‘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.”
Read also
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.”
Subscribe
The most engaging reads in blockchain. Delivered once a
week.
The US Nasdaq stock exchange is making SEC approval of its proposal to offer tokenized versions of stocks listed on the exchange a top priority, according to the exchange’s crypto chief.
“We’ll just move as fast as we can,” Nasdaq’s head of digital assets strategy, Matt Savarese, said during an interview with CNBC on Thursday, when asked whether the SEC could approve the proposal this year.
“I think what we have to really evaluate where the public comments come back in and then answer and respond to the SEC questions as they come through,” Savarese said. “We hope to kind of work with them as quickly as possible,” Savarese said.
Savarese says Nasdaq isn’t “upending the system”
The proposal, submitted by Nasdaq on Sept. 8, is requesting to allow investors to buy and sell stock tokens — digital representations of shares in publicly traded companies — on the exchange.
Savarese emphasized that Nasdaq is not trying to overhaul the way stocks are invested in when asked whether he expects other major exchanges to follow suit.
“We’re not looking at upending the system; we want everyone to come along for that ride and bring tokenization more into the mainstream,” he said.
“We want to do it in that responsible investor-led way first, under the SEC rules themselves,” he added.
It was only in October that Robinhood CEO Vlad Tenev said that tokenization will “eventually eat the whole financial system.”
The crypto industry is divided on tokenized equities
Savarese emphasized that Nasdaq is aiming to be an innovator in the ecosystem, noting that the exchange was the first to transition markets from paper-based trading to electronic systems.
Related: DATs bring crypto’s insider trading problem to TradFi: Shane Molidor
Tokenizing stocks has been one of the most significant talking points in the crypto industry this year.
On Sept. 3, Galaxy Digital CEO Mike Novogratz said the company became the first Nasdaq-listed company to tokenize its equity on a major blockchain following its launch on the Solana network.
The conversation around tokenized equities has also drawn skepticism from the crypto industry.
On Oct. 1, Rob Hadick, general partner at crypto venture firm Dragonfly, told Cointelegraph that tokenized equities will be a significant benefit to traditional markets, but may not be a boon to the crypto industry as others have predicted.
Hadick said that if tokenized stocks use layer-2 networks, it creates “leakage” as value and may not flow back to Ethereum or the broader crypto ecosystem as much as hoped.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
Hester Peirce, a commissioner of the United States Securities and Exchange Commission (SEC) and head of the SEC’s Crypto Task Force, reaffirmed the right to crypto self-custody and privacy in financial transactions.
“I’m a freedom maximalist,” Peirce told The Rollup podcast on Friday, while saying that self-custody of assets is a fundamental human right. She added:
“Why should I have to be forced to go through someone else to hold my assets? It baffles me that in this country, which is so premised on freedom, that would even be an issue — of course, people can hold their own assets.”
Peirce added that online financial privacy should be the standard. “It has become the presumption that if you want to keep your transactions private, you’re doing something wrong, but it should be exactly the opposite presumption,” she said.
The comments came as the Digital Asset Market Structure Clarity Act, a crypto market structure bill that includes provisions for self-custody, anti-money laundering(AML) regulations, and asset taxonomy, is delayed until 2026, according to Senator Tim Scott.
Related: SEC to hold privacy and financial surveillance roundtable in December
Exchange-traded funds (ETFs) challenge Bitcoin’s self-custody ethos
Many large Bitcoin (BTC) whales and long-term holders are pivoting from self-custody to ETFs to reap the tax benefits and hassle-free management of owning crypto in an investment vehicle.
“We are witnessing the first decline in self-custodied Bitcoin in 15 years,” Dr. Martin Hiesboeck, the head of research at crypto exchange Uphold, said.
Hiesboeck attributed the shift to the SEC approving in-kind creations and redemptions for crypto ETFs in July, which allowed authorized holders to exchange crypto for ETF shares and vice versa without triggering a taxable event, unlike cash-settled ETFs.
“A move away from the self-custody mantra of ‘not your keys, not your coins’ is another nail in the coffin of the original crypto spirit,” Hiesboeck added.
In February, notable Bitcoin analyst and investor PlanB, the developer of the BTC stock-to-flow model, announced that he transferred his Bitcoin to ETFs to alleviate the “hassle” of private key management.
PlanB’s announcement caused an outcry in the Bitcoin community, as many voiced concerns that handing over custody to a third party clashed with Bitcoin’s core values.
Magazine: When privacy and AML laws conflict: Crypto projects’ impossible choice
Jeremy Corbyn has declined to say his Your Party co-founder Zarah Sultana is a friend as supporters of the new grouping gather in Liverpool.
Speaking to Sky News on the eve of the conference, Mr Corbyn acknowledged “stresses and strains” in the set-up of the party but said it had become “a lot better in the last few days and weeks and we’re going to get through this weekend”.
The former Labour leader has publicly clashed with Ms Sultana, the MP for Coventry South, over the launch and structure of the new party.
Asked if they were friends, Mr Corbyn said they were “colleagues in parliament, and we obviously communicate and so on”.
The pair appeared at separate events on the eve of the party’s inaugural gathering.
Ms Sultana had previously claimed she was being “sidelined” by a “sexist boys’ club” within the fledgling party.
Mr Corbyn said her comments were an “unfortunate choice of words” but added that he had been more involved in the organisation of the conference than she had.
The co-founders have had a strained relationship since setting up the party. Pic: Your Party
The Islington North MP also said that Your Party was still waiting for Ms Sultana to transfer all of the funds she had raised from supporters.
“Obviously having money up front for a conference is a big help,” he said.
Ms Sultana has insisted she is transferring the donations in stages.
The weekend gathering in Liverpool will see supporters choose between four options for a permanent party name: Your Party, Our Party, Popular Alliance, For the Many.
The preferred choice of Ms Sultana – The Left – did not make the ballot.
Similarly, the Coventry MP had said she favoured a co-leader approach, but members will only be able to pick between single leadership or collective leadership models.
Speaking at her own pre-conference rally, Ms Sultana blamed a “nameless, faceless bureaucrat” for restricting the choices.
Read more from Sky News:
Reeves accused of deliberately making UK finances look worse
Famous names affected by prostate cancer criticise screening decision
The meeting also risked being disrupted by a series of member expulsions. One of those ejected, Lewis Nielsen, accused a “clique” of trying to “take over”.
Your Party sources said expulsions related to members of the Socialist Workers Party and that holding another national party membership was not allowed.
Ms Sultana blamed a “culture of paranoia at the top” and said she believed the same people who had been briefing against her were now also expelling members.
Mr Corbyn will open the conference on Saturday, while the results of the main decision-making votes will be announced on Sunday.
-
Sports2 years agoStory injured on diving stop, exits Red Sox game
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports2 years agoGame 1 of WS least-watched in recorded history
-
Sports3 years agoButton battles heat exhaustion in NASCAR debut
-
Sports3 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment3 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment1 year agoHere are the best electric bikes you can buy at every price level in October 2024