May 5, 2021
CD20: the liquid network, bisq, and bitcoin privacy with Adam Back and Wiz
EPISODE: 0.2.0
BLOCK: 681951
PRICE: 1837 sats per dollar
TOPICS: the liquid network, bisq, bitcoin privacy
@adam3us: https://twitter.com/adam3us
@wiz: https://twitter.com/wiz
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00:00 - Competition in currency and decentralization of monetary and financial power
02:28 - Citadel Dispatch and Bitcoin distributed systems privacy and open source software
06:26 - Liquid network and its benefits
18:08 - The trade-offs of using Liquid, Lightning, and Onchain Bitcoin
21:18 - Concerns about custodial risk and the need for user-driven peg outs or distributed atomic swap markets
25:30 - The plan for dynamic federations in Liquid
46:45 - The security model and the peg out asymmetry in Liquid
52:48 - The purpose of the 2 of 3 disaster recovery plan
57:44 - The fix for the bugs in the disaster recovery plan
01:08:31 - Comparison of Liquid and Lightning Network
01:43:49 - Stablecoin discussion: Sats as stablecoin
01:44:13 - Using Liquid to onboard onto Lightning
01:45:47 - Creating a combined Lightning network that can route between Liquid and Bitcoin
02:35:31 - Building your own server and hosting services
02:37:22 - Blockchain satellite and its trust requirements
02:49:58 - The future of Bisk and the challenges it faces
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:03:41 PM
Duration: 12088.007
Channels: 1
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Do you have a strong view about cryptocurrencies like Bitcoin
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given all the things you just said?
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I think that it is healthy
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to have
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competition
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in currency.
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I think that, we're looking at a very interesting
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future competition. For me,
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it's it's less interesting to talk about central bank digital currencies.
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I'm interested in the people who are more oriented toward the decentralization
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of monetary and financial power, who really wanna return money to its basic function
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of being a reliable unit of account, a dependable store value.
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I'm not suggesting that the cryptocurrencies
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have attained that because, for the most part, when you wanna buy something with them, you you still have to translate them back into the local currency, and so their value seems to move. But I do appreciate the idea
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that you want a currency that means the same thing on both sides of a of a supply and demand transaction
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between the producer and the consumer,
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And that is where price signals do their magic if they are accurate
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and they provide clear signals to all parties involved in the transaction.
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And so it's it's very interesting to see how this will shape up between
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sovereign created currencies
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and privately created currencies,
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and you'll get back into the old arguments. It's useful to look at monetary history
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between Robert Mundell
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and Milton Friedman
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and looking at Friedrich Hayek who predicted decades ago
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that you would have
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private currencies
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that would compete and provide a better product
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than sovereign provided
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currencies.
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What is up, freaks?
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Happy Bitcoin Tuesday. It's your boy, Matt Odell, here for another Citadel dispatch.
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This is episode 20.
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Pretty fucking crazy that we're already 20 dispatches down.
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Citadel Dispatch is the interactive live show about Bitcoin distributed systems privacy and open source software.
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That intro was Trump's Fed nominee, Judy
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Shelton,
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who sounded like a Bitcoiner to me.
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That was kind of crazy to hear her talk about it like that on CNBC.
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Free nations should be prioritizing open monetary competition.
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Shout out to the freaks supporting the show.
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It would be nothing without you guys.
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I wanna keep this ad free forever.
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No sponsors.
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Community funded.
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This is how we do it.
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So thank you.
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And shout out to the ride or die who are here for another live show.
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Without you, this would be nothing.
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So
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our platforms now are Twitter, Twitch, and YouTube as usual, but, also, we are now streaming live to Bitcoin TV,
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which is pretty fucking cool, which Wiz is hosting himself.
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If you do watch it through Bitcoin TV, you cannot use,
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the live chat to to be a part of this,
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but it is what it is. We are working on it. We are iterating, and it's fucking dope.
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And then last but not least, I just wanted to shout out to everyone that comes in through,
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both of our audio streams, but especially,
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those in the Sphinx tribe
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and Breeze and other podcasting 2 point o apps. It's pretty cool that we can stream value,
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directly
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to content creators, and being a part of that equation with you guys is really special. It's it's really cool seeing the Satch stream in.
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With all that said, I mean, I'm really excited about this show.
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As I said, it is the 20th dispatch and seems really fitting,
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that we have Adam back here, a legend in the space and cofounder of Blockstream.
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How's it going, Adam?
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Pretty good. Always lots to talk about in the,
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Bitcoin
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tech space.
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And we have Wiz joining us again.
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Project you know, one of the project leads at bisque
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and mempool dot space,
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and also happens to be a Liquid Federation member. So today's topics of Liquid, Bisque, and Bitcoin privacy are gonna be particularly
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suited to him. What's up, Wiz? Welcome back.
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It's always a pleasure, Matt. Thanks for having me.
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Me.
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Happy Bitcoin Tuesday, guys. It's been a long week. It's I'm excited to be here.
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It's, Wednesday here. But
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Good morning, Liz. I appreciate you waking up at, 4 in the morning for us.
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It's it's cool, Matt. Anytime. Only for you and Adam, though. Nobody else.
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Yeah. I was just saying I'll be more likely to be going to bed at 4 AM than getting up at 4 AM. So Like a true cyberpunk.
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Yeah.
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So so, guys, I mean, I I figured the best place to start is Liquid. I mean,
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I don't think there's enough open discussion about the Liquid network. I think it's an interesting tool available to Bitcoiners.
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I think one of the things that people tend to,
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I think they tend to miss with these types of discussions is that we have many tools available to us. They all have different trade offs,
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and they aren't necessarily mutually exclusive.
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You can use many tools, or you can use none of the tools. You get to choose what you want. That's what's cool about Bitcoin to me.
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So with all that said, Adam, do you wanna give,
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our audience, you know, a quick
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explanation of of why they should care that the liquid network exists?
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Yeah. It's,
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it's a different layer 2,
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And it was bought shortly,
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I guess, a year before
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I set about, you know, trying to form Blockstream,
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I was
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now I got interested in Bitcoin and went a rabbit hole like everybody. And my background was electronic cash,
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privacy enhancing technologies,
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and
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kind of applied crypto. And so
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I thought one
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area that Bitcoin
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could be improved was privacy and fungibility. So I
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spent, like, a few months trying to figure out the most efficient space efficient way to do confidential transactions.
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Well, what it wasn't called at that time, but what became known as confidential transactions.
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So it's a way to
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encrypt
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the
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amounts
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in Bitcoin transaction.
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You don't know how much money on transact kind of private math.
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I think we might have lost Adam there. Wizz, can you hear me?
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You're just fine, Matt.
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Okay. So,
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while we have, you know, we're doing this live, while we have Adam,
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just reset real quick,
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we'll proceed to Wiz. Wiz,
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you are
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a Liquid Federation member.
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It's kind of odd if you look at the Liquid Federation members. There's a lot of exchanges and large companies,
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and then there's just wiz there.
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Do you want to tell the freaks, you know, how that happened, why that happened, and what that means to you?
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Yeah. That's probably a good place to start.
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I I think it all kinda started with the
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the so called block size debate. Right? At some point, there was this realization that, Bitcoin fees would go up
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and kind of pump forever.
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And so if you're gonna have a small base layer blockchain,
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then you need a number of,
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layer 2 blockchains or side chains or off chain solutions like lightning, liquid, etcetera.
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And so I was very interested in the, the elements core side chain project and the technology that Blockstream had developed.
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They
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they were they published, like, a really cool, actually several white papers on the Blockstream website about side chains and about, the liquid one more recently.
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And, like Adam was saying about the confidential,
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transactions,
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and, you know, other base layer privacy
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features they have, which I thought were really cool.
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Hey, Adam.
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I think I dropped her.
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Yeah. Welcome back.
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I was just I was just saying,
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I I got really interested in liquid and, I think I tweeted at Adam actually one day. I said, Adam,
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why why wouldn't a bunch of cypherpunks, like individual cypherpunks,
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you know, kind of fork the elements project and make our own liquid instance
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for the community.
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Right?
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Yep.
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Yeah. And actually,
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there's a there's a Telegram group. Right? Where a bunch of people were discussing Right. How they might do that. So I was like, wow, this is really cool. I joined the discussion
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and made a suggestion which was to,
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do something first, which is sort of less work, and then move on to running a full network, which is to operate
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a second peg.
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So
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the
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in liquid, the blocks are
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signed by block signers, and then there's also a PEG
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manager, which is operate by the same HSMs.
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And
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those keys are the same in today's liquid network, but they don't have to be. So
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you could actually introduce
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a second
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peg that was operated by completely different people. And so it struck me that
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it would be easier to, you know, set up some HSMs or software
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operate by different people around the world with,
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you know, some kind of 2 out of 3
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or 11 out of 15 or some suitable size
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and have a Cypherpunks
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bitcoin, like a CBTC, 7 RBTC.
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So I think that'd be pretty cool to, to get there.
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Yeah. I remember we had discussed that, very early on. And at some point, I remember we were talking and you said, well, why don't, you know, wouldn't it make more sense to collaborate,
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you know,
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it
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it yeah. At least in the in the beginning or to until we figure out what we wanna do. And I I remember,
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you had kinda invited me to to join the federation and
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and kinda collaborate.
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So I'm I'm glad that,
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you know, I'm glad to be a member of the federation. It feels really cool to, even be now part of the oversight board to be able to,
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you know, kind of, talk to all of these large companies and,
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you know, oversee them,
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so to speak on behalf of, like, the BIS community or the Bitcoin community,
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and
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it's it's it's pretty cool. It's it's it's
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also going back to,
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like, what I was saying when you dropped out was, the small,
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or the the so called block size debate.
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Mhmm.
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Bitcoiners
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obviously have seen very low fees,
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up until very, very recently, the past few months,
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and so there wasn't,
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a really obvious need for
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layer 2. Right? Even lightning was pretty much dead the past couple years,
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but we all know it's coming. Right? Matt Matt said, the other day on the show,
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bitcoin fees are bitcoin fees are designed to pump forever,
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which is very That one triggered a lot of people.
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Well users want users want the best of all worlds right? They want the perfect security of the Bitcoin blockchain, they want the perfect privacy,
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they and they want it all for free, right? They want low fees too.
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But that doesn't really work because
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you need, you need to pay for miners
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and
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obviously, we're doing that by inflating the block, the Bitcoin supply now.
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But as it transitions to,
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you know, directly users paying the miners, with the transaction fee market,
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on chain transactions are gonna gonna become very,
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expensive, and this is something that,
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people need to accept and people need to understand.
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And so,
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this is the this is where the trade offs begin. Right? I think Adam Adam put this, in the in the tweet, a few months back. He said it's kind of like when, the Internet was starting
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and,
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congestion control was getting added into the TCP layer. Right?
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There was this huge
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debate. Well, we didn't need congestion control before so of course the users want to have,
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you know, as much bandwidth as possible. They don't wanna like,
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have, like, a fee market, so to speak.
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Right, Adam? That that Yeah. Yeah. I mean, I was trying to make an analogy that would resonate with people
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who are familiar with,
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you know, routers and operating ISPs
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and entities. So, no one no one you do you run your own ISP. I guess that one, made me, you know, was, like, something that paused to you. But, I guess, my point was that,
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you know, people are suddenly saying, well,
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Bitcoin transactions are always cleared for, like, once Toshi buy in the past, why is why is this this force change? And,
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really, it was just the, you know, you know, like, the Internet was extremely unloaded
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and so
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the flow control protocols never got to work out. No packets got dropped through to congestion.
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And, you know, suddenly you have the AOL effect and
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perpetual September and more users than it can cope with.
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And, of course, the flow control
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gets to work out and then people get upset. Like, why where is this FlowControl coming from? I don't like FlowControl. I was like, yeah. But I mean, what are you gonna do? You know, there's more demand than
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possible
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capacity.
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It has to
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degrade gracefully. I mean, I I think I I might say something more controversial
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actually
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about
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main chain blocks based stepping away from liquid or lightning.
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I saw some questions about, why liquid instead of lightning, so maybe we'll come back to it in a sec. But,
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I mean, I think even just about
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Bitcoin alone, the main chain,
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and, you know, Matt's comment, fees are gonna pump forever.
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I think that, to me at least, Bitcoin is about,
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you
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know, bearer like, empowering end users with
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bearer hard e cache that can't be seized and you can spend.
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And
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so it, you know, it doesn't have to be
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cups of coffee.
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But I think if
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the demand for block space got extremely high because there's lots of traders, that's one problem,
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or institutions or whales
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such that,
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you know, the fees got to be consistently,
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I don't know, $1,000
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a transaction or something, I would become a moderate big blocker, I think, at that point. Because I think that would have,
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you know, priced out
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the different shared use case. By that, I mean, the the use case the banks can't compete with. Right? So if you crowd out the
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main use case, that's a problem.
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So,
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you know, one of the thoughts with Liquid actually was that
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it's if you've got traders
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and I understand not everybody's a trader. Right? A lot of people just cold store. And I think that's
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a winning strategy as far as it goes.
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But the the traders are just moving, you know, Bitcoins and other assets between exchanges.
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So they're going from,
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like, Bitfinex custody to,
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I don't know, Bitsy or some other exchange,
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and
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is one custodian to another. So the fact that they send out on the Bitcoin chain is is essentially spam. Right? Because
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if they could if they had another way to transfer from custody of exchange a to custody of exchange b, Bitcoin chain doesn't need to see that, and they don't even get any benefit from themselves.
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And also the people that are trading like that, they are,
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completely fee insensitive. So it's I think it's generally accepted that most of the
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fee escalation
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is related to impatient traders. And the the reason they don't care is, you know, maybe the average transaction size is $10,000
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or $50,000,
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something like that. And they're gonna be paying,
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you know, 0.1 to 0.2 percent
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fees for the trade.
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So, you know, whether they have to pay 10¢ or a dollar for transaction,
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they don't they really don't care. So they just look at
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what's the fee, and then they'll double it and send it. Right? Just to be sure they're in the next block. So And yeah. Adam, let me jump in here real quick, because I feel like we're getting into the weeds a little bit without giving a a good overview.
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Yeah. 1st first comes first.
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The
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tell me tell me if this is a decent,
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TLDR, you know, quick summary of of what Liquid is. Liquid
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is essentially
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a multisig of,
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partners
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that are running this network,
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and you can move Bitcoin into that multisig
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to then transact on this side chain. That is called a peg in, or you can move you can move Bitcoin off of that, and that is called a out. And the peg in is a perm is a permissionless
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system where anyone can can peg in at will into this this multisig side chain.
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And then,
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the peg out is requires,
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the federation members to allow that to happen. Would you agree on that summary?
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Yeah. I mean, there's actually,
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so a few things there. That's that's correct.
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And for people's expectations
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because, you know, when when liquid was first announced, some of the wording was about exchanges and traders. So people assumed,
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oh, you'd have to be in exchange to transact on it or something. But actually, you know, the exchanges don't generally transact.
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It's just users. Right?
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And and just to jump in, so so and I missed a point. The reason a user would do that is because in return, they get low fees, quick confirmations,
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and confidential transactions, which is what you talked about earlier where where the amounts are blinded. So when you look on chain, if you look at a Liquid Explorer
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as opposed to a a Bitcoin Block Explorer, it won't show you the amounts that are being sent between people. It will still show you the addresses. It'll look like a Bitcoin address, but it's a liquid address.
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But it doesn't show you the amounts, and
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and and in regards to tokens, it won't show you what token is being traded either. So that's why a user would
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consider switching into into liquid.
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Now you mentioned something about traders.
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I think we should just really talk about this in passing because I really feel like it kind of has hurt liquid adoption so far in terms of my audience,
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because it it has as you said, it kind of
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it made people think like, oh, well, I'm not a trader, so I shouldn't care about it. In terms of traders, what you mentioned is that they're willing to pay higher fees, and that is because on chain,
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what the scarce resource that is being traded is is that block space.
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So you're being charged based on the amount of data you are sending,
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not the amount you are sending. So all else equal, a user that's sending a $10 transaction
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and a user that is sending a $2,000,000
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transaction,
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if they're paying the same fee rate,
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they're they're gonna end up paying the same absolute fee, but, obviously, the person who is sending the larger amount is gonna be paying significantly
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significantly
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less percentage wise than the person paying the lower amount.
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Now if when you add lightning into the mix, lightning fees are based on the amount you send.
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Liquid, I guess, is is probably more similar to Onchain Bitcoin in terms of what their that fee market should look like, but it just hasn't been tested yet. Right? There's just not that much volume there. So right now, it just acts as a
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a very, very cheap transaction chain.
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Would you agree on that assessment?
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I think I'm going to switch networks briefly because
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I heard what you said, but it was breaking up on and off.
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Okay. No problem. We'll be here when you come back. Consider a Chromium based browser
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and incognito mode or whatever, you know, so all your extensions are disabled. Wiz, what'd you think about my explanation?
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I was using Firefox.
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So let's try that.
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Yeah. I guess that's,
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that's pretty decent explanation.
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It it is really,
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complex,
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and very, very technical, very deep,
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you know, understanding of cryptography is required
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to to really, learn about all these things, and I I'm not an expert on this at all.
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I'm more of a
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server guy, network engineer.
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You know, I grew up in the data center, so I'm
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I'm good at running Bitcoin nodes, basically. And
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the the cool thing about Liquid for me
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is that, it's it's an actual blockchain,
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and it's optimized
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for, like Adam said, or,
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like exchanges. Right? So,
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obviously,
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I I I guess we'll get into this later on, but,
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lightning is really cool in my opinion for,
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you know, if you wanna if you go to this restaurant all the time or a cafe or a bar, you know, and you open a channel to them, you can do lots of,
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coffee transactions,
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you know, with your trade channel to the bar, and anytime you can,
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you know, publish that channel state to the the network and settle it on chain.
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So it's a really cool way of
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essentially batching
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many many transactions into a single on chain transaction.
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And liquid
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is kind of that too. Right? It's,
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it's
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it's taking lots of transactions
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that are between the members of the federation
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and, and also
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of the other users
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of the,
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of the of the side chain and kinda batching them all into a very few amount of,
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Bitcoin on chain transactions. So they both,
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they both kind of,
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you know,
365
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make the usage of the Bitcoin base layer blockchain more efficient.
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So,
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Adam, are you back now?
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Yeah. Yes. Yeah. Yeah. Back.
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So right.
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I think Matt was pointing
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at the
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the peg in versus peg peg out asymmetry.
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No. I mean, I went farther than that. Okay. But I I think I said everything.
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I I think I I think you would agree with me. I tried to give a high level summary of the fee structure between Liquid, Lightning, and Onchain,
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and why someone would wanna use Liquid,
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and why you mentioned traders to begin with, and and why they pay significantly less fees in terms of percentage because they send larger amounts.
377
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Right.
378
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Yeah.
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Yeah.
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Did you wanna go into
381
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the, kind of, security
382
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model for
383
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Yes. So I wanna I want you to claims?
384
00:24:50.960 --> 00:24:52.659
Yeah. So so so, basically,
385
00:24:53.375 --> 00:25:00.355
we started off this this dispatch with, you know, Bitcoin has had many tools available to us. They all have different trade offs.
386
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Every time a new tool gets added to a Bitcoin user's arsenal,
387
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that makes me happy.
388
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This is one of the reasons why I started dispatch. This is one of the reasons why I've been doing tails from the crypt for over, you know, almost 3 years now,
389
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is because these tools are awesome that we have the ability to use them, but not everyone needs to use them, and not all of them are suited for everybody.
390
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So in the case of Liquid,
391
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I think a good place to go here is, you know, what are what are the trade offs to Liquid? You know, what are the concerns?
392
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What are you know, what should people
393
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weigh in their heads when they're deciding whether or not they're gonna use Liquid versus on chain versus Lightning?
394
00:25:40.700 --> 00:25:42.560
Right. I mean, I think that,
395
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you know, from a user perspective,
396
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it's it's another trade off.
397
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And
398
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so it's
399
00:25:53.520 --> 00:25:55.780
it's not as unseasonable or unfreezeable
400
00:25:57.040 --> 00:25:59.299
because, you know, there remains a possibility
401
00:26:00.080 --> 00:26:02.660
that this federation of businesses could shut down,
402
00:26:03.265 --> 00:26:05.525
and then, you know, you'd have to get funds out of it.
403
00:26:05.985 --> 00:26:06.485
But
404
00:26:07.825 --> 00:26:08.304
it's,
405
00:26:09.505 --> 00:26:15.750
it has extended functionality like confidential transactions and other assets like stable coins, you know, Tether and so on.
406
00:26:17.090 --> 00:26:22.470
And it's cheaper and faster for the moment. So, you know, that that depends on usage. Right?
407
00:26:22.914 --> 00:26:27.654
If, usage grows a lot, it could end up with the same fee situation as Bitcoin.
408
00:26:29.990 --> 00:26:32.730
And the capacity is similar to Bitcoin
409
00:26:33.030 --> 00:26:34.250
in terms of transactions
410
00:26:34.630 --> 00:26:35.130
per
411
00:26:35.830 --> 00:26:37.450
hour or something. So it's,
412
00:26:38.054 --> 00:26:42.794
you know, maybe 1 and a half or 2 times as many that might grow a bit when we
413
00:26:43.975 --> 00:26:46.315
improve the crypto efficiency with bulletproofs.
414
00:26:47.430 --> 00:26:49.450
So it's not hugely different to Bitcoin.
415
00:26:50.150 --> 00:26:50.650
And,
416
00:26:52.790 --> 00:26:54.490
but I think one interesting
417
00:26:56.305 --> 00:26:57.685
comparison here is
418
00:26:58.385 --> 00:27:00.165
if you look at the
419
00:27:00.465 --> 00:27:00.965
old
420
00:27:01.585 --> 00:27:04.885
electronic cash system by David Chaun in the nineties,
421
00:27:07.480 --> 00:27:10.299
It had the property of extremely strong privacy.
422
00:27:10.600 --> 00:27:11.340
So, like,
423
00:27:11.960 --> 00:27:15.325
0 cash, zcash, but even better in principle.
424
00:27:16.425 --> 00:27:17.725
But it's completely centralized.
425
00:27:18.345 --> 00:27:24.000
And so because of the really strong privacy, there was no way at all for them to do any selective censorship.
426
00:27:24.300 --> 00:27:29.440
They couldn't tell anything. You know, the the company operating the bank with the double spend database
427
00:27:29.975 --> 00:27:31.674
just literally couldn't correlate anything.
428
00:27:31.975 --> 00:27:32.794
And so
429
00:27:33.575 --> 00:27:34.315
there was
430
00:27:34.615 --> 00:27:35.434
no real
431
00:27:35.735 --> 00:27:36.955
censorship risk
432
00:27:37.320 --> 00:27:40.540
because no no information left to figure out what's a sensor,
433
00:27:41.000 --> 00:27:45.740
but it was a risk that could shut the whole system down. And so you have that property.
434
00:27:46.395 --> 00:27:48.575
And Bitcoin has a property that,
435
00:27:49.115 --> 00:27:52.735
you know, there's there's some kind of pseudonymity based privacy,
436
00:27:53.850 --> 00:27:55.470
but, you know, the amounts are visible,
437
00:27:56.250 --> 00:27:58.030
the UTXO history is visible,
438
00:27:58.410 --> 00:28:01.390
and you can kind of piece together some information from that.
439
00:28:01.885 --> 00:28:08.225
But it's very decentralized so, you know, if even if you find something that that, you know, a given
440
00:28:09.650 --> 00:28:16.070
country wants to block or something, it's pretty hard to do because their mind is everywhere and the mind is anonymous. So it's got a different model.
441
00:28:16.695 --> 00:28:20.075
And I think liquid lies in between the 2. So that's my assertion
442
00:28:20.455 --> 00:28:21.675
that liquid is,
443
00:28:22.455 --> 00:28:29.230
you know, in some ways, a bit closer to the TRON system because it has more crypto fungibility. The confidential transactions adds meaningful
444
00:28:29.530 --> 00:28:31.070
privacy. They're not as good
445
00:28:31.530 --> 00:28:32.670
as the TRON model,
446
00:28:33.530 --> 00:28:34.030
and
447
00:28:34.575 --> 00:28:36.835
it's a bit more centralized, and it's still
448
00:28:37.135 --> 00:28:38.595
more decentralized than
449
00:28:38.975 --> 00:28:40.355
single server tool model.
450
00:28:41.600 --> 00:28:44.259
So it's somewhere in between those two models.
451
00:28:45.840 --> 00:28:49.620
And so, you know, for for general use, I think one
452
00:28:50.355 --> 00:28:52.534
interesting way to use it, and we've seen,
453
00:28:52.914 --> 00:28:53.815
you know, organically
454
00:28:54.595 --> 00:28:56.695
more users doing this, is
455
00:28:57.530 --> 00:28:58.030
to
456
00:28:58.490 --> 00:28:59.309
put sort
457
00:28:59.929 --> 00:29:16.720
of moderate amounts into liquid. Like, not cold storage savings, but, you know, spending money amount of money you're gonna spend online in a month or something like that. And then you can transact trip cheaply, and then you can, you know, take funds out and put them back in with a, peg out or peg in.
458
00:29:17.100 --> 00:29:20.480
And that you know, the peg out and peg in is a little bit analogous to the lightning,
459
00:29:20.860 --> 00:29:22.400
crypto channel, closer channel.
460
00:29:23.485 --> 00:29:25.665
With the difference with the difference being
461
00:29:27.005 --> 00:29:31.345
with with lightning, you can close the channel. Either party can close the channel Right. At will.
462
00:29:31.804 --> 00:29:32.304
Right?
463
00:29:32.840 --> 00:29:34.700
But with but but but
464
00:29:35.559 --> 00:29:36.460
but do you
465
00:29:38.519 --> 00:29:40.539
is is is there is there too much?
466
00:29:41.545 --> 00:29:43.885
I I mean, I think the goal, right, is ultimately
467
00:29:44.425 --> 00:29:47.645
some kind of atomic swap system for liquid.
468
00:29:48.160 --> 00:29:57.220
So wouldn't that just alleviate the whole peg out thing? Like, the peg out is more for, like, a settlement of of, like, major, like, the federation or whatever.
469
00:29:58.065 --> 00:29:58.565
Well,
470
00:29:58.945 --> 00:29:59.845
yes. So
471
00:30:00.705 --> 00:30:01.205
what's,
472
00:30:02.385 --> 00:30:05.045
there are lots of different ways to pick out.
473
00:30:05.505 --> 00:30:06.885
Many of them are countless
474
00:30:07.470 --> 00:30:11.490
and some of them exchange based. And exchanges often have,
475
00:30:11.870 --> 00:30:19.815
like, 2 tier sign up processes where you can get through the 1st tier and do crypt only, and then you get through the 2nd tier if you want wire transfers. So if you're doing, like,
476
00:30:20.915 --> 00:30:23.095
liquid Bitcoin to Bitcoin, you could make exchanges
477
00:30:24.090 --> 00:30:25.790
with just a But then we have
478
00:30:26.650 --> 00:30:28.750
yeah. But then we have a centralized custodian,
479
00:30:29.210 --> 00:30:30.910
probably gonna have to have KYC.
480
00:30:31.905 --> 00:30:36.005
So so just just unpack this here. The fear is, right, the fear is
481
00:30:36.545 --> 00:30:38.965
is you have funds on liquid.
482
00:30:39.620 --> 00:30:40.120
Yeah.
483
00:30:40.660 --> 00:30:42.600
You have them as liquid Bitcoin.
484
00:30:43.140 --> 00:30:49.155
Hopefully, you don't have too much, but you have well, let's say, well, you have whatever funds you have as liquid Bitcoin, and then the federation
485
00:30:49.535 --> 00:30:49.935
gets
486
00:30:50.575 --> 00:30:52.355
you know, they get compelled
487
00:30:52.815 --> 00:31:10.275
to freeze the network or their their their funds get seized, the the multisig gets seized. And this is why multi jurisdictional is involved, and you have all these different companies to try and reduce that risk. But that is the fear. Right? The fear is that happens and you can't get back out, that you lose your Bitcoin. It's the same idea as, like, a custodial risk,
488
00:31:11.054 --> 00:31:11.795
but, obviously,
489
00:31:12.655 --> 00:31:16.434
you know, significantly better than just trusting a single custodian. Right?
490
00:31:16.960 --> 00:31:23.620
Yeah. I mean, I think one thing that's I mean, there's a couple of points. So one is that there are multiple ways to
491
00:31:25.785 --> 00:31:26.285
go
492
00:31:27.545 --> 00:31:28.845
between liquid and Bitcoin
493
00:31:29.945 --> 00:31:31.085
to to get out.
494
00:31:32.025 --> 00:31:32.765
One is
495
00:31:33.320 --> 00:31:36.220
to atomic swap with another user, and there is
496
00:31:36.600 --> 00:31:37.880
a tool to do that.
497
00:31:39.640 --> 00:31:43.375
So that would be just 2 users that that happen to wanna go in the opposite direction.
498
00:31:43.835 --> 00:31:52.600
And, you know, as we've joined market and things like that, sometimes user services just bring up where people, you know, market may they don't mind go backwards and forwards, take a small fee.
499
00:31:52.900 --> 00:31:55.480
They speed it up for somebody else. They give them privacy.
500
00:31:55.780 --> 00:31:57.880
So it's that. And then there are
501
00:31:58.294 --> 00:31:59.914
3 services that are
502
00:32:01.255 --> 00:32:05.674
kind of, accountless, like, no sign up. So one is SideShift,
503
00:32:06.669 --> 00:32:09.490
another is Flip, another was liquidity.
504
00:32:09.870 --> 00:32:12.289
And they they like websites or
505
00:32:12.590 --> 00:32:21.615
Telegram bots, things like that. And you basically, you know, put your addresses in, you pay a small fee, and they they swap it. And that was It's like old school shape shift. It's like
506
00:32:22.050 --> 00:32:22.950
Yeah. Momentarily
507
00:32:23.570 --> 00:32:28.310
custodial with no account, and they just do there's a third party that does the swap for you.
508
00:32:28.610 --> 00:32:30.470
Right. And the new one, which
509
00:32:31.154 --> 00:32:37.174
just appeared out of nowhere in the last, you know, few weeks that people have been talking about is this side swap port.
510
00:32:38.910 --> 00:32:41.650
And that has integrated some of these things into
511
00:32:42.030 --> 00:32:43.250
a smartphone app,
512
00:32:43.630 --> 00:32:44.450
which is
513
00:32:44.750 --> 00:32:45.730
kinda curious,
514
00:32:47.654 --> 00:32:48.794
but it's,
515
00:32:49.335 --> 00:32:52.315
it's very nice. Use it simple to interface in a way,
516
00:32:52.615 --> 00:32:57.150
which is it's technically only a Lick wallet. You know, the other wallets that Blockstream made,
517
00:32:58.010 --> 00:33:04.190
the Aqua Wallet and Agree Wallet are both liquid and Bitcoin wallets, but Sideswap is technically only a liquid wallet.
518
00:33:04.570 --> 00:33:05.710
However, you can
519
00:33:06.345 --> 00:33:10.684
interoperate Bitcoin by a peg in and peg out, so there's a tab for that. And
520
00:33:10.985 --> 00:33:14.610
so if you want to pay somebody on Bitcoin, you peg out. If you want to receive some money
521
00:33:15.170 --> 00:33:16.309
from a Bitcoin
522
00:33:16.610 --> 00:33:20.630
wallet, you do a peg in. And so that that's your user interface. Now
523
00:33:21.170 --> 00:33:23.030
both of the peg out and the peg in
524
00:33:23.795 --> 00:33:27.095
go via the service. So it has the same kind of behavior
525
00:33:27.955 --> 00:33:28.455
as
526
00:33:28.755 --> 00:33:31.095
the side swap oh, sorry. The,
527
00:33:32.340 --> 00:33:33.400
you know, liquidity
528
00:33:34.179 --> 00:33:35.480
side shift and so on.
529
00:33:35.860 --> 00:33:36.760
But they also
530
00:33:39.125 --> 00:33:43.225
are doing some atomic swaps. So in in wallet, you can swap
531
00:33:44.005 --> 00:33:45.705
liquid Bitcoin for,
532
00:33:46.325 --> 00:33:48.425
Liquid Tether or for Euros
533
00:33:49.720 --> 00:33:50.220
EURX,
534
00:33:50.760 --> 00:33:54.060
which they're the issue which side swap the company's issuer of, actually.
535
00:33:54.520 --> 00:33:54.760
So
536
00:33:56.765 --> 00:33:57.905
and some of those things
537
00:33:58.205 --> 00:34:04.785
are are atomic and it you know, they're evolving and improving it over time. So they just did a release. It looks like
538
00:34:05.710 --> 00:34:10.530
today, actually, where they added a peg out feature, which which was missing in the previous version.
539
00:34:11.150 --> 00:34:11.970
And so
540
00:34:13.005 --> 00:34:15.265
there's a there's a Telegram channel. It's called,
541
00:34:16.685 --> 00:34:17.185
sideswap_io
542
00:34:18.605 --> 00:34:19.345
on Telegram.
543
00:34:21.460 --> 00:34:26.680
And they're talking about their road map and stuff. So it seems like they've got a lot of trustless things planned, like
544
00:34:27.060 --> 00:34:29.240
user coordinate. Because they're the
545
00:34:30.005 --> 00:34:34.425
they're the kind of counterparty in all the swaps at the moment, but they're interested to support
546
00:34:34.805 --> 00:34:37.945
user swaps so that different users can come in,
547
00:34:38.869 --> 00:34:43.369
coordinate on it in its way. So I think there is an opening there for them to do
548
00:34:43.830 --> 00:34:44.890
some more trustless
549
00:34:45.670 --> 00:34:47.609
peg in and peg out where,
550
00:34:48.150 --> 00:34:53.355
you know, you automatically pay them and they pay you from there. You automatically pay them in liquid Bitcoin,
551
00:34:53.895 --> 00:34:55.195
and they give you
552
00:34:56.289 --> 00:34:59.109
Bitcoin and MainChain, but in atomic fashion. Right?
553
00:34:59.970 --> 00:35:00.470
Right.
554
00:35:01.650 --> 00:35:05.030
So the the the the fear, right, the fear is
555
00:35:05.475 --> 00:35:06.455
is that custodians
556
00:35:06.835 --> 00:35:10.835
block the exit. Right? So so it it there's 2
557
00:35:11.795 --> 00:35:15.750
the way I look at it is there's 2 ultimate solutions here
558
00:35:16.050 --> 00:35:16.710
or mitigations.
559
00:35:17.010 --> 00:35:19.270
Maybe solutions is the wrong word. It's too absolute.
560
00:35:19.730 --> 00:35:23.270
22 mitigations, and that's either user driven peg outs,
561
00:35:23.715 --> 00:35:27.095
the ability for a user to basically execute a peg out,
562
00:35:27.715 --> 00:35:36.470
on their own without a you know, the federation easily being able to stop them, which seems pretty complicated to me, and I I don't know if you want to go into that.
563
00:35:37.010 --> 00:35:37.510
Alternatively,
564
00:35:38.130 --> 00:35:43.335
some kind of atomic swap market that is distributed rather than centralized. Something like
565
00:35:43.635 --> 00:35:45.015
a like a joint market
566
00:35:45.315 --> 00:35:47.494
type of situation where it's coordinated
567
00:35:47.875 --> 00:35:49.974
loosely between the actual users
568
00:35:51.009 --> 00:35:54.869
themselves. I mean, I I guess a bigger thing would be using Bisc,
569
00:35:55.410 --> 00:36:00.565
but that that's more heavy that's more heavy. Like, I'm envisioning kind of some kind of lightweight
570
00:36:00.945 --> 00:36:01.445
marketplace
571
00:36:01.745 --> 00:36:02.245
app
572
00:36:02.705 --> 00:36:04.885
that allows you to be on both sides.
573
00:36:05.185 --> 00:36:09.560
Would you agree? Well, I mean, I think I think that yeah. I mean, Biscuit is one way.
574
00:36:10.260 --> 00:36:11.800
HODL HODL has some
575
00:36:12.180 --> 00:36:13.880
liquid Bitcoin slash Bitcoin
576
00:36:15.954 --> 00:36:21.255
swaps and trades and loans and things. So you might be able to do it on hold as well, and that's evolving over time.
577
00:36:21.795 --> 00:36:25.860
But, you know, even with the sideswap app, if they get the
578
00:36:26.740 --> 00:36:28.760
you know, as as they improve it,
579
00:36:29.140 --> 00:36:29.960
if they get
580
00:36:30.740 --> 00:36:31.320
the atomic
581
00:36:31.780 --> 00:36:32.680
swap out,
582
00:36:33.455 --> 00:36:34.335
even though it's,
583
00:36:34.895 --> 00:36:38.355
you know, a centralized company that's doing it, you don't really have to trust them
584
00:36:38.815 --> 00:36:48.510
because you either get your main chain Bitcoins or you keep your liquid Bitcoins. Right? So your main remaining so you don't have that tertiary risk that the, you know, centralized service provider
585
00:36:49.130 --> 00:36:57.454
Like side shift ads. Been complete. Yeah. Then they could take your coins and pay you and, like, oh, man. That's now you'd have to argue about it online. You may not get your money back.
586
00:36:58.954 --> 00:37:04.089
With the the other kind of binary risk is the the whole federation shuts down for some reason.
587
00:37:04.710 --> 00:37:05.690
So that one,
588
00:37:06.069 --> 00:37:07.609
yeah, that's that's a,
589
00:37:08.069 --> 00:37:10.410
you know, that's that's a side effect of the
590
00:37:11.405 --> 00:37:12.305
current architecture.
591
00:37:13.484 --> 00:37:13.984
And
592
00:37:14.525 --> 00:37:17.505
but the the transitory risks, I think, are fixable
593
00:37:18.045 --> 00:37:19.665
because of this kind of atomic
594
00:37:20.220 --> 00:37:21.039
cross chain
595
00:37:22.059 --> 00:37:22.559
swap.
596
00:37:23.579 --> 00:37:25.200
And that could be
597
00:37:25.819 --> 00:37:29.200
it sounds like looking at what Sideswap was saying that they are
598
00:37:29.915 --> 00:37:32.175
interested to allow users to
599
00:37:32.475 --> 00:37:38.015
put offers, like, you know, some kind of built in board. So it's not really an order book in the sense that there's a
600
00:37:38.700 --> 00:37:39.280
a custodian,
601
00:37:39.580 --> 00:37:42.720
but an offer like you can offer to swap for a fee.
602
00:37:43.340 --> 00:37:47.280
And I guess they'll match or let you search it or something. So they're developing that.
603
00:37:47.674 --> 00:37:55.855
So that but that would also be, I presume I mean, that would have to be, you know, atomic. Right? Because users could otherwise exit scam each other. Right?
604
00:37:56.880 --> 00:37:59.220
So that that kind of thing's possible,
605
00:37:59.760 --> 00:38:01.940
and that that is a kind of mixture of,
606
00:38:02.400 --> 00:38:03.380
you know, a coordinator
607
00:38:03.680 --> 00:38:06.485
role, which is the wallet back end and
608
00:38:07.585 --> 00:38:12.965
users placing offers. So I think it's it's kind of an app wrapper around something
609
00:38:13.265 --> 00:38:14.085
disk like
610
00:38:15.150 --> 00:38:17.250
for, you know, subset of use cases.
611
00:38:19.150 --> 00:38:21.890
So about you you mentioned another thing there, which was
612
00:38:22.555 --> 00:38:24.735
that I should I should explain actually why,
613
00:38:26.475 --> 00:38:28.975
the peg out asymmetry is there. So
614
00:38:29.600 --> 00:38:31.380
it's actually not to do with,
615
00:38:32.400 --> 00:38:32.900
policy
616
00:38:33.200 --> 00:38:33.700
but
617
00:38:34.240 --> 00:38:34.740
security,
618
00:38:35.680 --> 00:38:37.460
which is if you,
619
00:38:37.840 --> 00:38:38.340
the
620
00:38:38.685 --> 00:38:42.305
the block signers, so there are, you know, all these different exchanges
621
00:38:43.405 --> 00:38:47.150
and people involved, like, who is this one of the, participants in the network.
622
00:38:48.109 --> 00:38:50.529
So some a subset of them are operating
623
00:38:51.710 --> 00:38:52.210
servers,
624
00:38:52.750 --> 00:38:58.905
you know, with firewalls and stuff and also an HSM inside. So the keys to the peg and a block signering in the HSM.
625
00:38:59.925 --> 00:39:03.464
And HSM is running a lot less code, so it's easier to control,
626
00:39:03.925 --> 00:39:04.505
you know,
627
00:39:05.630 --> 00:39:14.610
remote hacking risk for the HSMs. It's gonna be very hard to get keys out of that. But the server itself, you know, obviously, it's it's locked down as far as you can, but still Internet exposed server.
628
00:39:15.155 --> 00:39:15.975
So in
629
00:39:16.595 --> 00:39:17.095
theory,
630
00:39:18.595 --> 00:39:19.335
if you,
631
00:39:20.995 --> 00:39:22.375
if somebody could hack,
632
00:39:22.730 --> 00:39:25.470
you know, 2 thirds of the host computers,
633
00:39:25.849 --> 00:39:27.069
the the internet servers,
634
00:39:27.849 --> 00:39:28.589
and then
635
00:39:29.529 --> 00:39:32.270
override their instructions to just tell the HSM
636
00:39:32.974 --> 00:39:34.994
to peg it out to this user address,
637
00:39:36.015 --> 00:39:37.315
the whole you know, the
638
00:39:37.615 --> 00:39:38.275
the liquids
639
00:39:39.295 --> 00:39:45.140
kind of peg wallet would basically become a warm wallet of some kind. Right? Because you've got Internet exposed hosts.
640
00:39:45.440 --> 00:39:55.055
Yes. The keys are on HSM, but if the Internet exposed hosts operating system and code was compromised, they could just tell the HSM to do things and the HSM wouldn't understand enough
641
00:39:55.355 --> 00:39:56.414
to prevent it.
642
00:39:56.795 --> 00:39:57.615
And so
643
00:39:58.420 --> 00:40:00.119
when we were designing this in
644
00:40:00.500 --> 00:40:01.000
2014
645
00:40:01.300 --> 00:40:03.560
or so, Greg Maxwell hit on the idea
646
00:40:04.420 --> 00:40:05.880
of improving the security
647
00:40:06.180 --> 00:40:09.275
by having the peg outs be only go to,
648
00:40:10.455 --> 00:40:11.195
off, you
649
00:40:11.815 --> 00:40:13.595
know, offline hardware wallets
650
00:40:13.895 --> 00:40:14.395
of
651
00:40:15.015 --> 00:40:15.915
liquid members.
652
00:40:16.830 --> 00:40:17.330
And
653
00:40:17.870 --> 00:40:19.890
in that way, if somebody would compromise,
654
00:40:20.750 --> 00:40:24.370
you know, succeed in compromising of the servers and override the HSMs,
655
00:40:25.365 --> 00:40:28.984
they have to provide a proof to the HSM. The HSM can verify by itself
656
00:40:29.285 --> 00:40:29.785
that
657
00:40:30.484 --> 00:40:30.984
the
658
00:40:31.285 --> 00:40:33.704
the payout is going to go to an address
659
00:40:34.650 --> 00:40:38.510
controlled by one of these hardware wallets belonging to the members. It's it's technically
660
00:40:38.810 --> 00:40:41.390
a zero knowledge proof, so you don't really know which one
661
00:40:41.694 --> 00:40:43.714
and just proves that the address was derived
662
00:40:44.575 --> 00:40:46.194
from one of these, XPUBs.
663
00:40:47.214 --> 00:40:53.110
And so that's that's the concept. Right? But if it's becomes much less attractive to hack it, because all you do is you pay
664
00:40:53.970 --> 00:40:54.550
the Bitcoins
665
00:40:54.930 --> 00:40:56.470
to a liquid member,
666
00:40:56.770 --> 00:40:58.390
and that liquid member could,
667
00:40:59.515 --> 00:41:00.015
you
668
00:41:00.955 --> 00:41:04.175
know, peg out legitimately, so it's not so interesting to them.
669
00:41:04.475 --> 00:41:13.450
And, you know, there's a bit of a trust assumption that they're less likely to just try and take the money because people know who they are. So so the trade off chosen was,
670
00:41:14.070 --> 00:41:16.410
slightly more more trust in the federation
671
00:41:17.335 --> 00:41:17.835
at
672
00:41:18.295 --> 00:41:19.515
the benefit being
673
00:41:20.135 --> 00:41:26.155
less risk of, you know, complete loss of of the system, right, from an external actor or something.
674
00:41:26.609 --> 00:41:27.990
Yeah. It kinda makes it,
675
00:41:28.690 --> 00:41:34.470
colder in a way. So it means that the you know, in one way of thinking, the PEG funds are cold.
676
00:41:34.935 --> 00:41:37.755
Like, you can move them around inside the network logically,
677
00:41:39.175 --> 00:41:42.075
user to user. But if somebody wants to take them out,
678
00:41:42.695 --> 00:41:44.555
they actually go to a cold wallet.
679
00:41:44.920 --> 00:41:45.420
And
680
00:41:45.880 --> 00:41:49.740
then what typically happens is one of the service providers like
681
00:41:50.040 --> 00:41:50.540
SideShifts
682
00:41:51.720 --> 00:41:53.420
or, you know, SideSwap,
683
00:41:55.865 --> 00:41:57.565
the FinEx, you know, one of these exchanges.
684
00:41:57.865 --> 00:42:02.925
There are some people that are, like, prop traders. So companies do trading. So those guys,
685
00:42:03.360 --> 00:42:04.900
they are actually gonna give you
686
00:42:05.200 --> 00:42:07.620
the funds that you requested to pay out from their own,
687
00:42:08.400 --> 00:42:14.155
like, hot wallet, cold wallet, and and then they're gonna fetch it out of the peg out wallet later when they run out of funds.
688
00:42:14.855 --> 00:42:17.595
So that means they they absorb the risk, basically.
689
00:42:19.349 --> 00:42:28.329
So what so so an advantage of being a federation member is that you're able to, you know, to do that process yourself to your own cold storage.
690
00:42:29.895 --> 00:42:30.135
The
691
00:42:30.935 --> 00:42:32.715
so so enlighten me here,
692
00:42:33.175 --> 00:42:35.355
from from when from reading the website,
693
00:42:35.975 --> 00:42:36.715
my understanding
694
00:42:37.015 --> 00:42:37.515
is
695
00:42:38.050 --> 00:42:38.950
there's a significant
696
00:42:39.250 --> 00:42:41.350
amount of federation members,
697
00:42:41.650 --> 00:42:45.510
but at any given time, only 16 are active. Is that is that correct?
698
00:42:46.694 --> 00:42:48.315
That's a side effect of
699
00:42:48.775 --> 00:42:50.474
the current implementation.
700
00:42:50.935 --> 00:42:51.435
So
701
00:42:52.375 --> 00:42:54.234
the current federation is
702
00:42:54.640 --> 00:43:00.580
11 out of 15, and that was kinda hard coded in the first version. And we're in the process of rolling out
703
00:43:01.520 --> 00:43:04.100
an upgrade that switches to dynamic federations
704
00:43:05.265 --> 00:43:08.645
that can support larger numbers and people leaving and joining.
705
00:43:09.105 --> 00:43:12.085
So I should clarify as well that Blockstream is
706
00:43:12.450 --> 00:43:13.670
in a technology provider.
707
00:43:14.530 --> 00:43:17.830
We are not able to do auto upgrades. The
708
00:43:18.770 --> 00:43:19.270
liquid
709
00:43:19.695 --> 00:43:20.195
boards
710
00:43:20.495 --> 00:43:26.275
will, you know, look at, let's say, the release notes and and see if they like an upgrade. And they have to actually
711
00:43:26.900 --> 00:43:29.320
depending on what kind of upgrade it is, they have to physically
712
00:43:30.100 --> 00:43:31.400
be in front of and,
713
00:43:32.820 --> 00:43:43.405
you know, push buttons on the on the hardware box. So it's not, like, remote upgradeable of the Internet for security reasons. And it's actually interact with it. And we we can't upgrade it, and that's by design.
