Block’s latest push reveals why Lightning is working, why merchant adoption matters now, and why Bitcoin’s path to becoming everyday money is finally opening up.
Block’s latest announcements mark a major inflection point for Bitcoin’s “everyday money” narrative, something many Bitcoiners believe is essential for achieving Bitcoin’s full potential. Steve Lee explains why daily spending matters even if you’re a long-term hodler: more usage strengthens Bitcoin’s resilience, decentralization, political relevance, and price discovery. Lightning’s role as the “glue” between emerging Bitcoin subsystems, Cashu, Fedimint, Arc, Liquid, custodial apps, and more, shows it hasn’t failed, despite critics. Public metrics like channel capacity understate Lightning’s health; private payment data at Block shows ~15% monthly growth for two years straight. The conversation digs into why US merchants care, fees crush margins, and Bitcoin payments finally integrate seamlessly through Square, plus how discounts like Pink Owl’s 21% promo will bootstrap consumer adoption. Spiral’s grant strategy focuses on high-impact infrastructure no VC would fund: Lightning Development Kit, privacy tools, and now Payjoin, which could meaningfully break heuristic chain-surveillance. They highlight how no-KYC rails are essential not just for privacy, but for UX, AI agents, micropayments, and onboarding billions. They also make a call: Bitcoiners must actively contribute, bootstrap merchants, push for de minimis tax reform, repeal the BSA, defend open-source developers, and build toward a multi-decade transition where Bitcoin becomes true global money.
“Even if you’re only in it for number go up… you should still care about daily usage. It makes Bitcoin more resilient.”
“Lightning is the glue between all these subsystems. Users just send and receive Bitcoin, that’s all they need to know.”
“Calling Lightning a failure is ridiculous. If your expectation was 8 billion people with mobile channels, that was never realistic.”
“If 10% of merchants eventually self-custody, that’s millions of small businesses looking for Lightning-based solutions.”
“Prices going up means you need fewer sats in channels. Capacity is a terrible metric.”
“Silicon Valley missed that Bitcoin isn’t disrupting Visa, it’s disrupting the dollar.”
“No-KYC isn’t just about privacy. It’s about user experience. KYC kills onboarding before it even starts.”
“Payjoin destroys the common-input heuristic. It benefits everyone, even if only a small percentage use it.”
“We have to keep investing in trust-minimized systems, even when people say they’re dead or failed.”
“Remain optimistic. Even if the price is going down, we’re going to win.”
This episode makes the case that Bitcoin’s next era is about activation, not waiting. The technology stack is maturing, merchant incentives are real, Lightning is healthier than public metrics imply, and new application layers, AI agents, micropayments, no-KYC wallets, are finally feasible. But it won’t happen on its own. Bitcoiners must push merchant adoption, protect open-source development, build tools, improve privacy, and reshape policy toward a world where spending Bitcoin is normal. The message is clear: the infrastructure is here, the momentum is real, and a multi-decade transition toward Bitcoin as global money is already underway.
0:00 - Intro
0:21 - Why spend bitcoin
8:07 - Building payments tech at Spiral
11:34 - Addressing haters
18:14 - SLNT & Unchained
20:03 - Distribution/privacy of LN
24:09 - “Bitcoin is here” narrative
31:03 - CrowdHealth & SOTE
33:14 - Presidio Bitcoin
35:06 - Consumer conversion
46:45 - V4V
49:53 - Vibe coding
53:08 - AI agentic payments
58:38 - BSA
1:05:41 - Payjoin Dev Kit
(00:00) If 10% self-custody, that would be millions of small businesses who are looking for like a lightning based solution for accepting money. If you feel that strongly that fiat is crap money and Bitcoin is strong, then go all in on Bitcoin. Have all of your money in Bitcoin that hold no dollars or fiat and then you have to spend Bitcoin.
(00:17) Don't the Ves suck? Aren't they like a significant part of your profit margin? Wouldn't you like to get rid of them? They're going to say yes. And that's the book. Thank you for having me in your studio, sir. Great to be here. As we were just saying, this is the first time I've been interviewed in the studio, so I'm excited for it. I am, too. I mean, this is a long time coming.
(00:39) We've been talking behind the scenes for many years now. Yeah. I've never been on the show. I know. I'm sorry it took so long. The uh I mean, it's been a big week for the block organization. Yeah. The p past week extended into this week. There's a there's even more more announced on Well, yesterday, the DC policy stuff. Oh, yeah. the dimminimous tax.
(01:05) So, there's been a good week and week and a half of uh really great stuff from Block and extended to the whole Bitcoin community, I think. Um I finally I got through the whole Mile Sudtor episode of yours. So, I I'm I'm up I'm up to speed on that. He did a great job talking about uh all all the efforts. Um and then today's the uh investor day for Block.
(01:24) Um which only happened there was one like three years ago. Mh. that was co era so it was like remote remote and you know this one will be in person and I think a well better for two reasons one there's a ton of exciting stuff to share and then being just being in person it's more intimate and better feel to it well the reason I bring up the week that was for Block is because a lot of the products that were launched revolve around using Bitcoin as everyday money obviously payments and merchant adoption and it aligns very well with correct me if if I'm wrong, but based off of our
(01:58) conversations over the last few years with something that you're worried about, which is if Bitcoin doesn't become everyday money, it's not going to attain the full potential that you think it can. Well, that's definitely true that it it would not attain uh full potential. Then the question is can it can it just be digital gold and sustain with all the properties we that make it valuable as store value? I think that's a really interesting question to get into. We can we can certainly talk about it. Um but there's no doubt it doesn't
(02:29) reach its full potential. And I also feel strongly that um even for people that are into Bitcoin, you know, everyone's in you know there's different reasons people are into Bitcoin, right? But for the for the group of people who are just in it for number goes up, they believe in store value and that's it. That's completely completely fine.
(02:50) But even for that um group of Bitcoin users, they should care. My opinion, they should care about daily usage. It makes Bitcoin more resilient. It gets more people involved using it. More people um will care about it. So like in terms of like a political force and voting voting segment, it grows. Like imagine if millions of small businesses around the world depend on their for their business. That's a strong voting block.
(03:14) Um, it also helps distribute the pricing of bit price discovery of Bitcoin because instead of just a few global exchanges as the primary points of discovering the price of Bitcoin, um, you'd have millions of touch points around the world where people are exchanging value.
(03:37) I come to your store, you give me, you know, I buy fish from from you or whatever or bread or whatever and I give you Bitcoin and we're establishing a price right there. And that one single instance isn't going to really move the needle, but billions of those data points on a reg, you know, on a daily or weekly basis or whatever absolutely uh helps establish the price.
(03:55) Steve, why would you spend your Bitcoin? There's only 21 million and it's going to That's another thing I feel pretty strongly about. It's a multiundred trillion dollar market cap potential and it's only $2 trillion. Why would you spend your Bitcoin? You should absolutely spend your Bitcoin here. It's definitely a common thought process to you know I mean people who own Bitcoin most like believe it's going to keep going up a lot right uh including me probably including you um so why would you you spend it well so multiple reasons one um humans are already accustomed to like the concept of a spent like checking account savings
(04:26) account or like spending money like in your wallet or purse and then like your IRA or something so that that mental construct is very normal for for folks. So sure if if you have your stack that is your Bitcoin savings, don't touch that. Don't don't spend from that. Don't touch it. Like cold storage um secure it uh and and don't mess with it.
(04:52) But you know, if that's like tens of thousands of dollars or more, whatever, great. Your spending wallet is like, you know, 20 bucks, 50 bucks, 100 bucks, whatever you'd have in like your your billful, maybe a couple hundred bucks. But just spending amounts of money um for that just spend and replace, spend and replace.
