ADVANCED: Should the bitcoin blockchain be used for anything other than moving bitcoin around?

00:02 Everyone, this is an advanced video. So,
00:04 if you are not an advanced Bitcoin user,
00:06 you can skip this one. Just ignore it.
00:08 Not relevant to you, etc., etc. All
00:10 right. So, the question, which is a
00:12 hotly hotly hotly debated thing in the
00:15 world of uh advanced Bitcoin users, is
00:18 whether the Bitcoin blockchain should be
00:20 ever used for anything other than
00:22 transferring Bitcoin around. Um, so the
00:25 Bitcoin blockchain is a database. It’s
00:27 it’s a database that keeps track of how
00:29 much Bitcoin everyone has, which is a $2
00:32 trillion valuable sort of thing. So, it
00:35 is the most valuable single database in
00:37 the world, which is who owns what of
00:40 Bitcoin, and that’s it primary use. But,
00:42 inevitably, technology being the
00:45 flexible thing it is, people figured out
00:47 how to do creative things with it. So,
00:50 uh it is possible to etch uh other
00:53 information into the Bitcoin blockchain
00:55 other than just monetary transactions.
00:58 Now, I won’t go all into all the details
01:00 of how people have figured out how to do
01:02 that. Um but I’ll I’ll just use a simple
01:06 illustration. So um this this the the
01:08 terminology people often use for these
01:10 things like uh uh is you know people
01:13 using operturn or people using um
01:16 ordinals or inscriptions or you know all
01:19 sorts of stuff. But let me give you an
01:20 example of how you could etch something
01:22 in the Bitcoin blockchain. So right now
01:25 the smallest unit of a Bitcoin is a
01:27 Satoshi which is 1/100 millionth of a
01:29 Bitcoin. Almost nobody moves Satoshi’s
01:33 around individually or in super small
01:36 units because it makes no sense to pay a
01:38 40 cent transaction fee to move on
01:40 one/10enth of a cent of value. Let’s
01:43 assume I wanted to use the Bitcoin
01:45 blockchain to spell something. Let’s say
01:48 I wanted it to spell I love Rachel, my
01:51 wife. Uh she’s great. She’s fantastic.
01:54 And I wanted to spell I love Rachel on
01:57 the Bitcoin blockchain. Well, how could
01:58 I go about doing that? Well, for
02:00 example, I could each letter of the
02:02 alphabet I could assign 1 through 26 and
02:05 I could do I could move a transaction
02:07 with nine Satoshi’s for the letter I.
02:10 And then I could do a transaction with
02:12 12 Satoshi’s for the letter L. And then
02:15 15 Satoshi’s for the letter O. And uh I
02:18 think it’s 22 Satoshi’s for the letter
02:21 V. Something like that. And then five
02:24 Satoshi’s for the letter E. So I love
02:26 Rachel. 18 Satoshi’s for the letter R.
02:29 one Satoshi for the letter A, three for
02:31 the letter C, uh, eight for the letter
02:34 H, five for the letter E, and 12 for the
02:37 letter L. Anyway, um, maybe I messed up
02:40 either the order of those letters or or,
02:43 uh, the, you know, increment on the 26
02:45 letters.
02:46 If you saw the Bitcoin blockchain and
02:48 you saw the same Bitcoin user, even
02:50 though you didn’t know it was me, you
02:52 saw the same, you know, somebody who
02:54 owns, you know, a tenth of a Bitcoin
02:56 start making a bunch of small
02:58 transactions like that and you strung
03:01 them all together and you figured nobody
03:02 moves tiny little bits of Bitcoin around
03:05 in such small units. And you started
03:07 adding them up and you said, “Oh, you
03:09 know, I see what he’s doing here. He’s
03:11 using 1 through 26 Satoshi’s to spell
03:15 letters and he has spelled I love Rachel
03:17 in the Bitcoin blockchain. Well, there’s
03:19 no way you anybody can stop me from
03:21 doing that because you don’t know I’m
03:22 spelling I love Rachel. What if I was
03:24 paying somebody nine Satoshi’s for
03:27 something which is less than one penny?
03:30 What if I just wanted to pay someone on
03:31 the internet less than one penny to do
03:33 something for me or to thank them for a
03:36 message on the messaging platform Noster
03:38 and I just wanted to zap them some sats
03:41 and I just happened to zap them nine
03:43 sats and then I zapped the same
03:46 person 12 sats. You don’t know that I’m
03:49 spelling the letter L the 12th letter of
03:51 the alphabet or am I just spending 12
03:54 sats? Anyway, there’s a lot more
03:56 sophisticated and complex ways of doing
03:58 it versus something simple like that.
