WEBVTT - Making Bitcoin A Currency People Use 0:00:10.680 --> 0:00:14.480 Hello, and welcome to another episode of The Odd Blocks podcast. 0:00:14.520 --> 0:00:21.759 I'm Joe Wisenfal and I'm Tracylliwin Tracy, here's something funny. Um, 0:00:21.840 --> 0:00:26.880 I don't know why I'm laughing. Sorry, no, uh, we 0:00:26.960 --> 0:00:29.640 actually we're kind of have a little bit of a 0:00:29.680 --> 0:00:32.920 theme going here because on today's episode we're going to 0:00:32.960 --> 0:00:35.320 be talking about the same thing we talked about last week, 0:00:35.560 --> 0:00:39.320 Bitcoin and making and losing a lot of money off 0:00:39.320 --> 0:00:43.199 of bitcoin. Yeah, pretty much, pretty much exactly that. You 0:00:43.240 --> 0:00:45.120 know what's funny, Like a like a year and a 0:00:45.159 --> 0:00:48.640 half ago or a couple of years ago, when bitcoin 0:00:48.760 --> 0:00:51.599 and other cryptocurrencies were like surging to the moon all 0:00:51.640 --> 0:00:55.560 the time. I remember people complaining to us, They're like, oh, 0:00:55.600 --> 0:00:58.120 you should do more bitcoin episodes, because we actually didn't 0:00:58.120 --> 0:01:04.880 do very many in uh, and now bitcoin and others are, 0:01:05.120 --> 0:01:07.920 you know, in the toilet price wise, the bubbles over 0:01:08.400 --> 0:01:10.400 and now we have two in the rows. So maybe 0:01:10.440 --> 0:01:13.440 we're contrarians, or maybe our sense of timing is just 0:01:13.480 --> 0:01:17.520 completely off on what the market wants. Maybe having done 0:01:17.560 --> 0:01:21.120 the podcast for two years almost at this point, we 0:01:21.120 --> 0:01:24.600 are simply running out of ideas. Yeah, that's it's just 0:01:24.600 --> 0:01:29.360 gonna be bitcoin, Bitcoin, episodes from here on out, But 0:01:29.600 --> 0:01:31.559 this time I think it's gonna be a little different. 0:01:31.600 --> 0:01:33.920 So last time, last week, we talked to a trader 0:01:33.959 --> 0:01:35.600 who wrote the bubble all the way up and then 0:01:35.640 --> 0:01:38.320 all the way down, And this time we're going to 0:01:38.400 --> 0:01:41.479 be talking to someone who's also still very active in it, 0:01:41.560 --> 0:01:44.400 but more on the development side and some of the 0:01:44.560 --> 0:01:49.080 interesting technological innovations that are happening in the bitcoin world, 0:01:49.440 --> 0:01:53.440 even amid uh the Bitcoin winter, so to speak, the 0:01:53.520 --> 0:01:56.520 Bitcoin winter. I like that. But the general theme is 0:01:56.560 --> 0:01:59.440 similar to the last episode in that we are talking 0:01:59.440 --> 0:02:02.640 to someone and who still very much believes in the 0:02:02.760 --> 0:02:06.400 future of bitcoin and who is in fact actively working 0:02:06.520 --> 0:02:09.799 to make bitcoin work. Is that right? Yeah, exactly, So 0:02:09.880 --> 0:02:13.440 another die hard bitcoiner who has been with it a 0:02:13.440 --> 0:02:15.720 long time. And one of the things I want to 0:02:15.760 --> 0:02:19.079 explore on this one is, you know, people, even during 0:02:19.120 --> 0:02:21.920 the ups and downs, people are like, when are people 0:02:21.960 --> 0:02:25.160 actually gonna use bitcoin? When will people use it to spend? 0:02:25.600 --> 0:02:29.519 When will it become a medium of transaction? And that 0:02:29.680 --> 0:02:32.840 is something that our guests UH this week is working 0:02:32.880 --> 0:02:37.160 on directly in terms of building out the technologies and 0:02:37.240 --> 0:02:39.840 the layer on top of the sort of core bitcoin 0:02:39.880 --> 0:02:43.920 blockchain to actually make it a useful currency for spending. 