It's kind of insane to try and do computation and data storage
on chain. So you do computation and data
storage on off chain. You prove it by posting a proof
which gets validated, verified and executed to make BTCA
programmable asset and use the Bitcoin Ledger to allow for
other assets to be created and used programmatically.
This sort of concept is new in Ethereum land, but in many ways
is very, very old in Bitcoin lag.
We've got a low level language which is Bitcoin script and we
need to be able to compile sort of more abstract languages down
there into Bitcoin script. And the way that we do that is
through the medium of ZK proofs. And so actually, Boss is very
agnostic to the specific higher level language that you're going
to be using. If you're looking to stake your
crypto with confidence, look no further than Chorus One.
More than 150,000 delegators, including institutions like Bit
Go, Pantera Capital and Ledger Trust Chorus One with the
assets. They support over 50 block
chains and are leaders in governance on networks like
Cosmos, ensuring your stake is responsibly managed.
Thanks to the advanced MEB research, you can also enjoy the
highest staking rewards. You can stake directly from your
preferred wallet, set up a white label node, restake your assets
on Eigenia or Symbiotic, or use the SDK for multi chain staking
in your app. Learn more at Chorus .1 and
start staking today. This episode is proudly brought
to you by Gnosis, a collective dedicated to advancing a
decentralized future. Nosys leads innovation with
Circles, Nosys Pay and Metri, reshaping open banking and
money. With Hashi and Nosys VPN,
they're building a more resilient, privacy focused
Internet. If you're looking for an L1 to
launch your project, Nosys Chain offers the same development
environment as Ethereum with lower transaction fees.
It's supported by over 200,000 ballot errors, making Nosys
Chain a reliable and credibly neutral foundation for your
applications. Gnosis Dow drives Gnosis
governance, where every voice matters.
Join the Gnosis community in the Gnosis Dow forum today.
Deploy on the EVM compatible Gnosis Chain or secure the
network with just one GNO and affordable hardware.
Start your decentralization journey today at gnosis dot IO.
Welcome to Epicenter, the show which talks about the
technologies, projects and people driving decentralization
and the global blockchain revolution.
I'm Sebastian Quiccio and today I'm speaking with Yago, who is a
contributor to Bitcoin OS Bitcoin OS is a platform that
enables ZK proofs on the Bitcoin blockchains, which is really
exciting. And this enables lots of
different things, including L twos that are more efficient,
more scalable, more secure, and lots of other exciting
applications. So in today's conversation,
we're going to be diving deep into Bitcoin OS, how it enables
ZK proofs on Bitcoin and what we can expect from this platform
and the ecosystem that is being built upon it.
Yago, thanks for joining me. Thanks for having me.
I love Epicenter and it's always fun to to be on the show.
Yeah, it's a pleasure to have you on.
So yeah, before we get started, talk a little bit about your
background. You've been working in Bitcoin
for a while, you know, you've worked on sovereign and other
projects. So yeah, what's what brought you
to to Bitcoin OS? Well, so I I was attracted to
Bitcoin from pretty much the moment I heard about it.
To me, it spoke to a new ability to create property rights that
were self sovereign, digital and globally available.
And that meant that the Internet could have its own economy.
That was a massive idea. And so I think even before I'd
finished reading the white paper, I was already writing a a
mass e-mail to everyone I knew telling them this was the
future. And within a few months I'd been
mulling it and, and, and go sort of full time Bitcoin.
And so I've been in working since then to try and make it
possible to for as many people to use Bitcoin as possible and
to do so without having to go through intermediaries.
Initially, it's dug with like relatively limited use cases
like remittances. I started one of the first
remittance companies in the space and over the years that's
evolved. Around 4 1/2 years ago I I
joined a team building what became the largest and probably
the first significant D5 project in Bitcoin called Sovereign.
And even as we were doing that, we were also exploring how could
we go further, because even then we were had to rely on things
like merge mining and Federated bridges, which only approximate
actually using Bitcoin trustlessly.
And we wanted to go the hallway. And we had this hunch that it
would be possible to do that with some of the emerging
cryptography we're seeing, in particular ZK we, you know, as
opposed to a lot of Bitcoin Maxis, especially at the time,
we were very curious about what was going on in the rest of the
crypto space and we thought there was a lot to learn there.
And so despite being, you know, from the Bitcoin space, I think
I've, I've been working in the, in the, in the modular
blockchain world longer than most.
Yeah, that's cool. I I'm I'm bullish about bringing
it together modular and Bitcoin. It feels like those are two
things that are so diametrically opposed, but I think both bring
strengths to infrastructure that can really help scale defy.
And so I'm I'm really, really looking forward to this
conversation and diving deeper into that.
So I mean this today, today is actually pretty interesting day
to be recording this. I don't know when this goal come
out, but but this is November 6th is the day after the US
election. A lot of polling stations are
still are still counting the votes.
But it is pretty clear now that Donald Trump has won the
election. And Bitcoin is at all time high.
You know, maybe by the time it's record this comes out, you know,
Bitcoin will be at 100K Who knows?
But yeah. What are your thoughts on this
new US administration and what it means for crypto generally?
Well, I I think of the crypto industry and more specifically
of block chains themselves as sovereign jurisdictions, right?
They have their own rules set. They're not governed by any
court of law outside of themselves, and they have their
own ability to both defend themselves from third party
attacks and to enforce their own rules.
So they're basically jurisdictions.
So I think of the crypto industry as kind of like
Singapore in the sky. It's its own jurisdiction,
except that instead of being in physical space, it is in what is
quickly emerging to be a more important space, which is the
digital space and therefore is globally available.
And now if you start thinking about it through that lens, over
the last 16 years, we've seen the crypto asset industry, you
know, the crypto space, this Singapore and the sky become by
far the fastest growing economy in history ever period, right
from zero to, you know, $2 trillion in 16 years with
exponential growth. And this entire time that
industry has been under significant economic sanctions
from the world superpower of the United States of America.
So I think the most significant part of this election with
respect to our industry, right, our technology is that Singapore
up until now has been under sanction.
