Taproot Wizards on Bringing JPEGs to Bitcoin | Dovey Wan - Primitive Ventures | Udi Wertheimer

much oh wizard right there in front of me okay welcome to Stage I'm will foxley founder of blogspace Media we're a B2B publication for Bitcoin joined by Dy Wan of per Ventures and udy ver timer of Tap Root Wizards udy we're going to start off with you today when does eth become a side chain for Bitcoin well first of all uh thanks everyone for having me I I'm I'm slightly disappointed uh will that you're not wearing the the shades as we previously agreed but that's okay um yeah is has always been a s you know I one of the cool things is I'm really I'm really happy that uh I got the opportunity to speak here um you know I wanted to be with you guys in person but it turns out everyone who has to you know in order to get into the venue you you literally have to get an ethereum wallet and get your ticket into your wallet I just couldn't I could couldn't do it so so I'm going to do that remotely sadly but but look ethereum is great and I think that ethereum will help scale Bitcoin it has um so it's very promising awesome okay well in all seriousness we're here to talk about jpegs on bitcoin conversation we could not really have a year ago well close to a year ago ordinals launch you know about a year ago so we're going to talk about that with to Tapper Wizards and then dovey is at Prim Adventures which has been investing in many things including stuff that's not Bitcoin duy but that's okay yeah so but like we have been like sponsoring like independent Bitcoin developer because previously as a investor it's very hard to find Venture scaled investment in so in like the whole Bitcoin Universe because I think like a lot of our last generation like Bitcoin founder and it's too fundamentalist or like too in like a pure form and um you know like so they just want to build the tag and we are in for the TCH but we have to respect the pump as well right um so yeah so like I think like the last generation like Bitcoin Founders and they're more like idealistic and like this generation they're like more like expressive and so like that's why like ordino actually make Bitcoin expressive as well right and then so we should talk about like opcat we should talk about covant and like all these things that can potentially make like like all other like ethereum compatible application also available on bitcoin well unfortunately Jeremy ruin made me sign a memo and I'm not allow to talk about op cat on this panel since ud's here so we'll just uh gloss over that maybe until the end let's talk about Bitcoin Investments really quickly uh talk about last year inscriptions came on to the road map a few people were already looking at what can we do with Bitcoin Bitcoin season 2 Bitcoin Renaissance a lot of phrases that Udi has um coined for us if you will how did the investment landscape change from last year till now doy what were some things that you guys are looking at you're like we couldn't do this a year ago we can't now um I think first of all it's more about like the mindset change uh because like previously like Bitcoin is more about generational wealth and then like it has to um so it has to just say like not your key like not your coin and then so like UD remember like last cycle is like have fun staying po um and so I think like this cycle and we have seen a lot more like younger uh just like younger users and like especially in China Korea like vietamese and and uh like majority of the original trading volume like coming from China uh coming from China so pretty much like Asia thing and so I think like that's pretty like fascinating to me because on one hand we have like ETF so we have ETF approved like in the west and like all the Boomer basically just like buying ETF and like on the other hand so in like Asian market and like all the young um Asian users and then just like thanks to like the push from miners from like CX like like okx and biet and then like many other just like wallet providers uh in so like backing Asia so like they basically make trading or know like flipping jpad on like Bitcoin like pretty so it's like pretty easy um so like that's why I think um like before or know and just like this so like everything we invest in like Bitcoin is a highly centralized infrastructure like either mining pool like Mining facility and like those things are just a traditional business right so like it has nothing so little very little onchain element and then or you can invest in things like lightning and 1.2 billion or 1 billion valuation but it's kind of you know it's like probably underd deliver a little bit uh and then like also no path to uh to like a venture scale business so uh and we have seen a lot of our Bitcoin layer to popping up and so one of them surpass like two billion TV out already um so that that's also one of our portfolio and then so no one heard about this until recently and like even Nick Carter like only um so Nick only heard about this like yesterday so just imagine like the Divergence between East and East oh so between West and East we stick with that for a second and then udy we'll go back to you and talk about ta Wizards why do Asian biders like brc2 so much like how did that catch the attention Fair launch yeah so udy you can talk more about that but for me it's fair launch yeah it's like the spirit of like so it's the spirit of like the OG Cypher Punk right yeah author to you as well why do people