Runes: A Degenerate Casino on the Bitcoin Blockchain Creative

Transcript

I think that Bitcoin has lost a lot of M share and a lot of market share to these other ecosystems um I think people want to do these things and so the fact that people have been unable to do these things on bitcoin has sort of you know drawn them away from the Bitcoin ecosystem to these other ecosystems [Music] hello and welcome to the protocol podcast I'm Brad C here with my co-hosts Margot nykerk and Sam Kessler we're excited to dive into Today's Show with

the latest news and developments in technology behind crypto and blockchains first please don't forget to subscribe to our Weekly Newsletter the protocol on coindesk.com and let's dive right into it we do have in the house today uh Casey rhomar um just fresh off of the runes launch just a few days ago uh Casey claimed to us just as we were uh talking before the show started that this is his first media appearance since the runs launch so that's right the the the freshest scoop possible you heard it here on the protocol um well Casey I mean this is number two for you I would say based on

kind of response so far you're you're two for two uh in terms of of releasing pretty you know probably the most impactful protocols on the Bitcoin blockchain in two years so uh yeah we're pretty lucky to have you I thought maybe we could just start I would love to hear you describe where you were during the launch and you know what you were what you were doing what you were looking at and kind of what your reactions or thoughts were as that was happening uh I think like everybody else I was at home uh watching mempool dospace which is a Bitcoin blockchain explorer that people

use to watch pending transactions blocks fees all that um just watching the fees Spike up uh they got pretty wacky um I knew that they were going to get you know reasonably wacky that there were going to be some H Jinks but the actual level of wackiness and H Jinks was completely unprecedented especially the fees that the highest paying transactions uh paid in the first block uh I don't remember but the actual fee rates but it was uh many millions of dollars were were spent in that block it was uh it was pretty wacky yeah I was just looking at you know there's a bunch of dashbo various

dashboards that people are making I saw one on Dune and and it looked based on the data 275 BTC and runes fees so far that works out to $134 million uh yeah absolute Insanity I feel I feel a little guilty that um I you know encouraged people to take that money and light it on fire and send it to the miners but you know here we are well I mean speaking of of you know lighting money on fire what what's really happening is people were just creating money right uh but I mean again there's a couple different dashboards

for this but I was looking at one called runes market cap uh and that one puts the market cap out of $440 million but then there was another one called sat screener which puts T Fu I hope that's not like some completely dirty thing that I don't know what it is but uh z zue uh and that one is $2.34 billion dollars market cap I mean yeah I would I would take those market cap numbers with a grain of Sal uh I assume that the markets are incredibly IL liquid I think if you actually tried to sell everything or sell even a significant fraction of that it would it would nuke the price um but those numbers are good for me I

publicly commit committed to uh commit sepu one lunch one month after launch if the market cap does not reach $1 billion so it looks like according to to at least one dashboard I'm I'm in the clear so that's good you're going to make it I think I'm going to make it I'm going to make it yeah well does it have to still be at a billion dollars at that point in time or just at some point I I think it still has to be a billion dollars I mean that'd be pretty weak if it was sub one billion one month from launch and I I didn't kill myself so yeah it's got to it's got to go there and stay there well all right so another data point here 7,995 etchings so is that's like unique a unique token uh yeah so you know one

of the reasons that I make protocols is so that I can get everybody to use my very funny words so yeah when you create a rune this is termed etching a rune um which sets the name names of runes are unique they also have unique parameters which includes um whether or not they have an open Mint I.E if if at some point in the future anybody can sort of create a transaction to claim some amount of that Rune how much that Rune they get when they mint it um whether or not the Rune is pre-mined I.E the etcher has themselves allocated some amount of runes to themselves so yeah you etch a rune and then you can mint a rune if there is an open Mint at which point you

just get some of that Rune this was the an allocation mechanism that was popularized by um brc2 um I think that the idea that you know the traditional model is that somebody makes a Tok token and they claim that they're going to do all these fancy things that they're going to deliver some sort of utility and then they use that as an excuse to sort of dump on investors slowly while delivering absolutely nothing I mean if you look at the vast majority 99% of blockchains are completely worthless um if you look at coin market cap you'll see that there are like quote unquote serious blockchains like Avalanche and polka dot that are below the market cap of Doge um so you know DG really you

know prefer not to see a massive team allocation and get dumped on so the idea here is because these things are all you know not delivering any utility at all you don't need a team so the team allocation is like an inefficiency so you just let everybody print the token and that's just more efficient you know it's it's just uh it's uh it's it's better for the DG and let's just talk about these DG because I you know heard you talk about this on on some of your other podcasts that you've been on including hell money which is so good you know so much F to listen to uh yeah hell money podcast wherever F podcast are sold you know YouTube we make videos yeah and I did I mean you were talking

