 --> 00:14:36,200 there's like anonymous signers and there's like 30 to 50, maybe 288 00:14:36,200 --> 00:14:39,320 more, I think by now, which have these keys. 289 00:14:39,320 --> 00:14:40,840 And it's, but the model is always the same. 290 00:14:41,120 --> 00:14:44,320 If the majority is honest, everything's fine. 291 00:14:44,320 --> 00:14:46,760 But if the majority is dishonest, they can steal your 292 00:14:46,760 --> 00:14:49,400 money. And it's not that people like, 293 00:14:49,520 --> 00:14:52,000 it's not that these bridge operators actually collude to 294 00:14:52,000 --> 00:14:54,840 steal, it's just that they could get hacked, right? 295 00:14:54,840 --> 00:14:57,280 It's also like we've seen with the Bivate attack today doesn't 296 00:14:57,280 --> 00:14:59,800 mean that somebody's malicious. These attacks are very 297 00:14:59,800 --> 00:15:01,840 sophisticated and they could just be executed. 298 00:15:01,840 --> 00:15:05,680 And if you know who to target, you just hack a few devices that 299 00:15:05,680 --> 00:15:08,200 the fewer devices you need them, more likely it is that you can 300 00:15:08,200 --> 00:15:11,480 get hacked. And then what we've seen so far 301 00:15:11,480 --> 00:15:14,840 is in this model, right? Why is TBTC V2 struggle to get 302 00:15:14,840 --> 00:15:16,160 more adoption? I mean, we've worked with the 303 00:15:16,160 --> 00:15:19,000 TBTC team very closely on the Bob side as well. 304 00:15:19,000 --> 00:15:22,320 And the feedback we received from many OG Bitcoin holders for 305 00:15:22,320 --> 00:15:24,080 a lot of them are institutionalized big 306 00:15:24,080 --> 00:15:28,520 institutions funds for them, the security upgrade between a 307 00:15:28,520 --> 00:15:31,160 trusted multi CIG where you have a company behind it's like 308 00:15:31,160 --> 00:15:35,480 Pitco's rapid TC or corn misses to OK, it's it's a multi CIG, 309 00:15:35,480 --> 00:15:37,640 but now there's more sinus but I don't know who they are. 310 00:15:37,840 --> 00:15:40,600 That step doesn't make sense for them because for them trust is 311 00:15:40,600 --> 00:15:43,680 perceived. They prefer the legal risk over 312 00:15:43,680 --> 00:15:46,040 the technical risk where they don't know how the system works. 313 00:15:46,040 --> 00:15:49,040 And you have to build a lot of trust over time for people to 314 00:15:49,040 --> 00:15:51,520 make that transition, right. You have to have a lot of TBL in 315 00:15:51,520 --> 00:15:55,400 that more decentralized bridge for people to start using it. 316 00:15:56,200 --> 00:15:58,840 And it's just like with with yield as well. 317 00:15:58,840 --> 00:16:01,280 Big institutions, right? They don't move the Bitcoin 318 00:16:01,280 --> 00:16:04,280 unless there's a big opportunity or big, big improvement. 319 00:16:04,280 --> 00:16:06,800 And same as bridges, unless there's a big improvement to a 320 00:16:06,800 --> 00:16:09,160 multi SEC controlled by a custodian, they're not going to 321 00:16:09,400 --> 00:16:12,200 you're not going to budget. And that's where bit VM comes 322 00:16:12,200 --> 00:16:15,240 into play. That's where basically we're 323 00:16:15,240 --> 00:16:16,840 looking at. There's like light at the end of 324 00:16:16,840 --> 00:16:19,840 the tunnel. We now have a way to move away 325 00:16:19,840 --> 00:16:23,400 from multi sig designs on Bitcoin and transition to a 326 00:16:23,400 --> 00:16:26,440 system which is very close to this like client design where 327 00:16:26,440 --> 00:16:31,720 Bitcoin actually verifies that you're withdrawing back onto 328 00:16:31,720 --> 00:16:33,520 Bitcoin layer one from the layer 2. 329 00:16:34,040 --> 00:16:37,240 And with bit VM you have this model that it, it's basically 330 00:16:37,800 --> 00:16:39,960 for those of you who are not super familiar, a good 331 00:16:39,960 --> 00:16:42,760 comparison is arbitrary money theorem rights or optimism money 332 00:16:42,760 --> 00:16:44,880 theorem. It's a fraud proof based design. 333 00:16:45,320 --> 00:16:50,520 And the key concept here is that we run some execution of chain, 334 00:16:50,520 --> 00:16:52,160 we run the verification off chain. 335 00:16:52,160 --> 00:16:56,280 And if the operators misbehave, they can be challenged and we 336 00:16:56,280 --> 00:16:58,680 can prevent thefts. So that is like the key concept 337 00:16:58,840 --> 00:17:00,600 of bit VM. There is no like virtual machine 338 00:17:00,680 --> 00:17:03,640 per SE involved. It's a way to defrob proof some 339 00:17:03,640 --> 00:17:07,119 Bitcoin for the first time ever now, and that allows us to make 340 00:17:07,119 --> 00:17:11,240 this gigantic jump from OK, you have a multi sick bridge where 341 00:17:11,240 --> 00:17:14,640 if three or five signers colludio assets are gone to OK 342 00:17:14,640 --> 00:17:17,200 in bits VM, it's a bit more sophisticated in terms of how to 343 00:17:17,200 --> 00:17:19,560 describe security, but there's two things we can look at. 344 00:17:20,560 --> 00:17:22,400 Let's say we're 50 operators in bit VM. 345 00:17:22,720 --> 00:17:27,560 Even if all of them colludes, they cannot steal as long as 346 00:17:27,560 --> 00:17:30,120 somewhere in the network this there's one person. 347 00:17:30,120 --> 00:17:32,440 This could be you, me, anyone. The person was using the bridge 348 00:17:32,440 --> 00:17:34,440 at that moment to trigger a challenge. 349 00:17:35,080 --> 00:17:37,480 As long as somebody within the period of time, let's say a few 350 00:17:37,480 --> 00:17:41,480 days or a few hours, usually we work with like 7 days, makes a 351 00:17:41,480 --> 00:17:44,200 transaction and says, wait a second, these guys are trying to 352 00:17:44,200 --> 00:17:46,160 steal. Your assets are safe. 353 00:17:47,160 --> 00:17:49,480 And even if all fifty of them collude, the worst thing they 354 00:17:49,480 --> 00:17:52,200 could do is, is basically hold your funds captive. 355 00:17:52,200 --> 00:17:54,160 They can freeze your money, but they cannot steal it. 356 00:17:54,160 --> 00:17:57,360 Meaning that the incentive to collude is actually very low. 357 00:17:57,360 --> 00:17:59,640 And the game theory behind it becomes quite interesting 358 00:17:59,640 --> 00:18:03,200 because if you're 50 operators, they don't know if the other if 359 00:18:03,200 --> 00:18:05,200 like if they're trying to collude, try to collude and 360 00:18:05,200 --> 00:18:09,440 coordinate around 50 people that are anonymous, where if any one 361 00:18:09,440 --> 00:18:12,800 of them decides to actually be honest and not not attack the 362 00:18:12,800 --> 00:18:14,880 system, they'll kick out everybody else and penalize 363 00:18:14,880 --> 00:18:16,240 them. And, and to actually make money 364 00:18:16,240 --> 00:18:18,520 off this. So that from game three 365 00:18:18,520 --> 00:18:21,760 perspective, makes it very, very hard to even run a coordinate 366 00:18:21,760 --> 00:18:24,880 attack to freeze funds. And then of course, stealing is 367 00:18:24,880 --> 00:18:28,200 just almost impossible. And that is such a huge security 368 00:18:28,200 --> 00:18:33,320 upgrade that we think, OK, that is something where over time 369 00:18:33,320 --> 00:18:37,200 people will transition over as we build trust in bit VM because 370 00:18:37,200 --> 00:18:42,160 it's just such a jump from OK, three to five can steal 2, 371 00:18:42,240 --> 00:18:43,840 right? As long as one person's online, 372 00:18:43,840 --> 00:18:47,080 my assets are safe. I want to understand a little 373 00:18:47,080 --> 00:18:50,640 bit better, you know, bit VM and what bit BM is. 374 00:18:50,640 --> 00:18:56,560 I mean, you mentioned 50 operators here, so but bit VM, 375 00:18:56,560 --> 00:18:58,920 first of all, it's not an upgrade to Bitcoin. 376 00:18:58,920 --> 00:19:01,400 No, there's no changes to Bitcoin itself. 377 00:19:03,040 --> 00:19:05,520 Correct. But the beauty of bit VM is that 378 00:19:06,160 --> 00:19:08,040 it it works with Bitcoin as it is today. 379 00:19:08,040 --> 00:19:10,560 Of course like any additional upper up codes on Bitcoin make 380 00:19:10,560 --> 00:19:16,200 it easier and help us, but you don't need to change Bitcoin and 381 00:19:16,200 --> 00:19:20,200 that I think is is what makes it so exciting like it works as of 382 00:19:20,200 --> 00:19:24,960 today. And and then bit VM is, is what 383 00:19:24,960 --> 00:19:31,160 it's some kind of standard for how you write scripts that and 384 00:19:31,200 --> 00:19:35,720 and have them verified on Bitcoin or or like or how does 385 00:19:35,720 --> 00:19:41,200 it work bit VM? So, so if we a very good example 386 00:19:41,200 --> 00:19:44,400 of explaining bit VM is, is let's say we want to run like a 387 00:19:44,400 --> 00:19:48,000 multiplication program in Bitcoin and right, very simply 388 00:19:48,000 --> 00:19:51,040 want to multiply to numbers. And let's say it's a difficult 389 00:19:51,040 --> 00:19:53,800 task like multiplication. Of course, like we wouldn't use 390 00:19:53,800 --> 00:19:56,160 it for multiplication, use it for more advances, things like 391 00:19:56,160 --> 00:19:57,920 bridges. But let's use multiplication as 392 00:19:57,920 --> 00:20:00,520 example. Now what the first thing we have 393 00:20:00,520 --> 00:20:02,800 to clear up is what many people don't know is that using bit 394 00:20:02,800 --> 00:20:06,080 conscript, you can write any program, you can do universal 395 00:20:06,080 --> 00:20:11,480 computation in bit conscript, but it's very inefficient. 396 00:20:11,920 --> 00:20:14,400 And the way to think about it is something that is maybe fine 397 00:20:14,400 --> 00:20:19,560 lines of code in Solidity is is going to be like 1000 lines of 398 00:20:19,560 --> 00:20:24,960 code using bit conscript. And that means that you know, 399 00:20:24,960 --> 00:20:27,000 with these like, it's just so much bigger. 400 00:20:27,000 --> 00:20:30,520 So if, for example, if you want to write like multiply to 401 00:20:30,520 --> 00:20:34,720 numbers in on the theorem, you just write a multiply like times 402 00:20:34,720 --> 00:20:36,880 B. You don't think about how to 403 00:20:36,880 --> 00:20:39,240 build multiplication is just a function that's available right 404 00:20:39,240 --> 00:20:41,120 to you as a programmer, super easy. 405 00:20:41,120 --> 00:20:43,320 You don't think about it. Well, in Bitcoin, you actually 406 00:20:43,320 --> 00:20:45,760 have to build it yourself, like using logical gates. 407 00:20:46,240 --> 00:20:49,400 You actually have to build your multiplication, which is just 408 00:20:49,400 --> 00:20:50,760 super inefficient. You can fit like 3 409 00:20:50,760 --> 00:20:53,160 multiplications in a single Bitcoin block if you write them 410 00:20:53,160 --> 00:20:55,440 out all yourself, which is right. 411 00:20:55,440 --> 00:20:57,440 So I mean, you can think about is that you're just adding the 412 00:20:57,440 --> 00:20:58,960 numbers instead of actually multiplying. 413 00:20:59,640 --> 00:21:01,880 So that's the limitation. But in theory, we can write 414 00:21:01,880 --> 00:21:04,520 anything. And So what we do in bit VM is 415 00:21:04,520 --> 00:21:08,040 we, we take a program and we basically we, you know, let's 416 00:21:08,040 --> 00:21:11,360 say this multiplication program, we split it up as we would in 417 00:21:11,360 --> 00:21:13,520 bit conscript. So let's say like while on 418 00:21:13,520 --> 00:21:15,400 solidity in solidity and the theorem, it's like one line in 419 00:21:15,400 --> 00:21:18,680 Bitcoin, it's like you just add, add, add, add, add, add, add. 420 00:21:19,000 --> 00:21:21,120 So let's say we're we're multiplying 2 * 10. 421 00:21:21,120 --> 00:21:23,080 So in Bitcoin script, you'd basically, and again, I'm 422 00:21:23,080 --> 00:21:25,960 oversimplifying this to visualize it, but you'd be like, 423 00:21:25,960 --> 00:21:31,200 OK, 2 + 2 + 2 + 2 + 2 + 2 + 2. And what we do in bit like. 424 00:21:31,200 --> 00:21:34,000 And then let's assume that this program is too big, right? 