Alexei Zamyatin (BOB) on the Bitcoin Renaissance (EP.521)

Matt Walsh
Today on the podcast, I was joined by Alexei Zamyatin, co founder of Bob Short for Build on Bitcoin. Bob is a bitcoin layer two that is compatible with the Ethereum virtual machine and the Castle island portfolio Company. Alexei has been active and building in the bitcoin ecosystem for nearly ten years and shared some insightful views on where bitcoin innovation is headed. Thank you for tuning in and I hope you enjoy our conversation. Matt Walsh and Nick Carter are partners at Castle Island Ventures.

Nick Carter
All these expressed by them or the guests on this podcast are solely their opinions and do not reflect the opinions of Castle island ventures. Guests and hosts may and positions in the assets discussed in this podcast. You should not treat any opinion expressed by anyone on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of their personal opinion. This podcast is for informational purposes only. Brought down by bad mortgage investments Lehman, which has 25,000 employees, will be liquidated.

Alexei Zamyatin
The federal government loans American International group AIg $85 billion. This is a different kind of market and the Fed is asleep. The federal government is stepping in to stabilize Fannie Mae and Freddie Mac, the two mortgage giants that have been threatened by the housing crime. The bank of England has pumped 75 billion pounds more into Britain's ailing economy with a new round of constituted easing. You print a couple trillion dollars and.

Matt Walsh
All of a sudden people start to worry. So out of this worry we have. Something called the bitcoin bitcoin. Today I'm joined by Alexei Zamyatin, the co founder of Bob Short for Build on bitcoin. Alexei, thanks for joining us today.

I think maybe we just get started off with introductions, so if you don't mind, please go ahead and give some background on yourself and what you're working on over at Bob. Hey, thanks for having me. So I'm Alexei, I'm one of the co founders of Bob. I got into bitcoin in 2015, was always very excited about what else we can do beyond payments. Really got excited about Namecoin, which was the first altcoin used for decentralized DNS and from there did a bit of a random walk.

Alexei Zamyatin
Worked on merch mining, worked on payment channels, worked on color coins, got a chance to do a PhD in computer science, focusing on sidechains and layer two s. Had a chance to work on the ETH L two side and ultimately really focused on bitcoin sidechains, bitcoin bridges and Bob is a unique take on growing the bitcoin ecosystem and layer twos. Bob is a hybrid layer two that aims to combine both security and liquidity from the two largest ecosystems, namely bitcoin and ethereum, and ideally, unlock the best of both worlds. Got it. And how were you initially exposed to bitcoin?

Matt Walsh
I think you mentioned 2015. How did you get into it originally? It was the research. So I was doing my bachelor's thesis initially, working on trying to obfuscate tor traffic behind scout traffic. So to prevent people from detecting that you are using, like, onion rooting.

Alexei Zamyatin
And my supervisor, by coincidence, also had bitcoin topics, and I found them more exciting. And then I went down the rabbit hole. So it was pure coincidence. I heard about bitcoin before and it was quite funny because I came home, my parents were like, what are you doing? Like, this thing is dead.

This is a scam. And it's been uphill battle for years. But yeah, it was fun. I had joined right after bitcoin. I just crashed right from 600 to 200 or something like that.

Matt Walsh
Yeah. Hopefully your parents are more on board now. I imagine it took them a while. But yeah, we got there. Yeah.

And I'm curious, in the university context where you were, I think you were at the Imperial College London, how was the sentiment between bitcoin, ethereum or other blockchains? So imperial is quite interesting. So I got the position funded by blockchain.com comma, which initially pushed us to work more on payment channels and lightning. And then at some point when the realization came that it's very difficult to get any new functionality into bitcoin, there was consensus to really explore. Okay, how do we get bitcoin outside of the bitcoin blockchain?

Alexei Zamyatin
So they actually supported us in exploring sidechains, layer twos, and really kind of going that direction. So going beyond lightning, because I think they realized very early that lightning was going to struggle with adoption. In hindsight, that was very early in terms of realization that they made because they actually built some of their own lightning stuff. And an imperial college itself, imperial hosted both their own cryptocurrency meetups. It hosted ethereum meetups in London.

