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Amboss co-founder Jesse Shrader explains how Taproot Assets and Lightning Network are positioning Bitcoin to absorb the $9.7 trillion daily foreign exchange market.
Amboss co-founder Jesse Shrader makes the case that Bitcoin's Lightning Network is positioned to absorb the $9.7 trillion daily foreign exchange market through Taproot Assets, a new capability that allows tokens like stablecoins to be issued on Bitcoin and transacted over Lightning with extreme capital efficiency. Lightning currently processes an estimated $10 billion annually with just $500 million in channel capacity, meaning the entire balance cycles twice per month. Amboss has built Rails X, which Shrader calls "the first DEX without its own token," enabling peer-to-peer trading across assets on Lightning while maintaining self-custody. The introduction of stablecoins via Taproot Assets won't require existing Lightning users to change anything, all new asset channels are private, but it will dramatically increase transaction volume and routing yields. On adoption, Shrader sees Lightning following a "flat, flat, flat, then vertical" trajectory, with iGaming as the first major use case due to the industry's banking problems and high chargeback rates. Privacy is another underappreciated advantage: individual Lightning transactions never touch the blockchain and Lightning Labs is building tools to erase channel history entirely.
"They do $9.7 trillion dollars every single day. It's the whole market. And that means that Bitcoin is going to take that sector."
"It's going to be flat, flat, flat, flat, and then it's going to be vertical. This is a gradually then suddenly type of adoption."
"This is going to be the first DEX without its own token. The token is Bitcoin."
"We're estimating at over $10 billion annually is flowing through Lightning. That means that the entire balance that's locked in Lightning is cycling twice monthly."
"Lightning can do 40 million transactions per second while any of these other chains like Solana is going to cap out at 70,000 transactions per second."
"28% of all retailers can accept Lightning. So, it really has immersed itself in the digital economy and in a scalable way."
"If you have good judgment, you now have rocket fuel added to your ability to execute. If you have poor judgment, now you become a slop cannon."
"I'm less terrified of CBDCs if they're on Bitcoin itself because you don't have that censorship ability on Bitcoin itself."
"Any of the individual transactions within that lightning channel, they don't exist on the blockchain, nor will they ever."
"Bitcoin can become the medium of exchange and not just a store of value."
"I just heard that Twitter is now a team of 30. 30 people are running X. That tells me that there's incredibly lean teams that are able to take on the world."
Shrader paints a picture of Bitcoin's Lightning Network as the inevitable settlement layer for global commerce, not through hype, but through five years of quiet infrastructure building that has produced a network handling $10 billion in annual volume with remarkable capital efficiency. The combination of Taproot Assets enabling stablecoins, Rails X providing decentralized exchange without a new token, and Lightning's inherent transaction privacy creates a stack that solves real problems the legacy financial system and competing blockchains cannot. The "gradually then suddenly" thesis for Lightning adoption looks increasingly credible as iGaming, agentic payments, and the broader foreign exchange market begin to discover what Bitcoin builders have been constructing in the background.
0:00 - Intro
1:27 - Amboss history
4:20 - LN innovation lessons
9:55 - Capital management
12:44 - Taproot assets
14:35 - Is this the casino?
20:07 - Origins of Tether
23:04 - RailsX
29:05 - Broad effect on the network
34:55 - Awareness
39:24 - Ideal adopter & AI agents
46:02 - Agent training & slop cannons
49:33 - Hopes for the future
55:20 - Simple truths & privacy
(00:00) They do $9.7 trillion dollars every single day. It's the whole market. And that means that Bitcoin is going to take that sector. It's going to be flat, flat, flat, flat, and then it's [music] going to be vertical. This is a gradually then suddenly type of adoption. The first DEX without its own token.
(00:24) [music] Before we get into the show, I just want to send a heartfelt thank you. Thank you for joining us and ask for one quick thing. Could you like this episode? Subscribe to the channel and if you like the conversation, join us in the comment section. Jesse Shrader Bitcoin just passed $69,000. But it's back down below.
(00:41) How are you, sir? >> Doing great, Marty. Uh despite the Bitcoin price, uh we should be higher, but uh in due in due time. >> Well, as they say, building happens in the bare markets. That's what we're here to talk about today. You guys have been building at Ambos. >> Yeah. Uh non-stop building. I think it's five years in the making.
(01:01) It really has all built up to this to this moment where Bitcoin can become the medium of exchange. >> Before we talk about Rails X and sort of MCP server plugin you guys have built for the Agentic economy, let's uh let's talk about the history of Ambos like why did you start the company? What was the initial idea? How's it evolved over the last 5 years? And on top of that, what has Bitcoin done in parallel that has enabled you to to build out Ambos? >> Kind of what what got me into Bitcoin was that it was an alternative to to the
(01:35) banking system where the customers of the banks, you know, aren't beholden to the banking policies anymore. Instead, we have Bitcoin, which is freedom. But then I went to go use Bitcoin to actually pay for something and it was a horrible experience. Um, I ended up paying $60 in transaction fees and I was using overdraft.
(02:01) com which was like one of the few places where you could spend Bitcoin at the time. This was like late 2017. and my transaction didn't arrive in the in the 10 to 15 minutes that they had allotted um simply because a block didn't come in and the transaction got rejected. So, they ended up refunding my money and had to make me send it again.