care about BSO 20s and I I I bought a few of them I bought all all the wrong tickers like I thought Doge BRC was going to go up it didn't move at all and then all the random ones did go up yeah I I think I think do hits it right on the head uh it's it's it's the launching mechanism that it had which is really novel and unique it uses um block space consumption it uses Bitcoin block space consumption in order to issue new units of the of the the token um that's something you know actually I think that um on ethereum there was a project project called Zen uh I think in the past did something similar and essentially you need to consume block space you need to create transactions pay high transaction fees in order to uh get units of the new token and that is relatively fair in the sense that it's very hard to game you know you get what you put in so I think people like that um and it was very unique to BRC 20s so Tapo Wizards is a JPEG house that is trying to Trojan Horse an opcat that's how I would summarize it these days what would you what would you pitch it as yeah I look topper Wizards uh really is the community and the goal is to make Bitcoin magical again right and we started this a year ago uh back when everyone laughed at us and said that ornal are not going to catch on and nobody's going to care for it and the Bitcoin developers wouldn't allow it and you know the laser ey podcasters will reject it um everyone told us that and it turns out they're a little bit wrong uh it turns out that people do want to do magical fun things with Bitcoin and it's kind of obvious now but I think that's another point that D made that I really like is about the kind of um polarization between like the ETF stuff and then the onchain degeneracy with orals which actually I think works really well it's very very healthy for Bitcoin uh we could have ended up in a situation where anyone who wants to hold Bitcoin just goes to one of the ETFs Parks their funds there and no one really interacts with the chain no one really take self- custody of their funds anymore that would have been a bad outcome I think um one of the greatest things about own that it creates like this new Vibrant Community where people interact with Bitcoin every day on chain in very high volumes today um and that becomes like the main reason if you look at what people do on chain it's mainly like ons trading so it becomes the main reason to interact with the chain the main reason to hold funds in self- custody and it's a good balance you know you have the ETF for like the big institutions which is great but you also have like the onchain degeneracy for those who like that um I think it's a very healthy balance actually yeah I mean it's kind of wild to have Bitcoin just one two strokes in a row ETFs and then ordinals how do investors look at this landscape so wtu like we have all these l2s launching that's great but there's also this inscription landscape which is a little bit more vibrant a little more put together like on a technical front it's actually like more sophisticated and works as opposed to these l2s like they're kind of cobbled together people are figuring it out it's much like the ethereum ruup ecosystem in 20120 how are you guys looking at these different l2s and being like this is a good investment this is something worth putting our LP money into yep um so first of all because we don't have any outside money so it's basically all like um like the team's money so we can do anything that can be crazy like super Crypton native um and so when it comes to like Bitcoin Alune investment um so my thesis like as of now so like we have to wait like first of all and I think like bit VM uh like bit VM like not the Bitcoin VM like like BVM is a an interesting Innovation now um and uh uh so my asp ation is in so in probably one to two year and so when like BBM become a thing and like BBM like likely going to be like a public good like there will not be like a tokenized that bit VM like whatsoever right and so once that bit VM become uh available and then so it would be like a race for whoever can be like the like the first working optimistic Road up uh on bitcoin um so which means like the like the like the technicality wise like there's no like entry barrier like like so in like 2 years h Horizon so it will be engineering it will be implementation it so it will probably be like go to market so for us now because I believe in like L2 like needs to have both of the monetary gravity and that is at tvl and also like the monetary velocity and like that is at the onchain activity uh on the L2 so so far so I basically rank like all the L2 like to see who has like the highest at tvl and then so we basically made an investment there so we investing like the two highest at tvl and one is like Merlin and so they've surpassed at 2 billion TBL and like the other one is Bounce bit it's like 500 million TBL and so because like once you have the TV as a the mode and then uh and then so you can use this like two years like time frame to really like cultivate your community over there and then so have like good user retention uh so I think like that's like an invaluable asset like comparing with the other like upcoming layer to uh and then we also evaluating like a bunch of others and then so like like which which are also interesting um so like but like this is our current thesis and also I want to ask this to Will and like Udi as well because uh like assuming like opcat