1 00:00:00,000 --> 00:00:07,140 I'm extremely grateful to Foundation Devices for being the inaugural sponsor of this podcast. 2 00:00:07,140 --> 00:00:14,160 When it comes to beautiful, air-gapped, open source Bitcoin hardware wallets, this is a 3 00:00:14,160 --> 00:00:20,580 team that I look to because I've really come to realize it's not just about the hardware. 4 00:00:20,580 --> 00:00:27,160 It's also just as important to look at the ethos of the team that's building it. 5 00:00:27,160 --> 00:00:32,120 You can have a crypto hardware wallet that does exactly what you need, but if the team 6 00:00:32,120 --> 00:00:38,660 decides to start developing in a direction that you don't like, for instance, like Trezor 7 00:00:38,660 --> 00:00:46,660 has by offering privacy tools only to those who are government approved, and Ledger has 8 00:00:46,660 --> 00:00:55,140 done by adding the ability for hardware wallets to export their private keys, it's not easy 9 00:00:55,140 --> 00:01:01,760 at all to make a change once you're already entrenched with that hardware wallet. 10 00:01:01,760 --> 00:01:06,320 The team at Foundation is focused on more than just your Bitcoin. 11 00:01:06,320 --> 00:01:12,560 They're focused on your sovereignty and your freedom, and that's invaluable when you're 12 00:01:12,560 --> 00:01:15,020 looking for a hardware wallet. 13 00:01:15,020 --> 00:01:24,180 You can check out Foundation and their Passport Bitcoin Wallet at foundationdevices.com. 14 00:01:24,180 --> 00:01:29,800 On this episode, I speak with Jamison Lopp, the co-founder and CTO of CASA, which is an 15 00:01:29,800 --> 00:01:34,900 app that protects your Bitcoin and Ethereum with multiple keys stored in separate places 16 00:01:34,900 --> 00:01:37,020 for extra security. 17 00:01:37,020 --> 00:01:42,300 He's also the creator of Bitcoin.Page, which is probably the best one-stop resource of 18 00:01:42,300 --> 00:01:45,880 info about Bitcoin that you're going to find on the web. 19 00:01:45,880 --> 00:01:46,880 That's Bitcoin.Page. 20 00:01:46,880 --> 00:01:53,160 Most importantly, he's an OG cypherpunk, been involved with Bitcoin for nearly 10 years 21 00:01:53,160 --> 00:01:56,480 and a vast wealth of information about Bitcoin. 22 00:01:56,480 --> 00:01:58,880 Let's get right to it with Jamison Lopp. 23 00:01:58,880 --> 00:02:02,400 First, thanks for doing this. 24 00:02:02,400 --> 00:02:04,840 I appreciate it. 25 00:02:04,840 --> 00:02:20,040 We've never spoken before, but I've followed your work for a while, and I greatly appreciate 26 00:02:20,040 --> 00:02:22,520 you. 27 00:02:22,520 --> 00:02:23,520 You bet. 28 00:02:23,520 --> 00:02:31,200 I'm always interested in having in-depth conversations with people that I've only had kind of fly-by 29 00:02:31,200 --> 00:02:37,080 passovers on Twitter with. 30 00:02:37,080 --> 00:02:41,640 Your Bitcoin resource, I know everybody tells you, on your website, is the best one out 31 00:02:41,640 --> 00:02:42,640 there. 32 00:02:42,640 --> 00:02:50,800 It's such a great example of what somebody can do just by hosting a resource like that. 33 00:02:50,800 --> 00:02:56,240 Lopp.net slash Bitcoin, by the way, highly recommended. 34 00:02:56,240 --> 00:02:58,560 Or Bitcoin.Page, if that's easier to remember. 35 00:02:58,560 --> 00:02:59,560 Oh, no. 36 00:02:59,560 --> 00:03:02,240 You got an actual direct URL I didn't know. 37 00:03:02,240 --> 00:03:03,800 Bitcoin.Page. 38 00:03:03,800 --> 00:03:04,800 That makes it easier. 39 00:03:04,800 --> 00:03:10,640 Yeah, it just redirects, but I figured the vanity address might be easier to tell people. 40 00:03:10,640 --> 00:03:14,100 That's awesome. 41 00:03:14,100 --> 00:03:16,280 Who do you think your audience is? 42 00:03:16,280 --> 00:03:23,840 Because I go back and forth between, am I talking to people who already know kind of 43 00:03:23,840 --> 00:03:29,360 this stuff, or am I trying to talk to people who are completely outside of this world and 44 00:03:29,360 --> 00:03:34,200 who want to or who need this information, who need this to be drawn in? 45 00:03:34,200 --> 00:03:37,920 Who do you feel like you're talking to, usually? 46 00:03:37,920 --> 00:03:41,840 Yeah, I try to mix it up. 47 00:03:41,840 --> 00:03:49,920 I have my long form, in depth, highly technical writing that has probably gibberish to people 48 00:03:49,920 --> 00:03:53,680 who haven't been paying attention to the space for several years. 49 00:03:53,680 --> 00:03:59,240 That's kind of my exploratory research, trying to push the bounds of our understanding of 50 00:03:59,240 --> 00:04:01,280 what is going on. 51 00:04:01,280 --> 00:04:07,640 And then I just have my more simplistic, high level, 101 type of content. 52 00:04:07,640 --> 00:04:18,280 I try to hit the whole range, and I don't optimize for any one thing. 53 00:04:18,280 --> 00:04:24,160 I'm not trying to growth hack my audience like some people in the space. 54 00:04:24,160 --> 00:04:30,040 If I really wanted to do that, I probably could have more followers and more normies 55 00:04:30,040 --> 00:04:33,800 and whatnot. 56 00:04:33,800 --> 00:04:39,360 In general, I just consider myself a thought spewer, and I'm not trying to do any one 57 00:04:39,360 --> 00:04:40,360 thing. 58 00:04:40,360 --> 00:04:46,160 It's just like whatever comes across my radar is what I decide to spend my time talking 59 00:04:46,160 --> 00:04:47,160 about. 60 00:04:47,160 --> 00:04:58,560 So I guess indirectly, some of what I do is certainly based on feedback and questions. 61 00:04:58,560 --> 00:05:04,600 If I notice a pattern where I'm getting the same question dozens of times, and then I'll 62 00:05:04,600 --> 00:05:11,240 do some quick research and try to figure out, is there a good, simple, explainer type of 63 00:05:11,240 --> 00:05:13,320 resource around this question? 64 00:05:13,320 --> 00:05:15,400 If not, maybe I should create it. 65 00:05:15,400 --> 00:05:19,600 But if there is, then I'll put it on my website. 66 00:05:19,600 --> 00:05:23,720 That was actually the onus for my resources. 67 00:05:23,720 --> 00:05:27,920 This is not something that I created because I felt like it was going to give me fame and 68 00:05:27,920 --> 00:05:29,480 glory and whatnot. 69 00:05:29,480 --> 00:05:31,440 It was very self-serving. 70 00:05:31,440 --> 00:05:39,960 It was because back in 2016, 2017, the volume of questions kept increasing and there was 71 00:05:39,960 --> 00:05:42,120 so much repetition between them. 72 00:05:42,120 --> 00:05:47,680 It was becoming a huge time suck to repeat myself all of the time. 73 00:05:47,680 --> 00:05:57,160 So I really, I just started off where this was literally just a folder of different bookmarks 74 00:05:57,160 --> 00:05:58,160 in my browser. 75 00:05:58,160 --> 00:06:00,000 I'd get a question. 76 00:06:00,000 --> 00:06:02,680 It would probably match something I'd seen 100 times. 77 00:06:02,680 --> 00:06:08,400 I would go to my bookmarks and I would copy paste the bookmark to whoever was asking the 78 00:06:08,400 --> 00:06:09,400 question. 79 00:06:09,400 --> 00:06:12,320 Eventually I was like, this is not scaling very well either. 80 00:06:12,320 --> 00:06:15,560 I need to be able to just tell people to go to one place. 81 00:06:15,560 --> 00:06:21,680 That's when I took all of my bookmarks and organized them and added them to my website. 82 00:06:21,680 --> 00:06:26,480 Really today, I usually spend a few minutes almost every day doing some sort of maintenance 83 00:06:26,480 --> 00:06:27,480 on that website. 84 00:06:27,480 --> 00:06:30,200 You know, this space is constantly evolving. 85 00:06:30,200 --> 00:06:31,840 There's link rod issues. 86 00:06:31,840 --> 00:06:33,340 Some sites go away. 87 00:06:33,340 --> 00:06:38,180 Some new resources are created by other people that I can categorize and link to. 88 00:06:38,180 --> 00:06:41,520 So it's very much a living document and it's actually open source. 89 00:06:41,520 --> 00:06:46,760 So people are free to open a pull request if they come across something that they think 90 00:06:46,760 --> 00:06:49,140 is worthy of being added. 91 00:06:49,140 --> 00:06:50,140 That's cool. 92 00:06:50,140 --> 00:06:55,640 Yeah, I know what you mean with the same questions getting asked a lot. 93 00:06:55,640 --> 00:07:06,120 I think that at least from my experience with Twitter being kind of the main place that 94 00:07:06,120 --> 00:07:14,320 people look for this information now, I mean myself, I answer the same questions at least 95 00:07:14,320 --> 00:07:16,120 like once a month. 96 00:07:16,120 --> 00:07:17,400 It's like over and over. 97 00:07:17,400 --> 00:07:23,680 Just when you think that people get it, then you post the same thing again a month later 98 00:07:23,680 --> 00:07:27,640 and it gets tremendous interaction again from all these people who are like, I didn't know 99 00:07:27,640 --> 00:07:28,640 that. 100 00:07:28,640 --> 00:07:29,640 I didn't know that. 101 00:07:29,640 --> 00:07:30,640 I didn't know. 102 00:07:30,640 --> 00:07:34,880 So it's almost like Twitter, it's obviously great for distribution, but it's also erased 103 00:07:34,880 --> 00:07:39,400 people's memories because I feel like sometimes it's even the same people who forget the stuff 104 00:07:39,400 --> 00:07:40,840 that you told them. 105 00:07:40,840 --> 00:07:46,160 So to have it in one place like this for Bitcoin, I guess that's why this has become such an 106 00:07:46,160 --> 00:07:47,720 important resource for a lot of people. 107 00:07:47,720 --> 00:07:54,640 And I go back to your site and review a lot of this stuff even though I've already read 108 00:07:54,640 --> 00:07:55,640 it. 109 00:07:55,640 --> 00:08:03,000 It might have been a couple of years ago, but stuff about seed phrase security and how 110 00:08:03,000 --> 00:08:08,880 to make sure that your OPSEC is as strong as it can be and all this different kind of 111 00:08:08,880 --> 00:08:12,040 stuff, it's like you can't read that once and just be done. 112 00:08:12,040 --> 00:08:17,000 You have to almost study it over and over and over. 113 00:08:17,000 --> 00:08:21,000 Who do you go to to get that reinforcement? 114 00:08:21,000 --> 00:08:25,120 Do you go out there and do you have people that you look to and then you can in turn 115 00:08:25,120 --> 00:08:31,200 share it with the rest of us? 116 00:08:31,200 --> 00:08:33,280 No one in particular. 117 00:08:33,280 --> 00:08:36,200 It's just a lot of different people. 118 00:08:36,200 --> 00:08:41,700 The space has become so large and diverse that we see a lot of specialization now. 119 00:08:41,700 --> 00:08:47,040 So some people are really good at, for example, privacy stuff. 120 00:08:47,040 --> 00:08:48,800 Some people are good at security. 121 00:08:48,800 --> 00:08:50,480 Some people are good at economics. 122 00:08:50,480 --> 00:08:55,560 This is actually one of the first articles I ever wrote about Bitcoin. 123 00:08:55,560 --> 00:09:01,880 I think back in 2014 was the multifaceted nature of the space where there's easily a 124 00:09:01,880 --> 00:09:12,680 dozen, if not more, different fields of expertise that kind of overlap and almost nobody is 125 00:09:12,680 --> 00:09:16,760 an expert in more than one or two fields. 