0:02:43.960 --> 0:02:47.720 So it should be an interesting conversation. Great, I'm looking 0:02:47.760 --> 0:02:50.040 forward to it all. Right. On that note, our guest 0:02:50.120 --> 0:02:54.360 this week is Pierre Rochard. He is at Bitcoin Advisory, 0:02:54.400 --> 0:02:57.240 which is a firm he launched to help investors do 0:02:57.320 --> 0:03:00.320 their due diligence when buying bitcoin, and he is also 0:03:00.400 --> 0:03:04.680 involved in bitcoin development. So, Pierre, thank you very much 0:03:04.680 --> 0:03:08.079 for joining us. Thanks for having me on, Joe and Tracy. So, 0:03:08.360 --> 0:03:10.360 before we get started, how long if you you know, 0:03:10.360 --> 0:03:12.480 I follow you on Twitter. I have for a long time. 0:03:12.520 --> 0:03:17.760 You're one of a hardcore bitcoin maximalist. You don't double 0:03:17.800 --> 0:03:22.400 another cryptocurrency. You've had a consistent pro bitcoin message for 0:03:22.400 --> 0:03:25.040 a very long time. You weren't just someone who got 0:03:25.080 --> 0:03:28.280 in the party in seventeen. So tell us a little 0:03:28.280 --> 0:03:32.600 bit about your history and background with bitcoin. Sure, So 0:03:32.800 --> 0:03:35.200 late two thousand twelve, I was wrapping up my master's 0:03:35.240 --> 0:03:37.720 degree and accounting at the University of Texas at Austin. 0:03:37.760 --> 0:03:41.120 Hook Them, Hook Them, and at that point I was 0:03:41.200 --> 0:03:43.520 I was hanging out with crazy libertarians, as you know, 0:03:43.600 --> 0:03:46.760 Michael Goldstein and Daniel crewis there on Twitter as well. Uh, 0:03:46.800 --> 0:03:50.080 and we were. We were debating fractional reserve banking as 0:03:50.200 --> 0:03:53.400 libertarians do. Uh, and I at the time, I was 0:03:53.440 --> 0:03:55.840 a gold bug, sound money, a hundred percenters are banking 0:03:56.240 --> 0:03:59.360 type person. Hopefully we won't get into that debate today. 0:03:59.760 --> 0:04:04.520 And to get skip nail fast forward and I as 0:04:04.560 --> 0:04:07.680 part of our debate, bitcoin came up. And I had 0:04:07.720 --> 0:04:09.839 heard about bitcoin in the context of the Silk Road, 0:04:10.120 --> 0:04:12.720 but I didn't really think much of it. But in 0:04:12.720 --> 0:04:15.360 this context we started we were talking about bitcoins, you know, 0:04:15.360 --> 0:04:19.400 twenty one million bitcoins, it's a monetary policy quinquin, and 0:04:19.720 --> 0:04:22.240 that that captivated my imagination and I went down the 0:04:22.320 --> 0:04:25.920 rabbit hole at that point. So Joe described you as 0:04:25.920 --> 0:04:28.800 a bitcoin maximal list, which means that you sort of 0:04:28.920 --> 0:04:32.800 don't believe in other um cryptocurrencies or coins. What's the 0:04:32.880 --> 0:04:37.279 attraction for bitcoin? Is it a sort of first mover 0:04:37.640 --> 0:04:41.480 adoption advantage or is it something about the underlying technology 0:04:41.520 --> 0:04:45.359 what attracts you to it? Yeah? So, uh, at first, 0:04:45.480 --> 0:04:48.000 it was really that I had in high school. I'd 0:04:48.000 --> 0:04:51.080 been interested in Linux and open source free software, and 0:04:51.160 --> 0:04:54.240 when I opened up bitcoin, I realized that this is 0:04:54.320 --> 0:04:57.159 in the same vein as as that, and it really 0:04:57.160 --> 0:05:01.039 spoke to the authenticity of it, essentially, which was that 0:05:01.160 --> 0:05:04.360 the person who created this was a not someone trying 0:05:04.360 --> 0:05:07.120 to get rich quick. They were actually trying to build 0:05:07.160 --> 0:05:12.159 a piece of software that would lead to a money 0:05:12.160 --> 0:05:15.960 in payment system that was decentralized. And that I found 0:05:16.000 --> 0:05:19.400 to be fascinating because that's kind of the only guarantee 0:05:19.400 --> 0:05:23.160 that we have for for for bitcoin maintaining its properties. 0:05:23.200 --> 0:05:26.719 It has to remain decentralized. If it becomes centralized, then 0:05:27.360 --> 0:05:29.719 all bets are often will either get shut down or 0:05:29.800 --> 0:05:33.120 it'll change its properties in terms of its monetary policy 0:05:33.279 --> 0:05:36.840 or censoring people or whatever it is. And I'm deeply 0:05:36.920 --> 0:05:40.960 skeptical that other cryptocurrencies that are being promoted will be 0:05:41.000 --> 0:05:45.280 able to maintain their their properties and be remained decentralized. 0:05:46.000 --> 0:05:48.599 So let's just let's explore that a little bit further. 