Jameson Lopp: For Me Bitcoin Is a Hedge Against the Existing System
Amidst the unstable economic situation and uncertainty in the financial markets worldwide, financial safety should get lots of attention. Although, it’s much better to think about a rainy day in advance.
A renowned Bitcoin Core developer, security expert, and crypto advocate Jameson Lopp answered important questions regarding the problems with the existing financial system, security of Bitcoin as a whole, and safety of one’s own Bitcoin holdings. We’ve picked the most important bits of the talk.
Max Keidun: What is Bitcoin for Jameson Lopp?
Jameson Lopp: For me, Bitcoin is a hedge against the existing system. It’s a way of opting out and saying “I think that there is a better way to do the definition of money and finance.” You can take that a step further and say “what are the effects of redefining money and in separating the power over money from the corporations and from the states.” You can certainly speculate about how that may change things in the future but I try not to get too ahead of myself with that.
Right now, I just see what is still an experiment but a very well-vetted experiment that, I think, is highly unlikely to fail simply because there are so many of us now who are not going to allow it to fail. Even if there are major setbacks, something that is as distributed as Bitcoin cannot actually die unless it suffers an event that causes everyone who is involved in the system to agree not to work on it anymore. It is hard to even imagine what could do that.
MK: What is the main wrong thing about the existing financial system?
JL: The biggest problem, I think, is the fundamentally opaque nature of it. It’s a black box and we cannot look inside it. We have to accept whatever comes outside of the black box and there’s nothing we can really do to change that. The only option seems to be to create a completely different separate system that is completely unrelated to the existing system.
Of course, the result of having this black box is that the people who are in control can basically be pulling whatever levers and making whatever arbitrary changes they want. We may not even know everything that they’re doing until it’s far too late to do anything about it.
Even the greater financial system as a whole, as we saw in the 2008 crisis, had become so complicated that even the so-called experts that were driving the system had no idea what was actually happening. There were only a few fringe lunatics who could actually take the mile-high view and see how screwed up the system was, who could see that it was going to have a major correction. I think that in any system like this that is almost guaranteed to happen over a long enough time frame. We’re going to continue to see crises happen simply because no one is able to understand the system as a whole.
MK: Don’t you think that the existing financial system can be fixed at some point?
JL: Technically, I’m sure it could be, but the incentives are not there. I think this is true for any system that is controlled by a small group of people. Working from inside the system to try to fix it is generally a lost cause because you’re working against the incentives that are already in play.
This is the reason why over my life I went through the entire political spectrum. I was raised in a very conservative household and went to a very liberal University. After being disappointed by both of those political ideologies, I started becoming more libertarian and even voted libertarian for a few cycles, but now I don’t even bother voting anymore because I think it’s a waste of my time. I don’t believe that I am going to be able to have any meaningful impact on the existing system. I believe that the greatest impact that I can have is to try to create a completely separate system.
MK: Can you say that you’re a Bitcoin maximalist?
JL: It’s fair enough to say, but I’m certainly not a 100% purist. I am interested in other experiments. I’ve had other technologies coming along. I find improved privacy very important, so I’m interested in things like Monero, ZCash, and Grin.
Part of the problem with some of the extreme maximalists is, I think, that they’re too focused on the monetary aspect. I agree with Bitcoin maximalism from the monetary aspect. Yet, I’m also a computer scientist and I want to see continual experimentation and evolution of privacy features, many of which are unlikely to get into Bitcoin anytime soon. Ultimately, we end up in a clash between myself and more extreme maximalists because they don’t like the way that a project was launched. It usually has nothing to do with technology. They just don’t like the fact that a new project is launched and is essentially printing money in order to fund itself. But even within that, there’s a variety of different models, some of which are more scammy than others.
I do believe there’s a fair launch model like those of Grin, Monero, or Litecoin, where everything was announced ahead of time and anybody could mine them and there was no pre-mine. Those seem to be about as fair to me as you can get.
There’s a number of other more scammy situations where the developers would have hidden pre-mines that would only get revealed later. Those certainly seem to be less ethical to me if there are things happening that the wider community is not aware of.
I guess the short version is I do believe that the network effects and the more conservative nature of Bitcoin developers treating the software more like aerospace engineering than like web app engineering ultimately make Bitcoin a much stronger contender for lasting over the long run.