425 00:21:34,000 --> 00:21:36,280 Of course it can, like multiplication can probably get 426 00:21:36,280 --> 00:21:40,040 in, but think about it now as, OK, we're actually very fine. 427 00:21:40,040 --> 00:21:43,000 If you burn something like the wrapped acid on the other chain 428 00:21:43,000 --> 00:21:45,040 where you have to check the consensus rules and usually 429 00:21:45,040 --> 00:21:48,520 we'll use a ZK proof and you need to plug in the ZK verifier 430 00:21:48,800 --> 00:21:51,960 into Bitcoin script. And that ZK verifier is 431 00:21:51,960 --> 00:21:56,480 currently, I mean, it's down to 400 megabytes, but it's still 432 00:21:56,480 --> 00:21:58,160 way too big. It doesn't fit into a block. 433 00:21:58,160 --> 00:21:59,920 A Bitcoin block is 4 megabytes in size. 434 00:21:59,920 --> 00:22:01,280 Like we've really optimized that. 435 00:22:01,280 --> 00:22:04,160 It just doesn't work. So what we do is we chunk it up 436 00:22:04,840 --> 00:22:06,800 just like with this multiplication example, we take 437 00:22:06,800 --> 00:22:09,720 it and we split into subprograms that if you run them all after 438 00:22:09,720 --> 00:22:11,240 the other, you get the same results. 439 00:22:12,320 --> 00:22:16,720 And then what we do in BITS VM is we say, OK, you will. 440 00:22:16,720 --> 00:22:19,720 Now as an operator, you're going to commit using on stream 441 00:22:19,720 --> 00:22:22,920 commitments that, and this is what we actually do in script, 442 00:22:23,240 --> 00:22:25,640 that you're going to run exactly this program. 443 00:22:25,640 --> 00:22:27,640 Like you and I will agree, you're going to run exactly this 444 00:22:27,640 --> 00:22:28,640 program. Let's say it's this like a 445 00:22:28,640 --> 00:22:31,000 multiplication example. You and I agree that you're 446 00:22:31,000 --> 00:22:33,880 going to run this multiplication on, on, on off chain and then 447 00:22:33,880 --> 00:22:35,920 you're going to give me the results and post it on chain. 448 00:22:37,200 --> 00:22:38,880 And then as an operator, you're going to run it. 449 00:22:39,080 --> 00:22:42,640 So you've multiplied 2 * 10 and then if you write 20, I clearly 450 00:22:42,640 --> 00:22:43,960 can verify it. It's correct. 451 00:22:43,960 --> 00:22:45,680 You run exactly the program that you're supposed to. 452 00:22:45,680 --> 00:22:49,960 We're good now if you say it's 19, which is clearly wrong, I 453 00:22:49,960 --> 00:22:52,120 can see that I'm going to challenge you. 454 00:22:52,120 --> 00:22:53,480 So I'm going to say wait a second. 455 00:22:53,960 --> 00:22:57,400 You're lying because I know that this like I ran it off chain on 456 00:22:57,400 --> 00:22:59,880 my machine. I know that this is this is 457 00:22:59,880 --> 00:23:01,480 wrong. Now I just need to find out 458 00:23:01,480 --> 00:23:04,960 where you modified the program so I can prove to all the 459 00:23:04,960 --> 00:23:08,120 Bitcoin full nodes that you're cheating and then prevent you 460 00:23:08,120 --> 00:23:11,160 from taking money out of this, out of this bit VM deposit. 461 00:23:12,000 --> 00:23:14,640 And let's assume like I put some money in and if you give me the 462 00:23:14,640 --> 00:23:16,360 right answer, you're going to you're able to take it out. 463 00:23:16,360 --> 00:23:17,840 So I'm paying you for computation. 464 00:23:17,840 --> 00:23:20,480 A very simple example. So what I'll do is I'll post a 465 00:23:20,560 --> 00:23:24,520 challenge transaction and that gives you 7 days or whatever if 466 00:23:24,520 --> 00:23:27,600 or a few hours. It's a parameter to respond and 467 00:23:27,600 --> 00:23:31,240 when you have to respond by posting the intermediary results 468 00:23:31,320 --> 00:23:33,680 of your computation. So what you're going to do is 469 00:23:33,680 --> 00:23:36,680 you're going to start with 0246 because you're always adding 470 00:23:36,680 --> 00:23:39,600 two, right? 246810 and then let's say at 471 00:23:39,600 --> 00:23:42,440 some point you say 11 and then it's 3015. 472 00:23:42,440 --> 00:23:45,760 So you clearly that's that's wrong, like like 10 + 2 is not 473 00:23:45,760 --> 00:23:48,760 11, right? But I will see that I will see 474 00:23:48,760 --> 00:23:52,160 that in this step that's exactly where you've tried to cheat. 475 00:23:53,040 --> 00:23:55,760 And then I'll, what I'll do is I'll take that subprogram 476 00:23:55,760 --> 00:23:57,920 exactly. Only this piece that takes us 477 00:23:57,920 --> 00:24:01,720 input tenant adds 2 and I'm going to run it in a Bitcoin 478 00:24:01,720 --> 00:24:04,200 transaction and I'm going to link it back to the commitments 479 00:24:04,200 --> 00:24:08,120 you've made using Bitcoin script and like Lamport signatures, 480 00:24:08,120 --> 00:24:10,960 which is a cool concept, but we don't have to go into that in 481 00:24:10,960 --> 00:24:13,080 detail. But what, what this allows me to 482 00:24:13,080 --> 00:24:17,560 do is I can prove to everyone on Bitcoin that you've cheated 483 00:24:17,560 --> 00:24:21,480 because I can show, look, you're saying that running this program 484 00:24:21,480 --> 00:24:25,160 gives 11 as a result. But it's actually, if I run it 485 00:24:25,160 --> 00:24:28,040 on cheat and all the full notes will check it, it's 12, you're 486 00:24:28,040 --> 00:24:30,120 cheating, you'll not get the money out. 487 00:24:30,800 --> 00:24:34,280 And now if we take a step back and think about the bridging in 488 00:24:34,280 --> 00:24:36,880 this, in the bridging case, you could be trying to manipulate 489 00:24:36,880 --> 00:24:39,280 the recipient address. So you're as an operator, you're 490 00:24:39,280 --> 00:24:41,320 supposed to send a Bitcoin to me, but you're sending it to 491 00:24:41,320 --> 00:24:45,040 yourself, right? And since we know exactly what 492 00:24:45,040 --> 00:24:47,200 the program should look like because we've agreed on like 493 00:24:47,320 --> 00:24:49,120 this is what you're going to do and you're committed to it on 494 00:24:49,120 --> 00:24:52,400 chain with using like on chain commitments, I can always prove 495 00:24:52,400 --> 00:24:55,320 that you're cheating. And the cool thing is this only 496 00:24:55,320 --> 00:24:58,240 requires 2 transactions, right? I challenge you respond and then 497 00:24:58,240 --> 00:25:00,560 I prove and we're done. And these transactions are not 498 00:25:00,560 --> 00:25:06,480 cheap, but I can guarantee that's every bit control node 499 00:25:06,480 --> 00:25:08,800 will know that you're misbehaving and prevent you from 500 00:25:08,800 --> 00:25:12,880 accessing the funds, which in the bridge case is very good 501 00:25:12,880 --> 00:25:15,880 because that means you as an operator, if you're trying to 502 00:25:15,880 --> 00:25:18,680 steal funds from Bitcoin, I can prevent you from doing that. 503 00:25:19,080 --> 00:25:21,880 I will invalidate your attempt to withdraw basically. 504 00:25:23,240 --> 00:25:25,520 Yeah. So the CK verify was like 400 505 00:25:25,520 --> 00:25:28,960 megabytes. So like you would break it into 506 00:25:31,160 --> 00:25:36,800 like, I don't know, I, I mean 400 parts of one MB or something 507 00:25:36,800 --> 00:25:39,280 or. Actually I, I got it wrong. 508 00:25:39,280 --> 00:25:44,000 So it's one GB in size and just in current practice writes where 509 00:25:44,200 --> 00:25:46,560 it's currently the sizing is 1 gigabyte after with 510 00:25:46,560 --> 00:25:48,200 optimizations. And what we're doing is we're 511 00:25:48,200 --> 00:25:51,840 breaking into chunks of 400 kilobytes, but the these chunks 512 00:25:51,840 --> 00:25:53,840 could be maximum 4 megabytes in size. 513 00:25:54,280 --> 00:25:56,680 But then there's like a balance between like, do you make the 514 00:25:56,680 --> 00:25:59,120 chunk smaller? So it's cheaper for me to to to 515 00:25:59,360 --> 00:26:02,000 challenge you and to prove you wrong or to make it cheaper for 516 00:26:02,000 --> 00:26:04,160 the operator to respond. Like there's some like 517 00:26:04,400 --> 00:26:06,440 parameters that you can move back and forth, but that's 518 00:26:06,440 --> 00:26:10,200 basically the idea. If that challenge happens, 400 519 00:26:10,560 --> 00:26:15,640 kilobyte, OK, that's like a 10th of a Bitcoin block size. 520 00:26:15,640 --> 00:26:18,880 So, OK, probably pretty expensive or or how much does 521 00:26:18,880 --> 00:26:23,760 that cost in terms of fees? I mean there is like a fact like 522 00:26:23,760 --> 00:26:26,120 you have to model the fees. We don't know how the Bitcoin 523 00:26:26,120 --> 00:26:28,560 fees are like how the Bitcoin price and the Bitcoin like fee 524 00:26:28,560 --> 00:26:32,080 market is going to develop. So that is of course something 525 00:26:32,080 --> 00:26:35,040 we have to pay attention to. And the idea is that as an 526 00:26:35,040 --> 00:26:37,360 operator you're pre depositing some amount of Bitcoin, let's 527 00:26:37,360 --> 00:26:40,200 say 0.1 to one BTC, right, Could be less. 528 00:26:40,560 --> 00:26:43,800 But that is used to, if you misbehave, that we take that 529 00:26:43,800 --> 00:26:47,680 money and that's used to reimburse like, or to cover the 530 00:26:47,680 --> 00:26:52,520 costs of somebody challenging you or like there's some cost to 531 00:26:52,520 --> 00:26:55,320 the operator for like also not like misbehaving. 532 00:26:56,800 --> 00:27:00,840 But the, the, the main point here is that the, these costs 533 00:27:01,480 --> 00:27:04,640 and the maybe some deposits the operator has to make to offset 534 00:27:04,640 --> 00:27:06,320 these costs for potential challengers. 535 00:27:06,320 --> 00:27:08,800 So like, you know, if I'm challenging, I don't pay my, the 536 00:27:08,800 --> 00:27:11,840 costs myself. All of this is completely 537 00:27:11,840 --> 00:27:15,760 independent to the TDL to the amount of Bitcoin deposited. 538 00:27:16,520 --> 00:27:19,760 So sure, if you have only like 10 BTC in the system paying zero 539 00:27:19,800 --> 00:27:24,480 like 0.1 percent, 0.1 BTC and like cost of challenging is 540 00:27:24,480 --> 00:27:28,040 quite high. If you have 100,000 Bitcoin 541 00:27:28,040 --> 00:27:31,200 deposited, it's nothing, right? And so bit VM, it's like 542 00:27:32,480 --> 00:27:34,560 security is always, you know, there's no perfect security. 543 00:27:34,560 --> 00:27:37,120 You always have to balance the like cost versus benefit. 544 00:27:37,120 --> 00:27:39,880 And if you have a small system that has no TBL, then using bit 545 00:27:39,880 --> 00:27:43,560 VM as an overkill. If you're a big Bitcoin L2 that 546 00:27:43,560 --> 00:27:45,880 is getting a lot of TBL, then yes, you should definitely use 547 00:27:45,880 --> 00:27:48,320 it because there is some costs associated. 548 00:27:48,320 --> 00:27:51,080 But if you have a lot of TBL, your chin is making fees. 549 00:27:51,080 --> 00:27:53,840 You can have a pot that will offset any operational 550 00:27:53,840 --> 00:27:57,040 challenging costs for people to who actually enforcing safety. 551 00:27:57,040 --> 00:27:59,200 Right. So the economics can be modelled 552 00:27:59,200 --> 00:28:03,040 and it it basically scales with size, the bigger the cheaper it 553 00:28:03,040 --> 00:28:04,880 gets. Yeah, Yeah. 554 00:28:04,880 --> 00:28:07,760 I mean, I guess it's it's like with all these fraud systems, 555 00:28:07,760 --> 00:28:09,120 right. In the end, you're trying to 556 00:28:09,120 --> 00:28:14,720 create incentives such that such that you know, it never makes 557 00:28:14,720 --> 00:28:19,080 sense to try to attack it. And then you never actually have 558 00:28:19,080 --> 00:28:22,160 to go through this and you never have to pay all this. 559 00:28:23,040 --> 00:28:25,960 But then of course, you still need to have the situation that 560 00:28:26,720 --> 00:28:31,120 let's say you don't get to a point where maybe it would be so 561 00:28:31,120 --> 00:28:35,360 expensive to get this challenge into the Bitcoin chain that like 562 00:28:35,360 --> 00:28:40,240 it's not worth for anyone to like challenge anything or, or 563 00:28:40,240 --> 00:28:43,200 like maybe maybe you'd even struggle to get it in at all, 564 00:28:44,840 --> 00:28:46,840 you know? So I guess that that is still a 565 00:28:46,840 --> 00:28:48,320 scenario you have to worry about. 