0:05:48.640 --> 0:05:52.080 We talked about maintaining their properties. So you mentioned the 0:05:52.120 --> 0:05:55.960 fact that there will only ever be twenty one million bitcoin. Now, 0:05:56.040 --> 0:06:00.479 theoretically that could change, the code could change, but what 0:06:00.600 --> 0:06:04.400 you say is that it's pretty unlikely given the origin 0:06:04.560 --> 0:06:07.840 and the community, but that other coins where there may 0:06:07.880 --> 0:06:12.080 be a specific founder who faces political pressure or ideological pressure, 0:06:12.600 --> 0:06:15.920 those properties could change over time, and so in your view, 0:06:15.960 --> 0:06:19.440 the bitcoin maximalist view is Bitcoin has the best chance 0:06:19.720 --> 0:06:24.479 of essentially staying what it is forever, right, And you 0:06:24.480 --> 0:06:25.720 you hit the nail on the head when you said 0:06:25.760 --> 0:06:28.400 that the code can be changed, because the code can 0:06:28.440 --> 0:06:31.240 be changed, and lots of people have changed the code 0:06:31.240 --> 0:06:34.120 and either released it as their own version of bitcoin, 0:06:34.200 --> 0:06:36.400 you know, giving it a different name, or the an 0:06:36.400 --> 0:06:40.359 all coin, or creating new code from from scratch. But 0:06:40.960 --> 0:06:44.000 ultimately you have to have other people run that code 0:06:44.240 --> 0:06:47.640 and run it on their computer and consider that code 0:06:47.640 --> 0:06:52.160 to be Bitcoin. And that is the biggest challenge is 0:06:52.600 --> 0:06:57.200 persuading others to run your code. And the code is UM. 0:06:57.240 --> 0:06:59.800 You know, it's called a node, a Bitcoin node, and 0:07:00.320 --> 0:07:02.640 this node is going to communicate with this peer to 0:07:02.680 --> 0:07:07.000 peer network and essentially the lower the cost of running 0:07:07.000 --> 0:07:09.560 a node, the more likely it is that people will 0:07:09.640 --> 0:07:13.400 run one and thus make it decentralized. So let's talk 0:07:13.400 --> 0:07:18.240 about the current price slump in bitcoin. What actually has 0:07:18.280 --> 0:07:21.320 accounted for that fall? And you know you're talking about 0:07:21.320 --> 0:07:25.400 this idea of UM replicating the code and the Bitcoin forks, 0:07:25.440 --> 0:07:29.520 do you think that played into it at all? Honestly, 0:07:29.520 --> 0:07:34.040 I don't. Uh, there's the people have been creating knockoffs 0:07:34.040 --> 0:07:37.760 of bitcoin for years now. Um, I think that what 0:07:37.880 --> 0:07:40.640 accounts for the fall is that the price went up 0:07:40.680 --> 0:07:46.559 a lot, and uh, it went from the bull Sorry, 0:07:46.560 --> 0:07:50.440 the previous bear market bottomed out about two dollars and 0:07:50.480 --> 0:07:53.440 from there it rocketed up to twenty dollars in a 0:07:53.480 --> 0:07:56.520 period of eighteen months or a little bit longer than that. 0:07:56.600 --> 0:08:01.280 But um, essentially you can't have a go straight up 0:08:01.320 --> 0:08:05.040 like that and not expect a severe correction. Uh, it 0:08:05.160 --> 0:08:07.960 was not at twenty dollars long enough for me to 0:08:08.000 --> 0:08:10.720 get used to it. So four thousand dollars still feels 0:08:10.800 --> 0:08:14.640 very rich. But there's differing views on that. All right, 0:08:14.760 --> 0:08:18.480 let's talk about one of the biggest criticisms of bitcoin, 0:08:18.520 --> 0:08:21.080 and it's something you're working and others are working on 0:08:21.280 --> 0:08:25.280 to address. As they say, Okay, obviously it's a mode 0:08:25.280 --> 0:08:28.400 of speculation and people like to trade it, but no 0:08:28.400 --> 0:08:30.800 one actually uses it, and if they do want to 0:08:30.920 --> 0:08:35.880 use it for a typical purpose, it's very difficult. It's cumbersome, 0:08:36.559 --> 0:08:40.000 it's slow. It takes a long time to confirm that 0:08:40.040 --> 0:08:44.120 a transaction has even gone forth. If the network is busy, 0:08:44.240 --> 0:08:47.640 then fees can be very high, which places many everyday 0:08:47.640 --> 0:08:52.120 purchases completely out of reach. Um that existing payment systems 0:08:52.160 --> 0:08:54.360 do very well for most of the things we want 0:08:54.400 --> 