(05:09) Uh and I mean for super hardcore Bitcoiners who are just like throw out Gresham's law at you or whatever. Um if you feel that strongly that fiat is crap money and Bitcoin is strong, then go all in on Bitcoin. Have all of your money in Bitcoin, hold no dollars or fiat and then you have to spend Bitcoin because you because because uh that's the only way the only money you have.
(05:37) So I think um I I think people can still be strong hodlers and still spend Bitcoin. Then there's the reason I just mentioned which is even if you care about your stack that you're saving by spending it, it actually strengthens Bitcoin overall, the network, the resilience, uh and it and it protects it as a store of value. Yeah. The distribution.
(05:58) And when it comes to spending Bitcoin, building on what you were just saying about living on a Bitcoin center, I mean, Parker, our good friend Parker Lewis has run the numbers. I I forget the exact name of the the post that he that he wrote earlier this year, but it was basically the logic of spending Bitcoin and if you actually run the numbers over many years, if you use Bitcoin as your long long-term savings account and actually spend it as well on top of that on a Bitcoin standard, you can run the numbers. you're actually you're still making money. You're you're ending up with more
(06:26) purchasing power, which is actually my personal situation. Like Block pays me and folks on the spiral team in Bitcoin. So I receive it as Bitcoin. I I keep it in Bitcoin and then I I only convert it to dollars, you know, when I need if if I have to make, you know, still sadly, but you know, most realistically most of my payments are still are denominated in dollars. So then I will convert sort of on demand.
(06:50) It's the uh it's the way I do it as well. Yeah, it's it's great living on a Bitcoin center. It's hard. It has been hard historically from a UX perspective, but it's getting easier. I mean, the products are making it very fluid to switch from Bitcoin to fiat to bill pay features and strike cash app and top two.
(07:08) Well, certainly like with Cash App's announcements and and new features uh from the past week, it definitely helps, right? Because it now all four combinations work. You can I can have Bitcoin pay you as a merchant. you know, I can pay you in Bitcoin, you receive it as Bitcoin or Bitcoin to dollars or dollars to dollars, dollars to Bitcoin.
(07:26) So, sort of each party in that two-party transaction uses whatever they're comfortable with and what they want to do today. And I I think some some Bitcoin some hardcore Bitcoiners might like say that's fake or not really embracing Bitcoin. It's a it's a baby it is ab it's absolutely a meaningful baby step.
(07:46) Um, and everyone has their journey with Bitcoin. Not everyone starts as like hardcore fully embracing and understanding self- sovereignty and privacy and all these important properties of Bitcoin. So, um, meeting people where they're at today, whether they be the small business or the consumer, uh, gets them started on that journey. Yeah, preference optionality is is how I would describe it.
(08:11) But to get to all this, many people sort of gloss over or simply don't understand, particularly the masses, that there is technology needed to be built to enable people to live on a Bitcoin standard and use it as a as a payments vehicle. Yeah. And that's been a lot of your focus at Spiral.
(08:30) Um particularly open- source infrastructure around the lightning network um and and privacy as well. And so how would you describe the progression of the technology layer of this payment stack over the last five years? Yeah, so for people that don't know, Spiral has a full-time team and um most of that full-time team focuses on the Lightning Development Kit uh project.
(08:54) We also have a really robust grant program and fund over a dozen open source Bitcoin projects as well. So um our scope is Bitcoin, but we do fund and support many different projects in the space. I'd say overall we we tend to fund protocol development and um developer tools because six six years ago when we got started that's where a couple things one that those were very weak areas in Bitcoin and two they're not really naturally money-making opportunities.
(09:26) So like it's not going to attract venture capital or angel investment or be able to generate quick cash flows for an entrepreneur to bootstrap. yet they're really impactful important things. So I felt like with Spiral's budget, we have these magical dollars for Bitcoin to give to developers to work on high impact projects that that don't have a business model behind them. U and that's our criteria with all our grants, too.
(09:46) Like if if you came to me with a great idea, but also one that could make money, I'd be like, "That's awesome, but we're not going to give you a grant." And because it's like you you can go build it yourself, generate money, or or get VC money. Um, and I, you know, and I totally support that. So, we're looking for projects that are high impact that that that aren't going to make money.
(10:04) Um, and developer tools and protocol development are two categories that that fit that. So, um, yeah, but the full-time team has focused on Lightning Development Kit. Um, any anyone who's followed along with Lightning at all knows it's it's a very complex protocol.
(10:26) Um it's very ambitious protocol because it intends to like scale Bitcoin and and improve the U user experience relative to onchain in a dramatic way but preserve as many properties of onchain Bitcoin as possible and it it does a it does a I think a a really good job at preserving those properties. It it's a little bit weaker security model different and weaker security model to onchain but it does a relative to all the other new protocols that have popped up it still is the king.
(10:50) Lightning's the king at preserving those properties. Um, user experience has improved dramatically both for the developer and the user over the past six years. It still is not it still has some rough edges. Um, some of which are are fundamental. Mhm. And so we can talk about other payment protocols as well which choose different trade-offs. Yeah.
(11:12) Well, important to bring up trade-offs. mention like not the same security asurances as onchain, but this is what happens when you move up layers. Like you make the trade-offs for UX usability, but you can always fall back to the main chain and reap the benefits of all the benefits that exist there security um ability to self custody, which we'll talk about with lightning.
(11:38) But before we go on to sort of the overall state of lightning and um emerging second layer protocols as well, what would you say to the haters to say it's a failed experiment, it's centralized, it can't scale and people nobody uses it? Um well different answers to different points you made there. But I mean overall to call it a failure I think is ridiculous.
(12:02) Um I mean I under I can certainly steal man why people are saying that if you have certain expectations or you had a certain use case in mind like if if your expectation was 8 billion people with a mobile wallet each with like one or more lightning channels um that if that was your expectation and a great UX then um then it's failed at that and and it no no one ever no one ever expected it to scale to that point.
(12:25) I mean it's simple math like with the because it's it's a function of the blockchain size. So it can't scale um that much. But has it failed outright? Absolutely not. Um because it it it definitely has one at being the glue between a bunch of different subsystems. And those subsystems could be custodial like products like Coinbase or Cash App um or all the other systems that have popped up like Arc and Spark and Fediment and Cashew and these new um layer 2.
(12:54) Tell me about liquid blockchain. Liquid as well. Yeah. Yeah. Liquid as well. Uh you know whether you want to call you know let's call it layer two or I'll call it a subsystem. I like the semantics too. I like subsystem. subsystem, but the these, you know, they they all have trade-offs and and I can I'm happy to go through each and every one of them if we want to. I think they all have merit. All the ones we just mentioned have merit.
(13:18) I'm not a hater on any of them. In fact, Spiral supports almost almost all of them. Um, but the, you know, if you live in the Ethereum world or Salana, if you're using like stable coins there, it's a total nightmare in terms of UX and interoperability because I might have dollars on like USDC base or something and you have USDT on Tron and they're not compatible.
(13:41) So then we have to like as users, we have to like bridge or swap or do do like crazy stuff that just to send dollars. But on Bitcoin, Lightning is the protocol between all these subsystems. So I simply uh am sending and receiving Bitcoin as a user. That's all you need to know. I'm sending and receiving Bitcoin. You're sending and receiving Bitcoin.
(14:01) You might be on a Cashew wallet and I might be using custodial cash app. Um I don't have to know you're using a cashew wallet. You don't even have to know you're using a cashew wallet and we can send and receive Bitcoin. So uh and what makes that tick? Uh it's the lightning network and also the payment protocol.