about I think on one of them recently about how when you started you had I think like 10 people who listened or something like that yeah um but at any rate the the degens who are these degens are these just the same degens who were on ethereum and then salana pumping meme coins or or you know B&B chain or or who who do you think these people are who are doing who are who are you know on runes I I think I think definitely there's overlap in the uh the DJ you know population from these other chains um I think probably a of them are also

degens who were sort of like activated um or became degens when ordinals launched I think there was a lot of Bitcoin people who sort of wanted to do these you know degenerate activities but didn't particularly want to do them on other chains they didn't want to learn other ecosystems or leave the other ecosystems and then uh ordinals and inscriptions and now ruins have have provided an outlet for these degens on bitcoin so I assume that there's some of them that are you know newly minted Bitcoin degens but then I think a lot of them are the the same people who are who are on other chains so the the pitch makes a lot of sense to me you're basically saying all right um all of these other ecosystems that are ostensibly trying to do stuff with tech are really just launching coins that

people are gambling on anyway and just allocating some of the money um to developers and so the idea is to just make this whole so if you take it that you know all this other stuff is kind of BS um you know the idea of of runes is just like let's just make it all about the memes let's cut out all of the um you know all of that overhead is that right yeah definitely and and like I'm not you know I'm not gonna would I wouldn't argue that you know Meme coins and degeneracy and gambling and speculation is like a is is the greatest activity on Earth but I do think that you know a lot of pro like the the worst kind of project is one which um claims and they don't have to claim dishonestly

like they can believe it right they can either be scammers or they can believe they claim that they're creating the future of finance that they're going to create this thing that is incredible utility they're going to create a metaverse um and then normal people will see that claim and they will go okay well that sounds great and buy that token right um I think that those kinds of projects are much more likely to do um a lot more damage to normal people because they think that they're you know walking into a stock market and in fact they're just walking into a casino so the sort of purpose of runes is to be um as straightforward as possible to be like no this is a degenerate Casino like have fun um but don't you know lose your shirt um and I hope that that to some

degree um outcompetes these other you know projects that are making these like ridiculous claims I mean the the truth is is like 99.9% of you know quote unquote cryptocurrency like simply doesn't work at all there's just no there's just nothing there like blockchains are not good for doing doing most anything right and so the vast number of projects just will never deliver anything of value so I think it's much better to be honest and kind of distill it down you know like let's instead of gambling and fraud maybe we can just do gambling that's the that's the desire so that makes sense um but one you know obvious question

becomes if you you know further associate um now Bitcoin not just crypto broadly but um the blockchain you know um I know bitcoin's like Hey we're not crypto it's Bitcoin so um Bitcoin is there any fear that Regulators are going to look at this and inevitably when people get dumped on I mean it is a casino um they're going to take a you know sharper eye to this technology that it sounds like you think does have some fundamentally important use case yeah I definitely think that Bitcoin is extremely important um extremely valuable as a sort of credibly neutral global settlement layer um I think the regulatory concerns my my my personal opinion is probably that's not so much

of a worry right Regulators have always gone off after individual sort of coin issuers they've gone after individual projects I think it'd be pretty unprecedented for them to be like oh well people are doing you know bad things on bitcoin um we should you know go after the blockchain in some sort of concerted way and and in reality I think that the activity that the regulator would probably be more concerned about on bitcoin and the reason that Bitcoin is a a threat to government power is simply the Bitcoin you know the Bitcoin token itself right this allows people to um evade taxes to avoid um sanctions to avoid government control to have some

Financial privacy um all things that I think are good maybe not avoiding sanctions if it's like North North Korea but I'm I'm in favor of people like notay their taxes and the government not knowing what they're doing and so I think that that is the actual sort of existential threat to the government that Bitcoin poses and I don't think that they're going to get you know particularly insens about the fact that people can you know do meme coins on bitcoin certainly not to the point that that would motivate a you know state level attack on the on the base chain itself so the you know the the follow-up question of that just becomes why Bitcoin then why not just let people do you know the the casino stuff that they're already doing on Solana on ethereum on apas onu on all of these

ecosystems yeah I mean a couple reasons so I think that Bitcoin has lost a lot of Mind share and a lot of market share to these other ecosystems um I think people want to do these things and so the fact that people have been unable to do these things on bitcoin has sort of you know drawn them away from the Bitcoin ecosystem to these other ecosystems um you know I think that there's so yeah I increased use also increased fees um as the Bitcoin subsidy declines which is the new Bitcoin created in every block we just had a having so it went from uh 6.25 to 3.125 um so as that subsidy of new coins

