Dialogue with Casey, the father of Ordinals: Only use a small position for "gambling", and use the rest to buy Bitcoin

24-05-28 17:20
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Interview: DUDU (PukeCastCN), Jasmine (Runes Chinese Community)
Translation: Jaleel, BlockBeats

Editor's Note: As a programmer and Bitcoin developer, Casey Rodarmor (@rodarmor) created the Ordinals protocol and the Runes protocol respectively in two years. By developing the Ordinals protocol, Casey provides a new way to store and transmit non-monetary data (such as digital artworks) directly on the Bitcoin blockchain. It can be said that without Casey, there would be no Bitcoin ecosystem.

Casey shared his experience at the Ordinals Asia conference in Hong Kong

Before Runes was launched, Casey joked that if "the market value of Runes ecosystem did not reach 1 billion US dollars within one month of its launch, he would commit suicide." Although the goal was achieved briefly in the middle, the market value did not reach the target after one month. How did Casey respond to this joke? The Bitcoin Ecosystem Conference two weeks ago was very lively in Hong Kong. How did Casey feel about Hong Kong? Jasmine, one of the founders of the Runes Chinese community, and DUDU of PukeCastCN chatted with Casey in a Space yesterday.

BlockBeats has compiled the interview content as follows, with some content deleted.

DUDU: Bitcoin Week in Hong Kong two weeks ago was very lively. How do you feel about it? I heard that many people got sick because they played too crazy.

Casey: Yeah, I took a week and a half off, but it's much better now. The Bitcoin market in Hong Kong is really crazy. There's a big difference between Western and Eastern players. Chinese people really like gambling and have a huge passion for both Rune and shitcoins. I think this is much better than a lot of Western shitcoin fans who always pretend to pursue some future of finance and even talk about banking Africa. The market here is purer and more honest, and everyone is talking about how to make a lot of money.

DUDU: Rune Protocol has been launched for a month. How do you feel about the first month? Are there any special surprises or things you want to mention?

Casey: No surprises, which is fortunate. My main concern is bugs in the protocol. If there are protocol-level bugs that mess up the balance of Rune, or affect minting or transfers, it would be bad. But so far, everything has been smooth and there are no protocol-level bugs. There is a small bug in ord (a reference implementation of Rune), which is unfortunate, but not a big problem, and I am happy that the bug was fixed in time.

I think it was predictable that when Runes first launched, there would be a lot of disappointment because it was so hyped and everyone was saying "this stuff is going to take off, to the moon" and stuff like that. But it wasn't. When a technology first launches, it's in the worst state. The ecosystem support is the worst, the tools are not complete, the trading platform is not complete. I think it's natural that there will be some disappointment.

I don't know what the price and popularity of Runes will be like, I don't make predictions. The only investment I've made money with is Bitcoin, and as an investor, I have very limited wisdom. I really don't know what will happen. The pleasant thing is that those who have integrated Runes told me that it will be much easier than integrating BRC-20, which makes sense. The protocol is simpler, especially when you use BRC-20 for everything, making an inscription and then maybe transferring it. It takes three transactions to transfer a BRC-20, which is quite a lot. It only takes one transaction to transfer a Rune.

I think the technical advantages of Runes in terms of simplicity and efficiency have already been revealed. It has been simple and efficient, and those who have integrated Runes say so, which is great. I don't know what the future holds for Runes, it's hard to say. On Ethereum, there are decentralized exchanges where people can do all kinds of transactions on the chain, like trading Runes or BRC-20. Bitcoin doesn't have that. Solana has zero-second transaction times, Bitcoin doesn't. I think it remains to be seen what market Runes will occupy in the future. As far as I'm concerned, the first month has been great and everything has gone according to plan.

Image source: Ordinals summit 2023

Jasmine: You have always emphasized that Runes was born for Memecoin. It is not about technology, but more for social interaction, gambling and entertainment, so that more people from other ecosystems can pay attention to the Bitcoin ecosystem and eventually use Bitcoin. Runes has indeed attracted a lot of attention and participation from people from other ecosystems. As of now, there are more than 70,000 rune tokens, basically all Memecoin. So where do you think the next breakthrough of the Runes ecosystem might happen? What should builders pay more attention to? For example, building some applications that make StarCraft Casino more interesting? Or something else?