um going to approved or just going to just like uh be a real thing and so in about let's say five years and then so like so I don't want to be like too optimistic here so let's say like opat going to be available in like five years and then so there can be a possibility to have like a trustless bridge on um of from the layer one and then so potentially like we can actually do like a full on optimistic like ZK Road up and so that's possible right udy and I think like that is like a trophy like Road up like all like later to so in my mental model so uh yes I would say that's fairly accurate uh except for the part about five years I'm going to like uh you guys are like the lobby house now I think I think we're getting it this year I think by the end of 202 we're getting upcat to those who don't know a bip or actually implemented or flag on bitcoin mark your calendars nine months yeah let's go let's go can we get into like April like Fork like if possible I think it's very possible so for those who don't know opcat is this ancient uh op code it was literally in Bitcoin for the first release of Bitcoin in uh 2009 and um the uh Satoshi Satoshi himself disabled it a year later um just because he panicked he didn't he he disabled like 15 up codes in one day uh just because he was like well maybe we need less up codes and what happened since then in the 15 years since then is that developers realized that actually opat is way more powerful than anyone thought and while it wasn't its original intention you could actually use it to be extremely expressive uh with Bitcoin and yet just like uh just like DOI said you definitely could use it to do like optimistic bridging to another rollup or another chain which is um really massive I think so um it turns out it's just pin lines of code it's really easy it already was part of Bitcoin U getting it back into Bitcoin is very safe a lot of Bitcoin divs want it but I think that um people were a little bit afraid to kind of propose a soft fork for Bitcoin and to kind of go the upgrade route and I think that just like we've seen the orinal community kind of rise up and change the culture I think that the orinal community is going to have a big part in uh in upgrading Bitcoin this year too so that's you know that's that's a big Focus for us in Tapper Wizards and and we have the quantum cats collection that is all about um operating Bitcoin I actually really think it's going to happen this year um things are aligning things are aligning there's a lot of that want that and I think that a lot of those kind of layer twoos that you guys have been talking about I think that a lot of them are realizing as well that if they really want to ship the things that they want to ship they're going to need to have upcat there so the push back for upgrading Bitcoin last few years has been like why mess with this thing it's working it's slowly gaining volume it's slowly gaining price and this year it's ripping I mean e BTC the pair like bitcoin's dominating that right now that's always been a tug of war that people have paid attention to so why push opcat right now if we have ordinals if we have ETF we have price going up crushing altcoins why do we need to upgrade it again udy you know um the last upgrade Tapo was during a bull market as well um bull market actually makes a lot of things easier because you have a lot of eyes and you have a lot of interest and and a lot of people just weren't into it are now paying attention again it actually can help I think to move a softwork forward and it's it's like I the the interesting thing is it's not really us pushing for it it's everyone asking for it so we've been you know Bitcoin divs have reached out to us to help them promote upcat it's not that we kind of woke up and decided this is the thing that we need to do um I think a lot of those layer twos are realizing the same thing we've had some of them reaching out to and saying well you know what it looks like upcat can actually fix those problems and even um mining pools and miners you know we've heard about a public Mining Company launching in L2 just a couple days ago and you people have asked me like hey how are you going to convince Miners And it's like we're not going to need to convince miners miners want this yeah everyone want this so I'm I'm actually really bullish I think this is going to happen I think this is uh I think this is something that everyone is going to want and it it it just unlocks so much for Bitcoin instead of building those kind of crummy uh centralized multisig Bridges um that end up you know every bull market those those bridges end up losing like at least half a billion instead of doing that we can do something that is real um I think there's going to be a bunch of demand for that yeah and and so I have like a strong argument so why we need like opcat and so because said right now so if you see um like the original volume and like their consumption on like a block bace and then so it basically like cannibalized like coin join right so um so like that is so like that is actually my so that is actually my biggest issue why I want to push most of the orinal volume to like too and and uh because like now it's like cannibalizing coin joint and so it's basically um like impacting like the potential like privacy of like Bitcoin transaction and um so like that's why I think like ordinal is a step one and it's basically like a children horse like for us to just say activate it