You know, Sky Singapore has been sanctioned by the United States.
We can expect now for most of those sanctions to be lifted.
And this remarkable growth story that we've had is sort of had
the, the, the, the roof lifted off of it.
So I think we haven't seen anything yet.
I think we haven't even begun to see the potential growth that we
could see in this industry. It's integration into the rest
of the global economy and what we would call traditional
finance. And yeah, I'm, I'm extremely
enthusiastic about it. It's basically our country is no
longer sanctioned by the United States.
Yeah, that's a great way to look at it.
I, I think that I think we're in for a really interesting year,
2025. I think that the uncertainty
that loomed over a lot of U.S. companies building in crypto is
going to be lifted. You know, namely by the removal
of Gary Gensler and the annihilation of the anti crypto
army folks who no longer, as it appears, much of a voice in
Congress or the Senate. And you know, we're we're based,
you know, we're based in Europe and France here in the UK.
You know that that regulatory frameworks here, I think, are
very different. But the wind of change that's
coming to to the US crypto front is going to have significant
impacts on markets. I think, like markets will be
the first thing that we see react to this.
And it already has right with Bitcoin now at 7475 thousand and
and, and and also, you know, to other jurisdictions who you may
want to follow suit. I'm not super bullish on the
European jurisdiction and it's more regulatory focused approach
to crypto. Does it really matter, though?
Europe's kind of like a museum, you know?
We could kind of keep Europe around to remember what humanity
was like. Right.
I mean what I mean by that is I'm not, I'm not, I'm not, I'm
not bullish on what that means for European starch and crypto.
I think like European starch and crypto will, you know, we'll
have a very hard time to to innovate and that has been the
case that's never. Been really my concern so much I
mean many years ago I moved to the UK from the US because at
the time you know the US sanctions are making difficult
to build businesses in the space.
But over time, especially as we've seen sort of the creation
of, you know, Dows and other ways of, you know, generating
revenue and tokenizing projects. The systemic importance of
companies in the traditional sense governed by courts of law
and jurisdictions of sort of the terrestrial terrestrial
jurisdictions has significantly reduced and sort of crypto
native businesses, crypto native projects are not don't have a
company at all or are not, you know, associated with one
specific company. And so, yeah, I think there's
actually a huge amount of entrepreneurship not just in
Europe, but all over the world. It is the first truly global
industry in that there is no physical centre.
It's not like San Francisco or London or Shanghai is the centre
of crypto. It's all over the world.
And and that's because we are denizens of, of Singapore in the
sky. So I, I think that that's, that
concern is important for those businesses that are dealing a
lot with Fiat and that's an important part.
But but they're, they're sort of the merchants who are, who are
allowed in trade between the two jurisdictions.
It's not, it's not our native economy beyond that.
I I think that actually, if you look at the crypto industry, it
is the best way to understand what work will look like in the
future. The crypto industry was totally
ready for COVID, right? Because it was already fully
remote, it was already fully globalized.
It was already completely unreliant on the supply chains
of the physical world. People will frequently be
working for more than one project.
Sometimes they're able to work Anon they get paid in crypto.
There's very few agreements that get signed because everything is
done through smart contracts. The future isn't evenly
distributed, but it's here and more and more of our industry is
going to start looking at crypto, which means that that
the the crypto industry itself is, is going to become sort of
our economy. Yeah.
I, I, I think that that makes sense from a like a long term
perspective. I think in the short to medium
term jurisdictions still matter. I mean, look like the Usus
dominance, like U.S. dollar dominance over stable coins is 1
indicator that Europe is like really lagging behind.
And I think that like the use of US dominated stable coins is one
of the, one of the reasons why like one of the indicators that,
that, that, that Europe is going to lag behind in it, its
dominance over crypto. And and then the other, the
other is purely just the, the, you know, like Mika for
instance, you know, if we look at Mika, it's it, it makes it
very difficult for, for European startups to set up here and
become compliant just because of the high cost.
And so it's going to favor and already is favoring large
organizations, large institutions like the likes of
finance, etcetera to set up shop here because they have the
ability and the compliance teams and the capital to comply with
compliance. But you know, if you're if
you're a start up and you want to comply with Mika and like
offer your services here in Europe in a compliant way,
that's going to be increasingly difficult.
Now we'll see like what the regulatory firmware looks like
in the US. But for the moment, as far as I
know, there is no sandbox right in Europe for start-ups to ease
into compliance. It's like 0 nothing.
Sure. I, I, I, I don't think we're
disagreeing. I, I, I agree that this is not
good for the jurisdiction that is Europe or the EU, but I don't
think that you can identify the jurisdiction with the people,
right. There's, there's nothing
stopping Europeans from being involved in this industry and
many, many of them are, they hold the assets they are
involved in, you know, developing the projects.
So I just think you're right that we're not going to see like
overnight the disappearance of the jurisdictions.
We don't need to. There is more and more a viable
alternative economy and viable alternative methods of commerce
which people around the world are able to use.
It's sad. I.
Agree with 100%. It's sad that, you know,
Europeans have to deal with all these capital controls, but it
it hurts Europe more than it hurts Europeans.
Yeah, well, it's going to be an interesting next couple of years
for sure. And I'm, I'm really, I mean, the
thing that I'm more excited about is just like vault
building in the markets in the in the next, you know, weeks,
months and years. And, you know, volatility is
typically when, you know, there is the most money to be made.
So, you know, everybody should be, should be exposed right now.
Not investment advice, but being exposed is probably but good
life advice. Good, good life advice, Yes.
So not investment advice, but life.
Cool. So let's let's let's take a step
back and, and talk about Bitcoin in US or or boss, actually, you
know something I think now, now, now that I'm thinking about it,
I think we actually met in person in in Denver last last
year, very briefly at the Bitcoin Renaissance event.
I came up to your booth and and then said hi.
But but yeah, So what what is what, what is Bitcoin in US and
and what does that enable fundamentally?
So fundamentally what we're looking to do is to make it
possible to use Bitcoin as a general purpose Ledger with
unlimited programmability. So make BTCA programmable asset
and use the Bitcoin Ledger to allow for other assets to be
created and used programmatically or you know, in
sort of more colloquial speak, turn Bitcoin into a smart
contract layer, smart contract chain.