created per block uh declines fees must rise to replace that subsidy um otherwise the chain is insecure so I think that um having more users having more mind share having more fee Vue is all good for Bitcoin and also like I think that there's another world in which if you had the ability to issue tokens on bitcoin um you know a long time ago the ecosystem may have developed such that everybody would see the tokens and things on bitcoin as having the most value and a lot of other Chains would wind up trying to figure out how to be like layer twos or Bridges or whatever so that people could have more functionality with those tokens on

other chains so yeah ultimately I think it's it's good for fees it's good for adoption and users and so I'm surprised that this has happened but it seems like ordinals and sort of the whole activity in the Bitcoin space has sparked off a lot of interest in Bitcoin l2s and technological development um so I think that's that's good too because as people want to do the things on bitcoin they want to do more sophisticated more complicated things on bitcoin lots of people start working on Technologies to enable them to to do those things on Bitcoin in a lower fee or a more more expressive way so um you know if I can just ask one more thing on this point like just just to play Devil's Advocate it does seem like you're you're saying

fees mind share users um those are all things that Bitcoin is um you know lacking relative to some of these other ecosystems that have gone really far down that kind of you know defi Rabbit Hole mcoin Rabbit Hole um so why you're basically saying like why not bring that to bitcoin in order to you know prop up all of these things or push down fees and so on and so forth but there does seem like there's still this kind of underlying tension that I'm curious how you kind of like reconcile in your own mind where it's like are you basically saying because you did just speak positively of l2s um you you you know um you're saying it's gambling that is necessary to you know bring this excitement bring these fees down bring these users mind CH so on like is that just like kind of like an undermining of

the core Bitcoin thesis if it can't do this stuff without all these things that you take issue with on other ecosystems oh I mean I think Bitcoin would probably be you know fine without ordinals and inscriptions and runes I wouldn't say that you know I'm like saving Bitcoin I'm saying that you know I'm doing a small thing to shore up you know some parts of you know bitcoin's weak weaknesses um but no I think Bitcoin would probably be fine um the the fees do worry me in the sense of like the the having um fees cutting every four years it is very aggressive and so I think that all sorts of use is is good and I wouldn't want to sort of wait around

until that is a problem um but yeah no I think bitcoin's core value proposition is really is is very strong and it is you know Head and Shoulders above all the other cryptocurrencies cryptocurrencies in the ecosystem and if you look at the the level of care with which Bitcoin is developed the quality of Engineers the amount of quality contributions um and the sort of conservatism um with which the chain is developed it's it's far far ahead of everything else in the ecosystem and this is just you know supporting you know one or two very small things I wanted to ask just real quick um you know you bring up the the having and that just happened last week what

you know I'm sure you've lived through various having right now and runes was such a big part of this one um and there's been like a renewed interest in Bitcoin because of all these twos and you know ordinals last year and then now also the Bitcoin ETF so there's this like larger mainstream interest I feel like we've seen all sorts of mainstream um new sources cover this as well I want to get your perspective on how this having has been different compared to previous ones um yeah I'm trying to think I think the main thing is just that that I mean it seems like it's it's it's pretty the same the having is really a boring event you know um it's not a technical risk the behavior that changes in Bitcoin is is really just a few small lines of code

like literally like four lines of code that calculate the new subsidy for each block and just gets cut in half every you know every every four years so it's a it's a very boring event I think the only difference this time was that there were all these sort of new participants in the ecosystem that had entered the ecosystem you know um a little over a little more than a year ago when when ordinals went uh live originally um so yeah I think there's just a lot of new Fresh Faces but all in all it's a very like boring event um and it was very it's always nice you know as developers I know that Bitcoin can cope with high fees I know that the network is self-regulating that it has this nice

property of what's called back pressure where you know lots of people are trying to transact and there's back pressure in the form of fees that prevents the system from getting overloaded um so it was nice to see that in action but yeah all things told you know it's it's another having there's going to be another one in four years you know until you know 2142 or whatever it is it's a pretty you know routine event yeah no that's interesting you say that because I I read a lot about ethereum and so with the merge and with all these different upgrades like the developers are always happy to hear when it's like a boring event because it means that it worked um but you know every day is a boring day in Bitcoin which is great well I guess yeah well maybe maybe all this new stuff will bring some