(02:25) So, pay another $60 transaction fee. And I was listening to a ton of Andreas Antonopoulos at the time. So, he was talking about something called the Lightning Network. So I started experimenting um and in that process I got connected with Anthony Pot Devvin who created Thunderhub which was like one of the first UIs that you had on for running a lightning node and we got chatting in a telegram group like as two anonymous plebs that were building the space and he saw that like I was help I was customer support for Thunderhub. Um
(03:07) and so he reached out to you know explore starting a company and building out lightning network tools. So that was really the genesis of it. >> And so I imagine this around like 2018 when the lightning network was just launched and very rudimentary at that stage. >> Yeah. This was like the only thing that you could spend lightning on was feeding chickens with poo feed.com.
(03:33) >> Oh, I remember that. I remember that. I fed that chicken this chicken lay well. [laughter] >> They did. Um, so that was like that was the major retailer on Lightning uh proving the microp payments uh point from from day one, but it's it's evolved so much since then. Um, and really it was like command line tools.
(03:54) The Lightning torch had just happened. Um, folks were running Raspberry Pies. They were blowing up. But things have matured so so much more. And now like now like the protocol development things have like matured through like the ordinals explosion and now we've got tap routt assets that that are coming to the lightning network.
(04:18) >> Yeah. Well, before we get into tapered assets, what you guys have built at Rails X, I think it's important too to since you've been along for this journey of the maturation of the lightning network and Ambos playing a role in making [clears throat] it easier to use a lightning network. I I think that's one thing and I I just um was talking to a Bitcoiner earlier today.
(04:44) is like we we do a bad job of setting expectations and I think the lightning network is one of the prime examples where it launched and everybody's like yeah we have instant settlement with very low fee transactions and the medium exchange use case has been solved after the lightning network has launched. This was in 2018 and we all came to learn that um the lightning network is a distributed protocol built on top of another distributed protocol and Rome is not built in a day.
(05:13) So what um with that in mind like in terms of the maturation and the development of the protocol uh what has been what has happened that has enabled things like tapered assets and now what we're seeing with this uh sort of flurry of other second layer protocols that are using lightning as this connective tissue.
(05:37) Yeah, I think um kind of like SegWit for one was was the the soft fork that kind of made lightning network possible by fixing transaction malleability and then the next one was Tap Routt. Um, and so getting consensus around that piece and getting a successful soft fork into Bitcoin was one of those pieces. Um, and the Lighting Labs team really did some technical wizardry to be able to figure out how you could contain UTXOs within UTXOs and introduce additional assets that are minted on Bitcoin in a extremely chain
(06:26) efficient way. So, this isn't going to be spamming the blockchain because these assets are meant for lightning. They are onchain assets, but the purpose of them is so that they are lightning compatible, which we know is extremely chain efficient because and we're seeing it today because there's hardly any fees on Bitcoin today.
(06:52) Yet, there's so much commerce that's still happening where we've got uh you know, Coinbase, it's making up a dominant portion of its transactions. We got integrations with Kraken, Binance, like the whole ecosystem has developed around this. And at this point, we've got 28% of all retailers that can accept Lightning. So, it really has immersed itself in in the digital economy and in a scalable way.
(07:21) So, that change to the protocol enabled us to start bringing new assets or new data types into into Bitcoin >> and then talking about like liquidity management, channel management, I think it's one problem that you guys have worked hard to solve. How how much have we learned over the last seven, eight years about this interoperable distributed protocol on top of Bitcoin, how it works, and how it should be managed if you're trying to use it.
(07:55) >> Yeah. Um after starting to run a lightning node, I realized that getting connected and connected well on on lightning was a challenge. And so we were just doing this via Telegram where I would say I'm a well-connected node. I'll connect to you in exchange for payment. So you pay me and I'll open a channel to you and we'll agree upon a duration.
(08:24) So, I was doing this already just via chat. Um, and that was the precursor to us creating a marketplace so that other folks could be able to sell channels, which was like one of those key pieces cuz at the time there was 1mml.com which was like one of the first Lightning Network explorers and I I have I had a chat going with with Tony who created Thunderhub and you know Ambos co-founder and CTO that The 1ML experience was terrible.
(09:01) It was all like uh it wasn't dark mode. Um so it was blinding to look at uh for us all of like thus basement dweller lightning node operators. Um and it was really difficult to get the information and there was no way to easily contact other people and get them to open up lightning channels to you.
(09:26) I mean, and that's how you receive payments. So, we decided that there has to be a market here. So, we created Magma, which is now the largest liquidity marketplace on Lightning. Um, we've got 99% market share at this point. It's growing 20% month overmonth. Um, and it solves a real problem. Just getting connected on Lightning so that you can receive payments very simply.
(09:55) Yeah. No, it's a massive pain point. And again, like talking about like growing pains and setting expectations. I think in 2018 it's like a lightning's launch. We got SegWit, transaction [snorts] malability solved. We're spin up this network and payments are solved. But along the way, you learn, oh, channel management is not trivial.
(10:14) You need a two-sided marketplace to make it easier. You need to bring liquidity to the network. And then along the way too as lightning scaled and matured learned other lessons which was like oh maybe I don't need this much capital locked up in these channels uh which leads to um a lot of misconceptions in the broader public.
(10:34) They'll look at whatever it is, 4,700, 5,000 Bitcoin locked in Lightning, and then looked at something like WP Bitcoin on Ethereum. It has tens of thousands of coins locked up and say, well, Lightning is not having the success that is this is, but it's like, well, the way these payment channels work, um, you can actually do a lot more with a lot less.
(10:54) And so, capital efficiency, um, is something that the Lightning Network has gotten extremely good at over the last three years specifically. Yeah, it's uh it's a great point because lighting is extremely capital efficient. You're connecting it to a network. So, you've got a single connection and that's kind of becomes a nexus.