0:08:59.760 to buy. Um, you so are all the first of all, 0:08:59.760 --> 0:09:05.400 are these criticisms in your view? Fair? Absolutely? And Uh. 0:09:05.440 --> 0:09:08.880 In response to those criticisms, Uh, there's they're in a 0:09:08.960 --> 0:09:12.240 kind of a bifurcation. On the one hand, if there's 0:09:12.280 --> 0:09:14.120 there's a lot of bitcoiners who entirely can see those 0:09:14.120 --> 0:09:17.200 criticisms and say, bitcoins a store value. Uh, And so 0:09:17.360 --> 0:09:21.120 it's it's more like holding gold, right was So you're 0:09:21.120 --> 0:09:25.040 not transacting in gold day to day, you know, shaving 0:09:25.040 --> 0:09:28.160 off scraps of gold to pay for your coffee. Um, 0:09:28.600 --> 0:09:32.240 it's a store value. And so I think the and 0:09:32.320 --> 0:09:35.080 that's essentially a narrative because I don't think that it 0:09:35.160 --> 0:09:39.120 matches up to uh, the whole reality. It's certainly a 0:09:39.240 --> 0:09:41.679 part of the reality, which is that there are a 0:09:41.720 --> 0:09:43.920 lot of people who hold bitcoin in the same way 0:09:43.920 --> 0:09:46.720 that they would hold gold, and they're not actually even 0:09:46.760 --> 0:09:49.440 remotely interested in in finding out whether it's easy to 0:09:49.480 --> 0:09:52.880 transact in or not. They just understand that they are 0:09:53.000 --> 0:09:57.599 able to receive bitcoin and send bitcoin. Uh. To an exchange, 0:09:58.160 --> 0:10:01.520 and and then the speculat sation certainly exists and it 0:10:01.720 --> 0:10:04.720 is a big part of the market as well. Um 0:10:04.760 --> 0:10:08.840 of essentially momentum traders seeing it going up or down. UM. 0:10:08.920 --> 0:10:13.960 Now there's a growing sense that there's a group of 0:10:14.080 --> 0:10:19.520 individuals who want to transact with bitcoin and UM part 0:10:19.559 --> 0:10:22.920 of it is people who they see the price go 0:10:23.040 --> 0:10:26.960 up to x and they want to essentially cash out. Uh. 0:10:27.000 --> 0:10:29.040 And you can cash out by going to an exchange, 0:10:29.559 --> 0:10:32.120 or it might be more convenient for you to cash 0:10:32.120 --> 0:10:35.520 out when you're, for example, using an e commerce website 0:10:35.559 --> 0:10:37.959 and you're buying something and they have the option to 0:10:38.000 --> 0:10:40.200 pay with bitcoin, so you say, well, I already have 0:10:40.240 --> 0:10:42.800 too many bitcoin, let's lighten up my bags here and 0:10:42.840 --> 0:10:45.200 I'll use that option. So that's kind of on the 0:10:45.240 --> 0:10:49.840 demand side for for making payments. On on the other side, 0:10:49.920 --> 0:10:53.480 you have merchants that maybe they want to be accumulating bitcoin, 0:10:53.880 --> 0:10:57.440 and accumulating bitcoin by accepting it in the course of 0:10:57.440 --> 0:11:02.400 commerce is has more privacy and possibly a lower cost 0:11:02.520 --> 0:11:04.920 than going out to an exchange and buying it, so 0:11:05.800 --> 0:11:08.840 that that's happening. On top of that, we have this 0:11:08.880 --> 0:11:15.240 phenomenon of existing payment processors censoring individuals based on either 0:11:16.120 --> 0:11:19.240 political reasons or they're they're just de risking, right. Uh. 0:11:19.280 --> 0:11:21.880 And because they're they're complying with k y c mL 0:11:22.559 --> 0:11:25.560 regulations and they don't want to be on the wrong 0:11:25.559 --> 0:11:28.080 side of the regulators, so they're cutting people off even 0:11:28.080 --> 0:11:31.080 though they don't have uh you know, the person has 0:11:31.120 --> 0:11:34.680 not done anything wrong, you know. And it's across the 0:11:34.720 --> 0:11:39.120 ideological spectrum, right, because we have people who are running 0:11:39.160 --> 0:11:44.840 marijuana shops in Colorado and you know that's probably more democrat, 0:11:45.040 --> 0:11:47.080 you know, left leaning, and then on the other side, 0:11:47.200 --> 0:11:50.240 you have people saying politically incorrect things on the Internet 0:11:50.320 --> 0:11:53.520 and getting shut down, and that's sheneringly more on the right. Uh. 0:11:53.559 --> 