566 00:28:49,600 --> 00:28:52,200 Oh, absolutely. I mean, there is no like perfect 567 00:28:52,360 --> 00:28:54,400 safety in that there's always risk associated. 568 00:28:54,400 --> 00:28:56,360 And in this case, you have to trust that there's someone 569 00:28:56,360 --> 00:28:58,440 online that will post a transaction and that transaction 570 00:28:58,440 --> 00:28:59,760 will get into the Bitcoin blockchain. 571 00:29:00,400 --> 00:29:02,600 But to prevent that transaction from and then now it's a 572 00:29:02,600 --> 00:29:04,880 question of fees, right? If you have a big like, for 573 00:29:04,880 --> 00:29:07,240 example, for us as Bob, like we'll have a pots like, if 574 00:29:07,240 --> 00:29:09,240 you're willing to, you can crowd from this transaction. 575 00:29:09,240 --> 00:29:12,280 First of all, you can multiple users can come together, provide 576 00:29:12,280 --> 00:29:15,520 the the inputs of the fees or and then we can have a pot on 577 00:29:15,520 --> 00:29:17,920 Bob that basically again verifies that, oh, if you've 578 00:29:17,920 --> 00:29:21,440 made a successful challenge, here's a pots, here's a bounty 579 00:29:21,440 --> 00:29:23,760 for you to actually, you know, reclaim actually make some money 580 00:29:23,760 --> 00:29:25,840 on this. Because again, if we have a lot 581 00:29:25,840 --> 00:29:27,960 of TVL, that system generates fees. 582 00:29:28,240 --> 00:29:31,120 Part of that has to be reinvested into security and 583 00:29:31,120 --> 00:29:33,640 that is this that's what we have bug bounties and what not to 584 00:29:33,640 --> 00:29:36,920 invest in audits. And if you look at this, the 585 00:29:36,920 --> 00:29:39,920 numbers like purchasing in the worst case you like what's the 586 00:29:39,920 --> 00:29:41,440 worst case? You have to buy a full block. 587 00:29:41,440 --> 00:29:43,320 That's like say the worst, worst case scenario. 588 00:29:43,560 --> 00:29:46,360 The average cost over the last two years to buy a full Bitcoin 589 00:29:46,360 --> 00:29:49,200 block in terms of fees was 0.120.3 BTC. 590 00:29:50,160 --> 00:29:54,640 So again, it's not cheap, but it's also not the end of the 591 00:29:54,640 --> 00:29:58,080 world when it's actually doable, especially if you think that 592 00:29:58,080 --> 00:30:01,320 this could be securing a multibillion dollar ecosystem. 593 00:30:02,760 --> 00:30:06,320 If it's securing $10, OK, then no, that doesn't make sense. 594 00:30:06,320 --> 00:30:09,440 So yeah, but we're talking about, again, about unlocking 595 00:30:09,440 --> 00:30:13,080 Bitcoin Defy, you have 2050 to 20 billion depending on the 596 00:30:13,080 --> 00:30:14,440 price. And like how much moves in and 597 00:30:14,440 --> 00:30:19,760 out of BDC wrapped into Defy 5 1/2 billion dollars staked in 598 00:30:19,760 --> 00:30:23,520 Babylon with these numbers, it's already worth it, right? 599 00:30:23,520 --> 00:30:25,600 So we're just at a stage where there's so much demand for 600 00:30:25,600 --> 00:30:29,200 Bitcoin Defy that using bit VM, it's like we're past this kind 601 00:30:29,200 --> 00:30:31,920 of hurdle of are we sure that people want to use Bitcoin and 602 00:30:31,920 --> 00:30:33,640 Defy, are there enough people are going to bridge in? 603 00:30:35,200 --> 00:30:38,320 So what's the status with bit VM? 604 00:30:38,320 --> 00:30:42,000 So today there's no bridge life, right, that leverages bit VM. 605 00:30:42,520 --> 00:30:46,440 But are there like a bunch of different people building 606 00:30:46,440 --> 00:30:49,040 bridges and what's the what's the timeline here? 607 00:30:50,600 --> 00:30:53,800 So bit VM bridges are currently in test net state already. 608 00:30:53,800 --> 00:30:55,680 So right now they're on test Nets. 609 00:30:56,040 --> 00:30:59,760 You've seen prototypes live launch end of last year. 610 00:30:59,760 --> 00:31:03,120 So in Q4, we had a few teams including us showcase like, OK, 611 00:31:03,120 --> 00:31:05,120 here's the transactions. Like the system is already 612 00:31:05,120 --> 00:31:07,440 working. And now it's all about like fine 613 00:31:07,440 --> 00:31:11,040 tuning it, cleaning up the code audits to get a public test net. 614 00:31:11,320 --> 00:31:14,120 And depending when this podcast is airing, there may or may not 615 00:31:14,120 --> 00:31:17,720 be above public test net for bit VM already live. 616 00:31:19,160 --> 00:31:22,440 And then the way we kind of see this is we're expecting rollout 617 00:31:22,440 --> 00:31:25,840 to happen throughout this year. You'll probably see systems 618 00:31:25,840 --> 00:31:29,840 initially launched with training wheels and then gradually remove 619 00:31:29,840 --> 00:31:31,520 all the additional safety mechanisms. 620 00:31:31,520 --> 00:31:34,400 So you fully rely on this Prover verifier logic. 621 00:31:35,120 --> 00:31:37,400 I mean, yes, sure, it's taking a while, but if you look at the 622 00:31:37,600 --> 00:31:40,400 like, what we've actually done is we've created a system that 623 00:31:40,400 --> 00:31:43,160 can allow like trust minimize Bitcoin bridging and roll ups. 624 00:31:43,360 --> 00:31:45,680 It took Ethereum 5 plus years to get to that. 625 00:31:46,080 --> 00:31:48,680 Bitcoin is moving much faster cause a lot of the ZK stuff is 626 00:31:48,680 --> 00:31:50,280 already there, right? A lot of the infrastructure's 627 00:31:50,280 --> 00:31:51,960 there. So we don't have to reinvent it 628 00:31:51,960 --> 00:31:54,680 from scratch. This, like the interesting part 629 00:31:54,680 --> 00:31:58,800 is the ZK roll up thing or the ZK component within Bitcoin. 630 00:31:58,800 --> 00:32:02,320 The L2 is like within bit VM. It's different that it's not a 631 00:32:02,320 --> 00:32:04,560 ZK roll up, right? We actually just using it as a 632 00:32:04,720 --> 00:32:07,280 preprocessing step instead of I could plug in the whole 633 00:32:07,280 --> 00:32:12,480 computation right from the EVM into into the bit VM part, but 634 00:32:12,480 --> 00:32:14,560 it's just going to be always, it's going to be huge and 635 00:32:14,560 --> 00:32:18,480 inefficient. And with the with the snark, we 636 00:32:18,480 --> 00:32:20,680 just standardize it, right? You always get the same thing, 637 00:32:20,680 --> 00:32:23,120 which is constant in size and that allows you just to kind of 638 00:32:23,120 --> 00:32:25,120 plug in different computations. So for anything where you can 639 00:32:25,120 --> 00:32:27,400 generate a star proof, it works with bit VM, that's kind of the 640 00:32:27,400 --> 00:32:32,400 way to think about it. And what we expect to see is 641 00:32:32,400 --> 00:32:35,640 main Nets later this year. So I mean, on our side, we're 642 00:32:35,640 --> 00:32:38,800 going to start rolling it out and after the audits are 643 00:32:38,800 --> 00:32:42,200 complete and it's going to take a while, realistically speaking, 644 00:32:42,200 --> 00:32:44,880 because I don't expect everyone to volunteer one to throw money 645 00:32:44,880 --> 00:32:45,920 at this. Oh, I'm going to bridge in 646 00:32:45,920 --> 00:32:48,400 without using bit VM. There are some UX components 647 00:32:48,400 --> 00:32:51,920 that need to be fine-tuned and people need to build trusts. 648 00:32:51,920 --> 00:32:54,440 Like how many people can actually look at a Zika verifier 649 00:32:54,440 --> 00:32:57,400 and tell you, Oh yeah, this is secure, Not that many. 650 00:32:57,400 --> 00:33:00,320 So it takes time to build a community of developers, 651 00:33:00,320 --> 00:33:03,280 auditors, open source contributors that have looked at 652 00:33:03,280 --> 00:33:08,160 it and have said, OK, this is safe, I'm going to use it. 653 00:33:08,160 --> 00:33:10,880 And then you start, you have the D Jins coming in because they 654 00:33:10,960 --> 00:33:14,240 they're excited about it. And though our approach is also 655 00:33:14,240 --> 00:33:17,040 here working with institutional partners from day one. 656 00:33:17,040 --> 00:33:18,600 In fact, we're really working with a big group of 657 00:33:18,600 --> 00:33:23,000 institutional partners to a educate them about bit VM, but 658 00:33:23,000 --> 00:33:26,400 also understand how could this bit VM system fit into their 659 00:33:26,400 --> 00:33:29,320 current setup. Like my personal view is, you 660 00:33:29,320 --> 00:33:32,000 know, there's a lot of people like building bit VM and like 661 00:33:32,160 --> 00:33:34,080 trust minimized bridges. And what they do is they attack, 662 00:33:34,080 --> 00:33:39,640 they say PICO, see, rapid DC is bad, CBBTC is bad, it will all 663 00:33:39,640 --> 00:33:41,320 get hacked. All your money is lost. 664 00:33:41,560 --> 00:33:42,960 If you're using this, you're guilty. 665 00:33:42,960 --> 00:33:44,280 You're basically ignoring your safety. 666 00:33:44,280 --> 00:33:45,720 And I think that's just a long approach. 667 00:33:46,120 --> 00:33:48,680 Nobody of these rapid DC providers wants to steal your 668 00:33:48,680 --> 00:33:50,080 money. They're trying to build the most 669 00:33:50,080 --> 00:33:52,320 secure system with the technology that's currently 670 00:33:52,320 --> 00:33:54,560 available. I think the approach we should 671 00:33:54,560 --> 00:33:58,920 be taking is working with them and saying, hey, like here's an 672 00:33:58,920 --> 00:34:01,160 upgrade. Instead of using MPC in your 673 00:34:01,160 --> 00:34:03,960 back end, you could use bit VM. Complexity wise it's pretty 674 00:34:03,960 --> 00:34:07,280 similar, but bit VM is just so much better and and that's the 675 00:34:07,280 --> 00:34:09,360 approach we're taking. So I honestly think bit VM will 676 00:34:09,360 --> 00:34:12,480 be commoditizing. The only segue that we get this 677 00:34:12,480 --> 00:34:15,719 adopted properly in a reasonable amount of time is by working 678 00:34:15,719 --> 00:34:18,880 with partners and bridge providers as they are today and 679 00:34:18,880 --> 00:34:22,040 help upgrade the entire ecosystem to a better security 680 00:34:22,040 --> 00:34:25,040 standard. That will take some time, but 681 00:34:25,040 --> 00:34:28,400 we'll see between our maintenance in 2025 for sure. 682 00:34:29,159 --> 00:34:33,639 OK, OK. And so, so I get one approach is 683 00:34:33,639 --> 00:34:37,199 to try to convince, I don't know, Coinbase bit and bit go 684 00:34:37,199 --> 00:34:42,440 and stuff to maybe use this now for Bob. 685 00:34:43,400 --> 00:34:46,199 So do you guys, because you mentioned also, OK, there's 686 00:34:46,199 --> 00:34:49,320 different operators. So will those be specific to 687 00:34:49,320 --> 00:34:50,760 Bob? And you're going to have like 688 00:34:50,760 --> 00:34:54,280 the Bob Bitcoin, which is a version that's like bridged over 689 00:34:54,280 --> 00:34:56,760 with bit VM. And then, I don't know, some 690 00:34:56,760 --> 00:35:00,400 other roll up will have their own or like, because I, I think 691 00:35:00,400 --> 00:35:03,200 like one challenge you end up here, right, is you could end up 692 00:35:03,200 --> 00:35:07,920 with like a whole bunch of different, you know, Bitcoin 693 00:35:08,000 --> 00:35:11,400 versions that are kind of bridge in different ways that, you 694 00:35:11,400 --> 00:35:15,160 know, maybe kind of similar security underneath, but maybe 695 00:35:15,160 --> 00:35:17,840 not exactly identical. Or like how do you see that? 696 00:35:17,840 --> 00:35:21,520 You see like lots of versions or I think can there be like one 697 00:35:21,520 --> 00:35:25,120 version of bit VM that's like, you know, one token that really 698 00:35:25,120 --> 00:35:28,640 gets a lot of traction? There's going to be lots of 699 00:35:28,640 --> 00:35:30,240 versions. I mean, you know how things are 700 00:35:30,240 --> 00:35:32,520 like you have 1000 standards and we say, oh, let's make a 701 00:35:32,520 --> 00:35:34,800 standard to unite these standards and we have 1001 702 00:35:34,800 --> 00:35:38,200 standards. So plus with bridging, it's not 703 00:35:38,200 --> 00:35:39,960 just about the standard, but it's actually about the bridge 704 00:35:39,960 --> 00:35:42,720 design itself. A lot of the design of the 705 00:35:42,720 --> 00:35:45,360 bridge depends on the security model of the L2. 