(11:14) So, you can reach anywhere uh in lightning in just a a few amount of hops. So, you could reach the 15,000 or so nodes out there in four hops or less uh quite easily. you really don't need a whole bunch of extra capital. And that means that to handle the level of commerce that we're seeing on Lightning today, which we're we're estimating at over $10 billion annually is flowing through Lightning.
(11:44) That means that the entire balance of that's locked in Lightning is cycling twice monthly because we've got, you know, $500 million of capital in Lightning, which means it's super super chain efficient, super capital efficient. Uh we really just have liquidity slashing back and forth that's generating fees for the Lightning Node operators and the the ones that are well positioned especially.
(12:14) Yeah, 10 billion here. We need to pump that number. Do you think that number is going to go up? Uh, moving forward. >> I got to say, these are the numbers. I mean, it's already growing, but these are the numbers before Agentic payments really take off and before stable coins get involved, which are both massive drivers.
(12:37) Um, so I'm incredibly bullish on where we're headed with this. um even before those things were growing. >> Yeah. Well, let's hop into it. Tapered assets. Uh for anybody who's listening out there that's completely unaware of what that um that phrase means at all. Let's let's do a a highlevel explain it like M5.
(13:00) What are they? Why do they exist? What are they competing with? And how are they implemented um within Bitcoin and and the Lightning Network? >> Yeah. So, in order to create a tap routt asset, you're going to construct a specific Bitcoin transaction that says what asset you're creating. Um, how many of these tokens exist and what group are they part of? So that means you could do an initial burn or an initial mint of this asset, bring it to Bitcoin, and then you can do subsequent mints or subsequent burns on that to control how much of this asset is created. And the
(13:47) real purpose of this is that you can you can create a token and then have it backed by something outside of Bitcoin or another blockchain or whatever. Um the thing is it's a token and of course you're going to be introducing you know trust assumptions in whatever is backing it.
(14:12) Um, I think Genius Act and whatnot have, you know, done a lot of things to to support how this should be done, but at the technical level, it's creating a new token, how many of them exist on Bitcoin, and making it provable that there's only so many of these assets in existence. And so I think that's um I think people hear that like okay is pump.
(14:42) f fun coming to Bitcoin? Is the shitcoin casino coming to the lightning network? Are we enabling this uh proliferation of what many Bitcoiners, myself included, would deem to be um sort of casino-l like games or in your view, I mean, you mentioned stable coins and Tether has publicly stated that they're leaning into this like is it going to be something like stable coins? Obviously, real world assets is a big meme tokenizing real world assets uh this cycle.
(15:13) Um, how do how do you envision this this playing out? And for stable coins specifically, what is the benefit of minting uh and issuing and transacting with these stable coins over lightning compared to something like Tron or Salana, whatever they're running on today? >> Sure. So, Salana might be easier to issue some of these assets, especially, you know, any of these crypto casino tokens.
(15:39) Um, for Bitcoin specifically, what makes sense is for us to focus on what's meaningful for finance and settlement. So I think that's where stable coins fit the best because minting and burning is cheap today on Bitcoin, but we know that the global financial system is coming to Bitcoin and we have to be extremely chain efficient.
(16:09) So if you want to introduce these other types of casino tokens, I wouldn't bother doing that on Bitcoin itself. I would really focus on stable coins because what you're paying for is a blockchain that can't be stopped that has extremely high uptime. Like there's a reason that we we build on Bitcoin itself because it does have that full decentralization and we've got the most decentralized layer 2 built on top of it which is Lightning.
(16:40) So I'd focus things as much as possible on stable coins. We may see other things like uh real world assets, you know, tokenized gold, etc. Um, but I think where we see the most momentum and where we need lightning scalability is on stable coins, especially US dollar stable coins. >> Yeah.
(17:06) And so, uh, my vaunted co-host of Rabbit Hole Recap, Matt Odell, he's, uh, he's been a longtime bearer of Tapass and, uh, stable coins on Lightning specifically. and he his argument and I can see it. I think it's a valid argument, but I think you're the perfect person to play devil's advocate here is stable coins benefit from the centralization of networks like Tron and Salana, the relative centralization.
(17:30) um and trying to introduce them to a truly decentralized layer 2 and lightning, you sort of get the worst of both worlds where um you you have to play in this world that's distributed. you have all this channel management, you have wallet um compatibility considerations to to think about. Um what is the case for what is the the steelman case for issuing and transacting with stable coins on lightning specifically? >> If you're going to create a new token, it will be centralized.
(18:08) Um you're going to have one uh one set of assets and liabilities. You want to be looking at one balance sheet. you don't want to look at at a ton of them. Um, I think things that I find interesting might be like Caitlyn's long uh Caitlyn Long's tokenized deposits where those could become tapered assets. Uh, and so you could have something that is on the lightning network being being traded that's backed by one bank that has solid assets and liabilities that match up.
(18:44) So, I think there there is a centralized component to this. Um, and you do want to have one person that you can summon into a courtroom to answer for the assets and liabilities not matching up. I don't think you want to be in a fully decentralized system trying to seek out individual parties that are behind a single asset.
(19:09) Um, for Bitcoin, it's a different story because this is an an asset without an issuer. It is fundamentally different, which is why that Bitcoin is superior to any of these other tokens. Um, and you know, I was just in El Salvador. I heard Paulo from Tether talk about this. The guy is a Bitcoiner and also witnessed, hey, you know, we created this token.
(19:35) It's a US dollar stable coin. It's kind of a dumb thing. However, it has extreme product market fit because the world's demand for dollars is immense, but it doesn't need to be an issue where like it it could be it could be a government. I think, you know, all of us are terrified of CBDC's. However, I'm less terrified of them if they're on Bitcoin itself because you don't have that censorship ability on Bitcoin itself.