And I felt like if you're in the research space, there is not that much kind of cult like behavior between bitcoin and ethereum. A lot of my friends started on bitcoin and ultimately gradually transitioned to ethereum because they could have more impact there. They felt because on bitcoin you're just restricted by. Okay, if you're doing a fork in academia, you would not be considered an interesting research piece because bitcoin doesn't fork unless it's something very, very simple that has massive impact where there's not much of that. Right.

So everybody gradually moved away from bitcoin, moved into ethereum space. I think it was one of the last really focusing on bitcoin in the lab at some point. Preston yeah its very cool that there is such a community there. It seems like since years ago when you were around. But anyways thats a great segue into talking about Bob.

Matt Walsh
Like you said, the bringing more utility and bringing things out of bitcoin. Would you mind talking a little bit more about Bob and why its important in your view for us to have a bitcoin layer too and how you think about ethereum virtual machine compatibility in the context of bitcoin. So I think the discussion around bitcoin there too takes us back to the origins of bitcoin. There were always altcoins and even Satoshi himself looked into ways to prevent fragmentation of bitcoin. Security budget introduced, merged mining.

Alexei Zamyatin
So you always have this drive to create new use cases outside of bitcoin without forking it. And the idea of having side chains, which I think by now is more or less a synonym for layer twos. There is of course a distinction. They were first introduced on bitcoin. So these things come from the bitcoin community.

And the reason why I believe that bitcoin needs roll ups, layer two side chains is that for bitcoin this is the only way to increase functionality. And there's a big distinction between Ethereum and bitcoin in that regard. For ETH roll ups, layer twos are a way to scale. You have all the functionality on the ether one and you can scale better, make it more efficient, make it cheaper, make it faster. For bitcoin, it's a way to go beyond being just a ledger for holding assets and sending money around.

It's a way for bitcoin to expand functionality and allow people to do more with their bitcoin in a trust minimized way. Bitcoin has had an issue for the last decade. It is the most followed up digital asset with 300 plus users. It is mainstream. Like the bitcoin spotted EF Cooley highlights bitcoin is mainstream now.

If you ask anybody on the street that has anything to do with the Internet, they will know what bitcoin is. Media reports about bitcoin going up, not blockchains or ETH going up. Right. It's still clearly bitcoin is the driving factor for global adoption. But there is a problem.

There's a chasm between adoption and innovation, because bitcoin does not add additional functionality to build smart contracts. A lot of the new things in terms of use cases and decentralized financial products, nfts, social fi, daos, they were created outside of bitcoin then. So what we have over the last ten years is people, 90% of people who get into crypto still get into crypto through bitcoin. They learn about private keys, wallets and then they leave because they want to do more, they want to learn about daos, they want to engage in defi. And you cant do that on bitcoin.

And bitcoin for this reason has had a brain, capital and talent dream for the last ten years. A lot of my friends, as mentioned, left to build other things, whether on ethereum or competitors to ethereum. The reason why we need side chains and layer twos on bitcoin is to bring the talent back. Bitcoin is still the number one asset out there. It's still driving.

Adoption has penetrated every sector, from consumer apps, big merchants, online payment providers, even governments. And by allowing bitcoin users to do more with the bitcoin, we can increase the level of adoption globally. I think for digital assets and by allowing developers that build these products and other networks to come back to bitcoin, we can create a new, very strong ecosystem that not only allows us to do defi of three and speculative assets, but actually gets closer to consumer applications. Because that's ultimately where the majority of bitcoin users are today. It's end users, it's people who actually use bitcoin not just for investment, but also for diversification, protecting against hyperinflating cryptocurrencies, sending money to the families because they don't have access to a banking system.

And that's why I think not only for bitcoin it's important, but for overall the entire crypto industry, it's important to get the functionality that we see on other chains closer to bitcoin to create new use cases. Because I think it will help us get outside of the web three bubble a bit back to the roots, back to the reason why we actually created this in the first place as an. Entire community, I think the point about smart contract functionality being an unlock for consumer use cases is really important. One question I'd have would be why now for bitcoin versus say two years ago or three years ago when you did have innovation happening on Ethereum and on other chains that are either EVM compatible or even elsewhere. Why is now the time?

Matt Walsh
Or is 2024 the year? I think there's two explanations to this. There is the technical side. Layer twos are only recently in a stage that they're really robust and stable. And on Ethereum itself, right, it's very new now.