706 00:35:45,720 --> 00:35:48,360 And each of these L twos is actually making different 707 00:35:48,400 --> 00:35:51,720 jitters and assumptions, right? Like in our case, for example, 708 00:35:51,720 --> 00:35:52,960 with Bob, we're building a hybrid. 709 00:35:53,400 --> 00:35:58,080 We're using Bitcoin staking as Bitcoin finality and then we're 710 00:35:58,080 --> 00:36:00,000 using that like, and that's what we're doing right now because 711 00:36:00,000 --> 00:36:01,680 that's what currently is already possible. 712 00:36:01,680 --> 00:36:03,360 Like this will be possible in 2025. 713 00:36:03,360 --> 00:36:05,680 You can use Bitcoin staking for finality and build a Bitfame 714 00:36:05,680 --> 00:36:08,440 bridge that relies on Bitcoin stakers being honest. 715 00:36:09,880 --> 00:36:12,120 If you want to build a full Bitcoin roller where you post 716 00:36:12,120 --> 00:36:14,400 all the data to Bitcoin, that design is different. 717 00:36:14,400 --> 00:36:17,160 That design is still very early. It's very expensive to do right 718 00:36:17,160 --> 00:36:18,280 now. We haven't seen this in 719 00:36:18,280 --> 00:36:21,560 production even close, right? So there's different like some 720 00:36:21,560 --> 00:36:23,640 chains of merch mind on Bitcoin like to inherit Bitcoin 721 00:36:23,640 --> 00:36:25,040 security. Others don't even inherit 722 00:36:25,040 --> 00:36:27,000 Bitcoin security at all, right? There's teams trying to bridge 723 00:36:27,000 --> 00:36:29,640 to Ethereum Cardano using Bitcoin, which in my opinion 724 00:36:29,640 --> 00:36:32,080 will not properly work just because these systems don't have 725 00:36:32,080 --> 00:36:35,440 secure live clients. So the designs will differ. 726 00:36:35,760 --> 00:36:37,520 I think what will be similar is the core. 727 00:36:37,520 --> 00:36:40,840 But even from the core, right, you have bit VM2, which is the 728 00:36:40,840 --> 00:36:44,320 design that that I work with, with where Robin and I and a 729 00:36:44,320 --> 00:36:46,400 bunch of other researchers work together to kind of, you know, 730 00:36:46,560 --> 00:36:50,400 put together a full speck of how this bit VM system can be used 731 00:36:50,400 --> 00:36:52,480 to build a bridge and how it actually can be built in 732 00:36:52,480 --> 00:36:54,640 production. But there was bit VM like the 733 00:36:54,640 --> 00:36:56,800 version of Robin first wrote. And then you had a bunch of 734 00:36:56,800 --> 00:37:00,040 other teams like fork off that's to have their custom designs. 735 00:37:00,040 --> 00:37:03,720 So it's bit VMX. There is other versions rights 736 00:37:03,720 --> 00:37:06,680 of of this and the some teams have been abandoned theirs and 737 00:37:06,680 --> 00:37:11,120 come back to build a bit VM 2. So I think what you'll see is a 738 00:37:11,120 --> 00:37:14,480 completely new kind of set of the of approaches that try to 739 00:37:14,480 --> 00:37:18,000 achieve the same. But for an operator, it's going 740 00:37:18,000 --> 00:37:20,600 to be similar to staking. So proof of stake, right? 741 00:37:20,640 --> 00:37:22,600 There's so many proof of stake chains that and they have 742 00:37:22,600 --> 00:37:24,560 nuances. The concept is the same, but 743 00:37:24,560 --> 00:37:27,480 they're all nuanced. I don't know if this is really 744 00:37:27,480 --> 00:37:29,440 going to be a blocker for operators because I think 745 00:37:29,440 --> 00:37:32,240 staking providers and like custodians, that's their bread 746 00:37:32,240 --> 00:37:34,200 and butter, right? They, they integrate staking on 747 00:37:34,200 --> 00:37:36,280 different chains and they have to understand the nuances. 748 00:37:37,240 --> 00:37:39,480 And of course, that's why we're talking with, with all of them 749 00:37:39,480 --> 00:37:41,360 already because we want to understand like what are the 750 00:37:41,360 --> 00:37:43,800 things we should avoid to make sure it's easy to integrate. 751 00:37:45,240 --> 00:37:47,560 But in terms of liquidity fragmentation, I, I can 752 00:37:47,560 --> 00:37:51,200 definitely see challenges there. But on the other hands, again, 753 00:37:51,520 --> 00:37:54,000 since every from a picking user's perspective, if you're 754 00:37:54,000 --> 00:37:56,120 bridging to Bob, you have a different trust assumption than 755 00:37:56,120 --> 00:37:57,800 if you're bridging to another L2, right? 756 00:37:57,800 --> 00:38:00,040 There's trade-offs. These two bit conversions, 757 00:38:00,040 --> 00:38:02,720 there's no benefit for them being fungible because you, if 758 00:38:02,720 --> 00:38:04,680 you want to. So let's say I've deposited 759 00:38:04,680 --> 00:38:06,880 Bitcoin into Bob. So I have Bob BTC which is 760 00:38:06,880 --> 00:38:10,880 secured by bit VM and that's the 1:00 we, we build and operate. 761 00:38:11,480 --> 00:38:12,880 Now I want to bridge another bit. 762 00:38:12,880 --> 00:38:15,560 So that also has a bit VM bridge, right? 763 00:38:15,560 --> 00:38:17,680 It's similar security models, but they have fine tune like 764 00:38:17,680 --> 00:38:20,280 they're using, let's say merge mining or or something else or 765 00:38:20,280 --> 00:38:22,880 like they're like use they posting all the data to Bitcoin. 766 00:38:22,880 --> 00:38:24,320 It's more expensive, but they're doing that. 767 00:38:26,320 --> 00:38:28,800 I still have to bridge over my assets somehow. 768 00:38:29,360 --> 00:38:31,320 And that's where it gets interesting. 769 00:38:31,320 --> 00:38:34,320 Like there is optimizations already being developed in bit 770 00:38:34,320 --> 00:38:38,560 VM that will allow an operator to actually use like like plug 771 00:38:38,560 --> 00:38:42,400 into multiple Bitcoin L twos and act actually as a cross chain 772 00:38:42,400 --> 00:38:44,280 router. So even if the individual 773 00:38:44,280 --> 00:38:48,160 versions are different, the Bitcoin that's locked in is like 774 00:38:48,160 --> 00:38:50,160 similar. So like I can manage multiple 775 00:38:50,160 --> 00:38:52,720 like bitum instances with like different parameters based on 776 00:38:52,720 --> 00:38:55,600 different chains. And I just like act as a 777 00:38:55,960 --> 00:38:57,960 liquidity bridge. Like in 10 bridge operator. 778 00:38:58,200 --> 00:39:00,920 We see this on Ethel twos. That's already happening, right? 779 00:39:00,920 --> 00:39:02,720 If you're going between different Ethel twos, you're 780 00:39:02,720 --> 00:39:04,840 using an 10 base or like liquidity or like Burnham in 781 00:39:04,840 --> 00:39:06,320 bridges. Same here. 782 00:39:06,680 --> 00:39:09,200 So I honestly don't see this as a big problem. 783 00:39:09,200 --> 00:39:12,840 I know it's annoying, but again, if you're depositing into 784 00:39:12,840 --> 00:39:14,960 Coinbase, that Bitcoin is different to the ones who 785 00:39:14,960 --> 00:39:17,600 deposit into Binance. So when it's not like we're 786 00:39:17,600 --> 00:39:21,040 introducing new UX problems, they just exist already, right? 787 00:39:21,040 --> 00:39:23,800 Your dollars in bank one are not the same dollars in bank 2 until 788 00:39:23,800 --> 00:39:27,160 you withdraw them. OK, cool, cool. 789 00:39:27,600 --> 00:39:34,240 So let's go a bit more into Bob. So you mentioned Bitcoin 790 00:39:34,240 --> 00:39:40,080 staking, so and and you know, I understand, you know, Big Bob is 791 00:39:40,080 --> 00:39:43,800 basically a roll up like EVM roll up. 792 00:39:44,280 --> 00:39:48,560 So yeah, explain to us a bit more about the architecture of 793 00:39:48,560 --> 00:39:51,600 Bob. Absolutely. 794 00:39:52,000 --> 00:39:55,680 So with Bob, our vision is to create a hybrid L2 and this is a 795 00:39:55,680 --> 00:39:59,360 new kind of approach to putting big ground at the center of 796 00:39:59,360 --> 00:40:02,520 define. So it has multiple components. 797 00:40:02,960 --> 00:40:05,760 The first and foremost is Bitcoin security like Bob will 798 00:40:05,760 --> 00:40:07,840 inherit Bitcoin security. There's multiple ways of doing 799 00:40:07,840 --> 00:40:10,880 that and I'll talk about like we're rolling out this in three 800 00:40:10,880 --> 00:40:15,760 phases, but I will have Bitcoin security, we'll use bit VM for 801 00:40:15,760 --> 00:40:19,240 the Bitcoin bridge and then there's two additional 802 00:40:19,240 --> 00:40:21,760 components. We have the EVM server OP stack 803 00:40:21,760 --> 00:40:23,400 compatible. We're a super team member, 804 00:40:23,400 --> 00:40:25,160 right? Super easy for you to onboard 805 00:40:25,160 --> 00:40:27,200 and deploy their contracts. And they only need to think 806 00:40:27,200 --> 00:40:28,600 about the Bitcoin side of things. 807 00:40:29,240 --> 00:40:32,440 And we're actually connected to Etherium, So we have a native 808 00:40:32,440 --> 00:40:35,960 bridge to Ether and we can have native bridges to other chains 809 00:40:35,960 --> 00:40:40,800 as well. And the way this works is you 810 00:40:40,800 --> 00:40:46,320 have Bitcoin security on Bob. So that means that if you want 811 00:40:46,320 --> 00:40:50,200 to deposit from Etherium on to Bob, how do you know that Bob is 812 00:40:50,200 --> 00:40:52,760 secure, right? Well, because Bob is Bitcoin 813 00:40:52,760 --> 00:40:55,320 security, you actually go look at Bitcoin and you look, you 814 00:40:55,320 --> 00:41:00,040 say, OK, is like Bob a block 10,000 has this like finalized? 815 00:41:00,040 --> 00:41:02,160 Is that state correct? Specifically also for 816 00:41:02,160 --> 00:41:04,800 withdrawals like the ETH smart contract that has handling 817 00:41:04,800 --> 00:41:07,840 withdrawals similar to how it's done with optimism, right? 818 00:41:08,280 --> 00:41:10,720 Right now, an optimism arbitrum. It will check for ETH FROB 819 00:41:10,720 --> 00:41:12,400 proofs. Has it been a FROB proof on 820 00:41:12,400 --> 00:41:15,320 Ethereum within the last seven days to prove that the optimism 821 00:41:15,320 --> 00:41:17,920 chain has failed? If no, you're good, take your 822 00:41:17,920 --> 00:41:21,440 assets out back to Ethereum. Now what we do there, instead of 823 00:41:21,440 --> 00:41:24,640 looking at ETH FROB proofs, we modify the contract to run a 824 00:41:24,640 --> 00:41:27,040 Bitcoin like client and that like client on Bitcoin. 825 00:41:27,040 --> 00:41:29,360 What it does, it looks at the Bitcoin blockchain and can track 826 00:41:29,360 --> 00:41:32,760 what's going on there. And then we'll just look at, OK, 827 00:41:32,760 --> 00:41:37,320 Bob, at the block above, block 10,000, we can see that it's 828 00:41:37,320 --> 00:41:39,040 finalized on Bitcoin. You can see a Bitcoin 829 00:41:39,040 --> 00:41:41,360 transaction. And for example, in the case of 830 00:41:41,360 --> 00:41:43,680 staking, you'll see that, OK, it's been signed off by the 831 00:41:43,680 --> 00:41:46,640 majority of the Bitcoin stakers and they can track and see how 832 00:41:46,640 --> 00:41:48,480 much Bitcoin stake is committing to that. 833 00:41:49,320 --> 00:41:51,760 And if you're using bit VM for that in the future with fro 834 00:41:51,760 --> 00:41:54,160 proofs, you can also check, OK, there's no fro proof on Bitcoin. 