(20:05) Um, it's a it's a different story. Yeah. No, I was uh I saw Paulo speak at the Bitcoin Policy Institute event in June and it was funny how he described the creation of Tether. It was like somebody asked us uh to build it and we said, "Okay, we'll build it like sort of handwaved it away like maybe this will get a $100 million market cap is that but we have the capacity and the ability to do it.
(20:31) So, we'll we'll go do this. And obviously, it's turned into I don't know what its latest market cap is. Somewhere north of $180 billion, I think. And they're probably the most capital efficient company that's ever existed in terms of profit per employee. Um, and obviously they're uh one of the like it or not um one of the most important companies in the world right now.
(20:58) Um and to your point like product market fit really proved itself out. >> Yeah. Uh I think proof is in the pudding. Um overall people want dollars and Tether found a way to support the US government and I mean in many ways at finding a buyer for all of the government's debt through purchasing treasuries, tokenizing them and delivering them to the rest of the world.
(21:27) And I think the the you know Trump administration has really figured this out to recognize this does help US interests and has been a big part of why the US is now embracing stable coins because it does solve a problem. It finds the buyers for the debt that otherwise would not be attractive because the dollar has incredible brand name recognition and is deeply liquid.
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(23:25) Hyperlid compared to Coinbase are doing far better uh it seems like there's product market fit outside of Bitcoin for decentralized exchange um why does something like Rails X a DEX on Lightning makes sense. >> I think this is going to be the first DEX without its own token. Uh the token is Bitcoin and we have other assets that can now be traded on Bitcoin via the Lightning Network.
(23:56) So just about Lightning's efficiency, you now we're going from blockchain level efficiency, which we know does not scale. You look at Tron, they're seeing $3 to $6 per transaction and we're moving to the level of a data network which is lightning. So it performs much similar to that. So that means that we can have a decentralized system with no new token created that is operating like the internet in terms of scale so that we can achieve extremely low spreads and you can have a full decentralized economy that is all self-custody. Each of the players that
(24:36) will use Rails X can bring their own infrastructure. We can help them set up their own infrastructure. They can buy and sell digital assets peer-to-peer and choose their counterparties, choose their own policies. Like this is the decentralization that I wanted to see when I was, you know, in a call center listening to folks be beholdened to a bank's adversarial policies when this is about self-determination for Bitcoin.
(25:10) This is about sovereignty. is about freedom to transact with who you want, associate with who you want, and be able to trade seamlessly. >> Yeah. How'd you guys land on the idea for Rails X? And um beyond that, like let's talk about the implementation like how does it actually work? What's happening under the hood? >> Yeah, it solves a problem for us internally.
(25:37) Um the thing is we back in May we announced Rails which is a yield service. So we got Rails X that's doing trading peerto-peer and for Rails it's a Bitcoin yield service where you keep self-custody. And the the point of introducing Rails was that we needed incentive alignment between the Bitcoin treasury companies and Bitcoin's adoption as a medium of exchange.
(26:05) We wanted we wanted all that yield seeking behavior to be saying I want Bitcoin payments and I want Bitcoin to be the medium of exchange because that's honest yield. That's no lending. That's no re rehypothecation. But for routing, you've got Bitcoin that's slloshing between your channels and you're collecting fees when that happens.
(26:31) However, when you introduce a new asset into this, the sloshing that's happening in that means that your portfolio is shifting around. So, if I'm routing a whole bunch of stable coins to some business that wants to receive stable coins, that means that me as the next peer over, I'm accumulating Bitcoin and I'm losing my stable coin balance.
(26:55) So if I allow these customers who are using Rails to keep self-custody then I can't rebalance their channels for them. So because we introduced that limitation and we thought self-custody is important then we needed some other force in there to rebalance the channels for them between the assets and keep their portfolios relatively constant where they can have sloshing back and forth.
(27:28) So what we did for rails is we started generating price quotes which is uh what lighting labs would call the edge node service. So rails as a yield service in multiassets they're quite they're quoting prices between assets and now those prices get piped into rails x and so for rails x you see all these different prices being quoted.
(27:58) So a Rails X user can do simple uh buy low sell high between different nodes on the network and they are rebalancing the channels and capturing arbitrage opportunities for accumulations and shortages of assets within the lightning network. >> Okay, I need to get uh I need to get my agentic bot in this network uh playing around with it.
(28:24) [laughter] >> Everybody's focused on Poly Market. Rails X is here. There's probably better arbitrage opportunities there in the early days. You know, >> I I think the the bot play is like one of the first things that came up like as soon as we built this because it's all just going to be circular rebalances in Lightning but across assets.
(28:44) And it is something that is completely programmable, but it solves a problem for the people that are seeking yield and the people that are receiving payments across assets and want low spreads. So it is uh an open market approach to solving multi-assets in lightning. [clears throat] >> What do you think this does like uh for capacity on the lightning network? Like obviously we're talking about lightning's capital efficiency earlier, but if let's just run down the thought experiment and like people wake up, they're like, "Oh, like why would I want
(29:23) to have my stable coins run on Tron or Salana when they can run on the Lightning Network and could be compatible with Bitcoin invoices maybe at the end of the day, too." Um, and you see a ton of activity flood to the Lightning Network. Obviously, it's very capital efficient, but that capital efficiency will hit a limit which would dictate that more capital needs to be locked up in channels and so in terms of the growth of channel capacity and Bitcoin locked on the network, what's that going to do? Um, what effect is
(29:58) something like Rails X and Taper ass that's taking off going to have on that? And yeah, just broadly, where do we go? Where where do you see this going from here? I think the capacity the Bitcoin public capacity may not increase all that much. Um >> Oh, interesting. >> So there's a couple reasons for that is because all of the tapered asset channels are private.
