Transcript: DAC8 Is a Kidnapping Factory (Francis Pouliot)

Marty Bent [0:01] Francis, I'm ashamed to admit it, but it's been seven years since you've been on the show. Welcome back.

Francis Pouliot [0:06] It has been seven years. Wow, yeah. The last time was in San Francisco, I believe, at the Bitcoin twenty nineteen conference.

Marty Bent [0:12] Yeah. The first ever Bitcoin conference. I found out I was I was expecting my first child that day, right after we recorded. So I I remember that day vividly. but we progress. Children have been born, raised a little bit since then. Bitcoin has persisted and things are going on. We the Bulls on parade in France. We're gonna start off with what you and your team at Bull Bitcoin have been doing in terms of trying to protect your users' right to privacy, particularly in France, where they've implemented this DAC 8, DAC eight, which stems from from Micah, I believe, the which is very invasive to privacy and obviously France is a hotbed for five dollar venture tax. You guys are on the ground there, obviously serving customers and are having to deal with this up close and personal. So I think we should just start there. What's going on with DAC8, Micah Micah, however you pronounce it, and how oppressive are these governments getting in terms of trying to collect user data.

Francis Pouliot [1:21] Yeah, so DAC eight is a very interesting piece of legislation, because very few people know about it and it is, in my opinion, the single biggest threat to both the cypherpunk principles of Bitcoin and to the lives of our of our users. So the backstory of DAC eight is that in twenty twenty one, kind of like at the peak of the the COVID tyranny, the G twenty countries had a meeting Probably, I don't know, in Davos or something, you know, one of those globalist hangouts. And they decided during that meeting that Bitcoins posed an existential threat to the ability of governments to finance themselves. and when you look at kind of like the the minutes and you know, announcements of that meeting, they basically decided that tax evaders are going to bankrupt the state with Bitcoin.

Francis Pouliot ⋮ And that they needed to do something about that. So the G20 mandated the OECD, another globalist organization, to come up with a solution to that problem. And that solution is something that they came up with, which is called CARF, the crypto asset reporting framework. And CARF is basically a program or methodology of collecting all of crypto users. Transaction information and identity into a big database and allowing countries to share that database with each other. And in the EU, and as soon as the OECD came up with CARF, like 70 countries on Earth pledged to implement CARF. So this is a purely technocratic globalist thing. But then the national governments need to implement this in their national legislation.

Francis Pouliot ⋮ And in Europe, they did that at the European Union level with something called DAC 8, Directive 8, or also called DAC 8. So, what DAC 8 does is basically turn every single crypto company into a data collection, aggregation, and transmission platform where every year you have to report all of your users' kind of like financial transactions.

Francis Pouliot [3:42] Like their volumes and their cost of acquisition and their identity, their home address, everything about them to your national government. But what's even worse than that is that DAC eight allows EU countries to share that data with each other. So for example, we and Bull Bitcoin were incorporated in France. So we share this data with the French tax authority. But then the French tax authority shares this data with the German tax authority, with the Dutch tax authority, or whatever. So what it in effect creates is a big Fucking list of crypto users and how much Bitcoin they're buying and how much Bitcoin they're selling every single year.

Francis Pouliot ⋮ And that is what I would say a a very big rupture compared to the system of KYC that we've had before. And I'm gonna go off on a little tangent here, but you know, we've already had a globalist institution force national governments essentially to implement these. Kind of like KYC regimes, and that is the FETF, the Financial Action Task Force. So the Financial Action Task Force was the and I believe that is the AM IMF, that is like the head of the FETF. the It's it's it's it's you know, it's it's part of the club, like the BIS, the IMF, the OECD, the G20. It's always coming from somewhere in you know in Europe.

Francis Pouliot ⋮ and basically like so the FETF came up with this thing called the travel rule, and they basically came up with with these guidelines.

Marty Bent [4:54] It might be the BIS, I think. It's mm-hmm.

Francis Pouliot [5:12] And what they essentially told every country in the world is like you have to implement KYC AML on crypto in your country. Otherwise, you will be considered to be a bad actor, and you're gonna get on what's called the AMF's gray list or blacklist. if you are on the FETF's blacklist or gray list, then things don't go really well for you. there's there's a lot of penalties for a country not to implement FETF rules. They're not obliged to, but they they're flagged as a let's say non-cooperative state. so it's not the first time that this has happened. But the thing about KYC AML, the way that it's been going on like today, it's it's not as bad as people think.

Francis Pouliot ⋮ Okay, I'll give you example. most people think that every time you buy Bitcoin on an exchange, it's like automatically reported to their government, and that's not true. the point of KYC AML that we have now is basically okay, if there is something suspicious, like if one of your clients looks like he's financing terrorism because he's on a sanctions list or something, or if it looks like he's you know laundering money, you you report certain types of behavior that are like suspicious. And you you keep the data internally so that if there is a police investigation and they come to you with your with a warrant, then you have the data on hand.

Francis Pouliot ⋮ So and that's not something that happens a lot. You know I mean like it's not it's not like a frequent thing. Like we don't get the FBI knocking on our door asking for data. I'm something like, I don't know, Bull Bitcoin, we get that like once a year or something. So so yeah, KYC is is is bad, but it's not like we're streaming the data to the government in real time. the vast majority, like 99% of clients, like their data just never leaves Bull Bitcoin. What DACA does is a complete shift because now the government requires us to send all of the data, regardless of whether you're like a pleb or you're a whale, whether whether you're sketchy or not sketchy.

Francis Pouliot ⋮ All of the data gets sent to the government. And that's a massive problem, of course. and it's a big shift, it's it's a big change. if you thought that KYC was bad before, now it's it's way worse. And there's multiple reasons why that would be a problem. Well, first of all, just philosophically speaking, you can have a problem with the government just creating a list of people and their assets, just generally, because who knows what they're gonna do with that information.

Francis Pouliot [7:38] so just philosophically speaking, that's just bad. But where it becomes really bad is in places like France, where we are based, where the cybersecurity of the government is so awful that you have, and I'm not kidding, like something like a million user records that are leaked every single month. Every four or five weeks you have a top-tier institution, whether that's the tax authority. Or government agency or a big insurance firm where all of the user records are leaked. And not only are they leaked, but in France specifically, there has been convicted civil servants that were selling crypto users information to criminal gangs so that these gangs could identify victims to kidnap, torture, and extort for crypto ransoms.

Francis Pouliot ⋮ So this is not a conspiracy theory. Those people have been caught and convicted recently. So you have government bureaucrats which are collecting data on crypto users and selling that data to the mafia. And what is the result? The result is France, where again we are based, bull Bitcoin in Europe, is the crypto kidnapping capital of the world. This year in 2026, we expect about 150 to 180 crypto users to be kidnapped. last year was like something like 80 or something like that. If you look at just like the Q Q1 2026 kidnapping data, it's something like once every two and a half days on average, a crypto user gets kidnapped.

Francis Pouliot ⋮ And I know personally, I want to say maybe four or five people who had had either their daughter kidnapped. There's there's a there's a famous person that I know whose daughter got kidnapped, their wife got kidnapped, they got kidnapped. there's you know very famous stories. So essentially what we as an exchange have been forced to become is an agent of the EU's mass surveillance program. And

Francis Pouliot [9:52] If this database, this like mega global honeypot database of all crypto users in Europe is leaked, it will be catastrophic to the extent where I'm very confident that like someone is likely to die as a result. Someone is definitely gonna get kidnapped as a result, but people will be murdered as a result. R running an exchange, you have to do some kind of compromise. when you're a fiat regulated entity for multiple reasons. you know, bull bitcoin does have KYC. We're not a no KYC business. And the reason why we do this compromise is because for Bitcoin to succeed in its mission to eliminate fiat currency, you need Bitcoin to be a highly sellable and highly liquid asset.