excitement back to it but um you know so I also wanted to ask because I I you know I heard you on the on the bankless podcast and and I'm sort of getting here at you know you some comparisons with ethereum and an in Tron you had made I don't remember the exact wording that you had mentioned but basically from the picture that I was getting is that um there's been a lot of mistakes or you know scam gambling on these ecosystems that people get into crypto and they go you know go to these change and they and they avoid Bitcoin but sort of what Sam was getting at here earlier is asking okay well now you're a lot of this is being brought to bitcoin um so like I'm trying to sort of understand the connection here if if there what is it different

about these same sort of Technologies on these you know not as um as and please like you know correct me for my wording I don't want to put words in your mouth but from my interpretation was like these scam your blockchains like if that's all happening on these other blockchains why is it okay on bitcoin oh I mean I certainly wouldn't make the argument that anything that's not okay on other blockchains is okay on bitcoin um so yeah I mean uh I I think one thing is that the sort of the culture of the community is a little bit different um it is not a culture where people really make serious claims about you know crazy claims about some utility that doesn't exist which is sort of my primary

complaint about a lot of this activities on other blockchains me meme coins on Bitcoins are the same as meme coins on other blockchains um but my hope is is that due to the culture we see less of these claims that somebody's going to make a token that you should buy because it's going to do something um currently we see claims of people uh saying that you should buy this token because it's related to some funny story that I wrote a long time ago or it's a dogcoin or something like that I'm much more positive about those activities um on bitcoin than I am on other blockchains and also like yeah there's a lot of activity that I'm not a fan of wherever it happens but I think that Bitcoin is good for the world so if ultimately that brings users to bitcoin it brings mind

share to bitcoin I think that those uh negative some activities or possibly positive some in taking in whole with uh improving bitcoin's adoption and then also like another thing that you had mentioned on on uh Bank list was that you don't think that ethereum could with like could stand a nation state type of attack and I thought that was really interesting because I I have actually like talked a lot to um like someone on the team at the ethereum foundation whose job it is to uh you know find these Co like these vulnerabilities in the code so that like ethereum can withstand a a nation state attack and so it's interesting because you know they they I'm using the EF here as an example because they've deployed like a bunch of resources they've hired

a bunch of people who were in government um you know working on these kind of things so what is it specifically that you think that Bitcoin like why this Bitcoin could withstand stand it ver and not ethereum yeah so there's there's a few things so I think that there're just components to ethereum that are very fragile and very um centralized so one with um with ethereum staking protocols um I would have to go and look up all the you know numbers on this but for example there are a few uh very large um uh sort of proxy stakers on ethereum that individual eth holders will like deposit their eth to be staked by this

other entity and then they can receive a token which allows them to get liquidity for their staked e so that there these very there's a small number of very large pools of capital that if a nation state was able to uh take control over those pools of capital they would have significant sway in in which blocks were produced so that's one aspect another aspect is that um the vast majority I think almost all of ethereum's blocks are um com compiled by a centralized entity I always get this wrong I think it's like flash Bots or something um but this is the entity that essentially constructs the most profitable block templates and just

tells miners like okay this is the block template that you should um or ethereum stakers or whatever they call it this is the block template that should be the next block I will give you a cut of the fees from this block if you make this block the next block um I think that that's one entity that constructs you know I think like 70% or more of ethereum's blocks maybe just to clarify that's not exactly how just toast so there's like a there's an infrastructure that everybody uses but there's like a bunch of different entities that use that infrastructure I've written a bunch about how that's centralized um to to be fair um but just for the sake of you know Clarity um right so isn't it one entity that constructs the blocks that are going to

be used by so um it's a bit of an aside but basically what happens on ethereum is you have a bunch of you know people who like theoretically the idea of how it works is you have stakers who are constructing blocks meaning they take things from the men poool from the queue of transactions and then they order them into blocks what um people have started doing is they're like hey what if I put my own transaction as a validator at the top I can you know front run people and I can front them run them really effectively because I can see what order everything's going to be in I set the order so you have flash Bots that came in to kind of solve but also depending on who you ask make that problem worse by creating this middleware that all of these validators also called stakers use

where it's a third-party Marketplace of they're called Builders and Searchers that compete with one another to create those templates create those orders create blocks and then give them to validators but they have to kind of compete it's still a competitive Marketplace you have a few builders that do kind of monopolize the market Monopoly isn't the word because there's a few but I think the software itself is used by everybody um so there's a difference there it's like yeah I don't know I I don't know if that just made things more complicated or less no no no no yeah I mean yeah and also this is the case where I would really have to do more informed research um but yeah so this is an additional you know centralizing comp component that maybe could be exploited um and then also the