(14:18) I mean right now bolt 11 but in the future it'll be bolt 12. So um that that glue is uh essential. So it's it's absolutely one at that. It'll keep winning at that. The only way it's displaced is if one of those subsystems um ends up being subsumes the subsumes and if all all use cases and all payments work on through one of those subsystems or some future invented one and we'd all like to see that.
(14:48) We'd all like whether it's lightning arc zero knowledge proof rollups or something no one's have thought never thought of before. We'd love to have a technology that checks every box and scales to everyone and every AI and every machine and every possible use case. We'd love that. Um that is not on the horizon right now. It's it's there's will it ever be.
(15:05) And will it? Yeah. So given what we know now, there's no way in the next 5 years that's going to happen. So in the best case scenario, in the coming years something will emerge that is the silver bullet and then maybe in 10 years we're there.
(15:23) But even that's I I would assign a low probability to that given what we know even if that's what we all hope for. So we're going to have different subsystems. I'm quite confident in 10 years and beyond and because they they have different trade-offs. So your use case might arc might be the right solution. In my use case, cashew might be the right solution and that's totally fine.
(15:44) uh but to to keep that great user experience between us so that we're sending and receiving bitcoin and keep it simple the lightning network is that backbone. So it's to me it's one there it's going to keep winning there and in 10 years it's going to be there for that purpose and it's actually a great tech technology fit for that.
(16:02) Now running a mobile phone in your wallet with lightning that's where it gets it's a lot more interesting discussion and debate I think um it clearly hasn't won there. Um, we already know it won't scale to every use case and every person. Um, but are there still some uh use cases and people that will benefit and and that'll be the right technology? I think absolutely for sure.
(16:29) Uh, anyone who uses a Phoenix wallet I mean people who criticize the lightning UX even for mobile, I mean, have you used Phoenix? I I'm not saying it's Yeah, I'm asking I get the audience, right? I mean, you know, have you used Phoenix? Um, we can certainly still find things to critique about Phoenix. It's not perfect, but it's it's a good user experience. Um, so you can create a good user experience with Lightning.
(16:48) Um, and the LDK EOS, you know, Phoenix is built on on Async's own technology stack and Lightning implementation. Um, but with the LDK ecosystem, um, it now has all the APIs and tools and SDKs and features, uh, for anyone to build a wallet that matches and surpasses the Phoenix user experience as well. So, I don't think it's um, no one should have the expectation that every wallet on a phone is going to be running lightning and have channels, but I think there will absolutely be um, you know, it it has the capability and capacity to have tens
(17:19) of millions of users who benefit from that. and and it's the right choice for them and and also merchants too. I think it actually might be a more better sweet spot for merchants versus individual users where you know right now with the Square launch that's awesome.
(17:36) We're going to onboard more more merchants and kickstart that. Fast forward into the future when there's tens of millions of small businesses around the world accepting Bitcoin. Custodial is how most of them will start. Um but you know tens of millions and then if 10% go through their journey and realize the value of self-custody to them in their business uh or just the situation they're in the environment they're in the country or the banking situation uh or what their what their commerce is um if 10% self- custody that would be millions of small businesses who are looking you know who who are looking for like a lightning
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(19:53) Bring your questions. This conversation is designed to give you clarity on how to make inheritance seamless with real Bitcoin, not IUS. Go to unchain.com/tc to sign up. just one more sort of steelman of the lightning network or reputation of a FUD that's often thrown in. It's like there's no activity. Look at the amount of Bitcoin locked in the Lightning Network compared to the TVL of these DeFi protocols.
(20:19) Like it's a pittance. And I think there's two things here. Like number one, it's a mischaracterization of it's it's a bad comparison because the way lightning channels work like it's actually bullish if you have less cuz it means you're doing more with less. And then on top of that, lightning is so distributed.
(20:38) It's I think Lisa put it best when she was last on the show. It's literally if you look at any quote unquote L2 across any blockchain that's out there, Lightning is objectively the most distributed. Yeah. And that means that it's very hard to track what's actually happening.
(20:58) There's a lot of unannounced channels that aren't that aren't you know so like the number of channels reported as a bad metric. Basically all the popular metrics that are reported are misleading or relatively poor metrics. Um so it doesn't really tell the story which is which is it's also lightning is relatively private too which is a good thing but then it's hard to do like data analysis and know is it healthy or not.
(21:20) Um, but in terms of is it growing? Um, I I forget I forget exactly what my like Miles Sudter from Block at the Vegas conference gave a really great presentation on on Cash App and and Block and reported a bunch of juicy numbers. I I forget exactly what he revealed but definitely I can say that uh a couple years ago River came out with a report um where they collected a lot of private data from companies and assembled it into a report and I think it was like 1212% growth on the of uh payment volume on lightning network over the past 18 months and that that was two
(21:52) years ago. What I can say is looking at cash app and lightning node data from block since then the ensuing two years that growth rate of on the order of 15% monthly has sustained. So the data that we're seeing at block is very very strong for payment growth.
(22:17) So it's and and and you'll note that if you look at the capacity that the number of bitcoin locked into lightning does is is does not reflect that. has sort of been constant roughly what four or 5,000 Bitcoin or something in that entire 3 or 4 year period. So that I think that indicates um how misleading that that metric is and it's what you said. I I think the answer you might then someone might ask well if it's growing so much why isn't that growing? I think it's what you said lightning operators are learning how to be more efficient and operate with more efficiency. So like River kept closing channels and closing
(22:47) channels and then people are like oh are they getting out of the this business or whatever. It's like they're just making their operations more efficient. Now, of course, once you reach sort of optimal efficiency, then if you still still keep continuing to grow um um payment volume, you're going to see that number go up and I think it did recently go up and I think we're going to we are going to see it.
(23:11) It'll be a grind, I think, with Square payments and people paying in Bitcoin. It's not we're not going to it's not going to like 10x from now to Christmas or something, but we're going to see a steady growth month to month to month with that as well. And we will see that capacity grow.
(23:27) Well, it's not happening right now, but another thing to take into consideration is when the price of Bitcoin goes up, like prices denominated in stats goes down. So, you need less Bitcoin to move through these channels to actually purchase goods and services. That's that's another good point. Yeah. Yeah. So um yes I I think uh I think the easy simple metrics that are reported don't really tell the story or you certainly have to I mean I would agree that like 10 years from now the capacity of Bitcoin and lightning channels should go up a lot compared so I so if it's a that metric I think it's important to look at if you zoom out in a four-year
(23:59) window is it go is it going up and I think that is important but if you zoom in more um right now you have to have access to to these private data sources and stuff. But I think another thing, something that that I thought of recently, uh, a lot a lot of my friends who aren't into Bitcoin, they but but but they're they're techies.
(24:22) They're they're Silicon Valley people, not into Bitcoin, and they just they think like Bitcoin, at least as everyday currency, it's failed, but also that it's it's over. Like it had its moment, and it should have caught on. like their mentality is like back in 2013 or 2014 like the first wave of excitement of Bitcoin payments at least in Silicon Valley um that that is it didn't take off then and it should you know and if it was a if it was as great of technology or promising of money as as everyone is talking about then that it it would have taken off then and so they just write it off well there's a little
(24:54) more to it right and so um I think with the square launch and now there's going to be stickers and windows that show the Bitcoin symbol next to Visa, Mastercard, and Apple Pay. And um even if no one's actually making Bitcoin payments, normal people will see that sticker in the window and they'll they will think, "Oh, it has arrived. People are paying in Bitcoin. It is everyday money.