like upcat and then also like the current version of like the upcat is much more simpler like Udi so like crap if I'm wrong here so like the current version of like the opcat is much simpler like than the version 10 years ago it's just like a few lines of cod um so so like once we have the opcat and then so things we can build on bitcoin later to is like a native like Bitcoin Vault so it's like a smart so it's actually smart defi it's like it's like smart bipy like not defi right and so like those are the things like not like not going to be possible like without like opare and and so I remember I had a conversation with udy just um last year in stanf um like the problem with like orino is it's just like there's no much you can do Beyond just like the unspent utx though spending the chain and and so like there's no Financial interaction that you can do with it uh all the Vault like all the dexes like can only be enabled by like opcat and like Covenant so like that's why I think uh I have been encouraging like all my portfolio and uh Bitcoin portfolio Bitcoin layer to bitcoin da and so they should unite together like to push this out okay so we still have this cultural issue though even though we might have a good Tech upgrade grade what do we do with the part of the Bitcoin community that doesn't want anything to change they want Bitcoin to aify does that matter at this point UD like is it possible to get past that loud minority I uh you know a year ago I would have said that that loud minority is a challenge that we need to face I think we faced it already it's done um I think if there's one thing that's been clear to everyone looking at Bas is that the kind of laser eye maximist are just not relevant anymore like it doesn't really matter what they say or think at this point they tried to I think one of their biggest blunders were they were publicly and openly trying to stop ordinals and orinal cannot be stopped so you don't want to you don't want to try to stop something that cannot be stopped and put your reputation behind that and I think people see that now um it's a lot of podcasters and they have a lot of really nice shows and books and blog posts but they don't really know what they're talking about so the good the good news though if as long as they're holding Bitcoin they're going to be fine so you know they don't have to understand uh what's going on behind the scenes if they don't want to as long as they're holding Bitcoin they're gonna be perfectly fine WT last question can the eth community and Bitcoin Community find better ground to talk with each other because of ordinals or is this going to uh drain one side of the other's bags oh yeah so I think it's very very L synergistic and because um like the Bitcoin layer to like execution can be evm and then so like most of the Bitcoin Layer Two are evm execution um and so because like the blockchain is not like so it's not monolithic and like ethereum becom modular and then so now we have like if we can have like opcat like Bitcoin going to be relatively modular as well so in a very modular world and then so it's all about optionality right so like that's why we have seen so developer they're like pretty pragmatic just like application developer they're very very pragmatic and they just want to utilize where like the tvl and where like just like like the to Velocity SP right and and so I think they're completely just say um neutral it's so it's whether ethereum or like Bitcoin doesn't matter because previously Bitcoin has been silent right it's just like basically uh like sinking there like as so as like a so like as your like wealth Reserve but like once that Bitcoin become more expressive like become more like interactive and so like a lot of like this developer from the e Community like will be attracted to like the Bitcoin Community as well yeah so I'm so I'm very very bullish on that udy last question for you as we wrap up here what happens to Ether asset if Bitcoin gets opcat you know I'm not eth is going to be totally fine I think that ethereum is going to continue to grow and to succeed because Bitcoin is not going to be a better version of ethereum Bitcoin is still going to Exel it being a store value it being digital gold but in order it just in order for Bitcoin to do those things it needs to have more expressiveness and it needs to kind of scale bigger better um so you know Bitcoin would have some of those features but that's never going to be the main focus of what Bitcoin is and I think ethereum is going to continue to be um the sort of like developer platform and they can continue to coexist like they always have but I think that the thing with Bitcoin there's this massive growth opportunity because this is really a zero to one moment where for literally almost 10 years the the capabilities of Bitcoin have been held back by this like religious group of of laser IED zealots and it turns out there was no reason for it like technically Bitcoin can do actually a lot more and once it's not being held back I think it's like this massive moment of Bitcoin catching up to the capabilities of other ecosystems and there's all of growth in that but that doesn't mean that ethereum is you know going to disappear not at all I think ethereum gonna still lead the the kind of you know blockchain is the developer platform uh view love it udy doy thank you for joining talk to you guys soon thank you thanks will all right thanks will thanks doy thanks