‘Elegant and ass-backward’: Jameson Lopp’s first impression of Bitcoin
Jameson Lopp has been on the front lines of the battle between technologists and those who want to preserve Bitcoin as it is since the scaling debates of 2015–2017.
The topic arouses such passion that many suspect it was a disgruntled Bitcoiner opponent who called down an armed SWAT team to his home, leading him to famously go underground.
Lopp blamed the 2017 incident on the “same old same old: Bitcoin philosophy and scaling debate arguments. A few of the more extreme cases think I’m some kind of manipulative monster.”
Lopp, who is currently the chief technology officer for decentralized wallet service Casa, is an advocate for cautious progress who commands respect among the Bitcoin community.
Speaking from an undisclosed location, Lopp says he worries the backlash against Ordinals NFTs might result in lower support for much-needed future upgrades. Ordinals were largely an unexpected result of the 2021 Taproot soft fork.
“The problem that I see is that there’s a lot of ossification proponents out there. And they’re pointing at Ordinals and inscriptions and saying, ‘You see, this is what happens when you change the protocol. It gets abused and used in ways that were not intended,’” he says.
But Lopp says the alternative is every bit as risky. He has carefully considered the problem of Bitcoin’s “ossification” — where the network becomes so big “it kind of gets crushed under its own weight and unable to change itself.”
Lopp uses email as an example of an internet protocol that ossified in the 1990s, leaving it with little ability to deal with the massive volumes of spam that subsequently arose.
Instead, corporations constructed expensive centralized reputation services on top to sort out spam from legit emails, and today, large numbers of emails that don’t comply with the arcane rules of the systems simply disappear into a black hole. And users are still deluged with spam.
“As of today, something like 90% of all email users are captured by five corporations. So, I think we have to ask ourselves: Is that the mainstream adoption of Bitcoin that we want to see? And if not, then what do we need to do to prevent that?”
For Lopp, scaling Bitcoin — something he’s been agitating for, for years — remains the big challenge as the Lightning Network is “not going to fix everything.”
“If you talk to any of the developers, who’re pretty deep into the protocol, you’ll be hard-pressed to find any of them who think that we should ossify the protocol now. There’s so much work to be done.”
“Honestly, I don’t know how much time we have left to do that.”
Historically, Lopp’s company Casa has been solely focused on Bitcoin, but last month, it outraged puritans on social media by adding Ethereum to its multisignature self-custody solutions. It highlights the fact Bitcoin has a fast-growing challenger snapping at its heels if it lets up the pace.
Who is Jameson Lopp?
Lopp grew up in a “fairly typical Southern American conservative household” in North Carolina, where his father’s side of the family has lived since the 1700s. It was clear from early on that he was super bright, and his parents pushed him hard to achieve great things at school.
“I read probably several grades above my reading level, and I read all the time. I had a special exemption at the library to check out more books than you are normally allowed to just because I was going through such a high volume of them.”
Placed into high-level courses, he often wound up sitting on his own doing separate assignments from the rest of the class, something of a “social outcast.”
“On the social side, I would just get even more awkwardness and sort of abuse because I would sometimes use vocabulary that nobody else was using, and they were like, you know, ‘Who is this alien guy?’”
Lopp ended up joining Mensa in 2010, mainly to see if he could pass the test requiring an IQ in the top 2%. Naturally, he set up a Mensa Bitcoin special interest group, though he says super-smart people don’t necessarily get Bitcoin any faster than anyone else and points to the dismissive reaction to Satoshi’s original announcement about Bitcoin.
“The people who were responding to that email were not stupid. They were incredibly intelligent people. But if you’re intelligent enough, you can always find reasons why something won’t work.”
Coming of age
After school, Lopp headed to study computer science at the “very liberal” University of North Carolina at Chapel Hill. Brought up to be a very conservative Republican, he says university “swung my perspective a little bit more outside of the sort of family and household standards that I had been used to.” He ended up voting for Obama in 2008, Libertarian in the following election, and now believes he can have more impact building decentralized financial infrastructure than voting.