(25:20) " So, I think it'll be this huge psychological shift uh with the narrative, which we haven't really talked about the narrative, but the the narrative that dominates Bitcoin is like ETFs and number go up and store of value. that narative is hurting today and it yeah well right but I mean that um again that that's for my own experience in Bitcoin the last eight years the store of value that was ob to me sort of obvious from the beginning uh and just inevitable pre-ordained didn't really need much work um I mean it still needed work but in terms of like software development and design and um the kind things where I'd want to
(26:00) contribute to it's like yeah it's already it's already done. Uh but but everyday currency a lot of work needs to be done in you know improving the tools and creating better products and new use cases blah blah blah. Um, so I think uh I think it's a great use case, but it it's um it's really crowded out the everyday money uh narrative.
(26:24) And so last week to me was awesome, not just for Block the company, but for all of everyone who's into Bitcoin for as everyday money. I I think that's why it was easy for Bitcoiners to cheer Block on because of the alignment around that.
(26:43) And hopefully it's not just a oneweek wonder in terms of narrative, but it's the start of recreating this narrative and joining alongside the sto the digital gold narrative. I don't think it needs to replace that. Like the digital gold narrative shouldn't go away. It should just be we should be talking about everyday money way more. Yeah. Well, I want to uh since we're in San Francisco, I'll say it because this is the nomenclature on here.
(27:01) Let's double click on your uh Silicon Valley friend saying that it failed. Yeah. as payments technology. That blows my mind. Like to me it highlights some sort of time preference uh mistakes that are being made in this part of the country and other parts as well.
(27:25) How could you honestly expect something to be launched in 2009 and to take over the world and be an everyday payment um in 5 years if this was happening in 2014 or they expected that would happen? like how do they not recognize that Rome wasn't built in the day and there's a process to this? I think it's uh I mean I think there is a good explan I mean it's it's wrong thinking but it's a there's a good explanation if you think about the success stories through in Silicon Valley over the past many decades and the patterns that people build up in their head here working on it being part of it or seeing these
(27:56) success stories things do happen fast um whether it be Google or Facebook or Instagram or YouTube like you go from like zero to high growth in users very quickly, revenue quickly and acquisitions quickly or IPOs like it's it does move fast.
(28:23) So if it doesn't if things don't click in a few years or at least within the first four years, you usually just you write up you you you you shut the thing down and you move on to the next idea. That is the common pattern. And so that's the pattern matching all the smart successful people here have. So when you have something like Bitcoin, sure it was introduced in 2008, 2009.
(28:40) And so by 20 2014, great, oh great, this emerging technology, let's VC fund all these startups, make a lot of money. And then there's no one was making payments. Then it it wasn't used. None of these companies um I mean except for like Coinbase, um which had to go way beyond Bitcoin. They had to create a gambling casino to make a lot of money.
(28:58) Um there there were no there was just failure after failure from a venture capital and startup perspective. So I think that's why they that's why they wrote it off. Now we know like the Bitcoin community knows that that's that's an absurd expectation. I I think another dynamic was they uh people thought that like they they compared it to like PayPal or Visa as just this payment technology and they didn't have a deep appreciation for like oh no this is way bigger idea. This is not disrupting Visa. This is disrupting the US dollar.
(29:28) And there's, if you look at history, there's not that many things that have been money. Like we, you know, uh, we have like a piece of artwork here at Presidio Bitcoin from cryptographiti with a history of money and there's like eight different symbols of representation going back to like, you know, uh, seashells and rocks and stuff like that and obviously gold.
(29:55) Um and you know depending on how you define things like a credit card or something but um but even that actually is a bit of a mistake to think of that as money right it's dollars the money behind it but there's not that many things in history that have been money and now Bitcoiners are saying this is the new money and this is going to be the new money and then to your point that doesn't develop overnight especially if it's not fiat if it's not declared if it's not forced upon all of us from a uh from a up high it has to be a grassroots effort It also happens to be like super complex and counterintuitive
(30:24) um from many different angles. So it's very common whether you're a Silicon Valley person or Wall Street or just whatever your lot in life is you um it it's it it takes a leap of uh faith and and then and it requires a journey of of learning to really see like how does this work.
(30:45) So I think Silicon Valley missed that this is not just displacing and and competing with the payment layer but actually the money layer. And once you appreciate that then you realize oh this is obviously not going to happen in 5 years. This is like a 20 year or more process.
(31:03) Um and then all the other disruption happens on top of that sort of in parallel. Suffra's healthcare open enrollment has started. It will roll through the end of January. Opt out of traditional health insurance which doesn't care about you. It's impersonal. It's expensive. They deny an increasing amount of claims. Premiums are going up. You don't have to live this way. You can opt out. I opted out four years ago and joined Crowd Health. I've been a Crowd Health member.
(31:21) Very happy Crowd Health member for four years. I've had two children, a couple of health events in that time period. And Crowd Health has been there. You pay a monthly fee. You contribute to the crowd. We were paying $1,800 on Cobra as a family of three. Now we're paying around $900 a month as a family of five. And that's with Crowd Health and Direct Primary Care. You can opt out of health insurance. Go to join ccrowthealth.com/tc.
(31:40) You're going to get $99 a month for the first 3 months if you use the code TFTC. Join crowdhealth.com/TFTC. What's up, freaks? Been seeing a lot of YouTube comments. Marty, your skin looks so good. You're looking fit these days. How are you doing it? Well, number one, I'm going to the gym more. Trying to get my swell on.
(32:00) Trying to be a good example for my young sons, a fit, healthy dad. But part of that is having a good regimen, particularly staying hydrated, making sure I have the right electrolytes and salts in my body. That is why I use salt of the earths. I drink probably three of these a day with one packet of salt of the earth. I'm liking the pink lemonade right now.
(32:20) It's my flavor of choice. Uh this is their creatine. I've added this to my regimen. They have it in these packets as well. Uh makes it extremely convenient. If you're traveling, you want to work out while you're traveling, but you don't want to be carrying a white bag of powder going through TSA. It's very very uh nerve-wracking at times.
(32:38) You have to explain, hey, it's it's not what you think it is. It's creatine. I'm trying to get my swell on. Um, make sure you're staying hydrated. I have become addicted to these. It's made my life a lot better. I can supplement this for coffee in the morning and be energized right away. I can supplement I can bring the creatine wherever I need to.
(32:57) Just put a couple packets in here before I head to the gym. Bring this to the gym. Drink out of a glass bottle. Make sure I'm not injecting any microplastics into my body. Go to drinksotay.com. Use the code TFTC and you'll get 15% off anything in the store. That's drinksotay.com code TFTC.
(33:21) Do you think people are coming around to recognize like, oh, we mischaracterized this a decade ago? And sadly, I don't think so. Um hopefully we'll talk a little bit about Precidia Bitcoin too on on on this episode, but um one of the missions for Presidio Bitcoin is to help bridge that gap. We're gonna take advantage of the fact that we're here in Silicon Valley physically.
(33:40) Um, and we've got a bunch of people here who have ties to to Silicon Valley. Um, and so be it through uh events we host here. Um, we uh myself and Max Webster and David King do the Precidia Bitcoin Jam podcast. Great show. We're Yeah, thank you. We're podcasters now. Watch out. Everybody becomes a podcaster. Yeah. Big proponent. Um, but it uh our intended audience for that show is Silicon Valley people.
(34:09) It's not it's people who would not identify as a Bitcoiner. Now, of course, people who are into Bitcoin watch the show and I think like it and that's great, but like what what we have in mind, we want to bridge that gap to Silicon Valley. So, we um well, I mean, we're just ourselves in that show, but like I think we um you guys can talk the talk.
(34:28) Well, we we we come from I mean I worked at Google for a decade as a as a product director. So I come from Silicon Valley. David King does as well. Um we know that culture. We know that we come from that world. We're part of that world. We also happen to be hardcore Bitcoiners. So it's kind of rare to be in both camps. So we can we can speak both languages. So hope hopefully we can bridge that. Thank you for Google Maps by the way.