714
00:43:47.290 --> 00:43:47.790
So,
715
00:43:48.570 --> 00:43:59.415
yeah. So that will become more dynamic at the time. So yeah. But but at the moment, it's an 11 of 15. And if you look around on the block explorer, you can find the peg wallet, and it stands out because it's an 11 of 15
716
00:44:00.195 --> 00:44:01.655
signature. And another
717
00:44:02.420 --> 00:44:04.680
interesting topic is there's a CSV,
718
00:44:05.140 --> 00:44:06.440
so a time block
719
00:44:07.140 --> 00:44:08.680
and a 2 of 3 as well,
720
00:44:09.115 --> 00:44:16.175
which we can explain what that's about. Yeah. So, I mean, a lot of people have questions about that because of, I guess, there was,
721
00:44:16.660 --> 00:44:20.040
like, there's an aging thing, and then it went back to the 2 of 3,
722
00:44:20.980 --> 00:44:25.640
which represents a security risk. But before I get to that, just real quick, it's 11 of 15.
723
00:44:26.474 --> 00:44:26.974
So,
724
00:44:27.355 --> 00:44:30.415
like, Wiz is not a part of that 11 of 15. Right?
725
00:44:31.994 --> 00:44:33.775
Yeah. So the the
726
00:44:34.075 --> 00:44:36.350
the the problem is that the
727
00:44:37.930 --> 00:44:41.870
original, version of liquids was hard coded to 11 of 15.
728
00:44:42.810 --> 00:44:48.895
And since the and there there were 15 members at launch just a few years ago. Right? But now there's, like, over 50,
729
00:44:49.435 --> 00:44:50.895
and some people are,
730
00:44:51.195 --> 00:44:54.335
you know, happy to use the network services of another
731
00:44:54.790 --> 00:44:58.470
member, and you can pick out without having HSM. So you don't need to be
732
00:44:58.950 --> 00:45:00.710
there's a kind of list of of
733
00:45:01.270 --> 00:45:03.405
just submit like a hotdog wallet x pub.
734
00:45:04.205 --> 00:45:10.225
Okay. So they some people submit too. Right? Because they got 2 different applications or So when the XPUB is is
735
00:45:10.579 --> 00:45:20.295
is approved. He's he's got an approved XPub, but he's not running an HSM yet. Right. Right. And so there are people that may never wanna run HSM because, you know, they're they're cloud oriented
736
00:45:20.915 --> 00:45:22.455
or they don't have a machine room.
737
00:45:23.155 --> 00:45:23.895
People do.
738
00:45:24.355 --> 00:45:27.335
And so that but at the moment, the other problem is
739
00:45:27.640 --> 00:45:29.180
it's not that dynamic.
740
00:45:29.640 --> 00:45:30.460
And so
741
00:45:30.920 --> 00:45:34.859
and, actually, changing the federation membership is,
742
00:45:36.595 --> 00:45:40.375
you know, tricky. You've got to think about the game theory because,
743
00:45:41.235 --> 00:45:42.135
you know, if
744
00:45:42.970 --> 00:45:45.309
if somebody was to attack the system from the inside,
745
00:45:46.010 --> 00:45:55.775
you know, and they voted somebody off, they could do that iteratively until they controlled it. Right? So there's there's a bunch of you know, it it requires more than 2 thirds
746
00:45:56.235 --> 00:46:00.735
to to do a change, and it's for that kind of reason. So there's a bunch of logic
747
00:46:01.380 --> 00:46:02.760
about how the
748
00:46:03.780 --> 00:46:07.320
federation can evolve, and it can't be too quickly either because
749
00:46:07.940 --> 00:46:12.654
the coins in the peg have to change, you know, the key because the keys have changed in a time. Right?
750
00:46:13.275 --> 00:46:13.835
So it's,
751
00:46:14.714 --> 00:46:18.575
it's not trivial, but the end result is you've got,
752
00:46:19.500 --> 00:46:21.920
you know and I think the other way to think about it is
753
00:46:23.100 --> 00:46:25.200
even though it's built in a different way,
754
00:46:25.580 --> 00:46:26.960
it's a kind of
755
00:46:27.415 --> 00:46:29.915
blockchain assembled out of instead of minors,
756
00:46:30.615 --> 00:46:31.115
HSMs,
757
00:46:31.495 --> 00:46:35.275
HSMs can change which moves it, you know, with Dynafed, it moves it a
758
00:46:35.740 --> 00:46:38.960
bit less from a kind of fixed group businesses towards something
759
00:46:39.339 --> 00:46:42.480
that's dynamic and evolves. And that's that's So how does that look?
760
00:46:44.115 --> 00:46:48.055
How how do you mean? How does how does, like, the Dynafed look in practice?
761
00:46:49.155 --> 00:46:51.335
Because this is the the future goal. Right?
762
00:46:52.530 --> 00:46:54.630
Yeah. It's I mean, yeah. We've we've,
763
00:46:55.570 --> 00:46:56.869
we made a release
764
00:46:57.410 --> 00:46:57.910
recently
765
00:46:58.369 --> 00:46:59.110
of the,
766
00:47:00.745 --> 00:47:10.300
elements d, which is the full node for liquids. And, you know, power users can run 1 and you run a Bitcoin node and an elements node, and they they talk to each other.
767
00:47:10.680 --> 00:47:18.315
And that can verify everything about the chain, the pegs, and the liquid transactions, and so on. So that the most recent we saw about is
768
00:47:18.615 --> 00:47:20.075
dynamic federation is ready,
769
00:47:20.775 --> 00:47:23.675
but, you know, the next release and the next release, I needed to,
770
00:47:24.460 --> 00:47:29.770
actually get it active. So it's not active yet, but that's something that's happening, I'd say, in the next quarter or so.
771
00:47:31.425 --> 00:47:35.685
And, of course, it's it's, you know, subject to the liquid members
772
00:47:36.305 --> 00:47:38.890
like in the the feature set and upgrading to it. Right?
773
00:47:39.609 --> 00:47:44.269
And once they have that, there's there's likely to be some changes because there's, you know,
774
00:47:44.650 --> 00:47:47.789
new participants in the network since a couple years ago,
775
00:47:48.194 --> 00:47:50.375
you know, like Sideswap, for example,
776
00:47:51.234 --> 00:47:51.734
or
777
00:47:52.755 --> 00:47:57.415
Liquidity. There are lots of people who are quite active in building products and services like Vulcan.
778
00:47:58.340 --> 00:48:00.360
They've got, you know, Liquid Taxi,
779
00:48:01.060 --> 00:48:01.560
Marina
780
00:48:01.940 --> 00:48:02.440
Browser,
781
00:48:02.980 --> 00:48:03.960
plug in wallet.
782
00:48:04.500 --> 00:48:06.040
So there are lots of active
783
00:48:06.415 --> 00:48:08.915
department service companies that would have liked
784
00:48:09.855 --> 00:48:13.315
to run a functionary but couldn't because of the lack of dynamic
785
00:48:13.615 --> 00:48:15.380
change in the network. So
786
00:48:15.920 --> 00:48:18.099
that will enable that that change to happen.
787
00:48:19.920 --> 00:48:25.405
So but but how's the they, like, will rotate? Is that what happens? It's like they rotate randomly?
788
00:48:26.985 --> 00:48:29.245
No. So today, with 11 of 15,
789
00:48:29.625 --> 00:48:30.825
there's a kind of,
790
00:48:31.145 --> 00:48:32.525
there's a consensus protocol,
791
00:48:36.869 --> 00:48:44.935
and the block is proposed in turn by, you know, round robin. So in a circle, each proposes, and then blocks have to be signed by
792
00:48:45.555 --> 00:48:48.855
2 thirds of them. Actually, all of them that are online, try to sign.
793
00:48:49.395 --> 00:48:49.895
And
794
00:48:50.790 --> 00:48:53.530
with dynamic federations, it's not rapidly changing.
795
00:48:54.390 --> 00:48:58.490
It's just if, you know, if somebody goes out of business, then you probably wanna remove them because,
796
00:48:58.875 --> 00:49:00.575
now, maybe they sell their equipment,
797
00:49:01.674 --> 00:49:11.530
right, if they go bankrupt. Or, you know, you get somebody new that wants to join that's starting a new application, like, SiteSwap, for example. And if you heard about them until a few you know, till probably recently,
798
00:49:12.070 --> 00:49:15.185
and they're doing a lot of stuff. So, now, they joined the liquids.
799
00:49:15.565 --> 00:49:19.905
Right. And maybe they would wanna run a function array, let's say. So
800
00:49:20.285 --> 00:49:22.705
then that would basically be
801
00:49:23.490 --> 00:49:24.710
up to the Liquid Federation
802
00:49:25.250 --> 00:49:25.910
to, like,
803
00:49:26.450 --> 00:49:30.470
discuss amongst themselves to add them and then mechanically to add them
804
00:49:30.994 --> 00:49:32.295
to call some APIs
805
00:49:32.595 --> 00:49:33.255
on the
806
00:49:34.035 --> 00:49:34.855
on the liquid,
807
00:49:35.315 --> 00:49:35.815
hardware
808
00:49:36.674 --> 00:49:37.174
servers
809
00:49:38.035 --> 00:49:39.414
to add this new
810
00:49:40.930 --> 00:49:41.990
new block signer.
811
00:49:42.690 --> 00:49:45.270
And that would you know, it's it's not
812
00:49:45.570 --> 00:49:48.950
you know, it's something that has to be done relatively slowly because the
813
00:49:49.275 --> 00:49:52.175
the PEG keys have to, you know, they go from,
814
00:49:53.035 --> 00:49:55.375
you know, let's say 11 or 15 to
815
00:49:55.835 --> 00:49:58.175
12 or 16 or something to keep the threshold.
816
00:49:58.920 --> 00:49:59.740
And so,
817
00:50:00.600 --> 00:50:03.020
you know, and if somebody left at the same time,
818
00:50:04.120 --> 00:50:09.075
you've got to move the keys the coins off the old multisig onto the new multisig.
819
00:50:09.535 --> 00:50:12.755
So you can't, you know, you can't turn over the keys too quickly
820
00:50:13.535 --> 00:50:15.715
or the redundancy for control of the,
821
00:50:16.255 --> 00:50:20.730
ability to roll the coins forward in the peg wallet could get degraded.
822
00:50:23.190 --> 00:50:23.350
So
823
00:50:24.685 --> 00:50:27.585
okay. So so that that make that makes sense to me.
824
00:50:28.445 --> 00:50:29.345
We had,
825
00:50:29.805 --> 00:50:33.825
so first of all, I I we have Freaks in the chat. By the way, Freaks,
826
00:50:35.410 --> 00:50:39.830
the way I I consider dispatch, you know, I think it's hosted by the audience.
827
00:50:40.290 --> 00:50:49.865
I I'm just the moderator, and that that is is one of the reasons why the format of the show is the way it is. So I appreciate you all throwing comments into the live chat here,
828
00:50:50.420 --> 00:50:55.960
whether that's through Twitter, Twitch, or YouTube. I do personally think Twitch is is the best, for that,
829
00:50:57.215 --> 00:51:05.795
but I appreciate you all. We have a bunch of freaks in here basically saying that liquid is centralized. I want to just make it very clear to the freaks
830
00:51:06.400 --> 00:51:09.220
that this is an obvious trade off decision
831
00:51:10.000 --> 00:51:10.980
by by
832
00:51:11.520 --> 00:51:14.260
it it is not liquid was never meant
833
00:51:14.885 --> 00:51:17.065
and will never be meant to replace
834
00:51:17.365 --> 00:51:17.865
regular
835
00:51:18.245 --> 00:51:22.020
the the the Bitcoin network. It never was meant to replace a Bitcoin network.
836
00:51:22.340 --> 00:51:24.360
It it is making a clear centralization
837
00:51:24.820 --> 00:51:26.840
trade off. It is being more centralized
838
00:51:27.460 --> 00:51:28.600
for lower fees,
839
00:51:29.140 --> 00:51:30.040
quicker transactions,
840
00:51:31.035 --> 00:51:42.079
and the ability to adapt at a quicker pace than Bitcoin can. Like, that that is that is literally the trade off that the side chain has made. That is going to be more centralized. The question is
841
00:51:42.540 --> 00:51:44.320
is if we can make a network
842
00:51:44.780 --> 00:51:46.560
that sits alongside Bitcoin
843
00:51:47.020 --> 00:51:48.480
that is not too centralized
844
00:51:48.940 --> 00:51:50.160
where you have censorship,
845
00:51:50.835 --> 00:51:52.935
but is is centralized enough
846
00:51:53.395 --> 00:51:56.375
that you that you have those benefits that come with it.
847
00:51:56.915 --> 00:51:58.535
Right. So on that topic,
848
00:51:58.960 --> 00:52:04.099
we had this major concern. I mean, to be honest, I think it was a little bit blown out of proportion because
849
00:52:04.400 --> 00:52:07.714
as far as I'm concerned, liquid is still in the beta phase, and it definitely was
850
00:52:08.015 --> 00:52:08.755
at the time.
851
00:52:09.775 --> 00:52:11.875
But we had this situation where,
852
00:52:12.655 --> 00:52:13.795
I I guess
853
00:52:14.510 --> 00:52:19.170
the the liquid funds in this in this multisig aged past 2015
854
00:52:19.550 --> 00:52:20.690
blocks 2015
855
00:52:21.069 --> 00:52:21.569
blocks,
856
00:52:22.744 --> 00:52:25.965
I guess right before like, that's basically a difficulty adjustment,
857
00:52:26.505 --> 00:52:32.799
amount of blocks. I'd I I imagine that's not a coincidence, and then reverted back to this 2 of 3 emergency
858
00:52:33.180 --> 00:52:33.680
thing,
859
00:52:34.700 --> 00:52:37.599
where the 2 of 3 keys were held by Blockstream
860
00:52:37.980 --> 00:52:38.480
HSMs,
861
00:52:39.714 --> 00:52:41.734
in geographically distributed locations.
862
00:52:42.275 --> 00:52:50.339
Should we talk about this this concern and and how it's been alleviate it has been alleviated since then, I believe. Yeah. Yeah. So it was it was actually
863
00:52:51.440 --> 00:52:54.660
so first of all, let's just talk about the 2 or 3 to explain
864
00:52:54.960 --> 00:52:58.405
why they're there, and then how they how the
865
00:52:58.945 --> 00:52:59.445
behavior
866
00:53:00.465 --> 00:53:02.165
diverged from what it should have been.
867
00:53:02.625 --> 00:53:03.125
So,
868
00:53:03.745 --> 00:53:04.245
basically,
869
00:53:05.500 --> 00:53:07.520
the 2 of 3 is
870
00:53:08.140 --> 00:53:09.840
a sort of disaster recovery
871
00:53:10.860 --> 00:53:14.480
plan and the keys are actually not, you know, they're on.
872
00:53:15.165 --> 00:53:20.865
They're in very cold storage. They're not loaded in anything. They've never been used. They're they're there
873
00:53:21.405 --> 00:53:22.545
for a kind of very,
874
00:53:23.260 --> 00:53:24.400
hopefully, very unlikely
875
00:53:24.859 --> 00:53:28.140
eventuality, which is enough hardware breaks and enough
876
00:53:28.619 --> 00:53:30.800
and it physically fails and enough
877
00:53:31.605 --> 00:53:34.425
liquid members fumble or fail it back up,
878
00:53:34.725 --> 00:53:43.660
and you lose one too many keys to recover the funds. And now that could potentially be because, you know, there's, like, 100 of 1,000,000 of dollars in it already.
879
00:53:44.040 --> 00:53:44.540
So
880
00:53:44.920 --> 00:53:47.180
and that could become, you know, a 1,000,000,000 or 10,000,000,000
881
00:53:47.640 --> 00:53:51.555
depending on usage and market cap and what what people use it for. So
882
00:53:52.255 --> 00:53:52.994
the defensive
883
00:53:53.375 --> 00:53:55.955
kind of Bitcoin thinking was, well,
884
00:53:56.850 --> 00:53:58.470
it will be kind of irresponsible
885
00:53:59.810 --> 00:54:03.990
to have no disaster recovery plan just in case the unexpected
886
00:54:05.644 --> 00:54:12.144
actually happens. Right? And there are certainly Bitcoiners around who really wish they had a better backup plan,
887
00:54:12.599 --> 00:54:27.025
who would have a lot more Bitcoins today if they had, you know, a second backup kind of thing. So, you know, clearly, it would be very easy to remove this 2 or 3. And there's, like, you know, a few lines of code, delete that 1. Then it's 11 to 15, then there's no backup plan, and
888
00:54:27.360 --> 00:54:30.020
there's no, oh, Blockstream could do something.
889
00:54:30.480 --> 00:54:30.980
So
890
00:54:31.520 --> 00:54:36.595
but I think it's the right thing to keep the backup plan. So then, you know, the other thing is, obviously,
891
00:54:37.855 --> 00:54:39.315
we actively don't
892
00:54:39.855 --> 00:54:40.355
want
893
00:54:40.655 --> 00:54:41.955
the ability to
894
00:54:42.415 --> 00:54:43.395
touch the funds.
895
00:54:44.820 --> 00:54:45.960
So it's not just,
896
00:54:46.500 --> 00:54:49.080
a 2 of 3. It's 2 of 3 with a time lock.
897
00:54:49.380 --> 00:54:52.680
So it's kind of dead man's switch. Right? So what's supposed to happen
898
00:54:53.460 --> 00:54:54.120
is that
899
00:54:54.645 --> 00:54:57.305
the 2 of 3 would only ever become active
900
00:54:57.605 --> 00:55:00.025
if the network stops processing transactions
901
00:55:00.405 --> 00:55:02.345
for about a month. Like, it literally
902
00:55:02.660 --> 00:55:03.480
ceased to
903
00:55:03.859 --> 00:55:04.839
process blocks,
904
00:55:05.619 --> 00:55:06.119
which
905
00:55:09.140 --> 00:55:10.599
3rd of the note.
906
00:55:11.495 --> 00:55:12.315
And so
907
00:55:12.855 --> 00:55:17.275
if that time was met, you know, the the blocks are still being produced, the
908
00:55:18.055 --> 00:55:20.530
the keys in the the the coins in the
909
00:55:20.930 --> 00:55:24.950
the wallet should keep getting pushed forward into the future. Now it would get
910
00:55:25.330 --> 00:55:33.335
kinda spent or spent forwards or pegged in or pegged out, and it would just, you know, keep getting pushed forwards. And that's how it's designed. That's what it's supposed to do.
911
00:55:33.714 --> 00:55:34.214
So
912
00:55:34.755 --> 00:55:37.575
and that's that's kind of neat feature because it means that,
913
00:55:38.090 --> 00:55:43.150
you know, we have Blockstream has either 3 backup keys, geo distributed, cold storage,
914
00:55:44.170 --> 00:55:44.670
but
915
00:55:45.184 --> 00:55:49.365
they're not hot unless, like, they have no actually no power
916
00:55:49.904 --> 00:55:51.365
until the network stops
917
00:55:51.744 --> 00:55:57.110
for a protracted period of time, which, you know, normally it's signing once a minute. Right? So that's a pretty extreme
918
00:55:57.570 --> 00:55:58.790
kind of downtime situation.
919
00:55:59.570 --> 00:56:04.470
But now where it where it came and stuck, well, it it it ran its problems is that
920
00:56:05.315 --> 00:56:08.695
we, we had this kind of confluence of bugs, basically.
921
00:56:09.715 --> 00:56:10.215
So
922
00:56:12.010 --> 00:56:14.190
there is a target time window
923
00:56:14.570 --> 00:56:15.070
where
924
00:56:15.690 --> 00:56:21.555
it tries to roll transactions forward if they haven't been otherwise spent by a peg out. And
925
00:56:22.735 --> 00:56:24.435
it it was supposed to be
926
00:56:25.455 --> 00:56:31.010
4 weeks, but it was where the HSM code had 2 weeks and the host had 4 weeks. So it was a mismatch.
927
00:56:32.510 --> 00:56:33.330
And so
928
00:56:33.790 --> 00:56:35.010
it left the window
929
00:56:36.065 --> 00:56:39.685
where it's trying to roll them forward shorter than it should have been.
930
00:56:40.385 --> 00:56:42.805
And then there was another bug that was kinda related.
931
00:56:43.680 --> 00:56:44.180
And
932
00:56:45.200 --> 00:56:45.700
we
933
00:56:46.000 --> 00:56:47.700
were aware of the bug
934
00:56:48.400 --> 00:56:50.100
at, you know, after some time,
935
00:56:50.560 --> 00:56:51.060
and
936
00:56:51.744 --> 00:56:55.905
started trying to fix it. But then things got kinda crazy with COVID. And,
937
00:56:57.505 --> 00:56:58.405
a number of
938
00:56:58.900 --> 00:56:59.880
Fungsturi members
939
00:57:00.180 --> 00:57:03.960
were kind of locked down, so they couldn't and because of the security features, you know, that
940
00:57:04.260 --> 00:57:05.319
you have to be,
941
00:57:06.434 --> 00:57:08.694
physically upgrade on particularly on the HSM,
942
00:57:10.275 --> 00:57:11.734
it made it difficult to quickly,
943
00:57:12.355 --> 00:57:14.295
you know, to fix this. But
944
00:57:15.130 --> 00:57:18.270
what there was a period where there was something like 870
945
00:57:18.570 --> 00:57:19.770
coins that were
946
00:57:20.330 --> 00:57:28.855
Right. Like, it's about 40 minutes, and that was the worst point. But, you know, so we found a more creative way to fix it,
947
00:57:29.494 --> 00:57:33.700
basically, by upgrading a subset, and that was enough. I mean, it's all,
948
00:57:34.400 --> 00:57:35.700
like, fixed properly
949
00:57:36.720 --> 00:57:37.460
over time,
950
00:57:37.840 --> 00:57:39.859
but, you know, there was an immediate kinda
951
00:57:40.565 --> 00:57:41.704
4 node upgrade,
952
00:57:42.085 --> 00:57:42.744
I think.
953
00:57:44.404 --> 00:57:46.184
The fix is extending
954
00:57:46.484 --> 00:57:47.625
the lock time?
955
00:57:49.280 --> 00:57:51.839
Well, yeah. It's just to set it should have been, which is,
956
00:57:54.000 --> 00:57:55.460
4 weeks on both the
957
00:57:56.275 --> 00:57:58.135
and the host. And so it starts
958
00:57:58.755 --> 00:58:05.740
to roll forward. I think it's 2 weeks before expiry. So if if they're less than 2 weeks, so if they're more than 2 weeks until expiry,
959
00:58:06.280 --> 00:58:11.400
it just leaves them sitting there because they make it organically used for a for a peg out. So
960
00:58:12.435 --> 00:58:12.935
Yeah.
961
00:58:13.475 --> 00:58:16.375
My question is is I guess the fear is
962
00:58:16.915 --> 00:58:18.615
is Blockstream in a position
963
00:58:19.155 --> 00:58:19.655
to
964
00:58:19.955 --> 00:58:23.610
force that situation to go into a 2 of 3?
965
00:58:25.110 --> 00:58:25.770
Are are
966
00:58:26.150 --> 00:58:30.570
are are agents members allowed to block it able to block it? Is is basically my question. Yeah.
967
00:58:31.015 --> 00:58:34.155
Yeah. So, I mean, I think that all of this
968
00:58:34.615 --> 00:58:35.115
bug,
969
00:58:35.494 --> 00:58:36.795
you know, we have no remote
970
00:58:37.255 --> 00:58:37.755
grades.
971
00:58:38.420 --> 00:58:39.960
They have to source code everything.
972
00:58:40.740 --> 00:58:41.240
And,
973
00:58:42.980 --> 00:58:44.440
so long as they keep transacting,
974
00:58:45.060 --> 00:58:56.380
you know, the keys could be posted on the Internet and nothing would happen effectively. Right? Because they'd be powerless. I mean, that would be a good thing to do because if the network ever did stop for, like, a couple of weeks,
975
00:58:56.680 --> 00:58:58.700
that that would be risky. But just to illustrate,
976
00:58:59.080 --> 00:59:02.380
they have they should, you know, by design, have no power
977
00:59:03.160 --> 00:59:05.260
unless the network stops for
978
00:59:10.105 --> 00:59:14.105
so that's that's the trade off. And, you know, I've I've even though that,
979
00:59:16.010 --> 00:59:21.310
has its has its risks, I think the risk of funds loss is
980
00:59:22.010 --> 00:59:24.350
sufficiently high. It's good to have this
981
00:59:25.175 --> 00:59:27.115
this kind of, backup situation.
982
00:59:27.655 --> 00:59:29.115
So to be clear, a plurality
983
00:59:29.415 --> 00:59:35.270
of federation members can stop this from going to the 2 or 3 period. Right? Basically,
984
00:59:36.050 --> 00:59:37.430
as long as the network
985
00:59:37.810 --> 00:59:40.869
continues to process blocks, it shouldn't happen.
986
00:59:41.595 --> 00:59:42.415
Okay. Awesome.
987
00:59:43.035 --> 00:59:45.275
Can you tell us anything about the HSMs? Or
988
00:59:48.910 --> 00:59:49.410
So
989
00:59:50.030 --> 00:59:57.490
I mean, not that much, really. I mean, this we're working on a second version. We've deployed a couple of the new version ones, which have more
990
00:59:58.115 --> 00:59:59.095
kind of tamper detection
991
00:59:59.635 --> 01:00:07.460
Mhmm. Circuits and things like that than the first one. I mean, the first one has some kind of key zeroing tamper stuff as well, but the new one has more.
992
01:00:07.940 --> 01:00:11.960
It's kind of more powerful, more modern HSM that we designed.
993
01:00:12.580 --> 01:00:13.080
And
994
01:00:13.780 --> 01:00:17.160
what we're thinking to do actually is when we get the Dynafed
995
01:00:18.645 --> 01:00:20.185
deployed is to
996
01:00:20.725 --> 01:00:26.745
open a lot of it. So open open, you know, the source for the HSM and sell the HSMs.
997
01:00:27.285 --> 01:00:31.530
The people are interested to operate liquid like networks or to operate,
998
01:00:32.230 --> 01:00:32.809
you know,
999
01:00:33.109 --> 01:00:43.345
different pegs into it. So at the moment, there's one peg which is operated by the same services of block signer. But in principle, there could be other pegs operated independently, and you could choose
1000
01:00:44.640 --> 01:00:47.300
which peg you like the, you know,
1001
01:00:47.920 --> 01:00:48.660
the independence
1002
01:00:49.359 --> 01:00:49.859
and,
1003
01:00:51.985 --> 01:00:54.325
commitments, privacy, and so on. I
1004
01:00:56.545 --> 01:01:00.485
saw one question in the in the chat score about a minute ago, which I thought was quite interesting
1005
01:01:03.820 --> 01:01:09.200
related to this, which is the question was, there have been a case where the Federation has blocked a peg out. And so
1006
01:01:10.685 --> 01:01:11.345
the answer
1007
01:01:11.725 --> 01:01:11.805
is,
1008
01:01:13.244 --> 01:01:15.825
not no. That that won't happen because
1009
01:01:16.605 --> 01:01:19.425
technically the peg out is is only going to the
1010
01:01:20.240 --> 01:01:21.060
hardware wallets
1011
01:01:21.600 --> 01:01:22.420
of the
1012
01:01:22.800 --> 01:01:24.900
federation members. Right? And so
1013
01:01:25.840 --> 01:01:26.340
if,
1014
01:01:27.685 --> 01:01:34.485
you know, you you would go to the sites what wallet and post your Bitcoin address, and then they would pay that from their
1015
01:01:35.210 --> 01:01:36.589
from the coins they have,
1016
01:01:37.529 --> 01:01:38.509
in their own wallet.
1017
01:01:38.970 --> 01:01:42.509
And if they run out of coins in their own wallet, they'll they'll have you wait until
1018
01:01:42.815 --> 01:01:51.715
the peg out happens, and then they'll give you the coins that are pegged out. So as far as I know, it hasn't happened. But, technically, the drip peg out is to, you know, this this kind of offline
1019
01:01:52.330 --> 01:01:53.390
hardware works. Right?
1020
01:01:54.890 --> 01:01:55.390
So,
1021
01:01:56.010 --> 01:01:58.670
you you mentioned something else there, Matt, which was,
1022
01:02:00.385 --> 01:02:02.085
we have a plan, like,
1023
01:02:02.464 --> 01:02:04.244
a a road map, a new design
1024
01:02:04.865 --> 01:02:10.910
to have direct user packouts. And so I think it's Andrew Polstra who thought of this idea. So recall the original
1025
01:02:11.530 --> 01:02:14.350
offline hardware wallet design was Greg Maxwell's
1026
01:02:15.135 --> 01:02:16.675
way to improve the security.
1027
01:02:17.295 --> 01:02:20.675
So more recently, Andrew Polstra, who's, head research
1028
01:02:21.375 --> 01:02:21.955
at Blockstream,
1029
01:02:24.530 --> 01:02:27.990
Hit on the idea that you could allow direct user peg out
1030
01:02:28.290 --> 01:02:29.270
and still have
1031
01:02:29.650 --> 01:02:30.870
sort of similar security,
1032
01:02:32.745 --> 01:02:34.525
effect by making it slower.
1033
01:02:34.825 --> 01:02:35.325
So,
1034
01:02:35.785 --> 01:02:40.185
you know, lots of people can run full nodes. So if there was ever a peg out that didn't correspond to
1035
01:02:41.230 --> 01:02:47.490
you know, if if coins left the wallet that didn't correspond to a matching peg out, lots of people would notice and complain.
1036
01:02:48.349 --> 01:02:49.089
And so
1037
01:02:49.565 --> 01:02:52.545
if you made a process where there was an API for,
1038
01:02:53.405 --> 01:02:55.825
you know, a threshold of the HSMs to
1039
01:02:56.809 --> 01:02:57.309
retroactively
1040
01:02:58.890 --> 01:03:03.230
lock a Pega in progress, you know, the default is most likely
1041
01:03:03.635 --> 01:03:07.175
that will never happen, and they'll just go out, but they'll be delayed by,
1042
01:03:07.475 --> 01:03:12.150
you know, a 100 blocks or something that will give humans time to react if something goes wrong.
1043
01:03:12.710 --> 01:03:13.849
And that would achieve
1044
01:03:14.390 --> 01:03:15.690
a sort of similar effects
1045
01:03:16.069 --> 01:03:16.569
without
1046
01:03:16.950 --> 01:03:22.855
news pass through the hands of the middle man, you know, sort of somebody who's gonna give you their own coins and then fetch them out of the,
1047
01:03:23.975 --> 01:03:24.875
out of the wallet.
1048
01:03:25.415 --> 01:03:27.035
I mean That that was idea.
1049
01:03:28.190 --> 01:03:29.790
Basically well, first of all,
1050
01:03:30.190 --> 01:03:32.210
we have freaks in the chat asking,
1051
01:03:32.830 --> 01:03:36.290
what an HSM and HSM is, which means
1052
01:03:36.885 --> 01:03:44.345
that, the majority of the freaks coming in through the audio feeds are are are also confused. That means hardware security module.
1053
01:03:45.160 --> 01:03:47.900
Basically, a physical device that is encoded
1054
01:03:48.280 --> 01:03:49.819
to a certain set of rules.
1055
01:03:50.520 --> 01:03:56.435
For for a Bitcoin, the way you could think of it is like a purpose built hardware wallet that's always connected to the Internet,
1056
01:03:57.055 --> 01:03:59.795
and is signing based on a specific set of rules,
1057
01:04:00.575 --> 01:04:01.555
to to reduce,
1058
01:04:02.220 --> 01:04:05.040
the risk of any kind of hot wallet
1059
01:04:05.900 --> 01:04:06.400
attack.
1060
01:04:08.060 --> 01:04:08.560
Yeah.
1061
01:04:09.535 --> 01:04:16.595
So so, Adam, I mean, what what you're basically saying is and, I mean, this makes a lot of sense to me, and this is why I keep rattling the atomic swabstrum,
1062
01:04:18.390 --> 01:04:19.690
is is is basically
1063
01:04:21.270 --> 01:04:26.410
the easiest way to mitigate the risk of of not being able to exit liquid
1064
01:04:26.865 --> 01:04:27.185
Bitcoin
1065
01:04:27.665 --> 01:04:29.045
exit the liquid network,
1066
01:04:30.225 --> 01:04:33.285
is is competition, is having a lot of different,
1067
01:04:33.825 --> 01:04:34.565
you know,
1068
01:04:35.025 --> 01:04:35.845
lot of different
1069
01:04:36.440 --> 01:04:37.340
people, organizations
1070
01:04:37.800 --> 01:04:39.900
offering the ability to swap out.
1071
01:04:40.440 --> 01:04:40.940
Hopefully,
1072
01:04:41.960 --> 01:04:45.340
technical improvements in terms of, like, kind of distributed decentralized
1073
01:04:45.640 --> 01:04:46.735
atomic swaps.
1074
01:04:47.755 --> 01:04:53.535
But also on top of all of that, I mean, I think the fact that confidential transactions exist on liquid,
1075
01:04:54.075 --> 01:04:55.615
and you can't see the amounts,
1076
01:04:57.080 --> 01:05:00.300
adds another layer that makes censorship more difficult,
1077
01:05:00.600 --> 01:05:03.580
just because transactions are more private on the network.
1078
01:05:05.075 --> 01:05:07.735
On that note, I'm I'm kind of curious.
1079
01:05:08.995 --> 01:05:10.695
I think the confidential transactions
1080
01:05:10.995 --> 01:05:13.655
aspect really cool on Liquid, and,
1081
01:05:14.240 --> 01:05:22.340
you know, it's kind of I know it's a hot button issue. It's something that I I want to I I kinda wanna see on chain Bitcoin as well,
1082
01:05:23.075 --> 01:05:26.454
but we have it on liquid right now, and I can play around with it on liquid.
1083
01:05:27.555 --> 01:05:29.894
Is there a specific reason why?
1084
01:05:30.880 --> 01:05:32.339
So confidential transactions
1085
01:05:32.720 --> 01:05:34.500
is blinds the amounts.
1086
01:05:35.520 --> 01:05:37.700
Right. It blinds the amounts, and then
1087
01:05:38.115 --> 01:05:38.855
and then
1088
01:05:39.235 --> 01:05:39.735
there's
1089
01:05:40.035 --> 01:05:47.655
we're we're calling it with your confidential assets, I think, is what you're calling the fact that it blinds the tokens. Correct?
1090
01:05:48.069 --> 01:05:48.569
Right.
1091
01:05:49.109 --> 01:05:55.609
And so so so if you're sending Tethr or if you're sending a 100 sats, you can't tell which which is happening.
1092
01:05:55.990 --> 01:05:57.210
Or it could be
1093
01:05:57.525 --> 01:06:00.425
it could be like a a a spaceship in Samsung's,
1094
01:06:00.965 --> 01:06:08.480
video game, like an NFT in Samsung's video game or a 100 sats or tether, and you wouldn't tell what it is, and they can all be coin joined together.
1095
01:06:09.820 --> 01:06:11.280
Is there a reason why
1096
01:06:12.045 --> 01:06:14.944
stealth addresses haven't been added to liquid
1097
01:06:15.244 --> 01:06:15.744
versus
1098
01:06:16.125 --> 01:06:18.704
because the stealth addresses is this idea where,
1099
01:06:19.530 --> 01:06:24.430
I mean, the show is a perfect example with dispatch. If if I could post a stealth address,
1100
01:06:26.145 --> 01:06:35.205
and then people could donate and don't they don't completely docks the amounts and who's donating. Is there a reason why stealth addresses aren't on liquid yet?
1101
01:06:36.990 --> 01:06:38.450
It would it would be comparable.
1102
01:06:40.110 --> 01:06:40.930
I think
1103
01:06:41.870 --> 01:06:45.835
that I mean, I I was pretty interested in stealth addresses and try to find ways to,
1104
01:06:47.255 --> 01:06:52.155
make them more efficient. I think the downside of self addresses is the recipient
1105
01:06:52.695 --> 01:06:53.995
basically has to
1106
01:06:54.599 --> 01:06:57.500
try to decrypt every every stuff transaction
1107
01:06:58.760 --> 01:07:03.339
that goes on the blockchain, period. Right? So it's like CPU heavy for the recipient.
1108
01:07:03.714 --> 01:07:07.494
It's just a little tricky to do it on a smartphone, for example. Right? So you have to download all
1109
01:07:08.275 --> 01:07:11.974
transaction. I mean, if every transaction is stealth transaction, which should be ideal,
1110
01:07:12.589 --> 01:07:17.170
you'd have to download them all. You have to be a full node. You have to, like, try and decrypt them all.
1111
01:07:17.550 --> 01:07:22.444
So that's the kinda downside. I know some trade offs as well. People like, oh, you know, well,
1112
01:07:23.704 --> 01:07:25.165
I will make sure that mine,
1113
01:07:25.865 --> 01:07:34.059
like, start with this number. I'll only try to decrypt a 10th of it something, but then you've got less privacy. So, yes, sir, the the overhead is the issue.
1114
01:07:34.519 --> 01:07:40.904
So, I mean, this is a this is a particular use case that I've been focused on pretty heavily because I've been trying to,
1115
01:07:41.605 --> 01:07:45.785
I've been independently trying to help, like, activists and stuff accept Bitcoin privately.
1116
01:07:46.799 --> 01:07:48.020
And, like, the the
1117
01:07:48.400 --> 01:07:51.220
the dream, right, is that they can post, like, a text string,
1118
01:07:51.520 --> 01:07:52.819
and they can just receive
1119
01:07:53.359 --> 01:07:55.299
Bitcoin in a private way. Right?
1120
01:07:55.665 --> 01:07:56.165
And
1121
01:07:56.785 --> 01:07:58.565
it it kind of I mean
1122
01:07:59.425 --> 01:08:05.740
I mean, Adam, you're a legend here. I I'm I am I am just a a mere mortal. I just use these things.
1123
01:08:06.520 --> 01:08:10.380
It seems like Monero has figured out a way to do this stealth address
1124
01:08:10.765 --> 01:08:19.185
where I they can just post a a string of of of letters and numbers, and they can just receive donations in a in a relatively private way.
1125
01:08:20.960 --> 01:08:27.985
Can Liquid be that as as well? Like, can Liquid have that stealth address, Krishna? Like, what what am I missing something here?
1126
01:08:28.945 --> 01:08:31.205
No. I mean, there there are lots of things
1127
01:08:31.585 --> 01:08:33.925
which would be possible
1128
01:08:35.505 --> 01:08:36.965
with wallet support.
1129
01:08:37.800 --> 01:08:38.300
So
1130
01:08:38.760 --> 01:08:42.060
Liquid is very Bitcoin like, but with
1131
01:08:42.679 --> 01:08:45.580
extensions for confidential transactions and things like that.
1132
01:08:46.040 --> 01:08:46.860
And so,
1133
01:08:47.835 --> 01:08:49.535
you know, how how the wallet
1134
01:08:50.875 --> 01:08:51.375
presents
1135
01:08:51.915 --> 01:08:54.815
that to users, some of the features are, like,
1136
01:08:55.210 --> 01:08:58.350
wallet only. They don't need network changes. Right? And so
1137
01:08:59.050 --> 01:09:04.415
stealth addresses are like that. It doesn't doesn't need any network. It doesn't need, like, a soft fork or anything. You can just do it.
1138
01:09:05.055 --> 01:09:07.955
Usually send some extra data or not true or something.
1139
01:09:08.815 --> 01:09:09.215
But
1140
01:09:09.935 --> 01:09:16.000
so I think it's a trade off you could do in a wallet and it just has a cost. You know? Now you need a full node or you need to
1141
01:09:16.460 --> 01:09:20.640
semi trust a server to scan them for you, but at least the whole network can't see it.
1142
01:09:22.765 --> 01:09:23.265
And
1143
01:09:24.605 --> 01:09:26.145
yeah. I mean, I think if
1144
01:09:27.645 --> 01:09:33.890
that could be made more lightweight or people would just deal with it, right, run full nodes and live with this cost,
1145
01:09:34.990 --> 01:09:35.490
ideally,
1146
01:09:35.870 --> 01:09:41.285
staff addresses would be the default type of address. Because if you think about it, it's very convenient that you can have
1147
01:09:41.825 --> 01:09:47.845
an address that you can safely reuse. Like, having to keep changing addresses is very confusing to use this. So it's kinda ideal
1148
01:09:48.660 --> 01:09:52.120
solution. And I tried for a while to see if I could find a way to,
1149
01:09:52.900 --> 01:10:01.435
you know, accelerate the crypto or find a different way to do it, but I didn't find any way to do it. So we stuck with this kind of, you know, heavy CPU stuff.
1150
01:10:01.975 --> 01:10:02.475
And
1151
01:10:02.935 --> 01:10:04.635
actually, I mean, about the,
1152
01:10:05.300 --> 01:10:06.200
you know, Monero
1153
01:10:06.900 --> 01:10:09.000
things, it it actually adopted,
1154
01:10:09.860 --> 01:10:12.520
you know, a bunch of stuff that,
1155
01:10:13.755 --> 01:10:17.295
we did at Blockstream or that I proposed before Blockstream. So
1156
01:10:17.755 --> 01:10:18.415
I proposed
1157
01:10:19.195 --> 01:10:20.735
a way to shrink the
1158
01:10:21.355 --> 01:10:21.855
original
1159
01:10:22.580 --> 01:10:28.679
linkable rigs ring signature by 50%. And they, you know, they went off and hard forked it in. So I was like, well, okay.
1160
01:10:29.060 --> 01:10:31.885
They actually do r and d and deploy it. That's cool. And,
1161
01:10:33.244 --> 01:10:34.705
and more recently, they did,
1162
01:10:36.045 --> 01:10:39.580
they added confidential transactions to the ring sync. And
1163
01:10:40.120 --> 01:10:41.820
there's another variant of,
1164
01:10:45.080 --> 01:10:45.580
the
1165
01:10:46.455 --> 01:10:51.435
the way that Monero does things, which is more scalable, actually. So at the same time, I proposed
1166
01:10:51.735 --> 01:10:53.435
confidential transactions. I proposed
1167
01:10:55.420 --> 01:10:56.160
kind of,
1168
01:10:59.020 --> 01:10:59.920
way to
1169
01:11:02.755 --> 01:11:03.255
send,
1170
01:11:04.114 --> 01:11:06.054
other people dust. So,
1171
01:11:06.355 --> 01:11:09.975
if you think about you could do this in liquid. It just would require client support.
1172
01:11:10.594 --> 01:11:10.755
So
1173
01:11:11.600 --> 01:11:15.780
which is if the wallet just, you know, grabs other addresses and sends people
1174
01:11:16.160 --> 01:11:22.705
1 sat or 0 sat or something Yeah. That'd be great. And the wallets accept that and just ingest it and use it,
1175
01:11:23.725 --> 01:11:27.070
it doesn't it doesn't have the forever growing UTXO set
1176
01:11:27.630 --> 01:11:33.969
side effects that the linkable ring signature does, but it has the same basically, the same kind of privacy side effect.
1177
01:11:34.565 --> 01:11:40.344
And so I thought that was pretty cool. And I'd actually propose that at the same time as confidential transactions, but, yeah, it was
1178
01:11:40.725 --> 01:11:41.465
more ideas
1179
01:11:42.150 --> 01:11:43.770
and how people implemented.
1180
01:11:44.390 --> 01:11:46.330
So, I mean, Adam, you brought it up.
1181
01:11:46.870 --> 01:11:51.450
Look, I'm I'm very privacy focused. The freaks here know this. The audience here knows this.
1182
01:11:53.175 --> 01:11:58.155
You know, is is to me, I think the whole idea of focusing
1183
01:11:58.535 --> 01:11:59.915
liquid on traders,
1184
01:12:02.199 --> 01:12:05.820
you know, I could get I'll I literally could give 2 shits. I do not care,
1185
01:12:06.600 --> 01:12:10.775
what the traders use. I understand, like, it has knock on effects for for
1186
01:12:11.155 --> 01:12:14.135
the regular users in terms of them not using our chain
1187
01:12:14.594 --> 01:12:15.975
space, which is fantastic.
1188
01:12:17.965 --> 01:12:18.400
But
1189
01:12:18.960 --> 01:12:20.260
confidential transactions,
1190
01:12:20.800 --> 01:12:22.500
really fucking cool to me.
1191
01:12:23.520 --> 01:12:24.500
So so
1192
01:12:26.945 --> 01:12:34.965
like, do you agree that there's there's, like, there's I think there's, like, an area for for Liquid to excel in terms of of increasing
1193
01:12:36.159 --> 01:12:39.219
p to p, person to person transaction privacy,
1194
01:12:39.599 --> 01:12:42.420
transactional privacy in an easy accessible way.
1195
01:12:44.155 --> 01:12:50.815
Like you said, like, little things, like like self shuffling self shuffling on with confidential transactions
1196
01:12:51.115 --> 01:12:52.735
actually can improve your privacy.
1197
01:12:53.150 --> 01:12:53.890
Self shuffling
1198
01:12:54.270 --> 01:12:59.810
on Bitcoin on chain, you just look like an idiot, and you're spending a shit ton of money like an idiot. Right?
1199
01:13:00.244 --> 01:13:05.304
Yeah. Actually, that was one of the things that Greg Maxwell got excited about
1200
01:13:05.764 --> 01:13:06.905
confidential transactions
1201
01:13:07.284 --> 01:13:10.180
when he realized because Greg was the original,
1202
01:13:11.440 --> 01:13:12.820
proposer of CoinJoints
1203
01:13:13.440 --> 01:13:16.580
some years before. I don't know. Like, 2011 or 12 or something.
1204
01:13:16.885 --> 01:13:19.225
And so when he realized that confidential transactions
1205
01:13:20.565 --> 01:13:21.065
work
1206
01:13:21.685 --> 01:13:30.100
very well with coin joins and actually make any join a perfect coin join because you don't you don't know anything about the amounts, which is usually what creates the problem for coin joins.
1207
01:13:30.640 --> 01:13:32.580
And I got I thought that was pretty, you know,
1208
01:13:32.935 --> 01:13:33.675
more exciting
1209
01:13:34.454 --> 01:13:39.195
and got enthusiastic to put that together sort of thing. So it's certainly be possible to,
1210
01:13:39.735 --> 01:13:40.635
you know, run,
1211
01:13:41.660 --> 01:13:51.585
you know, port port one of the coin joint wallets to liquid, for example. It's very similar, and it and it would be much more effective because, you know, all these debates between Samura
1212
01:13:52.205 --> 01:13:52.705
and
1213
01:13:53.804 --> 01:13:54.304
Wasabi
1214
01:13:54.605 --> 01:13:59.300
about, you know, change management and value matching and stuff like that.
1215
01:13:59.840 --> 01:14:09.965
I think a lot of those things are simplified because you can basically join anything to anything. It doesn't even have to be the same asset type in liquid. But, you know Exactly. It could be an NFT. It could be Tether. It doesn't fucking
1216
01:14:10.505 --> 01:14:11.405
matter. Right.
1217
01:14:11.785 --> 01:14:13.085
Yeah. So that's cool.
1218
01:14:14.745 --> 01:14:15.245
And
1219
01:14:18.360 --> 01:14:18.860
right.
1220
01:14:19.320 --> 01:14:22.700
Let's see. Backtracking a bit because we got got off on a lot of topics there.
1221
01:14:23.745 --> 01:14:25.205
We do the the the
1222
01:14:25.985 --> 01:14:28.725
the, like, the, disaster recovery key.
1223
01:14:29.345 --> 01:14:30.005
That was,
1224
01:14:30.865 --> 01:14:35.809
how that why that's there, how it got fixed. Oh, yeah. So something else I was gonna say is that the,
1225
01:14:36.429 --> 01:14:39.329
you know, the fact that liquid is federated
1226
01:14:40.429 --> 01:14:40.929
is
1227
01:14:41.945 --> 01:14:46.204
actually, you know, just a side effect. So the original side chain white paper
1228
01:14:46.905 --> 01:14:53.170
proposed a soft walk to Bitcoin. Now we actually implement this. Matt Corella did that, you know, in the early days when he was at Silver Blockstream.
1229
01:14:53.949 --> 01:14:54.449
And
1230
01:14:55.150 --> 01:15:03.315
that would be kind of fully pit to peer side chain. So if your soft walk to Bitcoin is similar in concept to drive chains. That's that's another method.
1231
01:15:03.855 --> 01:15:05.555
And so then the
1232
01:15:06.220 --> 01:15:09.600
the soft walk in Bitcoin would have, you know, just enough
1233
01:15:10.700 --> 01:15:11.760
awareness of
1234
01:15:12.860 --> 01:15:15.440
small proofs from the side chain to verify
1235
01:15:16.665 --> 01:15:17.165
that,
1236
01:15:18.105 --> 01:15:28.970
these pagans are, you know, from the from the side chain into the main chain are authorized, and then you don't need any HSMs or signers. It's like, you know, miners are effectively processing that without any keys.
