Have Fun Staying Turing Incomplete: What Bitcoin Builders Borrowed From Ethereum | Muneeb Ali

go thank you thank you um I'm sorry are you guys all hung over from yesterday because you're not really loud enough for me um yeah there you go let's go pick it up speaking of magic internet jpegs have you guys seen these shirts they're pretty they're pretty much a hot commodity in the Bitcoin Eco um and now I get to fulfill my Oprah dream and say that hands up wake up you get a Wizard's t-shirt and you get a Wizard's T-shirt oh I have two more you get a Wizard's t-shirt and y'all get one of y'all get a Wizard's t-shirt excellent here's your T-shirt all right guys let's get this panel kicking all right on that note so like they like I said um I'm Hillary Adler I'm the VP of marketing at thesis we are a venture Production Studio building and investing in Bitcoin related projects and products um I want to let these gents introduce themselves as well and I also want to ask you one fundamental question for each of you to to address which is why do you think now and is the time in the market for l2s they're proliferating like crazy we all know that um so introduce yourselves your company your project and uh answer that question first and we'll kick it off all right thanks so much so I'm Alex say I'm one of the co-founders of Bob we are a hybrid Bitcoin layer 2 building between Bitcoin and ethereum so super excited to be here at e Denver um yeah I've been working on bitcoin research for the last nine years always trying to do more with it than just payments um and the reason I think now is the time to really explore Bitcoin ler 2 is is on one hand the technology is more mature than ever before ethal 2 is a really production R you've see billions of dollars in volume in tvl but then on the Bitcoin side and I think udy talked about this there's a culture shift it's okay now again to come to build on bitcoin you can be Innovative you can experiment and the New Kids on the Block are taking over and that's why I think we're experiencing this Renaissance hey I'm red I'm a research analist at misari we try to add some transparency to this industry and I cover Bitcoin and stacks and some other base layers I think the reason that now we're seeing so many layers pop up is not a change in demand I think there's always been some demand for that but there have been some tech breakthroughs that have maybe stirred up a little more excitement in that area and I think that's why so much of this is kicking up right now awesome uh hi everyone uh I'm M I'm the founder of stacks uh it's a Bitcoin L2 um I I started my career in Bitcoin around 11 years ago a big believer in Bitcoin as Freedom money and I think uh we started off in around 2017 uh because we have some battle battle scars from building directly on bitcoin L1 and realizing that the L1 is never going to scale so I think 2017 is when lightning started when stack started and we have been Believers in l toos for a very long time have done a lot of groundwork and it's just amazing to see it emerge as a category last year I think that your question is like very relevant that why is it happening now why didn't happen before I would say that one of the biggest things was ordinals you guys just heard from Udi and showing real usage on the L1 like it's almost like if you break the L1 it's very obvious to people that you need the l2s so when the fees did 200x uh directly on the L1 because of ordinals it became abundantly clear to everybody that we need the L twos and I think some of the work that we've been doing on building Dev communities Dev tooling that made sure that there was enough momentum uh when people started coming in that they saw that you know there's already a Dev Community there's already excitement people are already building stuff and now with the new l2s coming in I think it becomes a category like right I think e l2s are something like a 70 80 billion category right now uh Bitcoin l2s are newer they're around like 5 billion or so uh right now we are like 95% of the market but don't want to be that right like we want the pie to grow for everybody we want like you know tons of experiments and tons of different designs being explored because that is better for Bitcoin and it's better for our industry oh hi I'm David Shay um I'm a co-founder of Babylon so Babylon we started uh two years ago so we are big believer in Bitcoin we always believe in Bitcoin even before there were old notes and uh what do we believe we believe that Bitcoin is the most secure blockchain ever and and uh we should always leverage that and so our protocols that we build are trying to leverage the security to benefit the rest of the blockchain ecosystem particular proof of stick chains so we came up with a new protocol recently called Bitcoin sticking which is to take Bitcoin and use that to secure proof of stick chain through sticking okay so why L2 now so three things manip already mentioned all notes from the application side but from the technology side you know it took a few years in ethereum to really understand how to build rups many new ideas have come in optimistic rups