0:11:56.840 So I think that across the ideological spectrum our our 0:11:56.960 --> 0:12:02.200 politics has gotten so polarized that the corporations get dragged 0:12:02.240 --> 0:12:04.840 into it and they get lobbied to kick people off 0:12:04.880 --> 0:12:07.880 their platforms. Uh. And that opens up an opportunity for 0:12:08.000 --> 0:12:29.680 using bitcoin in in actual transactions. So here's my question, Like, 0:12:29.760 --> 0:12:32.720 if we back up to the moment when bitcoin was 0:12:32.920 --> 0:12:36.439 created and you were talking about the underlying technology, if 0:12:36.480 --> 0:12:39.600 it wasn't supposed to be a store of value or 0:12:39.640 --> 0:12:44.120 a tool for speculation. Then why didn't we sort of 0:12:44.160 --> 0:12:47.920 have a process embedded into it from the very beginning 0:12:48.000 --> 0:12:51.680 to make transactions easier, Because it's not like people didn't 0:12:51.760 --> 0:12:55.560 see this idea of database sprawl or you know, a 0:12:55.600 --> 0:12:58.160 really long ledger sort of hanging back and forth and 0:12:58.280 --> 0:13:02.520 really bulking up transaction time is coming, right, that's correct, 0:13:02.600 --> 0:13:08.040 and Citaian Documento had a he had included a feature 0:13:08.240 --> 0:13:11.040 that wanted to be lightning, but uh, he didn't have 0:13:11.120 --> 0:13:15.040 it fully thought through, and so his his first iteration 0:13:15.320 --> 0:13:18.240 on essentially and well, let's let's get into this right, 0:13:18.240 --> 0:13:22.800 which is that bitcoin is a a global broadcast system 0:13:22.920 --> 0:13:25.679 where you are having all of the nodes agree on 0:13:25.920 --> 0:13:29.400 the ledger and that imposes a huge amount of cost 0:13:29.520 --> 0:13:32.600 on the nodes, where essentially it's a negative externality. Every 0:13:32.600 --> 0:13:36.360 transaction is adding data to the ledger that everyone has 0:13:36.400 --> 0:13:42.600 to verify, so that doesn't scale very well. It's uh, essentially, 0:13:42.720 --> 0:13:45.240 what the result is that fewer and fewer people run 0:13:45.240 --> 0:13:48.040 notes and then it becomes centralized. So we needed a 0:13:48.120 --> 0:13:53.480 system that allowed us to send payments without globally broadcasting 0:13:53.920 --> 0:13:57.640 and that's so so Tocia had had this in mind, 0:13:58.200 --> 0:14:01.360 but uh, the way he clemented, it just didn't work. 0:14:01.720 --> 0:14:03.520 Before we get further, I just want to sort of 0:14:03.559 --> 0:14:07.319 make sure people understand this concept of global broadcasting and 0:14:07.400 --> 0:14:12.960 why it's so cumbersome. Because we blockchain technology. You often 0:14:12.960 --> 0:14:15.880 hear people say, oh, it's really efficient and it's gonna, 0:14:16.000 --> 0:14:18.880 you know, reduce all these costs. But it's inherently, at 0:14:18.960 --> 0:14:22.640 least in this version, very inefficient in the sense of 0:14:22.720 --> 0:14:26.240 you imagine I was sending you a text message during email. 0:14:26.800 --> 0:14:28.680 I think people could imagine a system in which the 0:14:28.680 --> 0:14:30.880 only way I could do that is to then send 0:14:30.880 --> 0:14:33.440 a copy of that email to everyone who has ever 0:14:33.520 --> 0:14:35.560 gotten an email ever, so they can all see it. 0:14:36.080 --> 0:14:39.560 We can all see why that's just insanely inefficient. It 0:14:39.600 --> 0:14:44.240 happens to be necessary so that uh, for the decentralization purposes, 0:14:44.280 --> 0:14:46.840 that there's no centralized database. We all have degree on 0:14:46.880 --> 0:14:50.320 the emails we've sent. But as uh, you know, as 0:14:50.400 --> 0:14:56.120 a system that just accumulating data, extraordinary negative externalities exactly, 0:14:56.600 --> 0:15:01.200 and thankfully there there's an opportunity here to solve that problem. 