1237
01:15:31.910 --> 01:15:41.075
And so I think it would, you know, be very nice to get back, you know, to get that next. So we just did, you know, the federated model because
1238
01:15:43.340 --> 01:15:50.855
there there were more technical challenges. And you wanna, you know, start somewhere and improve from it. Right? So we did the federated one first. We're
1239
01:15:51.235 --> 01:15:52.135
about to do the
1240
01:15:52.435 --> 01:15:52.935
dynamic
1241
01:15:53.475 --> 01:15:54.775
version, and
1242
01:15:55.235 --> 01:15:59.150
we're thinking about how to do how to do the next one. So I saw
1243
01:15:59.690 --> 01:16:00.190
Sergio,
1244
01:16:00.890 --> 01:16:02.670
from Rootstock has another
1245
01:16:03.050 --> 01:16:05.230
new idea and then there's a drive chain
1246
01:16:05.695 --> 01:16:07.395
thing that Paul Storz has been working
1247
01:16:07.935 --> 01:16:08.594
on. So
1248
01:16:09.375 --> 01:16:10.275
now it takes
1249
01:16:11.054 --> 01:16:17.090
it's it's a, you know, it's an adventurous and complicated soft fork to make to Bitcoin, right, to support side chains. But
1250
01:16:17.869 --> 01:16:18.530
I think
1251
01:16:19.550 --> 01:16:21.650
it's, you know, it's a very useful
1252
01:16:22.425 --> 01:16:24.605
soft work because it allows,
1253
01:16:24.905 --> 01:16:26.125
you know, more decentralized
1254
01:16:27.465 --> 01:16:28.445
opt in features,
1255
01:16:28.905 --> 01:16:29.565
for Bitcoin.
1256
01:16:31.239 --> 01:16:35.019
So yeah. The the, you know, the side effects of the federation are
1257
01:16:35.559 --> 01:16:38.699
are felt because we we really want to get to the
1258
01:16:39.165 --> 01:16:46.500
fully paid to pay. The other thing that kinda complicated the fully paid to pay version is you're you're effectively trusting miners, sort of, you know.
1259
01:16:47.060 --> 01:16:48.920
More so than with direct Bitcoin.
1260
01:16:49.300 --> 01:16:50.600
Because with direct Bitcoin,
1261
01:16:51.620 --> 01:16:54.440
everybody's running a full node and they can verify
1262
01:16:54.740 --> 01:17:01.355
all the blocks. So if one miner goes crazy, you can ignore them. Right? And it doesn't matter that much. But with,
1263
01:17:03.280 --> 01:17:05.060
with the side chain,
1264
01:17:06.000 --> 01:17:07.040
you're sort of,
1265
01:17:09.040 --> 01:17:15.905
you know, the majority of the hash rate, basically, if it was dishonest, could steal from the side chain wallet, you know, side chain peg wallet.
1266
01:17:16.285 --> 01:17:19.480
So that's the trade off with side chains. And you can't really,
1267
01:17:20.100 --> 01:17:22.679
you know, make a soft walk rule to verify
1268
01:17:23.139 --> 01:17:30.375
the side chain blocks because if you do that, it's not a side chain anymore. It's, it's an extension block, and people don't like that for a good reason.
1269
01:17:31.715 --> 01:17:35.335
Adam, do you do you think we'll ever see Confidence transactions
1270
01:17:35.715 --> 01:17:36.695
on main chain?
1271
01:17:37.750 --> 01:17:38.730
I hope so.
1272
01:17:39.110 --> 01:17:41.050
It'd be a certainly a much more interesting
1273
01:17:41.910 --> 01:17:43.050
debate to have,
1274
01:17:43.830 --> 01:17:46.490
than a block size debate from a few years ago.
1275
01:17:46.935 --> 01:17:48.795
And I'm I'm thinking it might be,
1276
01:17:49.255 --> 01:17:53.675
you know, a different set of people arguing on different sites. Right? You know? I think so too.
1277
01:17:53.975 --> 01:18:02.000
You know, because because I mean, I I I also suggested to people when they were having, you know, the block size debate that it would be
1278
01:18:02.780 --> 01:18:04.560
a logical thing to do
1279
01:18:05.764 --> 01:18:10.185
to increase the block size a bit, you know, like 4 times or something,
1280
01:18:10.965 --> 01:18:13.704
and put in confidential transactions at the same time
1281
01:18:14.380 --> 01:18:18.239
with the same kind of argument I was making about, you know, liquid being
1282
01:18:18.860 --> 01:18:20.159
a trade off in between
1283
01:18:21.100 --> 01:18:22.960
the very private churn server
1284
01:18:24.844 --> 01:18:25.585
and Bitcoin
1285
01:18:26.445 --> 01:18:27.824
pseudonymity based model,
1286
01:18:28.204 --> 01:18:33.264
which is that, you know, what are the side effects of a bigger block? Well, you know, it's more expensive to verify
1287
01:18:33.790 --> 01:18:35.570
There's increased risk of,
1288
01:18:36.030 --> 01:18:40.610
you know, minus centralization. And what's what's the consumer minus centralization? Well, selective censorship.
1289
01:18:41.150 --> 01:18:43.855
So if you've got more privacy that kind of counteracts
1290
01:18:44.395 --> 01:18:49.295
some of that centralization censorship risk. So I would say, I mean, you can't really
1291
01:18:50.120 --> 01:18:57.980
measure it exactly, but I'd say there's a reasonable argument to be made that, you know, the more fungible it is, more private it is,
1292
01:18:58.595 --> 01:19:00.135
the bigger a block you can
1293
01:19:00.915 --> 01:19:01.415
handle
1294
01:19:01.875 --> 01:19:07.975
without that creating a, you know, a bad side effects. Because the miners don't know what to sensor, basically.
1295
01:19:08.820 --> 01:19:18.635
Yeah. And you get you get a bit of that in liquid, but any kind of, you know, light version of it. I mean, confidential transactions are not, you know, silver bullet. Right? Because you still have
1296
01:19:19.255 --> 01:19:24.395
the transaction graph. It's just you really can't tell what's changed and what's payment and
1297
01:19:24.960 --> 01:19:28.900
what what type is what, so it gets lost pretty quickly.
1298
01:19:29.600 --> 01:19:31.220
It's easy to break the heuristics.
1299
01:19:32.295 --> 01:19:33.594
Yeah. Much easier. Yeah.
1300
01:19:34.375 --> 01:19:37.435
Wiz, you've been quiet there for a while. Are you still live?
1301
01:19:38.054 --> 01:19:39.494
I'm here, and I've been,
1302
01:19:40.340 --> 01:19:45.720
listening to Adam. Yes. I I yeah. I had a lot of thoughts about the, the federated model because,
1303
01:19:46.260 --> 01:19:52.895
I know we'll we'll get to BISC later, but BISC is also a federated model. And I think this is this is kind of an underrated,
1304
01:19:53.275 --> 01:19:57.935
thing or a lot of people are maybe afraid of it because they don't understand why,
1305
01:19:58.810 --> 01:20:01.390
you would make a federation in the 1st place. But,
1306
01:20:01.850 --> 01:20:07.150
the way I think about is that every transaction has, like, I don't know, maybe 4 or 5 properties.
1307
01:20:09.255 --> 01:20:11.275
So, obviously, security, privacy,
1308
01:20:11.655 --> 01:20:12.635
censorship resistance,
1309
01:20:14.215 --> 01:20:20.429
the, the cost of the transaction, and the speed of the transaction. Right? So I guess that's 5. And they all kind of,
1310
01:20:21.309 --> 01:20:23.010
trade off on each other. Right? Obviously,
1311
01:20:23.469 --> 01:20:29.085
we all know on the Bitcoin, main chain, if you use a higher fee, then you'll get a higher speed.
1312
01:20:29.545 --> 01:20:30.025
And,
1313
01:20:31.145 --> 01:20:33.885
likewise, if you want some additional functionality,
1314
01:20:34.530 --> 01:20:36.630
if you want to be able to trade,
1315
01:20:37.810 --> 01:20:41.110
then maybe you need more op codes in your transaction,
1316
01:20:41.570 --> 01:20:47.385
when you approach, like, smart contract functionality. So the size of the transaction gets larger, and so therefore,
1317
01:20:47.764 --> 01:20:49.864
your fees will will also be larger.
1318
01:20:50.710 --> 01:20:53.610
And, so so all of these security privacy,
1319
01:20:54.310 --> 01:20:54.810
functionality,
1320
01:20:55.510 --> 01:20:56.489
censorship resistance,
1321
01:20:57.270 --> 01:20:58.890
speed, and cost
1322
01:20:59.655 --> 01:21:04.155
are all affecting each other. And, if you change on any one of the variables,
1323
01:21:04.855 --> 01:21:16.559
then the entire equation kinda changes. So, of course, users want everything. Users want everything. They want the security of the Bitcoin main chain. They want, base layer privacy. They want censorship resistance.
1324
01:21:17.605 --> 01:21:22.345
They want the transaction confirmed right away, and they want it all for free or low fees. But,
1325
01:21:23.205 --> 01:21:23.705
unfortunately,
1326
01:21:24.910 --> 01:21:27.730
you know, this is this is the downside of digital scarcity.
1327
01:21:28.190 --> 01:21:31.890
There's only 21,000,000 Bitcoins. That's what gives Bitcoin its value.
1328
01:21:32.425 --> 01:21:38.284
But, at the same time, the same digital scarcity means that the space in Bitcoin's blockchain
1329
01:21:38.985 --> 01:21:41.005
is scarce, and so that,
1330
01:21:41.530 --> 01:21:45.309
will also increase in value. The, you know, the actual bytes. As you said,
1331
01:21:45.770 --> 01:21:47.869
Bitcoin fees are designed to pump forever.
1332
01:21:48.415 --> 01:21:49.075
And so
1333
01:21:49.615 --> 01:21:56.670
it hasn't been super relevant to to worry about Bitcoin on chain fees for a long time until recently. And now,
1334
01:21:57.469 --> 01:22:01.410
just a a couple weeks ago, we saw fees. I think they were over 300
1335
01:22:01.790 --> 01:22:03.090
SaaS per v byte.
1336
01:22:03.630 --> 01:22:04.449
And so,
1337
01:22:05.065 --> 01:22:07.565
a typical on chain transaction was approaching,
1338
01:22:07.945 --> 01:22:09.645
I think like 25, $30.
1339
01:22:10.505 --> 01:22:11.005
And
1340
01:22:11.385 --> 01:22:23.280
if you extrapolate this out and you realize, okay, maybe not this cycle, maybe 5 years from now or 10 years from now, yeah, a Bitcoin transaction could cost several $100 or even more.
1341
01:22:24.125 --> 01:22:24.785
And so,
1342
01:22:26.205 --> 01:22:29.185
how do you how do you address this? Well, there's,
1343
01:22:29.805 --> 01:22:36.750
the the fed the federated model is one way to kind of balance the equation of security and privacy and,
1344
01:22:37.530 --> 01:22:40.590
and speed and and cost and functionality. So,
1345
01:22:42.435 --> 01:22:48.215
obviously, with liquid, you know, you're trading off some of the security. You don't have the,
1346
01:22:49.075 --> 01:22:50.615
Bitcoin base layer
1347
01:22:51.079 --> 01:22:52.940
security that that blockchain provides.
1348
01:22:53.400 --> 01:22:53.900
Maybe,
1349
01:22:55.000 --> 01:23:01.485
you know, you you lose a little bit of censorship resistance. Maybe I mean, the the privacy gives you censorship resistance,
1350
01:23:01.864 --> 01:23:04.985
so it's so it's it's in a different way. If you use,
1351
01:23:05.545 --> 01:23:09.110
Liquid, then you actually gain privacy because of the confidential transactions,
1352
01:23:09.650 --> 01:23:13.670
and the fees are lower. Right? So you're kind of trading that security to gain privacy,
1353
01:23:14.290 --> 01:23:15.830
to gain cheaper fees,
1354
01:23:16.195 --> 01:23:22.295
and also speed with the one minute block times. And so you you every federated model or side chain,
1355
01:23:23.850 --> 01:23:31.950
or even other altcoin chains, they all are making trade offs. Right? Like, there's no free lunch where you get everything for free anymore.
1356
01:23:32.574 --> 01:23:36.594
The time of 0 fee transactions and even low fee transactions is,
1357
01:23:37.295 --> 01:23:38.514
probably gone. So
1358
01:23:39.215 --> 01:23:41.395
this is why we use federations. And,
1359
01:23:42.750 --> 01:23:44.130
with Bisk, for example,
1360
01:23:44.590 --> 01:23:47.730
Bisk is also a a type of a federated model where,
1361
01:23:48.829 --> 01:23:50.290
people want to trade.
1362
01:23:50.915 --> 01:23:54.135
And, obviously, Bitcoin's base layer does not support,
1363
01:23:55.155 --> 01:23:58.115
random people trading with each other. And so,
1364
01:23:58.595 --> 01:24:01.130
one one really funny thing I think is that,
1365
01:24:02.230 --> 01:24:12.155
people are really afraid of liquid. A lot of Bisq users are really afraid of liquid because it's a federated security model, but they seem to forget that best Bisc is also,
1366
01:24:12.695 --> 01:24:14.715
a type of federated security model.
1367
01:24:15.335 --> 01:24:16.715
If there's any type of
1368
01:24:17.070 --> 01:24:17.970
trade dispute,
1369
01:24:18.830 --> 01:24:25.585
so so a long time ago, Bisc originally started out with a 2 of 3 multisig model. And we talked about this on your other show,
1370
01:24:26.445 --> 01:24:29.345
Tales from the Crypt, I think about almost 2 years ago.
1371
01:24:30.045 --> 01:24:32.065
The 2 of 3 security model
1372
01:24:32.525 --> 01:24:33.025
is,
1373
01:24:34.390 --> 01:24:36.090
extremely insecure because
1374
01:24:36.550 --> 01:24:37.530
say say,
1375
01:24:38.470 --> 01:24:48.945
say Adam and Matt are going to trade some Bitcoin for some USD and, Wizz is the arbitrator here. You know? So these are the 3 key holders of our 2 of 3 multisig.
1376
01:24:49.725 --> 01:24:50.225
Well,
1377
01:24:50.820 --> 01:24:52.120
that's great if,
1378
01:24:52.500 --> 01:24:59.960
all the 3 people are actually separate people. But when you're dealing with, anonymous people on on a marketplace with like, Bisq,
1379
01:25:01.135 --> 01:25:12.830
If I'm the arbitrator, I can just go to the Bisq market and take all of the offers, and now I control 2 of the 3 keys. And I can steal all of the funds, and there's nothing that you can do about it. So
1380
01:25:13.290 --> 01:25:16.090
Bisc realized this a long time ago that the 2 of 3,
1381
01:25:16.490 --> 01:25:17.470
security model
1382
01:25:18.015 --> 01:25:19.155
with anonymous parties,
1383
01:25:19.935 --> 01:25:23.155
is not secure. And so this changed to a similar,
1384
01:25:23.535 --> 01:25:24.355
time lock,
1385
01:25:25.110 --> 01:25:26.330
trade protocol. So,
1386
01:25:27.110 --> 01:25:31.290
as Adam explained, liquid has this really cool 11 of 15 multisig
1387
01:25:32.125 --> 01:25:35.665
with a time lock that will degrade to a 2 of 3 multisig
1388
01:25:36.365 --> 01:25:39.425
after, set amount of time. I think it was 4 weeks, you said.
1389
01:25:39.805 --> 01:25:41.260
Well, bisque trades,
1390
01:25:42.520 --> 01:25:46.140
if if 2 people wanna trade with each other on BISC,
1391
01:25:47.400 --> 01:25:48.780
sometimes one person,
1392
01:25:49.240 --> 01:25:51.805
it's called it's also called like an option trade.
1393
01:25:52.905 --> 01:25:53.545
Say you,
1394
01:25:54.105 --> 01:25:56.765
take an offer to buy Bitcoin on disk,
1395
01:25:57.450 --> 01:26:01.630
But then as soon as you take the offer, the price tanks by 20%.
1396
01:26:02.330 --> 01:26:11.915
Well, maybe you change your mind and you don't wanna make that payments now. So in other words, you you want to default on the trade. Even though your security deposit was,
1397
01:26:12.475 --> 01:26:13.455
say it was 15%,
1398
01:26:13.930 --> 01:26:18.430
well, the price went down by 20%. So it actually makes sense for you to just abandon this trade.
1399
01:26:18.810 --> 01:26:22.910
Well, your security deposit and the seller's funds are locked in this,
1400
01:26:23.595 --> 01:26:24.815
2 of 2 multisig.
1401
01:26:25.675 --> 01:26:27.775
And if the other guy just disappears,
1402
01:26:28.395 --> 01:26:30.415
that would lock those funds forever.
1403
01:26:31.020 --> 01:26:35.280
So the BISK trade protocol also has a time lock where it's 2 of 2,
1404
01:26:37.260 --> 01:26:39.520
I think it's, 10 days for,
1405
01:26:40.325 --> 01:26:47.705
yeah, I think it's 20 days, is the hard time limit for a fiat to Bitcoin trade. After 20 days, it degrades to,
1406
01:26:49.192 --> 01:26:53.120
a a single sig where it just gets donated to,
1407
01:26:53.580 --> 01:26:56.320
BISC, basically. Right? So you now you're totally trusting
1408
01:26:57.225 --> 01:26:58.285
the BISC Federation,
1409
01:26:58.905 --> 01:27:00.365
in in the case of,
1410
01:27:01.385 --> 01:27:02.525
someone walking away.
1411
01:27:02.905 --> 01:27:04.125
So for the most part,
1412
01:27:04.490 --> 01:27:05.390
the bisque trades,
1413
01:27:06.250 --> 01:27:09.150
the 2 trade counterparties are financially incentivized
1414
01:27:10.490 --> 01:27:12.350
to complete the trade together
1415
01:27:12.675 --> 01:27:14.935
just between themselves. But if there is a problem,
1416
01:27:15.315 --> 01:27:17.815
then you essentially have to trust the Bisc Federation
1417
01:27:18.435 --> 01:27:20.775
with that trade capital and the security deposits,
1418
01:27:21.600 --> 01:27:27.460
that they're going to mediate and, you know, examine any evidence. Did the guy make the payments or not? And then,
1419
01:27:28.000 --> 01:27:29.540
reef you know, do a refund
1420
01:27:30.075 --> 01:27:30.795
of the,
1421
01:27:31.195 --> 01:27:34.495
trade trade capital to the the correct person.
1422
01:27:35.114 --> 01:27:38.815
And so the Bisc Federated model has its own governance structure.
1423
01:27:39.449 --> 01:27:43.870
It's not a company. It's it's it's a DAO. Right? It's a decentralized
1424
01:27:44.330 --> 01:27:45.310
autonomous organization,
1425
01:27:45.929 --> 01:27:47.230
and we you know,
1426
01:27:47.665 --> 01:27:50.565
there's only realistically, like, 15 or 20 people,
1427
01:27:51.905 --> 01:27:53.045
you know, who are the pseudonymous
1428
01:27:53.425 --> 01:27:55.605
BIS contributors that have the voting rights
1429
01:27:56.145 --> 01:27:56.645
to,
1430
01:27:57.040 --> 01:28:00.020
you know, participate in this DAO. Of course, anybody can,
1431
01:28:00.719 --> 01:28:06.500
but it's mostly the the contributors of BISC. And the more contributions you do, the more voting rights you get.
1432
01:28:07.255 --> 01:28:09.675
And so, you know, I have a few percent,
1433
01:28:10.615 --> 01:28:12.555
voting power in the Bisk DAO,
1434
01:28:12.935 --> 01:28:18.320
and maybe the the OG founders have a little bit more. You know, it depends on how much you contributed.
1435
01:28:18.860 --> 01:28:21.599
And from the DAO, you can have proposals,
1436
01:28:22.565 --> 01:28:24.264
you know, you you can make decisions,
1437
01:28:24.804 --> 01:28:28.905
without a company. And everyone's in a different jurisdiction. Some people are totally
1438
01:28:29.205 --> 01:28:33.600
pseudonymous. So that's how the BISC Federation kind of achieves this,
1439
01:28:34.860 --> 01:28:35.679
multi jurisdictional
1440
01:28:36.060 --> 01:28:37.120
censorship resistance.
1441
01:28:38.060 --> 01:28:45.305
No one country's government would be able to easily shut down the BISK DAO. And from that, we can actually,
1442
01:28:46.245 --> 01:28:47.305
have some federated,
1443
01:28:47.845 --> 01:28:53.770
seed nodes for example. Right? So in the BISK Federation, I think there are 4 seed node operators. Right? It's,
1444
01:28:54.390 --> 01:28:56.810
me, MZ, Devin, and Micah,
1445
01:28:57.165 --> 01:28:59.585
I think are the 4 guys. And we also have,
1446
01:29:00.285 --> 01:29:01.665
some other semi trusted,
1447
01:29:02.205 --> 01:29:09.630
you know, in this federated security model services like the price feed. If you put an offer on disc, the price changes ever, once per minute
1448
01:29:10.010 --> 01:29:13.070
to the bisque price index, which is our,
1449
01:29:13.995 --> 01:29:14.815
again, federated,
1450
01:29:15.995 --> 01:29:25.670
kind of price oracle service for what the price of Bitcoin is. So if you say, I wanna create a Bisk offer that's, you know, 10% premium on the market,
1451
01:29:27.010 --> 01:29:30.230
every one minute, your bisque node will connect to
1452
01:29:30.845 --> 01:29:33.345
either me or the other price server operators,
1453
01:29:33.885 --> 01:29:45.990
price services, get the price of Bitcoin that we say is the price, you know, based on the open source software running, and your bisque node will adjust the the price. Obviously, if one of the price server
1454
01:29:46.370 --> 01:29:47.590
operators was malicious,
1455
01:29:48.025 --> 01:29:51.485
they could say the price of Bitcoin is $1. Everyone would lower their
1456
01:29:51.864 --> 01:29:53.885
offers to a dollar and, you know,
1457
01:29:54.265 --> 01:30:00.170
you know, you could buy some really cheap Bitcoin. Right? So there's a lot of trust in the Bisk Federation in this,
1458
01:30:00.490 --> 01:30:00.990
Dow,
1459
01:30:02.170 --> 01:30:02.670
organization.
1460
01:30:03.290 --> 01:30:07.535
And liquid also, you know, when you use Liquid, you're trusting the federation
1461
01:30:08.315 --> 01:30:10.895
and its governance structure and its functionaries
1462
01:30:11.275 --> 01:30:11.775
to,
1463
01:30:12.290 --> 01:30:15.670
you know, do what they are entrusted to do. And,
1464
01:30:17.010 --> 01:30:19.270
that's why I just think it's so strange why,
1465
01:30:20.025 --> 01:30:24.684
Bisk traders would feel comfortable with the Bisk Federation, but not the the Liquid Federation.
1466
01:30:28.650 --> 01:30:29.130
I'm
1467
01:30:29.850 --> 01:30:32.830
Yeah. I mean sorry. I I think another thing is
1468
01:30:34.330 --> 01:30:35.390
comparable maybe
1469
01:30:36.295 --> 01:30:37.515
is people will,
1470
01:30:38.295 --> 01:30:40.475
you know, they'll use hosted wallets
1471
01:30:41.415 --> 01:30:41.915
like,
1472
01:30:42.695 --> 01:30:47.420
you know, Cash App or Exchange Wallet and things like that. Or I guess PayPal
1473
01:30:47.880 --> 01:30:52.540
is is a kind of has bought some of these things you can buy Bitcoin, but you can't draw them.
1474
01:30:53.000 --> 01:30:53.820
And so,
1475
01:30:54.575 --> 01:31:04.120
you know, some people will use that, but if they if you hear that liquid is federated, they'll say, no. I can't use that. Right? Or they'll use a single exchange capability, but they don't wanna use a federated custody. So I think
1476
01:31:04.500 --> 01:31:05.560
it's it's counterintuitive
1477
01:31:06.260 --> 01:31:06.760
and
1478
01:31:08.420 --> 01:31:13.795
Bitcoin is a benchmark. So everything new gets compared to Bitcoin and then people wanna be persuaded why it's
1479
01:31:14.415 --> 01:31:20.730
better than Bitcoin. And, of course, nothing is better than Bitcoin because if if there was a way to improve Bitcoin, it would have already done it. Right? So
1480
01:31:21.110 --> 01:31:22.490
any any layer 2
1481
01:31:23.270 --> 01:31:24.010
is generally
1482
01:31:24.950 --> 01:31:26.845
making cutting some corners, making
1483
01:31:27.325 --> 01:31:28.225
something worse
1484
01:31:29.565 --> 01:31:34.305
in one way to get some benefit in another way. So maybe not using lightning as an example.
1485
01:31:36.220 --> 01:31:36.960
You get,
1486
01:31:37.500 --> 01:31:42.800
very cheap, very fast final transactions. And so why didn't Bitcoin do that? I said, oh, yeah. Well,
1487
01:31:43.260 --> 01:31:53.915
okay. Let me tell you. Right? You've got managed channels. You've got hot wallet risk. It's okay. People start to call on the idea. But for the use of sense, it's but you just can't, like, you know, move everything out of Bitcoin into Lightning.
1488
01:31:54.489 --> 01:31:55.150
And, of course,
1489
01:31:55.530 --> 01:31:56.909
Lightning need to,
1490
01:31:57.289 --> 01:31:57.869
you know,
1491
01:31:58.170 --> 01:31:58.989
settle into
1492
01:32:00.170 --> 01:32:03.550
and do arbitration between channel court disputes or have you.
1493
01:32:04.055 --> 01:32:05.515
So and I think,
1494
01:32:07.094 --> 01:32:07.755
see this
1495
01:32:09.255 --> 01:32:09.755
similar
1496
01:32:10.135 --> 01:32:11.275
maybe with
1497
01:32:13.030 --> 01:32:14.410
a lot of old compare,
1498
01:32:15.430 --> 01:32:17.370
you know, how decentralized really
1499
01:32:18.150 --> 01:32:23.175
are many old clients? Like, look at maybe Binance Smart Chain or Ethereum
1500
01:32:23.635 --> 01:32:30.455
or EOS. And, like, dozens of them, and I'm not familiar with how they work. I mean, I guess, XRP is another one.
1501
01:32:32.180 --> 01:32:35.720
So many of these things are actually when you get down to it, federal stake
1502
01:32:36.260 --> 01:32:39.000
or one party earns, like, 70% of the coins
1503
01:32:39.455 --> 01:32:41.475
and it's proof of stake or one party,
1504
01:32:42.095 --> 01:32:43.795
you know, controls the,
1505
01:32:45.135 --> 01:32:45.955
list of,
1506
01:32:47.540 --> 01:32:50.520
what they call in XRP, like, URLs or something. So
1507
01:32:51.300 --> 01:32:54.360
I think it could make a reasonable case that Liquid is
1508
01:32:54.905 --> 01:32:55.645
more decentralized
1509
01:32:56.985 --> 01:33:00.365
than many of these things. It's just that, you know,
1510
01:33:01.065 --> 01:33:15.295
Bitcoin doesn't have a marketing department. So and and we and it doesn't have a coin to sell either. Right? So it's like, it's bitcoin. He uses you opt into this layer if the trade offs make sense to you. But there's nobody with, you know, a big marketing budget to,
1511
01:33:18.395 --> 01:33:20.390
advertise it, No. Overadvertise
1512
01:33:21.010 --> 01:33:21.910
and exaggerate
1513
01:33:22.210 --> 01:33:23.110
it. It's decentralization
1514
01:33:23.650 --> 01:33:24.150
or
1515
01:33:24.690 --> 01:33:26.230
or something. Right?
1516
01:33:27.275 --> 01:33:27.775
So
1517
01:33:28.395 --> 01:33:29.614
I think we tend
1518
01:33:29.915 --> 01:33:35.054
to fall into the same bucket as that and and various companies and individuals contributing to
1519
01:33:35.550 --> 01:33:37.650
tools and code into it and around it.
1520
01:33:38.190 --> 01:33:39.489
But there's nobody really
1521
01:33:43.105 --> 01:33:51.045
no. There's no native coin. There's no ICO. There's no, you know so it's just Bitcoin layer 2 stuff. And that has a side effect of
1522
01:33:51.490 --> 01:33:52.790
much less colorful marketing
1523
01:33:54.290 --> 01:33:55.190
and more
1524
01:33:56.610 --> 01:33:58.310
kind of focusing on the
1525
01:33:58.965 --> 01:34:00.744
technical it's kind of more engineer
1526
01:34:01.364 --> 01:34:03.945
led thinking or something, right, where there's not really much advertisement.
1527
01:34:07.860 --> 01:34:09.400
So, I mean, basically, what
1528
01:34:10.420 --> 01:34:11.080
Go ahead.
1529
01:34:11.780 --> 01:34:15.480
I mean, basically, the argument is is is we see,
1530
01:34:16.925 --> 01:34:19.264
in the so called cryptocurrency world,
1531
01:34:20.684 --> 01:34:21.184
basically,
1532
01:34:21.804 --> 01:34:25.960
the these chains, these projects that have decided to go more centralized,
1533
01:34:27.220 --> 01:34:28.440
they're almost doomed
1534
01:34:28.980 --> 01:34:34.985
to be superseded by someone who decides to go even more centralized. And we had Ethereum Oh, absolutely.
1535
01:34:35.525 --> 01:34:38.505
It went more centralized than us. So then Binance
1536
01:34:38.885 --> 01:34:40.745
and CZ went to BSC,
1537
01:34:41.270 --> 01:34:44.810
which is the same exact Binance Smart Chain, which is the same exact,
1538
01:34:46.070 --> 01:34:46.570
APIs
1539
01:34:47.030 --> 01:34:49.290
and calls, contract calls as
1540
01:34:49.745 --> 01:34:53.205
as Ethereum, but it's even more centralized so the fees are cheaper.
1541
01:34:53.665 --> 01:34:59.679
In the case of of something like Liquid though, it's it's a way to try and channel that
1542
01:35:00.059 --> 01:35:02.559
move to a more centralized model
1543
01:35:03.099 --> 01:35:05.840
while still maintaining the Bitcoin unit of account
1544
01:35:06.145 --> 01:35:10.885
and allowing Bitcoin users to actually flex and use that. It's it's it's more complimentary
1545
01:35:11.665 --> 01:35:21.820
than a competing centralized chain. It's a it's a it's a complimentary centralized chain. It's a side chain. Right? Which is is the term that is that has been used frequently.
1546
01:35:23.965 --> 01:35:25.184
Yeah. Yeah.
1547
01:35:25.645 --> 01:35:31.905
Something something else that people are often not aware of is that because because they will say I think it was
1548
01:35:32.285 --> 01:35:33.630
a question in the chat,
1549
01:35:34.110 --> 01:35:35.090
quite a while ago
1550
01:35:35.630 --> 01:35:36.130
about
1551
01:35:36.909 --> 01:35:39.250
talk about liquid versus lightning.
1552
01:35:39.949 --> 01:35:54.090
And so they think people will tend to think about it as, like, it's a choice or it's there's some positive competition between Bitcoin and Liquid and Lightning. Like, you know, if Lightning wins, that's good because it sucks transactions off Bitcoin. It makes Bitcoin transactions cheaper and faster
1553
01:35:54.950 --> 01:35:59.370
and creates more value for those users. But what they didn't realize is that actually
1554
01:36:00.295 --> 01:36:00.795
lightning
1555
01:36:01.735 --> 01:36:03.355
is a kind of caching layer
1556
01:36:03.974 --> 01:36:04.474
and
1557
01:36:05.255 --> 01:36:09.434
while it works on top of Bitcoin, it also works on top of liquid confusingly.
1558
01:36:10.340 --> 01:36:10.840
So
1559
01:36:11.540 --> 01:36:13.800
the c lightning implementation is that this
1560
01:36:14.180 --> 01:36:19.535
there were originally 3 main implementation lightning. I think there might be 4 or 5 now. But
1561
01:36:20.735 --> 01:36:28.915
the c lightning, which is by Rusty Russell, who's a ex Linux kernel developer that works for Blockstream. And Christian Decker, Lisa and I got
1562
01:36:29.330 --> 01:36:32.390
are our 3 developers working on that. And that implementation
1563
01:36:32.770 --> 01:36:33.910
is called c lightning.
1564
01:36:34.850 --> 01:36:38.710
You know, it's it's it works on Bitcoin, but it also works on liquid.
1565
01:36:39.505 --> 01:36:41.765
And so you can establish a
1566
01:36:42.705 --> 01:36:43.205
liquid
1567
01:36:44.385 --> 01:36:44.885
Bitcoin
1568
01:36:45.585 --> 01:36:46.565
lightning channel
1569
01:36:48.070 --> 01:36:53.770
by funding it with liquid Bitcoin. And, of course, the fees are cheap and the channel setup is fast.
1570
01:36:55.645 --> 01:36:59.264
And the enclose is fast and cheap, and closing channels
1571
01:36:59.965 --> 01:37:06.349
would escalate compared to when you opened it can be problematic. Like, that's that's a pain point sometimes for
1572
01:37:07.530 --> 01:37:14.035
It's a major pain point. Yeah. So I think it's an interesting trade off potentially because
1573
01:37:15.455 --> 01:37:17.075
people are typically not putting
1574
01:37:17.535 --> 01:37:19.235
huge amounts of money into liquid.
1575
01:37:19.700 --> 01:37:21.320
Sorry, into into lightning.
1576
01:37:21.780 --> 01:37:24.600
So maybe you could accept the kinda are.
1577
01:37:25.380 --> 01:37:28.600
Reduced well, yeah. Simple luck in Well, it's still Adam Adam.
1578
01:37:29.554 --> 01:37:33.815
Like, tell me, am I crazy here? So future future Bitcoiner
1579
01:37:34.434 --> 01:37:38.295
has so so one of the things I think liquid could be useful for is,
1580
01:37:38.840 --> 01:37:40.300
we have a bunch of outputs.
1581
01:37:41.560 --> 01:37:46.380
We care about privacy. I don't wanna consolidate them because I'm gonna link all of them together,
1582
01:37:47.554 --> 01:37:50.935
but fees are rising. Right? And I'm worried about fees increasing.
1583
01:37:51.715 --> 01:37:54.215
Is is there a scenario where a user
1584
01:37:54.755 --> 01:37:56.295
does an atomic swap
1585
01:37:56.980 --> 01:37:58.760
from a my chain UTXO.
1586
01:37:59.220 --> 01:38:13.945
My I'm worried I'm worried about this UTXO. I wanna consolidate it, but I I don't wanna link it to my other UTXOs. I do an atomic swap into liquid. I open a liquid lightning channel, and then in liquid lightning, I do an atomic swap into Bitcoin lightning.
1587
01:38:15.940 --> 01:38:20.440
Is that a reasonable scenario? Is that something that we could see in the future, or am I just
1588
01:38:21.060 --> 01:38:22.040
being crazy?
1589
01:38:22.755 --> 01:38:28.615
I think yeah. You can you can do that. And some people have I mean, it does look like some people are interested to
1590
01:38:31.750 --> 01:38:32.730
sort of accumulate.
1591
01:38:33.110 --> 01:38:36.490
I saw somebody in the side swap channel saying they were doing this. They would
1592
01:38:37.275 --> 01:38:39.695
buy liquid Bitcoin in small amounts
1593
01:38:40.075 --> 01:38:41.855
Yeah. And store them in a liquid wallet.
1594
01:38:42.395 --> 01:38:47.620
And then, you know, that was like the daily stock or the weekly stock. And after they built it up
1595
01:38:48.160 --> 01:38:54.420
a bit more, they take it out to the main chain and cold store it. And they felt that that, you know, cheaper partial custody
1596
01:38:54.925 --> 01:38:59.505
and they take it to real cold custody when they got enough to make it worth paying the main change in fees.
1597
01:39:01.405 --> 01:39:02.225
So that's cool.
1598
01:39:02.605 --> 01:39:03.345
That's obvious.
1599
01:39:04.040 --> 01:39:16.755
That that that's gonna happen. That that it makes sense to me that the stacker and this is my audience. Right? Is is the guy who's doing he's he's doing his daily his daily stack of $10, $15. He does that into liquid,
1600
01:39:17.135 --> 01:39:29.675
and then he he comes back on chain. Because if he tries to do that on if he tries to do that on lightning, self custodial, it it he has to deal with inbound liquidity and stuff. It becomes a major pain point, but you could do it on liquid easily.
1601
01:39:30.775 --> 01:39:32.215
Yeah. I mean, liquid is
1602
01:39:33.255 --> 01:39:34.795
I guess, has
1603
01:39:35.820 --> 01:39:36.320
simplicity
1604
01:39:36.780 --> 01:39:37.280
advantages
1605
01:39:37.740 --> 01:39:40.000
in user experience because you don't have to manage channels.
1606
01:39:40.620 --> 01:39:46.225
You can receive money when you're offline. You can store the coins in a in a hover wallet, things like that. So
1607
01:39:46.605 --> 01:39:49.105
it feels a lot more familiar to Bitcoin.
1608
01:39:50.364 --> 01:39:53.744
Not quite as cheap or fast as Lightning, but that's a trade off.
1609
01:39:55.620 --> 01:39:56.840
And because you get confidentiality
1610
01:39:57.220 --> 01:40:03.720
too, but Lightning has, you know, onion routing and privacy in a different way. So but then what you were saying about
1611
01:40:04.765 --> 01:40:08.305
liquids lightning on liquid connecting with lightning on Bitcoin,
1612
01:40:09.885 --> 01:40:11.090
that's like,
1613
01:40:11.489 --> 01:40:12.630
it it should be possible
1614
01:40:13.010 --> 01:40:13.750
to have
1615
01:40:14.449 --> 01:40:15.590
a lightning route
1616
01:40:15.969 --> 01:40:21.795
where hops in the lightning route are different. You know. First hop is Bitcoin, next hop
1617
01:40:22.335 --> 01:40:24.595
is liquid lightning, the next hop
1618
01:40:25.375 --> 01:40:26.435
is main chain lightning.
1619
01:40:27.050 --> 01:40:28.830
And, you know, you get paid
1620
01:40:29.450 --> 01:40:31.790
in Bitcoin or in liquid and you, you know,
1621
01:40:32.090 --> 01:40:34.350
it gets sort of converted along the way because
1622
01:40:35.690 --> 01:40:36.425
there are a lot
1623
01:40:37.465 --> 01:40:40.204
of places where you can basically do one for
1624
01:40:40.585 --> 01:40:47.739
paying any network fees for liquid Bitcoin versus Bitcoin. So it's not like you know, if if if you were to do that
1625
01:40:48.680 --> 01:40:53.260
where one hop was tether on liquids, and you can certainly make,
1626
01:40:53.960 --> 01:40:58.365
you know, a liquid channel that's funded with liquid tether or something.
1627
01:40:59.865 --> 01:41:01.565
I'm just curious. But
1628
01:41:02.000 --> 01:41:09.619
if you do that, then the lightning node needs to be like a trading bot or something to hedge it. Right? Because it doesn't really want to sell Bitcoin.
1629
01:41:10.375 --> 01:41:17.114
So if the channel's all Bitcoin, but some of the hops are liquid Bitcoin, some of them are mentioned Bitcoin, you could have a mixed
1630
01:41:17.830 --> 01:41:18.810
liquid and lightning
1631
01:41:19.590 --> 01:41:24.010
network with channels that go through it. I think that could be interesting.
1632
01:41:24.525 --> 01:41:25.025
And,
1633
01:41:25.805 --> 01:41:28.305
you know, if if people are using
1634
01:41:28.605 --> 01:41:29.105
lightning
1635
01:41:30.525 --> 01:41:31.025
for
1636
01:41:32.130 --> 01:41:33.830
lower values in the user dimension,
1637
01:41:35.490 --> 01:41:36.390
maybe the
1638
01:41:37.410 --> 01:41:38.150
trade off
1639
01:41:38.690 --> 01:41:39.430
of lightning
1640
01:41:39.885 --> 01:41:42.865
on top of liquid makes sense. Right? Because if they're putting
1641
01:41:43.405 --> 01:41:45.105
a $100 into it,
1642
01:41:45.565 --> 01:41:48.145
maybe they're happy putting that into liquid. And then
1643
01:41:51.600 --> 01:41:53.220
the lightning channel will be,
1644
01:41:54.560 --> 01:41:59.945
you know, it feel nicer. Right? It'll be cheaper to set up. It'll be cheaper to shut down. 100%.
1645
01:42:00.725 --> 01:42:01.225
Yeah.
1646
01:42:02.405 --> 01:42:07.784
I love this. I feel like we're brainstorming live. I mean, I was so so I mean, I I was just on,
1647
01:42:08.630 --> 01:42:11.610
shout out to our boy, Chaz. I was on his show,
1648
01:42:11.990 --> 01:42:13.930
Ellen Junkies, lightning junkies.
1649
01:42:14.390 --> 01:42:17.450
Obviously, they're a little bit biased towards lightning over there.
1650
01:42:18.385 --> 01:42:20.405
The biggest cost to using Lightning
1651
01:42:21.105 --> 01:42:24.085
is when you have to hit the chain, right, when you open.
1652
01:42:24.680 --> 01:42:28.220
Yeah. If you're a new user, you're trying to onboard new users,
1653
01:42:28.680 --> 01:42:29.980
and fees are crazy,
1654
01:42:30.360 --> 01:42:32.220
and Bitcoin's trading at $200,000
1655
01:42:32.920 --> 01:42:33.580
a coin,
1656
01:42:34.885 --> 01:42:38.264
then then, like, they have to hit the chain to open a channel at
1657
01:42:38.645 --> 01:42:39.465
$50 in
1658
01:42:39.925 --> 01:42:40.425
transaction
1659
01:42:40.965 --> 01:42:42.985
or something, $60 a transaction.
1660
01:42:43.560 --> 01:42:46.219
If they could do that through liquid, that's a major advantage.
1661
01:42:48.280 --> 01:42:48.780
Yep.
1662
01:42:49.640 --> 01:42:53.260
So somebody's asking a question. What about stablecoins like USDC?
1663
01:42:54.465 --> 01:42:58.565
Also, there are some stable coins on liquids. There is LCAT, which is,
1664
01:42:59.265 --> 01:43:02.085
Canadian dollars issued by Bull Bitcoin, which is a Canadian
1665
01:43:02.550 --> 01:43:08.090
kind of stacking also stacking Great exchange. Buying Bitcoin. So, yeah, the really Bitcoin that goes. And
1666
01:43:08.470 --> 01:43:10.730
so they're the issuer of the LCAS and it's,
1667
01:43:11.514 --> 01:43:18.094
it's a very fun stablecoin. Because it's not really a stablecoin. It's a voucher, and the only way to redeem it is to buy Bitcoin with it.
1668
01:43:18.610 --> 01:43:22.310
So you can't, like, get your Canadian dollars back. You just have to convert it into Bitcoin.
1669
01:43:23.090 --> 01:43:28.475
But you can it's stable in the price of Canadian dollars while you have it. And so people actually use it a little bit to,
1670
01:43:29.094 --> 01:43:30.534
kind of pay Canadian dollars around.
1671
01:43:31.415 --> 01:43:33.435
And there's Tether is on liquids
1672
01:43:33.975 --> 01:43:34.475
and
1673
01:43:35.570 --> 01:43:37.350
Eurex, which is a euro,
1674
01:43:38.530 --> 01:43:42.150
by the same Which is run by Sideswap. Right? Yeah. Exactly.
1675
01:43:43.010 --> 01:43:44.630
And there's some more, like,
1676
01:43:45.495 --> 01:43:48.875
those are the big ones, but there's a Japanese Adam, Adam. Stablecoin.
1677
01:43:49.495 --> 01:43:52.155
Adam, as far as I'm concerned, Sats are our stablecoin.
1678
01:43:52.540 --> 01:43:55.920
On this show on this show, we don't we don't like to talk about,
1679
01:43:56.540 --> 01:43:58.079
the trusted third party,
1680
01:43:58.619 --> 01:44:00.800
stay so called stable coins.
1681
01:44:01.175 --> 01:44:13.190
As far as I'm concerned, they call them stable coins, but they only go down, and they call Bitcoin not a stable coin. They call Sats not a stable coin, but it only goes up. So as far as I'm concerned, I would prefer the stable coin that only goes up.
1682
01:44:13.890 --> 01:44:15.590
Yeah. But all that said,
1683
01:44:16.530 --> 01:44:17.830
so so liquid,
1684
01:44:18.405 --> 01:44:20.665
if we go into liquid into lightning,
1685
01:44:24.085 --> 01:44:31.620
this this makes a lot of sense to me. This I this idea of using Liquid as a way to onboard onto Lightning if
1686
01:44:31.920 --> 01:44:33.860
if you're of a lower value
1687
01:44:34.525 --> 01:44:36.065
lower value user.
1688
01:44:38.045 --> 01:44:46.170
Am I correct in thinking that it's easier to do atomic swaps once we have them on Lightning, whether that's Liquid Lightning or
1689
01:44:46.710 --> 01:44:47.610
On Chain Lightning,
1690
01:44:48.150 --> 01:44:49.449
like, regular Lightning?
1691
01:44:51.324 --> 01:44:56.305
Well, I mean, the the this wallet work needed in either case. So it looks like
1692
01:44:56.765 --> 01:44:57.265
sideswap
1693
01:44:57.725 --> 01:44:58.545
can do
1694
01:44:59.340 --> 01:45:03.119
main chain swaps, and I guess they're gonna get more trustless over time,
1695
01:45:03.659 --> 01:45:04.800
liquid for Bitcoin.
1696
01:45:05.179 --> 01:45:06.800
And the there is,
1697
01:45:07.915 --> 01:45:08.415
Lightning
1698
01:45:09.435 --> 01:45:14.735
on Liquid. Grubles has some channels and stuff. It's not very big network, and it needs to be
1699
01:45:15.275 --> 01:45:16.655
integrated into more wallets.
1700
01:45:17.020 --> 01:45:19.040
So it's using the kind of c lightning,
1701
01:45:19.739 --> 01:45:23.199
which is a command like, Linux command line kind of lightning space.
1702
01:45:23.900 --> 01:45:26.835
So but, you know, it it should be fairly easy for
1703
01:45:27.575 --> 01:45:28.075
somebody
1704
01:45:28.815 --> 01:45:32.675
who can I mean, many of the lightning wallets open source? Right? And
1705
01:45:33.135 --> 01:45:33.635
lightning
1706
01:45:34.640 --> 01:45:38.820
on liquid is plus or minus the same as lightning on bitcoin. So for somebody
1707
01:45:39.360 --> 01:45:41.620
with the right skill set, they could basically fork
1708
01:45:42.554 --> 01:45:48.094
a main chain lightning wallet and make a liquid lightning wallet with it. And then there's another
1709
01:45:48.635 --> 01:46:03.795
interesting thing, which we're discussing there, which is, well, why not go further and make a combined lightning network that can route between the 2? So that would be a cool thing, but it's a project for something to do. I think, you know, it it should work, but there's a little bit of development work in there.
1710
01:46:09.220 --> 01:46:11.320
Wiz, what what are you thinking over here?
1711
01:46:12.020 --> 01:46:12.340
Well
1712
01:46:13.860 --> 01:46:14.740
okay. So
1713
01:46:16.325 --> 01:46:21.264
yeah. There's a lot of topics to to kinda touch on. Right? I mean, it
1714
01:46:22.005 --> 01:46:22.505
okay.
1715
01:46:22.965 --> 01:46:24.585
Another thing about the,
1716
01:46:25.380 --> 01:46:26.440
I guess, the
1717
01:46:27.300 --> 01:46:33.880
well, okay. So one of the first points made was Liquid was originally created for exchanges, but then they kind of opened up
1718
01:46:35.825 --> 01:46:37.445
the full node software,
1719
01:46:38.065 --> 01:46:40.165
to everyone. So any user can now,
1720
01:46:41.745 --> 01:46:42.725
use LVTC
1721
01:46:43.265 --> 01:46:43.765
and,
1722
01:46:44.710 --> 01:46:54.295
you know, issue assets or do any, really, you know, confidential transactions, which is which is really cool. But, especially for the the use case of this,
1723
01:46:55.415 --> 01:46:58.855
or or even, like, before we even get into that, like, there's this,
1724
01:46:59.815 --> 01:47:11.635
I don't know. There's, like, this meme on on Twitter I saw. Like, someone said, like, oh, Liquid is a shitcoin, and I thought that I thought that was funny. Liquid is not even a a coin. Liquid is just a blockchain. I guess they were referring to, like, LBTC,
1725
01:47:12.494 --> 01:47:18.034
but this is, this was said by someone who has coins on, like, Kraken or some centralized exchange.