Casey: There are actually not many plans for future protocol development. There are some small things. For example, there is a possibility of allowing people to create runes, and the creator of the rune is the only one who can cast it. This is part of the future protocol. Protocol development is very tricky. Especially, for example, people want something like decentralized exchanges (dexes), like Uniswap, a rune version of Bitcoin.

However, the problem is that if you design the protocol poorly, you can introduce something called MEV (miner extractable value). With something like Uniswap, miners or validators on Ethereum can insert their own transactions and reorder transactions to make money from user transactions. For example, if you send a buy transaction, a miner can buy it before yours, thereby guaranteeing that you are buying from a miner. Not only is this a problem of miners making money at the expense of users, it also leads to miner centralization because miners have to invest in this very complex infrastructure to be competitive. This means that miners can no longer simply plug in their hardware and start mining, they have to do a lot of other work, which centralizes miners. And the core value proposition of Bitcoin is decentralization. I want to improve the protocol, but no matter what, I will not add anything that leads to the centralization of Bitcoin miners, which is very tricky.

My advice to people building on Runes is that you have to make things fun. If you don’t have a decentralized exchange like Ethereum, or instant transaction confirmations of one second like Solana, you can only focus on making things fun, which is a tall order. It’s hard. You have to make your interface fun. You have to make your community fun. You have to make any mechanism you introduce fun.

But I think what people should really focus on is fun, think about how to build the best possible casino. Rune is built for meme coins and shitcoins, but it's a good protocol. There's nothing at the protocol level that stops people from doing "serious things" with it. I'm very skeptical about what serious things can be done, a lot of protocols are just scams, they don't do what they say, so don't do that. But I wouldn't be surprised if there's enough interest, like a stablecoin backed 1:1 by USD or something on Rune, let's all pray for L2 development.

99% of second layer protocols are garbage?

DUDU: Are you bullish on Bitcoin's second layer? Why?

Casey: I don't know if I would say I'm bullish on the second layer. The problem is that, as far as I know, no one has developed a second layer that actually works. A lot of people have ideas. Even if they have a fancy white paper, you have to look at it with skepticism. There have been thousands of white papers published over the last 10 years, but 99.999% of them are garbage, complete garbage. You have to wait until someone builds something that works, and then you can see the properties of the system when it exists.

For example, if you look at the Lightning Network, the Lightning Network is great. I like the Lightning Network, but it has some real drawbacks and operational hassles. It's hard to keep channels open, and there are all kinds of sophisticated attacks to worry about. We haven't seen the proliferation of mobile wallets for the Lightning Network that can pair with anyone and open channels with anyone. Currently, the Lightning Network wallets that work on mobile are opened with specific Lightning service providers. It's hard to predict all of these different difficulties if you just read the Lightning Network white paper.

My attitude towards the second layer is "see it, believe it". So I'm more on the sidelines than on the bullish side. I personally rely on the L2 developers. When people create L2 on Bitcoin, they can add whatever they want on the L2, and if they're careful, they don't cause MEV or centralization on the base layer. This is what I expect, and I'm counting on the development of L2. If L2 has this kind of transaction or other functions, people can transfer runes to L2, do any operation on L2, and then settle it back to the main chain. This is the future function I hope for.

Jasmine: You mentioned in a tweet before that you would rather invest in some centralized service projects than some Layer2. I would like to ask you about your views on decentralization. In all these ecosystems, is decentralization really that important?

Casey: First of all, to be clear, decentralization is best, followed by centralized services that deliver on their promises. If you can't be decentralized, then centralized services are acceptable if they work. In market competition, good services will survive and bad services will be eliminated. Even in competition among centralized services, this is true. The worst case is those services that claim to be decentralized but are actually either centralized or don't work at all. My comments are actually directed at those who invest in decentralized projects that don't work at all or are just excuses to issue tokens and then sell them to people. So I would rather invest in decentralized projects that actually work, but a lot of the investment I see today is going to decentralized projects that are unlikely to succeed.