0:15:01.240 --> 0:15:03.920 With a paper that was released back in two thousand 0:15:04.040 --> 0:15:08.520 fourteen describing what's called the Lightning network today and the 0:15:08.920 --> 0:15:13.120 Lightning network essentially says Okay, let's let's use this global 0:15:13.160 --> 0:15:18.720 broadcast system as a a system of last resort, essentially 0:15:18.760 --> 0:15:23.720 as a supreme court. And when when you're doing business, uh, 0:15:23.960 --> 0:15:26.760 you don't take your contract to court every time that 0:15:26.840 --> 0:15:29.880 you are relying on that contract. UH. You only take 0:15:29.920 --> 0:15:33.240 it when there's a dispute uh to the court. Uh. 0:15:33.280 --> 0:15:37.320 And that's otherwise it would be a completely unmanageable uh 0:15:38.040 --> 0:15:42.240 judicial system. So that's the idea behind lightning, is that 0:15:42.600 --> 0:15:46.200 you only go on chain when there's a dispute about 0:15:46.320 --> 0:15:50.760 the state of your what's called a lightning channel. And UH, 0:15:50.800 --> 0:15:54.040 this lightning channel, you you open it up by doing 0:15:54.040 --> 0:15:58.040 an on chain transaction and once it's open, now you 0:15:58.080 --> 0:16:00.880 can send value back and forth and you can be 0:16:01.000 --> 0:16:04.840 routing value around without having to trust your counterparties and 0:16:04.880 --> 0:16:08.040 while maintaining a lot of the same properties of of bitcoin. 0:16:08.320 --> 0:16:11.080 There are trade offs, but we can get into it, well, 0:16:11.200 --> 0:16:14.280 so what are the tradeoffs exactly? And you know, if 0:16:14.320 --> 0:16:16.320 I could be cynical about it, it sounds like you're 0:16:16.360 --> 0:16:19.760 sort of creating an additional layer on top of a 0:16:19.840 --> 0:16:23.880 system that has at various times already been criticized for 0:16:24.000 --> 0:16:28.640 being sort of unwieldy in various ways. Yeah. Absolutely. So 0:16:29.080 --> 0:16:31.440 the main trade off today is that you have to 0:16:32.080 --> 0:16:35.520 keep your bitcoins online, and there's been a lot of 0:16:35.640 --> 0:16:39.440 user education about not keeping your bitcoins online and putting 0:16:39.480 --> 0:16:42.440 them into what's called cold storage, right, which is either 0:16:42.560 --> 0:16:45.520 a hardware wallet. Uh. There are a few popular ones, 0:16:45.560 --> 0:16:49.000 including a treasure and ledger, or just printing it down 0:16:49.000 --> 0:16:52.920 on a piece of paper, writing down your mnemonic seed 0:16:53.480 --> 0:16:58.040 and putting it into a bank safe deposit box, which 0:16:58.200 --> 0:17:02.480 is also a little uh iron But so with with Lightning, 0:17:02.520 --> 0:17:04.960 you're you're asking users to keep their funds on their 0:17:04.960 --> 0:17:08.159 computer or on their phone, and really there it's just 0:17:08.200 --> 0:17:10.679 about managing ricks. So it's I think of it as 0:17:10.720 --> 0:17:13.920 a checking account. You wouldn't put your entire fortune on it. Uh, 0:17:14.000 --> 0:17:16.679 it's just so a way of being able to have 0:17:16.760 --> 0:17:20.159 some walking around money. Um. Now, in terms of the 0:17:20.880 --> 0:17:25.320 complexity from the user's perspective, that's a fair criticism. And 0:17:25.640 --> 0:17:28.439 I think that there's there's a lot of energy within 0:17:28.760 --> 0:17:33.200 the Lightning community into having a very seamless user experience, 0:17:33.480 --> 0:17:37.000 so that you don't even know that you're you're on Lightening. 0:17:37.119 --> 0:17:40.880 It's all abstracted away, so it feels like you're on 0:17:40.880 --> 0:17:44.320 on Venmo or on a square cash app. Does that 0:17:44.400 --> 0:17:47.600 exist currently or is that what you're working on? Essentially, 0:17:48.000 --> 0:17:52.080 Like I know that the Bitcoin core software is probably 0:17:52.160 --> 0:17:56.679 unrealistic for most people to download and run on their computers. 