1726
01:47:18.430 --> 01:47:20.690
And if you don't understand the,
1727
01:47:22.270 --> 01:47:24.610
it it's kind of like this progression of
1728
01:47:26.034 --> 01:47:33.655
so a lot of people say, like, I want I want something to be trustless. Right? But there's if you think about it, there's actually really no such thing as, like, trustlessness.
1729
01:47:34.370 --> 01:47:39.510
All you really ever do is spread the trust around to more people and,
1730
01:47:40.530 --> 01:47:49.755
add more checks or, slow it down with more time locks, but you can never, like, eliminate trust. So for example, if you walk up to a vending machine
1731
01:47:50.110 --> 01:47:57.650
and you put a coin in the vending machine, you're trusting the machine that it's gonna actually dispense the drink and not just steal your money. And likewise, when you,
1732
01:47:58.525 --> 01:48:03.425
you know, sit down at a restaurant and order some food, the restaurant is trusting you that you're going to,
1733
01:48:03.965 --> 01:48:05.744
pay the bill at the end of the meal.
1734
01:48:06.340 --> 01:48:11.619
And if there is a dispute, you know, they would call the police or take you to court or something, and there's some kind of,
1735
01:48:12.980 --> 01:48:15.239
dispute resolution process in all this.
1736
01:48:15.755 --> 01:48:17.375
And the way you,
1737
01:48:18.875 --> 01:48:23.295
the way you typically solve this problem in the real world, in the fiat world,
1738
01:48:23.670 --> 01:48:27.290
is by introducing a trusted third party. So for example,
1739
01:48:27.590 --> 01:48:32.970
if I go to the restaurant and I have, you know, an American Express credit card,
1740
01:48:33.945 --> 01:48:38.105
I don't trust the restaurant and rest restaurants doesn't trust me, but we both trust the,
1741
01:48:38.905 --> 01:48:40.045
bank to,
1742
01:48:40.800 --> 01:48:41.940
guarantee the transaction
1743
01:48:42.400 --> 01:48:43.140
and to,
1744
01:48:44.000 --> 01:48:47.140
sell everything. And of course, the bank takes their cut.
1745
01:48:47.520 --> 01:48:48.020
So
1746
01:48:48.395 --> 01:48:50.655
now when you extend that into the crypto,
1747
01:48:51.835 --> 01:48:52.335
space,
1748
01:48:53.835 --> 01:48:55.295
even on the Bitcoin blockchain,
1749
01:48:56.074 --> 01:48:58.300
you have, miners. Right? Like,
1750
01:48:58.860 --> 01:49:06.400
everyone knows the risk of a 51% attack. If the you're you're always trusting that the majority of Hash Power
1751
01:49:07.205 --> 01:49:07.705
will,
1752
01:49:08.805 --> 01:49:11.625
not just mine empty blocks, and they'll actually mine
1753
01:49:11.925 --> 01:49:15.865
your transactions and everyone's transactions in into the blocks.
1754
01:49:16.540 --> 01:49:17.040
And
1755
01:49:17.659 --> 01:49:18.140
this,
1756
01:49:18.540 --> 01:49:20.480
works. Wait. Wait. Wait. Wait. Wait. Wait.
1757
01:49:21.179 --> 01:49:21.679
What?
1758
01:49:22.995 --> 01:49:28.695
Wait. There there's 2 different things. Right? There's a 51% attack, and there's the chance of
1759
01:49:29.555 --> 01:49:44.055
of miners not mining your blocks, and not mining your transaction. Right? But but but if you raise your fees, if you we we can have we can have a censorship situation without a 51% attack, and we can have a censorship position with a 51% attack, but it's a different scenario.
1760
01:49:45.395 --> 01:49:49.155
Right. So the the the risk of censorship resistance is,
1761
01:49:49.875 --> 01:49:50.560
kind of
1762
01:49:52.320 --> 01:49:57.060
the the the combat to that is the financial incentives. Right? So by putting
1763
01:49:57.440 --> 01:49:58.580
transaction fees,
1764
01:49:59.784 --> 01:50:01.405
on your transaction, you're,
1765
01:50:02.025 --> 01:50:10.950
you know, you're saying, I'll, you know, you're putting, like, a bribe or or a bounty on your transaction. If anybody minds this, they can get the fee. And that's why
1766
01:50:11.330 --> 01:50:12.310
miners will
1767
01:50:12.770 --> 01:50:18.015
prefer to mine blocks full of transactions instead of empty transaction. There's also the, like, inherent,
1768
01:50:19.355 --> 01:50:19.855
incentive
1769
01:50:20.955 --> 01:50:23.535
that if the miners just mined empty blocks,
1770
01:50:24.155 --> 01:50:26.719
they would kind of destroy the,
1771
01:50:27.040 --> 01:50:34.020
the net the value of the token in the network, which is, something they would have had to invest in by building their, mining
1772
01:50:34.675 --> 01:50:35.255
hash power,
1773
01:50:35.635 --> 01:50:42.215
facilities and hardware. So there there's a lot of incentives which make the miners always wanna mine full blocks as much as possible.
1774
01:50:42.910 --> 01:50:46.290
And if you take that if you start with that point,
1775
01:50:47.230 --> 01:50:48.130
and you say,
1776
01:50:48.750 --> 01:50:58.594
okay. I'm I'm gonna trust literally any miner out there with hash power. I don't care who it is, but I will, you know, you you're trusting the majority. You're trusting the collective,
1777
01:50:59.855 --> 01:51:01.074
community of miners
1778
01:51:01.699 --> 01:51:04.679
to be honest and do your transaction to a block.
1779
01:51:04.980 --> 01:51:09.239
And then if you if you kind of trade off that a little bit and you,
1780
01:51:10.100 --> 01:51:11.000
say, okay.
1781
01:51:11.575 --> 01:51:21.080
Maybe I don't need to trust, you know, thousands of people. Maybe I only need to trust, like, hundreds of people or or thousands of anonymous people. Maybe I only need to trust, like,
1782
01:51:21.560 --> 01:51:29.820
a 100 reputable people or something. Right? Like, I I know that if I give my Bitcoin to, you know, Mark Carpelles,
1783
01:51:30.355 --> 01:51:33.094
you know, he can gox me. But if I
1784
01:51:33.554 --> 01:51:37.255
spread that trust around to 15, 20, a 100 people,
1785
01:51:37.715 --> 01:51:39.494
and they're all checking each other,
1786
01:51:40.380 --> 01:51:44.220
it's much much less likely that, you do this. So there's a lot of,
1787
01:51:46.060 --> 01:51:50.885
gray, like not gray area, but, like, this is like the spectrum of sliding scale where you start
1788
01:51:51.185 --> 01:51:52.324
with a single
1789
01:51:52.864 --> 01:51:53.364
centralized
1790
01:51:53.665 --> 01:51:54.965
trusted third party.
1791
01:51:55.380 --> 01:51:57.320
You move up to a multisig
1792
01:51:57.700 --> 01:52:01.400
model or you, you know, from beyond that, you move up to a federated model.
1793
01:52:02.100 --> 01:52:06.295
From beyond that, you move up to, like, decentralized model and then at the very top
1794
01:52:06.675 --> 01:52:08.135
would be a fully distributed,
1795
01:52:09.155 --> 01:52:09.975
like bitcoin
1796
01:52:10.675 --> 01:52:12.935
mining base layer level of security.
1797
01:52:13.810 --> 01:52:14.550
And so,
1798
01:52:14.930 --> 01:52:15.430
obviously,
1799
01:52:15.890 --> 01:52:19.990
Bitcoin is optimized for maximum security, but it's extremely expensive
1800
01:52:20.770 --> 01:52:21.270
to
1801
01:52:21.935 --> 01:52:24.915
pay all of those miners to, you know I mean,
1802
01:52:25.295 --> 01:52:27.475
Adam knows this even better than I do. I mean,
1803
01:52:27.775 --> 01:52:31.650
to build a mining facility is like, alright. Start by buying some land,
1804
01:52:32.030 --> 01:52:33.010
building a building,
1805
01:52:33.390 --> 01:52:35.810
high voltage power lines, high voltage transformers.
1806
01:52:36.575 --> 01:52:42.755
You're essentially building a data center just without any redundancy. So, you know, it's you could easily spend 1,000,000 of dollars
1807
01:52:44.540 --> 01:52:48.800
in your facility. And so the Bitcoin security is the most expensive,
1808
01:52:49.420 --> 01:52:49.980
but it's,
1809
01:52:50.460 --> 01:52:51.920
probably the most secure,
1810
01:52:52.665 --> 01:53:00.285
system that humans have ever figured out how to build. And so if you don't need that level of security, if you're just doing if you just wanna stack a $100,
1811
01:53:00.990 --> 01:53:03.170
you know, maybe you don't need
1812
01:53:03.550 --> 01:53:03.950
this,
1813
01:53:04.750 --> 01:53:07.650
Bitcoin based layer on security. Maybe you're fine with just trusting
1814
01:53:08.030 --> 01:53:08.850
20 reputable,
1815
01:53:09.915 --> 01:53:15.135
friends or companies or or whatever. Right? And so this is kind of why I think liquid is cool is because
1816
01:53:15.435 --> 01:53:16.974
especially with dynamic federations,
1817
01:53:19.310 --> 01:53:20.370
you can just
1818
01:53:21.470 --> 01:53:30.835
trade off. You can you can have that option. Right? And if you, you know, if you're gonna do a $1,000,000 transaction, then, of course, you're gonna use a Bitcoin based layer. If you're gonna do, like, a medium
1819
01:53:31.135 --> 01:53:32.035
sized transaction,
1820
01:53:32.655 --> 01:53:33.475
maybe you wanna,
1821
01:53:34.895 --> 01:53:45.230
use something like liquid. If you're gonna do a $5 transaction at the at the cafe for coffee, maybe a lightning channel is best you hit, and it's always about using the right tool for the job. So
1822
01:53:45.610 --> 01:53:49.085
with what you when you talk about liquid as a technology,
1823
01:53:49.785 --> 01:53:51.485
I believe it's like the best,
1824
01:53:52.505 --> 01:53:53.005
middle
1825
01:53:53.600 --> 01:53:54.100
balanced,
1826
01:53:55.040 --> 01:53:59.380
trade off where you trade off a little bit of security for a ton of additional,
1827
01:54:00.405 --> 01:54:18.335
privacy and new use cases and lower fees and faster confirmation times. It makes sense for a lot of use cases, not all use cases. Like you said, a lot of people will always prefer when when you talk about cold storage, yeah, you should you're not gonna use liquid as your, you know, to store your entire life savings.
1828
01:54:18.955 --> 01:54:19.915
It's kinda like,
1829
01:54:20.554 --> 01:54:23.730
a hot wallet in a in a way or maybe a warm wallet. There's some
1830
01:54:24.370 --> 01:54:27.590
maybe there's no terminology for this yet. But if you keep, like,
1831
01:54:27.970 --> 01:54:29.510
95% of your money
1832
01:54:30.130 --> 01:54:31.750
in offline multisig
1833
01:54:32.255 --> 01:54:37.235
cold storage on the Bitcoin base layer, but you have, like, 5% of your money in
1834
01:54:37.855 --> 01:54:42.880
a bank account, in fiat currency, or lightning channels, or, you know, liquid,
1835
01:54:43.280 --> 01:54:44.900
banking liquidity. Dollars.
1836
01:54:45.920 --> 01:54:47.460
Exactly. Like, that,
1837
01:54:48.560 --> 01:54:49.425
makes sense,
1838
01:54:50.145 --> 01:54:51.264
to have that kind of,
1839
01:54:51.824 --> 01:54:55.605
the best tool for the like, when you go to the supermarket and you wanna buy some food,
1840
01:54:56.224 --> 01:54:58.244
you know, you're not gonna be doing a Bitcoin
1841
01:54:59.010 --> 01:55:06.230
base layer transaction. Right? You're just The overwhelming majority of people have their wealth stored in trusted options.
1842
01:55:07.055 --> 01:55:09.555
So if in a hyper Bitcoinized world,
1843
01:55:10.015 --> 01:55:12.595
we have trusted options on top of Bitcoin
1844
01:55:13.455 --> 01:55:19.810
that are better than the current trusted options because at least you have proof of reserves, at least you have certain guarantees,
1845
01:55:20.989 --> 01:55:25.215
that's not the end of the world. Like, this idea that, like, everything needs to be
1846
01:55:25.675 --> 01:55:31.455
at the same level as Bitcoin on chain is just untenable. It's not a thing that's gonna happen,
1847
01:55:31.910 --> 01:55:36.890
and that's fine. These are things that give give Bitcoin users more options. Right?
1848
01:55:38.070 --> 01:55:41.885
Right. Yeah. And it goes back to the block size debate. It it was,
1849
01:55:42.285 --> 01:55:49.080
now, you know, you could get a Raspberry Pi and throw Umbrel on there and run bitcoin core and even elements
1850
01:55:49.380 --> 01:55:55.880
core, and a dozen or so apps all on this very very cheap computer, and you can fully verify everything.
1851
01:55:56.415 --> 01:56:04.675
And if, you know, this goes back to the block size of it. If you make the blocks big for some reason to try and make the transaction fees less,
1852
01:56:05.080 --> 01:56:08.140
then, you know, you probably can't run-in a Raspberry Pi anymore,
1853
01:56:08.520 --> 01:56:16.055
and it leads to centralization, etcetera, etcetera. So there has to be a balance for everything. Not not just the the Bitcoin,
1854
01:56:17.335 --> 01:56:18.475
block size itself,
1855
01:56:18.855 --> 01:56:26.100
but for middle transactions and for coffee transactions. There's, there's the right tool for the for the job for every type of transaction.
1856
01:56:26.560 --> 01:56:27.060
And
1857
01:56:27.360 --> 01:56:30.100
those are so far, I think we've only, mostly
1858
01:56:30.400 --> 01:56:31.220
talked about
1859
01:56:31.685 --> 01:56:32.985
simple payment transactions.
1860
01:56:33.685 --> 01:56:39.225
But if you wanna talk about, maybe the cooler features of liquid like simplicity where you you can actually do some,
1861
01:56:39.739 --> 01:56:41.040
smart contract functionality
1862
01:56:41.820 --> 01:56:46.000
or issuing some assets for some reason. Like, say, I have a coffee shop
1863
01:56:46.380 --> 01:56:50.635
and, you know, I'm gonna issue coffee coffee tokens. So if you have one of these,
1864
01:56:51.175 --> 01:56:56.475
wiz coffee tokens, you can come to my coffee shop and redeem it for a coffee, that type of utility token.
1865
01:56:57.700 --> 01:57:02.440
It's so cool to just be able to issue that on the liquid side chain. It eliminates
1866
01:57:02.900 --> 01:57:04.520
the need for so many,
1867
01:57:05.475 --> 01:57:10.615
you know, shit coins out there that all they do is just issue tokens. And
1868
01:57:11.235 --> 01:57:16.719
it's so nice to be able to have a liquid side chain with Bitcoin as its native token,
1869
01:57:17.179 --> 01:57:21.039
but also the the ability to do, more interesting use cases,
1870
01:57:21.659 --> 01:57:25.145
with, you know, different levels of privacy and,
1871
01:57:25.925 --> 01:57:27.545
speed and and lower cost.
1872
01:57:30.460 --> 01:57:32.320
Yeah. Actually, Grubbles made
1873
01:57:32.699 --> 01:57:33.440
an interesting
1874
01:57:33.980 --> 01:57:36.480
comment. So, like, not Grubbles on Twitter about
1875
01:57:39.015 --> 01:57:39.515
the,
1876
01:57:40.935 --> 01:57:42.475
so some debate about
1877
01:57:44.910 --> 01:57:46.290
swapping into altcoins
1878
01:57:46.910 --> 01:57:52.290
and and, like, a justification for altcoins privacy coins. And so he he made the point that,
1879
01:57:52.935 --> 01:57:58.715
you know, if you if you swap into an old coin, you're now exposed to its its price.
1880
01:57:59.415 --> 01:58:03.489
And there is no peg. Right? So, you know, you have to you have to do a
1881
01:58:04.110 --> 01:58:05.650
trade. So it's kind of like,
1882
01:58:07.150 --> 01:58:07.810
you know,
1883
01:58:09.905 --> 01:58:12.005
there's some analogy basically that
1884
01:58:12.385 --> 01:58:16.405
there is no peg, but there's a market. Right? So you have to find somewhere to trade it,
1885
01:58:16.785 --> 01:58:18.725
and you're exposed to its price movements.
1886
01:58:19.710 --> 01:58:20.210
And
1887
01:58:20.989 --> 01:58:27.810
if the coin was centralized in it, stopped allowing transactions or something, you'd have a kind of a different problem.
1888
01:58:31.905 --> 01:58:33.364
Yeah. So I think
1889
01:58:34.625 --> 01:58:35.125
that
1890
01:58:35.929 --> 01:58:37.469
if Bitcoin gets
1891
01:58:39.210 --> 01:58:40.409
too, you know, too
1892
01:58:43.130 --> 01:58:46.705
I mean, I guess I guess the point is people sometimes mistake
1893
01:58:47.645 --> 01:58:49.185
technology limits for intent.
1894
01:58:49.725 --> 01:58:53.825
So by intent, because we all like Bitcoin and censorship resistance
1895
01:58:54.630 --> 01:58:56.650
and bearer of properties and so on,
1896
01:58:57.110 --> 01:59:00.410
that we would like everybody to enjoy those benefits
1897
01:59:01.030 --> 01:59:08.155
and be able to afford it for their use case because people are, you know, have different amounts of income and savings in terms of the world.
1898
01:59:10.614 --> 01:59:12.395
But then the technology has limits.
1899
01:59:12.775 --> 01:59:13.594
So then
1900
01:59:14.360 --> 01:59:15.980
it has I mean, basically,
1901
01:59:16.760 --> 01:59:17.820
prices there
1902
01:59:18.520 --> 01:59:19.580
is the thing that
1903
01:59:19.960 --> 01:59:21.500
distinguishes. Right? So
1904
01:59:22.055 --> 01:59:24.315
but I think there might be a future where
1905
01:59:25.175 --> 01:59:30.155
new technology arises that that creates a different problem. You know? Like,
1906
01:59:31.020 --> 01:59:34.639
if there are very scalable Snarks so that the,
1907
01:59:36.619 --> 01:59:41.065
the blockchain is doesn't include all the transactions. It just includes, you know,
1908
01:59:41.605 --> 01:59:45.065
a few 100 kilobytes of snark proofs or something and that proves
1909
01:59:45.925 --> 01:59:51.120
anything. You know, it proves that every every transaction in the block was valid and then the coins are
1910
01:59:51.660 --> 01:59:52.960
just proofs that
1911
01:59:53.260 --> 01:59:54.480
their transaction was
1912
01:59:55.020 --> 01:59:55.840
in that block,
1913
01:59:56.565 --> 01:59:57.065
then,
1914
01:59:58.645 --> 02:00:00.185
you know, maybe maybe you have
1915
02:00:00.725 --> 02:00:03.385
a chance to make it very scalable,
1916
02:00:06.250 --> 02:00:08.670
and it'll be hard to get anybody pay for fees
1917
02:00:09.450 --> 02:00:09.950
because,
1918
02:00:11.425 --> 02:00:12.565
you know, there's no limit.
1919
02:00:13.185 --> 02:00:16.085
So so, Adam, I'm I'm, like, I'm curious, like,
1920
02:00:16.705 --> 02:00:22.699
on that topic, like, where do where does the liquid fee market come into play? Because right now,
1921
02:00:23.320 --> 02:00:34.355
I can pay 0.1 sats per byte for a transaction, which is Yeah. By the way, makes me feel like a fucking baller that I can just pay that for a transaction, and then it just gets confirmed right away.
1922
02:00:36.000 --> 02:00:47.125
The way I look at it is the whole point that we have the transaction fees is because me, humble node runner, who's running a node through fucking Tor on a Raspberry Pi
1923
02:00:47.585 --> 02:00:51.925
needs to be protected so that I'm allowed to run it, which I completely respect
1924
02:00:52.560 --> 02:00:54.660
on chain. But with Liquid,
1925
02:00:55.440 --> 02:00:57.860
you have these these federation members
1926
02:00:58.400 --> 02:01:02.925
that are running high performance hardware connected to very high bandwidth connections.
1927
02:01:03.865 --> 02:01:08.045
So what is the limit? Right? Like, if liquid gets successful,
1928
02:01:08.910 --> 02:01:17.890
do do does the block size increase on liquid very easily? Like, why why would there what situation ends up where there's fees on liquid
1929
02:01:18.375 --> 02:01:19.275
that are high?
1930
02:01:21.335 --> 02:01:22.875
Yeah. I mean, I think
1931
02:01:23.895 --> 02:01:25.355
the blockchain is a hard scale.
1932
02:01:26.720 --> 02:01:29.120
So you could push it a bit further because
1933
02:01:29.680 --> 02:01:31.060
but I think you do want
1934
02:01:32.160 --> 02:01:34.665
power users to be able to verify, you know,
1935
02:01:35.385 --> 02:01:39.005
to absorb that receive that much information over a reasonably fast
1936
02:01:39.385 --> 02:01:40.765
consumer Internet connection
1937
02:01:42.060 --> 02:01:46.080
and buy, you know, a gaming PC or something that can keep up,
1938
02:01:46.620 --> 02:01:47.200
you know,
1939
02:01:47.580 --> 02:01:50.320
sync a chain from scratch and then keep up with it
1940
02:01:51.005 --> 02:01:54.864
in, you know, like, a week or something. Right? And so
1941
02:01:55.405 --> 02:01:57.505
that will start to puzzle in it.
1942
02:01:57.890 --> 02:02:06.070
If you if you go beyond that, I mean, you know, it's just a bit of base at that point. Right? So you just won't give up. I think the verifiability is important because
1943
02:02:06.370 --> 02:02:08.315
so I mean, another thing that is
1944
02:02:09.975 --> 02:02:11.835
not so intuitive is that,
1945
02:02:14.070 --> 02:02:16.890
at least for the assets on on liquids,
1946
02:02:17.750 --> 02:02:18.250
the
1947
02:02:18.630 --> 02:02:20.730
the people with the full nerds could
1948
02:02:21.675 --> 02:02:22.815
fire the block signers
1949
02:02:23.515 --> 02:02:30.495
and, you know, elect new ones amongst themselves and resume the chain from the lost good state. So let's say the the block signers
1950
02:02:31.290 --> 02:02:36.989
start doing something that, you know, a bunch of users didn't like or some of the businesses relying on it didn't like.
1951
02:02:37.690 --> 02:02:39.230
They could take the chain and resume.
1952
02:02:39.925 --> 02:02:40.745
Now, of course,
1953
02:02:41.285 --> 02:02:47.225
they could take, you know, tethers and assets and things with them, but the Bitcoins, they'd have to peg out. And,
1954
02:02:47.620 --> 02:02:52.840
you know, if if the box signs refuse to give them their coins out, that's that's a different problem. But generally speaking,
1955
02:02:53.460 --> 02:02:55.000
they can resume the chain.
1956
02:02:55.614 --> 02:02:56.114
And
1957
02:02:56.735 --> 02:03:00.514
so it's important for them to be able to run a full node to check
1958
02:03:00.815 --> 02:03:06.840
that the blocks are valid. You know, the blocks the blocks are signing about and don't have double spends and so on.
1959
02:03:07.940 --> 02:03:13.695
I think I I guess the question I'm asking is, so so for the pegged assets, for things
1960
02:03:14.075 --> 02:03:19.055
like Tether or NFTs or whatever pegged asset you wanna talk about,
1961
02:03:19.550 --> 02:03:21.810
you know, EuroX or whatever, LCAD,
1962
02:03:23.630 --> 02:03:27.245
those things, it really doesn't matter what chain they're on because
1963
02:03:27.785 --> 02:03:28.525
the centralization
1964
02:03:28.825 --> 02:03:44.280
risk is is happening at the issuer side. So they can move if if if they're angry at at the Liquid Federation, they can move to whatever fucking chain they wanna move to. And we and we've already seen that happen. We've seen that happen with Tether. They went to Ethereum, then Ethereum fees went up, then they went to Tron.
1965
02:03:44.645 --> 02:03:46.665
You know? Now they're coming back to liquid.
1966
02:03:47.925 --> 02:03:55.969
They they can go wherever they want because, ultimately, what you are doing, you're trusting Tether. You're trusting Right. The people that are holding the USD.
1967
02:03:57.949 --> 02:03:58.449
So,
1968
02:03:59.550 --> 02:04:01.810
I mean I mean, with with all that said,
1969
02:04:04.675 --> 02:04:06.695
the the the the point
1970
02:04:07.235 --> 02:04:07.735
is
1971
02:04:08.275 --> 02:04:09.655
is if we're
1972
02:04:11.640 --> 02:04:12.620
talking about
1973
02:04:13.240 --> 02:04:16.700
this this idea of of of trust,
1974
02:04:19.245 --> 02:04:21.025
How does a how does a user
1975
02:04:21.725 --> 02:04:22.625
level that?
1976
02:04:22.925 --> 02:04:24.625
Like like, I I don't understand
1977
02:04:25.165 --> 02:04:27.265
exactly how a user realizes
1978
02:04:30.770 --> 02:04:33.429
what they're what they're gonna do in terms of,
1979
02:04:34.130 --> 02:04:37.190
like, do they trust Onchain versus Liquid?
1980
02:04:37.615 --> 02:04:38.335
Does Liquid
1981
02:04:38.735 --> 02:04:41.395
the the key is is is with Liquid,
1982
02:04:42.415 --> 02:04:46.435
I'm I'm trying to I'm trying to figure out how does the federation
1983
02:04:47.619 --> 02:04:50.679
like like, why would you be a federation member
1984
02:04:51.540 --> 02:04:56.119
if your fees aren't going to go up over time? How how does
1985
02:04:56.494 --> 02:04:58.994
like, where does where does the game theory
1986
02:04:59.454 --> 02:05:01.554
follow where the federation member
1987
02:05:01.855 --> 02:05:03.395
wants to secure the network
1988
02:05:03.850 --> 02:05:06.590
if if their fees are are just staying,
1989
02:05:07.290 --> 02:05:10.270
you know, at at their basis? Yeah. I mean,
1990
02:05:10.810 --> 02:05:11.310
so,
1991
02:05:15.875 --> 02:05:19.895
I mean, today, the fees don't actually go to the federation members. They go to Blockstream.
1992
02:05:20.500 --> 02:05:23.640
But then Blockstream is using them to offset
1993
02:05:24.180 --> 02:05:25.960
some of the peg wallet,
1994
02:05:27.140 --> 02:05:28.200
transaction costs.
1995
02:05:29.335 --> 02:05:29.835
And
1996
02:05:30.935 --> 02:05:34.235
I think you need I mean, you need fees to avoid spam,
1997
02:05:34.695 --> 02:05:46.805
and so the fees need to be in Bitcoin. They can't be in assets because they make a print, you know, ridiculous number of assets and pull up the chain using those fees. So I think Bitcoin is Liquid Bitcoin is the right asset to use for
1998
02:05:47.665 --> 02:05:48.165
fees.
1999
02:05:49.025 --> 02:05:54.250
But I don't you know, nobody's really trying to make money from the fees directly because they don't have mining costs
2000
02:05:54.550 --> 02:05:56.570
to be free. Right? So it's more like,
2001
02:05:57.030 --> 02:05:58.970
you know, the spamming, the people being
2002
02:05:59.990 --> 02:06:01.750
functionaries and block signers are
2003
02:06:02.390 --> 02:06:04.625
you know, they're trying to run a business. They're like
2004
02:06:05.485 --> 02:06:05.985
sideswap
2005
02:06:06.364 --> 02:06:07.105
that is
2006
02:06:07.804 --> 02:06:08.304
charging
2007
02:06:08.844 --> 02:06:10.545
swap fees. It's like 0.1%
2008
02:06:11.245 --> 02:06:12.065
swap fees.
2009
02:06:12.750 --> 02:06:15.890
Some of those swaps you can do yourself cheaper, but they're less convenient.
2010
02:06:16.910 --> 02:06:18.450
Or exchanges. So they're getting
2011
02:06:19.070 --> 02:06:22.465
kind of more use case use out of it. So they're willing to
2012
02:06:22.925 --> 02:06:28.705
or they're philosophically interested. Right? So they're they're running a node, but the node isn't like a profit center.
2013
02:06:29.290 --> 02:06:31.310
It's more the the indirect benefit.
2014
02:06:34.090 --> 02:06:36.350
So, yeah, that's that's the fees. And
2015
02:06:36.685 --> 02:06:39.185
oh, one thing to say about the fees as well. So 0.1
2016
02:06:40.605 --> 02:06:46.989
sets per v byte, but, they're confidential transactions, so they're a bit bigger. But still, you know, it works out,
2017
02:06:48.570 --> 02:06:51.870
like, less than 1 I think a little less than 1 set of byte,
2018
02:06:52.330 --> 02:06:54.665
but that always works kind of thing at the moment.
2019
02:06:55.145 --> 02:06:58.925
So I think your your general point, though, I agree with, which is
2020
02:06:59.465 --> 02:07:01.085
it would be a reasonable thing
2021
02:07:02.185 --> 02:07:02.685
to
2022
02:07:03.330 --> 02:07:04.949
increase the block size a bit
2023
02:07:05.330 --> 02:07:05.989
on liquids
2024
02:07:06.369 --> 02:07:10.310
if if the feast, you know, if it filled up and the feast started to get annoying.
2025
02:07:12.505 --> 02:07:16.525
But you can't you can't go kind of crazy. Right? Because the CPU
2026
02:07:18.240 --> 02:07:24.180
cost would get out of control. The bandwidth cost will get out of control. And if if nobody can verify it, then it's not really a blockchain anymore.
2027
02:07:24.640 --> 02:07:35.695
And you just But, like, how does the how does the federation members like, why why are they federation members? Like, what do they I I feel like they should they need to be making money off of it to be,
2028
02:07:36.700 --> 02:07:43.520
Yeah. I mean, so they've all got You know? Right. I mean, they've all got some use case. So, I mean, site like TechSight Swap. Right? They are,
2029
02:07:45.005 --> 02:07:50.304
they're making these commissions on the trades in the wallet. Right? So the swap they're sort of accelerating swaps and facilitating
2030
02:07:51.324 --> 02:07:52.045
Bitcoin to
2031
02:07:52.660 --> 02:07:54.440
liquid Bitcoin to liquid Tether
2032
02:07:55.540 --> 02:07:57.240
or Bitcoin to liquid Bitcoin
2033
02:07:57.780 --> 02:08:02.040
cross chain, and they're taking commissions on it. So that's how they make their money. And so,
2034
02:08:04.005 --> 02:08:11.785
I think the other part of it is, you know, they wanna be able to trust the network security. And one way to do that is to be to be part of it.
2035
02:08:12.090 --> 02:08:18.910
So to to operate, you know, 1 15th of it or something. Right. And look look around it who else is doing that. So there are people that have hypothesized
2036
02:08:19.370 --> 02:08:19.870
that
2037
02:08:21.245 --> 02:08:23.905
in a very far future where Bitcoin doesn't have
2038
02:08:24.365 --> 02:08:26.465
any subsidy left and it's all fees
2039
02:08:27.245 --> 02:08:33.290
that, you know, once it one hope is that while the fees will come will provide enough money for the miners to,
2040
02:08:34.070 --> 02:08:39.284
you know, make a profit, continue to operate, and provide security to the network. But another theory could be
2041
02:08:41.344 --> 02:08:47.930
that people who run Bitcoin related businesses maybe wanna do a bit of mining just keep the network secure and protect their Bitcoin related investment.
2042
02:08:49.430 --> 02:08:53.050
So that's the theory I did some Bitcoin mining on. I was like, well,
2043
02:08:54.305 --> 02:08:58.885
you know, here here is me complaining that Bitcoin is too Bitcoin mining is too centralized.
2044
02:08:59.665 --> 02:09:04.630
It's Bitcoin. There's never to complain to. So I guess I better do some mining. So, you know, I figured
2045
02:09:06.130 --> 02:09:09.110
a percentage of what I was comfortable with doing mining.
2046
02:09:09.730 --> 02:09:27.340
And I put some I put some money into mining. And that way, I felt like I mean, of course, I didn't make a dent, you know, like, turning fraction to a percent, but I figured that it doesn't take that much. I think it's like, you know, a few percent of Bitcoin's total market cap, you know, completely decentralized Bitcoin hash rate.
2047
02:09:28.915 --> 02:09:30.775
So I think something like that could apply
2048
02:09:31.235 --> 02:09:31.975
kind of thinking
2049
02:09:33.235 --> 02:09:38.420
is the more present and liquid because there is no mine. Right? I mean, there's there's no reward
2050
02:09:38.960 --> 02:09:39.620
as such.
2051
02:09:40.480 --> 02:09:48.745
So the it's already jump started to that situate, and they're not doing for the fees. They're doing it for well, because we're running we need to run a business on it, and we need to build trust
2052
02:09:49.125 --> 02:09:51.145
what's going on. So we're gonna we're gonna do it.
2053
02:09:52.245 --> 02:09:53.225
So it's kind of
2054
02:09:53.739 --> 02:09:58.239
jump start jump there to that. I mean, some sometimes layer twos and altcoins
2055
02:09:58.699 --> 02:10:09.454
experience that would only happen in the far future for Bitcoin. So it's kinda done one of those, I guess. And it seems to, you know, people there seems to be a queue of people that wanna get, you know, like, get function rates. So as soon as Dynafed
2056
02:10:10.290 --> 02:10:13.510
is ready, there are people that are, you know, keen to operate 1.
2057
02:10:18.585 --> 02:10:20.445
Yeah. So, I mean I mean, basically
2058
02:10:24.570 --> 02:10:29.070
I mean, there's incentives to be a a a liquid
2059
02:10:29.449 --> 02:10:30.590
federation member.
2060
02:10:31.050 --> 02:10:37.554
The those incentives aren't the fee. It isn't the fees. Like, you're not becoming a federation member to make fees.
2061
02:10:38.415 --> 02:10:38.915
Right.
2062
02:10:39.775 --> 02:10:42.355
And that's okay. You you could get into
2063
02:10:43.280 --> 02:10:45.619
kind of weird conflict too. Right? If if
2064
02:10:46.400 --> 02:10:47.539
if there were fees
2065
02:10:48.239 --> 02:10:49.219
and no rewards,
2066
02:10:52.215 --> 02:10:55.594
maybe some of the federation members want the blocks to be as small as possible.
2067
02:10:56.135 --> 02:10:57.435
The fees are really high.
2068
02:10:58.320 --> 02:11:04.980
Other ones like, no, our use case needs retail payments. You're killing the use case for us. You're getting some complex. So
2069
02:11:05.605 --> 02:11:06.985
the way it is at the moment,
2070
02:11:07.445 --> 02:11:11.705
nobody's really they just they just want to work, work reliably, spoil lots of use cases.
2071
02:11:13.100 --> 02:11:16.000
And to act as, I guess, in a way, I kind of,
2072
02:11:17.580 --> 02:11:18.560
sort of reduce,
2073
02:11:20.380 --> 02:11:21.440
you know, off
2074
02:11:22.844 --> 02:11:23.585
that can
2075
02:11:23.965 --> 02:11:28.385
support bigger blocks and, you know, more CPU to verify all these
2076
02:11:30.460 --> 02:11:32.160
confidential transaction proofs.
2077
02:11:33.100 --> 02:11:35.760
But that would be a problem on the main chain because it
2078
02:11:36.765 --> 02:11:39.824
would be, you know, censorship risk. But for a side chain,
2079
02:11:40.125 --> 02:11:42.065
you know, it's opt in. Right? So
2080
02:11:45.130 --> 02:11:51.310
people don't have to you know, they can tolerate it being more centralized because that's up to the people that opt into it.
2081
02:11:53.335 --> 02:11:53.835
Right.
2082
02:11:54.295 --> 02:11:56.215
And when you talk about, like, why,
2083
02:11:56.614 --> 02:12:00.155
why become a member of the Liquid Federation and what are the incentives,
2084
02:12:00.935 --> 02:12:01.515
I think
2085
02:12:02.980 --> 02:12:07.159
it it's funny. I actually saw something on Twitter that made me laugh. Someone said,
2086
02:12:07.940 --> 02:12:08.440
Wiz
2087
02:12:08.980 --> 02:12:09.415
is,
2088
02:12:09.895 --> 02:12:14.075
part of, like, the liquid cartel, so he's trying to hijack Bisk
2089
02:12:14.535 --> 02:12:17.355
and make it use liquid or something
2090
02:12:17.815 --> 02:12:18.315
hilarious.
2091
02:12:18.775 --> 02:12:22.390
And they don't realize the reason I joined liquid was
2092
02:12:22.930 --> 02:12:23.910
to be able
2093
02:12:24.370 --> 02:12:27.270
to represent, like, the interest of the BIS community,
2094
02:12:27.730 --> 02:12:28.390
you know,
2095
02:12:29.574 --> 02:12:34.155
by participating in the governance on the board or just being able to, like, verify
2096
02:12:34.534 --> 02:12:35.034
things,
2097
02:12:36.260 --> 02:12:37.080
you know, internally
2098
02:12:37.940 --> 02:12:39.240
or being able to,
2099
02:12:40.180 --> 02:12:41.960
you know, provide liquidity
2100
02:12:42.580 --> 02:12:49.305
or something. I will. Right? Exactly. Like, those those are the incentives, right, is to participate in the network,
2101
02:12:50.245 --> 02:12:54.900
as a as a member. Not not for any direct financial incentives. Right?
2102
02:12:55.440 --> 02:12:58.660
Obviously, I run a lot of stuff for Bisc. And so,
2103
02:12:59.520 --> 02:13:01.300
I also want to be able to,
2104
02:13:02.185 --> 02:13:05.005
provide this, you know, similar services or maybe
2105
02:13:05.385 --> 02:13:07.705
bridge services between the liquid and bisque,
2106
02:13:08.185 --> 02:13:09.245
community. So
2107
02:13:09.830 --> 02:13:15.449
that was the incentive for me. I don't know. It's kind of like, okay, on the Internet, the Internet also has governance.
2108
02:13:16.230 --> 02:13:20.905
Not to, like, go off topic, but the Internet being a peer to peer network,
2109
02:13:21.525 --> 02:13:23.545
does have a governance structure. And,
2110
02:13:24.470 --> 02:13:25.850
you know, I've even, like,
2111
02:13:26.630 --> 02:13:27.350
tried to,
2112
02:13:27.990 --> 02:13:36.625
get elected to the executive council of the Internet in Asia Pacific and, you know, other, like, fun stuff. But it but just being a part of the Internet, you kind of want to
2113
02:13:37.405 --> 02:13:37.905
participate
2114
02:13:38.285 --> 02:13:42.100
in the the policies or the governance. You you kinda wanna have a say,
2115
02:13:42.720 --> 02:13:46.260
in how things work and not only and then the other side, you want to
2116
02:13:47.335 --> 02:13:48.635
be part of the discussion
2117
02:13:49.015 --> 02:13:56.395
or you wanna, you know, just just have a have a say in things, how they're running. So the I would say from a membership perspective, those are,
2118
02:13:57.420 --> 02:14:01.760
the incentives. Then, of course, I think, Matt, you would agree as well. Before you
2119
02:14:02.460 --> 02:14:15.205
recommend your friends to use something, you also wanna be intimately familiar with how it works and 100%. Verify it yourself. Yeah. So so that was, you know, before I suggested to Bisk that we should consider adding,
2120
02:14:16.020 --> 02:14:18.280
you know, support for the liquid chain,
2121
02:14:18.660 --> 02:14:24.520
I I wanted to, like, fully verify it myself and and, get comfortable with how it works. And
2122
02:14:24.835 --> 02:14:26.455
that was cool. Like, even when there was,
2123
02:14:27.155 --> 02:14:31.415
that issue that, Adam mentioned earlier with the, the time lock,
2124
02:14:32.070 --> 02:14:40.735
2 weeks versus 4 weeks thing. I actually asked Adam. I was like, can you send me the the source code for this thing? I kinda wanna verify it. And sure enough, you know,
2125
02:14:42.175 --> 02:14:47.955
you know, I was able to get all the source code and actually verify what was what was going on. And I thought that was
2126
02:14:48.470 --> 02:14:50.170
that was really cool to be able to,
2127
02:14:50.630 --> 02:14:53.530
to ask for that. Right? And to be clear here, like
2128
02:14:53.910 --> 02:14:55.290
like, you're you're
2129
02:14:56.165 --> 02:14:59.065
I appreciate the fuck out of you. I mean, you're hosting bitcointv.com,
2130
02:14:59.845 --> 02:15:04.585
which hosts its hosts all of our archives for civil dispatch,
2131
02:15:05.900 --> 02:15:08.880
and we've had issues with people hosting that shit.
2132
02:15:10.460 --> 02:15:12.320
I mean, like, you're
2133
02:15:13.615 --> 02:15:21.715
you there there's there's no clear financial incentive for you to do what you do. You're putting yourself in a more vulnerable situation,
2134
02:15:23.010 --> 02:15:28.390
being a Liquid Federation member. I I cannot I work through all the different scenarios.
2135
02:15:29.865 --> 02:15:32.445
Yes. I'm a little bit biased because Wiz is a friend,
2136
02:15:33.065 --> 02:15:39.325
and he's been on dispatch multiple times. But, like, honestly, like, there's there's no way for him to make
2137
02:15:39.740 --> 02:15:44.160
money here. Like, the like, if anything, he's losing money being a federation member.
2138
02:15:44.700 --> 02:15:47.600
You put it all together, that's that's how it comes out.
2139
02:15:50.855 --> 02:15:53.195
I I I wanted to Adam,
2140
02:15:53.574 --> 02:15:55.195
while I have you, and
2141
02:15:55.600 --> 02:16:04.100
I appreciate the fuck out of you. Like, it's fantastic that you've been here for this conversation. I think this has been a really very conversation for the audience.
2142
02:16:07.155 --> 02:16:07.655
6102.
2143
02:16:08.195 --> 02:16:11.735
This has been famously called the 6102 Bitcoin show,
2144
02:16:12.380 --> 02:16:12.880
because
2145
02:16:13.500 --> 02:16:19.360
he refuses to dox himself. He's only doxed himself once on voice, and that was on the Stephane Levera podcast.
2146
02:16:20.035 --> 02:16:23.015
But besides that, he's never actually doxed his voice.
2147
02:16:23.395 --> 02:16:25.095
And and he wants to know,
2148
02:16:26.275 --> 02:16:30.840
and I'm very curious as well. So so he did channel me in this question.
2149
02:16:31.300 --> 02:16:34.520
Is it possible for us to do a multiparty transaction
2150
02:16:34.980 --> 02:16:35.640
on Liquid,
2151
02:16:36.420 --> 02:16:36.920
without
2152
02:16:37.954 --> 02:16:41.095
doxing the information, like, doxing the amounts,
2153
02:16:41.954 --> 02:16:55.085
and the destination of the individual transactions to the other people of the party. Basically, the idea is, is it possible to do a coin join without unblinding your confidential transactions?
2154
02:16:56.604 --> 02:17:01.825
Yeah. You just need the blinding factors to add up between the inputs and the outputs.
2155
02:17:02.525 --> 02:17:03.025
So
2156
02:17:03.920 --> 02:17:06.740
I think you don't really need to know anything
2157
02:17:07.360 --> 02:17:07.860
about
2158
02:17:09.440 --> 02:17:14.325
the types of values of the other parties, just that you get out the same amount that you put in.
2159
02:17:14.785 --> 02:17:17.045
And you have to do some kind of, you know,
2160
02:17:17.985 --> 02:17:22.630
coordination game where partially signed messages are passed backwards and forwards. So there's,
2161
02:17:24.529 --> 02:17:25.590
for people doing
2162
02:17:25.970 --> 02:17:34.505
some kinds of Bitcoin stuff, you come across PSVT, which is a kind of file format for partially signed Bitcoin transaction. So there's an extension to that called,
2163
02:17:34.985 --> 02:17:35.485
PSET,
2164
02:17:36.665 --> 02:17:37.565
which is by,
2165
02:17:38.665 --> 02:17:46.909
actually, Andrew Chow is the person who worked on both of those, and he works at Blockstream. So he's been working on PSET, which is a way to, you know, adds
2166
02:17:47.770 --> 02:17:49.310
liquid extensions to
2167
02:17:49.835 --> 02:17:51.295
this, kind of
2168
02:17:51.755 --> 02:17:57.215
message format and adds blinding factors and things like that to it. So something like that should be possible.
2169
02:17:59.431 --> 02:17:59.931
And
2170
02:18:00.711 --> 02:18:02.971
yeah. I mean, the the intuition is basically
2171
02:18:03.990 --> 02:18:04.811
with the blinding
2172
02:18:05.431 --> 02:18:05.931
stuff,
2173
02:18:06.895 --> 02:18:07.636
the the
2174
02:18:08.335 --> 02:18:09.875
in Bitcoin, the
2175
02:18:10.815 --> 02:18:16.115
inputs, you know, the values of the inputs have to add up to the value of the outputs plus the fees. And in liquid,
2176
02:18:17.280 --> 02:18:22.181
the value of the inputs of each type have to add up the same value of the same type
2177
02:18:22.881 --> 02:18:27.125
and that, you know, there could be multiple types in there. Right? But the inputs have to add to the outputs.
2178
02:18:27.984 --> 02:18:28.484
And
2179
02:18:28.944 --> 02:18:34.245
the way that happens with the blinding factors is the blinding factors have to sort of cancel out on each side. So
2180
02:18:34.880 --> 02:18:36.979
it's it's mathematically possible to,
2181
02:18:37.439 --> 02:18:41.460
you know, join with something where you don't really know what it is or how much it is.
2182
02:18:44.235 --> 02:18:47.135
That's great. I mean, that that that's what we wanna see.
2183
02:18:50.080 --> 02:18:56.580
Oh, something else I was gonna mention because we were talking about sort of privacy and confidentiality is the,
2184
02:18:57.040 --> 02:18:57.540
coincidentally,
2185
02:18:58.560 --> 02:18:58.810
the,
2186
02:19:00.305 --> 02:19:01.445
confidential transactions
2187
02:19:01.825 --> 02:19:03.525
is the building block
2188
02:19:05.585 --> 02:19:09.010
used in a in a few different things, including
2189
02:19:09.311 --> 02:19:10.210
member Wimble.
2190
02:19:12.510 --> 02:19:13.010
So
2191
02:19:13.710 --> 02:19:14.210
when,
2192
02:19:15.465 --> 02:19:19.405
Greg Maxwell used to be the CTO of Blockstream but is now, you know, independent,
2193
02:19:20.024 --> 02:19:20.524
he,
2194
02:19:21.225 --> 02:19:23.885
he was implementing it. I've mentioned to him that,
2195
02:19:24.990 --> 02:19:27.650
you know, with this range proof, you wouldn't need
2196
02:19:28.510 --> 02:19:32.130
a signature because the range proof itself is kind of proof of ownership.
2197
02:19:32.655 --> 02:19:37.075
And that is, you know, like a a first step along the way to Mimble.
2198
02:19:37.615 --> 02:19:38.436
Mimble was
2199
02:19:38.976 --> 02:19:41.555
sprung on the log by another pseudonym actually.
2200
02:19:42.930 --> 02:19:43.430
But
2201
02:19:43.810 --> 02:19:47.590
as a site liquid basically has the building blocks in it already
2202
02:19:48.130 --> 02:19:51.944
to do member wonderful like behavior, which is instead of doing a transaction
2203
02:19:53.205 --> 02:19:54.265
with a signature
2204
02:19:55.045 --> 02:19:59.145
and binding factor, you just, you know, make an opt true transaction. There's no signature.
2205
02:20:00.000 --> 02:20:00.500
And
2206
02:20:01.841 --> 02:20:03.301
knowing the blinding factors,
2207
02:20:04.080 --> 02:20:07.700
is what enables you to spend. And you and you have to know the blinding factors to spend.