“These days, I view politics at a very arm’s length amused perspective.”
He worked in email marketing for years in one of the tech areas near Raleigh, moving up from working on the web app to large-scale data analysis. Like most people in tech, he read about Bitcoin a few times and dismissed it as “nerd money that was going to end badly” before finally reading the white paper in 2012.
“I was just blown away,” he says, noting that Satoshi approached the double-spending and Byzantine generals problem from the exact opposite direction of the “performance and efficiency” mindset Lopp had been taught.
“When I read the white paper and I saw the solution to the problem, I was amazed because it was both elegant and ass-backward,” he says.
“The solution was to make everything really, really expensive in terms of resource usage. I was like, wow, I never in a million years would have thought to try that because it just goes against our nature as computer scientists.”
Bitcoiners back then were primarily libertarians, cypherpunks and crypto-anarchists, and the chance to find an alternate way forward was part of the appeal.
“We can build alternative power structures, alternative systems that don’t rely upon any of the existing infrastructure. And basically, we can create our own rules for how these systems should operate.”
Lopp forks Bitcoin Core
Within two years, Lopp had created a fork of Bitcoin Core called Statoshi to “bring more transparency and understanding to the internal operations of a Bitcoin node.” He applied for a grant from the Bitcoin Foundation to work full time on the project but never heard back. Five years later, he discovered he’d been successful, but the foundation fell apart before he received any money.
Lopp also applied to work at Coinbase in 2015 and “never even got an interview,” but his work on Statoshi did land him a gig running the nodes for institutional custody and infrastructure provider BitGo. He also began to nurture his public profile, ramping up his research and writing — he’s written for CoinDesk, Cointelegraph and Forbes — tweeting more often, organizing Meetups and presenting at events. He’s now a regular at conferences around the world, but it wasn’t easy to start.
“I’m definitely an introvert, though you wouldn’t know it because I do all of these public speaking events. But that took a lot of practice to do.”
Lopp says the block size wars (2015–2017) was the period when he started to become really well-known in Bitcoiner circles. Initially, he was on the big blocks side, writing an article in 2015 calling for an increase in the 1MB size of blocks to increase capacity and suggesting blocks may one day hit 10GB. He also supported the Bitcoin XT fork of Bitcoin Core, which ended up part of Bitcoin Cash.
“That was really a result of what I had been doing as an engineer for the past decade,” he says, adding that he’d spend much of each year prepping for the Black Friday and Cyber Monday sales because “if you couldn’t handle that, then it would be a bad user experience, you would lose customers, you would lose money, and the business would not grow as quickly.” He didn’t want Bitcoin to lose potential users through a bad experience with the slow, expensive blockchain.
However, his perspective started to change when he realized the impact bigger blocks would have on his own work at BitGo, writing services that talked to the nodes.
“I started to see the opposite side of the argument,” he explains. “Even with these ‘tiny’ 1MB blocks, it was quite challenging for me to write services that could ingest all of this blockchain data at a very fast pace.”
It took weeks sometimes to get a new indexing service up and running from scratch, and doubling or tripling the block size would require exponentially more resources “to the point where only the largest enterprises who had a lot of money to throw at this problem would even be able to run the nodes and the services on top of them.”
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So, while Lopp ended up strongly supporting SegWit as a practical solution and thinks Bitcoin is superior to any other cryptocurrency as “sound money,” he also sees room for experimentation on other protocols, and on Bitcoin.
“A lot of people get very ideological and, in some cases, puritanical about this stuff,” he says. “Bitcoin is not a kitchen sink type of protocol there. There’s a lot of things that you can’t do on Bitcoin that you can do with other protocols.”
Su Casa, mi Casa
Lopp joined the decentralized Bitcoin self-custody service Casa in 2018 and was soon promoted to chief technology officer. He also has the title of co-founder. Casa is an alternative to centralized custodians and offers a range of multisignature wallet plans that enable users to avoid losing their funds in security incidents and to recover lost or stolen keys.
Casa began support for Ethereum last month and claims it’s the first company to enable self-custody of both Bitcoin and Ether with up to five keys for distributed security. ERC-20 and NFT support is in the works.