Francis Pouliot ⋮ You need Bitcoin to be used for commodities trading, for by merchants, for payroll. For remittance, you need millions and millions of Bitcoin holders to use Bitcoin on on a day-to-day basis. And in order for that to happen, you need brokers, you need trading order book platforms. You can't achieve like a global revolution on just like a purely peer-to-peer exchange basis and like meet you know someone in a parking lot with a bunch of cash. Like you need exchanges to achieve this level of liquidity and salability and and market penetration. so we've done you know compromises. By implementing KYC, but we believe that this new regime, the DACAID regime, is a line that we cannot cross.

Francis Pouliot ⋮ There's a certain there's a certain level at which we have to say no, we have to make a stand, and we have to refuse to cede any more territory. If we don't refuse this global database of Bitcoiners, Then the message that we're sending to these globalists is is very clear, is that they can do anything. Right? Like what's what's worse than collecting what's worse than put it all than putting all the corners on a list and having all all of their wealth like in a centralized database, which is accessible by twenty seven bureaucracies across the European Union. I mean, it's it's pretty much as bad as it can get in terms of privacy.

Francis Pouliot ⋮ so we've decided to fight back.

Marty Bent [12:19] The I mean, not only is it incredibly invasive to privacy, but by sharing it with twenty seven other agencies, I mean you're just expanding the attack surface dramatically. And especially in the world that we're living in now with AI emerging and being able to attack critical systems rather trivially, it seems like we should be going in the opposite direction, try to collect the least amount of data as possible to protect end users and individuals and their lives and the lives of their l loved ones at the end of the day. And I think this has obviously been a massive topic on this podcast for the last nine years, which is the encroachment of KYC AML. And I'm very happy that you and your team are drawing the line and saying, No, we're not seeding any more ground. what is what does that look like? How how big is this fight gonna get, do you think?

Francis Pouliot [13:12] I think this is gonna be possibly one of the biggest tax law cases in Europe. So what we're doing is we are challenging the implementation of DACAID in France at the French government. So we actually did this, we started doing this in February, where we we first did our legal challenge. we decided not to talk about it until recently because we were in the process of applying for a Meek license in Europe and We didn't want to, you know, attract too much too much I guess anger from from the French state. So as soon as we got our Mika license, we started to to talk about it.

Francis Pouliot ⋮ So we're challenging the national implementation of DAC 8 in in France under three principles. One of them is proportionality. So basically the the the concept of creating this you know pan-European global database of crypto users is completely disproportional. To the objective of the French government to evade tax evasions. In other words, they already have the tools in place to like do all their investigations. They don't need like this new set of tools. It's not necessary. there's also violations of the EU Charter of Human Rights. I I hope I'm not my lawyer might be a little pissed at me because I I need to be careful about exactly what we're doing, but we're kind of like breaching the EU constitution, and there's a bunch of technical things also that the government did wrong.

Francis Pouliot ⋮ So our objective is to Repeal the implementation of DAC eight in France, which would in effect allow prevent or exempt bull bitcoin from complying with this regulation. at the same time, we also have a let's call it multi-angle legal strategy. So we have two more legal recourse that we're preparing that I can't really talk about, but one of them is about temporarily suspending. compliance with this at the same time. And if we lose at the French court level, we're gonna take this to the European Court of Justice, which is kind of like the higher judicial authority in Europe. And there are precedents. And this is not like a frivolous lawsuit that we're doing for marketing.

Francis Pouliot ⋮ Like we have very good chances of winning this because there's like a lot of legal precedents around this. So if we lose, then we're gonna take this to the European Court of Justice. And

Francis Pouliot [15:39] DAC 8 is a is a purely European thing, but I also want to remind the viewers that this is actually coming to the United States as well in 2029. I think 2028 or 2029. CARF is coming to the US. Carf is also coming to Canada this year. and pretty much every kind of like major developed nation are gonna have their own version of DAC 8. so we're starting with France as the first opening salvo of this battle. But soon after, we're probably gonna be looking at challenging challenging this constitutionally in Canada. And hopefully someone in the US also does a constitution constitutional challenge in the US.

Francis Pouliot ⋮ Although, as far as I know, Bowl is the only company in the world, it's it's the only legal challenge of CARF anywhere on earth, as as far as I'm aware of. so our goal is to, I mean, a legal precedent in Europe doesn't create a legal precedent in the US or in Canada, but ideally we can motivate people in their own countries to pursue legal action because politically there's nothing to do. Like nobody gives a fuck, right? There's no there's no congressman or there's no parliamentarian that really and tr truly does anything about, you know, even in the US you have like a pro a pro crypto government or something like that.

Francis Pouliot ⋮ But even in the US, like there hasn't been a challenge of this concept at all. so ideally we we motivate people to use the justice system, the courts, as a method of defending crypto users because yeah, sure, we can we can use like all sorts of technology. You know, we can use pay join, coin join, silent payments, you know, liquid swaps, all that kind of stuff. Like like we cypherpunks can build the tools, but it doesn't it doesn't stop every leakage. Like we need to also do this battle on the legal front as well.

Marty Bent [17:29] Yeah, I completely agree. And I mean timing is of the essence, particularly for DACAID in France. It looks like from my research, they wanted you to start tracking beginning on January first of this year and like the first mandatory report will be January thirty first, twenty twenty seven. So we have about six, seven months here before exchanges are expected to hand over this data.

Francis Pouliot [17:55] Yeah, and even if we lose the constitution the constitutional ch the the core challenge that we're doing now, we we have a pretty good strategy of having a bunch of backup plans. So our our goal is to using any and all legal means at our disposal to repeal. R re repealing is the number one goal. Delaying is the second goal, and mitigating, you know, nigga like the the plan C is basically negotiating to have something that is less harmful. But complete completely repealing is is our objective, and I think we have pretty good chances.

Marty Bent [18:31] Yeah. I mean I think we should dive into like the philosophy of this like deeper because I I mean I I think it's gotten to an ex insane point globally where exchanges, individuals have just been ex expected to just completely hand over the data. The government says, Hey, new guideline. And the thing about FATF too, it's like a supranational, unelected, bureaucratic institution that it sits under the BIS or IMF, doesn't matter who it really sits under, but they're technically not implementing laws. They get together, the globalists get together, they say, Hey, here are the guidelines. And like you said earlier, if a country doesn't adopt the guidelines, Financial Action Task Force comes in and says you're on the blacklist.

Marty Bent ⋮ And there there's just some weird leveraged incentives at play where you have this unelected, supranational bureaucratic institution that nobody asks for that is dictating basically what we can hold private in our lives in the digital age. And it's completely insane. And I think France is a good example, but we have plenty of examples across the world of turning exchanges into data data honeyp honeypots and now extending that further into government agencies, which are notoriously incompetent, turning them into to even larger honeypots. and and sharing that data amongst each other, which is even more frightening. And it just gets to the core of like what it means to be human.

Marty Bent ⋮ Like why why do we need to do all this? And and they opine that it's to protect protect you from terrorist and child abusers and things like that. And they try to mark you as an insensitive rube if if if you don't go along with it because you're Why why don't you want to do this? Do you support terror terrorism? Do you support the trafficking of children? It's like, no, of course not. But there's there's a better way to do these things, which is actual law enforcement. I think the proof is in the pudding of fifty years of this KYC AML regime, which really stems from the Bank Secrecy Ha Act here in the United States, that the these data collection mandates are completely ineffective at stopping crime and

Marty Bent [20:52] in fact, to to your point earlier, actually put more people in harm's way.

Francis Pouliot [20:57] You you said many great things I'm I'm gonna touch on. The first thing that you mentioned is it's a little reminiscent of COVID, isn't it? Right. So there's this COVID, there was this thing called the WHO, the World Health Organization, and they don't they can't force countries to do anything. But then you have all the bureaucrats of every country which basically get a software update from the WHO. You know what I mean? they get they get like a mind download from the WHO. And then they cook up some kind of, let's call it emergency or public safety concern, where the national elected governments don't actually make rules, right?