2208
02:20:08.275 --> 02:20:12.455
And then you need to, you know, you need to do something and you need to make a wallet
2209
02:20:12.995 --> 02:20:16.535
that understands this kind of different way to use the liquid
2210
02:20:17.360 --> 02:20:21.300
blockchain formats. So that's another thing that could be done potentially in wallets.
2211
02:20:22.800 --> 02:20:24.900
And then the, you know, the only
2212
02:20:25.615 --> 02:20:36.560
thing missing for Liquid for mimble and bull then would be that it's not, you know, making you some mathematical properties that lets you delete the history of mimble and bull transactions. But it's kind of curious that you get the,
2213
02:20:37.500 --> 02:20:39.760
you know, the kind of claimed
2214
02:20:40.300 --> 02:20:44.386
privacy benefits from them or something. It should be possible today even.
2215
02:20:45.485 --> 02:20:50.945
Yeah. That's a good point. There's a lot of, like, I I think we're just seeing the very beginning of
2216
02:20:51.450 --> 02:20:52.330
what's gonna be,
2217
02:20:52.730 --> 02:20:54.110
possible with this
2218
02:20:54.890 --> 02:20:56.830
basically new global financial
2219
02:20:57.370 --> 02:20:57.870
system.
2220
02:20:59.675 --> 02:21:08.976
There's this, very famous post by Hal Finney on the Bitcoin talk forums where he's talking about, the future of Bitcoin banks and Bitcoin banking.
2221
02:21:09.471 --> 02:21:10.210
And I think,
2222
02:21:11.070 --> 02:21:12.851
Adam also tweeted about this,
2223
02:21:13.230 --> 02:21:16.530
in the past too when, Hodo Hodo implemented their
2224
02:21:17.065 --> 02:21:19.565
decentralized lending platform on top of Liquid.
2225
02:21:20.105 --> 02:21:21.805
And it's and it's kind of like,
2226
02:21:23.226 --> 02:21:24.905
this is this is the future of,
2227
02:21:25.670 --> 02:21:28.890
Bitcoin banking is is some kind of side chain with liquid
2228
02:21:29.430 --> 02:21:30.970
that, of course, settles,
2229
02:21:32.070 --> 02:21:34.495
on the base base layer Bitcoin blockchain
2230
02:21:34.955 --> 02:21:36.555
and uses Bitcoin as its,
2231
02:21:37.035 --> 02:21:41.215
token of accounts, as a unit of account. But the side chain itself
2232
02:21:42.091 --> 02:21:44.910
can do all kinds of really cool stuff
2233
02:21:45.290 --> 02:21:47.230
that the Bitcoin base layer wouldn't,
2234
02:21:48.490 --> 02:21:49.471
be able to do.
2235
02:21:49.851 --> 02:21:50.351
And
2236
02:21:51.275 --> 02:21:56.255
this is this is also why I'm so interested in liquid. Right? Because we're just we're just seeing the surface of,
2237
02:21:57.195 --> 02:22:01.061
you know, what new op codes or what new contract functionalities.
2238
02:22:01.761 --> 02:22:07.301
And and, maybe this is a good time to to talk about Biscuit a little bit, like, with with,
2239
02:22:08.105 --> 02:22:08.605
you
2240
02:22:09.945 --> 02:22:11.726
know, we we talked about the
2241
02:22:12.905 --> 02:22:15.165
the the kind of, okay, coffee transactions
2242
02:22:15.625 --> 02:22:24.560
or day to day transactions for daily stack or, you know, large settlement transactions that batch batch a lot of things. That's like the obvious
2243
02:22:25.455 --> 02:22:34.915
use case of a side chain or or any of these things is, okay, Bitcoin base layer fees are getting high, so let's batch a bunch of transactions on liquid or lightning
2244
02:22:35.280 --> 02:22:38.160
to get the fees down. And then we'll settle on chain,
2245
02:22:38.480 --> 02:22:46.256
eventually at some point. But the real other side of the cool stuff you can do with a side chain like liquid is the new functionality.
2246
02:22:46.796 --> 02:22:51.660
Right? And this is this is, like, where you can you can just, you know, imagine the future of,
2247
02:22:52.300 --> 02:22:56.560
like, hold to hold to lend is a cool example. Right? They if you're not familiar, they have this,
2248
02:22:58.125 --> 02:23:00.945
on chain on in a liquid contract. They'll lock
2249
02:23:01.405 --> 02:23:08.040
up Bitcoin or they'll do some kind of atomic swap. I'm not too familiar with the technical details, but your, LVTC
2250
02:23:08.660 --> 02:23:09.720
and your USDT,
2251
02:23:11.300 --> 02:23:13.800
are in this really cool, multisig swap,
2252
02:23:14.564 --> 02:23:18.905
contract. Right? So you can you can fully verify everything. And I think that's the real key
2253
02:23:19.445 --> 02:23:19.945
to,
2254
02:23:21.641 --> 02:23:26.540
the future of Bitcoin banking is that okay. Back in the day, if you go back to the gold standard,
2255
02:23:27.240 --> 02:23:28.460
you know, you would have,
2256
02:23:29.045 --> 02:23:38.560
a bank vault. A bank has a vault with a bunch of gold bars in it. Well, how many gold bars do they have in the vault? Nobody can really verify that easily. But more importantly,
2257
02:23:39.260 --> 02:23:45.520
how many gold certificates did they issue out? Right? Are they a fractional reserve or is it a full reserve?
2258
02:23:45.875 --> 02:23:46.535
Is it,
2259
02:23:48.115 --> 02:23:50.295
I think they're, you know, like are they fully,
2260
02:23:50.835 --> 02:23:56.560
are they do they have a 100% reserves or not? And that's the really cool feature about Liquid that's underrated.
2261
02:23:56.939 --> 02:23:58.560
Is that if you imagine Liquid
2262
02:23:59.020 --> 02:24:00.399
as some kind of bank,
2263
02:24:01.655 --> 02:24:08.476
that's issuing like, not gold certificates, but like Bitcoin certificates or Bitcoin I use like with with the LVTC token,
2264
02:24:09.096 --> 02:24:15.080
essentially is is that you can fully verify not only the holdings of this
2265
02:24:15.460 --> 02:24:16.359
Liquid Federated
2266
02:24:16.820 --> 02:24:17.320
Bank,
2267
02:24:17.985 --> 02:24:24.165
but also the liabilities. And I don't know of any other system where this is really possible, where you can fully
2268
02:24:24.545 --> 02:24:26.805
verify both the assets and the liabilities
2269
02:24:27.610 --> 02:24:29.130
of, this type of,
2270
02:24:30.170 --> 02:24:31.870
side chain. So that's really cool,
2271
02:24:32.649 --> 02:24:34.430
that you can do that with Bitcoin
2272
02:24:34.915 --> 02:24:36.854
or more accurately on top of Bitcoin
2273
02:24:37.715 --> 02:24:41.895
to enable actual banking use cases like peer to peer lending
2274
02:24:42.354 --> 02:24:42.854
or,
2275
02:24:43.450 --> 02:24:51.955
you know, Bisc is another good example. Bisc on top of Liquid with more privacy and and lower fees. That's where Liquid is really going to shine. And that's,
2276
02:24:52.355 --> 02:24:56.936
why I'm bullish on the future of of, liquid for this, functionality.
2277
02:25:00.030 --> 02:25:08.210
Yeah. I mean, the Huddl Huddl stuff is interesting. I don't know if you guys ever had them on, but they could explain it more. But I tried it out a little bit, and it's We had them on.
2278
02:25:08.695 --> 02:25:16.075
You're technically a sponsor of of the greater podcast, but not a sponsor of this show. We have no sponsors on this show.
2279
02:25:16.649 --> 02:25:19.790
Cool. Yeah. I mean, it's just basically, like, a 2 or 3
2280
02:25:20.490 --> 02:25:21.550
trustless escrow,
2281
02:25:22.170 --> 02:25:22.670
and
2282
02:25:23.689 --> 02:25:24.750
it's quite
2283
02:25:25.565 --> 02:25:26.065
a
2284
02:25:26.445 --> 02:25:29.825
low risk way to collect interest on US dollars because
2285
02:25:30.445 --> 02:25:35.930
the person who borrows them has to over collateralize it with Bitcoin. And as the lender, you get one of the keys
2286
02:25:36.270 --> 02:25:36.770
for
2287
02:25:37.109 --> 02:25:39.689
the for the s for the, collateral.
2288
02:25:40.069 --> 02:25:40.890
And so,
2289
02:25:41.315 --> 02:25:48.295
you know, unlike the other lending platforms where you you basically give money to a middleman, you don't know what they do with it. Yeah. If it's like
2290
02:25:49.020 --> 02:25:52.880
laying out, you know, what risk is. You can actually see the the coins
2291
02:25:53.181 --> 02:25:53.681
called,
2292
02:25:55.740 --> 02:25:58.080
guaranteeing the loan. And
2293
02:25:59.225 --> 02:26:01.005
so, yep, it seems to be,
2294
02:26:01.625 --> 02:26:07.965
you know, there's more people wanting to borrow than there's dollars to borrow. So any any money that goes in there just gets used up immediately.
2295
02:26:08.670 --> 02:26:09.891
So, you know,
2296
02:26:10.351 --> 02:26:10.750
it's,
2297
02:26:12.270 --> 02:26:15.091
it seems to be pretty active. And actually, the main
2298
02:26:18.444 --> 02:26:18.944
borrowing
2299
02:26:19.805 --> 02:26:20.305
they
2300
02:26:21.005 --> 02:26:22.625
have tether on,
2301
02:26:24.365 --> 02:26:28.610
a couple of net liquid is the one that gets misused on that one for some reason.
2302
02:26:29.390 --> 02:26:30.210
Yeah. I mean,
2303
02:26:30.990 --> 02:26:34.030
they get a lot of shit. They get actually get a lot of shit about,
2304
02:26:34.430 --> 02:26:35.410
supporting Altcoin.
2305
02:26:38.575 --> 02:26:39.075
Altcoin
2306
02:26:39.535 --> 02:26:40.975
supported I see.
2307
02:26:41.455 --> 02:26:42.755
Or AltJade supported,
2308
02:26:43.136 --> 02:26:43.636
like,
2309
02:26:44.016 --> 02:26:44.516
stablecoins.
2310
02:26:45.750 --> 02:26:52.091
Yes. They What's interesting is what's interesting is they actually have a lot of trouble with the confidential transactions.
2311
02:26:53.515 --> 02:26:58.654
Yeah. It it actually ruins their setup. It makes it way more difficult for them to use,
2312
02:26:59.595 --> 02:27:00.895
liquid USDT
2313
02:27:01.690 --> 02:27:03.230
versus regular USDT.
2314
02:27:04.010 --> 02:27:13.285
Right. So there's a dispute, like, there's because it's 2 of 3. If the lender or borrower gets in dispute, like, you underpaid or you didn't pay as much as the city did, they can't tell because it's confidential.
2315
02:27:14.145 --> 02:27:20.940
It's kinda great. I love that. You have to. So we added a feature. I mean, we needed to add it anyway, but we kinda rushed it for them, which is
2316
02:27:21.400 --> 02:27:22.540
in the green wallet.
2317
02:27:23.160 --> 02:27:25.980
You there's, you know, you click on it. It takes you to the explorer,
2318
02:27:26.745 --> 02:27:31.725
but it's still confidential. And we made another a new feature for the explorer, which is you click on it,
2319
02:27:32.185 --> 02:27:33.564
and it sends the
2320
02:27:33.865 --> 02:27:34.925
blinding key
2321
02:27:36.030 --> 02:27:46.505
in a in a URL path as a, you know, comment field. So the the web server doesn't see it, but there's JavaScript in the browser to decrypt it, and then you can see it. So you can share that with Huddl Huddl,
2322
02:27:46.806 --> 02:27:50.425
and then they can see what who's telling the truth, basically.
2323
02:27:51.285 --> 02:27:55.200
But without that feature, they would kind of, who do we believe here?
2324
02:27:56.140 --> 02:27:59.500
Well, I'm fine with that. That the feature not a bug.
2325
02:27:59.980 --> 02:28:09.025
So Well, that's how this that's how Bisc has to I mean, I think Bisc actually requested that feature first. Yeah. Yeah. Yeah. So if I'm the mediator on a trade dispute,
2326
02:28:09.690 --> 02:28:10.190
and
2327
02:28:10.650 --> 02:28:13.931
if you wanna you the the burden of proof is on the,
2328
02:28:14.891 --> 02:28:18.351
buyer in this case. They need to prove to the mediator
2329
02:28:18.875 --> 02:28:27.620
that they sent the LBTC to the certain address, and the only way to do that is exactly what you just said by revealing the lining key. That's why originally when we launched,
2330
02:28:28.020 --> 02:28:30.980
LBTC trading on BISK, we actually had to,
2331
02:28:31.780 --> 02:28:35.240
require the users to use, like, an element's core full node because
2332
02:28:35.926 --> 02:28:38.266
at the time, the green wallet didn't have that feature.
2333
02:28:39.365 --> 02:28:41.445
Yeah. Well, the green wallet actually,
2334
02:28:42.325 --> 02:28:45.250
won't send to a non confidential address either. It's kind of,
2335
02:28:46.369 --> 02:28:55.204
it really wants you to use I mean, the network would support non confidential addresses and elements can, which elements is kinda like Bikki, but for liquid.
2336
02:28:56.944 --> 02:28:58.244
But Green and Aqua
2337
02:28:58.625 --> 02:29:00.085
are confident only, basically.
2338
02:29:01.101 --> 02:29:04.160
So yeah. But now that there's a a URL
2339
02:29:04.540 --> 02:29:07.761
on the explorer that can encrypt it in JavaScript, so it's kinda nice.
2340
02:29:08.115 --> 02:29:16.455
So I mean, so, Adam, like like, one of the cool parts about Liquid, right, is that, like, all the API calls, everything is exactly the same for Bitcoin.
2341
02:29:17.211 --> 02:29:20.431
Like, if you already implement Bitcoin, it's super easy to implement,
2342
02:29:21.211 --> 02:29:22.110
Liquid. Right?
2343
02:29:22.570 --> 02:29:27.056
Yeah. I mean, actually, Novak from Coldcard was talking about this the other day,
2344
02:29:28.155 --> 02:29:29.596
on on one of the
2345
02:29:30.075 --> 02:29:31.775
He's been on the show many times.
2346
02:29:32.250 --> 02:29:33.150
But I get he
2347
02:29:33.689 --> 02:29:37.050
he was talking I guess he's talked about in a couple of places. But, anyway, basically, what you're saying,
2348
02:29:37.610 --> 02:29:44.056
you know, liquid is very easy to do because all the API calls are the same. There's some small extensions to do the confidentiality.
2349
02:29:44.995 --> 02:29:47.415
But once you adapted for that, basically,
2350
02:29:47.955 --> 02:29:49.495
you know, there's your tool chain,
2351
02:29:49.900 --> 02:29:51.200
your application stack.
2352
02:29:51.900 --> 02:29:53.601
It it all works in its low friction.
2353
02:29:54.300 --> 02:29:55.120
And so
2354
02:29:55.500 --> 02:29:55.980
he was,
2355
02:29:57.260 --> 02:29:57.840
you know,
2356
02:29:58.495 --> 02:30:03.955
the one thing you need is the is the crypto library for confidential transactions. So Bitcoin has
2357
02:30:04.814 --> 02:30:08.340
the main library that it uses is Libsec p, which is all crypto.
2358
02:30:09.040 --> 02:30:09.540
And
2359
02:30:10.399 --> 02:30:11.220
the same
2360
02:30:11.760 --> 02:30:13.620
developers that work on Libsec p
2361
02:30:14.135 --> 02:30:16.074
added the confidential transactions implementation.
2362
02:30:17.175 --> 02:30:19.435
So there's a link sec p version with,
2363
02:30:20.535 --> 02:30:22.234
sec p's. So it has the
2364
02:30:22.940 --> 02:30:25.360
confidential transaction range proofs and things. So
2365
02:30:25.980 --> 02:30:28.080
he figures the main challenge is to,
2366
02:30:29.740 --> 02:30:35.556
you know, get that running on a cold card, and it feels like the rest will be quite simple. So that'll be pretty cool if,
2367
02:30:36.275 --> 02:30:37.800
you could support in cold card
2368
02:30:38.359 --> 02:30:39.100
as well.
2369
02:30:40.760 --> 02:30:44.700
Yeah. That's for now. There is already a liquid support in,
2370
02:30:45.560 --> 02:30:46.060
Ledger,
2371
02:30:48.475 --> 02:30:52.095
not like, the ledger hardware works as well, like, in NOS.
2372
02:30:52.795 --> 02:30:56.335
And, of course, Blockstream made the, you know, the
2373
02:30:56.860 --> 02:30:58.480
Jade as well to have,
2374
02:30:59.900 --> 02:31:02.480
content transaction support. And, actually,
2375
02:31:03.100 --> 02:31:05.840
it turns out that the hardware wallets have, like, rather
2376
02:31:06.726 --> 02:31:10.025
small memories and slow CPUs. So JADE is
2377
02:31:10.726 --> 02:31:12.665
significantly faster and more memory
2378
02:31:13.285 --> 02:31:20.649
because it can do well, I mean, it has a QR code reader on it as well, which which takes more resources because it has a camera and screen. And
2379
02:31:21.430 --> 02:31:21.830
it has
2380
02:31:23.485 --> 02:31:27.585
yeah. We we knew that we would wanna do confidential transactions on the
2381
02:31:28.365 --> 02:31:32.226
on the processor as well. So it's got, like, a kind of dual core 32 bit
2382
02:31:32.770 --> 02:31:33.591
wrist chip.
2383
02:31:34.370 --> 02:31:40.975
Yeah. Jade is really cool. I I, played with that a bit. I think the probably the one thing that most Bitcoiners would
2384
02:31:41.614 --> 02:31:44.175
want on their wish list if they were gonna,
2385
02:31:45.055 --> 02:31:49.730
use Jade would be, like, an easier ability to self host everything on, like,
2386
02:31:50.690 --> 02:31:53.431
for example, like, if they have a Raspberry Pi at home,
2387
02:31:54.370 --> 02:31:58.370
maybe Blockstream could make an app for the Umbrell App Store that's like the Jade,
2388
02:31:58.931 --> 02:32:00.295
how do you call it? PIN,
2389
02:32:01.234 --> 02:32:03.895
server side PIN back end? Is that what it was called?
2390
02:32:04.595 --> 02:32:08.135
Yeah. I know what you mean. It's kinda like PIN PIN server or something.
2391
02:32:08.580 --> 02:32:13.080
So, actually, I mean, we should explain what that is. Hey. Most hardware wallets are,
2392
02:32:15.785 --> 02:32:18.444
you know, I can cite it. It's protected by a pin,
2393
02:32:19.145 --> 02:32:19.885
but particularly
2394
02:32:20.824 --> 02:32:24.364
it's showing none of them are that great mostly. But, you know, if if you
2395
02:32:24.900 --> 02:32:26.120
if if somebody steals
2396
02:32:26.740 --> 02:32:31.400
it and they've got a lab, there's a chance they could get get your keys out of it and steal the coins.
2397
02:32:31.955 --> 02:32:35.975
And so some of them have HSMs oh, sorry. Secure elements
2398
02:32:36.275 --> 02:32:38.455
that are supposed to be hard to extract keys from.
2399
02:32:38.835 --> 02:32:40.354
But it turns out most of them
2400
02:32:41.940 --> 02:32:47.641
there's 2 CPUs, there's a secure element and MCU, a kind of general purpose CPU. And what happens is when you power it up,
2401
02:32:48.020 --> 02:32:55.175
you give the PIN to the secure element and it gives the mnemonic and the keys to the application processor, and then it's already in the application processor.
2402
02:32:56.595 --> 02:33:02.240
So the distinction is not that great to the different models, you know, whether it's a serial element or not.
2403
02:33:02.780 --> 02:33:04.400
The application processor ends
2404
02:33:04.860 --> 02:33:08.880
up doing the signature because serial elements don't have, like, DSA signing capabilities.
2405
02:33:10.495 --> 02:33:11.635
So in any case,
2406
02:33:12.015 --> 02:33:13.234
you know, JAD is
2407
02:33:13.854 --> 02:33:20.190
partly one of one of the thought processes we wanted to be that I can fully open source hardware that
2408
02:33:21.450 --> 02:33:26.270
you could buy off the shelf hardware and run it on it. So buy like a m 5 stack
2409
02:33:26.815 --> 02:33:27.315
type
2410
02:33:27.775 --> 02:33:30.595
of variants. There's a variance like a fire that you can
2411
02:33:31.135 --> 02:33:36.380
get down with the firmware open source and flash it yourself. And now you have, like, a Jade functionality.
2412
02:33:37.560 --> 02:33:38.060
And,
2413
02:33:39.560 --> 02:33:44.815
but then it's not gonna have a secure element. So we we figured, well, what can we do about this? And the thought was
2414
02:33:45.596 --> 02:33:46.895
to use a challenge response
2415
02:33:48.155 --> 02:33:57.199
protocol with a server so that if you get the PIN wrong three times, then you can't decrypt what's on it. And so the mnemonic and keys are encrypted.
2416
02:33:57.979 --> 02:34:00.720
And they're encrypted with a key that's kind of, you know,
2417
02:34:01.335 --> 02:34:05.435
split between the server and the client. So the server couldn't decrypt your stuff either.
2418
02:34:06.935 --> 02:34:17.065
But you can't decrypt it without challenge response to a server. And so if you fail 3 times, the server will say no. And then you you can recover it. You just have to reset it and put your mnemonic in again.
2419
02:34:17.785 --> 02:34:31.210
But it protects you against somebody attacking it even though it doesn't have a screw on it. But the question there is so what Wizz was saying is, well, what if I wanna run my own PIN server and I don't wanna rely on this, you know, Internet has to PIN server.
2420
02:34:31.830 --> 02:34:39.266
And, yeah, we we released the source code for it, and it's pretty small. It's like a bit Python code that, you know, answers this challenge response,
2421
02:34:40.101 --> 02:34:44.040
counts down to 0, and then locks you out and deletes the keys or what have you.
2422
02:34:44.900 --> 02:34:50.555
So it's pretty cool actually to, you know, to put that on a Raspberry Pi and hide it somewhere and you connect to it over
2423
02:34:51.255 --> 02:34:55.835
Tor. And then, you know, if somebody gets your hardware wallet, it's gonna be pretty hard to
2424
02:34:56.694 --> 02:34:57.734
override the pin lock out,
2425
02:34:59.590 --> 02:35:00.729
if you can't find it.
2426
02:35:02.150 --> 02:35:03.850
That way, you have one less dependency.
2427
02:35:04.550 --> 02:35:05.050
So,
2428
02:35:05.910 --> 02:35:08.010
yeah, that's possible. I think we need another,
2429
02:35:08.756 --> 02:35:09.335
we need
2430
02:35:09.795 --> 02:35:10.455
to to
2431
02:35:10.835 --> 02:35:13.335
have another firmware update for Jade to
2432
02:35:14.756 --> 02:35:18.490
to add the configuration option, but the server part is open source already
2433
02:35:19.910 --> 02:35:22.810
to use it. Yeah. Right now, I think you have to actually
2434
02:35:24.150 --> 02:35:25.450
change the hard coded,
2435
02:35:26.235 --> 02:35:28.914
PIN server back end URL in the
2436
02:35:29.354 --> 02:35:36.080
Right. JT firmware and then, like, refight. Yeah. Yeah. If you're building your own, you could do it. You got the source, and you can just change the URL. But we wanna
2437
02:35:36.460 --> 02:35:39.760
make it so that even with the stock, like, pre flash jade,
2438
02:35:40.061 --> 02:35:42.720
that you'd be able to change it your own server.
2439
02:35:43.725 --> 02:35:45.345
Because it it's kinda similar.
2440
02:35:45.805 --> 02:35:50.944
Like, a lot of friends will ask me to be, like, their, key buddy. Right? So they'll say, like,
2441
02:35:51.500 --> 02:35:55.340
can you just hold on to one of my keys of my multisig setup or,
2442
02:35:56.380 --> 02:36:06.965
you know, Raspberry Pi. Can you just, like, host my Raspberry Pi for me on your network or something like this? Mhmm. I think that would be a and it's a good service. Right? Because I have plausible deniability. I don't know,
2443
02:36:07.700 --> 02:36:11.239
what they're doing. I'm just, like, you know, hosting service.
2444
02:36:12.100 --> 02:36:13.640
But, that would be a cool
2445
02:36:14.819 --> 02:36:15.479
kind of
2446
02:36:16.936 --> 02:36:23.436
service to to provide is that, kinda like a self hosted Casa or something like this, where you you have a multisig,
2447
02:36:24.615 --> 02:36:32.359
signing, and then you could define whatever rules. And I think, with NVK's product, like, the cold card or something that you you could add, like,
2448
02:36:32.965 --> 02:36:34.345
Right. You could add multiple,
2449
02:36:35.284 --> 02:36:35.784
devices
2450
02:36:36.085 --> 02:36:38.984
in, like, multiple jurisdictions to create your own,
2451
02:36:40.164 --> 02:36:43.500
you know, cool, like, multisig setup. So
2452
02:36:43.880 --> 02:36:50.836
you could have 1 Raspberry Pi in one country with this hardware device and then in a different country, you know. And that way,
2453
02:36:52.655 --> 02:36:55.556
you you know, you're much more seizure resistant. Right?
2454
02:36:56.096 --> 02:36:57.875
I mean, you could at least do it
2455
02:36:58.370 --> 02:37:05.670
with cold cards in every jurisdiction that you want to put them in. Right. But then you have to actually travel to those countries. Right? Right.
2456
02:37:06.065 --> 02:37:11.686
But, like, but it's it's only him. Like, he's the only one, like, fucking going with this shit.
2457
02:37:12.065 --> 02:37:14.085
But I love him for it. You know?
2458
02:37:15.060 --> 02:37:16.200
I think it's cool.
2459
02:37:16.660 --> 02:37:18.520
No. It's very cool. I agree.
2460
02:37:21.060 --> 02:37:29.245
Yeah. This is fantastic. I so so, Adam, before we leave here, I I wanna talk about, the blockchain satellite.
2461
02:37:30.105 --> 02:37:32.445
Oh, yeah. I think it's a very cool
2462
02:37:33.529 --> 02:37:35.229
thing you guys are working on.
2463
02:37:36.010 --> 02:37:40.510
I I think we should talk to the freaks, talk to the audience about how,
2464
02:37:41.735 --> 02:37:45.676
it does require trust, but it doesn't require as much trust as you would think.
2465
02:37:46.936 --> 02:37:48.955
You wanna talk about this a little bit?
2466
02:37:49.600 --> 02:37:50.900
Yeah. Sure. So,
2467
02:37:51.280 --> 02:37:51.780
actually,
2468
02:37:53.120 --> 02:37:54.020
it's a
2469
02:37:54.720 --> 02:37:55.220
common
2470
02:37:56.575 --> 02:37:57.075
question
2471
02:37:58.095 --> 02:37:58.595
because,
2472
02:37:59.855 --> 02:38:03.395
you know, the satellites I mean, people don't necessarily know the details about
2473
02:38:04.069 --> 02:38:11.609
what outline of how satellites work, but they're basically quite there's not much intelligence in the satellite. So most intelligence is on the ground on a on the uplink.
2474
02:38:11.910 --> 02:38:13.210
And so we're running,
2475
02:38:14.585 --> 02:38:15.885
several physical
2476
02:38:16.505 --> 02:38:18.125
uplink sites that we control.
2477
02:38:18.665 --> 02:38:24.869
And, I mean, a lot of people will rent space in a satellite uplink colocation or something, but we have our own uplink.
2478
02:38:25.489 --> 02:38:25.989
And
2479
02:38:26.609 --> 02:38:31.350
that gives us a bit more independent control that maybe is, you know, interfering with our equipment.
2480
02:38:33.314 --> 02:38:34.935
And, we run a full nodes
2481
02:38:35.395 --> 02:38:36.455
on on those
2482
02:38:38.515 --> 02:38:40.535
and include the data in a way that,
2483
02:38:41.410 --> 02:38:45.030
gives redundancy for the satellite and upload it. And so
2484
02:38:45.410 --> 02:38:51.455
then you get the client equipment or different types of equipment, most recently in the base station, which is a kind
2485
02:38:52.075 --> 02:38:53.295
of power over Ethernet
2486
02:38:53.995 --> 02:38:56.415
flat panel dish. So you pretty much
2487
02:38:56.955 --> 02:38:57.855
connect it,
2488
02:38:59.210 --> 02:39:04.270
mount it, point it the satellite, and connect it with the Ethernet cable to your router.
2489
02:39:04.811 --> 02:39:05.530
If you have,
2490
02:39:06.170 --> 02:39:07.790
you have a p power of Ethernet
2491
02:39:08.295 --> 02:39:11.515
capable router. If you don't have, you just plug in the power injector.
2492
02:39:12.774 --> 02:39:14.395
And it it relays,
2493
02:39:15.255 --> 02:39:15.755
basically,
2494
02:39:16.800 --> 02:39:21.060
lots of stuff about Bitcoin, you know, real time transactions, blocks us in their mind,
2495
02:39:21.680 --> 02:39:23.380
and a full block history actually
2496
02:39:24.355 --> 02:39:25.535
lightning gossip,
2497
02:39:26.436 --> 02:39:27.255
data updates,
2498
02:39:27.715 --> 02:39:31.255
and the Bitcoin client source code as well, vertically.
2499
02:39:33.110 --> 02:39:40.250
And all of a lot of redundancy and error correction so that, you know, you can get a power cut for an hour and you still recover and all that kind of stuff.
2500
02:39:41.975 --> 02:39:48.315
So then the question that arises is, well, wait a minute. Now I'm trusting Blockstream for this data, and they could send me,
2501
02:39:49.069 --> 02:39:55.250
you know, bad blocks or sends us a sends the transactions and send trusting one person is is a bad idea. And
2502
02:39:56.114 --> 02:39:58.694
so and what Matt was saying is that counterintuitively,
2503
02:39:59.154 --> 02:39:59.895
it's actually
2504
02:40:00.595 --> 02:40:02.694
not really trusting us very much because
2505
02:40:03.770 --> 02:40:06.430
the Bitcoin blockchain is kind of signed
2506
02:40:06.810 --> 02:40:10.910
by miners in a way, you know, all the all the proof of work on it.
2507
02:40:11.609 --> 02:40:12.430
So for
2508
02:40:13.035 --> 02:40:17.535
for us as the node operator to to modify anything, we would have
2509
02:40:18.155 --> 02:40:21.055
to do a lot of, you know, we have to do a lot of money. Right?
2510
02:40:22.230 --> 02:40:23.051
And so,
2511
02:40:23.511 --> 02:40:26.570
you know, the data that comes out of the block site, you feed it into,
2512
02:40:27.910 --> 02:40:31.051
a Bitcoin node that is extended with this
2513
02:40:32.565 --> 02:40:34.025
forward error correction decoding.
2514
02:40:34.485 --> 02:40:37.705
Actually, the data that comes out of the box set is UDP.
2515
02:40:39.365 --> 02:40:40.105
And then
2516
02:40:40.561 --> 02:40:41.940
you feed those UDP
2517
02:40:42.480 --> 02:40:43.860
forward error correction packets
2518
02:40:45.681 --> 02:40:46.181
into,
2519
02:40:47.681 --> 02:40:49.620
Bitcoin that's been extended with
2520
02:40:50.025 --> 02:40:50.525
fiber,
2521
02:40:51.945 --> 02:40:55.005
optimized for satellite use, and it decodes it, basically.
2522
02:40:57.040 --> 02:41:02.580
And you get a full node. So the full node's verifying the proof of work and the transaction validity, so we can't do very much.
2523
02:41:02.960 --> 02:41:04.580
And the other thing you can do
2524
02:41:05.215 --> 02:41:05.715
is
2525
02:41:07.055 --> 02:41:09.234
verify it with very low bandwidth.
2526
02:41:09.774 --> 02:41:12.195
So if you just get something to give you a recent,
2527
02:41:12.840 --> 02:41:19.420
you know, block hash more recent block, and you can check it's in your blockchain, and you know everything is correct up to that point.
2528
02:41:20.065 --> 02:41:24.645
And there are and that you know, you could get them to read you that over a phone call or
2529
02:41:25.505 --> 02:41:26.485
there is a
2530
02:41:28.341 --> 02:41:35.160
there's a phone number that Grubles has in his profile. I think it's, like, 1800 BLK hash or something like that. And if you call that number,
2531
02:41:35.965 --> 02:41:36.285
it,
2532
02:41:36.766 --> 02:41:40.065
it reads you the the most recent block hash, like a time service.
2533
02:41:41.005 --> 02:41:44.306
You can go to that. So that's that's kind of idea. And
2534
02:41:45.190 --> 02:41:46.891
a little bit analogous to
2535
02:41:47.910 --> 02:41:54.011
being on a Bitcoin pitch, you know. If if one of your have on average 8 peers, and if one of them
2536
02:41:54.870 --> 02:41:59.755
I was trying to figure which is invalid data, you would just read by the other ones.
2537
02:42:00.455 --> 02:42:01.995
Ah, yes. The number is 1833
2538
02:42:02.694 --> 02:42:06.790
BLK hash. So if you call that, it will read you stuff about the
2539
02:42:07.091 --> 02:42:08.471
most recent block hash.
2540
02:42:10.450 --> 02:42:11.351
Yeah. So
2541
02:42:12.556 --> 02:42:25.430
if if you're on a peer to peer network and you've got, you know, 8 neighbors and one of them is very fast in feeding you most of the data, but you realize it's it's lying to you, you'll discover that because one of your low bandwidth neighbors will feed you,
2542
02:42:25.810 --> 02:42:30.695
you know, a more work block that conflicts with it. And then you'll you'll realize something's wrong
2543
02:42:31.655 --> 02:42:32.556
and, you know,
2544
02:42:33.096 --> 02:42:36.315
disconnect the fast node or ignore what it's saying.
2545
02:42:38.120 --> 02:42:49.365
So it's the idea. So the the block site is kind of like that. Right? It's a it's an extreme version of that, which is a very fast node single there, and then you have, you know, a very slow kind of
2546
02:42:50.386 --> 02:42:50.886
almost
2547
02:42:51.266 --> 02:43:02.010
human speeds that will check someone. And and some people use it, you know, they're not fully offline. They just use it, you know, you you could use it on a multiple network. So you could have other peers,
2548
02:43:02.645 --> 02:43:07.945
but just with very low bandwidth. So then you would automatically get that kind of cross check and just save on
2549
02:43:09.046 --> 02:43:10.025
Internet traffic.
2550
02:43:10.485 --> 02:43:11.365
And I think the main
2551
02:43:12.260 --> 02:43:15.720
know, for a lot of people, the interesting another interesting about the box set is
2552
02:43:17.140 --> 02:43:21.815
privacy because it's it's received only. Nobody knows your IP address. There's no
2553
02:43:22.375 --> 02:43:22.875
Bitcoin,
2554
02:43:24.296 --> 02:43:27.995
you know, other Bitcoin node in the IP address, so you've got very strong privacy.
2555
02:43:29.335 --> 02:43:29.835
And
2556
02:43:30.750 --> 02:43:31.250
it,
2557
02:43:32.350 --> 02:43:33.810
protects you, you know,
2558
02:43:34.830 --> 02:43:35.890
if you serve it.
2559
02:43:38.555 --> 02:43:39.375
Those can be,
2560
02:43:39.914 --> 02:43:42.095
you know, political or just
2561
02:43:42.795 --> 02:43:43.295
accidents.
2562
02:43:44.475 --> 02:43:45.694
Day before we released
2563
02:43:46.590 --> 02:43:47.410
base station
2564
02:43:48.351 --> 02:43:52.530
version, there's a Canadian lost its Internet connection because of beaver 8 through the,
2565
02:43:54.855 --> 02:44:00.715
like, a kit like a rodent 8 through the fiber cable to the whole app. So stuff stuff happens. Right?
2566
02:44:03.020 --> 02:44:03.520
Yeah.
2567
02:44:06.380 --> 02:44:07.520
I mean, that's fantastic.
2568
02:44:08.780 --> 02:44:09.680
I I think
2569
02:44:11.016 --> 02:44:12.235
I think people underestimate
2570
02:44:12.695 --> 02:44:16.315
how powerful it is that we have a satellite just literally broadcasting,
2571
02:44:17.095 --> 02:44:19.516
Bitcoin block data nonstop 247.
2572
02:44:20.561 --> 02:44:23.860
Can you get Elon Musk to make, like, a competing,
2573
02:44:24.641 --> 02:44:32.355
not competing, but a complimentary service? So, like, you don't have to just trust the Blockstream satellite, but you can get, like, multiple satellite peers.
2574
02:44:33.135 --> 02:44:34.515
That'll be cool. I mean,
2575
02:44:36.500 --> 02:44:39.160
once there is one I mean, people often ask,
2576
02:44:39.620 --> 02:44:40.120
will
2577
02:44:40.740 --> 02:44:42.280
the blocks that become redundant
2578
02:44:42.740 --> 02:44:44.120
after Starlink is,
2579
02:44:44.660 --> 02:44:47.005
you know, more widely deployed than available?
2580
02:44:47.865 --> 02:44:59.180
And the answer actually is no because Starlink is a routed network. It's kinda like you know, GSM or 4 g data in the sky. So it's, you know, there
2581
02:44:59.560 --> 02:45:00.380
are uplink
2582
02:45:01.079 --> 02:45:03.420
and then satellite satellite laser links.
2583
02:45:03.925 --> 02:45:10.860
And so it's not really broadcast. It's it's point to point, and the data is only available to subscribers. So they could selectively cut you off.
2584
02:45:11.660 --> 02:45:15.360
You have to probably identify yourself to pay to sign up for it. Whereas
2585
02:45:16.221 --> 02:45:22.274
and so the same day, if lots of people downloaded it, it would, like, use a lot of data because I mean, we've done it, you know, like, on the Internet.
2586
02:45:23.375 --> 02:45:24.675
Whereas the box that is
2587
02:45:25.694 --> 02:45:26.354
just surplus.
2588
02:45:26.740 --> 02:45:29.320
Yeah. And it I mean, there's there's, like, you know,
2589
02:45:30.101 --> 02:45:31.000
4 satellites
2590
02:45:32.101 --> 02:45:33.160
and 5 transponders
2591
02:45:33.620 --> 02:45:35.080
covering most of the globe.
2592
02:45:35.415 --> 02:45:39.435
And so we just got massive coverage areas that are literally receiving the same data.
2593
02:45:40.295 --> 02:45:42.555
And then there are some areas where there are 2
2594
02:45:43.160 --> 02:45:46.620
2 different satellites covering the same area, and then we send different,
2595
02:45:47.640 --> 02:45:48.700
forward error correction
2596
02:45:49.319 --> 02:45:49.819
code
2597
02:45:50.425 --> 02:46:03.130
of the same data. So if you if you receive both, you can you can buy, like, 2 dishes or 2 2 base stations. And then you'll get the block history twice as fast, and you'll get blocks and half the latency and stuff like that. So it can assemble
2598
02:46:04.010 --> 02:46:09.950
you know, you can receive from either one and it works. But if you receive both of them, you just get the data faster. So it's kind of a neat
2599
02:46:10.935 --> 02:46:12.955
trick of forward air correction codes.
2600
02:46:16.694 --> 02:46:20.319
Yeah. I'm kinda jealous I don't have my own satellites to also host
2601
02:46:20.779 --> 02:46:22.159
such a service. Mhmm.
2602
02:46:22.939 --> 02:46:27.040
We don't either. They're they're, like, very expensive. We're leasing bandwidth on,
2603
02:46:27.395 --> 02:46:30.936
on, like, commercial satellites that have satellite TV and other, like,
2604
02:46:31.556 --> 02:46:33.415
industrial, like, data uses.
2605
02:46:34.115 --> 02:46:38.510
So we have probably about an HDTV channels worth of bandwidth and which
2606
02:46:39.130 --> 02:46:39.630
is,
2607
02:46:40.010 --> 02:46:40.750
you know,
2608
02:46:42.170 --> 02:46:42.670
optimizing,
2609
02:46:43.530 --> 02:46:44.030
like,
2610
02:46:45.015 --> 02:46:46.715
custom compressor for
2611
02:46:47.175 --> 02:46:48.154
Bitcoin transactions.
2612
02:46:49.255 --> 02:46:53.274
So it's actually kinda cool. Like, Peter will work on a bit and
2613
02:46:53.641 --> 02:46:54.601
implemented it. And,
2614
02:46:56.601 --> 02:46:58.681
the question is on the Bitcoin network. It it's,
2615
02:46:59.160 --> 02:47:00.940
basically, losslessly compresses
2616
02:47:01.320 --> 02:47:02.221
Bitcoin transactions
2617
02:47:03.175 --> 02:47:05.274
with, you know, just with the transaction context.
2618
02:47:05.895 --> 02:47:07.354
So that saves a bit of space.
2619
02:47:09.654 --> 02:47:12.820
So there's there's lots of optimizations that went into it. And
2620
02:47:14.080 --> 02:47:18.900
yeah. So we can squeeze, you know, full stuff out of, 1.5,
2621
02:47:20.720 --> 02:47:21.220
megabits
2622
02:47:22.625 --> 02:47:34.030
of, raw raw data. But it it will Right. Fully sync a node from scratch, which is kinda surprising. Right? You just plug this thing and leave it there for, I don't know, week or so, and you'll have a synced node from scratch.
2623
02:47:34.729 --> 02:47:36.510
What I kinda like about it is,
2624
02:47:37.315 --> 02:47:41.096
I mean, I guess credit to the big the blockchain marketing strategy,
2625
02:47:42.596 --> 02:47:44.056
is this idea that
2626
02:47:45.529 --> 02:47:50.750
if if a government wanted to stop the blockchain satellite, they'd have to take out TV.
2627
02:47:51.210 --> 02:47:52.670
They'd have to take out other
2628
02:47:53.140 --> 02:47:55.414
Well, one thing that's it's not like just your satellite.
2629
02:47:55.954 --> 02:48:00.694
Yeah. If there's one thing that's gonna upset people, it's gonna lose their TV. Right?
2630
02:48:02.620 --> 02:48:06.000
Yeah. I mean, we also because there are some overlapping
2631
02:48:06.460 --> 02:48:08.480
coverage zones, we try to get
2632
02:48:09.725 --> 02:48:10.944
because because the satellites
2633
02:48:11.245 --> 02:48:13.345
are owned and operated by different
2634
02:48:14.444 --> 02:48:16.305
international companies. And
2635
02:48:17.165 --> 02:48:17.665
so
2636
02:48:18.170 --> 02:48:23.069
we tried to get different operators for overlapping satellites. So if one
2637
02:48:24.410 --> 02:48:25.050
if one got
2638
02:48:26.515 --> 02:48:28.835
like, it fall back on the other one or something like that.
2639
02:48:29.234 --> 02:48:33.415
The satellites is they are we'll say, well, what happens if the Internet connection
2640
02:48:34.680 --> 02:48:36.380
goes down at the uplink site.
2641
02:48:37.560 --> 02:48:39.819
We actually have satellite redundancy for that because
2642
02:48:41.080 --> 02:48:43.814
the west uplink is looking at the east
2643
02:48:44.274 --> 02:48:44.774
downlink.
2644
02:48:45.075 --> 02:48:46.215
You know? So
2645
02:48:46.835 --> 02:48:47.575
if the
2646
02:48:48.115 --> 02:48:51.015
if the Internet connection goes down on the west uplink,
2647
02:48:51.360 --> 02:48:53.220
which is heading out towards,
2648
02:48:54.320 --> 02:48:55.700
Europe and Africa,
2649
02:48:57.440 --> 02:49:03.205
then what will happen is the latency will get worse, but it will get the data from the, you know, the next satellite over.
2650
02:49:03.665 --> 02:49:09.511
Like, it will go up and down and up again kind of thing. So we wanna eventually get another one,
2651
02:49:10.370 --> 02:49:15.431
like another uplink site in Europe or Asia so that we can make a full circle. So we got 3,
2652
02:49:16.290 --> 02:49:17.030
you know,
2653
02:49:18.025 --> 02:49:18.845
3 ground
2654
02:49:19.385 --> 02:49:19.885
uplinks
2655
02:49:20.985 --> 02:49:27.245
so that if there's Internet at any one, then the whole system would keep running. At the moment, it's, you know, it's only double redundancy.
2656
02:49:29.330 --> 02:49:38.335
That's so cool. Is that why you named the company Blockstream? And Google No. That was, like, coincidental, but it does seem appropriate in that context. Yeah.
2657
02:49:39.035 --> 02:49:40.815
Because the logo kinda looks like,
2658
02:49:42.075 --> 02:49:43.855
satellites around the Earth or something.
2659
02:49:44.610 --> 02:49:45.351
Yeah. That's
2660
02:49:45.730 --> 02:49:48.391
kinda sound like a stream of blocks, I guess.
2661
02:49:52.805 --> 02:49:55.385
I mean, this has been great so far, guys. I appreciate
2662
02:49:56.165 --> 02:49:58.024
yeah. Hit us, Adam. Go.
2663
02:49:58.645 --> 02:50:02.505
Yes. So another question people keep asking is when Jade,
2664
02:50:03.910 --> 02:50:09.690
we know we're working on supply chain, so we should we should be able to get back on preorder within a couple of weeks, hopefully.
2665
02:50:13.795 --> 02:50:14.455
And yeah.
2666
02:50:15.314 --> 02:50:19.015
And I guess I guess they're also a nice price point at $40.
2667
02:50:19.475 --> 02:50:21.415
So our thinking is really the,
2668
02:50:21.910 --> 02:50:29.770
you know, we want to make it open source compatible so people can run their own, like, build their own. So it might be a way to avoid supply chain risks.
2669
02:50:30.230 --> 02:50:36.755
And, you know, they got the source code so they can add, submit features, or, you know, do other things with it
2670
02:50:37.375 --> 02:50:37.875
and
2671
02:50:38.391 --> 02:50:41.210
keep the cost down. So we've managed to make it
2672
02:50:42.230 --> 02:50:46.650
arguably similar security as a secure element without having the cost of a secure element.
2673
02:50:48.345 --> 02:50:55.385
That's pretty cool. Like, if you combine a low cost Raspberry Pi with the Jade, in in, like, a package and,
2674
02:50:56.320 --> 02:50:59.380
there was some kind of jade app for the Raspberry Pi,
2675
02:51:00.720 --> 02:51:01.860
for the the ping,
2676
02:51:02.320 --> 02:51:03.840
back end server. That would be a cool,
2677
02:51:04.835 --> 02:51:08.694
kind of Christmas gift or present for new Bitcoiner friends
2678
02:51:09.154 --> 02:51:13.650
to help them get started in, like, a self sovereign way. That way they would be able to do,
2679
02:51:15.570 --> 02:51:16.390
like, Bitcoin
2680
02:51:16.770 --> 02:51:19.910
or liquid Bitcoin or lightning or,
2681
02:51:20.965 --> 02:51:27.545
even, like, Tether kind of assets on top of liquid, all with their same Raspberry Pi and Jade Wallet setup. Right?
2682
02:51:28.405 --> 02:51:28.905
Right.
2683
02:51:30.340 --> 02:51:30.840
Yeah.
2684
02:51:32.020 --> 02:51:32.520
There's
2685
02:51:33.699 --> 02:51:37.960
a number of different, there's a company called Start 9, which which makes
2686
02:51:39.035 --> 02:51:43.455
right, like, Bitcoin full nodes, and they have some sort of decentralized
2687
02:51:44.314 --> 02:51:45.615
peer hosted apps.
2688
02:51:46.140 --> 02:51:48.939
I think it's like a chat app. I think they have,
2689
02:51:50.460 --> 02:51:53.279
an elements node on it or or an option to install
2690
02:51:53.806 --> 02:51:55.905
or something. My understanding is that their,
2691
02:51:56.285 --> 02:52:00.785
full node product doesn't use an external s SSD yet. So,
2692
02:52:01.811 --> 02:52:03.431
they're, like, they use a prunes,
2693
02:52:03.891 --> 02:52:06.710
Bitcoin d note on the SD card only.
2694
02:52:07.250 --> 02:52:07.910
I see.