“Obviously, there were a few clients who fell into the sort of extreme Bitcoin-only camp who went their own way,” says Lopp, adding that this was expected. “Really, it’s this loud, tiny minority that can seem a lot bigger than they are if you’re on social media. But in reality, I would say most of our clients and most Bitcoiners, in general, are pretty moderate and kind of apathetic about all of the drama.”
He says the decision resulted from user demand because many existing clients “do have more diverse portfolios, and they want to have that same level of security for assets other than Bitcoin.”
The loud, tiny minority goes SWATing
The famous SWATing incident happened after his views began to evolve. A 911 caller claimed to be holed up at Lopp’s house with hostages, having already shot someone.
“By my voice, you can tell I’m not in a mental health state right now. I’m on drugs. I’m all over the place. I don’t know what to do. […] If I don’t get $60,000, I’m going to blow the whole fucking block up.”
Heavily armed cops arrived at his home, guns drawn. Lopp wasn’t home at the time and arrived to find his neighborhood shut down and crawling with dozens of patrol units, a SWAT team, a mobile command post, a fire truck and a paramedic. He had a conversation with a cop to find out what happened, not realizing he was the suspect.
Following the incident, Lopp tweeted a video of himself firing off an AR-15 rifle as a warning to anyone trying to find him.
The incident also inspired Lopp’s radical privacy experiment to live off the grid and off the radar of the authorities. Apart from standard stuff like using VPNs, private mailboxes and using fake names, it also involved setting up a bunch of limited liability companies to apply for bank accounts and credit cards one step removed. He mainly spent cash, used burner phone numbers and even bought “the crappiest, cheapest hole in the wall I could find that has a physical mailbox” as a physical address to get a driver’s license.
“I determined that the amount of effort and especially money that is required to do it is going to price almost everybody out of doing this,” he says, adding the fact that you have to lie to everyone was also likely to deter people from trying it.
“Everyone in my physical proximity, my neighbors, they only know my pseudonym. And you know, I have my backstory, and I literally had to create this whole alternate persona, but not so different, it would be difficult for me to make it believable. So, like, I’m still a software engineer who knows a lot about security.”
Lopp maintains a GitHub list of “known physical Bitcoin attacks,” which spans from Hal Finney getting SWATed in December 2014 to a couple in Queens, New York who in mid July were mugged by assailants disguised as FBI agents that stole their car, $40,000 in cash and their crypto.
The No. 1 lesson to take from the list is that the fewer people who know they can rob you of your crypto by threatening you with a $5 wrench, the better. So it’s interesting to learn that prior to his SWATing, Lopp used to drive around in a flashy Lotus Elise with a BITCOIN license plate, basically inviting attacks.
Although many people thought it was a Lamborghini, Lopp says that “it was actually a salvage title car that I got for $20,000.” He eventually sold it, but he has the BITCOIN license plate hanging on the wall behind him during our interview as a memento. These days, Lopp drives “extremely common vehicles that are mass-produced by the millions.”
Future progress for Bitcoin
Pushing for progress on Bitcoin while not destroying all of the things Bitcoiners hold dear has always been a thorny problem. Roger “Bitcoin Jesus” Ver couldn’t solve it and went off with the Bitcoin Cash camp, who then split off with Craig “No, I really am Satoshi” Wright heading up Bitcoin SV.
There are also Bitcoiners trying to change it from within, like Eric Wall and Udi Wertheimer, who have embraced Ordinals. Wall is also investigating scaling Bitcoin using the same zero-knowledge proof technology being used to scale Ethereum via Starknet.
Lopp says he’s focused on a variety of improvements that can be made to “let people start building more outside of the base protocol.”
“You don’t need to go through the same onerous process to develop on a second layer, you don’t have to make these sweeping consensus changes that are really risky,” he explains.
“That’s one of the reasons why I want to see a lot more second layers other than just Lightning. I want to see more sidechains, drive chains, rollups, so on and so forth. Because I think that that is going to enable more innovation, more experimentation.”