Francis Pouliot ⋮ So in COVID, it was basically like I don't know who he was in in the US, but the like the national public health agencies, and they start issuing these edicts, and the the technocracy, the bureaucrats, and end up extending the state's power For something that nobody really vo voted for. Like nobody voted for COVID lockdowns for vaccine mandates. They were arguably, you know, popular in some places, but it's certainly not something that came from a representative government. It c it came from the bureaucracy, and the international bureaucracy coordinated itself around stuff like the WHO. And this is exactly what we see in the national legislature.

Francis Pouliot ⋮ You know, there's no protest on the street from people that want stricter KYC, AML. Regime that exchanges. You know, that just that it's not something on people's minds at all. It's something that's kind of like it's a slow creep. You know, you know what I mean? It's it's like it slowly creeps in through the bureaucracy, and nobody really n knows what's going on until until it's too late. carf and DACAID itself is presented as a purely technical thing. when you look at national debates, there's no national debate at there's no like congressional debate about CARF. You you will not find a congressional debate where you have like the Democrats and Republicans arguing back and forth about the merits of CARF.

Francis Pouliot ⋮ No, no, no. It's it's it's like a t it's like a technical change to, you know, the IRS rules, and it's like a technical change to the French in France. It's just a t a technical amendment, basically. So it kind of like sneaks under the radar, and then that shit just keeps adding up. It just keeps adding up over and over and over. and of course you have, you know, you had the public health stuff.

Francis Pouliot [23:24] You have the crypto stuff. Of course, at the same time, we also have regulation of social media under the new public health scare, which is hate speech. and all of that is is is coming in at the same time. And these institutions have a lot of leverage against crypto businesses and businesses in general, like because you know, like if you're a media, you need to have a broadcasting license or something like that. If you're a crypto exchange, you need to have a crypto license. So basically they use the threat. Of removing your ability to operate in a certain country if you don't comply. So it's kind of like again, it's kind of like with the vaccine mandate.

Francis Pouliot ⋮ It's kind of like, well, you don't have to get a COVID vaccine, but you can't go to the store. for us, it's basically like, well, you don't have to do that, but you know, you don't we don't have to give you a license either. so it's it's let's just let's just say I can I can see the pressure accelerating. I can see I can see the The soft tyranny, because it's not, it's not like tyranny in the same it's not tyranny in the sense of like a Marxist government lighting you up against the wall to shoot you and take your stuff. It's a soft, it's a bureaucratic tyranny.

Francis Pouliot ⋮ the best way to s t to conceive of this is actually with Alexandre de Tocqueville, which is a French author, but wrote about the American system of government. and he has this This this this very nice passage, this book called Democracy in America, where he specifically talks about this and he says, tyranny is not gonna look like you think it's gonna look like. It's not gonna be this this military government which is coming into your house and kicking down your door and and chaining you up. It's it's gonna be a a a ever-growing set of small rules which turn you into basically a docile sheep.

Francis Pouliot ⋮ and then when you're in the exchange business like I am. and and you're very regulated, yeah, I can I can see those as adding up. So at some point at some point you just gotta say no. Right? At some point we just gotta say no. And you gotta establish in your mind a a line that you will not cross. And you know, that specific one is the one that we just decided, like, no, we're not crossing this one.

Marty Bent [25:36] Yeah. I mean and even here in the States, th all the conversations around the Clarity Act and whether it will or will not get passed, I think odds are above fifty percent now that it will and everybody's cheering it on. I think like the Coinbases and the stablecoin issuers of the world and those who want to issue tokens, real world asset tokens, are cheerleading it. But if you if you read if you read the bill, it extends the the Patriot Act and some of the words some of the wording is such that you could squint and see how they would try to say, like, okay, open source wallet developers, you need to have some KYC AML compliance, like when somebody downloads your software, you need to we need to know who's downloading a blue wallet or a bull wallet, whatever it may be.

Marty Bent ⋮ and everybody's cheering it on. And and it's I think from the crypto industry outside of Bitcoin, it's mainly driven by greed, the the want to be able to go out and basically stand up their casinos without having to worry about the government coming in and and slamming the book at them for securities law. But they're sneaking all these KYC AML provisions into the act and then on top of that expands the Patriot Act, which I wholeheartedly believe should be repealed. And it it's a it's another example of what you just described, the slow creep of of new rules and regulations where it's like, hey, I Just want to be able to go about my life, make money, save it in the currency that I deem to be suitable for me and my family.

Marty Bent ⋮ And that's all I want to do. There's it's none of your business. I should be able to say make money, save it, and secure it without the government being in my business. And I'm very happy that you are standing up and beginning to beat the drum, like no, we need to draw a line in the sand as an industry here because I think, particularly from the American perspective there's not enough people doing that. And in fact they're they're cheerleading the the shackles to be to be approved by the government right now.

Francis Pouliot [27:42] I'm not an expert in the Clarity Act, but of course, like every person, I follow American politics because it's the Canadian Canadian politics don't matter at all. You know, the only politics that really matter is is the US and maybe the EU. But I haven't seen anything coming from the US that actually makes it easier or better. Or less restrictive for me or my users. Like imagine that bull Bitcoin was to go to the United States, like launch to the US. I I haven't seen anything in the Clarity Act that makes my life as a business easier or that makes my users safer. And I think b Bitcoin has reached a certain place where you can't just ban Bitcoin, right?

Francis Pouliot ⋮ You c you can't you can't just attack Bitcoin head on because there's just too much money involved. There's just there's just too many important and influential people that have exposure to the Bitcoin price. Not that are self-custodying and that are cypherpunks, but that have exposure to the Bitcoin price. So you can't just say something like, the miners were gonna shut you off, or owning Bitcoin is illegal or anything like that. So you you have to allow and facilitate institutional adoption of Bitcoin and stable coins with like stuff like the Genius Act and the Clarity Act. but that doesn't mean that you have to. Make it easier to self-custody and make privacy like legal again.

Francis Pouliot ⋮ so what I'm concerned is that the pro-Bitcoin or pro-crypto political narrative is focused like more exclusively on stuff that you mentioned, you know, like securities violations and you know, banks being able to do some accounting tricks with Bitcoin that they couldn't do before, or people being able to issue stable coins in the United States, as long as they As long as they buy the treasury bonds with the fiat, you know, I I s I see the stable coin as being kind of like the new petrodollar. You know, you can issue your stable coins as long as you're buying our treasury bonds with it, you're fine, you know.

Francis Pouliot ⋮ but if you issue stable coins outside of the US in a non-US bank and you and you don't store in treasuries, you're fucked. kind of like they did with the petrodollar. You know, you guys can yeah, you guys can

Marty Bent [29:37] Mm-hmm.

Francis Pouliot [29:58] Dick for oil in your in your Middle Eastern country, as long as you sell it for US dollars. so so it it is definitely a concern. and there's really never been kind of like a cyberpunk political party or political movement. so it has to it has to happen at the court level, I I believe. you know. E even even if it it's it's easy to blackbill. for example, even with COVID, like a lot of constitutional courts validated the vaccine mandates, for example. So in y you say, okay, well, the the the Supreme Court will save us if it's really bad. It's not always true. but it is it is a lever that that we have.

Francis Pouliot ⋮ It's the only lever that we have, basically. either either we go fully unregulated, which is an option. You know, some crypto companies, some Bitcoin companies might say, you know what, fuck you. I'm I'm I'm not complying and I'm gonna go fully unregulated. but then that is a noble move. It definitely is a noble move, but you have to you have to assess, okay, well, if I do that, what impact am I gonna actually have if I'm basically on the run? For example, you know, you're you're not good to anyone if you're in jail and your service is shut down. That's that's the thing. And you're also not good to anyone if your service is so cypherpunk, you know, like BISC, for example, like decentralized peer-to-peer marketplace.