2695
02:52:08.290 --> 02:52:14.765
So I guess that's to get the cost down or maybe just make it easier. But I could see why you would wanna combine that with,
2696
02:52:15.864 --> 02:52:19.725
like, the Jade device to get the the overall cost down. And, also,
2697
02:52:21.500 --> 02:52:22.800
we're working on the mempool,
2698
02:52:23.660 --> 02:52:24.720
Explorer app
2699
02:52:25.100 --> 02:52:26.540
for the start 9 Labs,
2700
02:52:27.180 --> 02:52:29.359
res not Raspberry Pi platform.
2701
02:52:30.005 --> 02:52:35.465
So that would be really cool. Since they have that liquid node, we could actually have the mempool explorer
2702
02:52:35.925 --> 02:52:40.930
on both the main chain and, liquid side chain all on that Raspberry Pi.
2703
02:52:42.189 --> 02:52:46.210
Yeah. I mean, it's it's kinda cool that you can run your own block explorer too. So,
2704
02:52:47.525 --> 02:52:49.465
one click installation. Yeah.
2705
02:52:49.766 --> 02:52:50.266
Yeah.
2706
02:52:52.885 --> 02:52:54.266
Also good for privacy.
2707
02:52:55.909 --> 02:53:01.689
Yeah. Originally, like, that was the original vision of the the project, and we started using the Blockstream,
2708
02:53:03.029 --> 02:53:12.064
fork of electris for our, production server back end. But when we wanted to get it working for home users on Raspberry Pi,
2709
02:53:13.110 --> 02:53:18.971
it's just too heavy. Right? It's it's meant for, like, high performance server. So we had to do a lot of work to
2710
02:53:19.585 --> 02:53:23.365
kind of, get it working with the Roman z Electris,
2711
02:53:24.145 --> 02:53:24.645
which
2712
02:53:25.505 --> 02:53:34.370
which can run on a Raspberry Pi. But if if you're trying to, like, explore an address with more than a 100 transactions or so, it'll just,
2713
02:53:34.750 --> 02:53:36.290
give up. Right? Because
2714
02:53:37.025 --> 02:53:37.745
it doesn't have,
2715
02:53:38.385 --> 02:53:42.805
that full index. That's the trade off. There seems to be a lot of, like,
2716
02:53:43.345 --> 02:53:43.845
Electrum.
2717
02:53:45.960 --> 02:53:48.380
I mean, Electrum's being a kind of
2718
02:53:50.120 --> 02:53:51.260
a back end for
2719
02:53:52.454 --> 02:53:52.954
indexing
2720
02:53:53.574 --> 02:53:55.274
Bitcoin data, basically.
2721
02:53:56.694 --> 02:54:01.940
And there are a few different like from personal server, they they export like Electron Pro. So Blockstreams,
2722
02:54:04.880 --> 02:54:11.865
open source explorer is also an Electrum server. So, actually, the Aqua Wallet is an Electrum client, and it connects
2723
02:54:12.965 --> 02:54:17.625
to the Blockstream as an Electrum server. But you can you can point Electra other Electrum clients at
2724
02:54:18.260 --> 02:54:18.760
Blockstreams,
2725
02:54:19.779 --> 02:54:21.000
Black Explorer, actually.
2726
02:54:22.739 --> 02:54:25.239
But in terms of the the footprint
2727
02:54:26.745 --> 02:54:28.846
of the thing, I think it's
2728
02:54:29.865 --> 02:54:32.125
the, fastest and most scalable
2729
02:54:32.745 --> 02:54:38.360
Electrum server you can get at the moment, but it's it's a bit of a beast. Right? It indexes everything can
2730
02:54:39.780 --> 02:54:45.445
because everything. So it chews up or it doesn't fit in Raspberry Pi very well, and it's it's kinda overkill for, like, a personal use.
2731
02:54:45.926 --> 02:54:47.785
It's it's designed to, like, you know,
2732
02:54:50.245 --> 02:54:52.186
through thousands of thousands of user.
2733
02:54:53.420 --> 02:54:56.960
So, yeah, I think it's right. Yeah. I mean, that's what we use for the production.
2734
02:54:57.900 --> 02:54:58.400
Yep.
2735
02:54:59.100 --> 02:54:59.600
Good.
2736
02:55:00.585 --> 02:55:04.904
Yeah. On on mempool space, we have several servers running it, and it's just a beast.
2737
02:55:05.545 --> 02:55:09.564
And and I I, it's really cool, though, that it has its own,
2738
02:55:09.960 --> 02:55:12.060
like, REST API, and a lot of,
2739
02:55:12.760 --> 02:55:14.620
applications and Bitcoin wallets
2740
02:55:15.399 --> 02:55:17.899
all integrate, like, a lot of, transaction,
2741
02:55:18.600 --> 02:55:19.100
broadcast
2742
02:55:19.596 --> 02:55:20.096
services.
2743
02:55:21.115 --> 02:55:25.375
A a lot of, people use this API. I would actually estimate that the
2744
02:55:25.756 --> 02:55:28.096
the Blockstream, Electris API that
2745
02:55:28.930 --> 02:55:33.029
you use on, Blockstreams Explorer and that we also use on the Mempool Space Explorer
2746
02:55:33.409 --> 02:55:37.510
is probably, like, at least 10 times as popular as the actual,
2747
02:55:38.534 --> 02:55:39.354
Block Explorer,
2748
02:55:40.215 --> 02:55:43.734
website itself. Right? Just because of all the other integrations and,
2749
02:55:44.375 --> 02:55:51.260
and wallet apps. And and also because, it's available on the Tor hidden service onion. So Mhmm.
2750
02:55:52.020 --> 02:55:54.040
Anybody can can query
2751
02:55:54.886 --> 02:55:59.306
transactions or addresses in their custom application or broadcast transactions,
2752
02:55:59.766 --> 02:56:03.465
but over Tor so their, privacy is protected. I think that's,
2753
02:56:04.450 --> 02:56:07.170
really cool, and more people need to to run these,
2754
02:56:07.730 --> 02:56:09.510
Explora API servers.
2755
02:56:10.370 --> 02:56:13.030
Yeah. I mean, actually, somebody proposed that
2756
02:56:13.525 --> 02:56:15.625
it wouldn't be that hard to,
2757
02:56:18.085 --> 02:56:18.585
mirror
2758
02:56:19.846 --> 02:56:20.346
blockchain
2759
02:56:21.490 --> 02:56:22.950
dot infos APIs
2760
02:56:23.811 --> 02:56:35.546
so that people could run their own blockchain dot info kind of, right? Because it it has a few rest APIs that are just coincidentally a little bit different to the Explorer ones. But, you know, the Blockstream Explorer has,
2761
02:56:36.086 --> 02:56:39.170
like, a send API. You can send transactions through it.
2762
02:56:39.729 --> 02:56:40.229
Right.
2763
02:56:42.370 --> 02:56:44.710
And I think at times the blockchain dot info,
2764
02:56:45.890 --> 02:56:46.390
like,
2765
02:56:48.155 --> 02:56:51.855
gets a bit out of date. You know, I think it it it all nodes.
2766
02:56:54.635 --> 02:56:57.070
It doesn't appear to be made well at times. So
2767
02:56:57.551 --> 02:57:02.051
it could be good for people because there there were, like, you know, actual wallets and services that rely on its APIs.
2768
02:57:02.670 --> 02:57:05.650
So I think it might be good for them to sort of self host,
2769
02:57:05.955 --> 02:57:10.935
and so it'll be easier for them to self host if the APIs were the same. So that's the kind of missing
2770
02:57:12.354 --> 02:57:16.489
feature. That was that was one of the things that I think, contributed
2771
02:57:17.189 --> 02:57:17.850
to mempool's,
2772
02:57:19.109 --> 02:57:23.045
app getting so popular is that for the fee estimation, we,
2773
02:57:23.525 --> 02:57:26.505
implemented the same API as I think earn.com.
2774
02:57:27.285 --> 02:57:34.500
And then, of course, since we're using your back end, we we support the same API as the Blockstream Explorer. So it's nice to be able to,
2775
02:57:35.520 --> 02:57:37.220
now on the Raspberry Pi,
2776
02:57:37.600 --> 02:57:38.420
App Store,
2777
02:57:38.755 --> 02:57:43.575
you know, distributions to be able to have normal home users just do, like, a one click
2778
02:57:43.955 --> 02:57:44.455
installation
2779
02:57:44.995 --> 02:57:47.495
and have that API back end up and running
2780
02:57:48.120 --> 02:57:49.020
quickly and very easily.
2781
02:57:49.480 --> 02:57:54.140
And then now what we're seeing is a lot of, wallet apps. I think Specter supports,
2782
02:57:55.480 --> 02:57:57.185
of course, they support blockstream.info
2783
02:57:57.885 --> 02:57:58.545
and mempool.space,
2784
02:57:59.085 --> 02:58:07.790
but more importantly, they support the next option, which is, like, self hosted mempool space back end. Right? So you can just point it to your Raspberry Pi. And I think that's,
2785
02:58:08.570 --> 02:58:15.605
that was kinda like the vision for the for the project, right, is to be able to empower individuals to self host very easily.
2786
02:58:16.785 --> 02:58:20.965
Yeah. It's pretty cool. I I think that self hosting is good. I mean,
2787
02:58:21.345 --> 02:58:21.845
sometimes
2788
02:58:23.300 --> 02:58:24.279
people write
2789
02:58:25.140 --> 02:58:26.600
kind of web mash up applications,
2790
02:58:27.540 --> 02:58:29.720
and then they rely on third party
2791
02:58:30.100 --> 02:58:32.520
service and APIs, and they cannot import,
2792
02:58:33.256 --> 02:58:35.995
accidentally import trust or service
2793
02:58:36.855 --> 02:58:37.995
reliability risk,
2794
02:58:38.455 --> 02:58:38.955
basically.
2795
02:58:43.120 --> 02:58:46.820
Have not not to change the subject. I know we're getting on, like, the 3 hour mark.
2796
02:58:47.440 --> 02:58:47.760
But,
2797
02:58:48.755 --> 02:58:58.520
did you want to, talk about BISC a little bit, Matt? I don't know if we still have time. Yes. Just hit us real quick on, and we're gonna have you back, Wizz, so don't worry about it. Don't worry
2798
02:58:58.980 --> 02:58:59.480
about,
2799
02:59:01.860 --> 02:59:09.145
us missing us missing this. But I I I think it's very important. I think Bisk is the one of the most important projects in Bitcoin.
2800
02:59:09.846 --> 02:59:11.546
We've been very clear about that
2801
02:59:12.085 --> 02:59:13.546
here at Cielo Dispatch.
2802
02:59:14.800 --> 02:59:18.340
So hit us with it. You know? What what what is the future of BISC?
2803
02:59:18.880 --> 02:59:23.475
What where where do we have to be concerned, and and where are you coming at it?
2804
02:59:25.555 --> 02:59:26.055
Well,
2805
02:59:26.515 --> 02:59:28.854
it's interesting you say Biscuit is one of the most,
2806
02:59:29.635 --> 02:59:36.569
important projects. It it's probably the only project that touches actual fiat money. Right? Like,
2807
02:59:37.029 --> 02:59:38.090
all of the other,
2808
02:59:39.430 --> 02:59:39.930
cool
2809
02:59:40.855 --> 02:59:42.395
Bitcoin projects are
2810
02:59:42.775 --> 02:59:47.275
kind of like crypto to crypto or layer 2 or side chain
2811
02:59:47.990 --> 02:59:49.370
or or basically,
2812
02:59:50.150 --> 02:59:50.650
using
2813
02:59:51.590 --> 02:59:54.410
almost all, crypt cryptography based.
2814
02:59:54.845 --> 02:59:58.225
And Bisk is is like the only project that dared to,
2815
02:59:59.165 --> 03:00:03.230
touch actual fiat money. And so it it's a really unique challenge to,
2816
03:00:05.310 --> 03:00:06.770
to, like, make Bisc work,
2817
03:00:07.790 --> 03:00:13.354
I mean, for a number of reasons. Like, obviously, the the fiat payment systems in every country are totally different
2818
03:00:13.734 --> 03:00:16.475
and, every fiat currency has its own markets,
2819
03:00:17.814 --> 03:00:27.725
with its own with their own challenges and and stuff. But but more so than all that, you're taking all of that and you're trying to implement it in a decentralized and censorship resistant way.
2820
03:00:28.205 --> 03:00:28.705
And,
2821
03:00:29.404 --> 03:00:32.705
that's like, we we talked about liquid a lot and and other,
2822
03:00:33.645 --> 03:00:35.984
systems for censorship resistance, but,
2823
03:00:37.320 --> 03:00:38.460
it seems like
2824
03:00:39.561 --> 03:00:43.500
the the on chain fees are going to pump forever.
2825
03:00:43.960 --> 03:00:45.500
And so, unfortunately,
2826
03:00:46.085 --> 03:00:47.145
since Bisk was
2827
03:00:47.604 --> 03:00:51.705
developed a very long time ago, it's, like, over 6 years old now, I think.
2828
03:00:52.645 --> 03:00:55.225
Bisk was developed in this time where
2829
03:00:56.070 --> 03:01:04.250
the the thought of of an on chain fee market was like a very distant future away. And now that it that it's kind of here,
2830
03:01:05.375 --> 03:01:09.155
you know, Bisc is is kind of forced to to figure out some,
2831
03:01:10.335 --> 03:01:10.835
scaling,
2832
03:01:12.670 --> 03:01:14.689
you know, options. And and and
2833
03:01:15.069 --> 03:01:15.569
understandably,
2834
03:01:15.949 --> 03:01:16.449
like,
2835
03:01:17.069 --> 03:01:26.944
the it it's not it's not an easy, problem to solve. Right? Because Bisc is really Bisc users are really enjoying the, the security and the privacy
2836
03:01:27.324 --> 03:01:31.345
and the low transaction fees. But now that the the fees go up,
2837
03:01:31.790 --> 03:01:33.810
they're gonna have to, you know,
2838
03:01:34.190 --> 03:01:41.665
like, if you wanna do a $100 trade on bisque, you're not gonna spend 20 or $30 for on chain fees. Right? It just totally prices out
2839
03:01:42.145 --> 03:01:44.485
a lot of these use cases. And so
2840
03:01:45.185 --> 03:01:47.685
now the users are in a situation where,
2841
03:01:48.545 --> 03:01:52.000
we kinda have to go back to the drawing board and say, okay. Well, how can we
2842
03:01:52.540 --> 03:01:54.800
how can we make bisque version 2,
2843
03:01:56.380 --> 03:01:58.240
you know, to to solve
2844
03:01:58.755 --> 03:02:02.694
not only the fees issue, but a lot of the other issues that DISC,
2845
03:02:03.154 --> 03:02:05.814
has encountered over the past several years.
2846
03:02:06.850 --> 03:02:09.830
Maybe, you know, maybe we can try to improve the user experience.
2847
03:02:10.370 --> 03:02:11.570
Maybe we can try and,
2848
03:02:12.450 --> 03:02:19.495
make it more social or more community oriented. And and it's it's a challenge. Right? Because everything is is a balance. And if you,
2849
03:02:20.435 --> 03:02:22.535
you know, say say you implement
2850
03:02:24.210 --> 03:02:28.950
support for liquid as a base layer, as an optional second base layer,
2851
03:02:29.410 --> 03:02:30.790
then, you know,
2852
03:02:31.386 --> 03:02:32.926
maybe you have to, like,
2853
03:02:33.705 --> 03:02:39.710
maybe you have to bootstrap a new market because now you're not just doing, like, Bitcoin to USD. You would have to have, like, an
2854
03:02:40.030 --> 03:02:40.530
LBTC
2855
03:02:40.910 --> 03:02:43.330
to USD market. And so,
2856
03:02:44.670 --> 03:02:53.795
you know, market makers will show up and provide liquidity, but it it it just gets more and more difficult. Right? And then you you also have, like, the the technical,
2857
03:02:54.415 --> 03:02:58.210
implementation under the hood. You have to support multiple blockchains now
2858
03:02:58.670 --> 03:02:59.170
and,
2859
03:02:59.551 --> 03:03:03.091
that increases, like, the computational cost. Like, Bisc is already,
2860
03:03:03.630 --> 03:03:09.045
pretty heavy app. But now if you, you know, add support for a different base layer, what are you gonna use? More CPU.
2861
03:03:09.585 --> 03:03:13.170
So then the UX also could suffer. So it it's very,
2862
03:03:13.810 --> 03:03:16.550
difficult to to solve this problem without,
2863
03:03:17.650 --> 03:03:18.550
you know, really
2864
03:03:21.074 --> 03:03:21.574
sacrificing,
2865
03:03:22.515 --> 03:03:24.375
some some important points.
2866
03:03:24.995 --> 03:03:25.734
And so,
2867
03:03:26.755 --> 03:03:32.970
yeah, it's it's a it's a difficult problem. And I think the future of this, like, in the version 2, will probably be more
2868
03:03:33.829 --> 03:03:34.649
like a generic
2869
03:03:35.109 --> 03:03:35.609
contract
2870
03:03:35.989 --> 03:03:36.489
execution
2871
03:03:37.430 --> 03:03:37.930
system.
2872
03:03:39.436 --> 03:03:45.615
So maybe the security will even be not part of the basic protocol. This is this is still, like,
2873
03:03:46.840 --> 03:03:50.140
conceptual and and being discussed and proposed. But,
2874
03:03:51.399 --> 03:03:51.899
say
2875
03:03:52.439 --> 03:03:52.939
say,
2876
03:03:54.455 --> 03:03:57.516
Matt, you and I wanna trade some Bitcoin for some Fiat,
2877
03:03:57.895 --> 03:03:59.915
and, we kinda know each other,
2878
03:04:00.375 --> 03:04:03.890
but we you know? So so you there's some reputational,
2879
03:04:05.630 --> 03:04:07.650
clout there. Like, maybe that,
2880
03:04:08.725 --> 03:04:10.345
you know, that that's that's, like,
2881
03:04:10.725 --> 03:04:15.225
good for some use cases, but bad for privacy. Right? Like, you wanna be able to trade
2882
03:04:15.931 --> 03:04:21.690
anonymously with other anonymous individuals, but still have security. Right? So so you want to,
2883
03:04:22.655 --> 03:04:30.675
you don't maybe you don't want a reputation system. Right? Or maybe you want a pseudonymous reputation system. So these are all the kinds of decisions that
2884
03:04:31.570 --> 03:04:36.950
we're gonna have to figure out in version 2. And I think for now, the only real optimizations we can do are,
2885
03:04:37.971 --> 03:04:38.471
obviously,
2886
03:04:38.995 --> 03:04:44.535
adding support for layer 2 stuff like liquid, which is, similar to Bitcoin. So it's not
2887
03:04:44.915 --> 03:04:48.990
super difficult to to add that, but it still is, a big challenge. And then
2888
03:04:49.610 --> 03:04:50.110
optimizing
2889
03:04:50.570 --> 03:04:51.070
the,
2890
03:04:51.770 --> 03:04:54.590
the on chain usage on the on the main chain. Right? So
2891
03:04:55.050 --> 03:04:55.550
maybe,
2892
03:04:56.016 --> 03:04:59.556
you know, maybe Biscuit is still gonna be very popular if you wanna buy $10,000
2893
03:05:00.016 --> 03:05:04.275
worth of Bitcoin. You don't mind paying 20 or $30. Right? But for the $100 trades,
2894
03:05:04.760 --> 03:05:06.300
maybe those guys will,
2895
03:05:07.079 --> 03:05:11.020
decide to go to liquid or some some other, you know,
2896
03:05:13.226 --> 03:05:15.465
some other venues. So it it's a really tricky,
2897
03:05:15.865 --> 03:05:17.245
problem to solve. Right?
2898
03:05:26.140 --> 03:05:26.640
Yep.
2899
03:05:27.695 --> 03:05:31.235
I I thought Adam was gonna jump in there. I I look.
2900
03:05:31.775 --> 03:05:34.895
I I 100% agree. I think BISC is
2901
03:05:35.830 --> 03:05:39.930
like I said, I think it's one of the most important projects that we have in the space.
2902
03:05:41.910 --> 03:05:45.925
I appreciate you going in into detail about it,
2903
03:05:46.865 --> 03:05:48.085
because I feel like,
2904
03:05:48.625 --> 03:05:51.045
people take it for granted. People don't realize,
2905
03:05:53.770 --> 03:05:58.990
people don't realize what the stakeholders of each of these projects put forward
2906
03:06:00.274 --> 03:06:03.015
to to make those projects what they are.
2907
03:06:05.475 --> 03:06:09.335
And at the end of the day, like, we can talk all about censorship resistance.
2908
03:06:09.851 --> 03:06:11.311
We can talk about distribution,
2909
03:06:11.851 --> 03:06:18.511
but it comes down to people. Like, people are running this shit. Right? And and if you talk about it at scale, people are running
2910
03:06:19.506 --> 03:06:22.645
people are running shit, man. And and and they're they're vulnerable.
2911
03:06:24.545 --> 03:06:26.085
Wiz is one of those people,
2912
03:06:26.960 --> 03:06:31.940
and he just fucking throws himself out there. So I I appreciate everything he fucking does.
2913
03:06:33.761 --> 03:06:35.780
I appreciate what bisque
2914
03:06:36.285 --> 03:06:39.505
what they what the stakeholders are bisque working on,
2915
03:06:40.845 --> 03:06:47.560
and I look forward to what they have in store for us. I I I would say to you is is I look forward to seeing you in Miami.
2916
03:06:48.660 --> 03:06:51.560
We're going to have a live civil dispatch
2917
03:06:51.860 --> 03:06:54.439
directly from our citadel in Miami.
2918
03:06:56.885 --> 03:07:00.265
That will be a rented citadel, but it'll be a fantastic dispatch.
2919
03:07:01.205 --> 03:07:04.665
So I look forward to that. I mean, we're we're gonna be talking about
2920
03:07:06.870 --> 03:07:10.410
the the best needs to transition, basically.
2921
03:07:11.030 --> 03:07:14.250
Best needs to transition from a low fee environment
2922
03:07:15.165 --> 03:07:17.824
to a high fee sustained environment.
2923
03:07:18.765 --> 03:07:19.265
And,
2924
03:07:20.685 --> 03:07:25.130
that's going to be a messy transition, but it's a transition that has to happen.
2925
03:07:25.830 --> 03:07:29.050
And we are gonna watch that happen here at dispatch,
2926
03:07:29.670 --> 03:07:31.529
and we're gonna try and
2927
03:07:34.455 --> 03:07:36.075
we're gonna try and explain
2928
03:07:36.855 --> 03:07:40.636
where all the stakeholders are coming from, basically. Would you agree, Wiz?
2929
03:07:41.600 --> 03:07:43.779
Yeah. You raised a good point. It's like,
2930
03:07:44.720 --> 03:07:49.785
I don't think anyone appreciates, like, the amount of, hard work by really smart people,
2931
03:07:50.165 --> 03:07:53.705
at Blockstream that went into, like, the element side chain project
2932
03:07:54.085 --> 03:07:57.225
and how much work goes into, you know, coordinating
2933
03:07:57.720 --> 03:07:58.699
the liquid federation,
2934
03:08:00.600 --> 03:08:05.340
or, you know, how much hard work went into the bisque, project. Like, everyone kinda
2935
03:08:06.405 --> 03:08:15.705
naturally takes the the tools for granted or the on chain fees, like, the low fee environment for granted. Everyone takes the security of Bitcoin for granted. Right? It's just,
2936
03:08:16.790 --> 03:08:19.050
so easy to do right now, like,
2937
03:08:19.990 --> 03:08:20.650
5 sat,
2938
03:08:21.030 --> 03:08:23.931
you know, on chain transaction and have it confirmed. But,
2939
03:08:24.955 --> 03:08:26.495
once those fees get up,
2940
03:08:27.115 --> 03:08:28.155
people get really,
2941
03:08:30.636 --> 03:08:31.136
yeah.
2942
03:08:31.730 --> 03:08:35.270
Then that's actually the stated mission of the the mempool project, is to,
2943
03:08:35.890 --> 03:08:41.190
help the Bitcoin community transition to a multilayer ecosystem, right, where we have these
2944
03:08:41.556 --> 03:08:43.415
layer 2 or even layer 3
2945
03:08:45.155 --> 03:08:50.455
systems that enable new use cases like like liquid and bisk,
2946
03:08:51.220 --> 03:08:55.240
new new banking. Right? You can do peer to peer lending or you can do,
2947
03:08:56.580 --> 03:09:01.385
trading of of different fiat currencies even. Right? That's,
2948
03:09:01.845 --> 03:09:03.465
that's the real future because,
2949
03:09:04.805 --> 03:09:06.745
in my opinion, KYC is
2950
03:09:08.160 --> 03:09:10.880
the illicit activity. Right? And,
2951
03:09:11.359 --> 03:09:13.779
all of these layer 2 and layer 3
2952
03:09:15.465 --> 03:09:16.605
banking systems
2953
03:09:17.226 --> 03:09:24.365
basically implement similar banking services that you would get from a traditional fiat bank but without KYC. Right? If you want do it?
2954
03:09:26.520 --> 03:09:29.260
Should we do it? Adam, Adam, check this out.
2955
03:09:31.239 --> 03:09:33.180
Are many places to buy Bitcoin.
2956
03:09:33.846 --> 03:09:35.865
They collect your personal information
2957
03:09:36.726 --> 03:09:38.585
and jeopardize your privacy.
2958
03:09:40.006 --> 03:09:42.800
K y c is the illicit activity.
2959
03:09:44.700 --> 03:09:46.000
This is open source.
2960
03:09:46.460 --> 03:09:48.480
It does not collect user data.
2961
03:09:48.940 --> 03:09:50.800
You keep your private keys.
2962
03:10:03.970 --> 03:10:04.949
I love that.
2963
03:10:08.449 --> 03:10:09.510
Shout out to Pedro.
2964
03:10:10.176 --> 03:10:11.155
Couldn't help myself.
2965
03:10:11.615 --> 03:10:14.756
The awesome designer who made that. Yeah. And I think that's the
2966
03:10:15.295 --> 03:10:16.355
that's the real
2967
03:10:17.430 --> 03:10:20.550
that's the real future, right, of of all of this hard work is that,
2968
03:10:21.030 --> 03:10:23.770
we get to we get to rebuild the banking system,
2969
03:10:25.245 --> 03:10:31.104
on our own terms using cryptography and and decentralized systems. And we get to decide
2970
03:10:31.570 --> 03:10:37.750
what is the correct balance of security and privacy and censorship resistance and cost and speed
2971
03:10:38.370 --> 03:10:41.190
and user experience. Like, we get to
2972
03:10:41.556 --> 03:10:43.495
build all of these new things. And,
2973
03:10:45.075 --> 03:10:57.220
it's honestly it's like a sometimes it's a thankless job. Right? Like, when you see these trolls on Twitter saying liquid is a shit coin or bisks it's like, come on, guys. Like, we're we're trying to build a new system for everyone here,
2974
03:10:57.680 --> 03:11:04.176
and it has challenges like any other project, but even more challenges because you're trying to build something in a decentralized
2975
03:11:04.556 --> 03:11:08.176
way, in a censorship resistant way, where you know the government's going to,
2976
03:11:09.390 --> 03:11:24.350
not be happy about what you're building. Right? And Adam is the, you know, the OG cypherpunk here, you know, doing he he's been doing it longer than any of us, like printing source code on t shirts, right, and and all kinds of crazy stuff. This this war is not
2977
03:11:25.130 --> 03:11:25.790
a new,
2978
03:11:26.810 --> 03:11:30.750
war. Right? It it's it's all about freedom for the people and,
2979
03:11:31.654 --> 03:11:33.194
freeing them not only from
2980
03:11:33.895 --> 03:11:41.680
fiat debt slavery, but also from mass surveillance and and capital controls and and and all of these horrible things. So,
2981
03:11:43.580 --> 03:11:45.199
we're doing this for the community,
2982
03:11:46.220 --> 03:11:49.195
and, you know, maybe have a maybe have a little bit more
2983
03:11:49.815 --> 03:11:51.035
respect for one another,
2984
03:11:51.415 --> 03:11:58.760
you know, developers in the space. Like, let's not troll each other so much. We're all on the same team here. If if one project is making a privacy,
2985
03:11:59.779 --> 03:12:12.895
enhancing tool, that's great. You know? Like, let's let's collaborate and work together. Let's not, troll each other and and, fight with one another. It's just a waste of all of our time. We should be working together because we're all on the same team.
2986
03:12:22.235 --> 03:12:22.735
100%.
2987
03:12:23.595 --> 03:12:24.095
100%.
2988
03:12:24.635 --> 03:12:25.535
Fuck yes.
2989
03:12:25.915 --> 03:12:26.415
Adam,
2990
03:12:28.210 --> 03:12:35.030
appreciate you coming and coming on the show. I think the show has been fantastic. I think this was a great episode of dispatch.
2991
03:12:35.735 --> 03:12:38.715
I think it it perfectly fits episode 20.
2992
03:12:41.095 --> 03:12:44.190
It's been a long time, guys. It's been a long time, Freaks.
2993
03:12:44.650 --> 03:12:48.910
Every Bitcoin Tuesday, I think of you guys, and we're gonna continue this forever,
2994
03:12:49.931 --> 03:12:50.431
because
2995
03:12:50.976 --> 03:12:56.755
you support the show. It's a 100% community funded. We don't have sponsors. We don't have ads,
2996
03:12:58.729 --> 03:13:01.229
And you guys you guys make it what it is.
2997
03:13:02.090 --> 03:13:05.470
Adam, thank you for joining us. You're a fucking legend.
2998
03:13:05.815 --> 03:13:10.636
We appreciate everything you do. Do you have any final comments for the freaks before we end this?
2999
03:13:14.510 --> 03:13:15.330
Very quiet.
3000
03:13:19.230 --> 03:13:25.155
Is Adam is Adam there? No. No. I was muted. Sorry. Yeah. No. So thanks for having me on. I I think the,
3001
03:13:25.695 --> 03:13:31.395
you know, more privacy and fungibility in, Bitcoin layer 1 or layer 2 is gonna be interesting to see,
3002
03:13:32.070 --> 03:13:33.610
and we wanna see it.
3003
03:13:34.710 --> 03:13:35.350
So let's,
3004
03:13:35.750 --> 03:13:36.729
see how that goes.
3005
03:13:37.189 --> 03:13:38.090
Fuck yes.
3006
03:13:40.604 --> 03:13:49.665
Yeah. I think I think what you said earlier, Matt, is, the way I try to do all the projects is, that I that I work on is is exactly that same model. No
3007
03:13:50.270 --> 03:13:51.730
altcoins, no advertisements,
3008
03:13:52.190 --> 03:13:52.690
no,
3009
03:13:53.710 --> 03:13:58.690
you know, you can't degrade any of that things. No KYC. Right? Like, that's the real
3010
03:13:59.895 --> 03:14:04.875
important thing is to to give the community exactly what it wants, and, that's what the show is.
3011
03:14:05.335 --> 03:14:06.270
And that's what,
3012
03:14:06.829 --> 03:14:12.529
all the the projects that Blockstream is putting out and and all of the community projects. It's just for the people.
3013
03:14:13.915 --> 03:14:16.335
Yeah. I mean, to be a 100% clear, like,
3014
03:14:16.875 --> 03:14:18.015
I'm a like,
3015
03:14:18.555 --> 03:14:19.615
I've decided
3016
03:14:21.171 --> 03:14:23.431
that our future is gonna be dominated
3017
03:14:23.891 --> 03:14:24.391
by
3018
03:14:25.250 --> 03:14:29.431
free open source projects. And I mean when I say dominated, I mean
3019
03:14:30.075 --> 03:14:35.615
we will fail. We will we will be in a horrible situation if we don't have free open source projects,
3020
03:14:37.035 --> 03:14:38.735
there to support us.
3021
03:14:39.790 --> 03:14:41.410
And I want to run this
3022
03:14:42.350 --> 03:14:44.530
show as a free open source project.
3023
03:14:44.910 --> 03:14:50.125
And as a result, there'll be no ads, no sponsors. I want this to be a 100% community funded.
3024
03:14:51.945 --> 03:14:53.726
I I I also want to announce
3025
03:14:54.280 --> 03:14:56.460
that we've officially launched opensats.org,
3026
03:14:59.561 --> 03:15:00.860
the proper Bitcoiner,
3027
03:15:02.285 --> 03:15:03.985
free open source foundation.
3028
03:15:05.405 --> 03:15:07.186
It is called Open Sats Initiative,
3029
03:15:08.365 --> 03:15:11.346
but we are a foundation, but we're we're an initiative.
3030
03:15:11.949 --> 03:15:16.370
And the idea is is that you can contribute as a Bitcoiner, you contribute,
3031
03:15:16.830 --> 03:15:20.930
and we're gonna provide it to open source projects, all free open source projects,
3032
03:15:22.415 --> 03:15:28.035
not, quote, unquote, open source projects, free open source projects. We have a very strong board.
3033
03:15:28.870 --> 03:15:33.449
We will argue, and we'll make sure that your stats go to the right place.
3034
03:15:33.750 --> 03:15:36.409
And even if you donate fiat, we will
3035
03:15:36.735 --> 03:15:42.436
we will automatically convert that over to Bitcoin and hold that as Bitcoin. All grants will be provided
3036
03:15:43.135 --> 03:15:43.875
in sats.
3037
03:15:44.575 --> 03:15:45.476
So that's opensats.org.
3038
03:15:47.520 --> 03:15:50.579
Literally officially launched as of 45 minutes ago,
3039
03:15:51.359 --> 03:15:55.460
and we're about to go really fucking hard. This is an this is an initiative
3040
03:15:55.855 --> 03:16:00.115
that I've been very excited about, but I had to be very quiet about.
3041
03:16:01.136 --> 03:16:02.516
So there you go.
3042
03:16:02.976 --> 03:16:05.315
I wanna do a big thanks for Adam back,
3043
03:16:06.090 --> 03:16:13.391
for joining us. Big thanks for Wiz for joining us a second time. I love you both. Thank you for all the work you've done.
3044
03:16:15.765 --> 03:16:18.104
You're my people. Appreciate you both.
3045
03:16:19.685 --> 03:16:22.024
Thank you for joining. This has been fantastic.
3046
03:16:24.330 --> 03:16:25.470
Thanks a lot, Matt.
3047
03:16:25.850 --> 03:16:26.350
Thanks.
3048
03:16:27.450 --> 03:16:28.350
Cheers, guys.
3049
03:19:52.410 --> 03:19:55.550
I love you freaks. That was a fucking great fucking dispatch.
3050
03:19:57.015 --> 03:20:02.555
For the record, I'm gonna be bringing a bunch of hats to Bitcoin Miami,
3051
03:20:03.150 --> 03:20:03.650
Bitcoin
3052
03:20:04.270 --> 03:20:06.050
2021, June 4th, 5th.
3053
03:20:07.710 --> 03:20:09.330
So if you want a hat,
3054
03:20:10.110 --> 03:20:12.050
reach out to me on Keybase or Telegram.
3055
03:20:13.125 --> 03:20:14.985
I will mail them out as well
3056
03:20:16.405 --> 03:20:23.780
if you must. If you're not gonna be if you're not gonna be there, it'll be a shame, but I will mail them out. So just reach out to me on Telegram
3057
03:20:24.960 --> 03:20:28.660
or Keybase, and I will send you a lending invoice, and we'll make it happen.
3058
03:20:29.985 --> 03:20:31.686
If you want a dispatch hat.
3059
03:20:32.465 --> 03:20:34.085
Besides that, quinsolo.comquinsolo
3060
03:20:38.561 --> 03:20:39.061
dotcom
3061
03:20:40.400 --> 03:20:41.940
has a solo dispatch
3062
03:20:43.440 --> 03:20:44.660
fucking flask
3063
03:20:45.895 --> 03:20:48.155
that is up for giveaway.
3064
03:20:49.015 --> 03:20:52.235
And the only way you can get it is if you
3065
03:20:52.940 --> 03:20:55.200
message in the sphinx tribe
3066
03:20:56.061 --> 03:21:02.561
of Scylla Dispatch. The Scylla Dispatch Sphinx tribe, the first one to message stack or die,
3067
03:21:03.086 --> 03:21:03.745
gets it.
3068
03:21:04.926 --> 03:21:06.466
So cheers to all of you.
3069
03:21:06.846 --> 03:21:10.145
Appreciate all you guys who came in and and listened to this,
3070
03:21:10.869 --> 03:21:17.930
and, stay on both Stack SaaS. I'll see you guys on Thursday for a rapid hold recap, and I'll see you next Tuesday for the next
3071
03:21:18.795 --> 03:21:19.775
Bitcoin Tuesday.
3072
03:21:20.635 --> 03:21:21.615
So dispatch.
3073
03:21:22.795 --> 03:21:24.335
Love you all. Peace.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:03:41 PM
Duration: 12088.007
Channels: 1
1
00:00:00.080 --> 00:00:02.659
2
00:00:03.520 --> 00:00:05.220
given all the things you just said?
3
00:00:06.960 --> 00:00:09.460
4
00:00:10.515 --> 00:00:11.175
to have
5
00:00:12.195 --> 00:00:12.695
competition
6
00:00:13.875 --> 00:00:14.535
in currency.
7
00:00:15.875 --> 00:00:18.935
I think that, we're looking at a very interesting
8
00:00:19.869 --> 00:00:21.570
future competition. For me,
9
00:00:22.109 --> 00:00:26.289
it's it's less interesting to talk about central bank digital currencies.
10
00:00:27.244 --> 00:00:32.625
I'm interested in the people who are more oriented toward the decentralization
11
00:00:34.000 --> 00:00:39.300
of monetary and financial power, who really wanna return money to its basic function
12
00:00:39.920 --> 00:00:44.375
of being a reliable unit of account, a dependable store value.
13
00:00:44.995 --> 00:00:47.015
I'm not suggesting that the cryptocurrencies
14
00:00:47.395 --> 00:00:59.660
have attained that because, for the most part, when you wanna buy something with them, you you still have to translate them back into the local currency, and so their value seems to move. But I do appreciate the idea
15
00:01:00.165 --> 00:01:06.265
that you want a currency that means the same thing on both sides of a of a supply and demand transaction
16
00:01:06.965 --> 00:01:08.985
between the producer and the consumer,
17
00:01:09.730 --> 00:01:13.910
And that is where price signals do their magic if they are accurate
18
00:01:14.450 --> 00:01:18.470
and they provide clear signals to all parties involved in the transaction.
19
00:01:19.405 --> 00:01:23.024
And so it's it's very interesting to see how this will shape up between
20
00:01:23.564 --> 00:01:25.185
sovereign created currencies
21
00:01:26.045 --> 00:01:27.905
and privately created currencies,
22
00:01:28.230 --> 00:01:32.570
and you'll get back into the old arguments. It's useful to look at monetary history
23
00:01:33.030 --> 00:01:34.330
between Robert Mundell
24
00:01:35.110 --> 00:01:36.170
and Milton Friedman
25
00:01:36.955 --> 00:01:40.895
and looking at Friedrich Hayek who predicted decades ago
26
00:01:41.435 --> 00:01:42.495
that you would have
27
00:01:42.875 --> 00:01:44.015
private currencies
28
00:01:44.315 --> 00:01:46.575
that would compete and provide a better product
29
00:01:46.910 --> 00:01:47.730
than sovereign provided
30
00:01:48.190 --> 00:01:48.690
currencies.
31
00:02:28.150 --> 00:02:29.370
32
00:02:29.885 --> 00:02:34.705
Happy Bitcoin Tuesday. It's your boy, Matt Odell, here for another Citadel dispatch.
33
00:02:35.245 --> 00:02:36.705
This is episode 20.
34
00:02:37.450 --> 00:02:40.510
Pretty fucking crazy that we're already 20 dispatches down.
35
00:02:40.970 --> 00:02:46.670
Citadel Dispatch is the interactive live show about Bitcoin distributed systems privacy and open source software.
36
00:02:47.115 --> 00:02:50.415
That intro was Trump's Fed nominee, Judy
37
00:02:50.955 --> 00:02:51.455
Shelton,
38
00:02:51.995 --> 00:02:54.175
who sounded like a Bitcoiner to me.
39
00:02:55.239 --> 00:02:58.860
That was kind of crazy to hear her talk about it like that on CNBC.
40
00:02:59.959 --> 00:03:02.940
Free nations should be prioritizing open monetary competition.
41
00:03:05.455 --> 00:03:07.475
Shout out to the freaks supporting the show.
42
00:03:08.335 --> 00:03:10.195
It would be nothing without you guys.
43
00:03:10.575 --> 00:03:12.675
I wanna keep this ad free forever.
44
00:03:13.240 --> 00:03:13.980
No sponsors.
45
00:03:14.280 --> 00:03:15.340
Community funded.
46
00:03:16.120 --> 00:03:17.500
This is how we do it.
47
00:03:18.200 --> 00:03:19.260
So thank you.
48
00:03:20.040 --> 00:03:23.975
And shout out to the ride or die who are here for another live show.
49
00:03:25.235 --> 00:03:26.935
Without you, this would be nothing.
50
00:03:27.555 --> 00:03:28.055
So
51
00:03:29.519 --> 00:03:36.420
our platforms now are Twitter, Twitch, and YouTube as usual, but, also, we are now streaming live to Bitcoin TV,
52
00:03:39.144 --> 00:03:41.805
which is pretty fucking cool, which Wiz is hosting himself.
53
00:03:42.424 --> 00:03:45.405
If you do watch it through Bitcoin TV, you cannot use,
54
00:03:45.784 --> 00:03:48.370
the live chat to to be a part of this,
55
00:03:49.310 --> 00:03:53.329
but it is what it is. We are working on it. We are iterating, and it's fucking dope.
56
00:03:53.870 --> 00:03:58.465
And then last but not least, I just wanted to shout out to everyone that comes in through,
57
00:03:59.165 --> 00:04:01.345
both of our audio streams, but especially,
58
00:04:01.965 --> 00:04:03.345
those in the Sphinx tribe
59
00:04:03.805 --> 00:04:09.110
and Breeze and other podcasting 2 point o apps. It's pretty cool that we can stream value,
60
00:04:09.730 --> 00:04:10.230
directly
61
00:04:10.610 --> 00:04:17.745
to content creators, and being a part of that equation with you guys is really special. It's it's really cool seeing the Satch stream in.
62
00:04:18.925 --> 00:04:22.065
With all that said, I mean, I'm really excited about this show.
63
00:04:22.509 --> 00:04:25.569
As I said, it is the 20th dispatch and seems really fitting,
64
00:04:26.270 --> 00:04:31.169
that we have Adam back here, a legend in the space and cofounder of Blockstream.
65
00:04:32.335 --> 00:04:33.555
How's it going, Adam?
66
00:04:34.574 --> 00:04:37.294
67
00:04:38.175 --> 00:04:38.675
Bitcoin
68
00:04:39.215 --> 00:04:39.955
tech space.
69
00:04:41.490 --> 00:04:44.070
70
00:04:45.010 --> 00:04:47.990
Project you know, one of the project leads at bisque
71
00:04:48.595 --> 00:04:50.455
and mempool dot space,
72
00:04:50.995 --> 00:04:58.660
and also happens to be a Liquid Federation member. So today's topics of Liquid, Bisque, and Bitcoin privacy are gonna be particularly
73
00:04:59.040 --> 00:05:01.220
suited to him. What's up, Wiz? Welcome back.
74
00:05:01.760 --> 00:05:04.100
75
00:05:04.475 --> 00:05:04.975
Me.
76
00:05:06.235 --> 00:05:11.055
77
00:05:13.449 --> 00:05:15.449
78
00:05:16.969 --> 00:05:21.355
79
00:05:22.155 --> 00:05:26.095
80
00:05:27.355 --> 00:05:34.620
81
00:05:35.560 --> 00:05:36.060
Yeah.
82
00:05:37.800 --> 00:05:42.175
83
00:05:42.635 --> 00:05:48.095
I don't think there's enough open discussion about the Liquid network. I think it's an interesting tool available to Bitcoiners.
84
00:05:48.960 --> 00:05:51.460
I think one of the things that people tend to,
85
00:05:54.160 --> 00:06:01.145
I think they tend to miss with these types of discussions is that we have many tools available to us. They all have different trade offs,
86
00:06:02.325 --> 00:06:04.825
and they aren't necessarily mutually exclusive.
87
00:06:05.140 --> 00:06:11.960
You can use many tools, or you can use none of the tools. You get to choose what you want. That's what's cool about Bitcoin to me.
88
00:06:12.585 --> 00:06:15.165
So with all that said, Adam, do you wanna give,
89
00:06:16.104 --> 00:06:18.205
our audience, you know, a quick
90
00:06:18.905 --> 00:06:22.250
explanation of of why they should care that the liquid network exists?
91
00:06:26.550 --> 00:06:27.510
92
00:06:28.470 --> 00:06:30.010
it's a different layer 2,
93
00:06:31.455 --> 00:06:32.995
And it was bought shortly,
94
00:06:35.135 --> 00:06:36.835
I guess, a year before
95
00:06:37.590 --> 00:06:40.570
I set about, you know, trying to form Blockstream,
96
00:06:41.350 --> 00:06:42.090
I was
97
00:06:42.470 --> 00:06:47.210
now I got interested in Bitcoin and went a rabbit hole like everybody. And my background was electronic cash,
98
00:06:48.375 --> 00:06:49.915
privacy enhancing technologies,
99
00:06:51.014 --> 00:06:51.514
and
100
00:06:51.975 --> 00:06:54.155
kind of applied crypto. And so
101
00:06:55.014 --> 00:06:56.155
I thought one
102
00:06:56.590 --> 00:06:57.570
area that Bitcoin
103
00:06:58.430 --> 00:07:01.570
could be improved was privacy and fungibility. So I
104
00:07:02.669 --> 00:07:08.765
spent, like, a few months trying to figure out the most efficient space efficient way to do confidential transactions.
105
00:07:09.465 --> 00:07:13.245
Well, what it wasn't called at that time, but what became known as confidential transactions.
106
00:07:13.785 --> 00:07:15.085
So it's a way to
107
00:07:16.250 --> 00:07:16.750
encrypt
108
00:07:20.250 --> 00:07:20.750
the
109
00:07:22.330 --> 00:07:22.830
amounts
110
00:07:23.770 --> 00:07:24.830
in Bitcoin transaction.
111
00:07:28.824 --> 00:07:31.805
You don't know how much money on transact kind of private math.
112
00:07:42.715 --> 00:07:46.815
113
00:07:47.810 --> 00:07:48.870
114
00:07:51.650 --> 00:07:52.630
115
00:07:53.570 --> 00:07:56.675
while we have, you know, we're doing this live, while we have Adam,
116
00:07:59.215 --> 00:08:00.675
just reset real quick,
117
00:08:01.455 --> 00:08:03.155
we'll proceed to Wiz. Wiz,
118
00:08:06.000 --> 00:08:06.740
you are
119
00:08:07.759 --> 00:08:09.620
a Liquid Federation member.
120
00:08:10.320 --> 00:08:15.215
It's kind of odd if you look at the Liquid Federation members. There's a lot of exchanges and large companies,
121
00:08:15.595 --> 00:08:17.455
and then there's just wiz there.
122
00:08:18.715 --> 00:08:25.110
Do you want to tell the freaks, you know, how that happened, why that happened, and what that means to you?
123
00:08:26.449 --> 00:08:28.870
124
00:08:30.384 --> 00:08:33.205
I I think it all kinda started with the
125
00:08:33.665 --> 00:08:40.190
the so called block size debate. Right? At some point, there was this realization that, Bitcoin fees would go up
126
00:08:41.050 --> 00:08:42.830
and kind of pump forever.
127
00:08:45.370 --> 00:08:47.950
And so if you're gonna have a small base layer blockchain,
128
00:08:48.425 --> 00:08:50.045
then you need a number of,
129
00:08:50.665 --> 00:08:55.965
layer 2 blockchains or side chains or off chain solutions like lightning, liquid, etcetera.
130
00:08:56.620 --> 00:09:03.600
And so I was very interested in the, the elements core side chain project and the technology that Blockstream had developed.
131
00:09:04.300 --> 00:09:04.800
They
132
00:09:05.625 --> 00:09:14.125
they were they published, like, a really cool, actually several white papers on the Blockstream website about side chains and about, the liquid one more recently.
133
00:09:14.779 --> 00:09:16.880
And, like Adam was saying about the confidential,
134
00:09:18.060 --> 00:09:18.560
transactions,
135
00:09:19.500 --> 00:09:21.760
and, you know, other base layer privacy
136
00:09:22.300 --> 00:09:24.320
features they have, which I thought were really cool.