technical complexity of ethereum is is just such that I am not super confident that there are not just outright bugs and vulnerabilities in the algorithm um also I I think proof of stake is very centralizing um if you have some amount of stake in a network um by just doing nothing you will maintain that percentage of stake which is very different from Bitcoin mining where you must continually expend Capital to maintain your hash rate right if you have 50 you have 50% of network hash rate and you don't do anything the default state is for your hash rate to decline as you know your miners go

offline as you're not paying the energy bills or whatever you must actively expend Capital to keep that up so ethereum um you have some percentage of stake the default is for you to just keep that percentage of stake if you keep that uh staked on the network um that is an additional centralizing Factor so there's all these centralizing factors for ethereum which make me sort of think that it would not withstand serious attack or serious uh regulatory um interference additionally like the centralization of the ethereum uh foundation on development decisions they basically just railroad users through hard Fork after hardfork and there isn't really a meaningful way to

for users to opt out if you compare this with Bitcoin where the developers have to like beg the users like please like adopt my soft Fork um and everybody has to be very sure that it's a good idea this is obvious VI l a slower pace of development but it is a more conservative pace of development so yeah all these things make me think that ethereum probably can't withstand a nation state attack which makes it less interesting to me because I think that's actually the entire point of this whole cryptocurrency thing like the government is the enemy and if you cannot withstand an attack from your enemy like what are you doing like get off the battlefield that's really interesting um Casey just to kind of push it back towards runes uh I think you were

talking about on your last hell money uh podcast with with Raph about a lot of the the auditing and and you know um checking of the code that you did not enough not enough but we did check it a lot a lot of it right and I'm just curious since the launch have you found any bugs or have you had issues that you had to deal with maybe that might be interesting to hear about yeah um so we I have a friend he's the he shall remain nameless because he's a very private person but he's the smartest person I know and if you ask people who know me and him he's the smartest person they know so he's way smarter than me um we

paid him to look over the code um before launch he found a bunch of bugs um including one that we fixed but then a bunch of people were running an old version of the code a few days ago so I think like half the network just kind of went offline uh because they hadn't updated the latest re version they then updated the latest version and everything is fine so that was a bug that existed that was found aside from that that was what like Saturday or Sunday or or yeah Saturday and Sunday it was a divide by zero you know classic classic bug you know just really one of the all-time greats um and then there really hasn't been a lot else that has been you know really critical um the

only two issues that come to mind is that people were creating transactions with very high fees and I didn't know that Bitcoin core has a um has a setting to reject very transactions that pay what it think is too high of a fee um in that transaction so these transactions were being constructed by or which is our software and then getting sent to bitcoin core and then getting rejected which is sort of a bad user experience um but it's pretty minor it didn't affect a ton of people and then also um one thing in the mint logic where the wallet was being a little bit too conservative about when it could mint it would think that A Min a mint was not open um one block in advance so it's a

little slower to let people mint but all told it's actually been very smooth um the software is hard to use like it does kind of suck but uh no horrific bugs so far okay uh let's take a quick break and we'll be right back calling all developers score a consensus 2024 developer pass for just $19 but Act Fast only a limited number of these passes are available you may have heard that consensus ain't for devs but here's why you're wrong consensus is the only place you can fully immerse yourself in a multichain environment and learn directly from 20 plus chains

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consensus. coindesk.com now to secure your developer pass before they're gone explore the epicenter of blockchain innovation at consensus 2024 [Music] and we're back with Casey Roar uh Casey one of the things that we've written about a lot is and you hinted at it developers begging people to adopt their softworks and you know how how hard it is to get a bip number in fact I

we breaking I don't know if you heard that that opcat just got a bit number and it's not the fake uh bit number really yeah it's like 367 or something all right there we go yeah so for yeah the the bip's uh the bip repo bip is St for Bitcoin Improvement proposal it is a repository that's maintained on GitHub which um uh it uh sort of archives um documentation and Technical proposals related to bitcoin uh for a long time the repo only had one editor he was very overworked it was very slow for things to get merged but uh day before yesterday Monday uh

four new bip editors were proposed four or five new bip editors um and they've been merging PRS and doing a lot of work and commenting on issues so that's been really great to see so yeah was a roast beef I'm not sure what that person's actual name is Lalu uh his last name is Nigerian and very hard to pronounce interesting yeah he that's his name on the U he's one of the main developers at lightning Labs on the lightning protocol yeah rast be uh caner John attack uh merch all new all new bip editors longstanding community members so it's great according to the the repository um roast beef was the one who