And the way we do this is we're is basically taking the, the,
the insight that modularity proposes, which is that it's
kind of insane to try and do computation and data storage on
chain. So you do computation and data
storage on off chain, you prove it to the, the, the, the chain
or what I prefer to call the Ledger by posting a proof which
gets validated, verified and executed.
And that execution allows you to issue new assets, introduce, you
know, qualifiers, encumbrances or covenants.
You know, basically say how those assets can be used and to
move assets from from, you know, from the ownership of one entity
to another. This sort of concept is new in
Ethereum land, but in many ways is very, very old in Bitcoin
land. Bitcoin has been designed as a
extremely limited system in comparison to most of the sort
of out chains that we've seen in that really it specializes in
being a Ledger only. Whereas mostly due to the
influence of Ethereum, other chains have sought to sort of
add into the chain smart contract, you know, execution,
AVM, data availability, basically everything plus the
kitchen sink. Right, Bitcoin is the original
lazy Ledger. That's right for the modular
world. And, and it's sort of like the
perfect base layer to act as a Ledger.
It's extremely reliable. You know, it's perma Ware.
It's not like software that keeps upgrading.
It's it's like it's code base is small enough that human beings
can understand it, which is very different from, you know,
Etherium sort of being the classic example of something
which not now there's not a single person in the world who
understands it's full code base. And it's relatively lightweight
also as a result. And so it's the most trusted,
most secure system. And for years there was this
debate between Bitcoiners and Ethereum, which effectively was
like the early innings of the modular debate where Bitcoiners
were saying, look, guys, you're going to be giving up.
You're going to be, you know, you're, you're, you're putting,
you're shoving too much into a chain.
You're going to be giving up on decentralized.
And you're going to find that the system doesn't scale this
way. And you know, a few years ago,
it became very, very obvious that Ethereum wasn't scaling,
transaction fees were becoming too high.
And now depending on the date, you know, you'll see more than
95% of the transactional activity on Etherium occurring
off chain, primarily on what we today call roll ups.
So I think in that respect, Bitcoin was designed in a manner
which foresaw where we would ultimately have to go and has
been. Sort of like the turtle in the
race, slow and steady, moving towards a very, very clear North
Star which everyone is galvanizing around.
You really think this that like Bitcoin was designed in in this
way, like to to figure out where it had to go.
And it's not just like a happy coincidence that, you know,
there are now technologies that enable I mean, you do.
I really think that in 2014, like Bitcoiners were thinking,
yeah, we're going to have like L twos and modular block chains on
top of Bitcoin right now. Yeah.
And I, I mean definitely. So actually it's interesting
that you say 2014, 2014 is when the side chain white paper came
out for Bitcoin. So that was very, very
explicitly how Bitcoiners were thinking about expanding it.
And then later in 20/16/2017, when there was the block size
wars, right, it was the group of people who didn't believe in
that vision who forked themselves off.
They said, look, we need to have much bigger blocks.
We need to introduce, you know, more things and have more
frequent forks so that we can upgrade Bitcoin.
And the majority of the Bitcoin community, and in particular the
Bitcoin developer community, rejected that idea very, very
explicitly with the idea that no, that's not how any system
ever has scaled. Yeah, that's great, great, great
point. I mean, those those, those
Bitcoin scaling debates were yeah, I mean, it was, it was, it
was a a really interesting time. And I at the time felt that
Bitcoin needed to increase its block size in order to enable
more transactions. I I didn't see Bitcoin as a way
to do smart contracts though. I felt like Bitcoin needed to
stay as a very simple sort of payment system that other
systems would would fill the role of smart contracts.
And like up until now, that has been, that has proven to be
true, right? Like other systems have filled
that role, Ethereum, Solana and all the other kind of like, you
know, modular chains, app chains that have come.
So I guess I, I guess there's still time to be proven wrong on
that, you know? Yeah.
Well, I think if you've come into Bitcoin in like, let's say
the last five years, you would be.
Forgiven. I came in in 2013.
Yeah. Oh, so there you go.
So I think you'd be forgiven for believing that Bitcoiners didn't
believe in smart contracts because the Bitcoiners who have
sort of come in over the last five years dubbed, and the
reason they don't I think can be attributed to Stockholm
Syndrome, right? So Bitcoin didn't have smart
contracts. They were held hostage in their
own minds by the fact that Bitcoin didn't have smart
contracts. And so they convinced themselves
therefore that if it doesn't exist in Bitcoin, it must be
shit, it must be unimportant. And so instead of saying, well,
OK, we, we're working from first principles on how best to
introduce smart contracts to biker.
And they, they just rejected the idea out of hand as sort of
throwing the baby out with the bath water.
If Etherium has it, it must be bad.
And that's how you ended up with the ultra retarded maxi.
True. I like to call it bag bag bias
as yeah, maybe not ultra retarded.
Yeah, no. But I mean, there were some like
really early applications on Bitcoin that I thought were
really cool. I mean, like we at Epicenter,
you know, we were using, we were part of the Let's Talk Bitcoin
network and we were using Counterparty to do like tokens
that our listeners would get access to.
And like this was all built on on this kind of, you know, early
version of a Bitcoin L2. It didn't have smart contracts,
but you know, these were kind of early ideas of what then became,
you know, very common in in terms of tokenizing using using
a blockchain to create other tokens than than the underlying
store value. So yeah, these are these ideas
have definitely like gotten taken whole.
Well, I mean 11 interesting thing which people don't know
most people don't know is that this sort of idea that you will
have the Ledger and also applications was there at the
very, very genesis of Bitcoin. In Satoshi's Bitcoin version
0.1.0, there were the beginnings of the first DAP.
It was a poker DAP designed to allow anyone to play poker over
Bitcoin. It was called Poker Lobby and
was later removed because he felt like, yeah, you can't just
shove these things into the chain if you want them to work.
And then in 2011, Bitcoin invented the first ICO with
Master Coin, which was a system designed to allow for smart
contracts on Bitcoin through a meta protocol.