Francis Pouliot ⋮ I mean, it's fucking sweet. I I mean it's fully unregulated, it's fully decentralized. but you you're not gonna achieve that there's like a critical mass of Bitcoiners that we need, and like we don't need mass adoption, okay. By the way, like we don't need all the normies to get into Bitcoin to have A socio economic and sociopolitical change. We do need like a certain critical mass of people. I I I like to think it's like three percent. I I think three percent is is the number. Why three percent? It's because of the meme with the American Revolution where you only had like three percent of the population in the US that that were actively involved in the US, you know, uprising against the British.

Francis Pouliot ⋮ I don't know if this is true or not. It's just a meme. But anyway, I think you need like three percent of the population to become sovereign individuals and like fully opt out.

Francis Pouliot [32:14] Like withdraw their consent from monetary debasement and withdraw their consent from from the fiat system. But three percent of the population is still a fucking lot of people. It's like my math is probably wrong, but I think it's like 300 million people or something worldwide. right, yeah, exactly. So so you you do need a critical mass of of people. And in order to reach that critical mass of people, you have to remain inside the overton window, so to speak.

Marty Bent [32:27] Yeah, it's like a quarter of a billion. Yeah.

Francis Pouliot [32:43] at least something. And basically I think the best that we can do as a regulated exchange is be within the the win the overton window where we we can operate legally, but be so far at the extreme of the overton window that we can slightly nudge it and push it with these kinds of things. there's all sorts of things that you know in Canada we've been very highly successful at that by the way. not necessarily publicize because we don't want to publicize every victory that we have against the state in terms of privacy because also we don't want to, you know, rub it in their face.

Francis Pouliot ⋮ But there's been multiple instances where the government was like, give me all of this data, and we're just like, no. What do you mean? This is the privacy we have the privacy act in Canada. We have a very strong privacy. Like this is a privacy act, like you're not allowed to ask me for this data. And then then they just kind of like back off. so people would be surprised how efficient it can be just to just say no to a government. And see what happens. it's kind of like again, like, you know, you walk into a restaurant with you know the COVID mandate, you know, what happens if you just say no?

Francis Pouliot ⋮ No, I'm not wearing a fucking mask, I'm just gonna go sit down. Many times it just works. You know, people don't actually bother you, they just expect you to comply. so yeah, so that's kind of like the philosophy that that we've tried to build. And you know, it's a little bit it's a little bit of a business risk for us to do that. But at the same time, I mean everything we're doing is legal and lawful and it's legitimate. And it's kind of like in the US, you guys know you guys know about that. Like if you don't exercise your rights, you lose them. I mean, that's that's why Americans are so I mean, I'm not American, I don't know, but I mean I have a lot of American friends and a lot of Americans that I know are so adamant about exercising the Second Amendment, just like very very visibly, like in public, because they know that if you don't exercise it, it just goes away.

Francis Pouliot ⋮ It's the same thing with free speech. If you don't exercise it, then it just goes away. And if you start to comply tiny bit at a time, eventually eventually your rights are gone.

Marty Bent [34:48] Yeah. No, it's funny with the I'm having flashbacks to an instance where I did this. I got I got funneled into a DUI checkpoint in Missouri in twenty twelve, twenty thirteen, and the cop was like, I'm gonna need you to get out, we need to breathlise you. it's a DUI checkpoint. I was like, No, you can't do that And he was pissed that I knew my rights and said no and he made me do a field sobriety test passed, was not driving drunk, but it was that little like push back knowing your rights. And to your point, I think in the industry, we need more people to say no to the government.

Marty Bent ⋮ Not not only in our industry, I think just broadly speaking, people need to develop the the intestinal fortitude to know when to say no to the government. Like you're trying to infringe on the rights of us as a company and our our clients and we're not going to stand for it. And I think many people would be surprised at how effective that can be. And again, thank God You're doing this and I I think it's important to highlight too. I know it's been seven years since you've been on the show. And for anybody listening, I I think it'd be worthwhile to talk about how you've designed your business, like the whole stack and like I think you guys talking about like working around the edges and within the Overton window, as close to the edge as possible.

Marty Bent ⋮ I think the way you've designed your exchange, how your users buy Bitcoin, it gets sent to self custody, how they sell Bitcoin, the ability to do swaps with liquid and liquid tether. I think from a design and architecture perspective, the way you've built your business, particularly the tech stack, is aligned with cypherpunk principles as closely as possible while operating in the fiat system.

Francis Pouliot [36:35] Ex exactly. And I have we we actu we actually kind of like try to conceptualize this inside the business with a chart, with literally a chart of Speed and on the top axis is like speed and skill and mass adoption. And the other axis is compromise. So we we try to do the least amount of compromise possible and see where we hit the ceiling. Right? Because there's a point where if you don't do any compromise ever, then you can't you can hit a ceiling. So basically we have this like level, again, always like a line where we don't cross. An example of that is, for example, with the bull wallet, you know, I wanted to build, and this is completely unrelated to like an exchange, but it's the same kind of philosophy where we wanted to build the most cypherpunk wallet, but at the same time be usable on on a mobile phone.

Francis Pouliot ⋮ and you know the examples that I like to use is something like Sparrow or Wasabi, which are, in my opinion, the Gold standard of like full cypherpunk software, which is reproducible. It's not not always open source, but it's reproducible. And you can do UTXO selection, and you can do this and that. And like you can connect your hardware wallets and you're fully in control. And both of them are really usable software. Like Wasabi is easy to use-ish. You know, Sparrow is easy to use. Like a boomer can use Sparrow. It's not that hard. So we wanted to build something that's like, you know, very, very similar for mobile.

Francis Pouliot ⋮ But the the problem that we kind of like reached was when we tried to integrate Lightning. when we tried to integrate Lightning, and we initially tried to do something that's kind of like the Phoenix wallet, which is a purely Phoenix is also doing its own set of compromises. So it's not with the LSP, with just in time channels and the the backup system and stuff like that. but when we try to implement liquid, sorry, lightning in the bull wallet, we realize that

Francis Pouliot [38:46] The absence of any kind of compromise just really did actually we did we did hit a ceiling where we we couldn't create a usable product that was satisfying my criteria, which is that I can orange pill a taxi driver and he can leave, I can tip him on my way out of the taxi within a few, you know, within a minute or two, and then he can be onboarded to Bitcoin. So we compromise with Liquid. Liquid was the first big kind of like compromise that I decided to make, and it was very conscious and it was it was very hard. Decision to do, which is like, I'm gonna compromise on pure full self sovereignty and use this other network, which is not as trustless as Lightning.

Francis Pouliot ⋮ but there there were other compromises that we could have made that I think would have would have been worse. and I don't wanna get this is not like a tech, I guess, episode. This is more like a political episode, but you know, eCash, I thought was too much of a big compromise. even Spark was too much of a big compromise. You know, there's other technologies like ARC which are they have different trade-offs. But anyway, so it's about setting up your ceiling of like no compromise. And then once you're once you really hit that ceiling, once you really hit the limit, then you can say, okay, we really cannot reach our goal without compromising here.

Francis Pouliot ⋮ We've tried every single thing that we can, and we cannot. Then you can kind of like raise the compromise limit a little bit and see, okay, if I compromise like a little bit, what what what returns do I get on this compromise? Like you have to think of Return on compromise. That's the new business metric. Okay, fuck return on investment. It's return on compromise. For every unit of compromise that I make, how much units of success am I getting? And that's the way that you have to conceive your business.

Marty Bent [40:15] Ha ha ha. Yeah. Well, I mean, talking about the Tech Sack, I you said it's not a tech episode, it's more political, but I think they intertwine, particularly now with all the this legislation that's coming across the world to really cattle herd Bitcoiners into this digital panopticon. I've been saying this a lot in the last year. It is incredibly frustrating because if allowed to, I think builders like yourself and others out there could rearchitect the global monetary and banking system with a new tech stack that is much more efficient and way is far superior to the incumbent financial system and monetary system that exists there. Like we have the potential to build true sci-fi cypherpunk mon monetary and banking routes and we're just being confined to this compromise matrix that you described because of the insane regulations and the The the thirst for control by by the governments and the supranational unelected bureaucrats of the world.