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The Texas Senate passed the Bitcoin strategic reserve bill SB-21 on March 6. This followed a debate in which State Senator Charles Schwertner, who introduced the bill, argued that it would help Texas add a valuable and scarce asset to its balance sheet.
Amid fears of Bitcoin (BTC) contending against the US dollar as a global reserve currency, Pro-Bitcoin lawmakers argued that Bitcoin was similar to gold and a hedge against inflation.
If SB-21 is enacted, Texas will be the first state in the US to have a digital asset reserve. However, the governor must still sign the bill before it becomes law.
New York bill aims to protect crypto investors from memecoin rug pulls
New York lawmakers introduced a bill to protect crypto users from memecoin rug pulls, where insiders abandon a project after investors have purchased their token. These scams usually end up with token prices plummeting, causing millions in losses to crypto investors.
On March 5, Assemblymember Clyde Vanel introduced the legislation to establish criminal penalties for offenses that involve “virtual token fraud.” This explicitly targets deceptive practices associated with crypto.
Fideum co-founder and CEO Anastasija Plotnikova told Cointelegraph that scams and rug pulls should be more thoroughly regulated. “In my view, these activities should fall firmly within the jurisdiction of law enforcement agencies,” Plotnikova added.
SEC’s Crypto Task Force to host roundtable on crypto security status
The Crypto Task Force of the US Securities and Exchange Commission will host a series of roundtables to discuss the “security status” of crypto assets, with the first set for March 21.
Crypto Task Force lead Commissioner Hester Peirce said she is looking forward to “drawing the expertise of the public” to develop a workable framework for crypto.
The roundtable series is called the “Spring Sprint Toward Crypto Clarity,” and the first topic of discussion is dubbed “How We Got Here and How We Get Out — Defining Security Status.”
Utah’s Senate passes Bitcoin bill — but scraps key provision
Utah lawmakers passed a Bitcoin bill after removing a section that would have allowed its state treasurer to invest in Bitcoin. While the HB230 bill passed the state Senate, it removed a key reserve clause that would’ve authorized the state treasurer to invest in digital assets with a market cap of over $500 billion.
The clause passed the second reading but was scrapped in the third and final reading. Still, the bill provides citizens basic custody protections, the right to mine, run a node and stake, among other things.
Argentine prosecutor aims to freeze assets in LIBRA memecoin fraud case
Argentine Federal Prosecutor Eduardo Taiano, the lead prosecutor investigating Argentine President Javier Milei’s alleged role in the LIBRA crypto scandal, requested the freezing of almost $110 million in digital assets related to the memecoin case.
Taiano also requested the recovery of Milei’s deleted social posts and detailed records of all LIBRA transactions since its launch. The prosecutor aims to reconstruct the financial operations of Feb. 14 and 15, when the project’s trade volume peaked.
Opinion by: Merav Ozair, PhD
Technology is advancing at the speed of light today more than ever. We have surpassed Moore’s law — computational power is doubling every six months rather than every two years — while regulations are, and have been, playing catchup.
The EU Artificial Intelligence Act just came into force in August 2024 and is already falling behind. It did not consider AI agents and is still wrestling with generative AI (GenAI) and foundation models. Article 28b was added to the act in June 2023 after the launch of ChatGPT at the end of 2022 and the flourishing of chatbot deployments. It was not on their radar when lawmakers initially drafted the act in April 2021.
As we move more into robotics and the use of virtual reality devices, a “new paradigm of AI architectures” will be developed, addressing the limitations of GenAI to create robots and virtual devices that can reason the world, unlike GenAI models. Maybe spending time drafting a new article on GenAI was not time well spent.
Furthermore, technology regulations are quite dichotomized. There are regulations on AI, like the EU AI Act; Web3, like Markets in Crypto-Assets; and the security of digital information, like the EU Cybersecurity Act and The Digital Operational Resilience Act.
This dichotomy is cumbersome for users and businesses to follow. Moreover, it does not align with how solutions and products are developed. Every solution integrates many technologies, while each technology component has separate regulations.