(34:47) You're welcome. I'm glad you said that instead of Google Glass because I worked on I worked on both. Google Maps is an uh I ragged on you enough for that. Unquestionable success, but yeah, class. Um, hey, Kyle Smani liked it, you know. Yeah, I know. Yeah, everything Yeah, let's not go there. Everything everything's everything's bad in that direction.
(35:10) Well, we're I mean, we were just focusing on Silicon Valley, broader Silicon Valley's perspective on on Bitcoin and how it may be uh the perception may be sort of misguided because they don't understand what's actually happening. shift to the Bitcoiner focus as a Bitcoiner really dedicated to building out Bitcoin as everyday money. How would you grade Bitcoin success up to this point? Is it as everyday as everyday money or just like where it is on the trae like understanding that Rome was in the day? This is going to be a multi-deade process.
(35:41) How would you I don't want to say grade like Yeah. How would you describe Bitcoin's progression up to this point? Is it over exceeding where it should be underperforming? Given the way you framed it, appreciating how long it takes to establish it as money and stuff, I'd say I'd give it a a good grade overall.
(36:00) Like high level, very good because um we can easily nitpick and say like the everyday currency narrative is has been sort of squeezed out and obviously it's not like heavily used for that yet. So, we can say like, "Oh, it's kind of it's so far failed at that." But but again, uh appreciating how long realistically it's going to take to to do that. I'd give it I'd give it a good grade.
(36:25) A good grade to this point, but like a lot of work ahead of us, but I remain super optimistic about that future. But it's but it's um to to attain like a sustainable good grade like we or like we've won, we've succeeded, that's going to take another 10 plus years.
(36:45) uh but that doesn't mean um that doesn't mean meaningful progress is not going to happen every year, right? I mean so there should be a sense of urgency among all of us. There needs to be intentionality um and not just assume other like oh you're you're going to do it like no like each person who's into Bitcoin find your own way to contribute and help will this into action.
(37:10) I I'm a strong believer in like the the individual can make a real big difference and you don't have to be like Elon Musk or something like any individual um can can um contribute value. I mean like with the launch last week in Spiral's small part in it, we we created like a Bitcoiner marketing kit to help people go to their favorite merchant and help them uh persuade them to turn on Bitcoin payments.
(37:33) And it's a laser sharp focused like save on fees, right? Get rid of the 3% fees. And so we have like a leave a one pager leave behind and plushies we've distributed to like six different physical Bitcoin physical hubs around the country. And um so that's our that's our small part. But then like as a individual Bitcoiner, you don't have to be a Bitcoin core developer or like an engineer to just go to your local merchant and talk to them about Bitcoin and talk to them about saving.
(38:00) I mean my recommendation start with like do you want to save fees? Like aren't don't the fees suck? don't you know, aren't they like a significant part of your profit margin? Wouldn't you like to get rid of them? And then they're gonna say yes, and that's the hook. And then you can say, well, here's how you can do it.
(38:17) Um, and that's a way for anyone to contribute. And I don't And another thing I like about the marketing kit, and I don't know if you guys actually made this or Square Merchant just put it on their door, but a Bitcoin preferred sticker. I think that uh that preference signal from the merchant is very strong, too. Yep. Yeah.
(38:34) Um, yeah, I'm glad you not noticed that. I think that's great copy and the, you know, it's a multi-phased approach to get people to spend Bitcoin. I think, um, at least at like a retail outlet in America. Um I I used even two months ago I was actually bearish on this becoming popular compared to other wow other types of payment use cases because like an American buying coffee like it like I I just I use Apple Pay and I get 2% cash back. It's like that and it's a super good user experience.
(39:08) Um so like why spend Bitcoin, right? that but I've turned from uh bearish to bullish just in the past two months and um largely thinking through it through the lens of the merchant like the small business those fee card fees are very material to their business and most small businesses are low margin and uh it it's like a it's a passion pursuit for them and they just want to stay in business.
(39:36) Um, and so being able to eliminate or significantly reduce that fee is an enormous value prop. So, but that's just step one. like and and of course with the Square product introduction that makes it so much easier for them because if if they're using a payment solution whether it's Toast or Clover or Square or whatever and then someone comes in with a like a Bitcoin wallet as the POSOS and there's se several of them out there and and they're good they're good user experiences on the surface but it doesn't integrate with their with the small businesses like accounting system and backend system and you have to be a
(40:11) pretty hardcore Bitcoiner I think as a merchant to adopt that but now with Square you it it it's integrated into the system you're already using for your whole business. So that that's a a much smaller lift, but that's just step one, getting them to turn it on because then they'll learn um early on they'll attract some rabid Bitcoiners to come in and spend some Bitcoin and attract new customers. That's a marketing win.
(40:36) They'll like that, but it's not sustainable and it doesn't grow to a larger part of their consumer audience or, you know, customer base. So then it's like, well, I love the pitch of saving fees, but no one's coming in and spending Bitcoin anymore. Um, or only like, you know, my 3% of my customer base who are crazy Bitcoiners do. And it it it's saturated.
(40:57) So, how do you get everyone else um spending Bitcoin? And that's where like Pink Owl Coffee helped change my mind because they're like, "We're going to give 21% discount." And I'm like, "Wow, that that's something that's going to wake up a normal person, right? 21% discount at at your favorite merchant." Then um that's going to get a lot of people over the hump to install a Bitcoin wallet in the a spending wallet in their phone and get some and load it up with some Bitcoin. $5 coffee becomes a $4 coffee. Yeah. Less than $4. Well, it adds up when you do that every day.
(41:25) Yeah. So, um and I do think early adopter merchants who are hardcore Bitcoiners or or see the value in um con changing consumer behavior to eliminate um well or to spend bitcoin in order to eliminate the fees. merchants will early adopter merchants will come out with crazy promotions like that.
(41:49) And it's a it's kind of a one-time thing because if you convert a consumer to install a Bitcoin spending wallet, get some Bitcoin on it, then that cost to the consumer, they don't have to do it over again. It's only a onetime thing to get the wallet set up and just sort of change your behavior. Um, so all other merchants in your local community will benefit from that one-time onboarding.
(42:09) So, it's not like every merchant has to offer 21% and has to do it indefinitely in order for Bitcoin payments to work. It's like a bootstrapping thing. Um, so I think I think that'll be I think that'll be effective. And then I think so another part of the spiral initiative is not just a Bitcoiner marketing kit, but we're going to come out with a merchant marketing kit as well.
(42:29) Um, and we also established a Facebook community. I haven't used Facebook for over 10 years. I've been off since I literally haven't. So I I a minor complaint to my team that I have to like log into Facebook again, but it's a smart move. Um some people some pe or Darth Coin on Stacker News was critical of the choice of Facebook news because who uses Facebook? But guess who uses Facebook? Merchants, small businesses around the globe are not on Twitter. They're on Instagram and Facebook.
(42:57) So my mom my mom runs a coffee shop in our in our hometown. I I can I can confirm that. So, we've created a Facebook community that is for merchant for merchants by merchants for merchants. So, we've seated it with some merchants who have been accepting Bitcoin and know Bitcoin and can answer one-on-one questions and then other merchants who are new to it can can ask questions or look stuff up there.
(43:18) So, we did that and then the merchant marketing kit will include ideas like, you know, offering financial incentives or putting a Bitcoin plushie by your cash register. Um, I actually am pretty bullish on that. The plushy is sitting in front of you right now. Um, can I get one of these for my boys? Uh, you can grab one. Yeah, you can grab one after the show for sure.