(30:26) So if you want to continue to use the lightning network, you say I don't want to deal with any other assets or any other tokens, you can continue to operate purely in Bitcoin. This does not affect you. The only thing that changes is like the volume of transactions that are flowing through. So, we're going to see much more cycling that's happening.
(30:47) And I think just uh just this week, Voltage announced the million-doll payment on Lightning. It's a huge achievement for them. I think a massive proof point to say, you know, Lightning's no longer for for micro payments. The max size channel that you can do on lightning is 21 million bitcoin.
(31:11) Um so there's really no protocol limitation on how large you can go. Um, so that means that as this takes off, we're going to see much larger channels that are created to be able to settle larger payments that are happening across assets because long-term this becomes the foreign exchange market. If everybody's issuing their own stable coins, which ones are going to take off? There's going to be much more of like macro level countrywide speculation on the performance of these tokens which are sovereign currencies and overall it's going to mean much more
(31:58) commerce because the foreign exchange market is massive. They do $9.7 trillion every single day settled in that market. um it's the whole market and that means that Bitcoin is going to take that sector and you know Bitcoin whenever its price goes up that means fewer of the tokens move around on lightning because it's like the pipes just expanded for how much value can be settled.
(32:28) So overall, it's positioned to be long-term bullish and that that could mean that it can remain extremely capital efficient. But we will see shortages and when there are shortages of Bitcoin in lightning, that means the yields spike up. So overall much more routing activity. >> Yeah, that's another thing we forgot to mention with the capital efficiency number go up.
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(34:48) com and use the code TFTCT10 at checkout to get 10% off your new Bitcoin multiig vault. That's TFTCT10 at unchain.com. I love uh I love the confidence with which you're saying all this. Like Bitcoin is going to take the FX market. This is happening. Uh this seems very underappreciated right now. Maybe I I would argue most people are completely unaware that this is even possible on Bitcoin right now.
(35:12) your boots on the ground. Obviously, you're on the cutting edge of all this. I saw you in person in New York earlier this week making the rounds. Like, what would you say to the relative awareness of something like Tapered Assets and or not even Tapered Assets specifically, but the fact that this is possible on Bitcoin? Um, are people beginning to wake up to it when you give the pitch? Um, are you seeing people recognize the the benefits doing it this way as opposed to on another change or a combination of chains? Um, how and to that point like how long do
(35:49) you think it takes for the market to wake up to this? >> As far as as far as the adoption goes, um, Lightning is going to solve one specific use case in pockets. So, Bitcoin Beach in El Salvador, it's like a great example of, you know, adoption happening in one place. And for Ambos, you know, we're we're a middleware provider.
(36:12) So, we're operating at the liquidity market side, but then we have folks like Voltage that are solving payments API adoption. So, they're mapping to the user cases. So all of the lightning network activity is going to happen in the background. So all we're going to see is widespread adoption of the lightning network invoice. So this is going to do the settlement across the network.
(36:42) It it won't matter what currency that you're transacting in. So we just have something that's standard that's Bitcoin compatible. whatever currency you want to send, whatever currency you want to receive, it's all using the exact same invoice. And what we're seeing from Voltage is they're they're answering the needs of i Gaming first, which they are having an immense amount of trouble getting a simple bank account.
(37:11) And Stripe and the other payment processors don't want to serve them because those customers are they have incredibly high fraud rates. They're getting killed by chargebacks. So, Bitcoin is there for them to serve like that market and they're doing incredible volumes. All of the poly market stuff, all of the like online gambling type of things that is going to get served by by Bitcoin, by Lightning Payments because it can do the micro payments.
(37:45) It doesn't have chargebacks and it's more decentralized. It can operate in, you know, many of the underserved markets. And so when you said the everything's going to be abstracted away to a lightning invoice, you can pay whatever pay in whatever currency you know you deem necessary or prefer. Does that necessitate uh local stable coins or like are we talking something like you're just going to pipe into like the like what Strike's doing with like you can send or Cash App like dollars to Bitcoin easily is like integrations like that that interface
(38:24) with the banking system itself a combination of the two. >> Yeah. like we'll still have on and off ramps and those on and off ramps that's what you'll where you'll have KYC AML type of stuff. So if you want to move to the tra traditional financial system but if we're operating purely on Bitcoin then you don't need to touch the traditional financial financial system you can continue to operate.
(38:51) So like that's where there's going to be some friction is when you want to go to a traditional bank account. However, if you've got tokens that are issued on Bitcoin, you know, you can trade peer-to-peer, you can start accepting currencies without needing a bank account anymore. And you've got something that is widely interoperable.
(39:15) So, anywhere that accepts a lightning payment, then you could offramp to a bank account. >> Yeah. I mean, it seems extremely profound. And then again, it's like I'm banging my head, why doesn't the market realize this yet? And obviously, your answer is going to start in pockets, but it seems like we have accessibility to sci-fi tech or to >> it's it's going to it's going to be flat flat flat flat and then it's going to be vertical.
(39:46) I mean, this is a gradually then suddenly type of adoption for Bitcoin payments. >> Yeah. Who do you think uh I mean outside of Bitcoin Beach like what uh or maybe a better way to frame it is what what would your ideal adopter look like? uh for us massive volumes. Uh if you want to be moving a ton of value and not have anyone looking over your shoulder to kind of uh say uh to slow you down in any type of way, then like lightning is what you should be using because it's incredibly scalable.
