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Between Bitcoin Stacks, Ordinals, BRC-20s, and more, the ecosystems being built on top of Bitcoin are quickly growing in popularity. Gone are the days of BTC being just an equivalent of ‘digital Gold‘. In this edition, we’ve included a full notes report to keep you up to date on everything around BTC Taproot and the possibilities it brings to Bitcoin DeFi and NFTs. Read our note of the day to hear from top BTC thought leaders Eric Wall, Udi Wertheimer, and Nic Carter, and learn why you should care about what’s being built on Bitcoin.
Stay Vigilant.⬇️
Bankless Shows - The Future of Bitcoin with Nic, Eric, & Udi
In this episode, David and Ryan from Bankless are joined by Eric Wall, Udi Wertheimer, and Nic Carter to discuss Ordinals, Taproots Wizards, and their influence on the Bitcoin Community. Read our notes below to learn more!
Background
David Hoffman and Ryan Adams from Bankless (Host) – David and Ryan are the co-founders of Bankless and frequently share their market insights and interview project founders in the crypto space.
Eric Wall (Guest) - a prominent crypto personality, investor, and Board Member at Starknet Foundation
Nic Carter (Guest) - General partner at Castle Island Ventures
Udi Wertheimer (Guest) - Independent Developer, Consultant, and co-founder of Taproot Wizards
Ordinals - a way for satoshis (individual units of bitcoin) to be numbered, identified, and even inscribed with information—transforming them into non-fungible tokens (NFTs)
Taproot Wizards - a PFP collection featuring thousands of crudely drawn wizard Ordinal NFTs
Rejected From Bitcoin Conferences
David asks Eric, Udi, and Nic if they perceive a new party forming within the Bitcoin world. Udi says that the group has always been there, but they're becoming more vocal because people are tired of repetitive discussions and a lack of focus on Bitcoin itself.
Eric Wall agrees with Udi, saying that this group has always been there but are now finding ways to express themselves better and are finally being recognized as true Bitcoiners.
Nic Carter shares his recent experiences observing Bitcoin Miami 2023 conference from afar. Despite feeling threatened and choosing not to physically attend BTC Miami 2023 conference, he mentions that most Bitcoiners are not extreme, and people are growing tired of fundamentalists.
Ryan Sean Adams asks about the division within the Bitcoin community and expresses surprise that the three guests might not feel welcome at a Bitcoin conference.
Udi Wertheimer explains that although they received many death threats on Twitter before the conference, the event itself was surprisingly welcoming. He adds that he and Eric Wall had a great time and the audience was supportive.
Meme and Culture Layer of Bitcoin
Udi Wertheimer mentions that nobody is willing to sell their Taproot Wizards avatar, thus making it difficult to determine the potential selling price of the Taproot Wizards Avatar. Eric Wall confirms that all avatars have been given away for free so far.
David Hoffman asks Eric and Udi about their wizard-themed appearance at the Bitcoin 2023 conference, seeking to understand the intention behind their dress and presentation.
Eric Wall explains their appearance was not a grand plan, but an effort to show that Eric and Udi don't take themselves too seriously. He believes Bitcoiners take themselves too seriously and that they need to be more humble and experimental.
Udi Wertheimer feels that a small group has captured the Bitcoin brand, leading to a misunderstanding about what Bitcoin is. He believes the culture of experimentation and discovery has been lost, and calls for a return to these principles.
Taproot Was a Trojan Horse
David Hoffman thinks that Taproot (Bitcoin’s recent upgrade that is meant to streamline the processing of transactions and make them more efficient in speed and cost) has been a Trojan horse for Bitcoin, as it allows for previously impossible actions such as embedding JPEGs and having chain fees on Bitcoin. He asks Eric Wall about his thoughts on Taproot's influence and where he thinks it's going.
Eric Wall sees Taproot as a marginal improvement that makes it slightly easier to experiment with the Bitcoin protocol. He believes that Taproot is the beginning of something big as it's opened up possibilities for more diverse uses of Bitcoin blockspace. He supports continued experimentation to understand the full implications of the changes.
Nic Carter says that the recent changes haven't fundamentally altered Bitcoin; it's still bound by the same constraints. He points out that data has been inscribed into Bitcoin from its inception. He criticizes Bitcoin fundamentalists who oppose certain uses of Bitcoin, arguing that they've lost sight of Bitcoin’s open protocol nature and don't value the potential revenue generation from novel applications of blockspace.