assigned the uh the new bit number but aside from that I mean that that's just the first step of even beginning to think about whether that would ever get merged right and so I'm curious one of your breakthroughs it seems like has been the conscious decision that you just got to make do with what you got I mean you just kind of buil into you know I mean with ordinals you just kind of built it on there and now here again you're just kind of building it on on there not asking for any changes I I'm curious if you think that is kind of realistically the only option for Bitcoin well um I do

think that it is the only option for weird things like ordinal inscriptions and runes that I I would not even Advocate that those should be added to the Bitcoin based layer um I don't think that Bitcoin should Bitcoin core should concern itself with uh these sort of higher level asset protocols I mean only if runes got like massively systemically important would I say that okay maybe the consensus rules should be amended such that you know certain kinds of invalid transactions aren't accepted into blocks I mean but that is like a you know crazy implausible future scenario um but yeah for for a lot of

things I think it is the appropriate way to develop on bitcoin is to avoid trying to change Bitcoin it's very hard and it's very it's necessarily very conservative and just figure out how to do it on top of Bitcoin without modifications um I've been in Bitcoin for a long time I've looked at the at the process for getting Bitcoin changed and it's a oftentimes very contentious very slow very political process that I would really rather like drink poison and jump off a bridge than participate in uh so yeah I always I always build things on top but yeah there there are a lot of core upgrades to bitcoin that cannot be made without changes to the base layer or you

can only make much more infu versions of them um without changing the base layer so yeah I think there there are a lot of changes to the base layer that that would be nice and I think that there's been a lot of interest and activity um in the last couple years I think it helps a lot that right now there are a number of software proposals that people are interested in there's opcat there's op CTV there's APO um and and I think that the fact that there are a bunch of things on the table makes it more likely that we will get one or more um soft Forks soon I I would actually be surprised if in two years we hadn't enabled at least one new

thing on bitcoin because it seems like there's uh developing sort of momentum in that direction and and you know one of the other things on a related note that's got people excited as Robin Linus's bit VM and and it's the same principle there right which is that you don't need to make any changes to bitcoin cor uh in order to do that and a lot of people are thinking that that could facilitate the layer two development and you've talked about you talked about that earlier I'm curious if you think that is ultimately where runes would end up on some kind of Layer Two yeah I mean I think that um people a lot of what people want layer Twos for is

even higher frequency degeneracy that you know centers around tokens and if you want a token to exist on an L2 and be able to go back to the L1 you know back and forth or move between l2s um it needs to be able to settle on the base chain um it needs to be able to exist on the base chain so that it can go from the base chain to an L2 back to the based chain to another L2 and so I think that if l2s become popular it will be very natural that um runes goes to l2s and and probably gets very high use on l2s with uh ever more advanced forms of of gambling and speculation hyper hyper

gambling where where else do you see um these l2s going like what other kind of things do you think they're going to accommodate I don't know I guess I am you know my default like my default posture towards these kinds of things is just one of skepticism that the UI is going to be good enough for it to get a lot of use um I was very optimistic about the lightning Network and I think that the level of adoption so far of the lightning network has been a bit a bit disappointing um especially the you know non-custodial individual users using the lightning Network um it is very hard to make a lightning Network wallet which

does not sort of expose some of the underlying like limitations or the underlying ways that the lightning network works you know um you have this wallet you can sort of paper over these things but underneath you still have channels opening and closing you still have onchain transactions that need to be made um so my sort of default assumption is that is that l2s might be the same way that they might kind of have these um usability limitations um but this is not a informed opinion I I hope I'm wrong um and in which case I mean I think we'll see the same things that we see on other chains I think we'll see you know somebody build a salana L2 that is just you know million miles a minute degeneracy and that will

just sort of exist as a venue for people to take their their Bitcoin assets my my last question just on that is just around like do you see uh so you seem to have certainty that these other ecosystems aren't you know fulfilling their promises they're not going to work ethereum centralized for all these reasons you know we haven't seen smart contracts really lead to the kinds of use cases that are world changing in the way that their developers promise they'll be so people are pulling money into these tokens based on false unfulfillable promises so on and so forth but you don't have that certainty when you talk about these l2s on bitcoin like you do seem to have some optimism that the ux will be so like such that it does prove useful well okay yeah to to

be clear like I think it's likely that we might see on these l2s exactly the same things that we see on these other ecosystems you know like um l2s which are sort of nominally decentralized but in reality are very vulnerable to attack like ethereum l2s a lot of them are just sort of glorified multisig at this point um I think it's very likely that we'll just recapitulate that kind of stuff um I think possibly the most yeah I wonder what would be like the most useful L2 I think probably the most like legitimate use of crypto as aside from Bitcoin itself is stable coins right because they give people access to uh payments