835 00:41:55,120 --> 00:41:57,480 But the cool thing is you're doing this all from within the 836 00:41:57,520 --> 00:41:59,480 ETH smart contract. So on the Ethereum side, you're 837 00:41:59,480 --> 00:42:03,160 very fine Bitcoin, and that's been possible since 2016, super 838 00:42:03,160 --> 00:42:04,760 easy to do. It's been running in production 839 00:42:04,760 --> 00:42:06,760 for ages. Bob has one and like TBT CS 840 00:42:06,760 --> 00:42:11,240 using such a live client. So that, and that means as an 841 00:42:11,280 --> 00:42:14,400 ETH user, when you're bridging into Bob, you're trusting Bob's 842 00:42:14,400 --> 00:42:18,120 Bitcoin security model. And if there's one thing that 843 00:42:18,120 --> 00:42:21,000 we're as a Bitcoin Maxi, EF maxi, Selenomaxi, we can all 844 00:42:21,000 --> 00:42:23,480 agree on, if there's one thing, it's that Bitcoin is secure. 845 00:42:23,480 --> 00:42:26,000 If Bitcoin goes belly up, we all go home, right? 846 00:42:26,000 --> 00:42:28,880 That's the assumption we make just from practical like 847 00:42:28,880 --> 00:42:32,320 perspective, every day we go to work and build in this, in this 848 00:42:32,320 --> 00:42:34,560 ecosystem. If Bikram breaks, we're all gone 849 00:42:34,560 --> 00:42:36,000 like this. This will not survive. 850 00:42:37,080 --> 00:42:39,760 So it's a very easy kind of sell to make to people like instead 851 00:42:39,760 --> 00:42:43,080 of, you know, trusting another like interpretability layer or 852 00:42:43,080 --> 00:42:45,160 like, you know, another blockchain that is supposed to 853 00:42:45,160 --> 00:42:47,000 do interpretability. OK, just trust Bitcoin. 854 00:42:47,000 --> 00:42:48,400 That's the one thing we're already trusting. 855 00:42:48,760 --> 00:42:53,320 And since Bitcoin is so easy to verify, every smart country 856 00:42:53,320 --> 00:42:56,440 capable blockchain beat ETH, polka dot cosmos, Avalanche, 857 00:42:56,440 --> 00:42:58,720 Sui, Aptos move better doesn't matter. 858 00:42:58,720 --> 00:43:02,480 They can all verify Bitcoin and that means we can have native 859 00:43:02,480 --> 00:43:05,440 bridges to all of these chains secure by Bitcoin. 860 00:43:05,960 --> 00:43:08,480 So what does that mean? This means that an ETH user can 861 00:43:08,480 --> 00:43:11,960 deposit their ETH into Bob, trade against Bitcoin, but also 862 00:43:11,960 --> 00:43:13,640 trade it against to buy, let's say Seoul. 863 00:43:14,560 --> 00:43:17,560 And then you can always withdraw back to the underlying layer one 864 00:43:17,920 --> 00:43:21,400 as long as Bitcoin works. And yes, you have like some 865 00:43:22,000 --> 00:43:25,200 levels of OK, so Bitcoin's taking is it full Bitcoin roll 866 00:43:25,200 --> 00:43:27,640 upright, but ultimately you're trusting that, you know this 867 00:43:27,640 --> 00:43:29,600 Bitcoin security model is operational. 868 00:43:30,760 --> 00:43:32,880 So that's one thing. So you can basically instead of 869 00:43:32,880 --> 00:43:36,000 like if you think about how do people trade sole against ETH or 870 00:43:36,000 --> 00:43:37,960 sole against bearer, they'll go to Binance. 871 00:43:38,200 --> 00:43:40,240 There is no other really efficient way to do that. 872 00:43:41,040 --> 00:43:43,360 In the future, they'll be able to go to these hybrid L twos 873 00:43:43,600 --> 00:43:47,120 like Bob and just do it there because you can deposit, swap, 874 00:43:47,120 --> 00:43:50,440 withdraw without having to worry about trusting Binance or 875 00:43:50,440 --> 00:43:54,080 trusting Bitcoin security. And then at the same time, from 876 00:43:54,080 --> 00:43:57,680 Bitcoin user's perspective, and that's what we're focusing on 877 00:43:57,680 --> 00:44:00,840 right now is, OK, I have Bitcoin, I want to use it in D5I 878 00:44:00,840 --> 00:44:04,040 can one click deploy it into Bob because Bob has like one click 879 00:44:04,040 --> 00:44:06,520 Bitcoin staking products, We can one click deploy into different 880 00:44:06,520 --> 00:44:08,720 Bitcoin strategies. That's independent from the 881 00:44:08,720 --> 00:44:12,040 bridge that's built on top. But then I can also say, OK, I 882 00:44:12,040 --> 00:44:14,520 actually want to use it on Etherium or on Salon, Like 883 00:44:14,520 --> 00:44:17,240 there's an opportunity for me to earn yield on my Bitcoin on if 884 00:44:17,240 --> 00:44:19,200 you, of course, do your own research, be cautious. 885 00:44:19,200 --> 00:44:21,600 There's always risks if you're bridging to Etherium, your trust 886 00:44:21,600 --> 00:44:24,800 in ETH, right? That needs to be clear, but that 887 00:44:25,040 --> 00:44:29,000 deposit process are from Bob to ETH that's secure by Bitcoin. 888 00:44:29,640 --> 00:44:32,200 So I don't have to trust another bridge for me to able to access 889 00:44:32,200 --> 00:44:35,480 Etherium from Bitcoin. So I Bob has the most secure 890 00:44:35,480 --> 00:44:39,680 version of BTC bridged using bit VM and that can be then accessed 891 00:44:39,880 --> 00:44:42,880 on etherium and then you can. The cool thing is you can manage 892 00:44:42,880 --> 00:44:45,120 this all from within Bob. So you can have vaults that, you 893 00:44:45,120 --> 00:44:48,480 know, deposit this into Etherium D5 products like Avid, Morpho, 894 00:44:49,160 --> 00:44:51,360 Pendol, same with Solana, same with Vera. 895 00:44:52,120 --> 00:44:55,240 But these the connection like the actual process of OK, you 896 00:44:55,240 --> 00:44:57,040 have Bitcoin on Bob and now we're moving it to ETH. 897 00:44:57,040 --> 00:45:00,240 That part is secured again by Bitcoin because the we're using 898 00:45:00,240 --> 00:45:03,440 this bridge that is native that use that verifies that OK, 899 00:45:03,760 --> 00:45:06,560 everything that's going on on Bob is locked is secured by 900 00:45:06,560 --> 00:45:07,800 Bitcoin. So we just check that. 901 00:45:08,400 --> 00:45:13,200 And so your trust is now Bitcoin security and Ethereum or Bitcoin 902 00:45:13,200 --> 00:45:16,400 and Solana and like, which is arguably better than anything 903 00:45:16,400 --> 00:45:20,000 else. So, but just to clarify this a 904 00:45:20,000 --> 00:45:23,800 bit, right, Because in the end, so you guys are planning to use 905 00:45:23,800 --> 00:45:28,080 Babylon, right? Or, or Ben, you say Bitcoin. 906 00:45:28,440 --> 00:45:31,600 I mean, because you're saying like, OK, Bitcoin security, but 907 00:45:31,600 --> 00:45:36,080 I mean, it's not, it's not comparable, right? 908 00:45:36,080 --> 00:45:40,200 In the security properties to, you know, I send a Bitcoin 909 00:45:40,200 --> 00:45:43,560 transaction to you and it's just a normal Bitcoin transaction. 910 00:45:43,560 --> 00:45:46,080 It's the same chain and it's in the block and now it's six 911 00:45:46,080 --> 00:45:47,760 blocks deep. And we're like, well, that's a 912 00:45:47,760 --> 00:45:50,440 different. So there's trade-offs, right? 913 00:45:50,440 --> 00:45:54,120 And and basically these trade-offs are also economical. 914 00:45:54,440 --> 00:45:57,000 So the way that Bob is approaching this is right now in 915 00:45:57,000 --> 00:45:58,840 phase one, we don't have Bitcoin security. 916 00:45:58,840 --> 00:46:01,960 We're in ETH roll up and we focused on building out this 917 00:46:01,960 --> 00:46:04,480 tech with bit VM and like integrating Bitcoin security. 918 00:46:04,960 --> 00:46:08,040 And but on the product side, we focused on like one click 919 00:46:08,040 --> 00:46:11,160 deployments like you improving the Bitcoin D5UX, working with 920 00:46:11,160 --> 00:46:14,800 tier 1D5 protocols from Etherium to actually make it easier for 921 00:46:14,800 --> 00:46:17,200 them to accept L1 deposits from Bitcoin. 922 00:46:17,200 --> 00:46:20,280 So instead of you going to five different bridges, no one click 923 00:46:20,280 --> 00:46:21,520 and you can go into any strategy. 924 00:46:21,520 --> 00:46:25,200 So that's been the. Focus that's that's basically so 925 00:46:25,200 --> 00:46:31,360 the idea that I put my Bitcoin into, I don't know, some vault 926 00:46:31,360 --> 00:46:35,200 or something on Bob. I mean, do you guys then try to 927 00:46:35,200 --> 00:46:40,200 deploy, you know, are they and and more for and all of these 928 00:46:40,200 --> 00:46:46,640 kind of D5 protocols on Bob itself or like you're trying to 929 00:46:47,040 --> 00:46:52,600 somehow give people access to defy on other chains via Bob? 930 00:46:53,400 --> 00:46:56,000 Both. So in this phase one, right, 931 00:46:56,000 --> 00:46:58,640 it's like while the tech is being developed, we focus on 932 00:46:58,640 --> 00:47:01,520 product like the two, two kind of verticals like the Cortec 933 00:47:01,520 --> 00:47:04,640 with a Bitcoin security and bit VM, which is now hitting test 934 00:47:04,640 --> 00:47:07,600 net and like we're entering this phase two in 25. 935 00:47:07,600 --> 00:47:11,320 But so far, we focus then on the product side of, OK, building 936 00:47:11,320 --> 00:47:13,120 the Bob default ecosystem, having the best default 937 00:47:13,120 --> 00:47:15,080 primitives, right? We have Unispot, for example, 938 00:47:15,080 --> 00:47:18,280 working with the top lending markets to build like a base 939 00:47:18,280 --> 00:47:21,800 default layer on Bob. But then also with we're 940 00:47:21,800 --> 00:47:24,600 releasing a new product, these vaults that I mentioned, that's 941 00:47:24,600 --> 00:47:26,200 a new thing. And depending when this podcast, 942 00:47:26,200 --> 00:47:28,920 I mean, actually, yeah, we're releasing it today, tomorrow. 943 00:47:28,920 --> 00:47:32,560 So it's called hybrid BDC. And these vaults allow you then 944 00:47:32,560 --> 00:47:35,760 to deploy a Bitcoin from Bob into positions, let's say 945 00:47:36,560 --> 00:47:39,800 selling like, you know, APY from bitcoins, taking LSDS on 946 00:47:39,800 --> 00:47:41,640 pendulum for fixed yield, getting it back. 947 00:47:41,640 --> 00:47:44,600 And then you can use them in Bob again to use it in Bob as 948 00:47:44,600 --> 00:47:47,040 collateral to trade it to lever up whatever. 949 00:47:47,600 --> 00:47:49,960 So you basically we you get these yield bearing 950 00:47:49,960 --> 00:47:52,360 presentations of bitcoins so that Bitcoin is staked on 951 00:47:52,360 --> 00:47:54,200 Ethereum and you cannot do something with it. 952 00:47:54,200 --> 00:47:56,640 And it could also the same can be in LSD that's also staked in 953 00:47:56,640 --> 00:47:58,560 Babylon. So you can build different 954 00:47:58,560 --> 00:48:01,280 layers on top, which of course incurs risk without question, 955 00:48:01,760 --> 00:48:03,800 but there is clearly demand for it and people have to, you know, 956 00:48:03,960 --> 00:48:06,160 make an assessment of like what they want to do with it. 957 00:48:07,640 --> 00:48:09,440 That's phase one, right? That doesn't have Bitcoin 958 00:48:09,440 --> 00:48:10,760 security. That's just pure product 959 00:48:10,760 --> 00:48:12,240 validation. Do people do that? 960 00:48:12,240 --> 00:48:15,120 And it works with all the big rapid DC and Bitcoin LLC 961 00:48:15,120 --> 00:48:17,680 providers. And in phase two, because they 962 00:48:17,680 --> 00:48:20,320 were correctly, like you pointed out earlier, like Bitcoin 963 00:48:20,320 --> 00:48:23,040 staking is not the same as Bitcoin LL1 security. 964 00:48:23,040 --> 00:48:27,080 That is true, almost true. There is a trade off in Bitcoin 965 00:48:27,080 --> 00:48:29,000 security, right? So in phase two, what we add is 966 00:48:29,000 --> 00:48:32,200 Bitcoin staking, we're working with Babylon and this means that 967 00:48:32,200 --> 00:48:35,600 you have a couple of billion worth dollars worth of Bitcoin 968 00:48:36,040 --> 00:48:38,000 that is staked and securing that system. 