126 00:09:16,760 --> 00:09:24,640 So you really have to diversify the people that you're listening to as well if you want 127 00:09:24,640 --> 00:09:29,960 to get as much comprehensive knowledge and as much of a broad understanding of what's 128 00:09:29,960 --> 00:09:31,240 happening in the space. 129 00:09:31,240 --> 00:09:33,160 Yeah, so true. 130 00:09:33,160 --> 00:09:43,680 I came in, I guess, six years ago now into the Bitcoin rabbit hole and somehow evolved 131 00:09:43,680 --> 00:09:49,000 into a critic of DeFi on Ethereum. 132 00:09:49,000 --> 00:09:57,700 I never stopped being a Bitcoiner, but most of the stuff that I talk about is related 133 00:09:57,700 --> 00:10:00,280 to the stuff that's going on on Ethereum. 134 00:10:00,280 --> 00:10:06,760 And the reason for that, the justification for me to do that is because that's an area 135 00:10:06,760 --> 00:10:14,080 that I understand and I understand how it can be directly compared to Bitcoin. 136 00:10:14,080 --> 00:10:21,560 So I feel like it's my way of educating people about Bitcoin to constantly compare all the 137 00:10:21,560 --> 00:10:27,080 stuff that's happening on Ethereum to the level of trustlessness and self-sovereignty 138 00:10:27,080 --> 00:10:31,800 you can achieve with Bitcoin and just constantly explain to people like you're not even close 139 00:10:31,800 --> 00:10:34,400 to that with this application on Ethereum. 140 00:10:34,400 --> 00:10:37,800 You're complete opposite end of the spectrum. 141 00:10:37,800 --> 00:10:41,920 So it's like it's my own little way to contribute to Bitcoin now. 142 00:10:41,920 --> 00:10:46,240 Bitcoin is so big that you can contribute to it by actually specializing in stuff going 143 00:10:46,240 --> 00:10:53,580 on other blockchains and explaining that stuff in the context of Bitcoin. 144 00:10:53,580 --> 00:10:59,000 So you're right about the specialties and sort of different ways of contributing that 145 00:10:59,000 --> 00:11:05,720 I guess we couldn't have even really thought of like five, 10 years ago. 146 00:11:05,720 --> 00:11:06,720 But do you? 147 00:11:06,720 --> 00:11:13,880 Yeah, the flip side, of course, is that Bitcoin simply doesn't have the same breadth of functionality. 148 00:11:13,880 --> 00:11:23,300 So it's sometimes funny to see people complaining about DeFi and then they tend to dismiss most 149 00:11:23,300 --> 00:11:26,360 of the functionality and they're like, well, we could do it on Bitcoin. 150 00:11:26,360 --> 00:11:27,540 We're like, yeah, sure. 151 00:11:27,540 --> 00:11:32,560 Maybe if you spend a few years writing some novel software and coming up with a lot of 152 00:11:32,560 --> 00:11:33,760 new tradeoffs. 153 00:11:33,760 --> 00:11:37,200 But DeFi exists for a reason. 154 00:11:37,200 --> 00:11:39,480 There's demand from certain people for that. 155 00:11:39,480 --> 00:11:42,320 I don't have to agree with it. 156 00:11:42,320 --> 00:11:46,920 Most of it to me seems to be like sophisticated forms of gambling. 157 00:11:46,920 --> 00:11:48,380 And so it doesn't interest me. 158 00:11:48,380 --> 00:11:52,600 But there's no denying that there's demand for it. 159 00:11:52,600 --> 00:11:54,760 Do you? 160 00:11:54,760 --> 00:11:59,480 Are you happy with the existing state of Bitcoin? 161 00:11:59,480 --> 00:12:03,200 Like are there things that you would have liked to have seen happen by now that haven't 162 00:12:03,200 --> 00:12:07,560 happened despite your your pushes and stuff like that? 163 00:12:07,560 --> 00:12:09,200 Oh, absolutely. 164 00:12:09,200 --> 00:12:15,740 I do not think that Bitcoin is anywhere near complete. 165 00:12:15,740 --> 00:12:24,040 So this is another, I think, point of friction between some people in the community and myself 166 00:12:24,040 --> 00:12:27,120 and really a lot of the developers. 167 00:12:27,120 --> 00:12:32,720 I started talking about ossification earlier this year because I've seen more of a push 168 00:12:32,720 --> 00:12:38,100 for it, especially after some of the inscription drama. 169 00:12:38,100 --> 00:12:41,160 But you know, I'm a engineer. 170 00:12:41,160 --> 00:12:47,880 I see Bitcoin as programmable money, even though compared to most of the other protocols 171 00:12:47,880 --> 00:12:54,680 out there, it is much more restrictive in how you can do the scripting and the various 172 00:12:54,680 --> 00:12:57,040 interactions with it. 173 00:12:57,040 --> 00:13:07,280 But there's so much left to be done on the scaling side of things on the privacy side, 174 00:13:07,280 --> 00:13:11,840 even on the security side, there have been some proposals that I think could greatly 175 00:13:11,840 --> 00:13:19,480 enhance the available security models to self custody and really to any custody. 176 00:13:19,480 --> 00:13:28,440 So I do want to continue to see changes and improvements at the base layer. 177 00:13:28,440 --> 00:13:33,720 Of course, this will get this gets controversial with some people, but I especially think we 178 00:13:33,720 --> 00:13:42,560 should be prioritizing changes at the base layer that can supercharge second layer solutions. 179 00:13:42,560 --> 00:13:51,000 And a lot of people, especially non technical people tend to hand wave away making changes 180 00:13:51,000 --> 00:13:54,420 to the base layer and they say, oh, we don't need to ever make any changes to the base 181 00:13:54,420 --> 00:13:57,260 layer because you can do everything at the second layer. 182 00:13:57,260 --> 00:14:02,160 And while that may technically be true with enough time, effort and creativity, it can 183 00:14:02,160 --> 00:14:03,800 also get really hacky. 184 00:14:03,800 --> 00:14:12,440 One of the real examples of that that I point out to people is actually lightning. 185 00:14:12,440 --> 00:14:17,680 The original lightning white paper actually proposed several different paths by which 186 00:14:17,680 --> 00:14:22,040 lightning as a protocol could be developed. 187 00:14:22,040 --> 00:14:28,000 And the optimal paths required several soft forks to happen to the base layer. 188 00:14:28,000 --> 00:14:32,540 And thankfully they did because if they had not, then lightning would have been an even 189 00:14:32,540 --> 00:14:38,620 more complex and kludgy protocol and I think would not be able to offer quite the same 190 00:14:38,620 --> 00:14:43,240 level of guarantees as it does in its current form. 191 00:14:43,240 --> 00:14:51,080 So there are protocols, changes out there that if implemented could improve lightning 192 00:14:51,080 --> 00:14:56,120 even more, could improve other second layers like drive chains. 193 00:14:56,120 --> 00:15:02,740 I want to see as much innovation, especially with second layers as possible because I do 194 00:15:02,740 --> 00:15:09,040 believe that innovation will happen much faster at second layers. 195 00:15:09,040 --> 00:15:13,840 But right now I think we're kind of ham strong with how difficult it is to even create these 196 00:15:13,840 --> 00:15:16,160 other second layers. 197 00:15:16,160 --> 00:15:21,400 What do you think second layers are going to are going to do for Bitcoin that it can't 198 00:15:21,400 --> 00:15:22,400 do now? 199 00:15:22,400 --> 00:15:26,280 Are you thinking about cheaper transactions, faster transactions, or are you thinking about 200 00:15:26,280 --> 00:15:27,280 programmability? 201 00:15:27,280 --> 00:15:31,520 Or like what in your head, what do you see is the promise there? 202 00:15:31,520 --> 00:15:32,960 Well, yeah. 203 00:15:32,960 --> 00:15:40,600 So when you're creating a second layer, in a way, it's kind of like creating a whole 204 00:15:40,600 --> 00:15:42,680 new blockchain, a whole new protocol. 205 00:15:42,680 --> 00:15:46,120 And whenever someone creates a new protocol, what are you doing? 206 00:15:46,120 --> 00:15:48,980 I mean, you're creating a new game. 207 00:15:48,980 --> 00:15:56,120 You're creating a new set of rules by which anyone who agrees with and decides to play 208 00:15:56,120 --> 00:15:59,440 that game can now interact. 209 00:15:59,440 --> 00:16:08,040 So the possibilities are really only limited by our imagination and our ability to experiment 210 00:16:08,040 --> 00:16:11,160 and find what works and what doesn't. 211 00:16:11,160 --> 00:16:14,720 Obviously, that means there will be failures and setbacks. 212 00:16:14,720 --> 00:16:19,040 That's the only way that you can really move forward meaningfully. 213 00:16:19,040 --> 00:16:27,400 So yes, scaling privacy, even DeFi like applications at second layers. 214 00:16:27,400 --> 00:16:31,640 The missing link, though, is the ability to easily create these second layers in such 215 00:16:31,640 --> 00:16:38,240 a way that they are actually tied to Bitcoin in a trustless fashion. 216 00:16:38,240 --> 00:16:45,080 One of the missing kind of holy grails of Bitcoin development is the trustless two-way 217 00:16:45,080 --> 00:16:46,400 peg. 218 00:16:46,400 --> 00:16:54,000 This was first originally envisioned in, I think, the 2014 side chains whitepaper and 219 00:16:54,000 --> 00:16:56,840 has never materialized. 220 00:16:56,840 --> 00:17:04,220 And I think the really the best proposal that we have for that right now is drive chains. 221 00:17:04,220 --> 00:17:10,480 Drive chains themselves are somewhat controversial, but the folks behind them have been developing 222 00:17:10,480 --> 00:17:12,940 them for quite a few years now. 223 00:17:12,940 --> 00:17:16,120 So we'll see how that goes. 224 00:17:16,120 --> 00:17:22,960 But I especially I want to see us be able to actually attain that vision of people being 225 00:17:22,960 --> 00:17:30,320 able to spool up side chains that are not simply a multi-signature federation for the 226 00:17:30,320 --> 00:17:34,360 actual funds being pegged in and out. 227 00:17:34,360 --> 00:17:37,440 Right like RSK is, which is the only one I'm aware of. 228 00:17:37,440 --> 00:17:38,680 But I'm sure there's others. 229 00:17:38,680 --> 00:17:43,520 RSK and Liquid and I think there may be a couple of others that are even smaller and 230 00:17:43,520 --> 00:17:44,880 less adopted. 231 00:17:44,880 --> 00:17:45,880 Okay. 232 00:17:45,880 --> 00:17:52,200 I guess with layer 2s, you know, my experience with the Ethereum ecosystem has been pretty 233 00:17:52,200 --> 00:17:57,640 negative as far as and this actually goes into a topic I wanted to talk to you about, 234 00:17:57,640 --> 00:18:05,520 which is what can we what is the most we can really expect from people from normal users 235 00:18:05,520 --> 00:18:09,800 with regard to the research they're going to do, you know, and with with Ethereum's 236 00:18:09,800 --> 00:18:18,640 programmability and with the ease of which you can spin up a centralized layer 2 on Ethereum, 237 00:18:18,640 --> 00:18:24,920 which they all are by the way, like 100% of the layer 2s on Ethereum are centralized to 238 00:18:24,920 --> 00:18:31,600 the point where a single multi-sig can basically make any kind of upgrade or bring the whole 239 00:18:31,600 --> 00:18:35,280 thing down. 240 00:18:35,280 --> 00:18:43,040 And they're primarily funded by like Silicon Valley VCs and they've been created not for 241 00:18:43,040 --> 00:18:48,360 purposes of enhancing liberty or freedom or self sovereignty, but for the purposes of 242 00:18:48,360 --> 00:18:54,240 generating a profit and an exit for those VCs and the founders. 