Alexei Zamyatin
It's l two season. Everybody's launching. In the layer two and ETH, you have rollup as a service providers. It's good infrastructure, it works. This wasn't the case a couple of years ago.

And at the same time you have a shift in the community behavior on bitcoin. You have a new mindset. I think what really triggered this is ordinals, among other things. But suddenly you could do new things on bitcoin. You could do nfts on bitcoin.

That had a unique value proposition, that you had all the data stored in the bitcoin blockchain, which made them more valuable to many people than ethnfts. And then you had a lot of bitcoiners, like media outlets, suddenly get excited about this as well because, well, you can do new things on bitcoin without forking it. And what happened here is that the cult like maximalist movement started losing importance. Previously, you could not go to bitcoin conference and talk about anything but lightning if you were talking about layer two s now we're talking about ordinals, talking about BRC's runes. And sure, you have still the camp of people who hate on this, but what you can see is you have many, many people from other ecosystems, from Ethereum, from Solana, from Kosos and Polkadot, from avalanche, coming back to bitcoin to start building again.

And that shift in mindset and community becoming more welcoming and open to innovation, that I think is the big, big factor that many people oversee when they think, oh, why does the bitcoin season now? It's not just about the tech, it's about the readiness of the wider community and the interest to go back to the roots and do things. With bitcoin. It's no longer just a rock, it can actually do things. There is now BitVM suddenly, right?

If you look at the innovation heartbeat on bitcoin over the last year, compared to the last ten years, it's exponentially increased. We have new things coming out every week. Bitvm, bitvm B two. We have even new innovation of payment channels. Lightning side, just because you have more people paying attention again, because it's exciting and they're welcomed instead of being shunned away.

And I think that is really what's triggering this new kind of bitcoin renaissance movement? While we're on the subject, would you mind talking a bit more about BitVM and explaining why you think it's important and what role you think it'll play? Absolutely. So I count myself to the people who were initially skeptical in public because I got confused of how BitVM was marketed. And the initial writer did not have too many details of what it actually could do.

It just described the concept of encoding a fraud proof mechanism into bitcoin scripts. Ultimately, that's what BitVM does. It was presented, however, as smart contracts on bitcoin and picked up by the media as that. But what BitVM actually is, it's fraud proofs on bitcoin. It allows you to execute any computation optimistically.

And if there's a dispute, that dispute resolution can be enforced by all the bitcoin full nodes. And this is the same mechanism that arbitrum or optimism use in their optimistic roll up designs. So suddenly we have a way to do optimistic roll ups on bitcoin. And yes, it's still clunky, it's still very early, there's some limitations, but out of nowhere, from bitcoin being a rock to, oh, we can do optimistic roll ups just like that. And I spent five years plus working on bitcoin bridges, trying to figure out how could we do trust, minimize bridging.

And I have to, like Robin deserves all the credit of this world, because I think BitVM is the single most important innovation in bitcoin for the last ten years. I would have never guessed that we could actually enforce, like, brute force, this proper logic into bitcoin script like script, was always considered. Yeah, it can do things. It's not feasible. And then basically, after having spent some time with Robin, I got bit vm pill.

I think right now we stopped all our other research efforts and are dedicating everything on the research side to BitVM research and also trying also on the personal side, just to help with, like, trying to just get people to give BitVM more funding. Because I honestly think this is the biggest unlock that bitcoin has seen in the last, at least five years, probably a decade. If we kind of consider lightning not being as successful as people hoped, it's pretty amazing. Robin must be pretty happy with the strides he's made in the community and with the reception that it sounds like, at least from what you've said, that's come about. Yeah, I mean, there's so much interest, but also it comes at a price.

The hype comes at the price that there's so much noise happening as well. I think it's important to be honest about what BitVM can and cannot do. BitVM allows us to do proper some bitcoin. There are some limitations, but again, they can be fixed. Like Robin just last week came up with an idea for BitVM version two already that is much better than BitVM version one.