So in a way, you know, all, it's sort of like, you know, people
will say that all of Western philosophy is a footnote to, to
Plato in a way, all of the development that we've seen in
crypto is sort of like a footnote to those first, you
know, four or five years of, of a Cambrian innovation and
explosion that occurred in Bitcoin.
And we've just been playing with the same themes ever since.
So let's talk about the the the ZK proof.
So Bitcoin OS verified the first ZK proof on Bitcoin in in block
number 853626 that's proudly on your website.
Block of historic importance. A block of historic importance.
How does this work? So you know, for like, let's
let's break this down for people who understand Bitcoin at a
fundamental level. You know, how do we use Bitcoin
to verify ZK proof and what are the different pieces of
technology that enable that? So yeah, it's it's very
different from how you would do it on a different chain, right?
So in a different chain, like with theorem, you have sort of a
easy Turing complete system. You basically write a verifier
into that code. With Bitcoin, it's much more
complicated. Obviously you've got limited
data avail, you know, limited data available to you.
You've got 4 megabytes per block.
You've got 1000 stack limit. You've got an extremely limited
scripting language. And So what we had to do is we
had to write from scratch AZK verifier using Bitcoin script.
And when you do that, you're, among other things, writing AZK
verifier without even the ability to use multiplication.
So the script size becomes huge. And then the next challenge
becomes how do you get that into a Bitcoin transaction?
And so obviously you can't. And so you need to beyond
standard optimization, you also need to, to, to chunk it up.
And so their introduction of Taproot into brickwork, which
allows you to create these very complex trees of, of
transactional outcomes, allowed us to effectively split up the
script and its potential outcomes as binary outcomes in a
large taproot tree. So we split it up into the
leaves. And then the Bitcoin miners
aren't able to directly verify ZK proofs.
And so you need to construct some kind of mechanism where
external verification can be proven Unchained to the miners.
And so right now the way we're doing that is with like a
challenge response game. We we bifurcate the, we set up a
a series of pre commits and then we bifurcate the.
The the, the, the, the. The script outcomes until we
force someone who's cheating to basically reveal their hand to,
to show that they're contradicting themselves.
So this has, yeah, there were a lot of mini innovations,
optimizations and and sort of breakthroughs along the way to
achieve this. There was a paper that came out
called Merkelize All the Things, which described splitting
scripts up into these Merkel trees and writing them in TAP
script. There was a paper called Bit VM
which described utilizing this to write a code of arbitrary
complexity. There was the work that we
published. In bits, Stark and Grail.
Which described how we can write as a key verifier in this.
And then there was the very significant optimization work
that is ongoing to, to make this not just fit, but it'd be so
cheap on bickering that it's competitive with verification on
Ethereum or even cheaper. And we haven't we're not done
yet, right. So there, there, there keeps
them there, there. Now that sort of the, the ball
has gotten rolling. The momentum keeps building and,
and, and new methodologies which improve the speed and some of
the security assumptions with which you can do these things
keep on getting published. There's work that the Boss
development team and its community is doing which which
is remarkable. I mean, every every month or so
sort of a new startling idea or sometimes even a significant
breakthrough is made. And so sort of the, the, the
limits of what you can do with Bitcoin have effectively
dissolved away almost entirely. So with Bitcoin OS, with Boss,
our goal is to. Create an.
Operating system for Bitcoin that allows you to take any
arbitrary code of any size, prove it to Bitcoin as a ZK
proof and then verify and execute it on chain.
And once you do that, you've effectively got a highly
efficient Turing complete system which can handle any code.
And and then, you know, sort of the question that has been one
of the most fundamental questions in the entire crypto
space, which is what can Bitcoin not do, goes away because
Bitcoin can do. Everything OK, I, I want to, I
want to just like dive into this a little bit.
So, so the, the issue is that Bitcoin doesn't have the right,
it doesn't have the necessary OP codes to produce AZK proof
because it doesn't have multiplications.
And so that makes it impossible to do Unchained.
It wouldn't produce AZK proof. That's true.
Somebody else needs to produce AZK proof.
I think that's true of all systems.
Sorry to verify AZK proof. Yeah, it it also doesn't
directly verify AZK proof. And So what you need to be able
to do is to create a, a scenario where you have other parties who
can verify the ZK proof. And if the proof is incorrect,
they can, they can force a transaction on chain which
invalidates the proof. And so that, that, that's what I
was describing with the, the bifurcation game.
And and and I think with in a few months we'll be beyond the
bifurcation game and we'll have basically one shot verification
and so. Let let's maybe also just kind
of take a take a tangent here and talk about Taproot.
And So what what Taproot enables for Bitcoin, you know, that
wasn't possible sort of pre Taproot.
And and how how does Taproot work exactly to enable, you
know, this this entire new ecosystem of Bitcoin health
twos? So Taproot had a lot of
implications and it was a a pretty chunky upgrade to Bitcoin
in terms of it, it was, you know, relatively it relatively
narrow in what it allowed sort of in it from from a, you know,
just like surface perspective. But what that did is it opened
up avenues which have given us among other things, Ordinals and
runes and BRC 20s and ZK verification and Bitcoin and
etcetera. So why did, how did Tepper do
this? First of all, what Tepper did is
it introduced the ability to introduce new cryptography into
Bitcoin, especially around or specifically around the ability
to sign, to generate and sign transactions so that you could
generate a tree of conditional transactions, right?
And this had all sorts of sort of obvious implementations like
you could create a multi sig where the signers were not known
or you could create a conditional transaction schemes
which were hidden until they were actually performed.
And a big part of the motivation there actually was to try and
improve Lightning Network by allowing sort of all kinds of
conditional payments which would impact liquidity transitions
within Lightning that. But once you get this tree of,
you know, of arbitrary complexity where you have, you
know, different conditional paths that you can, you can walk
down, well, that has massively opened up the type of
computational complexity that you can introduce into bits.