243 00:18:54,240 --> 00:19:00,040 You know, so like why why should we think that it would go differently with Bitcoin 244 00:19:00,040 --> 00:19:08,000 and just the subtext to this too is that with Ethereum those layer 2s have attracted a huge 245 00:19:08,000 --> 00:19:12,680 percentage of the transactions that would have occurred on the layer 1. 246 00:19:12,680 --> 00:19:15,600 Obviously the layer 1 got super expensive, etc, etc. 247 00:19:15,600 --> 00:19:23,840 But people I found are perfectly willing to trade away the decentralization that brought 248 00:19:23,840 --> 00:19:27,400 them into the space if they're going to save money and it's going to make their life easier. 249 00:19:27,400 --> 00:19:32,120 Like they almost revert back to what they were before, you know, and I feel like with 250 00:19:32,120 --> 00:19:36,680 Bitcoin there's a strong chance that that could happen with Bitcoin layer 2s as well. 251 00:19:36,680 --> 00:19:38,840 Like what's your experience been with this? 252 00:19:38,840 --> 00:19:45,640 Well, yeah, I mean that is the permissionless nature of these protocols. 253 00:19:45,640 --> 00:19:57,680 We should expect that if the sidechain technology continues to improve that there will be excellent 254 00:19:57,680 --> 00:20:03,580 sidechains from a liberty perspective and there will be equally terrible sidechains 255 00:20:03,580 --> 00:20:10,120 and probably even some outright scams and Ponzi schemes and who knows what. 256 00:20:10,120 --> 00:20:19,880 So I think at the really high level from a security liberty perspective, if we get those 257 00:20:19,880 --> 00:20:28,280 permissionless two-way peg sidechains out there, then that at least means that there 258 00:20:28,280 --> 00:20:35,480 will be some sort of escape patch where people can get their money out if it looks like something's 259 00:20:35,480 --> 00:20:37,400 going wrong. 260 00:20:37,400 --> 00:20:47,480 But this is still pretty theoretical area of exploration since we haven't actually seen 261 00:20:47,480 --> 00:20:52,240 this type of technology deployed with real money. 262 00:20:52,240 --> 00:20:58,980 Yeah, now I hear you with like it's still theoretical and it would require a lot of 263 00:20:58,980 --> 00:21:01,920 layer one work to make it happen. 264 00:21:01,920 --> 00:21:11,760 Do you have like I guess part of my issue and my struggle is that I go back and forth 265 00:21:11,760 --> 00:21:17,600 on whether I have faith in the long term that this space won't just suffer the tyranny of 266 00:21:17,600 --> 00:21:18,600 the majority. 267 00:21:18,600 --> 00:21:25,160 And I feel like the more people that come into the space, the higher percentage of people 268 00:21:25,160 --> 00:21:29,760 that don't care as much about all the stuff that we tend to care about, you know, and 269 00:21:29,760 --> 00:21:35,640 I think that we're seeing it already with the way regulation is forming and the way 270 00:21:35,640 --> 00:21:44,000 that government is never going to look at crypto from the point of view of freedom. 271 00:21:44,000 --> 00:21:46,960 Like it's going to look at it from the point of view of what can we control? 272 00:21:46,960 --> 00:21:52,760 You know, what can we do to protect this guy over here who's never even heard of crypto 273 00:21:52,760 --> 00:21:56,000 and keep him from losing all of his money in it? 274 00:21:56,000 --> 00:22:04,640 And it just seems to me that it's almost like a losing battle to try to convince more people 275 00:22:04,640 --> 00:22:11,360 that this is the path forward, you know, as opposed to like hardening Bitcoin's defenses 276 00:22:11,360 --> 00:22:19,320 against their inevitable like tyranny against it, you know, when they decide it's evil. 277 00:22:19,320 --> 00:22:25,580 So do you think that encouraging like I guess I guess what you just said is the way like 278 00:22:25,580 --> 00:22:32,000 the permissionless peg, you know, and having a trustless way to to move Bitcoin to move 279 00:22:32,000 --> 00:22:38,600 and in quotes, Bitcoin to and from a layer two is the way to sort of begin that journey. 280 00:22:38,600 --> 00:22:40,640 But long term, what do you think? 281 00:22:40,640 --> 00:22:47,520 Yeah, I mean, if we want to step back, take the 10,000 foot view of all of this, I would 282 00:22:47,520 --> 00:22:57,120 actually draw a kind of parallel between your government and and what you're describing. 283 00:22:57,120 --> 00:23:04,600 I think we see similar things happen at the sort of civilization level, where it does 284 00:23:04,600 --> 00:23:16,280 seem like there is due to incentives and human nature over years, decades, generations, societies, 285 00:23:16,280 --> 00:23:27,280 groups, organizations tend to collapse towards tyranny and ultimately towards a sort of failure 286 00:23:27,280 --> 00:23:35,600 state and, you know, this same thing with empires, right, as they they grow big enough 287 00:23:35,600 --> 00:23:40,480 that they end up creating all of these systemic weaknesses where ultimately they can't sustain 288 00:23:40,480 --> 00:23:42,520 themselves. 289 00:23:42,520 --> 00:23:53,240 So you know, perhaps this is a terrible metaphor or whatever, but I actually I look at it kind 290 00:23:53,240 --> 00:23:59,360 of from a like constitutional perspective of like, you know, look at the United States. 291 00:23:59,360 --> 00:24:06,640 One of the greatest things that the United States ever did was with its founding documents. 292 00:24:06,640 --> 00:24:12,400 And the reason for that was because the founding documents actually went to great links to 293 00:24:12,400 --> 00:24:16,680 limit the power of the government. 294 00:24:16,680 --> 00:24:21,960 And you know, over the period of centuries, many, many generations, of course, that has 295 00:24:21,960 --> 00:24:25,440 been degraded in a variety of different ways. 296 00:24:25,440 --> 00:24:28,440 And I think that is somewhat expected. 297 00:24:28,440 --> 00:24:33,160 But if we hadn't had those original protections, I think the degradation would have happened 298 00:24:33,160 --> 00:24:35,360 far faster. 299 00:24:35,360 --> 00:24:41,960 So I kind of see a similar type of game theoretical issue with Bitcoin and these other protocols, 300 00:24:41,960 --> 00:24:52,120 where you need to start out with the absolute strongest foundation that protects the individual 301 00:24:52,120 --> 00:24:53,960 users. 302 00:24:53,960 --> 00:24:59,280 And you know, we can speculate as to whether or not that will be maintained over the long 303 00:24:59,280 --> 00:25:00,280 run. 304 00:25:00,280 --> 00:25:03,080 But if you don't at least start out from there, you know, you're already in a bad position. 305 00:25:03,080 --> 00:25:09,880 So you know, this is why I think it's so important to have that fundamental ability for an individual 306 00:25:09,880 --> 00:25:16,480 user of like a layer two technology to be able to move their funds out of that layer 307 00:25:16,480 --> 00:25:23,560 without having to ask permission, without having to have gatekeepers scattered all throughout 308 00:25:23,560 --> 00:25:28,120 the ecosystem of the technologies that are being built around this. 309 00:25:28,120 --> 00:25:32,320 Now, obviously, a lot of these technologies will have gatekeepers and there's incentives 310 00:25:32,320 --> 00:25:36,720 for people to build their systems in that fashion. 311 00:25:36,720 --> 00:25:45,080 And so from that perspective, you know, we will see centralization and various weaknesses 312 00:25:45,080 --> 00:25:48,000 sort of pervade many corners of the ecosystem. 313 00:25:48,000 --> 00:25:55,840 You know, this is what I've been doing for almost a decade now is fighting against the 314 00:25:55,840 --> 00:26:01,200 encroaching convenience of custodians and people leaving all of their money with trusted 315 00:26:01,200 --> 00:26:03,120 third parties. 316 00:26:03,120 --> 00:26:12,440 And you know, I figure if nobody is fighting against that, then that will degrade the system 317 00:26:12,440 --> 00:26:15,480 as a whole faster and faster. 318 00:26:15,480 --> 00:26:21,560 So you know, I'm not terribly optimistic about it. 319 00:26:21,560 --> 00:26:26,960 You know, I think it's one of those things both with security and privacy, where the 320 00:26:26,960 --> 00:26:31,320 vast majority of people don't care about it until it's too late. 321 00:26:31,320 --> 00:26:37,000 And the only way that we can meaningfully fight against it is for the people like myself 322 00:26:37,000 --> 00:26:46,800 who do care about it to use our resources to try to make security, privacy, other aspects 323 00:26:46,800 --> 00:26:53,480 that are incredibly important to liberty, make that as convenient as possible so that 324 00:26:53,480 --> 00:26:59,820 hopefully at least a larger portion of people who come along will end up choosing something 325 00:26:59,820 --> 00:27:04,560 that puts them into a better position where they're less likely to get screwed in one 326 00:27:04,560 --> 00:27:06,200 way or the other. 327 00:27:06,200 --> 00:27:09,160 But ultimately, a lot of people are going to get burned. 328 00:27:09,160 --> 00:27:11,800 And that's kind of I think the nature of the game. 329 00:27:11,800 --> 00:27:19,080 Yeah, we're seeing way too many good examples of what happens when when people are forced 330 00:27:19,080 --> 00:27:27,320 to choose between liberty and freedom or like a comfortable life of free of persecution. 331 00:27:27,320 --> 00:27:31,600 You know, I feel like with the whole, you know, the past three years with with COVID 332 00:27:31,600 --> 00:27:39,480 and everything and that opened my eyes up so much with regard to how quickly principles 333 00:27:39,480 --> 00:27:42,520 can get compromised when somebody is afraid. 334 00:27:42,520 --> 00:27:49,400 You know, ultimately, fear is the real more than guns, more than tanks, more than bombs. 335 00:27:49,400 --> 00:27:54,000 Fear is the real weapon that a government uses against its own people. 336 00:27:54,000 --> 00:28:01,040 And fear was utilized the past few years to coerce people into going against what they 337 00:28:01,040 --> 00:28:07,200 believe and what they like their own virtues, you know, the stuff that makes them unique. 338 00:28:07,200 --> 00:28:13,680 And I think that the last few years really are the ones that convinced me that in the 339 00:28:13,680 --> 00:28:21,200 long term, Bitcoin personal belief, feel free, I want to hear your thoughts on this. 340 00:28:21,200 --> 00:28:29,600 In the long term, I don't think that this type of technology is going to take over the 341 00:28:29,600 --> 00:28:35,080 world, you know, as far as everybody's going to be using it, everybody's going to be valuing 342 00:28:35,080 --> 00:28:39,680 it, we're going to live in a place in a world where everybody's, you know, understands what 343 00:28:39,680 --> 00:28:44,000 it what it means to be financially free from fiat, etc, etc. 344 00:28:44,000 --> 00:28:51,440 I just I don't see it happening, maybe over 1000 or 5000 years, but like, at least in 345 00:28:51,440 --> 00:28:56,320 the near term, you know, it's going to be a small percentage of the world that actually 346 00:28:56,320 --> 00:28:57,360 gets it. 347 00:28:57,360 --> 00:29:03,160 And it's almost like we have to now put that shell up around us to keep all the other the 348 00:29:03,160 --> 00:29:10,080 other 95% of the world away from, you know, attacking these virtues and attacking these 349 00:29:10,080 --> 00:29:11,080 principles. 