(43:41) Um, you can grab two and then you can also give like your favorite merchant um, one of those. And we've seen evidence of merchants actually uh, not just taking it home and giving to their kid, but actually putting it by the cash register because it's a great way to communicate, hey, we accept Bitcoin. You should pay in Bitcoin. And it does so in a silly goofy way.
(44:00) It's it's like non-confrontational, right? It It's not like a No, he's he's grimacing like Well, imagine like, "Hey, give me Bitcoin." Look well Well, look at most of the most of the Well, well, our onepage leave behind tells the story of why he's grumpy because he doesn't like 3% fees. So, we were missing at the people paying our credit cards. This is Yes. Yeah.
(44:25) Um, but I think it's a really nice conversation starter at a local business, uh, where you have that humanto human connection to just start talking about Bitcoin and then so I I do think there's a plausible story to convert people to consumers to have Bitcoin in the on their um, mobile wallet and start spending. Um, also uh, you know, another thing that greases the the wheel is like uh, cash apps now dollars and lightning.
(44:50) So you can have the 58 million I know Miles talked to you about this on on on another episode, but 58 million active users in Cash App have dollar balances and all of them can now pay pay via Bitcoin like via via the Lightning and Bitcoin rails say cut out the card fees. Um but the Cash App customer has doesn't have to have ever owned Bitcoin or be into Bitcoin at all.
(45:15) And um is that the full experience we're hoping for long term? No. But it's a baby step. It allows the merchant to save fees. It allows the merchant to uh save in Bitcoin if they want to. And then um and eventually those those uh Cash App some of those Cash App customers will keep converting over to using Bitcoin. Yeah. Yeah. I'm very bullish.
(45:38) Somebody who's been spending Bitcoin using the Lightning Network for years now. And certainly and as I talked to this with Miles and talked with many other people like merchant adoption, I think there's an apprehension to really lean into Bitcoin payments and merchant adoption specifically due to the sort of failed attempts at it previously, most famously back in like 2014 to 2016 era.
(46:03) And then I think that was a big push by like Roger Burr and that that early Bitcoiner crew and I haven't really seen it since until now a decade later. And I think it makes sense. And I I thought Miles's point was really good, which is like, hey, today's the best day. Tomorrow will be the best day. Let's just get it out there and it's time. Yep. Well, like I mentioned, I think it'll be it'll be a grind.
(46:22) It'll be a lot of work, but I do think we'll see steady growth. And that's just like Square and America, but then like the world's big place. So, I think Square will also light a fire under like other payment providers, too. I mean, I would hope that Toast and Clover in the US and other um established payment providers around the world will be seeking out a a Bitcoin solution, too.
(46:46) Um, but that's just one type of Bitcoin payment solution I think or or like use case or category and one I mentioned I sort of went from bearish to bullish in the last few months. But others that I very excited about um one is just like new new applications and new ways to integrate Bitcoin and like Nostra's apps is the canonical example or Stacker News apps but like micro payments within these social media experiences or community forums people showering us with SAS as they listen to this podcasting 2.0.
(47:16) Oh yeah, that that as well. So there we we have these real world examples that we're we see uh they're not scaled yet but they we do see retention and usage and anyone who's done it I think like I I love zapping people's posts. It makes me feel good.
(47:34) I mean getting back to also another reason about spending spending my Bitcoin or whatever. It's like, okay, well, you know, I've got my savings account, my spending account, and the spending account, I mean, I'm zapping sats, but what is it like a few dollars a month or I don't know what it is, but like it's not that much money, but um it makes me feel good to do it.
(47:52) And then obviously on the receiving end, um my my zaps alone aren't don't move the needle, but you know, hundreds of people doing it, then it's kind of kind of a nice nice amount. I mean, it's at least like a uh you know, it's like being having a dinner paid for you because of your work or whatever. It's like a nice gesture.
(48:09) Well, I I was talking about this last night with somebody cuz they were asking about podcasting 2.0. Like, ah, is it is it actually working? I mean, we I think TFTC was literally like one of the first five podcasts in the world to ever put a Lightning address in our RSS feed to begin receiving SATs over the Lightning Network. Um, that was 2018, 2019, 2019 because Lightning launched. It was definitely before I left New York. So, it was like 2019.
(48:34) So, it's been six years. And I think a lot of people think it's a dead model, but you can fountain makes it very easy to look at the data. Like the numbers have been going up. I mean, it's not enough to run the business, but it's consistently up and to the right in terms of revenue from people streaming and boosting and commenting on the show via podcasting 2.0 and Noster.
(49:00) Um, and then we'll live stream rabbit hole recap every Thursday or Friday to Noster and um, we've sort of gamified the the zapping there. If you zap us more than 21,000 sats, we'll read your comment and uh, have a brief discussion around it. And that to your point of like spending bitcoin like I have my fountain app, my fountain wallet, my primal wallet and when I those are my main spending wallets and I it's all Bitcoin that's been sent to me from the content I've been producing. That's great. That's great. Yeah.
(49:33) So I'm all the all the Bitcoin bins around micro stuff is still still niche but like I'm I'm optimistic about that. anytime you can see uh usage and repeated behavior even if it's on a small scale if you see that repeated behavior uh in retention I think that that's a very good sign and it's just a matter of scaling it now um I think another really positive trend is vibe coding and just the development tools that opens up access to new product development to like literally a hundred times more people or a thousand or like orders of magnitude more people um who you no longer have to be a coder to take
(50:09) an idea in your head and manifest that into an application or a mobile app and allow people to to to use it. U coding is incredible for that where English is a language to program uh anyone can create um an application now one that is good enough to realize your vision or at least mostly and get it out to like a hundred people or a thousand people to use.
(50:39) And that's really all you need to like for most things to to prove out is this actually useful to people. Is it something people come back and do a second time, a third time, make it a recurring habit? Uh and if they do, it's hard to do that by the way. So um it's like law of large numbers.
(51:00) So if we have but if all of a sudden we have a thousand times more attempts at creating the right recipe, we're going to see way more at the end of that funnel, we're going to see a lot more compelling applications, ones that do have a thousand users who are using it constantly and love it. And then maybe vibe coding isn't that then you actually need real human engineer still to create something that's secure, scales, and checks all the boxes from an engineering stability standpoint. But you don't have to do that until uh that point in time and you've already and so 999 out of a
(51:32) thousand ideas fail by that point. So don't don't invest the hardcore expensive engineering resources until you reach that point. I think we're going to see that you know that that's happening right now and that's going to lead to thousands of applications being developed that people wouldn't call Bitcoin applications but they just integrate Bitcoin because the second trend is that the tools around Bitcoin are much easier.
(52:00) You can now take Lexi or Spark or Liquid or all these and like literally oneshot Vibe Code an application that has bit Bitcoin payments integrated into it. Say integrate this integrate this API or something like that or use this development kit too. Yep. Like M Matt Beles did a oneshot into Replet and was able to create a Bitcoin tipping app, you know, circa 2014 or whatever.
(52:19) But in 2014, the people creating a Bitcoin tipping app was like two developers for a year. Mh. they spent that much time and and and like um you know highly skilled engineers to build a Bitcoin tipping app. Now you have literally a one sentence or paragraph prompt that you you can speak to the computer and then 9 minutes later have the same Bitcoin tipping application that existed 10 years ago from two person years of engineering effort.
(52:45) That's amazing, right? So I think we're going to see thousands of of of quality applications created over the coming years. um that integrate Bitcoin in ways that we couldn't have thought of or imagined or I'm certainly not thinking of them right now. Um and that is going to yield some some home runs and then payment growth. So I think I'm I'm very very bullish on that. Um and then the and then AI.