um and unfortunately the most popular stable coin as of this moment if things haven't changed is a tether on Tron right which is like just a kind of silly combo so it is it is the case so that tether off offers or Tron offers very very low fees and tether is like a fully backed fully centralized stable coin but it does provide users what they want so maybe I have some optimism that we'll see something like that on bitcoin like a highfrequency side chain that lets people transact in a in a relatively high quality back stable coin I guess that would be good um but yeah no I mean I think the one thing that Bitcoin l2s can do that

other l2s or other ecosystems can't do is scale the trust minimized transfer of Bitcoin the asset itself um I think that is the really the possibly the only thing that is is really like an unalloyed good that I would expect to come out of these l2s if we could get an L2 that enabled a good user experience while letting people instantly transfer Bitcoin for low fees that would be phenomenal and would be I think very very good for Bitcoin and and ultimately very good for the world Casey I heard you mention that you do see or you did this is before the launch you saw runes becoming the

default fungible token protocol or standard on bitcoin and uh and so you're talking about stable coins here I mean do you see somebody trying to launch a stable coin via runes I mean it'll probably be it'll probably happen it's an interesting question um because there was actually uh tether was actually originally on bitcoin there was a very old protocol I think it was called Master shares and later called the Omni layer um which was an asset issuance protocol on bitcoin and tether had tether was originally issued on the Omni layer that that's sort of settled on bitcoin the Omni lay

got almost no usage um I don't know enough about the Omni lay to know what its problems were but yeah it got almost no usage and then tether retired uh tether on on on bitcoin so you know it could be that there's no market demand for it and that's why it it went away it could be that there were problems with the Omni layer that made it not worth running and that's why it went away if it's that latter case then yeah it is is possible that we could see stable coins on coin and even if tether doesn't do it I'm I'm sure some degenerate will be like oh yeah stable runes baby let's go like 10% management Fe why not so yeah it'll probably happen I mean just to take it from there going back to one of

your earlier points about you know and different people have different opinions about a lot of this stuff obviously but so-called legit projects maybe in some of the other ecos systems or or you know people who are Bonafide developers with real credentials who are plausibly honestly trying to make good projects for Humanity right and then they launch a token for whatever reason um I mean there's nothing to prevent people from doing that with runes right certainly not no it's a it's a free market let's go and so I mean do you expect expect some projects to take advantage of that

probably I hope they can just get out competed by the memers you know like uh why buy a token that is like oh the metaverse or whatever when there's a token with a funny picture of a dog so hopefully the memers can can out compete those people and one other just one related thing regarding the memers I mean you expressed some concern I think in your last H money podcast episode that ruins might be a flop and um that you know maybe Bitcoin wasn't the best place for mem coiners for various reasons uh and now we have seen this incredible uptake at least in

the first early days I'm curious if you see you know what we've seen so far if you if you think it's going to be if it's going to be sustained I think it still could certainly be a flop you know um there was very high interest initially um fees have gone down enormously already I think they're back to the sort of the preh having fee rate um so it could easily still be a flop and the the sort of the the thesis of tokens on bitcoin is is is an interesting one like I think that inscriptions they really did something very different from nfts on other chains they really provided these

strong guarantees that your content was onchain um and they provided a sort of Simplicity to how it works um that I think really provides a like a compelling benefit over tokens on other chains um runes I think are much more like incremental they're like the rc20 which already exists but more efficient they're actually much much more efficient in terms of uh the transaction fees that you'll wind up paying to do these transactions but you know how how things develop in the future is is is hard to say I do think that among all the Bitcoin fungible token protocol standards I think that runes I think runes is the most appealing um the

landscape kind of looks like brc2 which is the sort of early like meme coin protocol that was built on inscriptions um bc20 is very inefficient and they're doing all sorts of like weird stuff with the protocol now that I I don't think is going to work out um then there's a sort a bunch of other sort of like ordinals adjacent protocols like the pipe protocol and uh BRC 420 and all that stuff I don't think a lot of those have gotten very significant adoption then there's two sort of more serious protocols which one is RGB which is a Bitcoin fungible token protocol and smart contracts platform I think RGB is very over-engineered and has a lot of UI problems that that

people will realize that it has um I did a I did a podcast uh how many podcasts on this um just talking to two developers working on RGB my sort of overall opinion of RGB is that it's way way too complicated it's also been in development hell for a long time it's been de in in development for like literally six years um which kind of gives you an indication of how complicated it is and then there's tap rot assets by lightning Labs I think that possibly has the best chance if they're able to announce a really strong stable coin partnership and get that stable coin transferring on the lightning network using tappered Assets in that case I do think that that that would have like a fighting chance but as