350 00:29:11,080 --> 00:29:16,040 And that's, I think I'm more on the pessimistic side and more like almost dystopian side of 351 00:29:16,040 --> 00:29:17,040 this. 352 00:29:17,040 --> 00:29:19,640 But what were you on that? 353 00:29:19,640 --> 00:29:26,200 Yeah, there's so many examples that we could look at. 354 00:29:26,200 --> 00:29:37,520 You know, obviously, you look at like, Fang, right, the sort of Facebook, Apple, Google, 355 00:29:37,520 --> 00:29:45,600 the tech giants that have managed to create such amazing levels of functionality and utility 356 00:29:45,600 --> 00:29:52,200 and convenience for people that they've really hoovered up huge swaths of people's data. 357 00:29:52,200 --> 00:29:56,080 And people are more than happy to hand that over. 358 00:29:56,080 --> 00:30:01,800 There are a few, you know, glimmering points of hope, you know, I think a really good example 359 00:30:01,800 --> 00:30:06,760 is signal, for example, I think, you know, signal has gotten a mass level of adoption. 360 00:30:06,760 --> 00:30:17,120 And they've actually been able to put a huge number of people into a really sound set of 361 00:30:17,120 --> 00:30:19,880 privacy for their communications channels. 362 00:30:19,880 --> 00:30:26,040 And that I bet that I bet most people who use signal don't even really understand how 363 00:30:26,040 --> 00:30:27,040 it's protecting them. 364 00:30:27,040 --> 00:30:28,040 And that's great. 365 00:30:28,040 --> 00:30:36,320 Like that's how you get mass adoption of privacy and freedom technology is you just offer a 366 00:30:36,320 --> 00:30:40,400 level of convenience where it's like interacting with any other app. 367 00:30:40,400 --> 00:30:44,080 It's just so happens that under the hood, it's protecting you. 368 00:30:44,080 --> 00:30:51,760 So you know, that's what I think we need to be going after, you know, that type of model 369 00:30:51,760 --> 00:30:59,980 where we're offering really the same type of interface that people are used to for dealing 370 00:30:59,980 --> 00:31:06,460 with, you know, perhaps their banking applications, their Paypal's and Venmo's or whatever. 371 00:31:06,460 --> 00:31:10,720 It's just so happens that under the hood, it's doing all this much more complex, you 372 00:31:10,720 --> 00:31:13,240 know, self sovereign crypto stuff. 373 00:31:13,240 --> 00:31:18,520 But of course, that means it has to work and it has to be highly reliable. 374 00:31:18,520 --> 00:31:23,320 And if something does go wrong, they need to be able to reach out and get help from 375 00:31:23,320 --> 00:31:24,320 someone. 376 00:31:24,320 --> 00:31:27,740 You know, that's one of the other big missing aspects, especially in the sort of free open 377 00:31:27,740 --> 00:31:33,120 source software space is that there often tends to be no support line or it's like a 378 00:31:33,120 --> 00:31:38,560 community volunteer level of support, which is going to turn a lot of people off. 379 00:31:38,560 --> 00:31:46,360 So you know, I think that we can see that there are paths there that are available. 380 00:31:46,360 --> 00:31:52,320 It's just that they are the path less taken and it's the harder, more difficult path. 381 00:31:52,320 --> 00:31:58,520 Yeah, with the, you know, with the adoption into commercial ventures like PayPal, etc. 382 00:31:58,520 --> 00:32:07,800 and to see that running on crypto rails goes back to the whole problem that decentralization 383 00:32:07,800 --> 00:32:18,480 is by its nature, it's less efficient, it's more expensive, it's messier than centralized 384 00:32:18,480 --> 00:32:19,480 tech, right? 385 00:32:19,480 --> 00:32:24,200 Which you can run on a server and you don't have to worry about all the open source obligations 386 00:32:24,200 --> 00:32:25,620 and stuff like that. 387 00:32:25,620 --> 00:32:34,960 So for a commercial venture, like a PayPal or Facebook or any of these guys to adopt 388 00:32:34,960 --> 00:32:41,360 a decentralized infrastructure would be like betraying their shareholders almost, right? 389 00:32:41,360 --> 00:32:47,280 Because it's like you're not choosing the most efficient path forward for the company. 390 00:32:47,280 --> 00:32:51,000 You're putting principle ahead of profit in that case. 391 00:32:51,000 --> 00:32:53,880 And that never happens for a reason, right? 392 00:32:53,880 --> 00:32:55,760 Because of capitalism. 393 00:32:55,760 --> 00:32:58,080 So you know, and we're seeing that with Ethereum. 394 00:32:58,080 --> 00:32:59,840 We're seeing that with the layer twos. 395 00:32:59,840 --> 00:33:06,000 It's like, why should we add these layers of decentralization when we can just keep 396 00:33:06,000 --> 00:33:07,600 it centralized? 397 00:33:07,600 --> 00:33:09,040 People are still going to use it. 398 00:33:09,040 --> 00:33:10,960 It's going to be better for our bottom line. 399 00:33:10,960 --> 00:33:13,960 It's going to cost us less to run. 400 00:33:13,960 --> 00:33:15,300 So we're already seeing that. 401 00:33:15,300 --> 00:33:24,440 So it's like wherever there is commercial venture capital or other types of investment 402 00:33:24,440 --> 00:33:29,280 going on, you're almost guaranteed to see mutations of the tech and you're almost guaranteed 403 00:33:29,280 --> 00:33:34,480 to see like untenable centralization. 404 00:33:34,480 --> 00:33:37,960 And I just don't, I haven't seen any variations from that. 405 00:33:37,960 --> 00:33:41,640 And I don't think we ever will because like I said, it would be a betrayal to the company 406 00:33:41,640 --> 00:33:47,920 itself, like to spend more money than you need to in order to accomplish this goal. 407 00:33:47,920 --> 00:33:58,600 So yeah, I mean, what do you think about, one area I get concerned about is with the 408 00:33:58,600 --> 00:34:08,880 way that Bitcoin is influenced by companies who do that kind of stuff. 409 00:34:08,880 --> 00:34:13,180 You know, and I like, there's plenty of funding coming into Bitcoin development from companies 410 00:34:13,180 --> 00:34:20,080 that have shown that they're willing to sacrifice on decentralization in order to have a profitable 411 00:34:20,080 --> 00:34:26,440 company, like exchanges, like custodians, like, et cetera. 412 00:34:26,440 --> 00:34:29,440 And I know you've, you worked at BitGo, right? 413 00:34:29,440 --> 00:34:30,440 Yeah. 414 00:34:30,440 --> 00:34:37,840 So like, do you think that longer term, that type of influence that they have over, over 415 00:34:37,840 --> 00:34:41,160 development and when I say influence over development, I'm talking about specifically 416 00:34:41,160 --> 00:34:49,080 funding developers, like paying rent and food for Bitcoin developers. 417 00:34:49,080 --> 00:34:56,640 Do you think that long term that Bitcoin could start to make sacrifices in order to achieve 418 00:34:56,640 --> 00:35:01,360 commercial goals for those types of companies? 419 00:35:01,360 --> 00:35:04,400 No, not really. 420 00:35:04,400 --> 00:35:09,760 I mean, I couldn't tell you the figures off the top of my head, but I suspect that a far 421 00:35:09,760 --> 00:35:17,680 greater portion of developer funding is actually being funneled through nonprofits. 422 00:35:17,680 --> 00:35:25,600 I donate a fair amount myself to several different initiatives, charities that, you know, they 423 00:35:25,600 --> 00:35:28,800 basically run grant programs. 424 00:35:28,800 --> 00:35:37,000 If anything, I would say the sort of commercial business side of things, hiring developers 425 00:35:37,000 --> 00:35:46,280 or paying for grants is pretty miniscule and it's been underwhelming for the past decade 426 00:35:46,280 --> 00:35:48,160 even. 427 00:35:48,160 --> 00:35:56,840 I would suspect there were actually more developers that were being employed back in like 2015 428 00:35:56,840 --> 00:36:01,360 by some of these companies than there are today, but that's just sort of anecdotally 429 00:36:01,360 --> 00:36:05,840 off the top of my head. 430 00:36:05,840 --> 00:36:11,720 As the ecosystem grows, we also, we see more people donating to these charities, these 431 00:36:11,720 --> 00:36:17,920 grant programs and it kind of fluctuates back and forth with the market cycles, of course, 432 00:36:17,920 --> 00:36:25,080 but from what I've been hearing from a lot of the developers, one of the bigger problems 433 00:36:25,080 --> 00:36:34,520 is just curating talent, getting new people interested, getting people to do code review. 434 00:36:34,520 --> 00:36:41,440 It's the review process that's really more of a pain than the actual writing of code 435 00:36:41,440 --> 00:36:47,240 because of course we want to be incredibly careful and conservative about any changes 436 00:36:47,240 --> 00:36:51,800 that go into widely adopted Bitcoin software. 437 00:36:51,800 --> 00:36:58,600 So I'm really not concerned from a governance perspective in the foreseeable future, but 438 00:36:58,600 --> 00:37:06,240 my long-term concern has more to do with what we were talking about earlier is just the 439 00:37:06,240 --> 00:37:12,960 incentives of convenience versus security and sovereignty and whatnot. 440 00:37:12,960 --> 00:37:20,360 Once again, what I've been fighting against for so long, if we do get real mainstream 441 00:37:20,360 --> 00:37:26,280 adoption and the vast majority of that adoption just happens through exchanges and custodians, 442 00:37:26,280 --> 00:37:32,200 they get onboarded through those companies and then they never withdraw their money because 443 00:37:32,200 --> 00:37:40,160 the default is to just stick with the custodian, that's what worries me in the long term. 444 00:37:40,160 --> 00:37:48,920 If the custodians end up holding significant or vast majority of the actual coins, that's 445 00:37:48,920 --> 00:37:54,400 when some of the incentives around governance may start to break down and that's what worries 446 00:37:54,400 --> 00:37:55,880 me more. 447 00:37:55,880 --> 00:38:04,640 So we had during the scaling debates, thankfully a very active community of people that run 448 00:38:04,640 --> 00:38:14,760 their own nodes and voice their opinions and basically a large economic power, which you 449 00:38:14,760 --> 00:38:21,800 could argue may be more important than the node aspect, but there were some future markets 450 00:38:21,800 --> 00:38:28,360 that were running before any of the scaling debate forks happened that basically showed 451 00:38:28,360 --> 00:38:33,760 that 90% of the people who cared about this stuff were going to dump all their coins on 452 00:38:33,760 --> 00:38:39,920 the big block forks and that's basically what we saw actually happen. 