969 00:48:38,440 --> 00:48:41,160 So as long as the TBL of Bob doesn't exceed that, we're fine, 970 00:48:41,320 --> 00:48:42,760 right? Because then if you're stealing, 971 00:48:43,040 --> 00:48:45,840 if you, if these takers try to misbehave, they will lose their 972 00:48:45,840 --> 00:48:47,040 Bitcoin. Like the private keys are 973 00:48:47,040 --> 00:48:49,360 revealed if you double sign, if you're trying to create a Bob 974 00:48:49,360 --> 00:48:52,400 fork, you're creating, you're signing twice for the same 975 00:48:52,400 --> 00:48:55,080 block. The way Babylon staking works is 976 00:48:55,080 --> 00:48:57,880 it has a cool trick where your private key will be revealed on 977 00:48:57,880 --> 00:49:03,800 bitcoins, your Bitcoin are lost. And what we do with Bob then is 978 00:49:03,800 --> 00:49:07,200 as an ETH roll up right? We first of so it it's actually 979 00:49:07,200 --> 00:49:09,320 a bigger upgrade that's happening, but we become AZK 980 00:49:09,320 --> 00:49:11,640 roll up, right? We transition to a full ZK roll 981 00:49:11,640 --> 00:49:14,560 up on Ethereum as well. So for ETH users, we're AZK roll 982 00:49:14,560 --> 00:49:18,920 up right in phase two. But for Bitcoin users, we add 983 00:49:18,920 --> 00:49:21,560 this Bitcoin staking component. So then the Bitcoin stakers, 984 00:49:21,560 --> 00:49:23,680 they verify that what the sequencer is doing. 985 00:49:23,680 --> 00:49:27,080 So when the sequencer is producing the proof that we send 986 00:49:27,080 --> 00:49:30,240 it first to the stakers of that have Bitcoin stake, they verify 987 00:49:30,240 --> 00:49:33,800 it and then they sign off. And only if 2/3 of the Bitcoin 988 00:49:33,800 --> 00:49:37,240 staked has signed off, we can then post it to Etherium. 989 00:49:37,240 --> 00:49:38,800 And Etherium will actually check that. 990 00:49:38,800 --> 00:49:40,960 It's not only that's valid proof, but it's been approved by 991 00:49:40,960 --> 00:49:44,400 the Bitcoin stakers 'cause we're merging like the Bitcoin 992 00:49:44,400 --> 00:49:46,240 security and the E security in this model. 993 00:49:46,600 --> 00:49:49,000 And we do that. We have the Bitcoin security for 994 00:49:49,000 --> 00:49:52,280 OK Bitcoin finale faster withdrawals, but also because 995 00:49:52,280 --> 00:49:56,080 that's how we can build a bit VM bridge because in bit VM, what 996 00:49:56,080 --> 00:49:59,960 we verify on the bit VM side in on the Bitcoin end, when you are 997 00:49:59,960 --> 00:50:03,640 very verifying whether OK, I'm withdrawing from Bob is you're 998 00:50:03,640 --> 00:50:06,600 verifying the ZK proof, but you're also checking like you 999 00:50:06,600 --> 00:50:08,920 need to know like 'cause I can give you 2 proofs for different 1000 00:50:08,920 --> 00:50:11,440 States and they're all both valid, right, But I have two 1001 00:50:11,440 --> 00:50:14,320 different transactions in them, but might be conflicting. 1002 00:50:14,400 --> 00:50:17,640 So you cannot detect like you can, I can give you a valid 1003 00:50:17,640 --> 00:50:20,440 proof, but you won't know if that's the actual chain of Bob. 1004 00:50:20,960 --> 00:50:24,000 And to determine whether like when I'm telling you, oh, I've 1005 00:50:24,400 --> 00:50:27,400 correctly with as an operator send, you know, somebody with 1006 00:50:27,400 --> 00:50:29,920 withdrawing and I as an operator correctly process that. 1007 00:50:29,920 --> 00:50:31,880 And here's a proof that I did this correctly. 1008 00:50:32,440 --> 00:50:35,760 We need to know that this is actually the Bob L2 state that 1009 00:50:35,800 --> 00:50:39,160 that's visible to everyone, not just, I'm trying to do kind of 1010 00:50:39,160 --> 00:50:41,240 submit the fake states. But the proof could still be 1011 00:50:41,240 --> 00:50:43,760 valid, right? It could be like the rules could 1012 00:50:43,760 --> 00:50:47,040 be fine, but I'm pretending that it's not you withdrawing but me. 1013 00:50:48,120 --> 00:50:50,520 And for this, that's where the Bitcoin stakers need to sign 1014 00:50:50,520 --> 00:50:52,000 off. So the Bitcoin stakers check 1015 00:50:52,160 --> 00:50:54,560 whether I'm actually as an opera, as a sequencer, doing 1016 00:50:54,560 --> 00:50:58,960 everything correctly. And then we in Bitfame, we also 1017 00:50:58,960 --> 00:51:01,480 check that component. Like has the majority of Bitcoin 1018 00:51:01,480 --> 00:51:05,320 state confirmed that this ZK proof is specifically for the 1019 00:51:05,320 --> 00:51:08,440 actual Bob state that everybody's is seeing in public? 1020 00:51:09,760 --> 00:51:12,840 And that ensures that it's very hard to attack because now to 1021 00:51:12,840 --> 00:51:15,720 attack the system, you not only have to fit, you know, generate 1022 00:51:15,720 --> 00:51:18,800 a fake ZK proof, you also have to think corrupt a sequence. 1023 00:51:18,800 --> 00:51:21,200 You have to attack the majority of the Bikras takers. 1024 00:51:21,520 --> 00:51:24,920 And then for the ETH user, you also have to for the Etherium 1025 00:51:24,920 --> 00:51:28,120 users, you also have to attack Ethereum to prevent the fraud 1026 00:51:28,160 --> 00:51:29,560 for Zika proof from being submitted. 1027 00:51:30,160 --> 00:51:35,400 So this just makes Bob in Phase 2 the most secure L2 in practice 1028 00:51:36,080 --> 00:51:38,960 because you have these two security models merged into one 1029 00:51:38,960 --> 00:51:44,160 into one kind of layer. But yes, in Bitcoin staking the 1030 00:51:44,160 --> 00:51:46,320 big, there's a difference between insecurity, right? 1031 00:51:46,320 --> 00:51:48,520 It's not like every Bitcoin phone node is very fine. 1032 00:51:49,040 --> 00:51:50,880 It's a subset of nodes that have Bitcoin stake. 1033 00:51:50,880 --> 00:51:52,040 It's same with merge mining, right? 1034 00:51:52,040 --> 00:51:55,680 So there's a subset of of nodes and everybody can participate, 1035 00:51:55,680 --> 00:51:57,160 right? Everybody can run a node and 1036 00:51:57,160 --> 00:51:59,760 become a staker, but not every phone node is participating. 1037 00:52:00,880 --> 00:52:03,960 There's like 1 then step to get to this full, almost full 1038 00:52:03,960 --> 00:52:06,360 Bitcoin security level. And the reason why we like in 1039 00:52:06,360 --> 00:52:10,360 phase three, what will then happen is we take the the like 1040 00:52:10,360 --> 00:52:13,280 the proving like we turn off the Zeke proofs on Etherium. 1041 00:52:13,280 --> 00:52:16,960 You on my theorem, we no longer check anything except Bitcoin, 1042 00:52:17,640 --> 00:52:19,040 right? In phase two, we still check the 1043 00:52:19,040 --> 00:52:21,560 Zeke proofs on Etherium and we also we check that the stakers 1044 00:52:21,560 --> 00:52:24,800 have signed off. And then in phase three, what we 1045 00:52:24,800 --> 00:52:29,280 then do is we switch to full roll up of on Bitcoin where we 1046 00:52:29,280 --> 00:52:31,960 post the proofs specifically using bit VM. 1047 00:52:31,960 --> 00:52:33,520 We have been frog proofs on Bitcoin. 1048 00:52:33,520 --> 00:52:36,680 So we kind of go from ZK, full ZK proofs, state validity proofs 1049 00:52:36,680 --> 00:52:39,160 on Etherium 2. OK, we now plug it into Bitcoin 1050 00:52:39,400 --> 00:52:40,920 where we only can do frog proofs. 1051 00:52:41,720 --> 00:52:44,200 And then we have to post the data on chain, which is very 1052 00:52:44,200 --> 00:52:46,320 expensive. And that's what's prohibiting us 1053 00:52:46,320 --> 00:52:49,000 right now from going to phase three directly because we'd be 1054 00:52:49,000 --> 00:52:51,760 paying as a user, you'd be paying 100 to 1000 X more in 1055 00:52:51,760 --> 00:52:55,320 fees just because the cost on Bitcoin will be so high to keep 1056 00:52:55,320 --> 00:52:57,440 posting the data. So you can then generate the 1057 00:52:57,440 --> 00:52:59,960 frog proof. But in phase three, once Bob is 1058 00:52:59,960 --> 00:53:01,720 big enough, we can make that transition. 1059 00:53:02,160 --> 00:53:05,160 And then we have this bit VM security model where as long as 1060 00:53:05,160 --> 00:53:08,200 there's one user in Bitcoin that is online, I can't. 1061 00:53:08,360 --> 00:53:11,960 This user, which can be you or me or anyone, can enforce that 1062 00:53:11,960 --> 00:53:15,880 all the Bitcoin full modes will see that there's a fraud going 1063 00:53:15,880 --> 00:53:18,800 on and prevent it. So that's the final stage. 1064 00:53:19,000 --> 00:53:22,360 And that is where you get very close to full Bitcoin security, 1065 00:53:22,360 --> 00:53:23,640 right? It's still not quite the same 1066 00:53:23,640 --> 00:53:25,720 because of the assumption that needs to be one person online 1067 00:53:25,720 --> 00:53:28,280 somewhere. But arguably in practice, the 1068 00:53:28,280 --> 00:53:31,400 difference is very minimum, is very, very small because if 1069 00:53:31,400 --> 00:53:34,280 you're running a wallet for on your phone, you're actually not 1070 00:53:34,280 --> 00:53:36,120 downloading the full blockchain. You're already trusting that 1071 00:53:36,120 --> 00:53:38,160 somewhat there. There's a honest node that's 1072 00:53:38,160 --> 00:53:40,880 going to give you the honest data like, hey, did you get paid 1073 00:53:40,880 --> 00:53:43,640 or not? So in practice, that's almost 1074 00:53:43,640 --> 00:53:45,280 the same as having full Bitcoin security. 1075 00:53:46,200 --> 00:53:49,200 But the only limitation here is the costs. 1076 00:53:49,320 --> 00:53:52,760 For this to work, we have to keep posting the state updates 1077 00:53:52,760 --> 00:53:54,960 like we need to keep posting commitments to Bitcoin so that 1078 00:53:54,960 --> 00:53:57,520 you can create a frog proof so you as a user can see, oh, I 1079 00:53:57,520 --> 00:54:01,480 have the data to then show that you're misbehaving and that 1080 00:54:01,480 --> 00:54:05,080 would introduce way too high fees right now, and that's why 1081 00:54:05,080 --> 00:54:07,960 we have this gradual release and phase two, look, honestly, it's 1082 00:54:07,960 --> 00:54:10,640 more secure than any other Bitcoin L2, any other El two. 1083 00:54:11,280 --> 00:54:15,000 It's good enough. And then as the system grows and 1084 00:54:15,000 --> 00:54:18,120 we exceed the TBL limits, deposit limits of like what 1085 00:54:18,120 --> 00:54:21,400 Bitcoin's taking can ensure, then we can add this full 1086 00:54:21,840 --> 00:54:23,960 Bitcoin security through bit VM on top. 1087 00:54:24,080 --> 00:54:26,560 So not only use bit VM for the bridge, but for the entire 1088 00:54:26,560 --> 00:54:30,400 state. Like if you think about it, when 1089 00:54:30,400 --> 00:54:34,600 we use bit VM for the bridge in Phase 2, when do you run the 1090 00:54:34,600 --> 00:54:36,160 checks? You only run it when somebody's 1091 00:54:36,160 --> 00:54:37,920 withdrawing, right? You then you check, OK, is 1092 00:54:37,920 --> 00:54:39,520 everything right on Bob? Is it fine? 1093 00:54:39,520 --> 00:54:42,680 Can I accept the withdrawal? Is it, is it correct in the full 1094 00:54:42,680 --> 00:54:44,480 roll up? You do this continuously, every 1095 00:54:44,480 --> 00:54:47,160 minute, every block, every few blocks, you continuously have to 1096 00:54:47,160 --> 00:54:50,040 just revalidate, which makes it very expensive. 1097 00:54:50,400 --> 00:54:53,760 And like so that really only works at a certain size of the 1098 00:54:53,760 --> 00:54:56,680 roll up when you have millions of users, so that the difference 1099 00:54:56,680 --> 00:55:00,400 in fees per users may be a cent. And then I think it's quite 1100 00:55:00,400 --> 00:55:02,760 important to think pragmatically here because we don't want to 1101 00:55:02,760 --> 00:55:05,320 end up with another Lightning which is secure but unusable. 1102 00:55:06,880 --> 00:55:10,480 One thing I'm curious about, I mean today actually one of the 1103 00:55:10,480 --> 00:55:15,640 largest Bitcoin versions on Etheria or like outside of 1104 00:55:15,640 --> 00:55:21,760 Bitcoin is and I guess it's the largest one that's not like 1105 00:55:22,440 --> 00:55:27,680 custodial really is like Lombard Bitcoin, so LBTC. 1106 00:55:28,920 --> 00:55:31,320 With all due respect to the Lombard team, they're a great 1107 00:55:31,320 --> 00:55:33,440 team to work with Lombards, but it is custodial. 