So you can see it's still in the early research stages. I am personally 99% certain that it can be made practical from theory it works, but the question is kind of made practical and I personally am 99% sure that we can get it done. But what you also see is there's lots of teams coming out of nowhere announcing, oh, we are doing ZK rollups on bitcoin today, which don't yet work. We don't yet have ZK roll ups on bitcoin. That's also important to say because as of today, as of this recording, we have no way to efficiently encode a ZK verifier in bitcoin script.

There are attempts, but they're not feasible and we need a fork. Question is, which fork will Opcat be enough? Probably not. So there's still like a long way to go there. And there's also tons of teams who they just plug in BitVM onto their slide deck and that's fine.

But then it's a bit sad that you don't see that many contributing back yet. Like, the amount of people actively working in BitVM is still very low. It's getting better. You have more and more teams announcing grant support for BitVM research. But it's not just about the money.

It's actually about finding people who will dedicate their efforts to really diving deep into bitcoin script and figuring out ways of how to actually implement this. So that's also a call to action. Like, if you're really, like, deep into layer two, side chains, bridges, and you want to give bitcoin under the shot, like, BitVM is a thing to work on right now. Yeah, lots to be excited about. I have to say.

Matt Walsh
The number of times I hear bitvm on a weekly basis is probably trending 50% on a week by week basis. Right now. One thing I want to circle back on is obviously the miners, which are a key role player in the bitcoin ecosystem at the layer one level, how do you see the role of miners or mining evolving as bitcoin comes to ingratiate? Additional layers and be a layer two powered system in addition to just being the bitcoin base layer. How does that affect miners?

Alexei Zamyatin
I think it depends how these l two s are designed. So from our perspective, I think it's important from a layer two's position to give back to the layer one, because if you just vampire off the layer one, you pay no fees, you're taking away from the system that you rely on for security. And bitcoin security budget is very important. It's pretty vast. But also the bitcoin having is solely chipping away at the sustainability.

We have the having coming up now, which will have the rewards that's going to wipe out a few small miners. The one in four years might actually become a bigger problem. And so I think what miners have realized based on our conversations, is that layer two s are a way to actually achieve a more sustainable, long term security budget for bitcoin by layer twos, leveraging bitcoin for security, and then, of course, contributing resources back for that. And the miners, ultimately they earn fees from the block rewards and from transaction fees. So if you post data to bitcoin, if you get billions of users or hundreds of millions of users to use l two s, and then these l two s post data to bitcoin, that's one option.

And the other option is merge mining. Merge mining is a concept that is almost as old as altcoins themselves. Like it was invented by Satoshi for two reasons. One, to prevent fragmentation of bitcoin's hash rate across multiple conflicting altcoins that also used proof of work back then, but also to incentivize creation of side chains that expand functionality. What merge mining allows us to do, it allows us to reuse bitcoin's proof of work to secure other blockchains.

So for those who are not familiar with merge mining as an older concept, but are familiar with restaking, it's literally the same thing with slight technical differences and nuances. But ultimately, merge mining is a grandfather of restaking. It's the same thing of, ideally restaking, but for proof of work, more or less. And that's also something we've embraced in our designs, because it allows us to bring in bitcoin security into this hybrid rule of design and make Bob the most secure layer to of all. Essentially, the way we implement it is before we post data to ETH.

In our case, in our kind of second phase, we give it to the miners, and miners verify the data, and then they do proof of work over it. So they mine bitcoin. At the same time, they include commitments to that data in the bitcoin blocks they're mining on. And they give us back these proof of work solutions. And we then require these preferred work solutions to exist when we submit the data to the east side of the system.

And what we achieved here is that now to attack the system, to fork the roll up, you actually have to corrupt the sequencer, you have to prevent fraud pro from happening on ethereum, and you have to also attack the bitcoin miners. And of course with BitVM in the future, that will be complementary because you then have a system that uses bitcoin's proof of work for security, and then you can plug it into BitVM, which makes it much easier to verify within the BitVM kind of execution environment. Because in short, what BitVM essentially does, it runs a live client for the side chain on bitcoin. So bitcoin nodes not like implicitly become aware of what's going on in the roll up, but they only become aware of something goes wrong, right? So if something goes wrong, you have challenges and it goes on chain.

And if of course the layer two uses bitcoin already for security by using merge mining, then it's much easier to verify. Or you can do that by posting data to bitcoin. That's the other option. But in both cases, the miners actually benefit because there is more demand for bitcoin block space, or they're additionally paid to reuse a proof of work for securing the layer two s. And ultimately, I think miners more and more coming to realize that layer two is actually are not conflicting to bitcoin layer one.