0:17:57.200 --> 0:18:01.040 Is the software to run eatening so that I could 0:18:01.119 --> 0:18:04.159 theoretically one day go into a Starbugs and pull up 0:18:04.200 --> 0:18:06.600 my phone and scan a QR code and make a 0:18:06.640 --> 0:18:09.960 payment for a two dollar coffee and it would instantly 0:18:10.000 --> 0:18:11.919 take it out of some bitcoin wallet that I have. 0:18:12.480 --> 0:18:16.600 Is that going to be easier and less cumbersome? Yes, 0:18:16.760 --> 0:18:19.120 we have a very clear path to that, and it's 0:18:19.160 --> 0:18:21.639 just a matter of executing on it. So at this 0:18:21.680 --> 0:18:24.199 point in time, you do need to be running a 0:18:24.280 --> 0:18:28.920 Bitcoin node that then connects that you're lightning, so you're 0:18:28.960 --> 0:18:32.000 running two notes, a Bitcoin node and a Lightning note. 0:18:32.320 --> 0:18:35.080 And that's the software I've been writing to to help 0:18:35.119 --> 0:18:37.800 with that. And uh, the software I have called the 0:18:37.800 --> 0:18:42.680 node Launcher works on desktop and laptops And essentially the 0:18:43.040 --> 0:18:45.959 main drawback there is that you have to download two 0:18:46.240 --> 0:18:48.679 gigabytes of data. You don't necessarily have to store it, 0:18:48.760 --> 0:18:51.080 but you've got to download it. And here in New 0:18:51.160 --> 0:18:54.399 York city. That's fine because we have fiber and everyone 0:18:54.440 --> 0:18:57.040 has a good internet connection, But once you get into 0:18:57.119 --> 0:18:59.639 rural parts, even in America, uh, that that's just not 0:18:59.680 --> 0:19:03.200 even an option. They can't download transer giarbytes. Thankfully, we 0:19:03.359 --> 0:19:06.760 have a an innovation that has been worked on for 0:19:08.440 --> 0:19:11.520 a long time now that's going to be out this year. 0:19:11.920 --> 0:19:16.080 It's called Neutrino, and Neutrino allows you to not have 0:19:16.160 --> 0:19:20.480 to download the entire two untrigearbytes uh. And it will 0:19:20.480 --> 0:19:22.439 make it so that you can use lightning on your 0:19:22.440 --> 0:19:25.639 mobile wallet without using a bitcoin note per se. So 0:19:25.680 --> 0:19:28.600 I have a sort of existential question which is, let's 0:19:28.600 --> 0:19:31.480 assume that you you figure out a way, um, you 0:19:31.520 --> 0:19:34.520 know that this way of transacting and bitcoin is more efficient, 0:19:34.600 --> 0:19:37.479 it is easier for people to use. Does that end 0:19:37.560 --> 0:19:43.399 up solving the speculative problem which we've seen for bitcoin 0:19:43.720 --> 0:19:46.040 um And by that I mean, you know, a reluctance 0:19:46.119 --> 0:19:48.680 of people to use it in day to day transactions 0:19:48.680 --> 0:19:51.200 because they think that the price is going to shoot 0:19:51.280 --> 0:19:54.119 up to the moon at some point. And there's a 0:19:54.119 --> 0:19:57.440 specific example that I have in mind, which is, of course, um, 0:19:58.560 --> 0:20:01.080 the infamous pizza a. You know, like I think it 0:20:01.160 --> 0:20:03.320 was eight or nine years ago or something when we 0:20:03.400 --> 0:20:07.160 had one guy who paid for pizza using a bunch 0:20:07.160 --> 0:20:09.840 of bitcoins that, you know, a year ago would have 0:20:09.920 --> 0:20:14.080 been worth millions of dollars, and it's kind of funny, 0:20:14.160 --> 0:20:16.760 but people also sort of made fun of him about 0:20:16.800 --> 0:20:18.440 it and said, Oh, I can't believe you did that, 0:20:18.480 --> 0:20:21.520 and you wasted so much money. How do you overcome 0:20:21.800 --> 0:20:25.479 that problem? So I think Lightning is going to make 0:20:25.520 --> 0:20:31.440 that problem worse because ultimately people's anticipation or their projection 0:20:31.480 --> 0:20:34.920 of where the bitcoin price is going is based on 0:20:35.119 --> 0:20:37.359 the technology and the fundamentals that are going to be 0:20:37.440 --> 0:20:39.840 driving the adoption that would cause the price to go 0:20:39.960 --> 0:20:43.119 to that level. And so if if we with Lightning, 0:20:43.119 --> 0:20:46.920 if we demonstrate that it's going to be a very 0:20:46.960 --> 0:20:50.360 efficient system that's going to attract a lot of adoption, 0:20:50.400 --> 0:20:52.359 then we can expect the price to to go up 0:20:52.400 --> 0:20:55.240 even more than it otherwise would. So I think that 0:20:55.320 --> 0:20:58.520 it makes the problem worse in that regard. And really 0:20:58.560 --> 0:21:00.760 I think that the solution is just going to be time. 0:21:01.240 --> 0:21:04.960 And what I've