If people have to choose between a decentralized project that is doomed to fail and a centralized service that can provide a useful service, I would rather people invest in a centralized service that actually delivers on its promises. For example, in the United States, the best centralized service platform for buying Bitcoin is probably River. This is a very simple Bitcoin financial service platform where you can buy Bitcoin, transfer money, etc. I think it would be great if every country had one or two companies like River that provide people with a safe and easy way to get Bitcoin. I would rather see that than a bunch of L2s that never work. So this is not about centralization vs. decentralization, it's about centralization vs. pseudo-decentralization. In this case, I will always choose the functional centralized alternative. I would like to see some very good centralized exchanges that focus only on Bitcoin or Runes, listing every Runes. I think that would be very interesting and fill a gap in the ecosystem.

DUDU: BRC-20 has added new features for new tokens. For example, new tokens can be added or subtracted. But there is no such feature in Runes. Stablecoins are a very important feature in Bitcoin. For example, there is such a feature in Ethereum or Solana. But Runes does not have such a feature. What do you think of stablecoins in Runes? Are you aware of any projects about stablecoins in Runes?

Casey: Of course, I would divide stablecoins into three types.

First of all, I don’t agree with stablecoins that try to be backed by project utility tokens. This is a bad idea. These schemes always break down. Terra’s luna is one of these algorithmic stablecoins. I seem to have seen a similar project called DUCAT, which I don’t agree with. I read their white paper and it’s very complicated. I don’t believe that what they are doing will work at all. Let’s wait and see.

Another type of stablecoin is to create a synthetic coin. Essentially, let's say -- I'll cover the simplest stablecoin. The simplest stablecoin is you buy dollars. For example, or you get dollars. You have this token and people can buy tokens from you for $1 per token, or they can redeem for $1 per token. If you give them a token, you're sending a dollar to their bank account. That's the simplest and most secure stablecoin. Tether and USDC are such stablecoins. I haven't heard of anybody trying to build a stablecoin like this on Rune. These kinds of projects are usually very complex. You have to have banking relationships, and so on.

And then there's another type of stablecoin where you try to create a synthetic stablecoin by having two parties on the transaction. You have people deposit bitcoin into your bank account, and then you go long bitcoin so that the price of bitcoin goes up. You sell a put or a call on bitcoin. If the price of bitcoin goes up, you make money. And then you're also short bitcoin, so if the price of bitcoin goes down, you also make money. It's kind of like a delta neutral hedge. Whether the price goes up or down, your value stays at the same dollar amount.

I've heard of a couple of projects trying to build stablecoins based on this model. It's not as crazy as a fully synthetic stablecoin, which is trying to create value from nothing. I think neither of those are in a state of actual viability yet, they haven't made that public yet, just that they're privately saying, "Oh hey, we're working on this."

DUDU: You mentioned OP-CAT a few times, can you elaborate on why you're bullish on OP-CAT?

Casey: I like OP_CAT. OP_CAT seems like a very powerful opcode that adds a lot of missing functionality to Bitcoin. In general, as long as the opcode is reasonable and not crazy, I'm open to it. I personally would like to see OP_CAT. I would also like to see OP_CTV, which is a contract opcode. Even crazier things, like great script recovery, would be cool.

I'm not a researcher, I don't have deep insights. This is just my off-the-cuff opinion. I think it's too early to say what will ultimately happen. I like OP_CAT, but some people are talking about OP_CAT as if it's inevitable. Someone on Twitter said, unnamed, "OP_CAT is going to happen whether you like it or not." I think the reality is that it's actually very uncertain until people actually try to activate something, which they haven't done yet.