And so what's what happened was that when Taproot launched in
2020-2021, there was a lot of excitement and then literally
nothing happened. Like it wasn't used for anything
significant, right? There were a bunch of
experiments. So it was pretty quiet until the
beginning of 2023 when Casey introduced ordinals.
And that was sort of like first, it was like the simplest use
case, but it was the first use case that really, really took
off. And what we've been the
dividends that we've been seeing since then in Bitcoin have to a
great extent been from the fact that the level of sophistication
and understanding of how to manipulate and utilize Taproot
transactions has just. Exploded, right?
What have we learned from from Orden Will specifically that you
know helps create a path forward for Bitcoin policies?
I don't know that I could dress necessarily draw a strict line
between ordinals and sort of what we're doing, although we do
utilize inscriptions. So we're use it utilizing to to
to inscribe data. I think one of the things that
it did is it sort of introduced this idea of being able to
inscribe very large pieces of data into Bitcoin.
If before the upper turn, which is where you would put usually
put arbitrary data was quite limited and suddenly the space
that you had available to you was massively increased.
As it turns out, we actually to, you know, I, I have optimized
things so that even sort of the, the, the, the limitations that
we had from a data perspective could have been respected even
without taproot. But it, it, it's primary benefit
was getting eyes on the problem and sort of opening up sort of
like, you know, once the first person ran the, I don't know, 8
minute mile or whatever it was, suddenly everyone could there's,
there's something about just demonstrating that something is
possible that makes it possible for others.
There's another part of so we have we have the bits snark,
which allows for ACK proof verification.
And then there there's two other components to Bitcoin OS, which
is grail and Merkelmesh. I I'd love for you to also
explain what what these two pieces of tech do and and how
they enable better L twos for Bitcoin.
Sure. So a boss is an operating
system. And like any operating system,
it's designed to allow you to have different types of
computation which you can coordinate.
So you could have different external computational
environments, let's say two different roll ups, which boss
will coordinate between them and and then it will also coordinate
that with the CPU, which in this case is Bitcoin made, right?
And so to make that operating system as useful as possible,
you need to bundle in some core use cases.
So 1 core use case is the ability to lock up BTC and other
Bitcoin assets and then allow them to be manipulated in
external environments. So other chains, roll ups, Daps,
what have you. So that is what Grail is
designed to do and it does it first of all for assets and then
secondarily for messaging, arbitrary data and perhaps most
importantly for security. So if you're building A roll up
on Bitcoin, it is through Grail that you can sort of write your
state to Bitcoin and then use that as the transaction ordering
tool for your roll up so that your roll up has the same or
very nearly the same, depending on your design decisions,
security assumptions as Bitcoin maintenance and and and is
secured by Bitcoin proof of work, right.
So that's that's how you expand Bitcoin both from a scaling
perspective and a features or sort of, you know,
expressiveness perspective with making few or no sacrifices.
And then the next big challenge is you, if you're doing that,
you want to avoid what has happened to Etherium, which is
each of these different execution environments, these
different roll UPS is its own whole new chain with a whole new
world. And you lose the
interoperability, the fungibility, the composability,
you lose access to the users, the developers, and the whole
thing kind of becomes a mess. And So what you want to be able
to do is you want to maintain that composability.
And so that's what Merkelmesh is designed to do.
And, you know, these are things that we're still, you know,
they're all in different stages of development.
But the idea is with Bitcoin OS, you have a single chain
experience, right? So a user is on, on, on, on in
one execution environment. Let's say it's a an environment
which is designed to, you know Shields their transactions and
provide data and information security for them and privacy of
their transactions. Can interact with an EVM which
is focused on D Phi and a a UTXO based system which is focused on
Dow's. And within a single transaction,
interact with both of these things as a shielded transaction
which will get aggregated and ultimately settled on Bitcoin
main. OK, got it.
So we have, we have the ZK proving aspect, we have the
bridging and then we also have the interoperability and
composability as one cohesive system which is Bitcoin OS.
Are there any other features that we're missing here?
Like is there an SDK that people can use to build their
applications using Bitcoin OS? Not yet.
We expect that there will be and there's going to be other
components. Not everything will be developed
sort of by the the boss developer ecosystem.
Some of the things like data availability, which is going to
be really important. You will be able to bring in
other tools like Celestia or Nubit, which is like, kind of
like ADA layer specifically designed for Bitcoin or Babylon
or introducing the idea of staking.
And so, you know, as an OS, probably there'll be a set of
core components that get bundled together.
And then you'll probably also just be able to sort of pick and
choose from a large number of other tools, dev tools that
you'd want to to to use to make buses usable and and and then as
valuable to you as possible. OK, so, so effectively what what
boss enables or what it allows it it allows L twos to use
Bitcoin for security. They still will, you know, can
utilize should utilize some data available there, like Celestia
or new bid or avail. Now there.
There is one missing component here, which is sequencing.
What's the preferred or kind of recommended way that Boss yeah
recommends for for sequencing so.
On the basic level, BOSS is agnostic to the specific
sequencing methodology used. Where sequencing does become
sort of where BOSS becomes more opinionated with regards to
sequencing is when you want to have the highest degree of
composability. And there there's sort of this
concept of shared sequencers, which we're skeptical of because
getting everyone to use the same set of shared sequencers is that
sounds like the kind of thing that you can do in a centralized
environment, but not in a decentralized environment.
And so the way we're looking at this problem is to be able to
provide sort of an inter sequencer data feed so that
sequences who want to be composable with each other will
have access to a feed of transactions that are relevant
to them. So let's say you've got and by
the way, I, I tend to not use the term L2 because it has
almost lost all meeting. So I, I, I use the more general
terms sort of external computing environment or external
environment. So you have these external
execution environments and I want to perform an A transaction
which is going to call on another external environment,
right? So I want to have a system which
is available where I can basically ping that other
system. So rather than trying to force
all of the sequencers to basically view everything, we're
trying to pare down the problem so that you, the sequence, can
message amongst themselves. Here I have a transaction which
is going to involve you and and and you need to ultimately
sequence it. OK, got it.
So another question I want to ask is, you guys are partnered
with a team called Merlin Chain, which is an EVM external
sequence external execution environment as as you put it.