(40:22) Um you can also do microp payments. I think this is what what makes sense for the machine economy. You want to have AI agents and your Clawadbot just running wild and making money for you or paying out money uh hiring your fellow humans. Uh that that can happen on Lightning at scale because Lightning can do 40 million transactions per second while any of these other chains like Salana, you know, is going to cap out at 70,000 transactions per second.
(40:56) Yeah, well that's you brought it up. The agentic economy. How big is this opportunity and how real is it? And most importantly, um I'll just give this little preamble. I think a lot of Bitcoiners are just assuming, oh, the agents are going to choose Bitcoin because it's the best money. It's obvious.
(41:14) But, uh, if you've been playing with these tools, you realize that, uh, we're not at a AGI or ASI yet. And they are very subservient to their masters and will do whatever you tell them. And so I think the the onus is on Bitcoiners not to convince agents that Bitcoin is the best money but the people actually controlling the agents that this is the best way to do it. Um but the opportunity is massive.
(41:37) >> Yeah. I I think uh DeFi has already told us that Bitcoin is the favorite. Um that's like the safe >> that's the the safe zone. Um or you denominate your wins in DeFi in Bitcoin terms. Uh, of course, you know, stable coins are probably second to that. Or, you know, maybe I'm maybe I'm wrong on that.
(42:03) Maybe people love stable coins as the first stop. Uh, but it's going to seek deep liquid markets. Yeah. And so, thinking about equipping these agents, I mean, you guys uh released something for that, too. I think that's been fun to watch the last two weeks specifically as everybody has realized like, oh, maybe I should play around with OpenClaw and now they're realizing uh they're mapping the territory and realizing that these agents can spin up.
(42:35) Uh mine has a Phoenix D server and is able to len URL off into websites and then send Bitcoin and transact pretty autonomously. Um, and it's been fun seeing you guys. is I think I saw um uh Magnolia I think for their bank accounts. I didn't note that they have Bitcoin compatibility, but we've seen uh Money Devkit out.
(43:01) Uh I think Bram uh Cranstein came out with something that makes it easy to get your agent access to a Bitcoin wallet via Nostra Wallet Connect. Um and so we've had this explosion of skills in the Bitcoin space trying to equip agents which has been fun to watch. Heck yeah. Yeah. We we released the Magma MCP so that your AI agent can understand how to source liquidity.
(43:29) Um so that you can access an open marketplace for liquidity. You're not going to be locked into one provider that might be behind some of these uh other LSP tools. So yeah, you can access liquidity from anywhere on what makes sense. So the Magma MCP is like a step in that direction so that you can, you know, choose the right infrastructure, you know, whether it be Albbyhub or Voltage or an LDK node and source liquidity in a decentralized way.
(44:04) >> Yes, a better price. I need to teach uh my agent Martinbot how to uh I need to give it the Magma MCP plugin, right? I opened the channel via a Bolts submarine swap to Async. It was rather expensive and uh it is going to have to it's it's very profitable right now. It's it's making some Bitcoin. It's going to have to rebalance channels and so it makes sense to to plug into a liquidity pool that does it efficiently, right? It does.
(44:37) Um it's it's straightforward for humans to do. Um but also now your agent can do it. Uh it's really just paying a lightning invoice. >> Yeah. Well, that's the point I think Matt and I have been talking about and others like the the craziest thing of the explosion of this sort of harness on top of these LLM has been I mean I would push back and say like yes it's easy for a human to use magma but the humans that are using magma or people that are like on not on the cutting edge but like understand Bitcoin, understand the
(45:08) lightning network, understand channel management, liquidity, uh inbound outbound liquidity and all that But I think the layman is never going to take or put in the effort to understand the intricacies of how this works and how to be capital efficient. And the beauty of this emerging agentic economy is that your computer can just learn how to do it and do it for you without you having to do the hard work.
(45:35) >> Exactly. >> And I think that's going to be massive for adoption and usage on the lightning network specifically. >> It's it's going to be huge. I mean, now we've got MCPs which are like just forcing your AI to read the docs, uh, read the manual and know how to use these tools and then be able to map those to the solution, which is, you know, earn money for your for your human.
(46:02) >> Yeah. Well, let's get into that. Like, how so when you're building this MCP, what is what are the docs? What are the the uh manuals that you're handing agents? >> Yeah. I it really is uh just kind of teaching an agent how to use an API. So overall, you know, what what lightning invoice do you pay? Um and kind of what happens then? Who like what types of authentication do you need in order to do this? Um it really is uh you know two two or three API calls in order to order liquidity but it would map into a larger
(46:42) set. So you know does your AI agent know how to run a lightning node already? When does it need to purchase liquidity? That's where it would use the MCP portion. So, it really is a small element of the overall stack, but it's an important one because that's the piece that gets you liquidity, which enables us to have a debt-free payment system that works for anyone, whether they be human or an AI.
(47:14) >> Have you been playing around with the AI tools a lot? >> I haven't. Um however my team has and overall I'm seeing the productivity come out of it that is massive. Um any of these small elements that I see like on our like UI that you know I would want to tweak or fix suddenly that it's on the table that's a fun 4-minute project for them to do instead of spending a day on it.
(47:48) Um, this is a productivity accelerator. Um, we're in a completely different paradigm now. >> Well, as a founder, how does it has it how's it changed how you view scaling your business? >> I just heard that Twitter is now a team of 30 30 people are running X. Um, that tells me that there's incredibly lean teams that are able to take on the world.
(48:23) Um, if you have good judgment, um, you now have rocket fuel added to your ability to execute that. Um, if you execute, if you have poor judgment, now you become a slop cannon. um and are just >> I saw that team the team. [laughter] >> Yeah, >> you don't want to be a slob cannon. >> Don't be a slob cannon. Um you want to be really thoughtful about how you're using these tools because they're incredibly powerful and you could be so much faster.