They're complementary. They allow us to bring more users, more use cases, and ultimately they contribute to an increase of bitcoin's block space because it will not only be used for sending money and inscribing ordinals, but also for inscribing data blobs or posting other forms of commitments, which long term again contributes to the sustainability of the system. I imagine that in discussing merge mining, as we get close to the next halving, so we'll have the having this year, then we'll have another one. A few years after that, the miners will only become more aligned with merge mining and other ways that they can look to monetize or open up new business models outside of the bitcoin layer one. I mean, I would assume so.

And also that's what our observations are like. We, for example, on the Bob side work closely with marathon digital or specifically there sidechain endeavor called Anduro to create an ecosystem of bitcoin side chains that are secured by merge mining. And Alice, which is Bob's institutional counterpart, is institutional focused bitcoin sidechain, but it uses the same EVM components, the same technology and infrastructure that Bob lo two is using. But it's actually driven by the miners themselves. It's an effort that they're pushing to get more institutional use cases onto bitcoin using bitcoins brand.

And they're of course brand as publicly traded, very trustworthy companies to just push bitcoin adoption further in sectors where Defi teams don't have access to. And I find that quite interesting because it's not just like, oh, we will merge mine, but for example marathon and I can see others following. They are taking it a step further. They're not saying we'll only merge mine, but will actually help create new use cases and bring more adoption to these layer twos, which contributes to a more global acceptance of bitcoin and more use cases, and b, of course more revenue for them in the long term. So I find that step very exciting.

If you look back a couple of years, it has been tried before, didn't really work for various reasons, and now there's this renewed push to really go beyond just, okay, we will run the infrastructure to, hey, we will actually invest and contribute to making this work as an ecosystem, which I find quite fascinating. And obviously we're super excited to work with marathon digital and enduro to make this happen on our side. Yeah, definitely. That's a great partner and really excited for that initiative. I understand why a miner might be incentivized or ready to get on board with the idea of bitcoin layer twos.

Matt Walsh
But how do you go about driving adoption from, let's say, bitcoin maxis or others that might be less readily willing to adopt a bitcoin layer two or accept that as being part of the bitcoin core ecosystem, because obviously some people are very defensive about what bitcoin means and what its purpose is. So we'd love to hear more about how you think about driving adoption outside of just the miners and inner players there. That's a very, very good question. I think we call the bitcoin renaissance. It's like a software revolution.

Alexei Zamyatin
Every revolution causes some conflict, otherwise you're not changing anything, right? And we definitely see some groups in the bitcoin ecosystem complain. But ultimately we also have to come to the acceptance that the majority of people don't care about the loudest on Twitter. And I think that's a realization we have to make. The majority of bitcoin users are not on our Twitter bubble.

They're out there using it day to day. And what they want, well, they want stable coins. They've shown us clearly, like a certain group of people in bitcoin community has been pushing lightning as the main way to scale bitcoin. But by now, everybody has accepted that lightning might not be as good as we all hoped it would be. And you can see that people, for example, in Argentina, they don't use lightning, they use Deontron, which tells you the market wants one thing and you can reject that, or you can give users what they want and go actually try solve a real problem.

So coming back to the question, I think we can drive adoption and acceptance by working with users and trying to address problems of user experience, of accessibility, of cost of access to digital assets beyond bitcoin in a way that people actually want that. And sure, there will be people who believe that bitcoin should only be used for holding. And that's fine, because the cool thing is everything we're doing here does not require changes to bitcoin. I think bitcoin should be used by everyone however they want to use it. That's the whole purpose of bitcoin.

It's freedom, decentralization. Go do with it whatever you like. And yes, of course, we can really go up to the very extreme comparison of, okay, somebody wanting to send money to their family. Is that more important than means grabbing an image? Sure, probably we can argue that on the ethical side, but at the end of the day, it cuts both ways.

Why is your use case more important than mine? If I feel that I want to inscribe my digital art into bitcoin, why should I be censored? And that conversation has been going on and on for ages. And ultimately the argument, in my opinion, stands that bitcoin is an open system, it's permissionless, and people should do with it what they like. And instead of complaining about, oh, people are using bitcoin, not the way that I like it, the solution that we prefer is, well, okay, well, let's give the community another way to do nfts ordinals.