It might be time to reconsider the way we regulate technology.
A comprehensive approach
Tech companies have been pushing the boundaries with cutting-edge technologies, including Web3, AI, quantum computing and others yet to emerge. Other industries are following suit in the experimentation and implementation of these technologies.
Everything is digital, and every product integrates several technologies. Think of the Apple Vision Pro or Meta Quest. They have hardware, goggles, AI, biometric technology, cloud computing, cryptography, digital wallets and more, and they will soon be integrated with Web3 technology.
A comprehensive approach to regulation would be the most suitable approach for the following principal reasons.
A full-system solution
Most, if not all, solutions require the integration of several emerging technologies. If we have separate guidelines and regulations for each technology, how could we ensure the product/service is compliant? Where does one rule start and the other end?
Recent: Animoca Brands revenue climbs as AI cuts costs by 12%
Separate guidelines would probably introduce more complexity, errors and misinterpretations, which eventually might result in more harm than good. If the implementation of technologies is all-encompassing and comprehensive, the approach to regulating it should also be.
Different technologies support each other’s weaknesses
All technologies have strengths and weaknesses, and often, the strengths of one technology can support the shortcomings of the other.
For example, AI can support Web3 by enhancing the accuracy and efficiency of smart contract execution and blockchain security and monitoring. In contrast, blockchain technology can assist in manifesting “responsible AI,” as blockchain is everything that AI is not — transparent, traceable, trustworthy and tamper-free.
When AI supports Web3 and vice versa, we implement a comprehensive, safe, secure and trustworthy solution. Would these solutions be AI-compliant or Web3-compliant? With this solution, it would be challenging to dichotomize compliance. The solution should be compliant and adhere to all guidelines/policies. It would be best if these guidelines/policies encompass all technologies, including their integration.
A proactive approach
We need proactive regulation. Many of the regulation proposals, across all regions, seem to be reactions to changes we know about today and don’t go far enough in thinking about how to provide frameworks for what might come five or 10 years down the line.
If, for example, we already know that there will be a “new paradigm of AI architectures,” probably in the next five years, then why not start thinking today, not in 5 years, how to regulate it? Or better yet, find a regulatory framework that would apply no matter how technology evolves.
Think about responsible innovation. Responsible innovation, simplistically, means making new technologies work for society without causing more problems than they solve. In other words: “Do good, do no harm.”
Responsible innovation
Responsible innovation principles are designed to span all technologies, not just AI. These principles recognize that all technologies can have unintended consequences on users, bystanders and society, and that it is the responsibility of the companies and developers creating those technologies to identify and mitigate those risks.
Responsible innovation principles are overarching and international and apply to any technology that exists today and will evolve in the future. This could be the basis for technology regulation. Still, companies, regardless of regulation, should understand that innovating responsibly instills trust in users, which will translate to mainstream adoption.
Truth in Technology Act
The Securities Act of 1933, also known as the “truth in securities” law, was created to protect investors from fraud and misrepresentation and restore public confidence in the stock market as a response to the stock market crash of 1929.
At the core of the act lie honesty and transparency, the essential ingredients to instill public trust in the stock market, or in anything for that matter.
This act has withstood the test of time — an “evergreen” law. Securities trading and the financial industry have become more digital and more technological, but the core principles of this act still apply and will continue to.
Based on the principles of responsible innovation, we could design a “Truth in Technology Act,” which would instill public trust in technology, internationally, now and in the future. Fundamentally, we seek these products and services to be safe, secure, ethical, privacy-preserving, accurate, easy to understand, auditable, transparent and accountable. These values are international across regions, industries and technologies, and since technology knows no boundaries, neither should regulations.
Innovation may create value, but it may also extract or destroy it. Regulation helps limit the latter two types of innovation, while well-designed regulation may enable the first kind to survive and flourish. A global collaboration may find ways to incentivize innovation that creates value for the good of the global economy and society.
It might be time for a Truth in Technology Act — an international, comprehensive, evergreen regulation for the good of the citizens of the world.
Opinion by: Merav Ozair, PhD.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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