137
00:09:25.195 --> 00:09:25.935
Hey, Adam.
138
00:09:27.435 --> 00:09:29.455
139
00:09:30.795 --> 00:09:32.160
140
00:09:32.959 --> 00:09:34.420
I was just I was just saying,
141
00:09:36.240 --> 00:09:42.315
I I got really interested in liquid and, I think I tweeted at Adam actually one day. I said, Adam,
142
00:09:43.015 --> 00:09:46.714
why why wouldn't a bunch of cypherpunks, like individual cypherpunks,
143
00:09:47.895 --> 00:09:52.420
you know, kind of fork the elements project and make our own liquid instance
144
00:09:53.120 --> 00:09:54.180
for the community.
145
00:09:55.120 --> 00:09:55.620
Right?
146
00:09:57.425 --> 00:09:57.925
147
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Yeah. And actually,
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there's a there's a Telegram group. Right? Where a bunch of people were discussing Right. How they might do that. So I was like, wow, this is really cool. I joined the discussion
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and made a suggestion which was to,
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do something first, which is sort of less work, and then move on to running a full network, which is to operate
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a second peg.
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So
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the
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in liquid, the blocks are
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signed by block signers, and then there's also a PEG
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manager, which is operate by the same HSMs.
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And
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those keys are the same in today's liquid network, but they don't have to be. So
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you could actually introduce
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a second
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peg that was operated by completely different people. And so it struck me that
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it would be easier to, you know, set up some HSMs or software
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operate by different people around the world with,
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you know, some kind of 2 out of 3
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or 11 out of 15 or some suitable size
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and have a Cypherpunks
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bitcoin, like a CBTC, 7 RBTC.
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So I think that'd be pretty cool to, to get there.
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you know,
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it
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it yeah. At least in the in the beginning or to until we figure out what we wanna do. And I I remember,
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you had kinda invited me to to join the federation and
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and kinda collaborate.
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So I'm I'm glad that,
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you know, I'm glad to be a member of the federation. It feels really cool to, even be now part of the oversight board to be able to,
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you know, kind of, talk to all of these large companies and,
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you know, oversee them,
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so to speak on behalf of, like, the BIS community or the Bitcoin community,
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and
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it's it's it's pretty cool. It's it's it's
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also going back to,
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like, what I was saying when you dropped out was, the small,
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or the the so called block size debate.
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Mhmm.
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Bitcoiners
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obviously have seen very low fees,
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up until very, very recently, the past few months,
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and so there wasn't,
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a really obvious need for
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layer 2. Right? Even lightning was pretty much dead the past couple years,
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but we all know it's coming. Right? Matt Matt said, the other day on the show,
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bitcoin fees are bitcoin fees are designed to pump forever,
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they and they want it all for free, right? They want low fees too.
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But that doesn't really work because
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you need, you need to pay for miners
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and
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obviously, we're doing that by inflating the block, the Bitcoin supply now.
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But as it transitions to,
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you know, directly users paying the miners, with the transaction fee market,
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on chain transactions are gonna gonna become very,
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expensive, and this is something that,
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people need to accept and people need to understand.
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And so,
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this is the this is where the trade offs begin. Right? I think Adam Adam put this, in the in the tweet, a few months back. He said it's kind of like when, the Internet was starting
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and,
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congestion control was getting added into the TCP layer. Right?
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There was this huge
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debate. Well, we didn't need congestion control before so of course the users want to have,
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you know, as much bandwidth as possible. They don't wanna like,
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have, like, a fee market, so to speak.
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who are familiar with,
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you know, routers and operating ISPs
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and entities. So, no one no one you do you run your own ISP. I guess that one, made me, you know, was, like, something that paused to you. But, I guess, my point was that,
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you know, people are suddenly saying, well,
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Bitcoin transactions are always cleared for, like, once Toshi buy in the past, why is why is this this force change? And,
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really, it was just the, you know, you know, like, the Internet was extremely unloaded
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and so
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the flow control protocols never got to work out. No packets got dropped through to congestion.
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And, you know, suddenly you have the AOL effect and
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perpetual September and more users than it can cope with.
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And, of course, the flow control
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gets to work out and then people get upset. Like, why where is this FlowControl coming from? I don't like FlowControl. I was like, yeah. But I mean, what are you gonna do? You know, there's more demand than
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possible
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capacity.
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It has to
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degrade gracefully. I mean, I I think I I might say something more controversial
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actually
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about
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main chain blocks based stepping away from liquid or lightning.
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I saw some questions about, why liquid instead of lightning, so maybe we'll come back to it in a sec. But,
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I mean, I think even just about
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Bitcoin alone, the main chain,
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and, you know, Matt's comment, fees are gonna pump forever.
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I think that, to me at least, Bitcoin is about,
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you
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know, bearer like, empowering end users with
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bearer hard e cache that can't be seized and you can spend.
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And
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so it, you know, it doesn't have to be
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cups of coffee.
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But I think if
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the demand for block space got extremely high because there's lots of traders, that's one problem,
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or institutions or whales
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such that,
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you know, the fees got to be consistently,
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I don't know, $1,000
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a transaction or something, I would become a moderate big blocker, I think, at that point. Because I think that would have,
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you know, priced out
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the different shared use case. By that, I mean, the the use case the banks can't compete with. Right? So if you crowd out the
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main use case, that's a problem.
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So,
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you know, one of the thoughts with Liquid actually was that
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it's if you've got traders
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and I understand not everybody's a trader. Right? A lot of people just cold store. And I think that's
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a winning strategy as far as it goes.
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But the the traders are just moving, you know, Bitcoins and other assets between exchanges.
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So they're going from,
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like, Bitfinex custody to,
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I don't know, Bitsy or some other exchange,
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and
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is one custodian to another. So the fact that they send out on the Bitcoin chain is is essentially spam. Right? Because
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if they could if they had another way to transfer from custody of exchange a to custody of exchange b, Bitcoin chain doesn't need to see that, and they don't even get any benefit from themselves.
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And also the people that are trading like that, they are,
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completely fee insensitive. So it's I think it's generally accepted that most of the
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fee escalation
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is related to impatient traders. And the the reason they don't care is, you know, maybe the average transaction size is $10,000
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or $50,000,
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something like that. And they're gonna be paying,
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you know, 0.1 to 0.2 percent
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fees for the trade.
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So, you know, whether they have to pay 10¢ or a dollar for transaction,
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they don't they really don't care. So they just look at
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Yeah. 1st first comes first.
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The
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tell me tell me if this is a decent,
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TLDR, you know, quick summary of of what Liquid is. Liquid
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is essentially
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a multisig of,
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partners
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that are running this network,
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and you can move Bitcoin into that multisig
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to then transact on this side chain. That is called a peg in, or you can move you can move Bitcoin off of that, and that is called a out. And the peg in is a perm is a permissionless
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system where anyone can can peg in at will into this this multisig side chain.
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And then,
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the peg out is requires,
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the federation members to allow that to happen. Would you agree on that summary?
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so a few things there. That's that's correct.
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And for people's expectations
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because, you know, when when liquid was first announced, some of the wording was about exchanges and traders. So people assumed,
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oh, you'd have to be in exchange to transact on it or something. But actually, you know, the exchanges don't generally transact.
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It's just users. Right?
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and confidential transactions, which is what you talked about earlier where where the amounts are blinded. So when you look on chain, if you look at a Liquid Explorer
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as opposed to a a Bitcoin Block Explorer, it won't show you the amounts that are being sent between people. It will still show you the addresses. It'll look like a Bitcoin address, but it's a liquid address.
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But it doesn't show you the amounts, and
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and and in regards to tokens, it won't show you what token is being traded either. So that's why a user would
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consider switching into into liquid.
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Now you mentioned something about traders.
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I think we should just really talk about this in passing because I really feel like it kind of has hurt liquid adoption so far in terms of my audience,
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because it it has as you said, it kind of
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it made people think like, oh, well, I'm not a trader, so I shouldn't care about it. In terms of traders, what you mentioned is that they're willing to pay higher fees, and that is because on chain,
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what the scarce resource that is being traded is is that block space.
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So you're being charged based on the amount of data you are sending,
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not the amount you are sending. So all else equal, a user that's sending a $10 transaction
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and a user that is sending a $2,000,000
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transaction,
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if they're paying the same fee rate,
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they're they're gonna end up paying the same absolute fee, but, obviously, the person who is sending the larger amount is gonna be paying significantly
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significantly
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less percentage wise than the person paying the lower amount.
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Now if when you add lightning into the mix, lightning fees are based on the amount you send.
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Liquid, I guess, is is probably more similar to Onchain Bitcoin in terms of what their that fee market should look like, but it just hasn't been tested yet. Right? There's just not that much volume there. So right now, it just acts as a
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a very, very cheap transaction chain.
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Would you agree on that assessment?
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I heard what you said, but it was breaking up on and off.
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and incognito mode or whatever, you know, so all your extensions are disabled. Wiz, what'd you think about my explanation?
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326
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So let's try that.
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328
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that's pretty decent explanation.
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It it is really,
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complex,
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and very, very technical, very deep,
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you know, understanding of cryptography is required
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to to really, learn about all these things, and I I'm not an expert on this at all.
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I'm more of a
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server guy, network engineer.
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You know, I grew up in the data center, so I'm
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I'm good at running Bitcoin nodes, basically. And
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the the cool thing about Liquid for me
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is that, it's it's an actual blockchain,
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and it's optimized
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for, like Adam said, or,
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like exchanges. Right? So,
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obviously,
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I I I guess we'll get into this later on, but,
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lightning is really cool in my opinion for,
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you know, if you wanna if you go to this restaurant all the time or a cafe or a bar, you know, and you open a channel to them, you can do lots of,
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coffee transactions,
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you know, with your trade channel to the bar, and anytime you can,
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you know, publish that channel state to the the network and settle it on chain.
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So it's a really cool way of
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essentially batching
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many many transactions into a single on chain transaction.
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And liquid
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is kind of that too. Right? It's,
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it's
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it's taking lots of transactions
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that are between the members of the federation
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and, and also
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of the other users
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of the,
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of the of the side chain and kinda batching them all into a very few amount of,
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Bitcoin on chain transactions. So they both,
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they both kind of,
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you know,
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make the usage of the Bitcoin base layer blockchain more efficient.
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So,
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Adam, are you back now?
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369
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So right.
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I think Matt was pointing
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at the
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the peg in versus peg peg out asymmetry.
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I I think I I think you would agree with me. I tried to give a high level summary of the fee structure between Liquid, Lightning, and Onchain,
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and why someone would wanna use Liquid,
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and why you mentioned traders to begin with, and and why they pay significantly less fees in terms of percentage because they send larger amounts.
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379
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Did you wanna go into
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the, kind of, security
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model for
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384
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Yeah. So so so, basically,
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we started off this this dispatch with, you know, Bitcoin has had many tools available to us. They all have different trade offs.
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Every time a new tool gets added to a Bitcoin user's arsenal,
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that makes me happy.
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This is one of the reasons why I started dispatch. This is one of the reasons why I've been doing tails from the crypt for over, you know, almost 3 years now,
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is because these tools are awesome that we have the ability to use them, but not everyone needs to use them, and not all of them are suited for everybody.
390
00:25:22.840 --> 00:25:24.380
So in the case of Liquid,
391
00:25:25.480 --> 00:25:31.725
I think a good place to go here is, you know, what are what are the trade offs to Liquid? You know, what are the concerns?
392
00:25:32.105 --> 00:25:33.805
What are you know, what should people
393
00:25:34.425 --> 00:25:39.280
weigh in their heads when they're deciding whether or not they're gonna use Liquid versus on chain versus Lightning?
394
00:25:40.700 --> 00:25:42.560
395
00:25:43.100 --> 00:25:44.720
you know, from a user perspective,
396
00:25:46.235 --> 00:25:48.575
it's it's another trade off.
397
00:25:50.875 --> 00:25:51.375
And
398
00:25:51.914 --> 00:25:52.654
so it's
399
00:25:53.520 --> 00:25:55.780
it's not as unseasonable or unfreezeable
400
00:25:57.040 --> 00:25:59.299
because, you know, there remains a possibility
401
00:26:00.080 --> 00:26:02.660
that this federation of businesses could shut down,
402
00:26:03.265 --> 00:26:05.525
and then, you know, you'd have to get funds out of it.
403
00:26:05.985 --> 00:26:06.485
But
404
00:26:07.825 --> 00:26:08.304
it's,
405
00:26:09.505 --> 00:26:15.750
it has extended functionality like confidential transactions and other assets like stable coins, you know, Tether and so on.
406
00:26:17.090 --> 00:26:22.470
And it's cheaper and faster for the moment. So, you know, that that depends on usage. Right?
407
00:26:22.914 --> 00:26:27.654
If, usage grows a lot, it could end up with the same fee situation as Bitcoin.
408
00:26:29.990 --> 00:26:32.730
And the capacity is similar to Bitcoin
409
00:26:33.030 --> 00:26:34.250
in terms of transactions
410
00:26:34.630 --> 00:26:35.130
per
411
00:26:35.830 --> 00:26:37.450
hour or something. So it's,
412
00:26:38.054 --> 00:26:42.794
you know, maybe 1 and a half or 2 times as many that might grow a bit when we
413
00:26:43.975 --> 00:26:46.315
improve the crypto efficiency with bulletproofs.
414
00:26:47.430 --> 00:26:49.450
So it's not hugely different to Bitcoin.
415
00:26:50.150 --> 00:26:50.650
And,
416
00:26:52.790 --> 00:26:54.490
but I think one interesting
417
00:26:56.305 --> 00:26:57.685
comparison here is
418
00:26:58.385 --> 00:27:00.165
if you look at the
419
00:27:00.465 --> 00:27:00.965
old
420
00:27:01.585 --> 00:27:04.885
electronic cash system by David Chaun in the nineties,
421
00:27:07.480 --> 00:27:10.299
It had the property of extremely strong privacy.
422
00:27:10.600 --> 00:27:11.340
So, like,
423
00:27:11.960 --> 00:27:15.325
0 cash, zcash, but even better in principle.
424
00:27:16.425 --> 00:27:17.725
But it's completely centralized.
425
00:27:18.345 --> 00:27:24.000
And so because of the really strong privacy, there was no way at all for them to do any selective censorship.
426
00:27:24.300 --> 00:27:29.440
They couldn't tell anything. You know, the the company operating the bank with the double spend database
427
00:27:29.975 --> 00:27:31.674
just literally couldn't correlate anything.
428
00:27:31.975 --> 00:27:32.794
And so
429
00:27:33.575 --> 00:27:34.315
there was
430
00:27:34.615 --> 00:27:35.434
no real
431
00:27:35.735 --> 00:27:36.955
censorship risk
432
00:27:37.320 --> 00:27:40.540
because no no information left to figure out what's a sensor,
433
00:27:41.000 --> 00:27:45.740
but it was a risk that could shut the whole system down. And so you have that property.
434
00:27:46.395 --> 00:27:48.575
And Bitcoin has a property that,
435
00:27:49.115 --> 00:27:52.735
you know, there's there's some kind of pseudonymity based privacy,
436
00:27:53.850 --> 00:27:55.470
but, you know, the amounts are visible,
437
00:27:56.250 --> 00:27:58.030
the UTXO history is visible,
438
00:27:58.410 --> 00:28:01.390
and you can kind of piece together some information from that.
439
00:28:01.885 --> 00:28:08.225
But it's very decentralized so, you know, if even if you find something that that, you know, a given
440
00:28:09.650 --> 00:28:16.070
country wants to block or something, it's pretty hard to do because their mind is everywhere and the mind is anonymous. So it's got a different model.
441
00:28:16.695 --> 00:28:20.075
And I think liquid lies in between the 2. So that's my assertion
442
00:28:20.455 --> 00:28:21.675
that liquid is,
443
00:28:22.455 --> 00:28:29.230
you know, in some ways, a bit closer to the TRON system because it has more crypto fungibility. The confidential transactions adds meaningful
444
00:28:29.530 --> 00:28:31.070
privacy. They're not as good
445
00:28:31.530 --> 00:28:32.670
as the TRON model,
446
00:28:33.530 --> 00:28:34.030
and
447
00:28:34.575 --> 00:28:36.835
it's a bit more centralized, and it's still
448
00:28:37.135 --> 00:28:38.595
more decentralized than
449
00:28:38.975 --> 00:28:40.355
single server tool model.
450
00:28:41.600 --> 00:28:44.259
So it's somewhere in between those two models.
451
00:28:45.840 --> 00:28:49.620
And so, you know, for for general use, I think one
452
00:28:50.355 --> 00:28:52.534
interesting way to use it, and we've seen,
453
00:28:52.914 --> 00:28:53.815
you know, organically
454
00:28:54.595 --> 00:28:56.695
more users doing this, is
455
00:28:57.530 --> 00:28:58.030
to
456
00:28:58.490 --> 00:28:59.309
put sort
457
00:28:59.929 --> 00:29:16.720
of moderate amounts into liquid. Like, not cold storage savings, but, you know, spending money amount of money you're gonna spend online in a month or something like that. And then you can transact trip cheaply, and then you can, you know, take funds out and put them back in with a, peg out or peg in.
458
00:29:17.100 --> 00:29:20.480
And that you know, the peg out and peg in is a little bit analogous to the lightning,
459
00:29:20.860 --> 00:29:22.400
crypto channel, closer channel.
460
00:29:23.485 --> 00:29:25.665
461
00:29:27.005 --> 00:29:31.345
with with lightning, you can close the channel. Either party can close the channel Right. At will.
462
00:29:31.804 --> 00:29:32.304
Right?
463
00:29:32.840 --> 00:29:34.700
But with but but but
464
00:29:35.559 --> 00:29:36.460
but do you
465
00:29:38.519 --> 00:29:40.539
is is is there is there too much?
466
00:29:41.545 --> 00:29:43.885
I I mean, I think the goal, right, is ultimately
467
00:29:44.425 --> 00:29:47.645
some kind of atomic swap system for liquid.
468
00:29:48.160 --> 00:29:57.220
So wouldn't that just alleviate the whole peg out thing? Like, the peg out is more for, like, a settlement of of, like, major, like, the federation or whatever.
469
00:29:58.065 --> 00:29:58.565
470
00:29:58.945 --> 00:29:59.845
yes. So
471
00:30:00.705 --> 00:30:01.205
what's,
472
00:30:02.385 --> 00:30:05.045
there are lots of different ways to pick out.
473
00:30:05.505 --> 00:30:06.885
Many of them are countless
474
00:30:07.470 --> 00:30:11.490
and some of them exchange based. And exchanges often have,
475
00:30:11.870 --> 00:30:19.815
like, 2 tier sign up processes where you can get through the 1st tier and do crypt only, and then you get through the 2nd tier if you want wire transfers. So if you're doing, like,
476
00:30:20.915 --> 00:30:23.095
liquid Bitcoin to Bitcoin, you could make exchanges
477
00:30:24.090 --> 00:30:25.790
478
00:30:26.650 --> 00:30:28.750
yeah. But then we have a centralized custodian,
479
00:30:29.210 --> 00:30:30.910
probably gonna have to have KYC.
480
00:30:31.905 --> 00:30:36.005
So so just just unpack this here. The fear is, right, the fear is
481
00:30:36.545 --> 00:30:38.965
is you have funds on liquid.
482
00:30:39.620 --> 00:30:40.120
483
00:30:40.660 --> 00:30:42.600
484
00:30:43.140 --> 00:30:49.155
Hopefully, you don't have too much, but you have well, let's say, well, you have whatever funds you have as liquid Bitcoin, and then the federation
485
00:30:49.535 --> 00:30:49.935
gets
486
00:30:50.575 --> 00:30:52.355
you know, they get compelled
487
00:30:52.815 --> 00:31:10.275
to freeze the network or their their their funds get seized, the the multisig gets seized. And this is why multi jurisdictional is involved, and you have all these different companies to try and reduce that risk. But that is the fear. Right? The fear is that happens and you can't get back out, that you lose your Bitcoin. It's the same idea as, like, a custodial risk,
488
00:31:11.054 --> 00:31:11.795
but, obviously,
489
00:31:12.655 --> 00:31:16.434
you know, significantly better than just trusting a single custodian. Right?
490
00:31:16.960 --> 00:31:23.620
491
00:31:25.785 --> 00:31:26.285
go
492
00:31:27.545 --> 00:31:28.845
between liquid and Bitcoin
493
00:31:29.945 --> 00:31:31.085
to to get out.
494
00:31:32.025 --> 00:31:32.765
One is
495
00:31:33.320 --> 00:31:36.220
to atomic swap with another user, and there is
496
00:31:36.600 --> 00:31:37.880
a tool to do that.
497
00:31:39.640 --> 00:31:43.375
So that would be just 2 users that that happen to wanna go in the opposite direction.
498
00:31:43.835 --> 00:31:52.600
And, you know, as we've joined market and things like that, sometimes user services just bring up where people, you know, market may they don't mind go backwards and forwards, take a small fee.
499
00:31:52.900 --> 00:31:55.480
They speed it up for somebody else. They give them privacy.
500
00:31:55.780 --> 00:31:57.880
So it's that. And then there are
501
00:31:58.294 --> 00:31:59.914
3 services that are
502
00:32:01.255 --> 00:32:05.674
kind of, accountless, like, no sign up. So one is SideShift,
503
00:32:06.669 --> 00:32:09.490
another is Flip, another was liquidity.
504
00:32:09.870 --> 00:32:12.289
And they they like websites or
505
00:32:12.590 --> 00:32:21.615
Telegram bots, things like that. And you basically, you know, put your addresses in, you pay a small fee, and they they swap it. And that was It's like old school shape shift. It's like
506
00:32:22.050 --> 00:32:22.950
507
00:32:23.570 --> 00:32:28.310
custodial with no account, and they just do there's a third party that does the swap for you.
508
00:32:28.610 --> 00:32:30.470
509
00:32:31.154 --> 00:32:37.174
just appeared out of nowhere in the last, you know, few weeks that people have been talking about is this side swap port.
510
00:32:38.910 --> 00:32:41.650
And that has integrated some of these things into
511
00:32:42.030 --> 00:32:43.250
a smartphone app,
512
00:32:43.630 --> 00:32:44.450
which is
513
00:32:44.750 --> 00:32:45.730
kinda curious,
514
00:32:47.654 --> 00:32:48.794
but it's,
515
00:32:49.335 --> 00:32:52.315
it's very nice. Use it simple to interface in a way,
516
00:32:52.615 --> 00:32:57.150
which is it's technically only a Lick wallet. You know, the other wallets that Blockstream made,
517
00:32:58.010 --> 00:33:04.190
the Aqua Wallet and Agree Wallet are both liquid and Bitcoin wallets, but Sideswap is technically only a liquid wallet.
518
00:33:04.570 --> 00:33:05.710
However, you can
519
00:33:06.345 --> 00:33:10.684
interoperate Bitcoin by a peg in and peg out, so there's a tab for that. And
520
00:33:10.985 --> 00:33:14.610
so if you want to pay somebody on Bitcoin, you peg out. If you want to receive some money
521
00:33:15.170 --> 00:33:16.309
from a Bitcoin
522
00:33:16.610 --> 00:33:20.630
wallet, you do a peg in. And so that that's your user interface. Now
523
00:33:21.170 --> 00:33:23.030
both of the peg out and the peg in
524
00:33:23.795 --> 00:33:27.095
go via the service. So it has the same kind of behavior
525
00:33:27.955 --> 00:33:28.455
as
526
00:33:28.755 --> 00:33:31.095
the side swap oh, sorry. The,
527
00:33:32.340 --> 00:33:33.400
you know, liquidity
528
00:33:34.179 --> 00:33:35.480
side shift and so on.
529
00:33:35.860 --> 00:33:36.760
But they also
530
00:33:39.125 --> 00:33:43.225
are doing some atomic swaps. So in in wallet, you can swap
531
00:33:44.005 --> 00:33:45.705
liquid Bitcoin for,
532
00:33:46.325 --> 00:33:48.425
Liquid Tether or for Euros
533
00:33:49.720 --> 00:33:50.220
EURX,
534
00:33:50.760 --> 00:33:54.060
which they're the issue which side swap the company's issuer of, actually.
535
00:33:54.520 --> 00:33:54.760
So
536
00:33:56.765 --> 00:33:57.905
and some of those things
537
00:33:58.205 --> 00:34:04.785
are are atomic and it you know, they're evolving and improving it over time. So they just did a release. It looks like
538
00:34:05.710 --> 00:34:10.530
today, actually, where they added a peg out feature, which which was missing in the previous version.
539
00:34:11.150 --> 00:34:11.970
And so
540
00:34:13.005 --> 00:34:15.265
there's a there's a Telegram channel. It's called,
541
00:34:16.685 --> 00:34:17.185
sideswap_io
542
00:34:18.605 --> 00:34:19.345
on Telegram.
543
00:34:21.460 --> 00:34:26.680
And they're talking about their road map and stuff. So it seems like they've got a lot of trustless things planned, like
544
00:34:27.060 --> 00:34:29.240
user coordinate. Because they're the
545
00:34:30.005 --> 00:34:34.425
they're the kind of counterparty in all the swaps at the moment, but they're interested to support
546
00:34:34.805 --> 00:34:37.945
user swaps so that different users can come in,
547
00:34:38.869 --> 00:34:43.369
coordinate on it in its way. So I think there is an opening there for them to do
548
00:34:43.830 --> 00:34:44.890
some more trustless
549
00:34:45.670 --> 00:34:47.609
peg in and peg out where,
550
00:34:48.150 --> 00:34:53.355
you know, you automatically pay them and they pay you from there. You automatically pay them in liquid Bitcoin,
551
00:34:53.895 --> 00:34:55.195
and they give you
552
00:34:56.289 --> 00:34:59.109
Bitcoin and MainChain, but in atomic fashion. Right?
553
00:34:59.970 --> 00:35:00.470
554
00:35:01.650 --> 00:35:05.030
So the the the the fear, right, the fear is
555
00:35:05.475 --> 00:35:06.455
is that custodians
556
00:35:06.835 --> 00:35:10.835
block the exit. Right? So so it it there's 2
557
00:35:11.795 --> 00:35:15.750
the way I look at it is there's 2 ultimate solutions here
558
00:35:16.050 --> 00:35:16.710
or mitigations.
559
00:35:17.010 --> 00:35:19.270
Maybe solutions is the wrong word. It's too absolute.
560
00:35:19.730 --> 00:35:23.270
22 mitigations, and that's either user driven peg outs,
561
00:35:23.715 --> 00:35:27.095
the ability for a user to basically execute a peg out,
562
00:35:27.715 --> 00:35:36.470
on their own without a you know, the federation easily being able to stop them, which seems pretty complicated to me, and I I don't know if you want to go into that.
563
00:35:37.010 --> 00:35:37.510
Alternatively,
564
00:35:38.130 --> 00:35:43.335
some kind of atomic swap market that is distributed rather than centralized. Something like
565
00:35:43.635 --> 00:35:45.015
a like a joint market
566
00:35:45.315 --> 00:35:47.494
type of situation where it's coordinated
567
00:35:47.875 --> 00:35:49.974
loosely between the actual users
568
00:35:51.009 --> 00:35:54.869
themselves. I mean, I I guess a bigger thing would be using Bisc,
569
00:35:55.410 --> 00:36:00.565
but that that's more heavy that's more heavy. Like, I'm envisioning kind of some kind of lightweight
570
00:36:00.945 --> 00:36:01.445
marketplace
571
00:36:01.745 --> 00:36:02.245
app
572
00:36:02.705 --> 00:36:04.885
that allows you to be on both sides.
573
00:36:05.185 --> 00:36:09.560
574
00:36:10.260 --> 00:36:11.800
HODL HODL has some
575
00:36:12.180 --> 00:36:13.880
liquid Bitcoin slash Bitcoin
576
00:36:15.954 --> 00:36:21.255
swaps and trades and loans and things. So you might be able to do it on hold as well, and that's evolving over time.
577
00:36:21.795 --> 00:36:25.860
But, you know, even with the sideswap app, if they get the
578
00:36:26.740 --> 00:36:28.760
you know, as as they improve it,
579
00:36:29.140 --> 00:36:29.960
if they get
580
00:36:30.740 --> 00:36:31.320
the atomic
581
00:36:31.780 --> 00:36:32.680
swap out,
582
00:36:33.455 --> 00:36:34.335
even though it's,
583
00:36:34.895 --> 00:36:38.355
you know, a centralized company that's doing it, you don't really have to trust them
584
00:36:38.815 --> 00:36:48.510
because you either get your main chain Bitcoins or you keep your liquid Bitcoins. Right? So your main remaining so you don't have that tertiary risk that the, you know, centralized service provider
585
00:36:49.130 --> 00:36:57.454
Like side shift ads. Been complete. Yeah. Then they could take your coins and pay you and, like, oh, man. That's now you'd have to argue about it online. You may not get your money back.
586
00:36:58.954 --> 00:37:04.089
With the the other kind of binary risk is the the whole federation shuts down for some reason.
587
00:37:04.710 --> 00:37:05.690
So that one,
588
00:37:06.069 --> 00:37:07.609
yeah, that's that's a,
589
00:37:08.069 --> 00:37:10.410
you know, that's that's a side effect of the
590
00:37:11.405 --> 00:37:12.305
current architecture.
591
00:37:13.484 --> 00:37:13.984
And
592
00:37:14.525 --> 00:37:17.505
but the the transitory risks, I think, are fixable
593
00:37:18.045 --> 00:37:19.665
because of this kind of atomic
594
00:37:20.220 --> 00:37:21.039
cross chain
595
00:37:22.059 --> 00:37:22.559
swap.
596
00:37:23.579 --> 00:37:25.200
And that could be
597
00:37:25.819 --> 00:37:29.200
it sounds like looking at what Sideswap was saying that they are
598
00:37:29.915 --> 00:37:32.175
interested to allow users to
599
00:37:32.475 --> 00:37:38.015
put offers, like, you know, some kind of built in board. So it's not really an order book in the sense that there's a
600
00:37:38.700 --> 00:37:39.280
a custodian,
601
00:37:39.580 --> 00:37:42.720
but an offer like you can offer to swap for a fee.
602
00:37:43.340 --> 00:37:47.280
And I guess they'll match or let you search it or something. So they're developing that.
603
00:37:47.674 --> 00:37:55.855
So that but that would also be, I presume I mean, that would have to be, you know, atomic. Right? Because users could otherwise exit scam each other. Right?
604
00:37:56.880 --> 00:37:59.220
So that that kind of thing's possible,
605
00:37:59.760 --> 00:38:01.940
and that that is a kind of mixture of,
606
00:38:02.400 --> 00:38:03.380
you know, a coordinator
607
00:38:03.680 --> 00:38:06.485
role, which is the wallet back end and
608
00:38:07.585 --> 00:38:12.965
users placing offers. So I think it's it's kind of an app wrapper around something
609
00:38:13.265 --> 00:38:14.085
disk like
610
00:38:15.150 --> 00:38:17.250
for, you know, subset of use cases.
611
00:38:19.150 --> 00:38:21.890
So about you you mentioned another thing there, which was
612
00:38:22.555 --> 00:38:24.735
that I should I should explain actually why,
613
00:38:26.475 --> 00:38:28.975
the peg out asymmetry is there. So
614
00:38:29.600 --> 00:38:31.380
it's actually not to do with,
615
00:38:32.400 --> 00:38:32.900
policy
616
00:38:33.200 --> 00:38:33.700
but
617
00:38:34.240 --> 00:38:34.740
security,
618
00:38:35.680 --> 00:38:37.460
which is if you,
619
00:38:37.840 --> 00:38:38.340
the
620
00:38:38.685 --> 00:38:42.305
the block signers, so there are, you know, all these different exchanges
621
00:38:43.405 --> 00:38:47.150
and people involved, like, who is this one of the, participants in the network.
622
00:38:48.109 --> 00:38:50.529
So some a subset of them are operating
623
00:38:51.710 --> 00:38:52.210
servers,
624
00:38:52.750 --> 00:38:58.905
you know, with firewalls and stuff and also an HSM inside. So the keys to the peg and a block signering in the HSM.
625
00:38:59.925 --> 00:39:03.464
And HSM is running a lot less code, so it's easier to control,
626
00:39:03.925 --> 00:39:04.505
you know,
627
00:39:05.630 --> 00:39:14.610
remote hacking risk for the HSMs. It's gonna be very hard to get keys out of that. But the server itself, you know, obviously, it's it's locked down as far as you can, but still Internet exposed server.
628
00:39:15.155 --> 00:39:15.975
So in
629
00:39:16.595 --> 00:39:17.095
theory,
630
00:39:18.595 --> 00:39:19.335
if you,
631
00:39:20.995 --> 00:39:22.375
if somebody could hack,
632
00:39:22.730 --> 00:39:25.470
you know, 2 thirds of the host computers,
633
00:39:25.849 --> 00:39:27.069
the the internet servers,
634
00:39:27.849 --> 00:39:28.589
and then
635
00:39:29.529 --> 00:39:32.270
override their instructions to just tell the HSM
636
00:39:32.974 --> 00:39:34.994
to peg it out to this user address,
637
00:39:36.015 --> 00:39:37.315
the whole you know, the
638
00:39:37.615 --> 00:39:38.275
the liquids
639
00:39:39.295 --> 00:39:45.140
kind of peg wallet would basically become a warm wallet of some kind. Right? Because you've got Internet exposed hosts.
640
00:39:45.440 --> 00:39:55.055
Yes. The keys are on HSM, but if the Internet exposed hosts operating system and code was compromised, they could just tell the HSM to do things and the HSM wouldn't understand enough
641
00:39:55.355 --> 00:39:56.414
to prevent it.
642
00:39:56.795 --> 00:39:57.615
And so
643
00:39:58.420 --> 00:40:00.119
when we were designing this in
644
00:40:00.500 --> 00:40:01.000
2014
645
00:40:01.300 --> 00:40:03.560
or so, Greg Maxwell hit on the idea
646
00:40:04.420 --> 00:40:05.880
of improving the security
647
00:40:06.180 --> 00:40:09.275
by having the peg outs be only go to,
648
00:40:10.455 --> 00:40:11.195
off, you
649
00:40:11.815 --> 00:40:13.595
know, offline hardware wallets
650
00:40:13.895 --> 00:40:14.395
of
651
00:40:15.015 --> 00:40:15.915
liquid members.
652
00:40:16.830 --> 00:40:17.330
And
653
00:40:17.870 --> 00:40:19.890
in that way, if somebody would compromise,
654
00:40:20.750 --> 00:40:24.370
you know, succeed in compromising of the servers and override the HSMs,
655
00:40:25.365 --> 00:40:28.984
they have to provide a proof to the HSM. The HSM can verify by itself
656
00:40:29.285 --> 00:40:29.785
that
657
00:40:30.484 --> 00:40:30.984
the
658
00:40:31.285 --> 00:40:33.704
the payout is going to go to an address
659
00:40:34.650 --> 00:40:38.510
controlled by one of these hardware wallets belonging to the members. It's it's technically
660
00:40:38.810 --> 00:40:41.390
a zero knowledge proof, so you don't really know which one
661
00:40:41.694 --> 00:40:43.714
and just proves that the address was derived
662
00:40:44.575 --> 00:40:46.194
from one of these, XPUBs.
663
00:40:47.214 --> 00:40:53.110
And so that's that's the concept. Right? But if it's becomes much less attractive to hack it, because all you do is you pay
664
00:40:53.970 --> 00:40:54.550
the Bitcoins
665
00:40:54.930 --> 00:40:56.470
to a liquid member,
666
00:40:56.770 --> 00:40:58.390
and that liquid member could,
667
00:40:59.515 --> 00:41:00.015
you
668
00:41:00.955 --> 00:41:04.175
know, peg out legitimately, so it's not so interesting to them.
669
00:41:04.475 --> 00:41:13.450
And, you know, there's a bit of a trust assumption that they're less likely to just try and take the money because people know who they are. So so the trade off chosen was,
670
00:41:14.070 --> 00:41:16.410
671
00:41:17.335 --> 00:41:17.835
at
672
00:41:18.295 --> 00:41:19.515
the benefit being
673
00:41:20.135 --> 00:41:26.155
less risk of, you know, complete loss of of the system, right, from an external actor or something.
674
00:41:26.609 --> 00:41:27.990
675
00:41:28.690 --> 00:41:34.470
colder in a way. So it means that the you know, in one way of thinking, the PEG funds are cold.
676
00:41:34.935 --> 00:41:37.755
Like, you can move them around inside the network logically,
677
00:41:39.175 --> 00:41:42.075
user to user. But if somebody wants to take them out,
678
00:41:42.695 --> 00:41:44.555
they actually go to a cold wallet.
679
00:41:44.920 --> 00:41:45.420
And
680
00:41:45.880 --> 00:41:49.740
then what typically happens is one of the service providers like
681
00:41:50.040 --> 00:41:50.540
SideShifts
682
00:41:51.720 --> 00:41:53.420
or, you know, SideSwap,
683
00:41:55.865 --> 00:41:57.565
the FinEx, you know, one of these exchanges.
684
00:41:57.865 --> 00:42:02.925
There are some people that are, like, prop traders. So companies do trading. So those guys,
685
00:42:03.360 --> 00:42:04.900
they are actually gonna give you
686
00:42:05.200 --> 00:42:07.620
the funds that you requested to pay out from their own,
687
00:42:08.400 --> 00:42:14.155
like, hot wallet, cold wallet, and and then they're gonna fetch it out of the peg out wallet later when they run out of funds.
688
00:42:14.855 --> 00:42:17.595
So that means they they absorb the risk, basically.
689
00:42:19.349 --> 00:42:28.329
690
00:42:29.895 --> 00:42:30.135
The
691
00:42:30.935 --> 00:42:32.715
so so enlighten me here,
692
00:42:33.175 --> 00:42:35.355
from from when from reading the website,
693
00:42:35.975 --> 00:42:36.715
my understanding
694
00:42:37.015 --> 00:42:37.515
is
695
00:42:38.050 --> 00:42:38.950
there's a significant
696
00:42:39.250 --> 00:42:41.350
amount of federation members,
697
00:42:41.650 --> 00:42:45.510
but at any given time, only 16 are active. Is that is that correct?
698
00:42:46.694 --> 00:42:48.315
699
00:42:48.775 --> 00:42:50.474
the current implementation.
700
00:42:50.935 --> 00:42:51.435
So
701
00:42:52.375 --> 00:42:54.234
the current federation is
702
00:42:54.640 --> 00:43:00.580
11 out of 15, and that was kinda hard coded in the first version. And we're in the process of rolling out
703
00:43:01.520 --> 00:43:04.100
an upgrade that switches to dynamic federations
704
00:43:05.265 --> 00:43:08.645
that can support larger numbers and people leaving and joining.
705
00:43:09.105 --> 00:43:12.085
So I should clarify as well that Blockstream is
706
00:43:12.450 --> 00:43:13.670
in a technology provider.
707
00:43:14.530 --> 00:43:17.830
We are not able to do auto upgrades. The
708
00:43:18.770 --> 00:43:19.270
liquid
709
00:43:19.695 --> 00:43:20.195
boards
710
00:43:20.495 --> 00:43:26.275
will, you know, look at, let's say, the release notes and and see if they like an upgrade. And they have to actually
711
00:43:26.900 --> 00:43:29.320
depending on what kind of upgrade it is, they have to physically
712
00:43:30.100 --> 00:43:31.400
be in front of and,
713
00:43:32.820 --> 00:43:43.405
you know, push buttons on the on the hardware box. So it's not, like, remote upgradeable of the Internet for security reasons. And it's actually interact with it. And we we can't upgrade it, and that's by design.
714
00:43:47.290 --> 00:43:47.790
So,
715
00:43:48.570 --> 00:43:59.415
yeah. So that will become more dynamic at the time. So yeah. But but at the moment, it's an 11 of 15. And if you look around on the block explorer, you can find the peg wallet, and it stands out because it's an 11 of 15
716
00:44:00.195 --> 00:44:01.655
signature. And another
717
00:44:02.420 --> 00:44:04.680
interesting topic is there's a CSV,
718
00:44:05.140 --> 00:44:06.440
so a time block
719
00:44:07.140 --> 00:44:08.680
and a 2 of 3 as well,
720
00:44:09.115 --> 00:44:16.175
721
00:44:16.660 --> 00:44:20.040
like, there's an aging thing, and then it went back to the 2 of 3,
722
00:44:20.980 --> 00:44:25.640
which represents a security risk. But before I get to that, just real quick, it's 11 of 15.
723
00:44:26.474 --> 00:44:26.974
So,
724
00:44:27.355 --> 00:44:30.415
like, Wiz is not a part of that 11 of 15. Right?
725
00:44:31.994 --> 00:44:33.775
726
00:44:34.075 --> 00:44:36.350
the the problem is that the
727
00:44:37.930 --> 00:44:41.870
original, version of liquids was hard coded to 11 of 15.
728
00:44:42.810 --> 00:44:48.895
And since the and there there were 15 members at launch just a few years ago. Right? But now there's, like, over 50,
729
00:44:49.435 --> 00:44:50.895
and some people are,
730
00:44:51.195 --> 00:44:54.335
you know, happy to use the network services of another
731
00:44:54.790 --> 00:44:58.470
member, and you can pick out without having HSM. So you don't need to be
732
00:44:58.950 --> 00:45:00.710
there's a kind of list of of
733
00:45:01.270 --> 00:45:03.405
just submit like a hotdog wallet x pub.
734
00:45:04.205 --> 00:45:10.225
Okay. So they some people submit too. Right? Because they got 2 different applications or So when the XPUB is is
735
00:45:10.579 --> 00:45:20.295
is approved. He's he's got an approved XPub, but he's not running an HSM yet. Right. Right. And so there are people that may never wanna run HSM because, you know, they're they're cloud oriented
736
00:45:20.915 --> 00:45:22.455
or they don't have a machine room.
737
00:45:23.155 --> 00:45:23.895
People do.
738
00:45:24.355 --> 00:45:27.335
And so that but at the moment, the other problem is
739
00:45:27.640 --> 00:45:29.180
it's not that dynamic.
740
00:45:29.640 --> 00:45:30.460
And so
741
00:45:30.920 --> 00:45:34.859
and, actually, changing the federation membership is,
742
00:45:36.595 --> 00:45:40.375
you know, tricky. You've got to think about the game theory because,
743
00:45:41.235 --> 00:45:42.135
you know, if
744
00:45:42.970 --> 00:45:45.309
if somebody was to attack the system from the inside,
745
00:45:46.010 --> 00:45:55.775
you know, and they voted somebody off, they could do that iteratively until they controlled it. Right? So there's there's a bunch of you know, it it requires more than 2 thirds
746
00:45:56.235 --> 00:46:00.735
to to do a change, and it's for that kind of reason. So there's a bunch of logic
747
00:46:01.380 --> 00:46:02.760
about how the
748
00:46:03.780 --> 00:46:07.320
federation can evolve, and it can't be too quickly either because
749
00:46:07.940 --> 00:46:12.654
the coins in the peg have to change, you know, the key because the keys have changed in a time. Right?
750
00:46:13.275 --> 00:46:13.835
So it's,
751
00:46:14.714 --> 00:46:18.575
it's not trivial, but the end result is you've got,
752
00:46:19.500 --> 00:46:21.920
you know and I think the other way to think about it is
753
00:46:23.100 --> 00:46:25.200
even though it's built in a different way,
754
00:46:25.580 --> 00:46:26.960
it's a kind of
755
00:46:27.415 --> 00:46:29.915
blockchain assembled out of instead of minors,
756
00:46:30.615 --> 00:46:31.115
HSMs,
757
00:46:31.495 --> 00:46:35.275
HSMs can change which moves it, you know, with Dynafed, it moves it a
758
00:46:35.740 --> 00:46:38.960
bit less from a kind of fixed group businesses towards something
759
00:46:39.339 --> 00:46:42.480
that's dynamic and evolves. And that's that's So how does that look?
760
00:46:44.115 --> 00:46:48.055
761
00:46:49.155 --> 00:46:51.335
Because this is the the future goal. Right?
762
00:46:52.530 --> 00:46:54.630
763
00:46:55.570 --> 00:46:56.869
we made a release
764
00:46:57.410 --> 00:46:57.910
recently
765
00:46:58.369 --> 00:46:59.110
of the,
766
00:47:00.745 --> 00:47:10.300
elements d, which is the full node for liquids. And, you know, power users can run 1 and you run a Bitcoin node and an elements node, and they they talk to each other.
767
00:47:10.680 --> 00:47:18.315
And that can verify everything about the chain, the pegs, and the liquid transactions, and so on. So that the most recent we saw about is
768
00:47:18.615 --> 00:47:20.075
dynamic federation is ready,
769
00:47:20.775 --> 00:47:23.675
but, you know, the next release and the next release, I needed to,
770
00:47:24.460 --> 00:47:29.770
actually get it active. So it's not active yet, but that's something that's happening, I'd say, in the next quarter or so.
771
00:47:31.425 --> 00:47:35.685
And, of course, it's it's, you know, subject to the liquid members
772
00:47:36.305 --> 00:47:38.890
like in the the feature set and upgrading to it. Right?
773
00:47:39.609 --> 00:47:44.269
And once they have that, there's there's likely to be some changes because there's, you know,
774
00:47:44.650 --> 00:47:47.789
new participants in the network since a couple years ago,
775
00:47:48.194 --> 00:47:50.375
you know, like Sideswap, for example,
776
00:47:51.234 --> 00:47:51.734
or
777
00:47:52.755 --> 00:47:57.415
Liquidity. There are lots of people who are quite active in building products and services like Vulcan.
778
00:47:58.340 --> 00:48:00.360
They've got, you know, Liquid Taxi,
779
00:48:01.060 --> 00:48:01.560
Marina
780
00:48:01.940 --> 00:48:02.440
Browser,
781
00:48:02.980 --> 00:48:03.960
plug in wallet.
782
00:48:04.500 --> 00:48:06.040
So there are lots of active
783
00:48:06.415 --> 00:48:08.915
department service companies that would have liked
784
00:48:09.855 --> 00:48:13.315
to run a functionary but couldn't because of the lack of dynamic
785
00:48:13.615 --> 00:48:15.380
change in the network. So
786
00:48:15.920 --> 00:48:18.099
that will enable that that change to happen.
787
00:48:19.920 --> 00:48:25.405
788
00:48:26.985 --> 00:48:29.245
789
00:48:29.625 --> 00:48:30.825
there's a kind of,
790
00:48:31.145 --> 00:48:32.525
there's a consensus protocol,
791
00:48:36.869 --> 00:48:44.935
and the block is proposed in turn by, you know, round robin. So in a circle, each proposes, and then blocks have to be signed by
792
00:48:45.555 --> 00:48:48.855
2 thirds of them. Actually, all of them that are online, try to sign.
793
00:48:49.395 --> 00:48:49.895
And
794
00:48:50.790 --> 00:48:53.530
with dynamic federations, it's not rapidly changing.
795
00:48:54.390 --> 00:48:58.490
It's just if, you know, if somebody goes out of business, then you probably wanna remove them because,
796
00:48:58.875 --> 00:49:00.575
now, maybe they sell their equipment,
797
00:49:01.674 --> 00:49:11.530
right, if they go bankrupt. Or, you know, you get somebody new that wants to join that's starting a new application, like, SiteSwap, for example. And if you heard about them until a few you know, till probably recently,
798
00:49:12.070 --> 00:49:15.185
and they're doing a lot of stuff. So, now, they joined the liquids.
799
00:49:15.565 --> 00:49:19.905
Right. And maybe they would wanna run a function array, let's say. So
800
00:49:20.285 --> 00:49:22.705
then that would basically be
801
00:49:23.490 --> 00:49:24.710
up to the Liquid Federation
802
00:49:25.250 --> 00:49:25.910
to, like,
803
00:49:26.450 --> 00:49:30.470
discuss amongst themselves to add them and then mechanically to add them
804
00:49:30.994 --> 00:49:32.295
to call some APIs
805
00:49:32.595 --> 00:49:33.255
on the
806
00:49:34.035 --> 00:49:34.855
on the liquid,
807
00:49:35.315 --> 00:49:35.815
hardware
808
00:49:36.674 --> 00:49:37.174
servers
809
00:49:38.035 --> 00:49:39.414
to add this new
810
00:49:40.930 --> 00:49:41.990
new block signer.