(48:53) >> Yeah. Yeah. What was the the four quarters like high agency competent? Like top right like you're going to be fine, but it's like low agency incompetent. you're just going to be a slop cannon where previously before AI tools in like if you're low agency, low competency, you could hand them menial jobs, but in the world of AI slop potential, they can really screw things up.
(49:16) It's true. Um, so, you know, we built we built a great team. So, overall, I'm I'm loving how they're using these tools uh because we're able to achieve way more um and deliver deliver awesome products faster. Yeah. What um I mean beyond what we've discussed today, Rails, Rails X, uh the uh MCP plugin, what are you looking forward to um in the immediate and medium and long-term future in terms of like product suites and just Bitcoin overall? What do you what do you think needs to happen? I think again opining back to my
(49:57) comment earlier um or hearkening back to my comment earlier about the fact that I think uh particularly in the last two years Bitcoiners have gotten complacent in the sense it's like oh it's built it'll just happen. It's like no I think we need to get out there and uh really prove that it's worthwhile and um you should be adopting this.
(50:16) Uh what what do you think needs to happen for for Bitcoin to basically hit that tipping point where the mainstream doesn't look at it as some volatile Ponzi scheme asset, but as something that has incredible inherent value that can really um improve their lives and their businesses. >> I I think um what I'll look forward to is, you know, Bitcoin continuing to do what it does.
(50:46) um and be robust, reliable infrastructure. I think really that's it's underpinning our our value system and it's going to be our rock going into the next years which are going to be increasingly chaotic. Um while the rest of the world does what it does, Bitcoin will remain our steady hands. Um and I think that's that's like that most important foundation.
(51:15) Um, and being that it's open source and now that we're equipped with AI tools, the acceleration of development in order to be prepared for what's ahead, we just become more capable so that we can be continue to be productive and continue to do good things based on solid fundamentals where, you know, I'm more bullish than ever on our on our future.
(51:42) And I think that'll pan out. I think people will start to realize the Bitcoin builders are the ones that last and they're not being distracted by a whole bunch of token incentives. Um they'll continue to build. I think that will long-term really pan out for the venture capitalists within the space um that are investing in Bitcoin companies and uh we'll watch it play out.
(52:09) >> Thank you for that plug for venture capitalist there. much appreciated. Um >> the uh the to your to your uh to your point like I think um I think just like the long and steady brick by brick um progression just like staying the course is most important. I really like what you said about Bitcoin just being this reliable anchor as we go through this crazy chaotic transition in the world where there's technology with AI and the disruption that comes along with it, the geopolitics, the I mean throw in the Epstein files, whatever is
(52:46) happening. And to your point, like I've always like to when I explain Bitcoin and it's been described as a truth anchor and all this, but like like visualize it to people. For some reason, I always had this weird visualization of Bitcoin that really hearkens back to um the first iteration of [snorts] uh double entry accounting, which is where you would live in a town square, and then you'd go to the bank and you'd say, "Hey, I did a deal with him.
(53:10) I need you to change the debits and credits in our accounts to account for that." And Bitcoin is simply instead of going to that bank in the middle of that town square, it's just like a a beam of light streaming into the air and that is like what you anchor into. And anybody can approach it. You don't have to talk to an individual.
(53:28) You just go up to that beam and you you anchor your uh the truth of your transaction into it. It's very esoteric. Probably a little gay, but uh I think uh [laughter] I think that visualization uh it works for me at least. But like to your point, like having this stability, I don't think people really recognize the profound nature of this in these chaotic times, but being able to depend on Bitcoin to do what it does, produce a block roughly every 10 minutes, have a difficulty adjustment every 2016 blocks, have a subsidy having every 210,000
(54:03) blocks. um that is incredibly value in a world in which uh things are changing rapidly around us. [snorts] >> Kind of speaking to you know being a founder one of the biggest risks that we can have is to get distracted um and not be laser focused. So I deeply appreciate the Bitcoiner meme of laser focus and I think Bitcoin in many ways embodies that.
(54:33) uh like you said in order to create that beam of light and Bitcoin become in Dan Tapiro's words be a truth machine like what Bitcoin is doing is saying no to thousands upon thousands of garbage transactions that are out there to say you know no this is not going to be part of the record and only when you meet all of the stringent requirements of being provable being backed.
(55:04) We know exactly where the money came from to make this transaction happen. Only then does it get approved to be part of the Bitcoin blockchain. And I think that is powerful. It's objective. Um and it it gives Bitcoin what it needs to be to be that solid foundation. >> It's very simple, too. Yeah, I think it's important to I think it's another thing we've gotten away from um at least in the Bitcoin public sphere on X especially just these simple truths that exist within Bitcoin that are simple yet extremely powerful.
(55:38) It's uh if you're not abiding by the rules if you don't have a UTXO, a valid UTXO with an amount of Bitcoin that can cover the transaction you're trying to make to a public address that actually exists um and is compatible with the network as well. like it's not going to happen. That's simple. It's relatively dumb from an engineering perspective, but it's extremely powerful.
(56:00) >> Yeah, I I love it. Um, another aspect that, you know, like looking forward, um, is really about privacy. Um, I think we're seeing a lot of hand ringing of the stable coins, you know, talking about how they're going to incorporate privacy. Um, but I think a lot of the stuff around Lightning and its ability to keep transaction level privacy is is being undervalued when it may be that solution that the stable coins need in order to protect transaction level privacy but still have things be fully accountable at the blockchain level.