things stands now I think runes is just the the simplest um most efficient easiest to understand uh protocols so I I at the moment I do expect that if there is a fungible token protocol standard on bitcoin it winds up it winds up being runes and Casey you have talked a lot about how your your consternation about the potentially horrendous names that people would give runes zero through 10 zero through nine right so much so that you you uh obsessed to the point that you actually named the first one just to make sure it wasn't horrible I think were your words but I'm curious what you

think now that you can seen you know some of which are not uh namable here on a on a PG uh blockchain Tech but podcast um what do you think about some of the names that people have been coming up with the djents are really bad at coming up with names I mean they're bad they're not good um but I do think they are getting better and I do think the the cream of the crop is starting to to rise to the top like a high fee environment really sharpens all swords as far as uh naming goes so I I do feel like the the the average quality is not getting better but the highest percentile quality I do think is getting better so far there's only been a couple

you know really offensive runes even those were were not that bad um so yeah fingers crossed uh but more than a couple I would I mean I've scrolled through um some now what I mean there's 7,995 I mean but and do you have a favorite uh so far my favorite is is probably not mentionable on this podcast uh I wrote a NSFW just absurd story a long time ago that's on my blog and people found that story and then they created a meme coin based on the events of that story and uh

yeah so I like that one just because it's it's it's creative and deeply offensive and I mean just we can we can wrap it here and thanks again for being with us Casey but you know just kind of a postcript I think you've mentioned that you're you've you've runes you've delivered to the world the dgs are using it and uh and and and it sounds like there's not a lot more that you think or want to do with runes per se and uh I think you mentioned that you were

thinking about a file sharing protocol uh as your next project uh curious if that's if that's accurate and and why why that well I mean um I I've I've worked on bitcoin stuff for a while now um I don't actually have any like super clever ideas about if I was going to do something on bitcoin what my next project would be um I you know I like I like copy things right like I saw nfts on other chains and I was like okay maybe I can design a better version for Bitcoin and then I saw brt c20s on bitcoin and I was like well this offends my technical sensibilities so let me

design something better for Bitcoin um maybe I'll have a super clever idea about something to do on bitcoin uh but uh I do not have any such clever ideas at the moment um and file sharing has always been near and dear to my heart as a lifelong uh that just a lifelong pirate you know pirating content since my early days uh I really dislike copyright I I don't think that copyright is a net benefit to the world um I think the terms are absolutely insane like the fact that copyright lasts for more than 10 years I think is just an absolute absurdity just an AB insane absurdity like yeah so don't like copyright don't like the major rights holders

um the sort of the user experience on streaming platforms has kind of gotten worse and worse as they've started to balkanize it kind of used to be that there was a small number of platforms that you could watch all the content on if you paid the subscription fee now they're more and more fragmented fees are higher and higher I think that this has to do with the poor user experience of existing filesharing Technologies um the the most popular ones right now are probably bit torrent and uset and those both have not great user experiences for a newbie and so I think that I can probably improve on the user experience of those um of of those Technologies just sort of improve the file sharing

user experience and draw some some Normie users to the uh the high seas and does that have anything to do with Bitcoin no not at all not at all not at all no blockchain no cryptocurrency if somebody tells you like file sharing cryptocurrency projects anything related to that are my least favorite they're so stupid they're so stupid file coin dumbest [ __ ] on earth like unreal like there's no reason you want to trade files over the internet you want to store data there's no reason you need to put a blockchain anywhere near that like there's no reason you need to do proof of work on your like downloaded movies so yeah file sharing doesn't benefit

from a token doesn't benefit from a blockchain like all these other applications right like metaverse plus blockchain is worse than metaverse on its own like you mean I need a token to the connect to the metaverse so yeah no this is a pure fil sharing project um no cryptocurrency no blockchain whatsoever okay thank you um anything else Casey I mean you know top of mind no uh just got to shill the Pod uh go watch H money podcast whever F podcaster soul Aaron literally like watches my like media appearances and if I don't show the podcast then she beats me so uh yeah just got to do that but yeah it's been

it's been great talking to you guys thanks so much for thank you so much Casey really appreciate it thank you all right thank you well that wraps uh our episode for today uh thank you so much for Casey rmar uh from runes and ordinals creator of runes and ordinals it's kind kind of a mouthful case I feel like need you title yeah but um uh and thanks to our producer Michelle muso uh and our Booker Mel Montanas that's it for this week uh thank you for listening to the protocol podcast if you have any questions about any stories or comments please reach out to us at podcast coindesk.com subject line the protocol you can listen to US

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