Let's give them layer twos where they can do this much cheaper. Let's give them more functionality without changing bitcoin, but also free up the space for other use cases on the l one, but also specifically allow users who use bitcoin for transacting, sending money, or sending stable coins on Tron to just do that on a bitcoin layer too, with cheaper fees, much better user experience. And my feeling isn't, given the feedback we've seen and received, the majority of people that get into bitcoin every single day right now and for the last couple of years, the new users, the actual people who will use it, they don't care about the quotes that we've seen in the past. They want to use it, they have a problem. Bitcoin is a solution, and it would be wrong to reject them and tell them, no, go somewhere else.

Because that has happened before. It's no longer happening. Bitcoin is welcoming all users, and that's the way it should be. Yeah, I think considering the rise of stablecoin usage in crypto, it's only a matter of time until we see stable coins on bitcoin in some way or form as a really logical next step. If you had to guess, what do you think will be the major stablecoin on bitcoin and the bitcoin ecosystem?

Matt Walsh
Will it be USDT? Will it be USDC? Will it be some other player? Or what do you think that looks like? I think you have to be pragmatic about this.

Alexei Zamyatin
I think it will be USDT for the foreseeable future, simply because USDT is just globally much more adopted than anything else. People use USDT on Toronto, Transact, in Argentina, in Turkey, in countries with hyperinflation. That's the power users, and they will keep us. But my hope and my wish is, and something that I really want to support on the bob ecosystem and overall and other layer twos, is decentralized stablecoins backed by bitcoin as collateral. Because I generally feel that that's more robust, more stable.

It might not be as efficient, but I think that's much more aligned with the ethos of bitcoin, with the security of bitcoin. But also it uses bitcoin as collateral. And bitcoin is the best collateral because it's essentially digital gold, or whatever you want to call it. If you look at what bitcoin is used for in default, it's collateral. And the interesting thing is, because people want to keep their bitcoin, but they want to use it for something, and using it as collateral to get leverage to borrow stable coins and use the stable coins in day to day transactions, that just happens to be the easiest way to do that.

So yes, I really hope that we can get bitcoin back stable coins on layer two s, rather than relying only on centralized solutions. But you also have to be pragmatic. It won't happen in one day. And we are also trying to get digital assets more widely adopted. And Tron is in the same boat as we all are at the end of the day.

So I think we'll see as the t tether they'll be definitely leading the charge here for the foreseeable future. And you mentioned a couple here, but just to circle back, stable coins obviously being a major one, what are some innovations or breakthroughs that you're excited about in and around the bitcoin ecosystem? If you were to point out maybe your top one, two and three for things that aren't thought about when people think about bitcoin now, but you think, well see, in the next 1224 months. I think we can split the things that are happening on bitcoin into two. There is things that are happening right now where there's clear demand and that's easier.

Deployments of bitcoin into defi bitcoin staking so you can deploy bitcoin and it does something, it becomes useful, it becomes working capital. You don't have to worry about figuring out how bridges work. You don't need to click 20 times. So making that super easy. So think of a year in finance or defi saver or something like that for bitcoin.

That's one aspect, and that's happening now. This will be one of the use cases over the next couple of months, years. On the other hand, you have a big part of the bittreak community that wants to get access to assets that are minted on bitcoin. So be it. Ordinals, runes, boc twenty s.

A lot of it is of course speculative, but digital arts, it's hard to measure why people want to have something sometimes. And bitcoin has some aspect or covers some aspects that other chains cannot do. It's the original, it's oldest chain, it's the most secure. The data is stored in the bitcoin network. And I think we'll see more demand increasing for ordinals and assets on bitcoin over the next couple of months.

But then if you look beyond that for less obvious use cases, I think we'll see a bigger push into the consumer application side. So part of course of institutional use cases in bitcoin that we discussed on the minor marathon digital side, I can see a push into the consumer direction. So think of suddenly payments happening on bitcoin. So people being able to transact on bitcoin Linux using stable coins, but also do micro loans against bitcoin, or just use bitcoin as their savings accounts, using DeFi primitives, which are more powerful than just having bitcoin on a centralized exchange, but more transparent, more accessible. But also, I think on the social side, people connecting more on the network, and I think one thing problems from the other, and I'm not 100% sure what will come first, the chicken or the egg.