453 00:38:39,920 --> 00:38:50,640 So it's really an activism thing and kind of like what you were saying, as mainstream 454 00:38:50,640 --> 00:38:58,160 folks come into the system, they're going to bring all of their mainstream legacy perspectives 455 00:38:58,160 --> 00:39:06,280 around how things work and that's what could be the bigger danger of basically people coming 456 00:39:06,280 --> 00:39:12,920 in and believing that democracy is how things should happen because obviously we're not 457 00:39:12,920 --> 00:39:17,080 building democratic systems here, at least from a governance perspective. 458 00:39:17,080 --> 00:39:18,080 It's inevitable, right? 459 00:39:18,080 --> 00:39:20,480 It's like it's going to happen. 460 00:39:20,480 --> 00:39:23,840 It's just a matter of time, but like I want to go back to something you said because you 461 00:39:23,840 --> 00:39:31,120 were talking about how with the custodians holding more coins, more Bitcoin, they have 462 00:39:31,120 --> 00:39:34,080 more power in the debate. 463 00:39:34,080 --> 00:39:37,760 Why does that happen because this is not a proof of stake system obviously. 464 00:39:37,760 --> 00:39:39,760 So like what gives them that power? 465 00:39:39,760 --> 00:39:44,920 You're just talking about like political power or what kind of power is it? 466 00:39:44,920 --> 00:39:51,340 It's systemic risk that happens as a result of the decisions that the custodians can make. 467 00:39:51,340 --> 00:40:00,480 So I'm not a lawyer, but if I recall from some of the examples, I think like one example 468 00:40:00,480 --> 00:40:09,120 if I recall correctly that happened with the grayscale trust is I think that they have 469 00:40:09,120 --> 00:40:13,440 some clauses in there and I think that a number of other custodians have similar clauses that 470 00:40:13,440 --> 00:40:20,480 basically say that if there is a fork, we the custodian get to choose what the real 471 00:40:20,480 --> 00:40:26,440 fork is and we reserve the right to like sell those coins or to not even let you access 472 00:40:26,440 --> 00:40:29,160 those fork coins. 473 00:40:29,160 --> 00:40:35,200 I think this came up again recently with the BlackRock ETF maybe and some phrasing that 474 00:40:35,200 --> 00:40:36,360 was in there. 475 00:40:36,360 --> 00:40:43,280 And so the short version is centralization and putting a lot of power into a small number 476 00:40:43,280 --> 00:40:49,920 of hands where these companies and often just like a handful of people at these companies 477 00:40:49,920 --> 00:40:56,240 now get to make decisions on behalf of potentially millions of people. 478 00:40:56,240 --> 00:41:00,400 I don't know if that just came through, but I'm in a hotel and they just decided because 479 00:41:00,400 --> 00:41:01,920 it's like we're doing a podcast. 480 00:41:01,920 --> 00:41:08,040 So of course they're going to get on the fire alarm speaker at the exact moment. 481 00:41:08,040 --> 00:41:13,920 That's a massive concern and you're right, it did come up with the BlackRock ETF recently 482 00:41:13,920 --> 00:41:19,640 and it's another one of these things that I almost wonder with everything we've been 483 00:41:19,640 --> 00:41:25,080 talking about and the fact that we really can't rely on the majority to make rational 484 00:41:25,080 --> 00:41:30,440 decisions when it comes to financial self sovereignty. 485 00:41:30,440 --> 00:41:38,040 So like isn't it inevitable that custodians are going to pick up more and more of a share 486 00:41:38,040 --> 00:41:44,520 of the Bitcoin and that they will have that political sway over development? 487 00:41:44,520 --> 00:41:50,840 And even if like there's this, it just always seems to come back to this small group of 488 00:41:50,840 --> 00:41:58,800 pirates at the end of the day defending some fork of Bitcoin that manages to stay true 489 00:41:58,800 --> 00:42:05,200 to the principles we talk about and we believe in right now. 490 00:42:05,200 --> 00:42:17,540 But that always in my head is the smaller portion versus the corporate government friendly 491 00:42:17,540 --> 00:42:25,080 centralized to a certain extent, maybe even proof of stake Bitcoin fork that will please 492 00:42:25,080 --> 00:42:32,720 all of the BlackRock's and all of the central banks of the world in the long term. 493 00:42:32,720 --> 00:42:38,360 And one good example of what freaks me out about this entire thing is I feel like we 494 00:42:38,360 --> 00:42:45,880 might have already seen this kind of influence with regards to privacy on Bitcoin. 495 00:42:45,880 --> 00:42:52,520 Why don't we have privacy on layer one except for the fact that it would mean that Bitcoin 496 00:42:52,520 --> 00:42:56,280 wouldn't be useful to custodians? 497 00:42:56,280 --> 00:43:00,080 Like is that the main reason that you think we don't have privacy today? 498 00:43:00,080 --> 00:43:07,200 I mean, I think that the main reason we don't have strong cryptographic privacy is that 499 00:43:07,200 --> 00:43:14,640 the solutions that are out there tend to break the auditability of the supply. 500 00:43:14,640 --> 00:43:24,200 So the way that I've looked at it is that there are many different priorities and valuable 501 00:43:24,200 --> 00:43:31,760 attributes of Bitcoin that are generally agreed upon and the ability to easily audit the money 502 00:43:31,760 --> 00:43:35,380 supply is one of the top few of those. 503 00:43:35,380 --> 00:43:43,000 And privacy is much, much further down on the sort of value attributes. 504 00:43:43,000 --> 00:43:53,480 So any type of privacy enhancing technology that breaks that ability I think is a non-starter. 505 00:43:53,480 --> 00:43:56,520 So you don't think Bitcoin will ever see layer one privacy? 506 00:43:56,520 --> 00:44:01,720 You're thinking layer two, like optional privacy in the future maybe based on what you said 507 00:44:01,720 --> 00:44:02,720 earlier, right? 508 00:44:02,720 --> 00:44:08,360 Not to put words in your mouth, but that's what I'm gathering. 509 00:44:08,360 --> 00:44:14,880 I don't think that we will see it implement any of the type of cryptographic privacy solutions 510 00:44:14,880 --> 00:44:20,680 that some other coins have implemented to date, but that doesn't mean that there's no 511 00:44:20,680 --> 00:44:25,240 way to improve the privacy. 512 00:44:25,240 --> 00:44:34,120 For example, if I recall correctly, things like the Anyprevout proposal where you can 513 00:44:34,120 --> 00:44:43,040 essentially have massive shared input transactions. 514 00:44:43,040 --> 00:44:46,720 One of the cool things about that is that can really supercharge lightning channel 515 00:44:46,720 --> 00:44:47,720 construction. 516 00:44:47,720 --> 00:44:55,440 So you can essentially have L2, by which I mean ELTOO, which I think is a block stream 517 00:44:55,440 --> 00:45:03,120 project, much more massively scalable lightning nodes. 518 00:45:03,120 --> 00:45:08,880 But I think that that can also supercharge Bitcoin mixing, if I recall correctly. 519 00:45:08,880 --> 00:45:15,440 So there are ways to take some of the existing technologies we have, like lightning and coin 520 00:45:15,440 --> 00:45:18,640 mixing, and make them even better. 521 00:45:18,640 --> 00:45:23,320 And then you could sort of quibble over whether or not that is strong enough privacy or not. 522 00:45:23,320 --> 00:45:34,080 But I don't advocate coin mixing in general because I think, A, it doesn't really scale. 523 00:45:34,080 --> 00:45:38,480 It can get very expensive if you're doing it a lot because of the volatility of on-chain 524 00:45:38,480 --> 00:45:39,480 fees. 525 00:45:39,480 --> 00:45:45,120 And B, it's easy to do a bunch of coin mixing and still shoot yourself in the foot if you're 526 00:45:45,120 --> 00:45:47,900 not really careful about your UTXO management. 527 00:45:47,900 --> 00:45:54,640 And I think that UTXO management is not something that is ever going to be a mainstream adoption 528 00:45:54,640 --> 00:45:56,640 level of thing. 529 00:45:56,640 --> 00:46:00,440 That needs to be completely abstracted away from the average user. 530 00:46:00,440 --> 00:46:04,680 That should really be a power user type of functionality. 531 00:46:04,680 --> 00:46:13,160 So it doesn't mean, though, that it's not possible for us to continue improving coin 532 00:46:13,160 --> 00:46:19,960 mixing technology and improve some of the underlying functionality that is currently 533 00:46:19,960 --> 00:46:23,640 limiting what can be done with coin mixing. 534 00:46:23,640 --> 00:46:31,720 But then what are the other options for staying private on Bitcoin when you are forced, for 535 00:46:31,720 --> 00:46:38,080 the most part, unless you go to great lengths, you're forced to identify yourself to the 536 00:46:38,080 --> 00:46:42,480 government to get permission to buy Bitcoin in the first place. 537 00:46:42,480 --> 00:46:47,440 And then with tools like Chainalysis and TRM Labs and all these other guys out there that 538 00:46:47,440 --> 00:46:55,360 are highly financially incentivized to keep tabs on us and to track us down when needed, 539 00:46:55,360 --> 00:47:03,080 what hope does a Bitcoiner have to achieve privacy and get uncucked, I guess, I don't 540 00:47:03,080 --> 00:47:07,040 know, on-chain from the government in that case? 541 00:47:07,040 --> 00:47:16,000 Well, I think you touched on it, which is the fact that a large portion, last I checked 542 00:47:16,000 --> 00:47:21,600 it was around half, it may still be majority, but very large portion of transactions are 543 00:47:21,600 --> 00:47:23,640 to and from exchanges. 544 00:47:23,640 --> 00:47:27,600 And of course, these centralized exchanges are the choke points. 545 00:47:27,600 --> 00:47:33,640 They're the ones that have regulatory pressure and compliance and are often working with 546 00:47:33,640 --> 00:47:40,840 the Chainalysis companies in various fashions. 547 00:47:40,840 --> 00:47:46,160 I think the way around that is that we need to break this onboarding offboarding cycle. 548 00:47:46,160 --> 00:47:52,120 We need actual peer-to-peer circular economy where you're not interacting or we don't have 549 00:47:52,120 --> 00:47:58,680 everybody interacting with a handful of choke points, but rather we're actually engaging 550 00:47:58,680 --> 00:48:08,360 in meaningful direct peer-to-peer transactions, which means that buying Bitcoin, I think optimally, 551 00:48:08,360 --> 00:48:12,760 buying and selling Bitcoin should not even really be a thing. 552 00:48:12,760 --> 00:48:14,760 We should be earning Bitcoin. 553 00:48:14,760 --> 00:48:19,280 We should be paying Bitcoin for goods and services. 554 00:48:19,280 --> 00:48:26,480 That's one of the ways to, I guess, indirectly improve our privacy is just by simply not 555 00:48:26,480 --> 00:48:32,600 routing all of our transactions through a handful of entities that can surveil us. 556 00:48:32,600 --> 00:48:34,320 Yeah. 557 00:48:34,320 --> 00:48:39,880 It seems like it's trending in the other direction though with the talk and the planning with 558 00:48:39,880 --> 00:48:43,280 CBDC, right? 559 00:48:43,280 --> 00:48:49,480 It's almost becoming like a buzzword now, CBDC, but for me, it's becoming a general 560 00:48:49,480 --> 00:49:03,160 catch-all phrase for digital, highly trackable fiat money that is printed directly from a 561 00:49:03,160 --> 00:49:12,360 central bank into your own cryptographic or otherwise wallet. 