03:60 But the bottom line is you can’t stop
04:02 people from making the Bitcoin
04:04 blockchain do things and say things
04:06 because it moves monetary value and you
04:09 can use that monetary value to represent
04:11 other things. One of the most
04:13 significant was a year or two back. The
04:17 uh the government of Guatemala used the
04:19 Bitcoin blockchain to etch vote totals
04:22 into the Bitcoin blockchain as the votes
04:25 were coming in from the remote provinces
04:27 of Guatemala so that they could not be
04:30 manipulated later. So, you know, you’ve
04:32 got this, you know, this remote province
04:35 and it’s 27 votes for one person and 46
04:38 votes for another person. they etched
04:40 that onto the Bitcoin blockchain like
04:42 every hour or whatever it was so that
04:46 when all the votes got mixed together
04:48 they’re at headquarters and somebody
04:50 allocated a different vote total than
04:52 that because there’s all sorts of
04:53 electioneering that happens often in
04:56 countries uh in lots of countries when
04:59 all that electionering happening
05:01 happened you couldn’t go back and change
05:03 the vote totals because the Bitcoin
05:05 blockchain which is this absolutely
05:06 immutable record says
05:09 This is how many votes came from each
05:11 province at 8:00 p.m., you know, 8:00
05:14 a.m., 9:00 a.m., 10:00 a.m., 11:00 a.m.,
05:16 12:00 a.m. or 12:00 p.m. 1 p.m. You
05:19 can’t go back and change those because
05:21 all of those are indelibly, unchangeably
05:23 etched into the Bitcoin blockchain. Now,
05:26 is that a valuable use of the Bitcoin
05:28 blockchain? It is. But people who are
05:31 monetary purists have a lot of heartburn
05:34 about the Bitcoin blockchain including
05:36 any data in it that is not purely
05:39 financial transactions. Uh personally I
05:42 think it’s pretty cool that you can do
05:45 you can do small things. You can’t do
05:46 big things in the Bitcoin blockchain
05:47 because it’s limited to uh one uh the
05:51 way it’s limited is effectively between
05:53 one and four megabytes per 10 minutes.
05:55 So there’s not much you can do there.
05:57 You can’t stream an entire movie. You
05:60 can barely even uh you know embed
06:02 images. If you do try to embed an image
06:04 into the Bitcoin blockchain, it it’s
06:06 very pixelated, very basic, like it
06:09 can’t it can’t store large amounts of
06:11 information, but it can store vote
06:13 totals from a Guatemalan election. It
06:15 can store short messages and things like
06:18 that. But of course, you have to pay
06:19 transaction fees. So, um if I wanted to
06:22 spell I love Rachel, every character is
06:24 going to cost me 40 cents right now.
06:26 Well, that’s a very expensive message by
06:28 the time you’re writing out if you try
06:30 to write something long in the Bitcoin
06:31 blockchain, it gets very expensive and
06:33 you’re basically paying all of that to
06:35 the Bitcoin miners to include those uh
06:38 transactions in the blockchain just like
06:40 you would pay the Bitcoin miners if you
06:42 were paying them to include any other
06:44 message in the blockchain. So, my view
06:46 is there’s nothing you really can do
06:48 about it. I mean, the Bitcoin blockchain
06:49 can be used however people want to use
06:51 it as long as they pay the transaction
06:53 fees. The fact that there is some
06:55 messages in there and vote totals from
06:57 Guatemala alongside financial
06:60 transactions is so what you know there’s
07:02 a limit to how big the Bitcoin
07:03 blockchain can be every 10 minutes
07:05 anyway. So there’s a you know there’s
07:07 not there’s not there’s not a way for it
07:10 to end up bloated with a ton of stuff in
07:12 it because again by definition it’s
07:15 limited to between 1 megabyte and 4
07:17 megabytes per 10 minutes which in a
07:19 world of gigabit Ethernet is is you know
07:22 frankly a very tiny amount. So anyway I
07:25 think the whole thing the whole you know
07:27 extremely heated argument about it is
07:29 basically a nothing burger. A nothing
07:31 burger meaning it’s nothing. It means
07:34 people are going to debate it all day
07:35 long and I just think it doesn’t matter.
07:37 The Bitcoin blockchain by its nature
07:40 cannot end up bloated because of the
07:42 space limitations that are set by the
07:44 protocol. And if some people want to
07:46 from time to time include messages or
07:50 include any other information, so be it.
07:53 It’s it’s not really hurting anything in
07:55 any meaningful way. And there are very
07:57 valuable uses again like the Guatemalan
07:60 election and things like that where it
08:02 actually is extremely valuable to have
08:03 something like that etched forever in a
08:06 way that humans cannot change it to rig
08:08 a system. So hope hope that helps.
08:09 Thanks everyone.