They they, they would describe themselves and what they are
looking to become is a Bitcoin roll up right.
And so they've generated quite a lot of enthusiasm.
They've got quite a lot of TBL just in the basis of the fact
that they're going to be able to be an EVM roll up to Bitcoin.
And there is actually remarkably quite a lot of competitors with
significant size already who, who are doing this.
So so I mean. Merlin Chain is, is an EVM based
roll up and certainly there are a lot of other EVM based roll
ups that are launching on Ethereum.
There's also a bit VM, which I think has its own programming
language, although I'm not entirely sure maybe we can clear
that up here. But you know, if we take a step
back here, do you think that? So my, my view is that the, the
EVM long term is going to lose market share to other more
modern VMS that are abstracted, where sort of security and
complexity is abstracted away from the developer that is more
performant, doesn't have some of the legacy bugs that EDM has
like like re entrancy, etcetera. And and that is more modern and
tuned for modular block chains. And the analogy I I like to draw
here is how you know, the early development languages of web
like PHP and ESP has have mostly given way to more modern
languages and frameworks like Node JS with the advent of
mobile and and the modularization of the web 2
stack with Bitcoin. You know, now now that Bitcoin
has sort of leapfrogged the entire sort of, you know, defy
period of the last couple years. Isn't there an opportunity here
for Bitcoin to adopt very modern VMS as the kind of flagship L
twos on Bitcoin VMS that are was and based like the slot of VM
like move and attract new new waves of developers that are
coming from say like emerging markets that are looking to
learn the next generation of of blockchain languages that will
be you know, used in the next 1020 years.
Yeah, what? What, where do you sit here on
this, on this issue? Yeah.
So if so, I think the way to think about boss and the boss
stack is we have a low level language that we need to sort of
compile that. This is an analogy, but it's a
pretty close analogy. We've got a low level language,
which is Bitcoin script and we need to be able to compile a
bunch of different languages, sort of more abstract languages
down that into into bit conscript.
And the way that we do that is through the medium of ZK proofs,
right? So basically any language, any
language can which can be proven as a ZK proof.
And and now current iteration and probably, you know, for the
foreseeable future, we're talking about Groth 16 snarks.
If you can turn your code into a Groth 16 snark then BOSS can
read it and so actually BOSS is very agnostic to the specific
higher level language that you're going to be using.
Now with regards to EVMI, mostly agree with you and in fact I
would go even further than you. Right.
So I think the reason EVM has been so popular is an artefact
of the way that Etherium was constructed.
So Etherium hard coded it's VM into the system and then
Solidity became the most popular sort of language group.
But basically everyone is forced to use EVM.
And then the way that other chains have developed is well,
they've just forked that. And so they've they've taken all
of that with them. And that's true for other L ones
and it's also true for roll ups to Etheria.
Now we are, I think, rapidly moving into a world where almost
everything that we know and sort of assume around our industry is
wrong. And so the best example of us is
we call ourselves the blockchain industry, right?
But that is just a symptom of us not understanding what we're
actually doing. Nobody wants a blockchain.
A blockchain's a sort of a stumbling block towards getting
what we want. It's this really annoying, slow,
non performant database. What we actually are is we're a
property rights industry, We're a digital crypto asset industry.
And it turns out that you don't need most of what you would have
in a blockchain to generate that in at all.
So 2 examples of companies that are really, I think at the
leading edge of this is RISC 0 and succinct.
And both of them have developed more general purpose ZKVMS,
right? And so these are VMS which allow
you to take Rust and then, you know, later TypeScript, WASM,
whatever, compile that down to directly to ZK proofs.
And So what that means is that we're actually not going to have
sort of chain specific or blockchain specific languages
we're going to see this year. And it's certainly in the years
following the developers being able to choose whatever their
favorite language is and then compile that down.
And it also means that this idea of you need to have your own L1
or you need to be a chain at all is going to look very
anachronistic to us quite soon because you've got this really
great Ledger, right? It's Bitcoin.
You use that as your Ledger, you've got data availability,
multiple different projects are competing to, to do better, more
efficient, faster, more scalable data availability.
You've got the VM, you, you can create an execution environment
which is highly optimized to your particular use case.
And then you have a whole assortment of builders and, and,
and sequencers who are sequencing and providing
interoperability and composability between these
different execution environments.
And so at that point, you've completely unbundled the
blockchain. Why would you even want a
blockchain? It's, it's, it's, it's sort of
getting in the way of everything that you want to do.
It's constraining you. It's, it's heavy, it's
expensive. And so I, I think we're actually
at the early innings of an entirely new phase.
The blockchain industry is dead, the crypto asset industry is
about to take off. And this whole idea of layer
ones is, is is going to disappear the and so our this
prism through which we've been looking at our industry, right,
that it's a blockchain industry is wrong.
And projects are going to have to either choose to adapt to
this new environment, which is I sometimes call the post chain
environment, or I think they're going to wither.
Yeah, I think I was watching a talk from yeah, I, I think it
was Murad, you know, this, this, this meme coin guy, I was
watching his talk from 20 from token 2049 and, and he says
basically like, you know what, what, what, what this industry
does is produce its tokens and, and that the technology really
doesn't matter. And in the same way that like if
you look back at in the last 20 years, intranet and web
development are the industry developing Like what what we
produce is like we produce services and software that that
improves people's lives. We didn't produce like, you
know, database technologies or, you know, we don't look at it as
like, you know, the, the database, like the connected
database industry or, you know, the kind of like cloud industry.
We look at it as the software industry or the services
industry or all the different like food tech, Med tech,
fintech industries that were produced there.
And, and, and I think that that's like an aptology for
crypto. And thinking about it from like
the end product, which is, you know, tokens and, and
applications that allow people to utilize those tokens makes a
lot more sense than looking at it from from the underlying
technology perspective. That's I think a symptom of the
industry being very early, which is something I believe in real
adamantly. Like I think we are much, much
earlier than people think we are or people think generally.
I think we are, you know, we're somewhere still in the 90s,
early 2000s era of the Internet where nothing works.