ZK rups fraud proofs data availability many many new ideas will develop more on the etherum side and now you can see these ideas coming back to benefit us from a technological point of view how to build rups layer 2 properly awesome I will quickly add one more thing to David's Point uh in terms of like why now a big technical breakthrough is also bit VM right so if you talk to a lot of ethereum researchers one of the biggest criticism they had for Bitcoin l2s is that there are trust assumptions in moving BDC from L1 to L2 and bitm think of that as almost like a fraud proof leg system it opens the the door to having much more trustless way of moving BDC from L1 to L2 and I think it that's the last missing piece which was which we have now and that enables Bitcoin l2s and bit VM itself borrow from optimistic row up I okay man I want to I want to start with you now um by the way can you move your mic up a little bit I think uh folks might have a hard time hearing you a little bit um as the OG L2 Builder uh what do you hope specifically uh that the L2 ecosystem does in its expansion um and what does it accomplish uh is is the question more about what should happen now like what what direction should we going in yeah I think just like what do you hope the Bitcoin L2 ecosystem accomplishes that as it expands is probably the more succinct way to put it y so I think first of all I think there's a amazing opportunity to learn from everything that has already happened in eel 2os right like there there was this old saying in Bitcoin like you know 10 years ago that all the successful experiments would eventually come to bitcoin and I think because so much experimentation has happened in ethereum and they do have a very Innovative experimental mindset said I do think that Bitcoin l2s would sort of like have their they will remix some of the ideas but I do think that they there will likely be a more focus on security and and and being more risk averse than some of the experiments that we have seen outside of Bitcoin right because I I think people really value their BDC like having like hacks of BDC and and and and things they're uh much more impactful and the culture is very different in in that sense so I'll give you a concrete example like for example in stacks um we actually don't use touring complete languages uh we use uh Clarity which is a much safer programming language like that makes some things harder because people have to learn something new but we fundamentally believe that in Bitcoin security and safety is actually you know Paramount uh the the second quick point I would make here is what I would love to see is tons of collaboration and the mindset of like let's everyone come together and like increase the pie for everybody versus what we've seen like 3 four years ago was that even small relatively small Bitcoin projects are basically like you know gunning at each each other and trying to do like internal politics and whatnot and we've been trying to change that culture like you know we organize events we invite like any anyone or anyone who's building on bitcoin and we seeing that happen like you know David and these guys had a event yesterday it was packed but it was a very friendly sort of like a Bitcoin Builders movement and i' love to double down on it and continue that because I think that's going to be key Rising Tides LIF off boats mindset Alexi David do you guys have anything to add there yeah it's kind of amazing yesterday's event we organized a Bitcoin uh event in East Denver and 1,00 people showed up wild yay we'll clap for ourselves and we plan to do more of those so yeah I think like the goal of BDC r solence as an event was to Showcase that there are synergies between Bitcoin ethereum Cosmos and other ecosystems and what was really cool about it is this positive vibe we had people from Cosmos from polygon but also rap from orinal speak on stage Al together and I think that just shows maximalism is is not great and I think if we work together we can achieve much bigger things than just grow the pie and I think that's what the event stands for okay so on the flip side of that um David what do you think the ethereum ecosystem did right when they approached uh layer twos and what do you hope the Bitcoin ecosystem will do differently so so you know the thing is that right etherum has the benefit of a smart contract now of course manip also mentioned there are two sides to it which is security and versatility but you the the fact that there smart contract does make it much easier to build many many new things uh so Bitcoin has the limitation that is hard to program so I think uh I think there's still a lot of work technologically bit VM I think is a good uh Point um which is to how to leverage off The Limited description of the Bitcoin language and still be able to build stuff and I think because of that constraint we will learn from ethereum but it the what we do will not be the same as ethereum I believe red I want to I want to pull you into the conversation because I haven't yet um as an analyst who looks at the space you obviously looking at it a lot differently than the