seen is that people who have owned 0:21:05.000 --> 0:21:09.680 bitcoins for a while, they are essentially overexposed to bitcoin, 0:21:10.040 --> 0:21:12.960 and they're always looking for ways to spend bitcoin. UH. 0:21:13.080 --> 0:21:17.359 So I think that will will see essentially, the people 0:21:17.359 --> 0:21:20.440 who bought it twenty thousand dollars in two thousand seventeen, 0:21:21.080 --> 0:21:25.240 they might be in the hottele mindset for another decade UM. 0:21:25.359 --> 0:21:29.000 But people who who bought it five dollars or a 0:21:29.080 --> 0:21:33.080 thousand dollars, uh, they might be thinking about how how 0:21:33.160 --> 0:21:36.639 to uh you know, buy a hard drive on on 0:21:36.640 --> 0:21:40.960 online to um or. And the other aspect of it 0:21:41.040 --> 0:21:46.720 is that, um, you people who even who are buying 0:21:46.760 --> 0:21:51.240 it today, UM, they want to experiment. They are fascinated 0:21:51.320 --> 0:21:55.359 by the technology, uh, and they they're very bullish on 0:21:55.359 --> 0:21:58.920 the price, but they're also interested in educating themselves and 0:21:59.040 --> 0:22:02.800 improving their under standing of bitcoin. And uh, I have 0:22:03.000 --> 0:22:06.120 a lot of people who are very new to bitcoin 0:22:06.200 --> 0:22:10.200 who um want to learn more about lightning because they 0:22:10.280 --> 0:22:13.159 just find the idea of a decentralized payment system to 0:22:13.200 --> 0:22:16.479 be fascinating. So I think that you'll have people who 0:22:16.600 --> 0:22:20.399 both are hoddling bitcoin and also transacting in it in 0:22:20.480 --> 0:22:23.480 an experimental way but on some level. And I think 0:22:23.480 --> 0:22:26.240 it's kind of implicit in what you're saying and when 0:22:26.280 --> 0:22:30.400 you describe the people who use it now using bitcoin 0:22:30.520 --> 0:22:33.120 isn't a way as a means of transacting, even if 0:22:33.119 --> 0:22:36.800 it were really smooth, it's still a sort of um, 0:22:37.000 --> 0:22:39.600 kind of a medium of exchange of last resort. In 0:22:39.600 --> 0:22:43.240 other words, if all you're doing is going to Starbucks 0:22:43.480 --> 0:22:47.960 and buying a coffee, even if it were incredibly simple, Uh, 0:22:47.960 --> 0:22:50.840 you know, just scanning your phone across a thing, and 0:22:51.560 --> 0:22:54.560 it's still like, there's not much reason to do it 0:22:55.560 --> 0:22:59.040 for transaction like that, even in the most simplistic scenario. No, 0:22:59.440 --> 0:23:02.960 there isn't. You could make arguments about privacy. For example, 0:23:03.440 --> 0:23:05.600 you know, do you want visa knowing that you go 0:23:05.720 --> 0:23:09.480 to Starbucks every day? I think that most people don't 0:23:09.560 --> 0:23:12.360 care about that at all. Um, And yeah, that's that's 0:23:12.359 --> 0:23:16.600 exactly right. It is a I think that the most 0:23:17.359 --> 0:23:22.000 underrated aspect of bitcoin is optionality, right, and owning a 0:23:22.040 --> 0:23:23.800 little bit of bitcoin and having a little bit on 0:23:23.840 --> 0:23:27.720 your phone gives you an extra option. Uh. And it's 0:23:27.800 --> 0:23:31.120 it's that it's kind of a form of insurance from 0:23:31.160 --> 0:23:33.959 a payment system perspective. I want to go back to 0:23:34.160 --> 0:23:37.160 something you just said about You say, people are um 0:23:37.200 --> 0:23:40.880 who are getting into bitcoin now it feels like obviously 0:23:41.280 --> 0:23:45.359 interest in bitcoin is significantly less than it was a 0:23:45.440 --> 0:23:47.480 year ago. I think it's safe to say. But in 0:23:47.560 --> 0:23:51.720 your world of people who are super into the technology 0:23:51.800 --> 0:23:54.840 and hacking away at lightning and building this out, do 0:23:54.880 --> 0:23:59.120 you still see growth in that community? Yes, to my surprise, 0:23:59.160 --> 0:24:02.679 I do. I hope stay podcast the noted Bitcoin podcast, 0:24:03.119 --> 0:24:07.040 and uh, I joked that we're not getting any new listeners, 0:24:07.119 --> 0:24:09.680 and then on Twitter the next day I got a 0:24:09.760 --> 0:24:12.080