Running Diary of Joel Valenzuela's interview of Amaury Sechet

Sunday, September 6th, 2020

If you haven't already, please check out the running diary I posted yesterday of Joel's interview with Roger Ver. This time I will be doing the same thing with Joel's interview of Amaury Sechet. As both interviews are about the IFP, it's interesting to compare and contrast the two. After rewatching both interviews, what I found was that Amaury spends most of the interview talking about ideas while Roger spends much of his time talking about personalities (Craig, Calvin, Amaury, Shammah, Derek, Freetrader, Vin, Gavin, Mike, etc.). I also realize much of what follows is me regurgitating and expanding on Amaury's points, but I hope there's value in seeing them written out like this. And now, here's my running diary:

2:25 Asked to describe the IFP, Amaury says to him the IFP is about "the node software charging for its services" because the problem is that there is a lack of funding for infrastructure development. Therefore node software developer teams don't have incentives aligned with the system to work and improve that system. Amaury says the most straightforward way to solve this problem is the same way it's been done in markets since forever, which is to charge for your services. He continues:

"The direction that we're going with Bitcoin ABC is that we are not charging anyone for using the software in general, except for miners if they want their blocks to be validated by our software. Then they're going to have to pay a fee, and this is going to fund the infrastructure that we're building. And I think the incentives are aligned because we want to maximize value of the whole ecosystem so that we can maximize the revenue we have from that system."

Let me expand on the above quote with my own thoughts. I understand people's fears that ABC can simply take the money and enrich themselves and do little to nothing to grow BCH. That might be what some low IQ person would do, but if you have half a brain you wouldn't settle for breadcrumbs when you can play honestly and build the network to maximize your profits. I can see the temptation could be there to pay yourselves as much as possible, but my guess is Amaury is smart enough to play the long game. I compare it to what Tom Brady has done for much of his career. Instead of forcing the Patriots to pay him his maximum potential value, he was never the highest paid quarterback in the NFL despite many metrics say he is, because he saw how he would benefit more by saving the Patriots some money to pay for better players to surround him.

4:18 Joel brings up three main questions he wants to explore: 1) Whose right is it to make the decision? 2) Should we just fund only one team and should only one team be deciding all this? 3) Do we need this or is there enough funding already out there?

7:02 Joel mentions Zcash to compare how they had a developer fund baked into the protocol from the start whereas ABC is trying to implement the IFP three years into the project. The question is does ABC have a right to do this? Amaury explains why he doesn't think it's a big deal that ABC has decided to charge for their services. He cares about his customers, and that is the miners. He compares the situation to a sandwich shop where a customer comes in and wants a sandwich but doesn't want to pay. Well, in that case the customer doesn't get a sandwich and would be told to go somewhere else. Amaury says they've tried other methods of fundraising for the past three years, but at some point you have to listen to what the market is telling you and realize that the people who take issue with this new policy are properly viewed as not being their customers.

Let me expand on the analogy and put it this way. For the past 3 years, imagine if someone has loved ABC's sandwiches so much they wanted their shop to stay open, so they've been paying not just for their own sandwiches but everyone else's as well. Well, let's say that person got tired of paying for everyone, so now the sandwich shop has to survive on its own. What should they do? To me the only real choice is to charge for their sandwiches and see if customers decide their sandwiches are worth it or not. This to me is how the free market works. I agree with Amaury that this isn't a big deal, it's the obvious next step. Otherwise the sandwich shop workers would have no choice but to work for donations, and I've never seen a sandwich shop that works on donations. In fact, if you were to prevent ABC from charging for their sandwiches, that would be preventing the free market.

9:27 Joel moves onto the next question, which is whether or not there should be multiple teams rather than one dominant team like Bitcoin Core that decides everything. He lays out a scenario where ABC ends up leaving because the customers decide they can get stuff for free from the BCHN and BU sandwich shops. Then what?

In Amaury's view, the situation would become very chaotic. He mentions how in the past Bitcoin Unlimited has said they don't believe BCH should have a roadmap because that's collusion. The problem is that with open source software, there is basically two models. One where there is a lead implementation and they dictate the direction of the project (i.e. Linux model). And the other option is where you don't have a leader but a roadmap and some general ideas of what gets into the roadmap. In the second option the emphasis is put on the roadmap so that if someone joins the project and wants to add a new feature that doesn't really make sense for the project, that person's ideas will be rejected and told it's not a good fit (i.e. Subversion model).

Amaury further explains that if ABC didn't exist, he can't see how BCH would work with the second model when you have people saying there shouldn't even be a roadmap. Therefore you would have no choice but to fall back on option one even if that's not what people want because that's the only option available.

12:4o Joel talks about a theory of his that "either someone decides, or the project forks". I think this is a great insight. He brings up Bitcoin Core as being the decision maker in BTC, which is why that project hasn't forked since BCH forked off in 2017. BSV hasn't forked since the split with BCH in 2018 because nChain is the decision maker for BSV. Similar things have happened on other coins like XMR, he adds. So basically, unless you have a leader that makes the decisions, you have to be prepared for more forks down the road.

14:33 Joel asks the third major question, which is whether BCH really needs the IFP or if there's enough money already going to fund infrastructure development. Amaury answers by saying in the early days of BCH, there was a lot more money, but that money was given to projects that didn't yield results. For example, BU has always had way more money than ABC but they haven't contributed any significant value to the network in the past three years. So the problem is that resources haven't been allocated rationally, but two, that more recently there just isn't enough resources. For example, someone boasted to Vitalik Buterin how BCH raised over $1m for infrastructure development, but to Vitalik that must have sounded like a joke since Ethereum has easily raised more than $100M for development. That means ETH can be 99% less efficient in how they spend their money and still beat BCH because they have so much more. I agree. Anyone in BCH who touts the $1M raised in flipstarters is kidding themselves. Those people are as bad at math as the people who were saying the $500M Mike Bloomberg spent on his recent presidential campaign could have paid every American $1M dollars each.