(53:13) Um I'm still not super articulate on exactly what this looks like, but it just I mean obviously AI is explosive right now. AI agents. Um, you can imagine a world with payments between agents and you can imagine like a AI agents don't have an identity like they're not going to be able to KYC or onboard. So like permissionless systems just to me make intuitive sense for this world.
(53:37) Um, but I still don't know exactly what it looks like. And it's important to compare like okay where where do stable coins fail and where can Bitcoin succeed in in that use case. Um, so I'm that's still like a learning process for me and I think for most of us trying to figure that out, but I'm generally bullish in that that area as well.
(53:56) And one thing I'd sum up for that category for the microp payments and sort of new application categories, uh, what's really important for those is no KYC. And so let's talk about that a little bit because I I think most Bitcoiners when they um think of no KYC the reason they think it's important is like government shouldn't have my data or like privacy focused and that's completely legitimate and a very very good point.
(54:27) But I think that's sort of it's my impression a lot of Bitcoiners that's the start and end of that argument and I think there's other arguments too. It improves the user experience. Like if I have to fill out a bunch of forms, if I have to upload selfies holding my passport and like all that like it's so ridiculous.
(54:46) It's it's a hor I just stop like I like something has to be really important to me like buying Bitcoin or whatever. I mean, you know, it has to it's a really high bar to go through that effort totally independent of the privacy. Even if you don't even care about it or you're ignorant about it, you don't even think about the ramifications of that.
(55:04) just the friction of onboarding is a is horrible with KYC. So, getting back to the um like the zapping stuff, let's say Nostra takes off in a big way and actually starts scaling to to other people. Um that's going to be the first introduction point to most people for Bitcoin, at least Bitcoin payments, right? They'll have never done a Bitcoin payment before. They pro probably don't even hold have any Bitcoin.
(55:27) So, that's going to be their first introduction to Bitcoin. If and let's say I'm I'm that person. I'm new new to this but new to this but I'm I love uh you know Primal or Damas or whatever new application gets built in. I love that and I'm really interacting with that and then all of a sudden people start zapping my posts and I get this bitcoin.
(55:46) If I have to like upload my passport and go through all this onboarding friction, I'm unlikely to do that because I'm not I I don't have a strong enough reason yet in my head to do that. So I'll I'll just opt out. But if it's like frictionless and it just accumulates because there's like no onboarding cost really then sure.
(56:09) And then once it then once that that um stash grows big enough then it's all of a sudden it's like oh and you mean I can spend it here or I can use it here or I can zap people back. So I think no KYC is like um very important for that application. And then like for the AI agents, it's super important again because if they don't have identity, they just impossible.
(56:26) It's just fundamentally they they need no KYC. So to me, there are many important reasons for no KYC. Um and and not not just sort of down to the state privacy reasons. Um and and and that's why it it really and it it just scales to everyone like everyone. People don't walk around thinking, "Oh, I need no KYC." But like it it impacts everyone.
(56:50) it's important. Um, and and then that leads to why are trust minimized systems very important, which this gets all the way back to like why do we work on lightning and LDK at Spiral? Um, because it's a very trust minimized system. Um, if you know, if you're running a lightning node, I'm running a lightning node. I don't have to trust you. Um, uh, you can't you can't steal my money.
(57:15) I mean there's a few few are like if I'm offline and then maybe then you could you could try to steal but it like o overall it's a very trust minimized system. Um and so that's why I think it's worth continuing to invest in lightning or any technology that minimizes trust. Um some of the other newer payment protocols I I really like them as a recipe.
(57:40) They make smart tradeoffs and I think they're valuable for the ecosystem, but they are more trusted and some of them are going with the no KYC approach now and I I think that's great. Um I'm gl I'm glad they're doing that. How long will it last? I I don't know. Um when will the state crack down on some of these other ecosystems? And I I think it's a matter of time.
(58:01) I mean I I think it's like three three to five years away. it won't really be an issue until they become really popular or there's a lot of um illegal activity through it. That's when it gets the attention of regulators. But ultimately, I think it will fail at that. It will then require KYC and then all of a sudden all these cool, interesting, valuable application categories we just mentioned won't be possible with them anymore. So it's very important from a developer and protocol perspective to keep investing in trust minimized
(58:30) systems even if it like even if people are saying things are dead failed or whatever we got to keep working at it. Yeah. And I I mean I the conversation recorded with Kyle in here yesterday was really on the tip of the spear in terms of save our wallets campaign ensuring that we get the ability to um developers like yourself and everybody working at Spiral and other open source projects across the space have the ability to write open source code and not be held liable for what their end users do. And it just gets like and and I completely agree
(59:05) based off the trade-offs some of these other um second layer solutions are making or subn network solutions are making sub subsystem subsystem excuse me are making uh the states will eventually be like hey you got a KYC and we've seen it with Fininsen Treasury coming out with guidelines like hey they want to um sort of connect PII with Bitcoin addresses and try to make it so wallets are doing the job of the state collecting this information.
(59:34) It's just like it's so demoralizing number one, but two it's infuriating because it's like are we free? Are we free? Do we women live in a free country? But broader point being once if and when manifesting positivity here we get the blockchain regulatory clarity act in the market structure bill the way we need it to be which protects uh individual developers and individual users and their ability to self-custody. Next battle has to be repeal the bank secrecy act.
(1:00:09) It is insane that we have to have this conversation and go through these mental cycles, goes through all the cost, goes through the UX hurdles. Yeah. Just because they want to force this ineffective um sort of data aggregation system on us. Since you brought that up, I'll I'll uh um I've tweeted this before, but like Spiral will offer a grant to someone who want like and this would probably be like a um like a lawyer or policy type person.
(1:00:38) So it's it's not we have not given a grant to a lawyer or policy person before, but we would totally would with the project being something like imagine the world without the BSA. So imagine a world where it is repealed, but also imagine like the real world where there there are like legitimate policy issues that need to be addressed somehow like you know anti-terrorism and AML type stuff.
(1:01:06) So let's say we have to address those but we we get to start from scratch and let's learn what have we learned the past 50 years with the BSA what have we learned with new technologies and like incorporate the fact that Bitcoin exists and that there'll be an AI exists in in these technologies and just start from scratch and and um develop a new policy that would that's credible.
(1:01:30) I think that would be a really awesome project because it also gives Bitcoiners more credibility if you are in DC talking to regulators or politicians, whatever, because if you just if you just go in there and rant, then they're not going to listen to you.
(1:01:46) Um, even if that's even that's your view and that's what you want, you're not going to win that argument. But if um I think it does two things. one in the somewhat remote possibility that the BSA would be revealed. Well, then okay, here's a credible alternative that we've thought about and would be pro um you know pro society, pro-American um and ultimately like everyone in the world and and pro technology etc.
(1:02:14) Um but secondly, um even for the nitty-gritty like we're debating the Clarity Act or whatever like incremental changes we're either wanting to see happen in legislation or things we don't want to see happen. If we have this body of work to fall back on, it can influence, I think, these other more, you know, smaller year-to-year decisions. So, this is this needs to happen. If you're out there, Spiral would give a grant for anyone who wants to work in something in that vein.
(1:02:37) I know there's many esteemed lawyers in the audience. Okay, please do your do your duty to Bitcoin in your nation. It is it is insane when you number one how much friction it adds to any interaction you have with financial applications and then number two how completely ineffective it is. It's It's not stopping.
(1:03:03) Well, like the we briefly mentioned at the beginning of the show the dimminimus tax and like um Block's doing a a marketing campaign in DC right now around that and it's just we're talking about spending Bitcoin. Well, I mean, you know, right now it in the US and I think I think many other countries, but certainly the US, it's treated as a capital gains um when when you when you buy coffee. And it's kind of ridiculous, right? So the proposal is like a $600 dimminima.