rest of us uh what do you see as the current bitcoin versus ethereum narrative especially as Bitcoin moves to becoming more than just a store of value yeah so I see ethereum being a lot more collaborative than competitive with it that's including the teams building within ethereum uh there are undercover BTC Max in every ecosystem so a lot of them are happy that they can go work with Bitcoin now uh but a lot of the difference is BTC the asset is maybe going to be off boarded elsewhere Bitcoin the network I'm not seeing as many of those changes happening to it so a good part of it could be everyone wants to use BTC the asset in other ecosystems things like bit VM might give you a safer way to do that where you can now use it in ethereum on salana really wherever you want so I see more usage of Bitcoin on other networks because of this what metric what metrics of success are you looking for as the Bitcoin ecosystem expands liquidity is one uh there is not a lot of liquidity in different versions of wrapped and synthetic BTC but safety is more of like a spectrum it's not yes or no so at some point it might be bit VM it might be something that comes after we'll probably hit a threshold where everyone says this is safe enough for me and then you have all this tap liquidity of BTC that actually gets utilized and you know you can use it for yield and other things in different defi ecosystems or within layers still within the Bitcoin ecosystem I can I I can chime in on the on the metrics as well so I think there are two metrics that I I personally think is very important one would be the amount of BTC that is actively deployed into smart contracts and applications right because if you look at look at Bitcoin uh look at ethereum I would say something like maybe 25 to3 3% depending on when you measure it uh of eth is actively deployed that M makes it a productive asset and not a passive asset that you're just holding where where Bitcoin I would say not even 1% of Bitcoin is actively deployed so there's a huge like unta potential of of deploying BTC so I think you can measure it and there's there are some people who are building the equivalent of like a L2 beat for for Bitcoin and it'll be great to have the stats that across all these different l2s or even you know things like tbdc which is ethereum native how much BDC is actually being productive and think we should see the chart and that that would be very amazing the second thing I would try to measure is just the de Dev Community uh for example in the Electric Capital report uh ethereum obviously has you know one of the largest Dev communities Solana is is taking off as well but imagine like Bitcoin is a trillion asset and we could measure like 600 developers that are on L1 and you could measure like maybe 150 developers on lightning and same on Stacks that's a that's less than a thousand people in total who are sort of like working on on a trillion doll asset and I think we need to measure that like that also is my call out to developers that you want to be in a blue ocean area where there's tons of opportunity and very little competition right so that's that's that metric would be very important to watch as well David do you look like you were uh having a good thought there anything you want to share no no no it's fine I agree okay well I have a question for for everybody it was originally going to be one for red um so where red we can start with you but I'd love to hear each one of you chime in here um when we're talking about real world use cases for for Bitcoin uh building real world use cases on l2s and just utility overall uh what what else can we expect or what do we want to see being built on bitcoin Beyond just this digital gold narrative or Beyond just being a store value I fully expect one at least one of you to to disent with another but we'll see yeah so defi obvious use case is kind of the extension from it being payments and a store of value I think separate from that which is not as much related to BTC the asset but more so the network is using it as a database because it's really the most secure and credible you know neutral database you can use and with new Innovations in inscriptions with prot meta protocols like ordinals you can kind of use it like a dynamic database you can point things to each other and kind of continually update some State and things are stored on chain not just a pointer which is how most nfts or things posted on chain Look So Meta protocols around inscriptions are where I think Bitcoin the network will be innovated on I mean if you look at what Bitcoin is used in defi today it's mainly collateral so people have BTC they escape hyperinflation currencies and they use that to diversify the risk but of course we've seen that people don't want to paint with Bitcoin and I think stable coins are a very powerful use case we've seen people use stable coins um in Argentina for example and it's a lesson learn also in the Bitcoin Community yet people don't want to pay with BDC lightning did was not able to deliver on that promise but now we see stable coins and I think using Bitcoin as collateral to borrow