BlockBeats Note: OP_CAT is an opcode that may be implemented to help Bitcoin implement smart contract functions. For more information, see: "13 lines of code to help Bitcoin implement smart contracts? Read OP_CAT soft fork"

「Have fun, buy Bitcoin」

DUDU: Can you share with us a little more about the Fun Collection? Seeing that you post frequently on your social media, do you have any further plans and when to release it?

Casey: Fun is a collection of photos taken by my friend Parker Day, and we have been working together. She started working on this project two years ago. At the time she started shooting and doing all the actual work, I was working on ordinals and what later became inscriptions. We didn't know exactly how we were going to sell them, but it turned out that in the time it took to complete them, the ordinals and inscriptions became popular enough that it actually started to make sense to put them on Bitcoin as inscriptions. So, it's a collection of 1,000 photos taken on film. No Photoshop, just makeup and hairstyles, no special effects.

Fun Collection

I actually just finished inscribing all of them today, and it took a long time. I had to write a program to wait for low fees to do the inscriptions. So, I finally got all 1,000 inscribed. That's a lot. The total size is, I think, 100 megabytes. So, that's 25 full blocks of inscriptions. Yeah, there's no specific release plan at this point. We're going to sell them somehow, but I'm not sure how yet. I'm very happy with this collection, though. I think it's probably the most expensive collection, because it's all shot on film, with models and makeup and hairstylists. Probably the most expensive collection to inscribe, too. 97 megabytes of data is no joke. So, it's a nice collection. I don't know if I'd recommend it to someone else. I don't give investment advice, but the art is very good. So, I'm very happy it's on chain.

While this kind of art isn’t everyone’s cup of tea, it’s Parker’s style, and she launched a series of portraits called “Icons” in 2017, which was her breakthrough work in a similar style. I think it’s a great fit for NFTs because profile picture sets (PFPs) are popular. I think it’s closest to what a PFP would look like. What something like Board Ape Yacht Club or Crypto Punks would look like in real life. They’re colorful and very weird. I think if it wasn’t weird, it’d be a little boring. I don’t want to do another collection of 10,000 images made up of numbers. If it’s not weird, it’s not worth doing. It’s not very interesting. I would encourage people to start looking through these images. There are some weird details. Some may not be to their taste. There are some sexy girls in there. People who are not that weird. There are also a few pictures of cats. Take a closer look and see if there’s anything you like.

Jasmine: You joked before that you would commit seppuku if Rune Protocol didn’t reach a market cap of $1 billion within a month of launch. Do you want to say anything about that joke? Or do you want to set another goal today?

Casey: Absolutely not, I will never make price predictions again. Given the last goal, we didn’t achieve it. I remember on May 20th, our market cap was $999 million. It did exceed $1 billion a month before that. But the rule is what the price is a month later. A month later, the total market cap of Runes was not $1 billion, so you are now talking to Casey’s “ghost”.

Runes market value data, source: GeniiData

DUDU: Finally, please share any thoughts you have on the Bitcoin ecosystem.

Casey: It's great to be with you all and meet a group of dgens in Hong Kong. As for the last thing I want to say, it's to buy Bitcoin. Runes and Ordinals are an interesting form of speculation, but nothing can really compare to Bitcoin. It's the hardest currency we've ever had.

If you look at the history of fiat currencies, the lifespan of fiat currencies is at most 100 years. They all die, are devalued, and fall apart. We can see that even with the seemingly so strong US dollar, inflation is happening faster and faster. So I would say buy Bitcoin and use only a small portion of your deposit to play the Runes and Ordinals gamble. But whatever else you want to do, don't buy VC mined coins, there is no reason to buy pre-mined coins. It costs nothing to make coins, especially runes, you can issue a coin with a click of a mouse.

I don't condone VC mined coins, use a small portion of your capital for gambling. But the rest, buy Bitcoin. Like I said, it's the only investment I've ever made money on. I'm still very confident in it. We have about 10x growth before Bitcoin reaches the market value of gold. I think it may happen. Bitcoin is much better than gold, and you can teleport it to the other side of the earth in 10 minutes.

So that's all I want to say, have fun and buy Bitcoin.

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