(1:03:27) So if your payment is under $600, you don't have to pay taxes. It's too low. Sorry, it's too low. Oh, too capital gains. So a little bit of inside. Let's think big. Uh yeah, I I agree. But so little bit of um context. Uh Senator Lamus uh original bill I think was $300. Um there uh are other cryptocurrency stakeholders that I've heard are pushing for $50 scumbags, which is completely ridiculous.
(1:04:04) That to the degree to the degree that's true, I I've got to think that is like uh companies that have a vested interest in stable coins. And so that that's really just that's throwing Bitcoin under the bus to do a $50 dimminimus. So, um, in that context, 600 is a lot better than 300 or 50.
(1:04:29) Um, but I agree that it should be ideally a lot higher. Sorry. We're taking the wins that we can get if we can get taking it's it's it it's arguably a big win over or it is a big win over what we have now and arguably is maybe the best best that can be achieved and we haven't achieved it yet either. So, we'll see.
(1:04:47) But it also s I mean a problem with the BSA and everything uh since then is that they're they're the way they're written into either law or regulations is a fixed amount of dollars. Well, as we as certainly all Bitcoiners know, like inflation, right? So, but what a $3,000 limit in the 70s was is way different than today.
(1:05:07) Like $3,000 in the 70s was like a substantial amount of money. So it might have seemed like you're reasonable or whatever the limits 3,6 when you have to like report certain transactions whatever like and now all of a sudden it's like well that's like a pretty common that's like a nice bicycle or something. I mean it's it's not like buying a house.
(1:05:27) Um so uh that dimminimous tax will be yeah so some some Bitcoiners want it um denominated in Bitcoin as well which again I philosophically agree with. I mean I agree with that. It's just like is that is that practical practical? Yeah, I know we got to get going here soon, but I mean on this note too, BSA privacy like onchain privacy too. I think everybody's like, "Oh, that's a big narrative.
(1:05:51) There's a bunch of people in Silicon Valley trying to pump Zcash right now. Looking at you, Naval Bagi. We see it like they're like, "Bitcoin is not private enough." It's like it it's certainly has its uh pitfalls on chain when it comes to privacy, but it's not impossible.
(1:06:10) And one thing I want to make sure I ask you about is payjoin development kit like making uh the case for payjoin at a large level particularly at exchanges because it'll improve onchain uh privacy by messing with the the chain surveillance heristics that exist. But just as importantly, maybe more importantly for these exchanges creates efficiencies in terms of being able to batch and so it can be positioned that way too. Yes. Depending I think how you position that technology and project. Um you want to know your audience.
(1:06:43) But um I've I've always liked paid join and um big credit to Dan Gold who's like carried that torch for many years now. Thankless torch carrying. Thankless torch carrying. And like no one else is really working on it despite the Uh, I like the like when it was first I I forget when it was even like originally like thought of, but um I like the trade-offs from the get-go, but then yeah, no one was working on it, but he he started working on it and now there's a really healthy set of developers working on it. Spiral funds
(1:07:13) it in a big way. We we're big believers in it. Um, you know, well, starting with like, well, why is it attractive? I I think it's like there's a couple different versions of page join now, too. So, I'll start with like the one that is implemented today and integrated into some wallets. I feel like it's a very practical and pragmatic solution.
(1:07:33) Um, it's not overly complex. It also it doesn't require like the whole ecosystem to adopt it for everyone to benefit because you only need I don't know what the threshold is but if as long as there's just like a um nominal amount of usage of it benefits everyone because it destroys the common input heristic which chain analysis um heavily depends upon and is very successful at right now be because um pretty much it's a good heristic right now to identify like help um identify everyone's coins into oh e these are all these coins which are disperate are actually all from your wallet. If you
(1:08:14) can break that common input heristic, uh, it really destroys that level of analysis. And Payjoin does that. And as you mentioned, Payjoin also has a benefit of like of batching. And if I'm the receiver, if like I'm a merchant and you're paying me, I'm incentivized to do it because I actually get to consolidate my UTXOs as part of that trans that transaction.
(1:08:38) So I think it has a number of um attractive properties. It improves. It's not a silver bullet for privacy, but it definitely improves privacy. You don't need the whole ecosystem to adopt it. Um, so I think it's very very promising. Then there's um, Payjoin V3, which is like uh, a much more advanced version of it. Yuvall Kman uh, he goes by nothing much on most of his online handles.
(1:09:05) He's on the he's a full-time member of the Spiral team and super super sharp guy, really passionate about privacy. um and he he uh used to contribute to Wasabi. He's sort of the architect behind that. So he he has a lot of um experience from that and he learned a lot of things from that too and things he didn't really like about what was created at the time and and and and he so he has a lot of ideas on how to improve it that ultimately so he was working on a project called Fungi which was that like um and it's really multi-party um uh coin joins and but he worked with Dan Gold and
(1:09:40) other Payjoin contributors in that project to fold it into the Payjoin project. So now Payjoin V3 is that vision because Payjoin is just two-party like you're paying me and we both put uh you know UTXOs as inputs into the transaction but with Payjoin V3 it can be more than two. Is this is this similar to what Dusty Damon was? I talked to him at Bitcoin++ earlier this year and he was saying like a a payjoin protocol where you could sort of have a gossip network looking at lightning channels and with their rebalancing and oh um probably I don't know exactly what he was referring to but that that's
(1:10:17) I think it was an idea I don't think he implemented anything but in the context of like splicing it was like yeah page one can be implemented but similar to that where it sounds similar so that's still R&D mode but that that'll be that'll be coming and then that that takes the privacy to uh another lab.
(1:10:35) It's a lot more challenging for that to be successful. But if it is successful, there has to be a a very high volume amount of payments willing to do that so that you don't have too much latency with your with your payments. Um like channel rebalancing is like a perfect thing to Yeah. put into that. Right. Right. Yep.
(1:10:51) So um in any case, but back to what you're saying like getting getting people to adopt it, I think getting mobile wallets to adopt it is um relatively easy. I mean it's always a prior prioritization game. Yep. And cake wallet as well. Um getting exchanges too. I think you know most likely this to succeed you have to go in with the um save save efficiency, save transaction fees angle.
(1:11:16) Looking out for shareholders here. Yeah. Yeah. We're looking out for shareholders. Yeah. And and um it's definitely worth the effort to make that sales pitch and get it to happen. So that that sales pitch will will happen within block but within other other companies too and we'll we'll see.
(1:11:35) I mean these com these companies have compliance departments so unclear how they'll how they'll respond to it just using the Bitcoin protocol in a more efficient way. Why would you want to do that? Yeah, there there is power like I my observation for speaking with lots of compliance teams not just block but many others is that uh the more something is part of the proto it's part of the open protocol everyone's doing it's part of the open protocol uh that does help that does help I've been on this page win journey for years Dan thank you for your work y exchanges seriously consider it like I
(1:12:08) think this is one of the lowest hanging fruits highest leverage sort of tech implementations at the protocol level that everybody can make in the space. Yeah, Steve, we got to get going. Any final thoughts, parting notes for the audience out there? No, thanks for having me on.
(1:12:32) Um, I'd say that uh uh people should remain optimistic on Bitcoin even the price is going down, even if they're not happy with their lightning out of mobile phones. There's just a lot of promising stuff ahead. So, everyone keep their spirits up. We're going to win. We're going to win. Peace. That's Yeah, that's that's your email signature.
(1:12:49) I just noticed some people some people don't uh some people don't think it's a signature after the first email and they think I'm just writing it and get a thread like, "Oh, that's your that's your signature." That's great. We're going to win. You got to have that irrational optimism. We're going to win. Peace and love, freaks. Thank you for listening to this episode of TFTC.
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