Francis Pouliot [41:31] Yeah, and there's there's so many technologies that you know pe people think that Bitcoin is like old tech and it's not good for privacy and you know you should use Zcash instead. you've you've you've got the like the suits that are pushing for for Zcash, and then you've got like the Jason Bourne style, you know, hardcore cypherpunks pushing for Monero, and then you've got the retards pushing for Ethereum and so on, you know. but

Marty Bent [41:42] Yeah.

Francis Pouliot [41:56] There's a lot of technologies in Bitcoin. You know, you know, if I was to design it from scratch, like I don't think that privacy would be that much of an issue. and for whatever reason, people are afraid to use Bitcoin privacy technologies in their stack because somehow they think the government is going to be upset at them. There's there are cases in Europe where a bunch of exchanges decided to drop the Lightning Network. And who knows why, for in truth, but I suspect that. It was because they believed that Lightning was not necessarily compatible with like the travel rule or KYC AML laws, which I think is complete bullshit.

Francis Pouliot ⋮ Like when we got our Mika license, like we still kept Lightning and we still kept liquid. we still kept, you know, Pageoin and all those kinds of technologies. And then I'm sure the government, you know, they ask questions about like what is this page on thing? And we're like, don't look at that. It's it's just it's you know, it's not it's it it's not illegal.

Marty Bent [42:52] Sufficient transaction batching.

Francis Pouliot [42:54] It's it's it's collaborative tran transaction batching and it helps you save on fees. And there's a like a side effect that it you know imp improves privacy. same thing with lightning and same thing with liquid. and all you have to do is say, like, no, you have to you have to like def defend those technologies as being like purely valid. And you have to also defend the user against that that's kind of like the argument that we're using in France. It's like let's reframe this as From bad people trying to finance terrorism to people trying not to get kidnapped. And that's a very successful reframing.

Francis Pouliot ⋮ And you know, to your point, like if KYC was not mandated legally, I would still probably do some, we would still probably plead do some voluntarily. a good example of that is in Costa Rica. in Costa Rica, there is no KYC rules. Cause Bitcoin is entirely Unregulated in Costa Rica. There's there's there's no legislation at all forcing us to do any type of KYC. but we do enhanced due diligence and we do KYC some people in Costa Rica because I don't want to have you know, I'm not a fan of Islamic terrorism killing my people in Europe. I don't want to deal with, as a business, I do not want to deal with Islamic terrorists.

Francis Pouliot ⋮ I do not want to deal with there, there there is child trafficking. That is a thing. And some of them might use Bitcoin. I don't think they they do use Bitcoin in reality, but some probably do. There's probably some instances of that where Bitcoin is used. I don't want to deal with that. I don't want to deal with cartels that smuggle fentanyl and decimate my civilization. And I also certainly do not want to deal with scammers that steal money from old people with a bunch of crypto scams. so so there is a point where, even as a business that's not mandated to do KYC, I would still probably do s some of it, especially for fraud and especially to protect elderly people from getting scammed.

Francis Pouliot ⋮ But but that's that's a purely voluntary business decision. you know another thing where the industry has been super cucked, very cucked, is chain analysis. So chain analysis at the same time is a is a big threat to privacy, but at the same time as well

Francis Pouliot [45:21] is a fucking scam. It's a pure LARP. the amount of false positive that you get on chain analysis is surreal. we get a bunch of requests from a bunch of law enforcements and bunch of governments and bunch of people all the time at Bull Bitcoin that are like, hey, our chain analysis is identified that this transaction belongs to you. And we look and it's like no it's not us. So chain analysis just just completely sucks. And I don't think provides and it's not legally mandated. Chain analysis was never legally mandated in any country that I'm aware of. What you have to do as an exchange is to make sure that sanctioned entities are not using your company.

Francis Pouliot ⋮ But what you can do is, and that's what we do, for example, we don't use a third-party chain analysis service. We download the list of addresses and we check internally to see if one of those sanctioned entities is dealing with us. You don't have to send all of your data to third-party chain analysis companies, and I guarantee you that all the exchanges are doing that. Every single Bitcoin address that's ever been used on Let's say almost all of the exchanges, except the select few that are kind of like Bull. Bull is not the only one, but there's like, I don't know, maybe two or three or four worldwide that I know that have like the same approach.

Francis Pouliot ⋮ so you don't have to use chain analysis to be compliant. But then the industry kind of like had this desire to be over compliant and to show the banks that we're doing as much as we want. So we created not we, they created this kind of like meme around chain analysis that in order to be a good Crypto citizen, you have to have this $100,000 a year subscription to the chain analysis software company, and you have to send every single address that you have. And that's a big problem. That's also one of the reasons why a lot of the exchanges they don't support they force address reuse.

Francis Pouliot ⋮ They're forcing address reuse because it makes their chain analysis easier. And what that does is that not only that fucks with everybody's privacy, but it also exposes these addresses to quantum risks. Because if we if you reuse an address, you've revealed the public key when you spend it. that exposes a new level of quantum risk. So so this kind of like it's it's it's not only that people are not fighting back, the industry is not fighting back, but the industry is proactively cucking itself in order to try to dispel the myth of the the shadiness. You know, it's like they have like an an inf inferiority complex, like, no, you know, we're not sketchy, like we're just like you guys, we're just like swallows reap, we're just like banks, we want to play by the rules.

Francis Pouliot [47:49] So we're gonna invent these industry-wide rules. And the thing about like chain analysis, it's an interesting rule. again, that was that was fully created by exchanges, not by governments. The the the the requirement to use chain analysis. And now, like eight years later, if you're an exchange that doesn't, you know, and if you're applying for a partnership with a bank, they're gonna be like, which chain analysis provider do you use? And if you say no, then they're immediately gonna flag you as sketchy. Because we've created this expectation of compliance, which was not required at all. And then and then eventually this this this custom, so this is like an industry custom, customs tend to become law.

Francis Pouliot ⋮ So so you know, currently chain analysis by third parties, like even with Mika, which is really hardcore European regulation, they do not actually legally mandate chain analysis. But if you don't have like a chain analysis subscription, you have to go. Above and beyond to demonstrate that you're still you're still doing that. So yeah, the industry has been cucking itself pretty, pretty badly. and of course it creates a moat, right? And you know, like bull, if I was to start bull Bitcoin today, there's zero chance, zero chance that I would be able to succeed. Zero chance. because the moat of compliance is so big. Like Mika, I don't know how much it cost us, but Part I I don't know, there's all sorts of costs, but probably close to a million dollars just to get the Mika license.

Francis Pouliot ⋮ And it took like two years. And at some point we had like six people working like full time on this for for many, many months. the cost of compliance is huge. And the level of you know, e yeah, it's it's it's it's really huge. And then when when I launched Bull Bitcoin, I launched Bull Bitcoin like like a classic American startup, like in my garage, basically, with no funding, just like hustling. You know, with one person and then two and then three. And then that's kind of like how we were able to, I believe, be so successful is because of the lack of funding. we have to be very, very, very careful about A not spending too much money and B treating the customers correctly.

Francis Pouliot ⋮ Because if if if you're massively funded, you don't really need customers to like you. You just need to raise the next round.

Francis Pouliot [50:06] whereas if you're self-funded, like if the customers don't like your product, then you're fucked because they're your number one source of funding. but like with all the regulation that you had to if I was to start today, it would not be possible. Of course, like the reason why we can afford to spend a fucking million dollars on this license is because through the b because we were early, essentially, because we did that 10 years ago. But if I was to start today, I wouldn't be able to do that. So these companies have obviously a massive interest in creating this smote. to give you an example, like in Europe there was about four thousand something crypto companies in Europe and about two hundred and sixty got a license. I make a license in Europe. So it's like about ninety percent of all crypto companies just got kicked out of Europe. And

Marty Bent [50:50] A week ago, right? It went live July first.