562 00:49:12,360 --> 00:49:15,440 Anybody who knows me knows, I see it as inevitable at this point. 563 00:49:15,440 --> 00:49:18,240 I see a lot of this stuff as inevitable. 564 00:49:18,240 --> 00:49:25,360 I'm not sure if that's just because I'm a gloomy-gus type pessimist or if it's based 565 00:49:25,360 --> 00:49:31,200 on just the way that humans are and the way that humans have always been and the trend 566 00:49:31,200 --> 00:49:36,720 that we've seen with our own country over the past 250 years, right? 567 00:49:36,720 --> 00:49:44,360 We're now betraying the very, the majority is happy to betray the rules, the consensus 568 00:49:44,360 --> 00:49:50,040 mechanism that was set up for us here. 569 00:49:50,040 --> 00:49:54,400 Even though it's the reason that we're here, the reason that we have this beautiful system 570 00:49:54,400 --> 00:50:00,400 that we have today, the reason we have the freedom we have today is because of the Constitution 571 00:50:00,400 --> 00:50:05,360 of the United States, which basically is the Bitcoin layer one of the United States. 572 00:50:05,360 --> 00:50:12,280 Fast forward to now and we see people that can't even tell you what the First Amendment 573 00:50:12,280 --> 00:50:15,760 actually is or can't even tell you what Article 1 says. 574 00:50:15,760 --> 00:50:22,520 It's like they have no idea even where the capitals of their state are. 575 00:50:22,520 --> 00:50:23,520 So it's- 576 00:50:23,520 --> 00:50:26,720 Yeah, well, it's been really perverted, right? 577 00:50:26,720 --> 00:50:33,480 Even though there's a lot of protections from the government, for example, spying on its 578 00:50:33,480 --> 00:50:37,280 citizens, they managed to find workarounds. 579 00:50:37,280 --> 00:50:44,080 So now what we have instead is we have corporate surveillance and then the government just 580 00:50:44,080 --> 00:50:49,840 enters into agreements with the corporations for data sharing so that they're not actually 581 00:50:49,840 --> 00:50:55,080 surveilling people directly and it's quote unquote legal to do that. 582 00:50:55,080 --> 00:50:59,960 It's also cryptography is a double edged sword. 583 00:50:59,960 --> 00:51:03,320 There's two different ways at a really high level to use cryptography. 584 00:51:03,320 --> 00:51:09,720 One of them is to actually encrypt data and make it private so that only the intended 585 00:51:09,720 --> 00:51:13,400 recipient can even decipher the data. 586 00:51:13,400 --> 00:51:21,240 The flip side of it though is actually tracking and basically using public keys as identifiers 587 00:51:21,240 --> 00:51:29,040 so that you can then tell who is doing what because your activities are cryptographically 588 00:51:29,040 --> 00:51:36,200 signed and say, okay, public key X was the one that initiated this particular thing. 589 00:51:36,200 --> 00:51:42,640 And so I think we should expect that governments and authorities will be more than happy to 590 00:51:42,640 --> 00:51:47,840 leverage that latter half of functionality to their own benefit to basically empower 591 00:51:47,840 --> 00:51:50,560 themselves and their own surveillance capabilities. 592 00:51:50,560 --> 00:51:51,720 Yeah. 593 00:51:51,720 --> 00:51:55,600 Have you been following this WorldCoin story? 594 00:51:55,600 --> 00:51:57,400 How can you not? 595 00:51:57,400 --> 00:52:03,520 Yeah, there's so much wrong with that. 596 00:52:03,520 --> 00:52:09,760 And unfortunately they have a lot of capital so I think they're going to be around for 597 00:52:09,760 --> 00:52:10,760 a while. 598 00:52:10,760 --> 00:52:16,280 Yeah, to me it's another one of those breadcrumbs as far as what the future is going to hold. 599 00:52:16,280 --> 00:52:22,240 Because I think that somebody put it perfectly that it's not proof of work, not proof of 600 00:52:22,240 --> 00:52:29,760 it's proof of stupidity of the people who are ultimately walking up to this device letting 601 00:52:29,760 --> 00:52:38,320 it scan their biometrics in exchange for a few dollars worth of some token that they 602 00:52:38,320 --> 00:52:39,320 have no idea what it is. 603 00:52:39,320 --> 00:52:43,080 They'll probably have to dox to an exchange in order to even sell it for five bucks or 604 00:52:43,080 --> 00:52:45,200 whatever it's worth. 605 00:52:45,200 --> 00:52:53,800 But the biggest issue with this with COVID with just a lot of stuff we've seen lately 606 00:52:53,800 --> 00:52:59,000 is that people lack the ability to think rationally. 607 00:52:59,000 --> 00:53:01,120 They weren't taught how to think. 608 00:53:01,120 --> 00:53:06,160 They weren't taught how to apply logic to these types of situations and they weren't 609 00:53:06,160 --> 00:53:13,720 taught to value human rights as much as they think that they do. 610 00:53:13,720 --> 00:53:18,040 It's like the people who often scream the loudest about human rights are the people 611 00:53:18,040 --> 00:53:21,720 who least understand what they actually are. 612 00:53:21,720 --> 00:53:26,820 That they are about being free to make your own decisions, being left alone, being able 613 00:53:26,820 --> 00:53:30,400 to think independently. 614 00:53:30,400 --> 00:53:34,120 So WorldCoin, it is what it is. 615 00:53:34,120 --> 00:53:35,760 I don't think it's going to succeed. 616 00:53:35,760 --> 00:53:37,560 It's gimmicky. 617 00:53:37,560 --> 00:53:41,960 It's like a toe in the water almost for these guys to see what they can get away with, I 618 00:53:41,960 --> 00:53:42,960 think. 619 00:53:42,960 --> 00:53:46,320 But it's a test. 620 00:53:46,320 --> 00:53:50,480 It's a predictor, I think, for what's around the corner, not just for WorldCoin, not just 621 00:53:50,480 --> 00:53:56,600 for Ethereum, not just for Sam Altman or anything like that, but for Bitcoin too, I think. 622 00:53:56,600 --> 00:54:04,280 I think that we need to look at stuff like this and we need to apply it to the future 623 00:54:04,280 --> 00:54:11,560 of Bitcoin and think about the attack vectors and think about how unbelievably ignorant 624 00:54:11,560 --> 00:54:13,200 it sounds mean. 625 00:54:13,200 --> 00:54:14,560 It sounds like I'm being a jerk. 626 00:54:14,560 --> 00:54:20,240 But the more of the stuff I see, the more you have to acknowledge the reality in front 627 00:54:20,240 --> 00:54:21,240 of your face. 628 00:54:21,240 --> 00:54:23,560 Most people don't know how to think. 629 00:54:23,560 --> 00:54:29,000 So it's like when they're confronted with defend Bitcoin or get $3 worth of McDonald's 630 00:54:29,000 --> 00:54:34,200 vouchers in exchange for your fingerprints, they're going to pick the McDonald's vouchers. 631 00:54:34,200 --> 00:54:42,920 So am I being too pessimistic, am I being too negative on the majority? 632 00:54:42,920 --> 00:54:45,400 No. 633 00:54:45,400 --> 00:54:47,640 So what's novel about WorldCoin? 634 00:54:47,640 --> 00:54:50,160 They have the hardware that's somewhat novel. 635 00:54:50,160 --> 00:54:54,640 They have some zero-knowledge functionality that's novel. 636 00:54:54,640 --> 00:54:58,920 But what's not novel, what has been done many times before, is airdrops. 637 00:54:58,920 --> 00:55:05,560 And I think it should be quite clear from now that simply giving money away to people 638 00:55:05,560 --> 00:55:09,600 or giving tokens away, people don't value it. 639 00:55:09,600 --> 00:55:13,800 Like when you give them something for free, they ascribe basically no value to it. 640 00:55:13,800 --> 00:55:20,960 So I think it's incredibly overoptimistic to believe that you can bootstrap a monetary 641 00:55:20,960 --> 00:55:27,560 system by airdropping a bunch of tokens to people, regardless of the other security and 642 00:55:27,560 --> 00:55:31,960 privacy attributes around how you're doing the airdrop. 643 00:55:31,960 --> 00:55:34,600 Yeah, that makes sense. 644 00:55:34,600 --> 00:55:35,600 It's true. 645 00:55:35,600 --> 00:55:37,200 It's interesting to watch. 646 00:55:37,200 --> 00:55:38,520 But yeah, most people get it. 647 00:55:38,520 --> 00:55:40,560 If they can get a few bucks for it, they'll just sell it. 648 00:55:40,560 --> 00:55:46,680 It's not going to become like a big global phenomenon of any sort. 649 00:55:46,680 --> 00:55:52,720 Famous last words, watch, we'll replay this in five years and WorldCoin will be the dominant 650 00:55:52,720 --> 00:55:54,320 financial system of the world. 651 00:55:54,320 --> 00:56:01,080 What do you think about, I'm taking a right turn a little bit, about the options for Bitcoiners 652 00:56:01,080 --> 00:56:07,560 to be self-sovereign with their custody right now? 653 00:56:07,560 --> 00:56:15,000 Do you think that the hardware wallet system scene that we see right now, do you think 654 00:56:15,000 --> 00:56:16,000 it's adequate? 655 00:56:16,000 --> 00:56:20,440 Because the more that I watch it and the more that I watch the decisions that are being 656 00:56:20,440 --> 00:56:26,240 made and the more that I see the corporations making corporate decisions as opposed to user 657 00:56:26,240 --> 00:56:32,880 based decisions, the more I wonder if we're going the wrong direction with regard to the 658 00:56:32,880 --> 00:56:36,040 options that we have as normal people. 659 00:56:36,040 --> 00:56:40,040 And I know you just wrote a blog post or you just shared a blog post recently about burying 660 00:56:40,040 --> 00:56:46,240 your metal engraved seed words in your back somewhere in the woods. 661 00:56:46,240 --> 00:56:54,960 That's obviously an option for the most dedicated people, but for the average sort of person 662 00:56:54,960 --> 00:57:04,400 who's in the space, do you feel like we have adequate options for them right now? 663 00:57:04,400 --> 00:57:07,640 Well this is a whole can of worms. 664 00:57:07,640 --> 00:57:11,580 I have an interesting perspective because of what Cossett does. 665 00:57:11,580 --> 00:57:22,580 We build a distributed key self-custody service and software where we integrate with a number 666 00:57:22,580 --> 00:57:25,420 of different hardware vendors. 667 00:57:25,420 --> 00:57:32,700 And we do that because we believe that multi-vendor, multi-sig, aka having multiple keys on multiple 668 00:57:32,700 --> 00:57:39,060 different types of dedicated hardware is how you eliminate single points of failure that 669 00:57:39,060 --> 00:57:42,180 could happen at any given company. 670 00:57:42,180 --> 00:57:48,360 So we have to realize every company is a single point of failure. 671 00:57:48,360 --> 00:57:53,720 And so that means if you have a piece of dedicated hardware, then there can always be some sort 672 00:57:53,720 --> 00:58:05,680 of supply chain or insider attack or who knows what, even malicious firmware that bypasses 673 00:58:05,680 --> 00:58:16,060 internal systems or even that is created as a result of regulatory pressure, who knows? 674 00:58:16,060 --> 00:58:22,860 The result is that if you want to be protected from any one of these companies, you don't 675 00:58:22,860 --> 00:58:28,720 want to put all your money, all your eggs into one basket so to speak. 676 00:58:28,720 --> 00:58:34,400 We should not be trusting companies in this space. 