18:55 Regarding the recent announcement of the Global Network Council (GNC), Joel wonders if it’s going to be just ABC inviting their friends and telling them this is what we are going to do. Amaury answers it's not about inviting friends but about finding the major actors that can prove they have skin in the game. The problem they are trying to solve is the high noise to signal ratio. BCH provides them with a tool to mathematically prove who matters and who doesn't, so we want to take advantage of that and finally separate the signal from the noise. Amaury expects the initial council to spend its time ironing out the details of this new organization.

20:57 Joel brings up how people wanted to fire Blockstream since they didn't like the direction they were taking BTC. Amaury explains you can't fire someone you didn't hire to begin with and gives an example regarding Linux and Intel. My main takeaway here is that you can't fire someone you didn't hire, so if a development team decides to take the project in the wrong direction, you can't do much about it in that situation. I'll take this idea one step further and add that if you did hire the team, as the IFP is effectively going to allow the miners to do, then now it gives the miners the choice to fire that team if they don't perform and find a better team.

29:30 Amaury uses Coinbase as an example of adapting to the market. Due to the high fees on BTC, Coinbase went from being a company that only sold Bitcoin and acted as a place for people to store their Bitcoin to listing many coins and collecting fees on trades. They also integrated a payment processing system so that instead of making payments on-chain, if a business accepts crypto and a customer also has a Coinbase account, the payment can be made through Coinbase's centralized system. This avoids paying the miner fees and instead allows Coinbase to charge a fee. The main point here is that now that Coinbase has adapted to the high fees, they no longer have to fight it and are in fact benefiting from the high fees. Similarly, I see the IFP as BCH adapting to the market as well. It's the free market at work.

39:40 Joel moves on to the subject of governance in crypto and brings up various examples of the different governance models that are being tried. Amaury talks about programming language culture. He compares it to crypto in that both are open source and people are free to build on top of a programming language the same way people are free to build on top of a cryptocurrency network. For example the C++ programming language has been around for 40 years, and the reason it's been around so long is because they make changes very slowly. The most influential people and experts need to come to consensus on what changes can be made to improve the language. When you have such a decentralized and bureaucratic process, you introduce a lot of inefficiencies, but you gain stability. In a centralized system, you can be very efficient but very unstable, so it's a matter of trading off one for another. An extreme example of this contrast is seen when comparing a state versus a start-up. States are as bureaucratic as any organization so everything is super inefficient, but in exchange, they are generally very stable and can last centuries whereas startups can be super efficient but super unstable. So it's a matter of choosing between these trade-offs.

46:35 Joel mentions how everything comes down to economic incentives and how people will always act in their own economic best interest. Amaury disagrees and says this is true in the aggregate or the long run, but there's nothing stopping people from acting against their own economic best interest, which you see happen a lot in crypto, but if people do that too much they eventually become irrelevant. I think this will apply to this idea of the GNC. If the council acts in their own best interest, the price of BCH should rise, but if they don't, then the GNC will eventually become irrelevant.

50:30 Discussion about the fairly recent shift in information availability. Amaury believes this is one of the most important topics that isn't being talked about enough. In the past, we were information starved. The problem was getting your hands on enough information, but now we have too much of it, and the new problem is extracting value from a sea of information. That's what companies like Google, Amazon, and Facebook provide. They collect all that information and try and show you what's relevant to you and filter out anything that you would consider irrelevant.

"So the whole world has flipped on its head, and many of the frameworks that we use about censorship and stuff like that are effectively completely obsolete and quite often very counterproductive. So when you say we must not kick anyone from the community, there is free speech, and everyone needs to talk and stuff like that, what happens in practice when you do that, and this was the golden standard for literally centuries, right, like if you want to have the best community that have the best information that have the best result, this is what you need to do, you need to allow everyone to speak because speaking is very expensive, and way more expensive than the attention span that people had. So you wanted to get as much information as you could, even if some of it is bad, this is okay because you're information starved. But now we are like completely the opposite. We have way too much information, so when you do that, effectively someone will hire a troll farm and completely overrun the ecosystem and make it look like some idea or some opinion is the dominant one, but it's just a bunch of sybils. So the challenge that we're going to face, and it's way bigger than crypto, but the challenge that humanity is facing now is how do we move from a world that is information scarce to a world that is information abundant. And this is a huge challenge and the framework that we have are really bad. I'd say this is the root problem we're tackling with this council stuff if I am to look back to what we are doing with BCH. Because we want to extract the voice from the actors that actually matter. This is the number one stuff we are achieving there, and getting funding. But getting funding is just getting the resources to do something, so what do you want to do? And what we're doing, this is the first point we are addressing."

58:40 If you want to learn more about Bitcoin Cash you can go to Bitcoincash.org. If you're more interested in the technical nitty gritty of the node software the powers Bitcoin Cash, you can go to BitcoinABC.org.

In conclusion, I think the biggest takeaway for me is that the IFP represents capitalism and market forces at work. The sandwich example crystallizes it for me. To me, if you believe the sandwich shop shouldn't be allowed to charge for their sandwiches, that's the very definition of central planning and a communistic system rather than a capitalistic one. What do you think?