Francis Pouliot [50:53] Yeah, a week ago. Even Binance didn't make it. If Binance can't make it, well, you know, also Binance is, you know, it's Binance. But even Binance didn't make it. And pretty much all the crypto companies, we made it like at the last minute. and it it was a close call. you know, Strike got it. The deadline was like June July 1st. We got it on June 2nd, 22nd. Strike got it on like July 28th or something, like three days before the deadline was over. And then if you didn't get it before the deadline, you were essentially fucked. and yeah, so there's tons of little brokers.

Francis Pouliot ⋮ And that's how Bull Bitcoin started in Europe, actually, was this broker, this Bitcoin-only cypherpunk brokerage from France called Leonode. And they've been operating since like 2018, and they were like a you know, your local, kind of like your local Bitcoin broker. And they came to me and they're like, dude, there's zero chance that there's zero chance that we're ever gonna be able to get Mika. So, you know, either We s we sell you the business or we're just gonna close shop. so I acquired this brokerage in order to get grandfather and it's a long regulatory story, but I acquired this brokerage. and I can tell you I've had many, many people reach out to Bull Bitcoin to be like, We're closing sh shop in Europe.

Francis Pouliot ⋮ We can't afford to comply. do you wanna buy us out? And of course, like I can't, I don't want to. so it's kind of like all all all the small good guys are getting closed down and only the big guys. Very few of the small good guys are able to to remain in operation. So it sucks. It sucks because of course all the Coinbases and Binances and Kraken and all these guys have nothing against them, but they obviously have a vested interest in the regulation because they have the bandwidth and they have the funding and they have the weight, the political capital to to remain in operation.

Francis Pouliot ⋮ So they want these moats. Whether they subconsciously want to expel their competition or not is another thing. But, you know, deep down I'm sure they Coinbase likes regulation. You know, Binance likes regulation except when they get kicked out of Europe, but they they usually like regulation.

Marty Bent [53:01] Yeah, they probably don't mind their competition getting taken behind the woodshed and forced to shut down.

Francis Pouliot [53:05] I don't think they share the same yeah, I don't sh I I don't think they share the same free market ideas as as we do.

Marty Bent [53:14] But they're they're liberating they're liberating finance and money on the internet. That's what Coinbase is doing. They're bringing freedom money to everybody.

Francis Pouliot [53:24] They're they're democratizing finance. That's that's what I heard, yeah. with with USDC and prediction markets and gambling and democratizing gambling is more like it, but yeah.

Marty Bent [53:34] Well Yeah, it's disgusting. on the point of chain surveillance too, I I know we talked about it you you mentioned it a while ago, but I wanted to bring it up. Like Roman Sterlingov's in jail and it's like there's been plenty of people pointed out that like chain analysis, their analysis of what they deemed to be him buying that domain was completely wrong. And still he's in jail. The defense said, Hey, can we audit chain analysis? their systems to make sure that they actually did this right and they said no, it's a black box. You don't get access to it. It's proprietary.

Francis Pouliot [54:11] That is one of the biggest travesties. It is very it is very dangerous. And I can I can confirm and guarantee that chain analysis reports are being used to get warrants and also to convict people and there are false positives. So this is like the equivalent of using 1970s fingerprint technology to convict somebody of a crime based on probability heuristics which are completely bogus. I have some personal stories that I will I will share eventually. I don't want this to be the the scenario, but I have I can guarantee you that false positives are are very bad. People are getting arrested with false positive chain analysis, and it's fright- it's frightening because judges will take a chain analysis report at face value and consider it to be as damning as DNA fingerprint on the gun, like the video camera.

Francis Pouliot ⋮ Like, like chain analysis will come up with this report, say, okay, Roman Sterb Sharonov is the guy that was operating the Bitcoin fog because of this PDF that I have, which proves that it's it's him. The judge will s will see that and be like, that is the same thing. It has the same weight as a fingerprint on the gun. And there's like video camera with like 93% facial recognition and The DNA was on the victim. they really believe that this evidence is is like flawless. Whereas I can guarantee you that it's fucking retarded because it's it's so retarded. And even there's a brilliant report by Peter Todd where I don't know how this wasn't like major news, but Peter Todd in his report on chain analysis and wasabi points out that he was at a dinner with

Francis Pouliot [56:15] one of the founders of chain analysis or like a VP of chain analysis or something.

Marty Bent [56:19] He was drunk, right? And he was g loose lips.

Francis Pouliot [56:22] He was drunk and he was bragging that their shit is fucking phony as hell. It's complete LARP. it's just it it's a warrant factory. You wanna you want a warrant on anybody in on earth? Just go to chain analysis and you know, they'll find a way to link his Bitcoin to some crime. And then they meet you at the airport and they fucking cuff you. And then you know, and then you have to hire your own counter chain analysis and then it and then it becomes a battle of experts. yeah, it's it's it's frightening. That's part of the reason why I'm so interested in technologies like page oin, for example, because one of the foundational heuristics of chain analysis is the common input ownership heuristic.

Francis Pouliot ⋮ There there's a lot of false assumptions that chain analysis makes. some of it is about identifying change, and some of it is about fingerprinting and stuff like that. But the the the worst one I think is the assumption, chain analysis makes the assumption that every input in a transaction belongs to the same person. And from this heuristic, they build their analysis. so part of the reason why I'm so involved in building and promoting PageOin is that on a on a massive scale, if enough people use PageOin, and and what Pageoin does is it it breaks this heuristic. Like in a PageOin transaction, the the inputs don't belong to the same person.

Francis Pouliot ⋮ Some of them some of them belong to the recipient and some of them belong to the sender. so if a sizable percentage of pay of transactions on the network are pay join, then at a legal level, we can actually legally challenge chain analysis as evidence. And there's there's a legal principle in in US case law, which I think that would be probably the next legal battle that I want to do, is to is to challenge the legality of chain analysis to be like, hey, it is based on faulty evidence. Like, like, and if that's the case. then not only can it not be used for a warrant, but people that were convicted, they should be retried because the evidence was not was not good.

Francis Pouliot ⋮ Ki kind of like, you know, I think this is a common thing where, you know, 30 years later w now that the DNA evidence is better, we realize that the previous DNA evidence was like was not was not good. so that's probably the next and again, that that's that's we need to be using the courts to our advantage. Like cypherpunks write code, but cypherpunks also use the the legal system.

Francis Pouliot [58:49] We don't really we don't really have the choice. I I really do believe that. I've had many discussions with cypherpunks, and they they also tell me like yes, this is is this is a key cypherpunk principle is to is to, you know, I you know you know, Hal Finney and like Adam back, we you know, with the arms export kind of thing that they did, like like we need we need to we need to there we go. Cypherpunks, yeah. Hell yeah. Yeah, so cypherpunks use the law.

Marty Bent [59:12] That's why I have this. Always in the background.

Francis Pouliot [59:19] To their advantage. And they also fight legal battles. And I I also want to make a distinction between political battles and legal battles. I think political battles are are not fully obsolete. They're mostly obsolete, but thank God we still have some kind of legal system where the courts are presumably at least making a half assed attempt to protect the rights of the individuals, and we should leverage that to the maximum.

Marty Bent [59:46] Completely agree. What what's the current state of page one adoption? Obviously you guys have implemented it and what you're doing at Bull Bitcoin. I think there's a couple others maybe, but are you talking to any 'cause I I think if you get exchanges like Bull Bitcoin, we need a few others to do it and that's a good a good jumping off point to get towards that critical mass that you described earlier.