Ryan Sean Adams doesn't understand why fundamentalists are upset about the changes, as he sees them as a profitable utilization of Bitcoin blockspace, fitting into the free market philosophy.
Nic Carter explains that Bitcoin fundamentalists have a specific vision of Bitcoin's purpose: to mediate monetary transactions, especially for marginalized global south users. They regard some uses of Bitcoin, such as settling JPEG transactions, as disrespectful, thus opposing changes that enable these uses. Carter disagrees with this view, arguing that it overlooks the long-term sustainability of the protocol.
Are Ordinals Good For Bitcoin Bags?
Ryan Sean Adams asks if the consumption happening on the Bitcoin blockspace, such as Ordinals and Taproot, could be beneficial for Bitcoin's price and economic security.
Nic Carter thinks that many newcomers in the Bitcoin community don't truly understand the financial gains of Bitcoin. Instead, they treat it more like a religious obligation, converting their savings into Bitcoin without necessarily pursuing wealth.
Eric Wall talks about the cultural and social elements shaping Bitcoin arguments. He explains how the perception of certain developments, like the intended use of Taproot for more flexible smart contracts, can vary depending on who's promoting the narrative and how it resonates with the listeners.
Eric Wall talks about the concept of a power struggle within the Bitcoin community, suggesting that some Bitcoiners may dislike Ordinals and his group because they don't like Eric and Udi personally. He implies that personal biases can influence opinions on certain topics within the community.
Nic Carter mentions that NFTs, which are more associated with Ethereum, are seen as foreign within the Bitcoin community.
Eric Wall mentions that Lightning Labs introduced Taproot Assets, a protocol that enables the creation of NFTs and BRC-20 tokens, essentially bringing more tokens onto Bitcoin's ecosystem. He also mentions that critics may argue that Taproot Assets is acceptable due to its relative efficiency.
How Ordinals Have Changed Public Perception
David Hoffman asks Nic Carter about how the perception of Bitcoin has changed in the investment world due to his VC experience at Castle Island Ventures.
Nic Carter mentions that there is a growing interest in Bitcoin among generalist venture firms (venture capital firms that invest in a broad range of industries and sectors) that previously never considered Bitcoin as an investment. He identifies this as a new trend where companies are realizing that Bitcoin is a new landscape for building value-creating companies.
Nic Carter also observes an influx of new developers, including those initially engaged in Ethereum, now focusing on Bitcoin. He believes that this shift will lead to more financings in the Bitcoin space than before.
Even though Bitcoin's Layer-2 Lightning Network didn't perform as anticipated, Carter views the shift towards Bitcoin favorably. This transition with Taproot and Ordinals has bolstered Bitcoin's security and amplified its potential for long-term fee revenue, among other advantages.
Eric Wall comments on Michael Saylor's understanding of Taproot and Ordinals and points out that Saylor is willing to explore these new possibilities, whereas others entrenched in Bitcoin Maximalism aren't.
Udi Wertheimer mentions that many newer Bitcoin followers, often referred to as "laser eyes," haven't experienced Bitcoin before Saylor's influence and tend to trust his viewpoints. Udi also mentions that Saylor has been successful in making Bitcoin discussions more accessible.
Nic Carter adds that Saylor is viewed as a "designated truth teller" in the Bitcoin community, comparing his role to that of a religious leader delivering divine intent.
Eric Wall agrees with Nic and mentions that Bitcoin serves as a secular religion for some, filling a "God-shaped hole" in their lives.
A Bitcoin Civil War
Eric Wall believes the future of Bitcoin is not about creating a civil war or a fork within the communities. He emphasizes working within the protocol and making Bitcoin easier to validate. He disagrees with the idea of inserting more data into the blockchain, instead suggesting a free market for competing for blockspace.
Eric Wall finds it interesting that Michael Saylor sides with the concept of Ordinals. This shows that clear battle lines cannot be drawn within the community as there are differing opinions within each faction. Eric doesn't predict a civil war or split, but rather an evolution of Bitcoin incorporating more ideas.
