Oct. 29, 2026
Building a New Path for Bitcoin Innovation with Paul Sztorc of LayerTwo Labs
In this episode of The Smart Economy Podcast, host Dylan Grabowski is joined by CEO of LayerTwo Labs Paul Sztorc, to discuss why years of attempting to bring Drivechain to Bitcoin ultimately led him toward launching a new Bitcoin fork. They explore Bitcoin's security budget, Sztorc's criticisms of the Lightning Network, the shift toward protocol ossification, prediction markets, and how eCash aims to create a new environment for Bitcoin-based experimentation.
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RSS Feed In this episode of The Smart Economy Podcast, host Dylan Grabowski is joined by Paul Sztorc, CEO of LayerTwo Labs, a Bitcoin development company building Drivechain technology that enables opt-in sidechains designed to expand Bitcoin's functionality and generate additional transaction fees for miners.
Sztorc traces his path from mainstream economics to Bitcoin and explains how the global financial crisis, Austrian economics, and Bitcoin's early use in commerce shaped his thinking about money and decentralized systems. The conversation explores his early work on prediction markets through Truthcoin before turning to the problems he believes Bitcoin still needs to address.
What you'll learn:
- How Sztorc's economics background and the global financial crisis led him to Bitcoin
- Why his early work on Truthcoin anticipated today's renewed interest in prediction markets
- How Drivechain could enable specialized Bitcoin-style L2s while directing transaction fees to miners
- Why Sztorc believes Bitcoin's declining block subsidy makes transaction-fee revenue increasingly important
- Why he argues the Lightning Network has not delivered the scaling solution many Bitcoiners expected
- How Bitcoin's culture shifted from experimenting with new technology toward greater resistance to protocol changes
- Why years of attempting to bring Drivechain to Bitcoin ultimately led Sztorc toward eCash
- How eCash is intended to give developers another environment for building Drivechains and testing new use cases
Paul Sztorc is the founder and CEO of LayerTwo Labs and a longtime Bitcoin developer and researcher. He is the co-author of BIP300, which proposes Drivechain functionality for Bitcoin, and BIP301, which proposes blind merged mining. His work also includes Truthcoin, an early proposal for decentralized prediction markets. After more than a decade advocating for Bitcoin sidechains and Drivechain, Sztorc is now developing eCash as a new environment for putting those ideas into practice.
Did you enjoy this episode? Check out these other great guests:
- Tomasz Stańczak - Ethereum Foundation
- David Hoffman - Bankless
- Fisher Yu - Babylon Labs
- Alexei Zamyatin - BOB
- Sid Powell - Maple Finance
And many others!
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