Building applications is a mess. There are like tons of different
ways you can do things. I mean, I was a web developer in
late 2010 and I mean was a web developer just by teens.
And you know, remember it was like building a website 15 years
ago, just 15 years ago, building website was just so incredibly
complicated. You had to write CSS for
different, for different versions of of your the same
browser. You had to build different
applications for depending on the on the type of device you
were on. Nothing was secure.
There was no HTTPS, everything was nothing was private.
Deployments were slow. You had these like very
unsecured kind of languages like PHP and my SQL and and that all
changed in the last 15 years long.
So, you know, think of think of that in in terms of blockchain.
Years. We haven't even scratched the
surface. We haven't scratched the surface
and this was 20 years after the first website, right?
Like so we have not scratched the surface.
And I really believe that we're much earlier than we
collectively think we are, you know, looking back at Ethereum,
bringing it back to Ethereum. And you know, if Ethereum I
think has somewhat suffered from it's a roll up centric road map
with cannibalization of the L1's business model.
And you know, we we've seen these charts, right, of base
generating millions of dollars in revenue, but yet only paying
several thousands of dollars of fees to Etherium.
How does Bitcoin avoid this? And like is, is Bitcoin
fundamentally different from the fact that it's proof of work and
that it's just a different animal than than Ethereum?
Or or are there really like lessons to be learned here where
Bitcoin needs to do things differently and it's L2
strategy? Well, first of all, Bitcoin is
fundamentally different in many very significant ways.
First of all, Bitcoin, the chain doesn't have an asset in the
same way that Etherium the chain has an acid, right.
So the entire Etherium chain has been built around ETH.
It's the method of consensus. You need to stake it.
It's highly dependent on revenues and and sort of it's
extremely over engineered. BTC is a simple commodity and
and so I think I think Etherium is phenomenal.
It's been, you know, an absolute treasure trove of
experimentation and innovation. But at the same time, it's been
sort of running around like a headless chicken for exactly the
same reason. It doesn't know that Ethereum is
not built from first principles. It, it, it it's sort of is in a
constant race to run after the last narrative right So smart
contracts when you couldn't do smart contracts on on Bitcoin
proof of stake because Bitcoin was proof of work modularity,
because we needed to solve the technical debt that we created
with those first two decisions ultrasound money because we need
to compete with BTC and, and, and so Ethereum is is fantastic,
but it's not both from first principles.
BTC is a product in and of itself that's why it's called
digital gold. It's extremely simple to
understand and, and that's what makes it so popular and so
Bitcoin is not reliant on BTC in the same way that ETH is reliant
what BTC is it's a first class citizen in the Ledger, right.
It is like the first example and the best example of an asset
secured by the world's best Ledger.
Another way in which Bitcoin is very different from Etherium is
it has what you could call second mover advantage, right?
So despite what people think, it's not really important who's
first, it's important who's lost.
And so one of the advantages that we have when building
bosses, we get to look at Ethereum, we get to look at
other systems and recognize some of the pitfalls.
So we're building in composability and
interoperability as a first class citizen.
And then the, the, the third sort of conceptual problem is
that Ethereum itself is very dense, right?
It's, it's, it's got so much in it.
And the roll ups that have been built for Ethereum partly as a
shortcut, have just basically replicated that chain.
And so they're not built as execution environments.
They're built as sort of alternate L ones, which just
happened to have, you know, an optimistic or a ZK bridge to
Etherium. And so in many ways, actually,
their relationship with Etherium is, is possibly less than what
you ideally would want for Etherium, although it's great
for the for the roll ups themselves.
And I, I think that's going to change both for Etherium and for
Bitcoin, But for Bitcoin it, it, it might actually happen sooner,
partly because of the simplicity of Bitcoin where we will start
seeing sort of highly optimized non EVM, right?
We, we, we don't have the baggage of the EVM that
everything needs to be built for EVM.
And so you're, you're likely to see sort of rust and, and, and
WASM and TypeScript experimentation on Bitcoin,
perhaps even more aggressively than you would see it on
Ethereum. That that I'm not sure about,
Yeah. Yeah, that that I'm very hopeful
for. I'm, I'm very much a proponent
of, you know, building new environments with which
developers can, you know, interact and build applications
in a much more efficient, scalable and secure way.
And, and I think we get there by sort of investing and believing
in like Rust based VMS, Watson based VMS, move based VMS more
so than the VM, which, you know, it's 10 years old in, in a few
months. And and just wasn't, wasn't
built for, I think the future of of blockchains, even though I
think it will continue to be relevant, you know, in the same
way that PHP continues to be relevant.
You know, it still powers something like 70% of the
websites, but it's not the thing that college kids are going to
be learning and getting excited about, you know, in the next 10
years. Yeah.
Before we wrap up here, I also want to talk about Cardano,
which is interesting because you guys are working with Cardano to
bring Cardano liquidity to, to Bitcoin or maybe I think it's
the other way around, Bitcoin liquidity to Cortana.
Sorry. So yeah, what's what's happening
there? So I think the big story is that
from Bitcoin's perspective, everything is an external
execution environment, right? And if you can hook into these
systems and extend Bitcoin into these systems, they become
scaling. Tools, they become basically
layer twos to Bitcoin and Cardano is quite unique in that
Cardano yeah, has a lot of sort of philosophical agreements with
Bitcoin, but from a technical perspective as one which is
particularly important, which it is, which is that it's UTXO
based. And so to do address and
transaction mapping as well as transaction finality between
Bitcoin and Cardano actually turns out to be relatively
easier, right? It can be done with an EVM.
It can be done with any chain, but Cardano have at least in the
early innings, a important advantage.
And so the Cardano community and Cardano developer community in
particular saw that we'd verified ZK on Bitcoin and they
reached out to us. And as they dived deeper, there
was this growing sense of excitement which culminated in
one of the the weirdest things that have ever happened to me,
which is I went and I gave a talk at, at a Cardano
conference, which that in and of itself was an extremely
unexpected outcome for me. But but then also the reaction,
right? I, I, I, I was just, you know,
it was just another one of many panels that I've given at a
conference. But suddenly sort of the, the
crystallization it it's sort of Cardano realized a lot of what
we just discussed over the course of this call, right?