677 00:58:34,400 --> 00:58:39,820 You should not even be trusting CASA, which is why we architect our solutions so that 678 00:58:39,820 --> 00:58:44,980 even if CASA were to somehow become malicious or were to disappear from the face of the 679 00:58:44,980 --> 00:58:52,460 earth, our users would not lose their money because they hold all but one of their keys. 680 00:58:52,460 --> 00:58:58,620 They hold the spending threshold of keys and CASA doesn't have the ability to unilaterally 681 00:58:58,620 --> 00:59:03,220 block their transactions or create transaction without their approval. 682 00:59:03,220 --> 00:59:09,980 So the roundabout thing of what I'm getting around to here is that one of CASA's internal 683 00:59:09,980 --> 00:59:18,140 engineering big points of friction, and this is by design, is the fact that we do not control 684 00:59:18,140 --> 00:59:25,740 these hardware devices that our users are making use of to actually manage and store 685 00:59:25,740 --> 00:59:28,660 and use their private key material. 686 00:59:28,660 --> 00:59:41,020 And so the result of that is that these various companies, they tend to focus on developing 687 00:59:41,020 --> 00:59:49,340 their own full stack solution, by which I mean an example with Ledger is Ledger has 688 00:59:49,340 --> 00:59:54,960 of course Ledger Live and they put a lot of time and effort into improving the experience 689 00:59:54,960 --> 01:00:01,660 and monetizing functionality within Ledger Live and of course they probably want all 690 01:00:01,660 --> 01:00:07,660 of the people who buy a Ledger device to just be using Ledger Live rather than other wallet 691 01:00:07,660 --> 01:00:11,460 software that might integrate with Ledger. 692 01:00:11,460 --> 01:00:17,220 And so the incentives are a little out of whack here in the sense that sometimes they 693 01:00:17,220 --> 01:00:23,980 make changes that break stuff because they I think just aren't thinking about the fact 694 01:00:23,980 --> 01:00:29,020 that they're not just building hardware for themselves and their own ecosystem, they really 695 01:00:29,020 --> 01:00:35,980 need to be thinking of themselves as platforms that other developers are building on. 696 01:00:35,980 --> 01:00:44,800 So it can be challenging for sure, but once again this all comes back to the sort of convenience 697 01:00:44,800 --> 01:00:47,040 and security trade-offs. 698 01:00:47,040 --> 01:00:50,220 CASA did not choose the easiest path. 699 01:00:50,220 --> 01:00:57,420 It would have been so much easier from an engineering perspective if CASA didn't integrate 700 01:00:57,420 --> 01:01:02,660 with hardware devices and we just had all of our users keep their keys basically on 701 01:01:02,660 --> 01:01:08,220 their phones managed by our software which we could have a lot more control over. 702 01:01:08,220 --> 01:01:15,500 But we did choose the harder path and I think that it's worth it because I can sleep easier 703 01:01:15,500 --> 01:01:21,580 at night knowing that even if something got totally screwed up with CASA that our users 704 01:01:21,580 --> 01:01:23,820 would not lose their money. 705 01:01:23,820 --> 01:01:34,900 Yeah I tend to look at these things from a lot of unique I guess perspectives or from 706 01:01:34,900 --> 01:01:41,620 these perspectives that there's more attack vectors than just like making off with the 707 01:01:41,620 --> 01:01:53,100 money and a lot of them have to do with the whether it's KYC or other forms of requiring 708 01:01:53,100 --> 01:02:01,500 like checking users against a blacklist or like even CASA requires KYC right? 709 01:02:01,500 --> 01:02:02,500 No. 710 01:02:02,500 --> 01:02:03,500 No? 711 01:02:03,500 --> 01:02:04,500 Oh sorry my bad. 712 01:02:04,500 --> 01:02:13,180 I thought you had to have identity proven for somebody before you could hold a key for 713 01:02:13,180 --> 01:02:14,180 them. 714 01:02:14,180 --> 01:02:20,600 No some of our competitors require KYC but this is actually one of the big differentiators 715 01:02:20,600 --> 01:02:28,620 between us and some of the other multi-sig services out there that aren't just free software. 716 01:02:28,620 --> 01:02:38,060 So once again this is it's trade-offs it would probably be easier from us from some perspectives 717 01:02:38,060 --> 01:02:47,660 if we required KYC from our users but we don't want to have to protect that information. 718 01:02:47,660 --> 01:02:56,560 It's almost as toxic and radioactive as trying to hold on to private keys. 719 01:02:56,560 --> 01:03:03,620 Well yeah yeah I mean it is and you know like Ledger Recover anybody who uses that solution 720 01:03:03,620 --> 01:03:10,740 is going to have to KYC to Ledger and so Ledger is going to know who they are have all their 721 01:03:10,740 --> 01:03:16,940 information have their Bitcoin balances at least as far as their Ledger goes. 722 01:03:16,940 --> 01:03:23,420 So that's the kind of stuff where I mean that in that particular situation I think that 723 01:03:23,420 --> 01:03:30,300 they admitted that they could even be coerced into taking somebody's Bitcoin right because 724 01:03:30,300 --> 01:03:32,100 they basically are going to have the keys. 725 01:03:32,100 --> 01:03:40,900 So it's like stuff like that you know another litmus test for you know it's proof of in 726 01:03:40,900 --> 01:03:46,500 this case I don't know if it's proof of stupidity or proof of misplaced trust you know because 727 01:03:46,500 --> 01:03:53,480 you're you're placing your trust in a few guys that run Ledger with your Bitcoin stash. 728 01:03:53,480 --> 01:03:57,100 Do you understand that do you understand the implications of that maybe not you know so 729 01:03:57,100 --> 01:03:59,940 it might be a very naive thing. 730 01:03:59,940 --> 01:04:04,820 CASA sounds like it's taking the more noble path at the expense of profit like you just 731 01:04:04,820 --> 01:04:11,680 said so you know maybe you're already a company that that's disproving you know the my pessimism 732 01:04:11,680 --> 01:04:13,740 a little bit at least. 733 01:04:13,740 --> 01:04:19,340 How do you justify how do you justify that like when you guys are sitting down looking 734 01:04:19,340 --> 01:04:24,940 at the numbers and you know you know I'm sure you have investors and you have to go back 735 01:04:24,940 --> 01:04:32,360 and be like explain that you guys made the most prudent decisions for the business. 736 01:04:32,360 --> 01:04:38,620 How do we know that when CASA or if CASA faces a time where it's crunched for money and you 737 01:04:38,620 --> 01:04:42,940 might have to lay people off and maybe you've already had these times tell me but like you 738 01:04:42,940 --> 01:04:47,620 know those are the times that really most companies start to buckle on their principles 739 01:04:47,620 --> 01:04:51,620 like why won't that happen to CASA. 740 01:04:51,620 --> 01:04:59,580 Yeah and we have had layoffs before we actually came very close to the brink I think back 741 01:04:59,580 --> 01:05:06,540 in 2019 or so and that was when we shuttered the node product because it was just hemorrhaging 742 01:05:06,540 --> 01:05:15,860 money for us and you know we laid off everybody that was working on that product. 743 01:05:15,860 --> 01:05:21,340 I think part of it is the fact that we have intentionally hamstrung ourselves and what 744 01:05:21,340 --> 01:05:27,900 we can do is that the temptation might be there but there's we're literally limited 745 01:05:27,900 --> 01:05:35,800 into what we can do in terms of our customers and you know potentially screwing with them. 746 01:05:35,800 --> 01:05:42,660 So you know I think a lot of people would say oh we've already compromised on our principles 747 01:05:42,660 --> 01:05:49,780 by adding support for Ethereum and so on and so forth and you know for there's plenty of 748 01:05:49,780 --> 01:05:57,380 reasons why I wish that we were able to just stick to Bitcoin but you know we do have that 749 01:05:57,380 --> 01:06:04,780 profit motivation of wanting to improve our revenues and profit margins and basically 750 01:06:04,780 --> 01:06:10,620 meet the demands of our customers because we know that if we don't then we could potentially 751 01:06:10,620 --> 01:06:17,820 lose them to other competitors and we know that we have lost a decent amount of business 752 01:06:17,820 --> 01:06:27,500 to custodians because we don't have as wide of an offering as a lot of custodians do and 753 01:06:27,500 --> 01:06:33,980 so there are a number of people out there who if they have very broad range of assets 754 01:06:33,980 --> 01:06:38,740 they want to keep them all in one place and so you know they are looking for convenience 755 01:06:38,740 --> 01:06:44,740 and so this I really do consider custodians to be our biggest competitor. 756 01:06:44,740 --> 01:06:50,020 They have this huge edge this advantage on the convenience that they're able to offer 757 01:06:50,020 --> 01:06:55,220 and if we can't get at least most of the way there on the convenience then a lot of people 758 01:06:55,220 --> 01:07:02,300 are going to shoot themselves in the foot and choose the convenience over security. 759 01:07:02,300 --> 01:07:08,820 So what is CASA going to do over the long run? 760 01:07:08,820 --> 01:07:18,440 We're going to continue to explore our options of essentially what services we are able to 761 01:07:18,440 --> 01:07:29,900 provide people while remaining a software service and not a regulated financial institution. 762 01:07:29,900 --> 01:07:37,260 The vast majority of our competitors are regulated financial institutions. 763 01:07:37,260 --> 01:07:44,260 That gives them a whole lot more leverage in the things that they can do. 764 01:07:44,260 --> 01:07:48,140 Of course a lot of risk as well that comes along with that. 765 01:07:48,140 --> 01:07:56,100 So I guess you could say that we're trying to take a much less risky path for our customers 766 01:07:56,100 --> 01:08:03,900 and it may be more risky for us as a business because we are essentially hamstrung from 767 01:08:03,900 --> 01:08:09,100 a number of different decisions that we can make. 768 01:08:09,100 --> 01:08:19,820 Do you think CASA is the best solution period for a retail just a Bitcoin holder? 769 01:08:19,820 --> 01:08:28,900 To me I can't get my head out of the mindset that the best way to protect my own freedom, 770 01:08:28,900 --> 01:08:38,740 to protect my own freedom to move, to transact, to be self-sovereign at least maximally if 771 01:08:38,740 --> 01:08:49,060 not entirely but as much as I can be in this world is to have complete control and to not 772 01:08:49,060 --> 01:08:59,620 have identity attached in any way and to be the guy out there burying shit in the dirt. 773 01:08:59,620 --> 01:09:03,860 To me that's the ultimate freedom. 774 01:09:03,860 --> 01:09:11,820 As soon as you start involving any other third parties you start to make tradeoffs. 775 01:09:11,820 --> 01:09:13,020 That's how I feel. 776 01:09:13,020 --> 01:09:14,300 Do you feel the same way? 777 01:09:14,300 --> 01:09:19,380 Do you feel like CASA is the optimal tradeoff point? 