Matt Kratter: Inside Bitcoin's Civil War Over BIP-110 (Potential Chain Split)

**Natalie Brunell** (0:00)
I sort of feel like I'm walking into the lion's den a little bit when it comes to BIP 110

**Matt Kratter** (0:04)
It actually is a civil war, and the enemy is within the game.

**Natalie Brunell** (0:08)
If people signal to BIP 110, will this be a chain split?

**Matt Kratter** (0:12)
We could end up with a chain split if we end up with mining pools, mining according to different consensus rules.

**Natalie Brunell** (0:17)
It's two Bitcoin versions, right? Like Bitcoin Cash, and we saw how that went.

**Matt Kratter** (0:21)
If there is going to be a chain split, I would expect it to happen this Saturday. You'd have to ask yourself, do you want corporate captured PayPal Bitcoin where it's controlled by the miners and it's controlled by the large corporations, or do you want the one that's truly censorship resistant?

**Natalie Brunell** (0:35)
If the chain split does happen, what will you do? Because it seems like this is your pill to die on, essentially.

**Matt Kratter** (0:41)
This is, I consider, a life or death matter for Bitcoin.

**Natalie Brunell** (0:43)
Are you going to hold both and sort of see where the chips fall?
Welcome back to the show. Joining me this week is Matt Kratter. He is the founder of Bitcoin University. Thanks for joining me in person.

**Matt Kratter** (0:59)
Thanks for having me on, Natalie.

**Natalie Brunell** (1:01)
I sort of feel like I'm walking into the lion's den a little bit when it comes to BIP 110
And I'm sure I'll share it throughout the show.
It's been interesting interacting with some of the folks in this community. But one of the reasons why I really wanted to have you on, and I've wanted to do an interview with you for a while, is because people seem so passionate about this. But I don't understand all the technical aspects of it. So we'll get into it. But first, I want to get to know you a little bit better. You come from the TradFi world, you worked at a hedge fund, right, I believe with Peter Thiel. Can you tell me your origin story?

**Matt Kratter** (1:35)
Yeah, absolutely. So I studied English literature and music composition as an undergraduate at Stanford University. And when I graduated, the job market was not great in Silicon Valley because it was sort of transitioning from being more defense and military to the commercial internet hadn't really taken off. So I decided to go to graduate school. I did a PhD in English literature at UC Berkeley. And the reason I mentioned this is I met Peter Thiel as part of my graduate studies. We had a professor in common, a really cool French philosopher named René Girard, who was at Stanford, and I ended up working with him on my dissertation.
He sat on my dissertation as one of the professors, and he also ran a seminar, a weekly seminar. And so that's where I met Peter Thiel. And so I sort of knew Peter from kind of a humanities perspective. And then in the late 90s, I discovered the stock market. This was the advent of discount brokerages. And I began to sort of neglect my dissertation or spend more time on the markets, gain interest in the markets than writing. And by the time I finished my dissertation in 2000, I realized I really wanted to spend time in the financial markets. And I'd already been trading. I got a couple sort of scholarships and I put them into discount brokerage and started trading the money. And as part of this, Peter and I were exchanging ideas. This was a very interesting time in the markets because long-term capital was blowing up and we had the Asian crisis and the Russian default crisis and all these things. And so we were comparing notes. I came more from a systems trading background and Peter was more global macro. So he was the one who really got me into macro.
And then by the time I graduated, got the PhD, I realized that that was something I didn't really want to do. I was obsessed with the markets and then Peter sold, ended up selling PayPal in 2002 to eBay.
And so he took kind of a couple of years off to grow eBay from sort of 1997 or 98 to 2002 He sold it to eBay. He restarted his hedge fund, which had been called Teal Capital before that. He rebranded it as a sort of a Soro style, leveraged directional trading shop. And did you work there? Yeah, as part of it, he hired all his friends. So this was a very lucky thing for me, being an English PhD, which is normally people do that to enter a certain market, which would be to become a professor.