(56:41) >> Well, let's jump into that. How would um stable coins running via tapered assets over lightning uh provide an individual actor with more privacy compared to doing it on Tron or uh Salana or whatever it may be? >> Yeah. Uh well, at the blockchain level, you can see every single transaction. Um and so if you've got something that's on Tron, well, it can look up the the record of that.
(57:13) Um many of these blockchains operate the same way unless they have you know some type of cryptography like kind of uh Monero but then for Monero you lose the ability to do the widespread accounting calculation and making sure that there is a a known supply that has not grown. So like that's that's one of the pieces that Bitcoin has like we know there's never going to be more than 21 million.
(57:40) Like we can run the script, it doesn't take long at all to count how many bitcoins have been created. But when it comes to scaling things up, you create a a lightning channel and there's a certain amount of Bitcoin in to create this what I like to call a joint account with a with another peer. any of the individual transactions within that lightning channel, they don't exist on the blockchain, nor will they ever.
(58:11) And then, you know, after some years, you may close out the channel and each each party in the channel gets their payout, which is the net settlement after many years and thousands or hundreds of thousands or millions of transactions have occurred. So it gives you that transaction level privacy, but what is lasting is uh your peers, all the friends you made along the way um to connect to to other folks.
(58:44) You're kind of building a reputation at the at the node level instead of at the >> individual transaction level where people are peering into everything you're spending money on. Yeah, it is still mindboggling to me just like seeing like people trading on Poly Market or trading assets on chains like Ethereum like due to their accountbased system.
(59:08) You can just see like you just be like, "Oh, here's Vitalic's wallet like it's his. we know it's his and we can see every transaction he's making and there doesn't seem to be any any qualms or um you know worry about that sort of lack of privacy existing on all these chains especially when you're especially for like poly market indexes and things like that if you're trying to get a market edge but everybody can see your balance at any given point in time and what asset you're trading it's like it seems like we'll look I mean at least who knows time will tell and the market will
(59:42) decide But to me, it's like I think we'll look back at this be like, it was insane that we did things this way. >> It's going to be crazy cuz, you know, for Lightning, we're creating side ledgers. Um, that's what each channel is. It's a side ledger that you just have with one other party. And I know Lightning Labs has been working on a tool to actually erase that history, you know, once it's over.
(1:00:05) Um, there's no need to keep it around. Um, yeah, it's it's nobody's business and it doesn't need to exist anymore. But we don't have to live in a world where there's going to be massive data breaches where all of this information gets exposed and people are pouring through it later. Yeah. Yeah. We're going to do it the right way.
(1:00:30) This is exciting. I know you've been working on this uh very hard for the last 5 years. It's uh it seemed like the momentum at Amboss has been picking up considerably over the last year. Uh and so it's it's really fun to see you guys succeeding, launching new products and really honestly pushing the industry towards a place where I would argue it needs to be.
(1:00:51) Again, I'm not I don't I'm not a trader. I don't I'm not going to speculate on assets that are trading on DEXes. I recognize the value of stable coins, the product market fit they've had. And for quite a while, over a decade now, um the whole meme is going to be like what you can do on uh shitcoin trade chains is eventually going to come to Bitcoin.
(1:01:12) But I think the hard discussion within Bitcoin [snorts] uh across that decade has been all right, we need to make sure we do it the right way with the um with a trade-off set that everybody's comfortable with. And I think pushing all this up into lightning makes a lot of sense from the scalability efficiency perspective, but then too a large part of um what we just discussed the privacy aspect of it as well. Um it's doing it the right way.
(1:01:41) >> Yeah. Uh thank you. Um we have been working hard at this. Um, and overall it's just because we want people to have more control over their, you know, financial futures. Um, not be beholden to others and what policies they they institute in some backroom deal. Um, that you could have sovereignty over how you trade, how you interact, how you peer with others, how you associate.
(1:02:10) Um, and this gives us uh quite a bit of power at the individual level to be able to select what currency we want to receive, what currency we want to send. And that information isn't even contained in the lightning invoice. It's going to be private on what currency you are receiving and what currency you're sending.
(1:02:35) And Bitcoin is at the core of it going to be that connector. So, Bitcoin can become the medium of exchange and not just a store of value. >> And is that privacy attained via B 12 specifically in the invoice? >> It's it's not. Uh the way it works is um you're going to choose which channel you're going to receive your payment in. And one of those channels may be a taproot asset.
(1:02:59) So it really just looks like a routing hint >> to say, "Hey, use this channel that is not publicly visible." >> Okay. >> So it's just just they don't know what they're routing. >> Exactly. >> Yeah. This is beautiful. >> Well, Jesse, I hope um the next time [snorts] we're in New York together, uh we get to make a trip back to Automatic Slims and sing uh sing American Pie.
(1:03:25) Um [laughter] >> we didn't get to do it this week. Um, I'm I'm looking forward to it and we can catch a 4 a.m. slice of pizza. Um, >> yeah, >> look forward to it. >> Where can um, anybody so curious find out more about what you guys are building on Ambos? Test out Rails, Rails X, uh, Magga Magma, MCP. [snorts] >> Um, you can always find our information at amboss.te for the company site.
(1:03:53) Uh if you want to dive deep into you know exploring lightning it's amboss.space for the explorer. Um but you can find us on X at amboss tech or you follow us on Noster as well. Um yeah I'm available as Jifer_BTC on X. Great X handle. Uh justifer. Um we'll include all those links in the show notes.
(1:04:19) I hope you enjoy the rest of your Friday and uh can't wait to see you again, brother. >> Yeah, look forward to it. Thanks so much, Marty. >> Cheers. >> Peace and love, freaks. >> Thank you for listening to this episode of TFTC. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family.
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