That the the whole crypto space is sort of inverting that you
can utilize Bitcoin as the sort of global canonical Ledger.
That doesn't mean that you're dead in the water instead of
fighting that you can actually utilize that you can gain access
to, you know, a multi trillion dollar asset base, hundreds of
millions of users. You can provide data and compute
that Bitcoin itself is never going to do for itself.
You can do it trustlessly. And so I think Cardano is
turning out to be just one. You know, we, we discussed
Merlin and b ^2 and and there's a whole bunch of other projects
that haven't made public announcements sort of sort of
also integrating boss. But Cardano so far are the
biggest sort of project and community that have gone public
with the fact that they are sort of pivoting or starting to see
themselves as an ideal platform to provide asset management and
smart contracts to Bitcoin. I, I, I think that this is going
to be thematically one of the most important things over the
course of 2025 and beyond, right?
The, this idea that we've had in our heads for the last 13 years,
which is that you've got Bitcoin and then you've got all of the
competitors to Bitcoin. Like, I don't, you know, I, I
don't agree with a lot of the, the what I call, you know, ultra
retarded maxi stuff. But Michael Saylor has this
thing where he says there is no second best.
And in one very deep respect, he is correct.
There is no other platform, there is no other Ledger out
there that is going to prove to be the credibly neutral globally
spanning Ledger that all of these other chains and projects
can plug into, right? Everyone else is sort of a
threat to themselves. Bitcoin competes with nothing.
And so this idea that you're competing with Bitcoin, I think
has been dead in the water for seven years.
The the the high watermark of it was 2017 where sort of there was
the Ethereum flippinning. Since then, if in BTC terms has
fallen more than 80%, pretty consistent monotonic decline.
The flippinning is never happening.
Bitcoin is a fact. It remains as much as ever the
center of gravity of this entire industry.
And so the game has changed. It's now the technology for the
first time through boss is also available where you can
integrate with Bitcoin and and and and and provide services to
that asset base. And not only that, but utilize
Bitcoin as a Ledger for many assets beyond BTC.
Is Cardono the place where it's going to happen though?
I mean, like Cardono is is in in the top market cap assets by
virtue of having been early and it it's very liquid on on sexes,
but the cardinal defy ecosystem and like the cardinal ecosystem
generally is not that exciting. I think to a lot of people, you
know, TVI was like 200, two, 130 million.
I just checked, you know, like the excitement around things
like Solana, you know, even Cosmos, I think you know as as a
place for a defy innovation powered by Bitcoin liquidity
feels more credible to me than than Cardano, I mean.
Well, you know, the Internet is sort of like this one globally
spanning network that we all use and on top of the Internet over
the last, it's called a 20 to 15 years, a number of companies
have launched which have grown to multi trillion dollar market
caps, right? So many have, you know, hundreds
of billions in dollars in market cap, but there's a several that
have trillions in market cap. If you roll the tape forward
with Bitcoin, Bitcoin if even if it continues at a sort of 50% of
its current trajectory, is going to be somewhere between 20 and
$40 trillion in asset value 12 years from now.
There's going to be several companies or more likely
protocols that are going to have trillion dollar valuations
building for that ecosystem. Now the question is who is it
going to be? I think some of the winners are
already out there. Cardano might be one of them,
and Cardano could have a very, very significant trajectory
change if they end up, you know, becoming a leader in providing a
really great UX experience and really secure smart contract
experience for Bitcoin. Other projects are taking a
different approach and they're sort of more tightly coupling
themselves to Bitcoin. They're basically becoming roll
ups and not, you know, they don't have their own consensus
mechanism at all. I don't know if it's going to
be, you know, if Cardano is going to be a project that wins
here. And I definitely don't think
there's only going to be 1 winner, right.
So you could have Cardano being one of 10 very, very significant
projects 10 years from now. That's really a question of
execution. But what we are definitely
seeing is more and more projects are starting to recognize that
this is not just a viable path, but the most viable path towards
positioning yourself for 2025 and also 2035.
And so if it was just one or two projects, it was just Cardano
and just Merlin, you know, I would say, OK, that's just a
straight line. But it's enough significant
projects and many, many, many smaller sort of innovative
projects that at this point it's, it's a, it's a trend.
Cool. So what's what's on the road map
for Bitcoin OS and how can people stay up to date with a
project? And what is your what is your
call to action to our audience? OK.
Well, you know the the the first versions of the ZK primitive are
already unbecoming and we're now in the process of integrating
different pieces of the OS to launch sort of V1 of the
production level OS, which is going to make it easy for
developers to start using these different primitives.
And we expect to roll that out over the next that's quarter
four or five months. So where things will get
particularly interesting is the beginning of next year.
In terms of following us, that's pretty easy.
You can follow me on Twitter, I'm at Idan Yago.
You can follow Bitcoin OS which is at BTC under SCORE OS and
there's a whole bunch of other projects I'm working in Cardano
and Merlin that you can follow as well to to track their
progress in terms of call to action.
Like your audience I think is particularly tech savvy.
You guys have a lot of developers who listen to you.
I think there's just a huge blue ocean opportunity.
Bitcoin has been sort of this dormant platform in many
respects with a completely underutilized asset base and all
of that is changing in now extremely rapid.
So there's huge opportunity. There's huge opportunity to do
new things, but there's also a huge opportunity to just see
what's worked in other environments, in Etherium, in
Solana and bring that over to Bitcoin.
And then just more broadly, I think thinking about what we're
building not through the lens of chains, but through the lens of
ledgers of assets and computation or asset management,
I think is an extremely helpful frame of mind to understand
what's going to happen next because we're not a blockchain
industry. And if we ever were that, that
that time is coming to an end. Couldn't agree more.
That's great note to end on Yago, thank you so much for
joining us today on Epicenter. We've been great learning about
Bitcoin OS and diving, diving into Bitcoin for the first time
in a long time. To be honest, it's been really
exciting and interesting. Thanks again.
Thank you.