Eric Wall says that it's a war about what opinions are acceptable and what Bitcoin really is about. He wants Bitcoin to be successful but does not believe everyone needs to have uniform ideas about the path to that success. He wants to promote a more open dialogue and a willingness to experiment with different strategies
Nic Carter agrees with the sentiment, mentioning that the notion of fork-based governance is discredited. He also mentions the lack of successful forks in the past. He suggests that the protocol has changed naturally to accommodate more interesting transaction methods on Bitcoin, rather than through forced changes.
Nic Carter says that people will always find ways to insert arbitrary data into Bitcoin due to its permanence and assurances of persistence. He highlights the limited throughput of Bitcoin, which assures future availability of data, as a key attraction for users.
Nic Carter argues that data embedding has been a common practice in Bitcoin, whether through OP_RETURN, malformed signatures, or public keys. He references the ASCII Bernanke in 2011 as an example, which he suggests was likely accomplished via public keys.
Nic believes the concept of Ordinals has become so popular that even the most fundamentalist group of Bitcoin acknowledges its usefulness. Therefore, he says it's impossible to remove such a feature, and trying to prohibit it would be a losing battle.
Udi Wertheimer’s “We Broke Bitcoin” Tweet
Udi Wertheimer talks about a recent event where he and Eric humorously claimed to have "broken" Bitcoin on Twitter, leading to high fees and upset within the Bitcoin community. This statement divided opinions into two camps: those who couldn't believe they broke Bitcoin and those angry that they did.
Udi believes that Bitcoin is a social system and not just software running on computers. He suggests human interaction and involvement in the system are crucial.
He expects that as new builders and innovations enter the Bitcoin space, the current discourse around Bitcoin's logo and cultural aspects will become less relevant.
Udi Wertheimer mentions that the fear and anger within the community stem from the realization that they might not compete in the new landscape. He suggests some of these community members are more focused on personal wealth accumulation than Bitcoin's overall development.
Nic Carter agrees with Wertheimer's points, stating that previously one could gain prominence in the Bitcoin community by being a vocal advocate for Bitcoin. Now, as the Bitcoin space evolves with new structures, technologies, and uses, there is an increasing need for tangible contributions.
Nic Carter says that the Bitcoin maximalists' frustrations are due to their fear of losing relevance. They will have to actively contribute rather than merely promote Bitcoin if they want to maintain their clout within the community.
Addressing Bitcoin Media
David Hoffman believes that Bitcoin media needs to keep the conversation going by producing and distributing content. He sees the advent of Ordinals and BRC-20 tokens as positive for the business models of Bitcoin media companies.
Eric Wall appreciates Bitcoin Magazine, and Pete Rizzo, for their courage in standing up to the Bitcoin community's resistance to Ordinals at the BTC Miami 2023 Conference. He appreciates the boldness of Bitcoin Magazine in supporting the Ordinals track at their conference and believes it was brave of them to do so.
Nic Carter mentions two events that he believes were pivotal in shifting the narrative around Ordinals: Michael Saylor speaking intelligently about Ordinals and Bitcoin Magazine releasing their Ordinals collection. He appreciates Bitcoin Magazine's bravery in challenging its hardcore fans and adopting a more moderate stance.
Udi Wertheimer describes Bitcoin media companies as the primary mouthpieces for the community, as there's not much else to report on in the Bitcoin world except for what these companies are saying.
Udi mentions that the acceptance of Ordinals will actually benefit Bitcoin media companies by providing more content. He also suggests that the shift could benefit software developers and protocol developers within the Bitcoin ecosystem by opening up new employment opportunities.
Eric Wall asks Udi whether the support for Ordinals is purely profit-motivated. He wonders if there should also be a cultural reason for companies to support the movement.
Udi Wertheimer argues that the reason the Ordinals movement has become profitable is because of a cultural shift within the Bitcoin community. He acknowledges that it can be challenging for Bitcoin media companies to support the movement due to internal resistance, but he applauds Bitcoin Magazine for leading the way.
Are David and Ryan Bitcoiners?
Ryan Adams appreciates the influence of Udi, Eric, and Nic in promoting a more moderate approach to Bitcoin, viewing this as the stance that will likely win out due to its inherent economic logic and truthfulness.
Ryan, speaking for himself and possibly for David, admits to identifying as Bitcoiners, despite it being increasingly challenging to voice this publicly in thsme past year or two.