stable coins create Bitcoin back stable coins and then using them to actually pay for things and make it more useful I think will be one of the big unlocks and we see the demands both on ethereum with the BDC and you see what Tron is doing with usdd and now imagine you could just bundle this and allow people to use Bitcoin as collateral to get stable coins on ramp offramp but do that within that Bitcoin brand within the Bitcoin ecosystem without having to learn about any other network and just abstracting away the complexity and telling people look you have Bitcoin you can get stable coins you can cash in cash out you can pay you can do whatever you want I think that will be a major use case and something that we all should work towards should I all right so um I had I had two points and I think uh he has already covered one of them but I'll I'll try to emphasize it in a slightly different way so imagine you know you have you have maker in the ethereum ecosystem now imagine a BTC backed stable coin and why is that important I think the reason why it's important is that the final boss is always going to be governments like when Bitcoin becomes large enough uh they're going to try and stop it right and one of the biggest choke points that we have right now are stable coins because they are centralized issuers you can go to them they these These issuers are becoming large enough like there's a joke that you know every uh smart contract chain is actually an L2 to Circle or tether because they can decide what Fork happens or doesn't happen right and I think removing those centralized choke points by having a Bitcoin back stable coin like if there's one sort of like you know digital money that you can trust that BDC and you use that as collateral for issuing these things I think that's a very very important application the second one that I'm personally interested in uh is this idea of almost like a privacy Dow where not like a fully open system like tornado cach which I think someone is going to build and that's good for the world but just personally I would want to see a privacy da where there's some sort of a checkpoint for members who join in it might be kyc like you know you do kyc with a central party or with a with with with a group of people and after that it's a privacy mixer right so the reason is that you can keep certain Bad actors out of it and I will feel comfortable that okay maybe one party knows like who I am but the rest of people don't know who I am and then I can I can have a privacy mixer for BDC that way and I think that one is actually much better protected from governments because a completely open one is going to get the hammer from governments like very very quickly but this one would actually survive and will give people like really good privacy guarantees for people who are just honest and they're you know not doing anything NE nefarious online okay so I'm not an application type of guy but I I do have some uh issue about sort of using Bitcoin as the data availability that you mentioned earlier because Bitcoin has a such a low capacity so maybe uh a Twist on that could be that Bitcoin can the Bitcoin L1 can be a sort of a censorship resistant uh backup for the layer two if you get sensor on the layer two you can use Bitcoin as a censorship resistance layer so you don't have to use it on a regular basis but only when you get censored so maybe that would be good way of using the very limited block space of Bitcoin any rebuttal yeah one thing to add on the stablecoin point that Alexa and man you both mentioned is in most ecosystems you'll see with certain metrics like active addresses user activity and then tvl as well you have two kind of big moments where the ecosystem get stable coins and you have a lot more people participating because you know they're good things to pair in LPS uh it's an Escape from volatility and then you have that moment happen again when you get liquid staking so this is like that utilization of the asset and you'll probably get both of those at the same time with BTC because we've solved these issues elsewhere and once we can do one of them we can do both so those will probably both hit at the same time when we uh get there with layer twos very nice thank you guys guys for that uh we are coming down to the final under five minutes I want to ask two more questions that sort of mesh AUM and Bitcoin Alexi are there any Tech Stacks or Dev tooling uh from the ethereum tech stack that you think can interrupt well with bit Bitcoin so so Bob essentially our mission is to really embrace the C operability and use what ethereum has created and make that available to the Bitcoin Community I don't think we should Bren invent the wheel I think what people want to do is they want to start building on Bitcoin today and it's great we have bit VM we have so many new things coming on bitcoin but at the end of the day if we tell people look in two years in one year you'll be able to do all these cool things that you can do on ethereum that's not going to get Builders to start building now and that's why you know if you look at the L2 Stacks out there they can be