1108 00:55:33,520 --> 00:55:36,560 So I think it's very important to clarify everything today is 1109 00:55:36,560 --> 00:55:39,160 still, it's still a multi sig, it's institutional custody and 1110 00:55:39,160 --> 00:55:42,560 you can do it in a very secure manner, but you still have this 1111 00:55:42,560 --> 00:55:45,280 custodial aspect behind it like that is always present. 1112 00:55:46,960 --> 00:55:51,200 So what I'm I'm so curious basically whether you think 1113 00:55:51,920 --> 00:55:56,200 like, I mean, I think you are working on decentralizing this 1114 00:55:56,200 --> 00:56:00,640 as well, or like like if you have some kind of basically LRT 1115 00:56:00,640 --> 00:56:05,200 type token, you know, like a Lombard Bitcoin that OK, now 1116 00:56:05,200 --> 00:56:09,480 it's like reached somewhere else, but it's also, you know, 1117 00:56:09,480 --> 00:56:13,520 accrues some Babylon points and Lombard points or tokens. 1118 00:56:13,520 --> 00:56:17,240 And maybe it's used, you know, it it it's kind of like it can 1119 00:56:17,240 --> 00:56:22,120 be yield bearing, you know, even before it's being used in those 1120 00:56:22,120 --> 00:56:25,080 other chains. So that seems pretty compelling 1121 00:56:25,080 --> 00:56:27,360 probably I imagine for a lot of users. 1122 00:56:27,680 --> 00:56:31,200 So do you think of something like LBTC also as like a version 1123 00:56:31,200 --> 00:56:33,760 of which Bitcoin or you think that you're like, how do you 1124 00:56:33,760 --> 00:56:37,240 think about this? So I mean absolutely, I mean 1125 00:56:37,400 --> 00:56:40,160 LSD. So the way that I mean, and it's 1126 00:56:40,160 --> 00:56:43,520 quite relevant for Bob because again, as, when, as we're 1127 00:56:43,520 --> 00:56:46,680 becoming a bit concentrate network, we actually are the 1128 00:56:46,680 --> 00:56:49,400 source of these fees, right? Like the fees generated on Bob 1129 00:56:49,400 --> 00:56:52,240 are the fees that the LBTC stakers, that's what they're 1130 00:56:52,240 --> 00:56:54,360 actually making money on in the future, right? 1131 00:56:54,360 --> 00:56:56,240 That's where the fees come, That's where the staking rewards 1132 00:56:56,240 --> 00:56:59,200 come from. They come from our chain having 1133 00:56:59,200 --> 00:57:01,240 enough like generating like getting like, and that's where 1134 00:57:01,240 --> 00:57:03,560 LSDS are so powerful because it created this powerful liquidity 1135 00:57:03,560 --> 00:57:05,280 flywheel. Cause like people stake Bitcoin, 1136 00:57:05,280 --> 00:57:07,200 they mint LSDS so they can move it around. 1137 00:57:07,720 --> 00:57:08,880 It's a yield bearing asset, right? 1138 00:57:08,880 --> 00:57:12,560 That's getting fees for being like locked into staking, just 1139 00:57:12,560 --> 00:57:14,200 like on Etherium, but in this case on Bitcoin. 1140 00:57:14,200 --> 00:57:17,360 And then you put them on Bob and in D5, this creates volumes that 1141 00:57:17,360 --> 00:57:19,840 generates fees, which pays the staking rewards. 1142 00:57:20,200 --> 00:57:23,760 The more fee volume, the more fees, the more yield, like 1143 00:57:23,760 --> 00:57:26,480 staking rewards for Bitcoin. Bitcoin has no native yield, 1144 00:57:26,480 --> 00:57:27,680 right? Except for mining. 1145 00:57:27,680 --> 00:57:29,840 And then you have all the risk of like managing the equipment. 1146 00:57:29,840 --> 00:57:33,360 So the, the, the bar for like how much you have to generate 1147 00:57:33,360 --> 00:57:36,480 for people to consider staking. It is quite low, but there's not 1148 00:57:36,480 --> 00:57:39,160 much competition. So again, it will attract more 1149 00:57:39,160 --> 00:57:41,760 Bitcoin to be staked and Babylon already has like 5.5 billion, 1150 00:57:41,760 --> 00:57:43,320 right? So this will keep attracting 1151 00:57:43,320 --> 00:57:46,200 more BDC that will get minted as an LST using for example, 1152 00:57:46,200 --> 00:57:49,560 Lombard is one example of a Bitcoin LST that is staked into 1153 00:57:49,560 --> 00:57:51,520 Babylon, which can be used on Bob. 1154 00:57:51,840 --> 00:57:55,640 The more TDL, the more fees go back and again that attracts 1155 00:57:55,640 --> 00:57:57,840 more liquidity, basically starts cycling the liquidity. 1156 00:57:58,280 --> 00:58:02,000 So the LSD is a version of a Bitcoin because the Bitcoin is 1157 00:58:02,040 --> 00:58:05,200 custody, it's staking to Babylon, but it is also custody 1158 00:58:05,200 --> 00:58:07,520 because it's not the users managing their own staking 1159 00:58:07,520 --> 00:58:09,560 deposits. You're basically what the way it 1160 00:58:09,560 --> 00:58:13,360 works, you, you would delegate, you're delegating to the LSD 1161 00:58:13,360 --> 00:58:15,960 provider who then has either their own finality providers or 1162 00:58:15,960 --> 00:58:18,200 they delegate to other finality providers in partnership. 1163 00:58:19,000 --> 00:58:21,720 And then basically it's your, it's like delegated staking, but 1164 00:58:21,720 --> 00:58:24,200 and then they give you the LSD. So it's basically like lider, 1165 00:58:24,200 --> 00:58:27,800 right? And then you can use that on Bob 1166 00:58:27,800 --> 00:58:30,720 as well and in the future. And I like, like that's 1167 00:58:30,720 --> 00:58:33,040 something that people are looking at and we're actually 1168 00:58:33,040 --> 00:58:34,920 looking at. And I know there's like interest 1169 00:58:34,920 --> 00:58:39,360 also from LSD providers to then you can do this with bit VM, 1170 00:58:39,360 --> 00:58:41,600 right? Like you can basically you get 1171 00:58:41,960 --> 00:58:44,240 the custody component of like, how is a Bitcoin kept? 1172 00:58:44,640 --> 00:58:46,880 Like, yes, it's taken to Babylon, but like who makes a 1173 00:58:46,880 --> 00:58:48,680 stake? Who actually has the Bitcoin and 1174 00:58:48,680 --> 00:58:51,400 it stakes it. That component can be again in 1175 00:58:51,400 --> 00:58:54,440 bit VM, you can actually have this reflected in bit VM. 1176 00:58:55,200 --> 00:58:58,080 So in Bob's bit VM bridge, what you can do in the future is you 1177 00:58:58,080 --> 00:59:00,520 can say, oh, I'm just getting like native rap Bitcoin, It's 1178 00:59:00,520 --> 00:59:03,720 secure, but bit VM it's safe. Or I can opt into another 1179 00:59:03,720 --> 00:59:06,040 version where OK, when I'm stick, when I'm bridging it at 1180 00:59:06,040 --> 00:59:08,720 the same time, it's being staked into deposited into Babylon 1181 00:59:09,200 --> 00:59:11,760 because you can verify any like you can actually have this step 1182 00:59:11,760 --> 00:59:14,000 in the bit VM program, like, OK, the Bitcoin goes in, it's 1183 00:59:14,000 --> 00:59:16,720 deposited to Babylon and you're earning staking rewards and 1184 00:59:16,720 --> 00:59:19,960 you're getting an LST version of bit V MB TC. 1185 00:59:20,400 --> 00:59:23,200 So that definitely works. And in fact is, as you said, a 1186 00:59:23,200 --> 00:59:26,440 very powerful interesting use case. 1187 00:59:28,480 --> 00:59:32,000 So it's kind of it's, it's not an alternative a bit VM can also 1188 00:59:32,000 --> 00:59:34,040 help improve the security of these systems. 1189 00:59:35,840 --> 00:59:37,440 Yeah. OK, very cool. 1190 00:59:37,760 --> 00:59:42,920 I would say maybe as a sort of like last topic to touch on sort 1191 00:59:42,920 --> 00:59:47,480 of where you see that Bitcoin defy going on, on what time 1192 00:59:47,480 --> 00:59:49,240 horizon, right. Like, I mean, I think today we 1193 00:59:49,240 --> 00:59:55,320 have around 2 trillion in Bitcoin market cap or maybe a 1194 00:59:55,320 --> 00:59:58,640 little bit less. And I think around maybe 20 1195 00:59:58,640 --> 01:00:03,000 billion, right are held in this kind of like wrapped version. 1196 01:00:03,000 --> 01:00:05,880 So it's like 1%. I'm not exactly sure how much of 1197 01:00:05,880 --> 01:00:09,760 that is actually being used in, you know, some sort of defy 1198 01:00:09,760 --> 01:00:12,240 activity. I, I guess it's probably a 1199 01:00:12,400 --> 01:00:17,200 pretty significant percentage. But what's your and and you 1200 01:00:17,200 --> 01:00:19,760 mentioned also institutions in the beginning. 1201 01:00:20,880 --> 01:00:24,600 So what's your expectations for how Bitcoin D5 ecosystem is 1202 01:00:24,600 --> 01:00:26,840 going to develop in the next, you know, few years? 1203 01:00:28,040 --> 01:00:30,960 I honestly think that Bitcoin D5 right now is one of the large, 1204 01:00:30,960 --> 01:00:34,360 if not the largest opportunity in in crypto and like Fintech of 1205 01:00:34,360 --> 01:00:38,160 the decade because as you said, like it's such a huge market and 1206 01:00:38,160 --> 01:00:40,440 only it's less than a percent that has actually been deployed 1207 01:00:40,760 --> 01:00:43,880 less than a percent. It's like 0.1 to 0.5 depending 1208 01:00:43,880 --> 01:00:49,320 what you count as like D5. So with like, and then we 1209 01:00:49,320 --> 01:00:51,760 debated at the beginning of this, of this kind of podcast, 1210 01:00:51,760 --> 01:00:53,720 right? Like why have people deployed it 1211 01:00:53,720 --> 01:00:55,240 yet? It's the UX, it's the security. 1212 01:00:55,240 --> 01:01:00,440 It's also just like the, the adoption of, of, of D5 products 1213 01:01:00,440 --> 01:01:03,000 like these D5 chains, the adoption of Ethereum and Solana 1214 01:01:03,000 --> 01:01:05,520 is nothing compared to the adoption of Bitcoin globally. 1215 01:01:06,560 --> 01:01:09,680 And so if, and there's of course, there's always a big 1216 01:01:09,680 --> 01:01:14,600 effort, if we can convert more users, more Picanos from 1217 01:01:14,600 --> 01:01:17,000 exchanges, from their Ledger devices, right? 1218 01:01:17,000 --> 01:01:19,920 And give them a choice, like if you want to do something, do it 1219 01:01:19,920 --> 01:01:22,360 in Defy. That could be major unlock. 1220 01:01:22,360 --> 01:01:24,720 And the the tools and the things that need to happen is of 1221 01:01:24,720 --> 01:01:27,480 course, on one hand, the more secure ways of using Bitcoin in 1222 01:01:27,480 --> 01:01:29,800 Defy because people are concerned about losing their 1223 01:01:29,800 --> 01:01:33,280 BDC, but also building more, building more Defy products and 1224 01:01:33,280 --> 01:01:36,040 specifically improving distribution, improving the way 1225 01:01:36,040 --> 01:01:38,200 that you can access. So instead of you having to go 1226 01:01:38,200 --> 01:01:41,440 and like wrap it that that people like, if you have to 1227 01:01:41,440 --> 01:01:43,360 start talking to people about, oh, you have to wrap your 1228 01:01:43,360 --> 01:01:46,400 Bitcoin and then you can stake it and get this LSD and then you 1229 01:01:46,400 --> 01:01:48,680 have to put it into a lending market to get a receipt token 1230 01:01:48,680 --> 01:01:49,800 that you can activate as collateral. 1231 01:01:49,800 --> 01:01:52,400 Then you can that just yes, for you and me, we use D Phi. 1232 01:01:52,400 --> 01:01:55,960 That's clear for you to like, no, it's that way too complex. 1233 01:01:56,520 --> 01:01:59,200 So what you need to basically do and that's how the cool thing is 1234 01:01:59,200 --> 01:02:02,120 that D Phi is experiencing a renaissance as a whole right now 1235 01:02:02,120 --> 01:02:04,680 with UX improving significantly. At the same time, what's 1236 01:02:04,680 --> 01:02:09,200 happening on Bitcoin is you're unlocking secure ways of doing 1237 01:02:09,200 --> 01:02:11,640 that. So what I think will happen in 1238 01:02:11,640 --> 01:02:16,400 the next 5 years is that Bitcoin defy is going to become one of 1239 01:02:16,400 --> 01:02:19,880 the biggest catalysts in like liquidity sources in the entire 1240 01:02:19,880 --> 01:02:22,360 ecosystem. And it's just going to, it's 1241 01:02:22,360 --> 01:02:23,800 going to grow. I mean, I don't know how much it 1242 01:02:23,960 --> 01:02:26,400 will grow in practice. It there's, you know, also a lot 1243 01:02:26,400 --> 01:02:32,400 of factors, but it could grow by like 100 to 300 X in size. 1244 01:02:32,400 --> 01:02:34,800 Because if you look at Etherium's TBL to market cap 1245 01:02:34,800 --> 01:02:41,000 ratio, we're 30% on Bitcoin where at what 0.10.3 something 1246 01:02:41,000 --> 01:02:44,320 like this. So we have like this huge 1247 01:02:44,320 --> 01:02:50,640 potential to unlock a completely new kind of ecosystem of, of D5. 