Will people use bitcoin first to transact in stable coins, and then they'll use it to interact with each other. So you have nullster, for example, that has quite some decent adoption, but not as much as some other networks. Or will you first have alternative use cases where people use bitcoin for, as mentioned, or nodes, inscriptions? Maybe you will see some gaming assets inscribed, you might see some messaging layers. Get more adoption within the bitcoin layer two space, and then people will start sending money to each other.

I'm still not 100% sure which will come first. There's both things developing in parallel. What we can see is interest from payment providers in bitcoin layer two s. And I think once we manage to establish bitcoin layer two as the way to transact between bitcoin stablecoins and other blue chip digital assets, that will open the floodgates for really mass adoption of really consumer applications. One thing I wanted to touch on, I heard you say bitcoin renaissance.

Matt Walsh
We say bitcoin season two internally. What do you like? The verbiage should be here. It's a tricky one. Bitcoin renaissance might sound a bit snobby, and it's actually hard to pronounce in some cases, but, I mean, I like bitcoin renaissance.

Alexei Zamyatin
There's a debate of who actually coined the term. Woody says it was him. We claim it was us quite a while back. Bitcoin season two is cool, but the thing is, it's not season two for bitcoin. If you really think back, it's like season four or five by now in terms of the cycles.

Matt Walsh
You'll have to take that up with Nick Alexei. Yeah, but fair enough. Whatever works. Like, be it bitcoin season two, be bitcoin renaissance. I mean, how long will season two be?

Alexei Zamyatin
If, like, the last 1015 years was season one, then we're in for a ride. If this is the start of season two and we kind of get mass adoption, then there are long seasons in bitcoin. In closing, it's obviously already been a very big year for bitcoin outside of, let's call it the crypto native community with the ETF and more global financial adoption broadly on the back of that, what do you view as the potential major unlocks when you're thinking about that really broad scale for further adoption of bitcoin at the institutional level and beyond? I mean, I could come up with groundbreaking use cases and everything, but ultimately I think it's a shift on the psychological and perception level. Bitcoin is no longer frowned upon.

That itself is the biggest unlock, I think, that we have. But bitcoin is mainstream, full stop. And from here it's just, okay, people are going to start getting bitcoin, they're going to start buying, and they're going to start looking into what else they can do. They're going to start putting other things on bitcoin than maybe images, maybe some other data, maybe they'll start building other products around it. And I think what happened this year was less on the technical innovation side.

I know we love talking about all these nuclear use cases and all the tech and everything and all the new infrastructure, but I think the biggest unlock was the shift in mindset within the bitcoin community, within the broader web three community. Bitcoin is ready to be built upon. And then outside of the web three bubble, people now realize, well, yeah, bitcoin is a thing. It's not going away. It's now approved.

Institutionally, it's mainstream. It's okay to use it. It's no longer frowned upon. And I think that is something that will just drive so much more adoption because you don't have to sell bitcoin to anyone anymore. People know that it's there and they know why it's there.

So now is the question, what else can you do? And I think the next couple of years, and it's going to take a while, obviously. So I'm really excited for the next, I guess. Yes, season to the next ten years to see. Okay, we can hold bitcoin.

Let's do more stuff with it. Me too. Very excited. Well, Lexie, thanks for coming on the podcast. It was great having you and sharing more about Bob and bitcoin season two or the bitcoin renaissance.

Matt Walsh
And until next time, thanks again. Thanks for having me. Thanks for listening to another episode of on the Brink with Castle island. To find out more about Castle island, visit Castleisland VC. To listen to all of our podcast episodes, please go to onthebrink dash podcast.com or just click on the the tab in our website.

Nick Carter
Thanks for listening.

Alexei Zamyatin (BOB) on the Bitcoin Renaissance (EP.521)

Primary Topic

Episode Summary

Main Takeaways

Episode Chapters

1. Introduction to Alexei Zamyatin and Bob

2. Technical Innovations and Bitcoin’s Future

3. The Importance of Merge Mining

Actionable Advice

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