made compatible um with Bitcoin you can allow people to start building using evm tooling and then work on this intersection between Bitcoin and evm to make it easier for a smart contract developer to start using BDC to working with Bitcoin without having to have this deep learning curve of understanding the UT Soul set and and all these kind of models that are different to the account based model in ethereum and Bob for example uses the op stack and we make slot modifications over time to make it more and more Bitcoin friendly but the cool thing is you can just go and deploy you can start within a few minutes you're up and running and then what we work on is things like okay well how about we use one wallet only one browser extension for all eth assets eth enes but also Bitcoin ordinals brc's and all the other assets make UniFi that experience and there's so many more things and we've had some really interesting conversations with some of the big uh eth infrastructure providers and what we see is there's lots of interest to explore okay how can we make that Gap basically smaller how can we ensure that people can work on bitcoin without having to spend months and months of like digging through documentation that is sparsely available on Bitcoin but is widely available on eth and I think that is one of the superpowers that we can use to just Kickstart this Renaissance and get more people working on bitcoin thank you all right final question we're going to start with David make our way down I want you guys to be thoughtful about this response um I think there is a lot that we can learn from ethereum we've got obviously a lot of ethereum folks here uh the core contributors for ethereum have had Monumental success over the last few years as we're looking to build out the Bitcoin ecosystem system further what successes do you think Bitcoin Builders can take from ethereum I start no no you can go ahead you want me to start sure okay um I would I think there are two things I I would definitely want to take uh one would be D5 Primitives who've been battle tested right so I think the same thing happened with Solana that Solana is a different infrastructure stack but if you look at the applications being built like those D5 atives are coming from ethereum and other places so I think things are they tried and tested they can come to bitcoin maybe on a different Tech stack that is more native to bitcoin but The Primitives are the same I think that's one thing the second thing that I I would love to see is uh some of the funding models that have been very successful in ethereum like if you look at Bitcoin core like again you know trillion dollar asset there are like four maintainers who are running on pretty small grants uh like I think maybe 30 people who contribute like have some requ request but four people who are maintainers and the amount of funding around it is sadly nowhere close to what even ethereum or so on other netex have so we obviously want to play a role there ourselves but you know we would love to borrow ideas from ethereum in terms of just funding core development my take will be oh my take will be controversial here it's that ethereum's greatest asset is its fluidity and willingness to change and a lot of people in Bitcoin world you you know kind of like the ocation but because of that alt l1s have kind of been ethereum test nets for a while if you have a good idea like proof of stake or app chains ethereum is going to implement it because it's willing to change and I think that attitude will help Bitcoin a lot yeah I fully agree on that experimentation so I think yeah experimentation definitely and I think the other thing is embracing decentralized governance and experimenting with models here I know like tokenization is always a controversial topic and there are good things and there are a lot of bad things about it but rejecting it completely I think is a dangerous game because at the end of the day as MIP said the embus are like you know governments that might come after bigcoin at some point and working with models where you can decentralize control I mean not on the base layer of course that has to be the final layer of Defense I don't think it's going to change I don't think we should be modifying Bitcoin core a lot that's l2s are four and on l2s we should go and experiment and embrace the the kind of decentralization aspect decentralized governance and experiment with models there so that maybe as a community we can organized and then also as a community we can go and say look we have thousands of users sorry may have millions of users we have thousands of different assets we need something in Bitcoin core we need this one op code like op cat or maybe op um ZK verify let's kind of embrace this and there's a reason why we should be doing that but then organizing as a community that will happen probably on the layer twos because we have voice of decentralized governance represent that on The Ledger well you guys for listening I'm looking forward to embracing and succeeding together and all the the projects we build thank you thank you thank you thank you guys thanks hello