1248 01:02:51,480 --> 01:02:56,040 And what we, what you can see in practice is that every chain, 1249 01:02:56,320 --> 01:02:59,640 every major protocol in the D5 space has a big time strategy 1250 01:02:59,640 --> 01:03:02,240 where has been working on it. When we work with a bunch of top 1251 01:03:02,240 --> 01:03:06,640 tier D5 teams on building Defy products, whether directly and 1252 01:03:06,640 --> 01:03:08,920 Bob are working with them together for these like high BDC 1253 01:03:08,920 --> 01:03:11,400 vaults. And you see a lot of chains 1254 01:03:11,400 --> 01:03:14,280 announced like, oh, we're going to now, like Starknitz is also 1255 01:03:14,280 --> 01:03:16,560 announcing, Oh, they're going to also be connected to Bitcoin. 1256 01:03:16,960 --> 01:03:20,640 You see Tron, for example, made if you look at like late last 1257 01:03:20,640 --> 01:03:22,720 year, like mid last year, they said, oh, we're going to we want 1258 01:03:22,720 --> 01:03:24,800 to build a Bitcoin also that's connected to Bitcoin and Tron. 1259 01:03:25,760 --> 01:03:29,080 So like Cardano, right, you name it, like everybody is now 1260 01:03:29,080 --> 01:03:31,760 looking to try to get access to Bitcoin. 1261 01:03:33,120 --> 01:03:35,800 And the beautiful thing here is that Bitcoin L twos are just 1262 01:03:35,800 --> 01:03:38,200 uniquely positioned to to capture that market because 1263 01:03:38,200 --> 01:03:40,720 again, all of this thing, all the things were just discussed 1264 01:03:40,720 --> 01:03:42,920 about you better secure deposits and and so on. 1265 01:03:43,280 --> 01:03:45,800 These things only really work well with Bitcoin secured 1266 01:03:45,800 --> 01:03:47,520 networks. So Bitcoin layer twos. 1267 01:03:48,480 --> 01:03:51,800 So I think not only will Bitcoin DFI grow and the institutional 1268 01:03:51,800 --> 01:03:54,600 interest is definitely present. You've seen like institutions 1269 01:03:54,600 --> 01:03:57,720 with Babylon and like Bitcoin DFI, they've started, you've had 1270 01:03:57,720 --> 01:04:00,440 bullets move Bitcoin in that haven't done anything with a 1271 01:04:00,440 --> 01:04:04,880 Bitcoin for like 5 to 10 years. People have tasted blood like 1272 01:04:04,880 --> 01:04:07,400 they've tasted like, oh, I can use this now. 1273 01:04:07,440 --> 01:04:09,120 There is a way for me to do this now. 1274 01:04:09,320 --> 01:04:11,640 I just need to now get comfortable with the risks and 1275 01:04:11,640 --> 01:04:13,080 assess like how they want to use it. 1276 01:04:13,480 --> 01:04:17,360 But it's not certainly possible. And it's a combination of, you 1277 01:04:17,360 --> 01:04:20,440 know, with bit VM being making progress, Bitcoin staking defy 1278 01:04:20,440 --> 01:04:24,720 experiencing a renaissance as a whole, Defy UX making this huge 1279 01:04:24,720 --> 01:04:27,440 leap to, oh, I need to note down my seed phrase too. 1280 01:04:27,440 --> 01:04:29,160 I can sign in with my Twitter account. 1281 01:04:29,640 --> 01:04:33,040 This combination, I think is exactly the recipe that we need 1282 01:04:33,440 --> 01:04:36,720 to be able to onboard hundreds of millions of retail users that 1283 01:04:36,720 --> 01:04:40,520 have Bitcoin into D Phi and it's giving them a better option than 1284 01:04:40,520 --> 01:04:43,800 centralized exchanges. So I predict this is going to be 1285 01:04:43,800 --> 01:04:47,480 the biggest thing over the next five years in terms of growth in 1286 01:04:47,480 --> 01:04:51,760 the crypto space. Yeah, I mean, I so this makes me 1287 01:04:51,760 --> 01:04:54,400 think of one of the last episodes I did the last episode 1288 01:04:54,400 --> 01:04:57,640 that it which was with SC from Turtle Club. 1289 01:04:58,800 --> 01:05:03,360 You know, we talked a lot about D Phi on a high level and, and 1290 01:05:03,360 --> 01:05:11,000 just how amazingly efficient and composable and dynamic the D Phi 1291 01:05:11,040 --> 01:05:14,840 ecosystem must become. And it's really amazing also how 1292 01:05:15,360 --> 01:05:18,680 how high yield you can earn on dollars and how you can use the 1293 01:05:18,680 --> 01:05:21,000 thing in, you know, five different protocols at the same 1294 01:05:21,000 --> 01:05:22,880 time. The downside certainly is 1295 01:05:22,880 --> 01:05:25,720 there's a lot of complexity and it's hard to understand the 1296 01:05:25,720 --> 01:05:28,760 risks, but you can still just see that. 1297 01:05:29,360 --> 01:05:35,200 I think what to me feels very obvious is that this kind of 1298 01:05:35,200 --> 01:05:38,720 financial system is going to evolve at a such so much higher 1299 01:05:38,720 --> 01:05:41,360 rate and it's going to end up being so much more efficient 1300 01:05:41,560 --> 01:05:44,920 that it will replace the existing financial system. 1301 01:05:45,400 --> 01:05:48,200 And then of course, in Bitcoin, right, People have always been 1302 01:05:48,520 --> 01:05:53,000 excited about this idea, you know, of hyper bitcoinisation or 1303 01:05:53,000 --> 01:05:57,640 the idea that, you know, Bitcoin can be this, you know, global 1304 01:05:57,640 --> 01:06:01,160 reserve asset, then maybe replace gold or, you know, you 1305 01:06:01,320 --> 01:06:07,160 have, you know, really achieved this enormous role in in the 1306 01:06:07,160 --> 01:06:10,800 financial system in the world. And, you know, right now it's 1307 01:06:10,800 --> 01:06:15,240 basically really just this coin you buy. 1308 01:06:15,240 --> 01:06:19,120 And I hope it goes out in value. And that's kind of mostly what 1309 01:06:19,120 --> 01:06:21,120 it does now. Of course, it's in ETFs and 1310 01:06:21,320 --> 01:06:23,720 people can borrow against it in some context. 1311 01:06:23,720 --> 01:06:27,240 And there's a bit more going on. But yeah, I do feel like that 1312 01:06:27,240 --> 01:06:33,280 kind of merger of Defy and Bitcoin, I mean, it's first of 1313 01:06:33,280 --> 01:06:37,200 all crucial for Bitcoin to really have a shot at the at 1314 01:06:37,280 --> 01:06:45,360 becoming this crucial building block of the financial world. 1315 01:06:46,200 --> 01:06:48,400 And then of course, I think you're totally right. 1316 01:06:48,400 --> 01:06:53,880 It it does, it does just represent a huge opportunity, 1317 01:06:53,960 --> 01:06:56,440 right? I mean I think I think total 1318 01:06:56,440 --> 01:07:00,360 value in D5 locked is 100 billion. 1319 01:07:00,360 --> 01:07:04,560 Is that right? I I I might be wrong? 1320 01:07:05,080 --> 01:07:08,760 You mean like Bitcoin locked or in total? 1321 01:07:08,760 --> 01:07:13,160 No, no in total total D5. Yeah, I'm looking at D5. 1322 01:07:13,200 --> 01:07:16,240 It's 107 billion. Right, exactly. 1323 01:07:16,240 --> 01:07:19,560 Right. So then you're basically, yeah. 1324 01:07:19,560 --> 01:07:24,200 So if you're certainly very feasible, right, that Bitcoin 1325 01:07:24,200 --> 01:07:29,240 starts to make up a very meaningful percentage of that, 1326 01:07:29,240 --> 01:07:34,040 you know, within, you know, maybe the next two years or so. 1327 01:07:35,240 --> 01:07:37,200 Yeah, I fully agree. Like if you just compare the 1328 01:07:37,200 --> 01:07:39,600 numbers and the, the, the, the dimensions here, right. 1329 01:07:39,600 --> 01:07:43,800 Like The thing is, yes, like Bitcoin is, is so fascinating 1330 01:07:43,800 --> 01:07:47,280 because yes, it's a hard market. It's hard to to to grow in that 1331 01:07:47,280 --> 01:07:48,880 market. You have to spend a lot of time, 1332 01:07:48,880 --> 01:07:53,400 build a lot of trust and you have to be in for the long game, 1333 01:07:53,400 --> 01:07:55,120 right? I've seen like there was when we 1334 01:07:55,120 --> 01:07:57,880 started Bob and we kind of we're one of the first, if not the 1335 01:07:57,880 --> 01:07:59,840 first to go out and say, look, you know what, we're going to 1336 01:07:59,840 --> 01:08:01,640 give this another shot. Like I know there was other 1337 01:08:01,640 --> 01:08:04,800 teams like working in parallel, but at that time, maybe like it 1338 01:08:04,800 --> 01:08:08,320 was 3/4 teams working in stealth and like trying to take it. 1339 01:08:08,320 --> 01:08:09,840 Have another shot at Bitcoin L twos. 1340 01:08:10,320 --> 01:08:13,320 Now you have over 75 Bitcoin L twos, right? 1341 01:08:13,320 --> 01:08:15,280 And I think there's also, of course, many people who are now 1342 01:08:15,280 --> 01:08:17,319 see this as a big opportunity and want to come in and say, oh, 1343 01:08:17,319 --> 01:08:18,880 well, let's make some quick money, let's build this out 1344 01:08:18,880 --> 01:08:20,840 quickly. That's not how Bitcoin works. 1345 01:08:20,840 --> 01:08:24,479 Like if you're trying to come in, just pump the numbers and 1346 01:08:24,479 --> 01:08:28,200 then, you know, expect this to scale from zero to 1 within a 1347 01:08:28,200 --> 01:08:31,479 month, Bitcoin's going to chew you up and spit you out like he 1348 01:08:31,479 --> 01:08:35,000 Bitcoin is is a you're playing at the high stakes table A but 1349 01:08:35,080 --> 01:08:38,680 if you win in Bitcoin, you win the entire market just because 1350 01:08:38,680 --> 01:08:41,120 of its sheer size, global adoption dominance. 1351 01:08:41,120 --> 01:08:43,080 I mean, I don't the brand itself alone, right? 1352 01:08:43,080 --> 01:08:45,479 If the news talks about crypto, they talk about Bitcoin 1353 01:08:45,880 --> 01:08:47,760 acceptable. They specifically mentioned the 1354 01:08:47,760 --> 01:08:50,040 ETF. Otherwise, it's always Bitcoin 1355 01:08:50,040 --> 01:08:52,279 price is going up, Bitcoin price is going down or something 1356 01:08:52,279 --> 01:08:55,160 happened with Bitcoin nation state adopts Bitcoin reserve. 1357 01:08:55,160 --> 01:08:58,600 It's always Bitcoin. And if you just look at the 1358 01:08:58,600 --> 01:09:02,279 numbers, right, the total, like the entirety of D5 today is 1359 01:09:02,279 --> 01:09:04,080 merely 5% of Bitcoin's market cap. 1360 01:09:04,960 --> 01:09:09,319 So I think, you know, if we can get this to work, that is 1361 01:09:09,319 --> 01:09:12,840 probably the best way to not only, you know, make Bitcoin 1362 01:09:12,840 --> 01:09:15,920 more useful, but it's probably the best way to actually take D5 1363 01:09:15,920 --> 01:09:19,240 mainstream using Bitcoin rails in the trust that Bitcoin brings 1364 01:09:19,240 --> 01:09:22,800 with it and just the global adoption and the recognizability 1365 01:09:23,399 --> 01:09:25,760 to just get more users into D5, get them on chain. 1366 01:09:27,760 --> 01:09:29,840 Cool. Well, thank you so much Alexei 1367 01:09:29,840 --> 01:09:31,560 for coming on. I really enjoyed this 1368 01:09:31,560 --> 01:09:35,600 discussion. I think it was great to to learn 1369 01:09:35,600 --> 01:09:39,120 a bit learn more about bit VM and just the power there 1370 01:09:39,160 --> 01:09:41,840 regarding preaching. I think that sounds sounds very 1371 01:09:41,840 --> 01:09:44,960 cool. And I also really enjoyed 1372 01:09:44,960 --> 01:09:48,960 hearing kind of like the vision of how you see Bob play, you 1373 01:09:48,960 --> 01:09:51,960 know, Bob launching and then evolving using Bitcoin security 1374 01:09:51,960 --> 01:09:53,920 in the future. So yeah, thanks so much for 1375 01:09:53,920 --> 01:09:55,800 coming on. I'm super excited about this, 1376 01:09:56,640 --> 01:10:00,240 you know, this part of the crypto space and I, I couldn't 1377 01:10:00,240 --> 01:10:03,080 agree more that there's going to be enormous opportunities and 1378 01:10:03,080 --> 01:10:05,040 growth here in the, in the coming years. 1379 01:10:06,600 --> 01:10:08,360 Cool, amazing. Thank you for having me. 1380 01:10:08,360 --> 01:10:10,040 Really enjoyed this one. Bye bye.