Francis Pouliot [1:00:13] So when we integrated PageOin, it was kind of like the reckless thing to do. It was very early alpha level technology. And there was a few other companies that did it at the same time as us. There's Cake, Cake Wallet, a a shitcoin wallet, but we love them anyway. and Sparrow and Blue. But all of us were kind of like on incompatible versions of PageOin, because either The technology was shifting so much that there was like breaking change, or we were using different pageoin protocols, like Blue was using Samurai's pageoin protocol, and Sparrow was using, I think, also Samurai's PageOin protocol, whereas we were using BIP77, anyway, technical stuff.

Francis Pouliot ⋮ but the Pageoin project, which is supported by you know private companies but also a lot of nonprofits, has reached a level where we have what's called Pageoin version one. where the protocol is stable. So Bull has it. 23 or something. Anyway, long story short, bull bull is upgrading to the latest version. Everybody's doing that. Cake is also upgraded to the latest version. So cake and bull are gonna be compatible. And in terms of exchanges, I think that so technically bull, this is kind of like breaking news, but PageOne was only in the wallet. It was not in the exchange. so we've just managed to put it in the exchange.

Francis Pouliot ⋮ It is currently in the exchange now. It hasn't been announced, and it's it's kind of like hidden from the general public. It's like an experimented an experimental feature. But Bull is now the exchange now has Pageoin, allowing people to buy and sell Bitcoin with PyJoin. and I believe that a bunch of a bunch of others, maybe two or three that I know of, that are either exchanges or swap providers, are Swap providers would be would be massive, like companies like Boltz, like you know, if they were to integrate page on, that would be massive. so it's unfortunately the adoption is low. Adoption of PageOn is low.

Francis Pouliot ⋮ but think about it like this: like if the bull wallet and the bull exchange talk to each other and both have page on and transactions are page-on by default, like every single transaction between a bowl wallet user and the exchange is gonna be page one by default. So just that is gonna create. Tens of thousands, hundreds of thousands of of page on transactions. If you add bolts to that, everybody that does a swap with bolts from the bull wallet, that's gonna be another page join. And if you add cake to that, anybody that sends it and it's it's gonna be growing. And then of course there's there's Sparrow, and then there's Wazabi as well.

Francis Pouliot ⋮ so it's low right now, but I think it's it's just because the technology was early. PageOne is really complicated. it's it's not it's not that simple.

Francis Pouliot [1:02:59] And of course, the other big one is silent payments. I'm insanely bullish on silent payments. you know, when Sparrow introduced it, people were like, well, it doesn't really do much. it doesn't solve chain analysis. Yeah, it solves the address reuse problem. And address reuse is the number one cause of Bitcoin privacy issues because so many people reuse addresses that it's kind of like the chain analysis companies can cluster a bunch of entities because If if a lot of people are really bad at their privacy, like you who are good at your privacy, you stand out, essentially. so other people reusing addresses is bad for them, but it's also bad for us.

Francis Pouliot ⋮ and part of the reason why people reuse addresses is because we like to have a reuse usable payment code. You don't wanna have to like let's say like for your mining pool rewards, like you don't wanna be every time you get a payout, you don't wanna be putting a new address or something and or If you're like DCAing or something, you don't want to have to put a new address. Or there's there's tons of reason if you have a donation. You know, the Pirate Bay on their website has a static Bitcoin. Everybody that's using a donation address puts a static donation address. so silent payment really solves that.

Francis Pouliot ⋮ And that's something that we've been working on. there was a pull request that was just opened today. Finally, after one year of RD, we actually literally opened the silent payments pull requests in the bull wallet this morning. And we're also bringing it to the exchange as well. So that again, like the user of the bull wallet would only give one address to bull forever. it's gonna be a silent payment address, and we will just generate new addresses on the fly. so there are tools and there are technologies. You know, there's liquid, there's you know, eCash, which I'm not I it's it's a bigger rabbit hole to to talk about, but liquid swaps, lightning, pay join, silent payments.

Francis Pouliot ⋮ There's there's other experimental technologies. There's another one that I'm looking at now called OctoJoin by this guy called Floppy. very interesting transactional tool. and people are building awesome software. That's also one of the really nice effects of vibe coding and the AI software revolution is that it

Francis Pouliot [1:05:11] reduces the asymmetry of of of power between the state and the individual because the state has enormous power for surveillance and and we as individuals we don't have like seven thousand engineers and a data center to protect ourselves like the NSA has, you know? But now that we have vibe coding, we can build self-defense tools very cheaply. So one of the best examples that I know is this these guys They have something called MIX I'm I Exposed. And it's an open source chain analysis that you can run yourself and you can see what the chain analysis companies know about you by replicating. So and of course, like if you look at the software repository, it's not slop, like it's it's pretty cool, but you can tell like this is vibe coded stuff, you know what I mean?

Francis Pouliot ⋮ Like the the the capital required to build this kind of software, like five years ago, this would have like a five million dollar, you know, VC raise. To build this kind of software. I need, you know, you need a runway for like three, four years with like, you know, seven, eight engineers and like, you know, a product manager and that kind of stuff. Now you can just build these tools yourself. so so yeah, I'm pretty excited. Like even the stuff that we've been doing with the wallet, like of course, as a wallet developer, you can't vitecode a wallet. That's that's that's asking for trouble. But you can do a lot of testing and like you can save a lot of time.

Francis Pouliot ⋮ So like The pace, the pace of progress that we have as cypherpunks, and again, like you can't do slop with cryptography. It's very dangerous. But it is 100% true that we are accelerating way faster than the state, than the bureaucrats, right? so I'm I'm very bullish on that because it's kind of like you know, drone tech or you know, 3D printing, or you know, look at 3D printing now, like it's fucking insane what you can do with 3D printing. Look at so, you know, right now I think we're still at the liberator level of AI, you know, like the first 3D printed gun. But in two years, I mean sovereign individuals are gonna be able to do a lot of damage, so to speak, like, you know, metaphorical damage.

Francis Pouliot ⋮ anyway, I can't I'm kind of rambling. But I'm not I'm not bearish. I'm not bearish on the state of the cypherpunk movement, even though I am very concerned, for sure, because I'm probably more I'm I'm probably less concerned than a lot of people.

Francis Pouliot [1:07:36] But I'm probably more accurately concerned than a lot of people because I being inside the industry as a regulated entity, I can see the tag vectors. I'm not as concerned because I also know that there's methods of resistance that are being employed. so I am worried, but I'm also bullish. I'm also bullish on the cipherpunk principles of Bitcoin. a lot of people are are blackpilled about like Sailor and BlackRock and whatever. Bitcoin has been co-opted and whatnot, like the cypherpunk dream is dead and blah, blah, blah. And and that's just because the ratio of noise to signal is like higher, right? The ratio of of noise to signal is higher because the absolute amount of like garbage slop in Bitcoin, like NGU, Bitcoin Treasury Company, you know, Wall Street financialization of Bitcoin is increasing more than the cypherpunk base. So

Marty Bent [1:08:17] Mm-hmm.

Francis Pouliot [1:08:35] The the institutional narrative and like the anti-cypherpunk narrative of Bitcoin is increasing faster than the cypherpunk, but who cares? Like what matters is the absolute amount of cyberpunks working on Bitcoin. I don't care about the ratio of cypherpunk to non-cypherpunk in Bitcoin. I care about that. I I care about the absolute number of cypherpunks in Bitcoin. And being in this space, and of course, there are like signal chat groups and you know telegram groups where the I talk with a lot of privacy devs and we meet in person at conferences and we work on technology collectively. And I've never been so stoked, by the way.

Francis Pouliot ⋮ Like all the wallet developers are, I mean, I wouldn't say we're all friends, but a lot of us are friends. Like I talk with the cake guys, I talked with the Sparrow guy about silent payments, I talk with Breeze, I talk with these guys. Like we talk all the time. I talk with Aqua. and we're most of us are on the same page when it comes to privacy tech.