MK: Do you think that at some point Bitcoin might absorb some of the great security features from others?
JL: This is something that has been discussed for a number of years and as far as I’m aware no innovation in another network has been incorporated later into Bitcoin.
I’ve actually spoken to a number of people about how we improve Bitcoin privacy. I would like to see more development happen on Liquid and make use of confidential transaction technology. I’ve been playing around with mixing software lately and I think that it’s fallen short of my expectations. It’s not really that user-friendly and the privacy you get from it can very easily be broken if you make a mistake. But If we could get people to write mixing software that works on Liquid with confidential transactions that will be a much higher level of privacy than what you can do with Bitcoin mixing. Then the next question is just how do you get from Bitcoin to Liquid and back, preferably without having to go through the pegging process. I know that there are some people who have successfully demonstrated atomic swaps between Bitcoin and Liquid and other assets.
As for features getting absorbed into Bitcoin, I think that we’ve seen they don’t necessarily have to get absorbed into the base protocol. We have better privacy features on layer 2 on Lightning Network and then you could also consider side chains to be a kind of layer 2.
MK: Can you share the fundamental tips for the people out there who want to preserve their privacy and keep their Bitcoin safe?
JL: There is education that is required. You don’t have to understand how the protocol works at a low level you need to at least understand “hey I have some private data that needs to stay private and needs to be recoverable.”
In fact, the inheritance aspect is one of the most complicated and very few people think about it. We’re still working on inheritance protocols at Casa. This is more complicated than just your regular security because everyone’s situation is unique: people live in different jurisdictions with different laws around how estates are handled. For every person, this is going to require some guidance. That’s why we think that’s another valuable service that we’ll be able to offer to people.
As for the people who are just getting into crypto, the best options that I have are all listed on my website. With any of these things, it’s like an onion: you can start peeling off one layer and you can go as deep as you want to. It has to be a kind of personal choice about how much effort you are willing to put into your privacy and security. Most of that comes down to what are your threats that you are afraid of and what is the level of value that you’re trying to protect.
One of the bigger errors that a lot of people make in this space is not being over-optimistic about where Bitcoin will go. I mean they may create a level of privacy and security that is appropriate for their current holdings and their current situation, but due to the volatility of Bitcoin, both from a price standpoint and just from a public awareness standpoint, you can very easily find yourself in a situation where you have 10 times as much value to protect. In my case, there was 10 times as many people who are paying attention to me and therefore 10 times as many potential attackers.
I think that it does pay to be a little bit more paranoid and try to achieve a level of security and privacy that is at least several multiples more than you think you actually need. You need to have some sort of buffer zone there. That also means that you need to educate yourself even more than you feel like you need to.
The number one thing that I tell people is that they should be using hardware devices like Trezor, Ledger, Coldcard, or what have you. That automatically protects you from pretty much any remote attack. Even if you get malware on your computer, as long as you’re verifying on the screen of the device, you’re protected.
The next thing that you have to worry about then is general robustness, things like getting rid of any single point of failure. You should assume that your house will get set on fire, flooded, or have a natural disaster happening. You may or may not want to assume that a physical attacker will come in and try to rob you. This, once again, comes down to your own level of publicity and how many people know that you are involved in this space. Once you get at least that level of security and robustness, then the frontier is the inheritance aspect.
Watch the full interview on ForkLog Live YouTube channel.
Follow us on Twitter and Facebook and join our Telegram channel to know what’s up with crypto and why it’s important.
Subscribe to our Newsletter<
- Bitcoin ATMs Operator Faces 30 Years in Prison for Money Laundering
- Chess Ex-Champion Garry Kasparov: Bitcoin is Natural Choice in Fight Against Human Rights Violations
- CipherTrace: Twitter Hackers Laundered Stolen Bitcoins Through Exchanges and Casinos
- Opinion: Trump’s Election Campaign to Trigger Bitcoin Pump
- Korea Imposes 20% Tax on Capital Gains From Crypto Transactions
- Former GlobalHell Hacker: The Attack on Twitter Is Way Bigger than Anticipated
- Antifa Threatened With Extremist Status: No Longer Thinks Bitcoin Is an Alt-Right Currency Antifa and BLM Will Make Bitcoin Edgy Again
- North Korean Hacker Group Lazarus Laundered Over 2,500 Stolen Bitcoins In May, Report