778 01:09:19,380 --> 01:09:24,660 That's what I'm going for. 779 01:09:24,660 --> 01:09:33,380 If someone wants to attain the maximum level of privacy and security in Bitcoin, whatever 780 01:09:33,380 --> 01:09:42,120 crypto assets they're dealing with, then they basically need to do everything on their own 781 01:09:42,120 --> 01:09:49,100 and this has always been possible but it's a much higher bar. 782 01:09:49,100 --> 01:09:56,060 You have to climb a pretty steep mountain of knowledge to understand all of the tradeoffs 783 01:09:56,060 --> 01:10:03,620 of all of the decisions that you need to make when you are creating and maintaining your 784 01:10:03,620 --> 01:10:04,620 custody. 785 01:10:04,620 --> 01:10:07,400 It's not impossible. 786 01:10:07,400 --> 01:10:09,940 It just takes a lot of time and effort. 787 01:10:09,940 --> 01:10:16,420 So what we're going for at CASA is we're not trying to capture that segment of the market, 788 01:10:16,420 --> 01:10:22,360 the people who are willing and able to do that all themselves. 789 01:10:22,360 --> 01:10:28,620 What we're trying to capture is more of the people who are more mainstream, less technical 790 01:10:28,620 --> 01:10:36,700 or less, they just have more time constraints and that would probably be choosing a custodial 791 01:10:36,700 --> 01:10:39,540 solution due to the convenience. 792 01:10:39,540 --> 01:10:48,340 So our value proposition is we can give you the level of support and actually a much better 793 01:10:48,340 --> 01:10:52,740 level of support than you're probably going to be able to get with a custodian and we 794 01:10:52,740 --> 01:10:58,580 can do that in such a way that you maintain control over your funds and you're not actually 795 01:10:58,580 --> 01:11:00,300 trusting us. 796 01:11:00,300 --> 01:11:06,780 So it's trying to bridge this gap between doing everything yourself versus having a 797 01:11:06,780 --> 01:11:09,780 third party do everything for you. 798 01:11:09,780 --> 01:11:13,300 Yeah, I hear you. 799 01:11:13,300 --> 01:11:18,300 It seems like there's these multiple camps out there these days about like there's people 800 01:11:18,300 --> 01:11:24,800 that say seed phrases are too complicated, normal people will never get it. 801 01:11:24,800 --> 01:11:30,820 It's okay to use a custodian until you've figured things out and then you can go from 802 01:11:30,820 --> 01:11:32,620 there. 803 01:11:32,620 --> 01:11:39,200 And I always come back with the mindset that you know what, my point of view on this is 804 01:11:39,200 --> 01:11:45,500 if you are not willing to put in the research and the time and understand what this asset 805 01:11:45,500 --> 01:11:54,820 is and what it's capable of and be able to self custody confidently, then you probably 806 01:11:54,820 --> 01:12:03,980 shouldn't be here at all because how does somebody holding Bitcoin on a custodian benefit 807 01:12:03,980 --> 01:12:07,220 the decentralized universe here? 808 01:12:07,220 --> 01:12:08,220 It doesn't. 809 01:12:08,220 --> 01:12:09,220 It hurts it actually. 810 01:12:09,220 --> 01:12:13,020 The only thing it does is it helps the price potentially. 811 01:12:13,020 --> 01:12:15,060 You know, that's arguable too. 812 01:12:15,060 --> 01:12:18,060 We were doing a lot better before futures markets came in, right? 813 01:12:18,060 --> 01:12:27,020 But at least as far as pace of growth of the asset, but yeah, so it's a big debate. 814 01:12:27,020 --> 01:12:28,260 We're running low on time. 815 01:12:28,260 --> 01:12:34,020 But you know, it's sort of my take on it is always that and it seems kind of brutal and 816 01:12:34,020 --> 01:12:38,100 seems kind of like not so compassionate. 817 01:12:38,100 --> 01:12:42,620 But at the same time, I think that people are capable of doing it. 818 01:12:42,620 --> 01:12:48,420 People are capable of learning and they're capable of sinking their teeth in. 819 01:12:48,420 --> 01:12:52,660 And the ones that aren't the ones that don't want to the ones that that just aren't doing 820 01:12:52,660 --> 01:12:55,420 it can't be dragged along. 821 01:12:55,420 --> 01:12:59,840 We can't force them into it unless there's like a Trojan horse like you said before. 822 01:12:59,840 --> 01:13:03,540 But it seems like you've got your eye on the right target, which is people who've already 823 01:13:03,540 --> 01:13:07,460 decided yes, I want this level. 824 01:13:07,460 --> 01:13:09,060 I want to self custody. 825 01:13:09,060 --> 01:13:13,700 I just one step away from I mean, you're still self custodying with Casa but you're one step 826 01:13:13,700 --> 01:13:21,620 away from the you know, the complete the complete version of that I guess it's one way of saying 827 01:13:21,620 --> 01:13:27,260 like the the version of it where you're the one in complete 100% control your with Casa 828 01:13:27,260 --> 01:13:31,980 maybe or you're just at 99. 829 01:13:31,980 --> 01:13:34,060 It's the wrong way of putting it because you're still in control. 830 01:13:34,060 --> 01:13:35,060 I get it. 831 01:13:35,060 --> 01:13:36,060 It's a multi SIG. 832 01:13:36,060 --> 01:13:37,060 You have the keys. 833 01:13:37,060 --> 01:13:45,500 It's hard to talk about the security model once you get into a sort of hybrid key situation. 834 01:13:45,500 --> 01:13:49,500 It gets really the lines start to blur and they're actually going to blur a lot more 835 01:13:49,500 --> 01:13:54,660 in the coming years because I think with some of the advances in Bitcoin scripting that 836 01:13:54,660 --> 01:14:02,860 we're seeing start to come out, we're going to start to see people creating security models 837 01:14:02,860 --> 01:14:10,860 where you know, you may have full self custody during normal conditions that but then you 838 01:14:10,860 --> 01:14:17,860 may also defined other conditions like inheritance, you know, basically timeout conditions in 839 01:14:17,860 --> 01:14:24,740 the future where a flip a switch will flip and the ability for other people to access 840 01:14:24,740 --> 01:14:30,780 those funds may start to come into play and and it may not be as simple as saying okay, 841 01:14:30,780 --> 01:14:37,380 you know, if a few years go by, then just let you know, entity X access it, but we could 842 01:14:37,380 --> 01:14:47,180 very easily get into situations where we have kind of multi institution custody setup where 843 01:14:47,180 --> 01:14:53,380 you may say, you know, if my wallet is inactive for many years, then a spending threshold 844 01:14:53,380 --> 01:15:01,900 of keys between semi semi trusted institutions, X, Y and Z may be able to come together to 845 01:15:01,900 --> 01:15:07,780 you know, spend the funds from this and you know, those will probably be you know, KYC 846 01:15:07,780 --> 01:15:13,420 type of institutions that have lists of beneficiaries and other people who should be able to you 847 01:15:13,420 --> 01:15:16,900 know, lay claim on the funds and whatnot, but it's definitely going to get more complicated 848 01:15:16,900 --> 01:15:23,500 and difficult to talk about, but I also I look at this whole thing from a technology 849 01:15:23,500 --> 01:15:28,940 adoption lifecycle perspective of, you know, I remember my family and the like 90s and 850 01:15:28,940 --> 01:15:36,460 early 2000s being extreme laggards to adopt the internet and email and stuff like that, 851 01:15:36,460 --> 01:15:43,060 but you know, decades go by, then the technology and the interfaces continue to improve and 852 01:15:43,060 --> 01:15:51,660 and eventually it becomes a network effect such that they they go from instead of being 853 01:15:51,660 --> 01:15:57,140 the majority of people who haven't adopted the technology, you become the outsider where 854 01:15:57,140 --> 01:16:02,820 everybody except you is using the technology and it's and it's basically a sort of peer 855 01:16:02,820 --> 01:16:08,380 or social pressure incentive of you're missing out if you don't use it. 856 01:16:08,380 --> 01:16:17,820 True, true, but if the if the internet from you know, the early 90s to today, if that 857 01:16:17,820 --> 01:16:21,940 same trajectory is followed by Bitcoin, I think we're kind of screwed, right? 858 01:16:21,940 --> 01:16:26,980 As far as like the centralization of it, as far as the vulnerabilities everywhere, the 859 01:16:26,980 --> 01:16:31,500 tracking, the surveillance, the regulation, we have to we have to do better than we did 860 01:16:31,500 --> 01:16:35,700 with the internet, I think, like so but I hear you, but it's kind of also what I fear 861 01:16:35,700 --> 01:16:39,060 is that people get sucked into the wrong version of it. 862 01:16:39,060 --> 01:16:42,500 You know, and yeah, yeah, you know, that's one of the things I've been talking about 863 01:16:42,500 --> 01:16:47,300 for the past year is actually looking at various internet protocols and how they have become 864 01:16:47,300 --> 01:16:50,260 extremely centralized over time. 865 01:16:50,260 --> 01:16:52,980 My favorite is email. 866 01:16:52,980 --> 01:17:00,040 You know, email is mass adopted used by billions of people every day, but it's actually a monster 867 01:17:00,040 --> 01:17:06,340 of a protocol compared to what it was in the 70s, 80s and 90s. 868 01:17:06,340 --> 01:17:10,960 And it's not really possible to actually be a sovereign email user anymore. 869 01:17:10,960 --> 01:17:15,680 The thing that we call email is literally just a handful of gatekeepers that are talking 870 01:17:15,680 --> 01:17:17,780 to each other on our behalf. 871 01:17:17,780 --> 01:17:19,380 Yeah, that's a great example. 872 01:17:19,380 --> 01:17:25,140 I just got I'm a proton mail user and I just got an email from them recently advising like 873 01:17:25,140 --> 01:17:29,100 why it's you basically can't run your own email server anymore. 874 01:17:29,100 --> 01:17:32,380 Like you just can't you can't receive email to it. 875 01:17:32,380 --> 01:17:37,220 You know, you have to be a custodian of email or you have to deal with one in order to even 876 01:17:37,220 --> 01:17:38,580 use it anymore. 877 01:17:38,580 --> 01:17:39,940 And it's a great example. 878 01:17:39,940 --> 01:17:45,440 Email is, you know, a great parallel, a great comparison for Bitcoin as an open protocol 879 01:17:45,440 --> 01:17:49,060 that got centralized over time. 880 01:17:49,060 --> 01:17:50,900 We just have to that's that's the thing, man. 881 01:17:50,900 --> 01:17:56,260 We just have to fight and make sure that people understand why Bitcoin can't go in the same 882 01:17:56,260 --> 01:17:57,260 direction. 883 01:17:57,260 --> 01:18:00,220 I did a forked email like 10 20 years ago, right? 884 01:18:00,220 --> 01:18:01,940 We've done it differently. 885 01:18:01,940 --> 01:18:04,540 But anyway, now this is great, man. 886 01:18:04,540 --> 01:18:08,300 I have to have you come back sometime because I like I have a whole list of stuff that I 887 01:18:08,300 --> 01:18:09,700 wanted to get to with you. 888 01:18:09,700 --> 01:18:13,420 But I was way too ambitious, especially with like Twitter stuff with Noster and stuff like 889 01:18:13,420 --> 01:18:14,420 that. 890 01:18:14,420 --> 01:18:15,660 Oh, yeah, sure. 891 01:18:15,660 --> 01:18:17,620 That's a whole separate convo. 892 01:18:17,620 --> 01:18:18,620 But thanks for being here. 893 01:18:18,620 --> 01:18:19,620 I really appreciate you. 894 01:18:19,620 --> 01:18:20,620 You bet. 895 01:18:20,620 --> 01:18:27,620 Thanks for having me.