Marty Bent [1:09:34] I love to hear that. And that's I'm happy you said that because I I agree there's a lot of black pilling out there. But similar to you, I mean I'm I don't have as much inside knowledge in terms of the attack. I I think I understand them pretty well, but you see it day in and day out. And obviously you're talking to these wallet developers. I talk to a lot of the privacy tech people too. But just again to reiterate the vibe coding unlock is real and When it comes to black pilling, yes, the noise is way louder and yes, you may not agree with what Michael Saylor is doing.

Marty Bent ⋮ You may think it's gonna end in cataclysm, but it doesn't matter if you can run a node, if you can create a private public key pair, if you can use tools like pay joy and silent payments and use Bitcoin the way in which you want to, which I hope is in a sovereign and and private fashion. It's never been easier and it's only going to get easier from here.

Francis Pouliot [1:10:26] It has never been s this easy. And people who said that Bitcoin was better ten years ago, shut the fuck up. You have no idea what you're talking about. No idea whatsoever. running a node like, dude, like I have my where's my start nine? It's right here. Well, you know, I don't want to dox my location, so I'm not gonna turn my camera. But I have my start nine right here next to my Sterlink. just like Connect connecting a self-custodial wallet to your own Electrum, using silent payments and pay join on your phone, doing swaps, like like it's nothing. Like you can do that like with a few clicks.

Francis Pouliot ⋮ Like people have absolutely no idea how bad it was like 10 years ago. And you know. Ever everybody everybody that says that that Bitcoin is that it's not advancing or it's not progressing or that the cypherpunk dream is dead is selling you something. They could be just uneducated, but I think most of them know, but they're selling you something else. they're selling you either a shit coin or a financial product, basically. Right. They so it's either of course, and like for example, you know, self-custody.

Marty Bent [1:11:30] Zcash. Z cash. Getting the Z Cash. Bitcoin's dead. Getting the Z Cash.

Francis Pouliot [1:11:38] So there's there's like you know two major components to making Bitcoin better. It's privacy and self-custody, right? And of course, you can't have privacy without self-custody by definition. so you need to work like that's why we work so much on self-custody. I see it as the foundation of everything else. Like every property that makes Bitcoin valuable as money, so the things that are on the on the sales pitch, you know, when you sell Bitcoin, censorship resists, it's it's this, it's that, you can't change the rules. it's immutable, it's trustless, it's private. All of these features of Bitcoin that are on Michael Cero's pitch deck stem from the fact that you can self-custody it.

Francis Pouliot ⋮ If you can't self-custody it, then all those features kind of like disappear. And the second one, the second layer is is privacy. And like there are problems with self-custody, but there's a lot of entrepreneurs. you know, back in the day, you know, there there's a certain type of individual. Which is again today liberated with AI, because they can do stuff now that they couldn't before. But when you see a problem, I see a business.

Francis Pouliot [1:12:49] And I see I see a marketing campaign. I see a new feature. And I see a new market. That's that's what I see when I see a problem. And I'm not the only one. Like there's tons of people that are like call it cypherpunk entrepreneurs. so of course, like like self-custody is is a massive problem. we've built tools, for example, like the the main thing that I that I think that I'm the most the most proud of in the last couple of years is our backup protocol called recoverable. I mean it's not it's not fancy, it's not like really well known out there, but it's a very clever way to create an encrypted backup that is safe for the cloud using a key server protocol anyway.

Francis Pouliot ⋮ So so it's this tool in the bull wallet where you can do a backup in like 30 seconds, and it's very secure. It's very, very secure. It's not as secure as like 12. 12 seed in in in a plate, but it it makes self-custody like extremely, extremely simple. kind of like the stuff that we did with you know, one of the things that Aqua and Bull came up with this at the same time, by the way. None of us were first. it it's actually a I think I was first, but Aqua also thinks they were first. Agree to disagree. but Aqua and Bull came up with the same idea at the same time, which was I think A consequence of the first spam attack in 2023, where we realized that, you know, a mobile wallet where you manage channels on your phone, kind of like Phoenix, does not work if the network fees are 150 Satoshis per bite.

Francis Pouliot ⋮ It just doesn't work because you need to open too many channels and it locks up too much liquidity anyway. so that idea of like having what's called a graduated wallet. So Bull and Aqua were the first two graduated wallets, and that's like where you have like A liquid or eCash or Fediment or I don't know, like a Spark or something, and it's using swaps to communicate with a lightning network. so I'm really proud of those tools. And then of course there's multiple other things that we need to work on, like inheritance. Inheritance is the next big step to solving self custody. But again, like these are problems that are being worked on.

Francis Pouliot ⋮ So if someone is selling you, because the people who are selling you away from Cypherpunk Bitcoin, they're selling you

Francis Pouliot [1:15:14] It's not private, so use Zcash. And you can't self-custody your coins. It's not safe for you to do that. You're not ready to do that. So buy my stonk. Right? so I want to make sure that these people run out of arguments. And also the the argument, like, well, you can't spend your Bitcoin anywhere. We've solved that too. That was like one of the first things that I tried to solve when I was starting out as an entrepreneur in 2013. It's gonna, where can you spend your Bitcoin? Well, that's why we started Bills, which then became Bull Bitcoin. That's already been solved with companies like BitRefill, like Bitcoin Jungle, all these things.

Francis Pouliot ⋮ Like, you can spend your Bitcoin. Like this is not an this is not a serious argument, you know, with of course with Square in the United States, like you can't have a serious debate with someone who's like, Well, you can't spend your Bitcoin. Shut the fuck up, man. There's like, look at this map. Like I can I can buy Bitcoin, I could we c we can we can walk down the street in any American city right now, and I will probably find within a few minutes A a shop that accepts Bitcoin because of the work of the cypherpunks. Like, you know, I wouldn't say that Square is necessarily Cypherpunk, but you know, close enough.

Francis Pouliot ⋮ Like they're they're they're pr they're pretty good in terms of of of doing things the right way within their, you know, they have a different box because they're, you know, a publicly traded company and it's a massive, you know, global empire now. but they've done it pretty well. So anyway, just a a lot of words to say that I'm very bullish. That's it.

Marty Bent [1:16:39] I am as well. as it pertains to DACA, the the legal battles and and honestly all the cypherpunk tech that we've been talking about for last portion of this conversation, what what calls to action do you have for anybody out there? How can we help on the legal front? How what

Francis Pouliot [1:16:57] com. I did buy the domain just to rub it in their face. com is a website which basically shows all the arguments for repealing DAC8 and explains our legal strategy. com and like educate yourself about what that is. I don't really have that much of a call to action because When we decided to fight this legally, we decided not to do an industry group and not to do a crowdfund and not to do like a big thing. Just because of the overhead of doing those things, we're just like, fuck it, we're gonna pay the lawyers ourselves and we're gonna do it ourselves. so we don't have a donation page, and we don't really have any real way for people to help us.

Francis Pouliot ⋮ we have one partner in this lawsuit, which is another crypto exchange in France, the only other crypto company. that I talked to that was willing or had the balls to to do it. so there's no donation page.

Marty Bent [1:18:34] We'll link to that in the show notes so you can go download and use it. Highly recommend it. Francis, there's not many of you out there. There's only one of you out there. There's only one of you out there. And I'm very glad that you exist because I think what you're doing, what you have done for over a decade now at this point has been extremely impactful for Bitcoin and very important for the ability of individuals to use Bitcoin in a in a sovereign fashion. And particularly in this era of Bitcoin, a lot of what you do is overshadowed by by the the orange ties and the suits. And I think it's important to remind people that the cypherpunk dream of Bitcoin is nowhere near dead. In fact it's more alive than ever, because of people like you. So I just honestly, earnestly thank you for for all the work and the commitment that you put into this.

Marty Bent [1:20:14] Alright, peace and love freaks. Take