811
00:49:42.690 --> 00:49:45.270
And that would you know, it's it's not
812
00:49:45.570 --> 00:49:48.950
you know, it's something that has to be done relatively slowly because the
813
00:49:49.275 --> 00:49:52.175
the PEG keys have to, you know, they go from,
814
00:49:53.035 --> 00:49:55.375
you know, let's say 11 or 15 to
815
00:49:55.835 --> 00:49:58.175
12 or 16 or something to keep the threshold.
816
00:49:58.920 --> 00:49:59.740
And so,
817
00:50:00.600 --> 00:50:03.020
you know, and if somebody left at the same time,
818
00:50:04.120 --> 00:50:09.075
you've got to move the keys the coins off the old multisig onto the new multisig.
819
00:50:09.535 --> 00:50:12.755
So you can't, you know, you can't turn over the keys too quickly
820
00:50:13.535 --> 00:50:15.715
or the redundancy for control of the,
821
00:50:16.255 --> 00:50:20.730
ability to roll the coins forward in the peg wallet could get degraded.
822
00:50:23.190 --> 00:50:23.350
823
00:50:24.685 --> 00:50:27.585
okay. So so that that make that makes sense to me.
824
00:50:28.445 --> 00:50:29.345
We had,
825
00:50:29.805 --> 00:50:33.825
so first of all, I I we have Freaks in the chat. By the way, Freaks,
826
00:50:35.410 --> 00:50:39.830
the way I I consider dispatch, you know, I think it's hosted by the audience.
827
00:50:40.290 --> 00:50:49.865
I I'm just the moderator, and that that is is one of the reasons why the format of the show is the way it is. So I appreciate you all throwing comments into the live chat here,
828
00:50:50.420 --> 00:50:55.960
whether that's through Twitter, Twitch, or YouTube. I do personally think Twitch is is the best, for that,
829
00:50:57.215 --> 00:51:05.795
but I appreciate you all. We have a bunch of freaks in here basically saying that liquid is centralized. I want to just make it very clear to the freaks
830
00:51:06.400 --> 00:51:09.220
that this is an obvious trade off decision
831
00:51:10.000 --> 00:51:10.980
by by
832
00:51:11.520 --> 00:51:14.260
it it is not liquid was never meant
833
00:51:14.885 --> 00:51:17.065
and will never be meant to replace
834
00:51:17.365 --> 00:51:17.865
regular
835
00:51:18.245 --> 00:51:22.020
the the the Bitcoin network. It never was meant to replace a Bitcoin network.
836
00:51:22.340 --> 00:51:24.360
It it is making a clear centralization
837
00:51:24.820 --> 00:51:26.840
trade off. It is being more centralized
838
00:51:27.460 --> 00:51:28.600
for lower fees,
839
00:51:29.140 --> 00:51:30.040
quicker transactions,
840
00:51:31.035 --> 00:51:42.079
and the ability to adapt at a quicker pace than Bitcoin can. Like, that that is that is literally the trade off that the side chain has made. That is going to be more centralized. The question is
841
00:51:42.540 --> 00:51:44.320
is if we can make a network
842
00:51:44.780 --> 00:51:46.560
that sits alongside Bitcoin
843
00:51:47.020 --> 00:51:48.480
that is not too centralized
844
00:51:48.940 --> 00:51:50.160
where you have censorship,
845
00:51:50.835 --> 00:51:52.935
but is is centralized enough
846
00:51:53.395 --> 00:51:56.375
that you that you have those benefits that come with it.
847
00:51:56.915 --> 00:51:58.535
Right. So on that topic,
848
00:51:58.960 --> 00:52:04.099
we had this major concern. I mean, to be honest, I think it was a little bit blown out of proportion because
849
00:52:04.400 --> 00:52:07.714
as far as I'm concerned, liquid is still in the beta phase, and it definitely was
850
00:52:08.015 --> 00:52:08.755
at the time.
851
00:52:09.775 --> 00:52:11.875
But we had this situation where,
852
00:52:12.655 --> 00:52:13.795
I I guess
853
00:52:14.510 --> 00:52:19.170
the the liquid funds in this in this multisig aged past 2015
854
00:52:19.550 --> 00:52:20.690
blocks 2015
855
00:52:21.069 --> 00:52:21.569
blocks,
856
00:52:22.744 --> 00:52:25.965
I guess right before like, that's basically a difficulty adjustment,
857
00:52:26.505 --> 00:52:32.799
amount of blocks. I'd I I imagine that's not a coincidence, and then reverted back to this 2 of 3 emergency
858
00:52:33.180 --> 00:52:33.680
thing,
859
00:52:34.700 --> 00:52:37.599
where the 2 of 3 keys were held by Blockstream
860
00:52:37.980 --> 00:52:38.480
HSMs,
861
00:52:39.714 --> 00:52:41.734
in geographically distributed locations.
862
00:52:42.275 --> 00:52:50.339
Should we talk about this this concern and and how it's been alleviate it has been alleviated since then, I believe. Yeah. Yeah. So it was it was actually
863
00:52:51.440 --> 00:52:54.660
864
00:52:54.960 --> 00:52:58.405
why they're there, and then how they how the
865
00:52:58.945 --> 00:52:59.445
behavior
866
00:53:00.465 --> 00:53:02.165
diverged from what it should have been.
867
00:53:02.625 --> 00:53:03.125
So,
868
00:53:03.745 --> 00:53:04.245
basically,
869
00:53:05.500 --> 00:53:07.520
the 2 of 3 is
870
00:53:08.140 --> 00:53:09.840
a sort of disaster recovery
871
00:53:10.860 --> 00:53:14.480
plan and the keys are actually not, you know, they're on.
872
00:53:15.165 --> 00:53:20.865
They're in very cold storage. They're not loaded in anything. They've never been used. They're they're there
873
00:53:21.405 --> 00:53:22.545
for a kind of very,
874
00:53:23.260 --> 00:53:24.400
hopefully, very unlikely
875
00:53:24.859 --> 00:53:28.140
eventuality, which is enough hardware breaks and enough
876
00:53:28.619 --> 00:53:30.800
and it physically fails and enough
877
00:53:31.605 --> 00:53:34.425
liquid members fumble or fail it back up,
878
00:53:34.725 --> 00:53:43.660
and you lose one too many keys to recover the funds. And now that could potentially be because, you know, there's, like, 100 of 1,000,000 of dollars in it already.
879
00:53:44.040 --> 00:53:44.540
So
880
00:53:44.920 --> 00:53:47.180
and that could become, you know, a 1,000,000,000 or 10,000,000,000
881
00:53:47.640 --> 00:53:51.555
depending on usage and market cap and what what people use it for. So
882
00:53:52.255 --> 00:53:52.994
the defensive
883
00:53:53.375 --> 00:53:55.955
kind of Bitcoin thinking was, well,
884
00:53:56.850 --> 00:53:58.470
it will be kind of irresponsible
885
00:53:59.810 --> 00:54:03.990
to have no disaster recovery plan just in case the unexpected
886
00:54:05.644 --> 00:54:12.144
actually happens. Right? And there are certainly Bitcoiners around who really wish they had a better backup plan,
887
00:54:12.599 --> 00:54:27.025
who would have a lot more Bitcoins today if they had, you know, a second backup kind of thing. So, you know, clearly, it would be very easy to remove this 2 or 3. And there's, like, you know, a few lines of code, delete that 1. Then it's 11 to 15, then there's no backup plan, and
888
00:54:27.360 --> 00:54:30.020
there's no, oh, Blockstream could do something.
889
00:54:30.480 --> 00:54:30.980
So
890
00:54:31.520 --> 00:54:36.595
but I think it's the right thing to keep the backup plan. So then, you know, the other thing is, obviously,
891
00:54:37.855 --> 00:54:39.315
we actively don't
892
00:54:39.855 --> 00:54:40.355
want
893
00:54:40.655 --> 00:54:41.955
the ability to
894
00:54:42.415 --> 00:54:43.395
touch the funds.
895
00:54:44.820 --> 00:54:45.960
So it's not just,
896
00:54:46.500 --> 00:54:49.080
a 2 of 3. It's 2 of 3 with a time lock.
897
00:54:49.380 --> 00:54:52.680
So it's kind of dead man's switch. Right? So what's supposed to happen
898
00:54:53.460 --> 00:54:54.120
is that
899
00:54:54.645 --> 00:54:57.305
the 2 of 3 would only ever become active
900
00:54:57.605 --> 00:55:00.025
if the network stops processing transactions
901
00:55:00.405 --> 00:55:02.345
for about a month. Like, it literally
902
00:55:02.660 --> 00:55:03.480
ceased to
903
00:55:03.859 --> 00:55:04.839
process blocks,
904
00:55:05.619 --> 00:55:06.119
which
905
00:55:09.140 --> 00:55:10.599
3rd of the note.
906
00:55:11.495 --> 00:55:12.315
And so
907
00:55:12.855 --> 00:55:17.275
if that time was met, you know, the the blocks are still being produced, the
908
00:55:18.055 --> 00:55:20.530
the keys in the the the coins in the
909
00:55:20.930 --> 00:55:24.950
the wallet should keep getting pushed forward into the future. Now it would get
910
00:55:25.330 --> 00:55:33.335
kinda spent or spent forwards or pegged in or pegged out, and it would just, you know, keep getting pushed forwards. And that's how it's designed. That's what it's supposed to do.
911
00:55:33.714 --> 00:55:34.214
So
912
00:55:34.755 --> 00:55:37.575
and that's that's kind of neat feature because it means that,
913
00:55:38.090 --> 00:55:43.150
you know, we have Blockstream has either 3 backup keys, geo distributed, cold storage,
914
00:55:44.170 --> 00:55:44.670
but
915
00:55:45.184 --> 00:55:49.365
they're not hot unless, like, they have no actually no power
916
00:55:49.904 --> 00:55:51.365
until the network stops
917
00:55:51.744 --> 00:55:57.110
for a protracted period of time, which, you know, normally it's signing once a minute. Right? So that's a pretty extreme
918
00:55:57.570 --> 00:55:58.790
kind of downtime situation.
919
00:55:59.570 --> 00:56:04.470
But now where it where it came and stuck, well, it it it ran its problems is that
920
00:56:05.315 --> 00:56:08.695
we, we had this kind of confluence of bugs, basically.
921
00:56:09.715 --> 00:56:10.215
So
922
00:56:12.010 --> 00:56:14.190
there is a target time window
923
00:56:14.570 --> 00:56:15.070
where
924
00:56:15.690 --> 00:56:21.555
it tries to roll transactions forward if they haven't been otherwise spent by a peg out. And
925
00:56:22.735 --> 00:56:24.435
it it was supposed to be
926
00:56:25.455 --> 00:56:31.010
4 weeks, but it was where the HSM code had 2 weeks and the host had 4 weeks. So it was a mismatch.
927
00:56:32.510 --> 00:56:33.330
And so
928
00:56:33.790 --> 00:56:35.010
it left the window
929
00:56:36.065 --> 00:56:39.685
where it's trying to roll them forward shorter than it should have been.
930
00:56:40.385 --> 00:56:42.805
And then there was another bug that was kinda related.
931
00:56:43.680 --> 00:56:44.180
And
932
00:56:45.200 --> 00:56:45.700
we
933
00:56:46.000 --> 00:56:47.700
were aware of the bug
934
00:56:48.400 --> 00:56:50.100
at, you know, after some time,
935
00:56:50.560 --> 00:56:51.060
and
936
00:56:51.744 --> 00:56:55.905
started trying to fix it. But then things got kinda crazy with COVID. And,
937
00:56:57.505 --> 00:56:58.405
a number of
938
00:56:58.900 --> 00:56:59.880
Fungsturi members
939
00:57:00.180 --> 00:57:03.960
were kind of locked down, so they couldn't and because of the security features, you know, that
940
00:57:04.260 --> 00:57:05.319
you have to be,
941
00:57:06.434 --> 00:57:08.694
physically upgrade on particularly on the HSM,
942
00:57:10.275 --> 00:57:11.734
it made it difficult to quickly,
943
00:57:12.355 --> 00:57:14.295
you know, to fix this. But
944
00:57:15.130 --> 00:57:18.270
what there was a period where there was something like 870
945
00:57:18.570 --> 00:57:19.770
coins that were
946
00:57:20.330 --> 00:57:28.855
Right. Like, it's about 40 minutes, and that was the worst point. But, you know, so we found a more creative way to fix it,
947
00:57:29.494 --> 00:57:33.700
basically, by upgrading a subset, and that was enough. I mean, it's all,
948
00:57:34.400 --> 00:57:35.700
like, fixed properly
949
00:57:36.720 --> 00:57:37.460
over time,
950
00:57:37.840 --> 00:57:39.859
but, you know, there was an immediate kinda
951
00:57:40.565 --> 00:57:41.704
4 node upgrade,
952
00:57:42.085 --> 00:57:42.744
I think.
953
00:57:44.404 --> 00:57:46.184
954
00:57:46.484 --> 00:57:47.625
the lock time?
955
00:57:49.280 --> 00:57:51.839
956
00:57:54.000 --> 00:57:55.460
4 weeks on both the
957
00:57:56.275 --> 00:57:58.135
and the host. And so it starts
958
00:57:58.755 --> 00:58:05.740
to roll forward. I think it's 2 weeks before expiry. So if if they're less than 2 weeks, so if they're more than 2 weeks until expiry,
959
00:58:06.280 --> 00:58:11.400
it just leaves them sitting there because they make it organically used for a for a peg out. So
960
00:58:12.435 --> 00:58:12.935
Yeah.
961
00:58:13.475 --> 00:58:16.375
962
00:58:16.915 --> 00:58:18.615
is Blockstream in a position
963
00:58:19.155 --> 00:58:19.655
to
964
00:58:19.955 --> 00:58:23.610
force that situation to go into a 2 of 3?
965
00:58:25.110 --> 00:58:25.770
966
00:58:26.150 --> 00:58:30.570
967
00:58:31.015 --> 00:58:34.155
968
00:58:34.615 --> 00:58:35.115
bug,
969
00:58:35.494 --> 00:58:36.795
you know, we have no remote
970
00:58:37.255 --> 00:58:37.755
grades.
971
00:58:38.420 --> 00:58:39.960
They have to source code everything.
972
00:58:40.740 --> 00:58:41.240
And,
973
00:58:42.980 --> 00:58:44.440
so long as they keep transacting,
974
00:58:45.060 --> 00:58:56.380
you know, the keys could be posted on the Internet and nothing would happen effectively. Right? Because they'd be powerless. I mean, that would be a good thing to do because if the network ever did stop for, like, a couple of weeks,
975
00:58:56.680 --> 00:58:58.700
that that would be risky. But just to illustrate,
976
00:58:59.080 --> 00:59:02.380
they have they should, you know, by design, have no power
977
00:59:03.160 --> 00:59:05.260
unless the network stops for
978
00:59:10.105 --> 00:59:14.105
so that's that's the trade off. And, you know, I've I've even though that,
979
00:59:16.010 --> 00:59:21.310
has its has its risks, I think the risk of funds loss is
980
00:59:22.010 --> 00:59:24.350
sufficiently high. It's good to have this
981
00:59:25.175 --> 00:59:27.115
this kind of, backup situation.
982
00:59:27.655 --> 00:59:29.115
983
00:59:29.415 --> 00:59:35.270
of federation members can stop this from going to the 2 or 3 period. Right? Basically,
984
00:59:36.050 --> 00:59:37.430
985
00:59:37.810 --> 00:59:40.869
continues to process blocks, it shouldn't happen.
986
00:59:41.595 --> 00:59:42.415
987
00:59:43.035 --> 00:59:45.275
Can you tell us anything about the HSMs? Or
988
00:59:48.910 --> 00:59:49.410
989
00:59:50.030 --> 00:59:57.490
I mean, not that much, really. I mean, this we're working on a second version. We've deployed a couple of the new version ones, which have more
990
00:59:58.115 --> 00:59:59.095
kind of tamper detection
991
00:59:59.635 --> 01:00:07.460
Mhmm. Circuits and things like that than the first one. I mean, the first one has some kind of key zeroing tamper stuff as well, but the new one has more.
992
01:00:07.940 --> 01:00:11.960
It's kind of more powerful, more modern HSM that we designed.
993
01:00:12.580 --> 01:00:13.080
And
994
01:00:13.780 --> 01:00:17.160
what we're thinking to do actually is when we get the Dynafed
995
01:00:18.645 --> 01:00:20.185
deployed is to
996
01:00:20.725 --> 01:00:26.745
open a lot of it. So open open, you know, the source for the HSM and sell the HSMs.
997
01:00:27.285 --> 01:00:31.530
The people are interested to operate liquid like networks or to operate,
998
01:00:32.230 --> 01:00:32.809
you know,
999
01:00:33.109 --> 01:00:43.345
different pegs into it. So at the moment, there's one peg which is operated by the same services of block signer. But in principle, there could be other pegs operated independently, and you could choose
1000
01:00:44.640 --> 01:00:47.300
which peg you like the, you know,
1001
01:00:47.920 --> 01:00:48.660
the independence
1002
01:00:49.359 --> 01:00:49.859
and,
1003
01:00:51.985 --> 01:00:54.325
commitments, privacy, and so on. I
1004
01:00:56.545 --> 01:01:00.485
saw one question in the in the chat score about a minute ago, which I thought was quite interesting
1005
01:01:03.820 --> 01:01:09.200
related to this, which is the question was, there have been a case where the Federation has blocked a peg out. And so
1006
01:01:10.685 --> 01:01:11.345
the answer
1007
01:01:11.725 --> 01:01:11.805
is,
1008
01:01:13.244 --> 01:01:15.825
not no. That that won't happen because
1009
01:01:16.605 --> 01:01:19.425
technically the peg out is is only going to the
1010
01:01:20.240 --> 01:01:21.060
hardware wallets
1011
01:01:21.600 --> 01:01:22.420
of the
1012
01:01:22.800 --> 01:01:24.900
federation members. Right? And so
1013
01:01:25.840 --> 01:01:26.340
if,
1014
01:01:27.685 --> 01:01:34.485
you know, you you would go to the sites what wallet and post your Bitcoin address, and then they would pay that from their
1015
01:01:35.210 --> 01:01:36.589
from the coins they have,
1016
01:01:37.529 --> 01:01:38.509
in their own wallet.
1017
01:01:38.970 --> 01:01:42.509
And if they run out of coins in their own wallet, they'll they'll have you wait until
1018
01:01:42.815 --> 01:01:51.715
the peg out happens, and then they'll give you the coins that are pegged out. So as far as I know, it hasn't happened. But, technically, the drip peg out is to, you know, this this kind of offline
1019
01:01:52.330 --> 01:01:53.390
hardware works. Right?
1020
01:01:54.890 --> 01:01:55.390
So,
1021
01:01:56.010 --> 01:01:58.670
you you mentioned something else there, Matt, which was,
1022
01:02:00.385 --> 01:02:02.085
we have a plan, like,
1023
01:02:02.464 --> 01:02:04.244
a a road map, a new design
1024
01:02:04.865 --> 01:02:10.910
to have direct user packouts. And so I think it's Andrew Polstra who thought of this idea. So recall the original
1025
01:02:11.530 --> 01:02:14.350
offline hardware wallet design was Greg Maxwell's
1026
01:02:15.135 --> 01:02:16.675
way to improve the security.
1027
01:02:17.295 --> 01:02:20.675
So more recently, Andrew Polstra, who's, head research
1028
01:02:21.375 --> 01:02:21.955
at Blockstream,
1029
01:02:24.530 --> 01:02:27.990
Hit on the idea that you could allow direct user peg out
1030
01:02:28.290 --> 01:02:29.270
and still have
1031
01:02:29.650 --> 01:02:30.870
sort of similar security,
1032
01:02:32.745 --> 01:02:34.525
effect by making it slower.
1033
01:02:34.825 --> 01:02:35.325
So,
1034
01:02:35.785 --> 01:02:40.185
you know, lots of people can run full nodes. So if there was ever a peg out that didn't correspond to
1035
01:02:41.230 --> 01:02:47.490
you know, if if coins left the wallet that didn't correspond to a matching peg out, lots of people would notice and complain.
1036
01:02:48.349 --> 01:02:49.089
And so
1037
01:02:49.565 --> 01:02:52.545
if you made a process where there was an API for,
1038
01:02:53.405 --> 01:02:55.825
you know, a threshold of the HSMs to
1039
01:02:56.809 --> 01:02:57.309
retroactively
1040
01:02:58.890 --> 01:03:03.230
lock a Pega in progress, you know, the default is most likely
1041
01:03:03.635 --> 01:03:07.175
that will never happen, and they'll just go out, but they'll be delayed by,
1042
01:03:07.475 --> 01:03:12.150
you know, a 100 blocks or something that will give humans time to react if something goes wrong.
1043
01:03:12.710 --> 01:03:13.849
And that would achieve
1044
01:03:14.390 --> 01:03:15.690
a sort of similar effects
1045
01:03:16.069 --> 01:03:16.569
without
1046
01:03:16.950 --> 01:03:22.855
news pass through the hands of the middle man, you know, sort of somebody who's gonna give you their own coins and then fetch them out of the,
1047
01:03:23.975 --> 01:03:24.875
out of the wallet.
1048
01:03:25.415 --> 01:03:27.035
I mean That that was idea.
1049
01:03:28.190 --> 01:03:29.790
1050
01:03:30.190 --> 01:03:32.210
we have freaks in the chat asking,
1051
01:03:32.830 --> 01:03:36.290
what an HSM and HSM is, which means
1052
01:03:36.885 --> 01:03:44.345
that, the majority of the freaks coming in through the audio feeds are are are also confused. That means hardware security module.
1053
01:03:45.160 --> 01:03:47.900
Basically, a physical device that is encoded
1054
01:03:48.280 --> 01:03:49.819
to a certain set of rules.
1055
01:03:50.520 --> 01:03:56.435
For for a Bitcoin, the way you could think of it is like a purpose built hardware wallet that's always connected to the Internet,
1056
01:03:57.055 --> 01:03:59.795
and is signing based on a specific set of rules,
1057
01:04:00.575 --> 01:04:01.555
to to reduce,
1058
01:04:02.220 --> 01:04:05.040
the risk of any kind of hot wallet
1059
01:04:05.900 --> 01:04:06.400
attack.
1060
01:04:08.060 --> 01:04:08.560
1061
01:04:09.535 --> 01:04:16.595
1062
01:04:18.390 --> 01:04:19.690
is is is basically
1063
01:04:21.270 --> 01:04:26.410
the easiest way to mitigate the risk of of not being able to exit liquid
1064
01:04:26.865 --> 01:04:27.185
Bitcoin
1065
01:04:27.665 --> 01:04:29.045
exit the liquid network,
1066
01:04:30.225 --> 01:04:33.285
is is competition, is having a lot of different,
1067
01:04:33.825 --> 01:04:34.565
you know,
1068
01:04:35.025 --> 01:04:35.845
lot of different
1069
01:04:36.440 --> 01:04:37.340
people, organizations
1070
01:04:37.800 --> 01:04:39.900
offering the ability to swap out.
1071
01:04:40.440 --> 01:04:40.940
Hopefully,
1072
01:04:41.960 --> 01:04:45.340
technical improvements in terms of, like, kind of distributed decentralized
1073
01:04:45.640 --> 01:04:46.735
atomic swaps.
1074
01:04:47.755 --> 01:04:53.535
But also on top of all of that, I mean, I think the fact that confidential transactions exist on liquid,
1075
01:04:54.075 --> 01:04:55.615
and you can't see the amounts,
1076
01:04:57.080 --> 01:05:00.300
adds another layer that makes censorship more difficult,
1077
01:05:00.600 --> 01:05:03.580
just because transactions are more private on the network.
1078
01:05:05.075 --> 01:05:07.735
On that note, I'm I'm kind of curious.
1079
01:05:08.995 --> 01:05:10.695
I think the confidential transactions
1080
01:05:10.995 --> 01:05:13.655
aspect really cool on Liquid, and,
1081
01:05:14.240 --> 01:05:22.340
you know, it's kind of I know it's a hot button issue. It's something that I I want to I I kinda wanna see on chain Bitcoin as well,
1082
01:05:23.075 --> 01:05:26.454
but we have it on liquid right now, and I can play around with it on liquid.
1083
01:05:27.555 --> 01:05:29.894
Is there a specific reason why?
1084
01:05:30.880 --> 01:05:32.339
So confidential transactions
1085
01:05:32.720 --> 01:05:34.500
is blinds the amounts.
1086
01:05:35.520 --> 01:05:37.700
Right. It blinds the amounts, and then
1087
01:05:38.115 --> 01:05:38.855
and then
1088
01:05:39.235 --> 01:05:39.735
there's
1089
01:05:40.035 --> 01:05:47.655
we're we're calling it with your confidential assets, I think, is what you're calling the fact that it blinds the tokens. Correct?
1090
01:05:48.069 --> 01:05:48.569
Right.
1091
01:05:49.109 --> 01:05:55.609
And so so so if you're sending Tethr or if you're sending a 100 sats, you can't tell which which is happening.
1092
01:05:55.990 --> 01:05:57.210
Or it could be
1093
01:05:57.525 --> 01:06:00.425
it could be like a a a spaceship in Samsung's,
1094
01:06:00.965 --> 01:06:08.480
video game, like an NFT in Samsung's video game or a 100 sats or tether, and you wouldn't tell what it is, and they can all be coin joined together.
1095
01:06:09.820 --> 01:06:11.280
Is there a reason why
1096
01:06:12.045 --> 01:06:14.944
stealth addresses haven't been added to liquid
1097
01:06:15.244 --> 01:06:15.744
versus
1098
01:06:16.125 --> 01:06:18.704
because the stealth addresses is this idea where,
1099
01:06:19.530 --> 01:06:24.430
I mean, the show is a perfect example with dispatch. If if I could post a stealth address,
1100
01:06:26.145 --> 01:06:35.205
and then people could donate and don't they don't completely docks the amounts and who's donating. Is there a reason why stealth addresses aren't on liquid yet?
1101
01:06:36.990 --> 01:06:38.450
1102
01:06:40.110 --> 01:06:40.930
I think
1103
01:06:41.870 --> 01:06:45.835
that I mean, I I was pretty interested in stealth addresses and try to find ways to,
1104
01:06:47.255 --> 01:06:52.155
make them more efficient. I think the downside of self addresses is the recipient
1105
01:06:52.695 --> 01:06:53.995
basically has to
1106
01:06:54.599 --> 01:06:57.500
try to decrypt every every stuff transaction
1107
01:06:58.760 --> 01:07:03.339
that goes on the blockchain, period. Right? So it's like CPU heavy for the recipient.
1108
01:07:03.714 --> 01:07:07.494
It's just a little tricky to do it on a smartphone, for example. Right? So you have to download all
1109
01:07:08.275 --> 01:07:11.974
transaction. I mean, if every transaction is stealth transaction, which should be ideal,
1110
01:07:12.589 --> 01:07:17.170
you'd have to download them all. You have to be a full node. You have to, like, try and decrypt them all.
1111
01:07:17.550 --> 01:07:22.444
So that's the kinda downside. I know some trade offs as well. People like, oh, you know, well,
1112
01:07:23.704 --> 01:07:25.165
I will make sure that mine,
1113
01:07:25.865 --> 01:07:34.059
like, start with this number. I'll only try to decrypt a 10th of it something, but then you've got less privacy. So, yes, sir, the the overhead is the issue.
1114
01:07:34.519 --> 01:07:40.904
1115
01:07:41.605 --> 01:07:45.785
I've been independently trying to help, like, activists and stuff accept Bitcoin privately.
1116
01:07:46.799 --> 01:07:48.020
And, like, the the
1117
01:07:48.400 --> 01:07:51.220
the dream, right, is that they can post, like, a text string,
1118
01:07:51.520 --> 01:07:52.819
and they can just receive
1119
01:07:53.359 --> 01:07:55.299
Bitcoin in a private way. Right?
1120
01:07:55.665 --> 01:07:56.165
And
1121
01:07:56.785 --> 01:07:58.565
it it kind of I mean
1122
01:07:59.425 --> 01:08:05.740
I mean, Adam, you're a legend here. I I'm I am I am just a a mere mortal. I just use these things.
1123
01:08:06.520 --> 01:08:10.380
It seems like Monero has figured out a way to do this stealth address
1124
01:08:10.765 --> 01:08:19.185
where I they can just post a a string of of of letters and numbers, and they can just receive donations in a in a relatively private way.
1125
01:08:20.960 --> 01:08:27.985
Can Liquid be that as as well? Like, can Liquid have that stealth address, Krishna? Like, what what am I missing something here?
1126
01:08:28.945 --> 01:08:31.205
1127
01:08:31.585 --> 01:08:33.925
which would be possible
1128
01:08:35.505 --> 01:08:36.965
with wallet support.
1129
01:08:37.800 --> 01:08:38.300
So
1130
01:08:38.760 --> 01:08:42.060
Liquid is very Bitcoin like, but with
1131
01:08:42.679 --> 01:08:45.580
extensions for confidential transactions and things like that.
1132
01:08:46.040 --> 01:08:46.860
And so,
1133
01:08:47.835 --> 01:08:49.535
you know, how how the wallet
1134
01:08:50.875 --> 01:08:51.375
presents
1135
01:08:51.915 --> 01:08:54.815
that to users, some of the features are, like,
1136
01:08:55.210 --> 01:08:58.350
wallet only. They don't need network changes. Right? And so
1137
01:08:59.050 --> 01:09:04.415
stealth addresses are like that. It doesn't doesn't need any network. It doesn't need, like, a soft fork or anything. You can just do it.
1138
01:09:05.055 --> 01:09:07.955
Usually send some extra data or not true or something.
1139
01:09:08.815 --> 01:09:09.215
But
1140
01:09:09.935 --> 01:09:16.000
so I think it's a trade off you could do in a wallet and it just has a cost. You know? Now you need a full node or you need to
1141
01:09:16.460 --> 01:09:20.640
semi trust a server to scan them for you, but at least the whole network can't see it.
1142
01:09:22.765 --> 01:09:23.265
And
1143
01:09:24.605 --> 01:09:26.145
yeah. I mean, I think if
1144
01:09:27.645 --> 01:09:33.890
that could be made more lightweight or people would just deal with it, right, run full nodes and live with this cost,
1145
01:09:34.990 --> 01:09:35.490
ideally,
1146
01:09:35.870 --> 01:09:41.285
staff addresses would be the default type of address. Because if you think about it, it's very convenient that you can have
1147
01:09:41.825 --> 01:09:47.845
an address that you can safely reuse. Like, having to keep changing addresses is very confusing to use this. So it's kinda ideal
1148
01:09:48.660 --> 01:09:52.120
solution. And I tried for a while to see if I could find a way to,
1149
01:09:52.900 --> 01:10:01.435
you know, accelerate the crypto or find a different way to do it, but I didn't find any way to do it. So we stuck with this kind of, you know, heavy CPU stuff.
1150
01:10:01.975 --> 01:10:02.475
And
1151
01:10:02.935 --> 01:10:04.635
actually, I mean, about the,
1152
01:10:05.300 --> 01:10:06.200
you know, Monero
1153
01:10:06.900 --> 01:10:09.000
things, it it actually adopted,
1154
01:10:09.860 --> 01:10:12.520
you know, a bunch of stuff that,
1155
01:10:13.755 --> 01:10:17.295
we did at Blockstream or that I proposed before Blockstream. So
1156
01:10:17.755 --> 01:10:18.415
I proposed
1157
01:10:19.195 --> 01:10:20.735
a way to shrink the
1158
01:10:21.355 --> 01:10:21.855
original
1159
01:10:22.580 --> 01:10:28.679
linkable rigs ring signature by 50%. And they, you know, they went off and hard forked it in. So I was like, well, okay.
1160
01:10:29.060 --> 01:10:31.885
They actually do r and d and deploy it. That's cool. And,
1161
01:10:33.244 --> 01:10:34.705
and more recently, they did,
1162
01:10:36.045 --> 01:10:39.580
they added confidential transactions to the ring sync. And
1163
01:10:40.120 --> 01:10:41.820
there's another variant of,
1164
01:10:45.080 --> 01:10:45.580
the
1165
01:10:46.455 --> 01:10:51.435
the way that Monero does things, which is more scalable, actually. So at the same time, I proposed
1166
01:10:51.735 --> 01:10:53.435
confidential transactions. I proposed
1167
01:10:55.420 --> 01:10:56.160
kind of,
1168
01:10:59.020 --> 01:10:59.920
way to
1169
01:11:02.755 --> 01:11:03.255
send,
1170
01:11:04.114 --> 01:11:06.054
other people dust. So,
1171
01:11:06.355 --> 01:11:09.975
if you think about you could do this in liquid. It just would require client support.
1172
01:11:10.594 --> 01:11:10.755
So
1173
01:11:11.600 --> 01:11:15.780
which is if the wallet just, you know, grabs other addresses and sends people
1174
01:11:16.160 --> 01:11:22.705
1 sat or 0 sat or something Yeah. That'd be great. And the wallets accept that and just ingest it and use it,
1175
01:11:23.725 --> 01:11:27.070
it doesn't it doesn't have the forever growing UTXO set
1176
01:11:27.630 --> 01:11:33.969
side effects that the linkable ring signature does, but it has the same basically, the same kind of privacy side effect.
1177
01:11:34.565 --> 01:11:40.344
And so I thought that was pretty cool. And I'd actually propose that at the same time as confidential transactions, but, yeah, it was
1178
01:11:40.725 --> 01:11:41.465
more ideas
1179
01:11:42.150 --> 01:11:43.770
and how people implemented.
1180
01:11:44.390 --> 01:11:46.330
1181
01:11:46.870 --> 01:11:51.450
Look, I'm I'm very privacy focused. The freaks here know this. The audience here knows this.
1182
01:11:53.175 --> 01:11:58.155
You know, is is to me, I think the whole idea of focusing
1183
01:11:58.535 --> 01:11:59.915
liquid on traders,
1184
01:12:02.199 --> 01:12:05.820
you know, I could get I'll I literally could give 2 shits. I do not care,
1185
01:12:06.600 --> 01:12:10.775
what the traders use. I understand, like, it has knock on effects for for
1186
01:12:11.155 --> 01:12:14.135
the regular users in terms of them not using our chain
1187
01:12:14.594 --> 01:12:15.975
space, which is fantastic.
1188
01:12:17.965 --> 01:12:18.400
But
1189
01:12:18.960 --> 01:12:20.260
confidential transactions,
1190
01:12:20.800 --> 01:12:22.500
really fucking cool to me.
1191
01:12:23.520 --> 01:12:24.500
So so
1192
01:12:26.945 --> 01:12:34.965
like, do you agree that there's there's, like, there's I think there's, like, an area for for Liquid to excel in terms of of increasing
1193
01:12:36.159 --> 01:12:39.219
p to p, person to person transaction privacy,
1194
01:12:39.599 --> 01:12:42.420
transactional privacy in an easy accessible way.
1195
01:12:44.155 --> 01:12:50.815
Like you said, like, little things, like like self shuffling self shuffling on with confidential transactions
1196
01:12:51.115 --> 01:12:52.735
actually can improve your privacy.
1197
01:12:53.150 --> 01:12:53.890
Self shuffling
1198
01:12:54.270 --> 01:12:59.810
on Bitcoin on chain, you just look like an idiot, and you're spending a shit ton of money like an idiot. Right?
1199
01:13:00.244 --> 01:13:05.304
1200
01:13:05.764 --> 01:13:06.905
confidential transactions
1201
01:13:07.284 --> 01:13:10.180
when he realized because Greg was the original,
1202
01:13:11.440 --> 01:13:12.820
proposer of CoinJoints
1203
01:13:13.440 --> 01:13:16.580
some years before. I don't know. Like, 2011 or 12 or something.
1204
01:13:16.885 --> 01:13:19.225
And so when he realized that confidential transactions
1205
01:13:20.565 --> 01:13:21.065
work
1206
01:13:21.685 --> 01:13:30.100
very well with coin joins and actually make any join a perfect coin join because you don't you don't know anything about the amounts, which is usually what creates the problem for coin joins.
1207
01:13:30.640 --> 01:13:32.580
And I got I thought that was pretty, you know,
1208
01:13:32.935 --> 01:13:33.675
more exciting
1209
01:13:34.454 --> 01:13:39.195
and got enthusiastic to put that together sort of thing. So it's certainly be possible to,
1210
01:13:39.735 --> 01:13:40.635
you know, run,
1211
01:13:41.660 --> 01:13:51.585
you know, port port one of the coin joint wallets to liquid, for example. It's very similar, and it and it would be much more effective because, you know, all these debates between Samura
1212
01:13:52.205 --> 01:13:52.705
and
1213
01:13:53.804 --> 01:13:54.304
Wasabi
1214
01:13:54.605 --> 01:13:59.300
about, you know, change management and value matching and stuff like that.
1215
01:13:59.840 --> 01:14:09.965
I think a lot of those things are simplified because you can basically join anything to anything. It doesn't even have to be the same asset type in liquid. But, you know Exactly. It could be an NFT. It could be Tether. It doesn't fucking
1216
01:14:10.505 --> 01:14:11.405
1217
01:14:11.785 --> 01:14:13.085
1218
01:14:14.745 --> 01:14:15.245
And
1219
01:14:18.360 --> 01:14:18.860
right.
1220
01:14:19.320 --> 01:14:22.700
Let's see. Backtracking a bit because we got got off on a lot of topics there.
1221
01:14:23.745 --> 01:14:25.205
We do the the the
1222
01:14:25.985 --> 01:14:28.725
the, like, the, disaster recovery key.
1223
01:14:29.345 --> 01:14:30.005
That was,
1224
01:14:30.865 --> 01:14:35.809
how that why that's there, how it got fixed. Oh, yeah. So something else I was gonna say is that the,
1225
01:14:36.429 --> 01:14:39.329
you know, the fact that liquid is federated
1226
01:14:40.429 --> 01:14:40.929
is
1227
01:14:41.945 --> 01:14:46.204
actually, you know, just a side effect. So the original side chain white paper
1228
01:14:46.905 --> 01:14:53.170
proposed a soft walk to Bitcoin. Now we actually implement this. Matt Corella did that, you know, in the early days when he was at Silver Blockstream.
1229
01:14:53.949 --> 01:14:54.449
And
1230
01:14:55.150 --> 01:15:03.315
that would be kind of fully pit to peer side chain. So if your soft walk to Bitcoin is similar in concept to drive chains. That's that's another method.
1231
01:15:03.855 --> 01:15:05.555
And so then the
1232
01:15:06.220 --> 01:15:09.600
the soft walk in Bitcoin would have, you know, just enough
1233
01:15:10.700 --> 01:15:11.760
awareness of
1234
01:15:12.860 --> 01:15:15.440
small proofs from the side chain to verify
1235
01:15:16.665 --> 01:15:17.165
that,
1236
01:15:18.105 --> 01:15:28.970
these pagans are, you know, from the from the side chain into the main chain are authorized, and then you don't need any HSMs or signers. It's like, you know, miners are effectively processing that without any keys.
1237
01:15:31.910 --> 01:15:41.075
And so I think it would, you know, be very nice to get back, you know, to get that next. So we just did, you know, the federated model because
1238
01:15:43.340 --> 01:15:50.855
there there were more technical challenges. And you wanna, you know, start somewhere and improve from it. Right? So we did the federated one first. We're
1239
01:15:51.235 --> 01:15:52.135
about to do the
1240
01:15:52.435 --> 01:15:52.935
dynamic
1241
01:15:53.475 --> 01:15:54.775
version, and
1242
01:15:55.235 --> 01:15:59.150
we're thinking about how to do how to do the next one. So I saw
1243
01:15:59.690 --> 01:16:00.190
Sergio,
1244
01:16:00.890 --> 01:16:02.670
from Rootstock has another
1245
01:16:03.050 --> 01:16:05.230
new idea and then there's a drive chain
1246
01:16:05.695 --> 01:16:07.395
thing that Paul Storz has been working
1247
01:16:07.935 --> 01:16:08.594
on. So
1248
01:16:09.375 --> 01:16:10.275
now it takes
1249
01:16:11.054 --> 01:16:17.090
it's it's a, you know, it's an adventurous and complicated soft fork to make to Bitcoin, right, to support side chains. But
1250
01:16:17.869 --> 01:16:18.530
I think
1251
01:16:19.550 --> 01:16:21.650
it's, you know, it's a very useful
1252
01:16:22.425 --> 01:16:24.605
soft work because it allows,
1253
01:16:24.905 --> 01:16:26.125
you know, more decentralized
1254
01:16:27.465 --> 01:16:28.445
opt in features,
1255
01:16:28.905 --> 01:16:29.565
for Bitcoin.
1256
01:16:31.239 --> 01:16:35.019
So yeah. The the, you know, the side effects of the federation are
1257
01:16:35.559 --> 01:16:38.699
are felt because we we really want to get to the
1258
01:16:39.165 --> 01:16:46.500
fully paid to pay. The other thing that kinda complicated the fully paid to pay version is you're you're effectively trusting miners, sort of, you know.
1259
01:16:47.060 --> 01:16:48.920
More so than with direct Bitcoin.
1260
01:16:49.300 --> 01:16:50.600
Because with direct Bitcoin,
1261
01:16:51.620 --> 01:16:54.440
everybody's running a full node and they can verify
1262
01:16:54.740 --> 01:17:01.355
all the blocks. So if one miner goes crazy, you can ignore them. Right? And it doesn't matter that much. But with,
1263
01:17:03.280 --> 01:17:05.060
with the side chain,
1264
01:17:06.000 --> 01:17:07.040
you're sort of,
1265
01:17:09.040 --> 01:17:15.905
you know, the majority of the hash rate, basically, if it was dishonest, could steal from the side chain wallet, you know, side chain peg wallet.
1266
01:17:16.285 --> 01:17:19.480
So that's the trade off with side chains. And you can't really,
1267
01:17:20.100 --> 01:17:22.679
you know, make a soft walk rule to verify
1268
01:17:23.139 --> 01:17:30.375
the side chain blocks because if you do that, it's not a side chain anymore. It's, it's an extension block, and people don't like that for a good reason.
1269
01:17:31.715 --> 01:17:35.335
1270
01:17:35.715 --> 01:17:36.695
on main chain?
1271
01:17:37.750 --> 01:17:38.730
1272
01:17:39.110 --> 01:17:41.050
It'd be a certainly a much more interesting
1273
01:17:41.910 --> 01:17:43.050
debate to have,
1274
01:17:43.830 --> 01:17:46.490
than a block size debate from a few years ago.
1275
01:17:46.935 --> 01:17:48.795
And I'm I'm thinking it might be,
1276
01:17:49.255 --> 01:17:53.675
you know, a different set of people arguing on different sites. Right? You know? I think so too.
1277
01:17:53.975 --> 01:18:02.000
You know, because because I mean, I I I also suggested to people when they were having, you know, the block size debate that it would be
1278
01:18:02.780 --> 01:18:04.560
a logical thing to do
1279
01:18:05.764 --> 01:18:10.185
to increase the block size a bit, you know, like 4 times or something,
1280
01:18:10.965 --> 01:18:13.704
and put in confidential transactions at the same time
1281
01:18:14.380 --> 01:18:18.239
with the same kind of argument I was making about, you know, liquid being
1282
01:18:18.860 --> 01:18:20.159
a trade off in between
1283
01:18:21.100 --> 01:18:22.960
the very private churn server
1284
01:18:24.844 --> 01:18:25.585
and Bitcoin
1285
01:18:26.445 --> 01:18:27.824
pseudonymity based model,
1286
01:18:28.204 --> 01:18:33.264
which is that, you know, what are the side effects of a bigger block? Well, you know, it's more expensive to verify
1287
01:18:33.790 --> 01:18:35.570
There's increased risk of,
1288
01:18:36.030 --> 01:18:40.610
you know, minus centralization. And what's what's the consumer minus centralization? Well, selective censorship.
1289
01:18:41.150 --> 01:18:43.855
So if you've got more privacy that kind of counteracts
1290
01:18:44.395 --> 01:18:49.295
some of that centralization censorship risk. So I would say, I mean, you can't really
1291
01:18:50.120 --> 01:18:57.980
measure it exactly, but I'd say there's a reasonable argument to be made that, you know, the more fungible it is, more private it is,
1292
01:18:58.595 --> 01:19:00.135
the bigger a block you can
1293
01:19:00.915 --> 01:19:01.415
handle
1294
01:19:01.875 --> 01:19:07.975
without that creating a, you know, a bad side effects. Because the miners don't know what to sensor, basically.
1295
01:19:08.820 --> 01:19:18.635
Yeah. And you get you get a bit of that in liquid, but any kind of, you know, light version of it. I mean, confidential transactions are not, you know, silver bullet. Right? Because you still have
1296
01:19:19.255 --> 01:19:24.395
the transaction graph. It's just you really can't tell what's changed and what's payment and
1297
01:19:24.960 --> 01:19:28.900
what what type is what, so it gets lost pretty quickly.
1298
01:19:29.600 --> 01:19:31.220
1299
01:19:32.295 --> 01:19:33.594
1300
01:19:34.375 --> 01:19:37.435
1301
01:19:38.054 --> 01:19:39.494
1302
01:19:40.340 --> 01:19:45.720
listening to Adam. Yes. I I yeah. I had a lot of thoughts about the, the federated model because,
1303
01:19:46.260 --> 01:19:52.895
I know we'll we'll get to BISC later, but BISC is also a federated model. And I think this is this is kind of an underrated,
1304
01:19:53.275 --> 01:19:57.935
thing or a lot of people are maybe afraid of it because they don't understand why,
1305
01:19:58.810 --> 01:20:01.390
you would make a federation in the 1st place. But,
1306
01:20:01.850 --> 01:20:07.150
the way I think about is that every transaction has, like, I don't know, maybe 4 or 5 properties.
1307
01:20:09.255 --> 01:20:11.275
So, obviously, security, privacy,
1308
01:20:11.655 --> 01:20:12.635
censorship resistance,
1309
01:20:14.215 --> 01:20:20.429
the, the cost of the transaction, and the speed of the transaction. Right? So I guess that's 5. And they all kind of,
1310
01:20:21.309 --> 01:20:23.010
trade off on each other. Right? Obviously,
1311
01:20:23.469 --> 01:20:29.085
we all know on the Bitcoin, main chain, if you use a higher fee, then you'll get a higher speed.
1312
01:20:29.545 --> 01:20:30.025
And,
1313
01:20:31.145 --> 01:20:33.885
likewise, if you want some additional functionality,
1314
01:20:34.530 --> 01:20:36.630
if you want to be able to trade,
1315
01:20:37.810 --> 01:20:41.110
then maybe you need more op codes in your transaction,
1316
01:20:41.570 --> 01:20:47.385
when you approach, like, smart contract functionality. So the size of the transaction gets larger, and so therefore,
1317
01:20:47.764 --> 01:20:49.864
your fees will will also be larger.
1318
01:20:50.710 --> 01:20:53.610
And, so so all of these security privacy,
1319
01:20:54.310 --> 01:20:54.810
functionality,
1320
01:20:55.510 --> 01:20:56.489
censorship resistance,
1321
01:20:57.270 --> 01:20:58.890
speed, and cost
1322
01:20:59.655 --> 01:21:04.155
are all affecting each other. And, if you change on any one of the variables,
1323
01:21:04.855 --> 01:21:16.559
then the entire equation kinda changes. So, of course, users want everything. Users want everything. They want the security of the Bitcoin main chain. They want, base layer privacy. They want censorship resistance.
1324
01:21:17.605 --> 01:21:22.345
They want the transaction confirmed right away, and they want it all for free or low fees. But,
1325
01:21:23.205 --> 01:21:23.705
unfortunately,
1326
01:21:24.910 --> 01:21:27.730
you know, this is this is the downside of digital scarcity.
1327
01:21:28.190 --> 01:21:31.890
There's only 21,000,000 Bitcoins. That's what gives Bitcoin its value.
1328
01:21:32.425 --> 01:21:38.284
But, at the same time, the same digital scarcity means that the space in Bitcoin's blockchain
1329
01:21:38.985 --> 01:21:41.005
is scarce, and so that,
1330
01:21:41.530 --> 01:21:45.309
will also increase in value. The, you know, the actual bytes. As you said,
1331
01:21:45.770 --> 01:21:47.869
Bitcoin fees are designed to pump forever.
1332
01:21:48.415 --> 01:21:49.075
And so
1333
01:21:49.615 --> 01:21:56.670
it hasn't been super relevant to to worry about Bitcoin on chain fees for a long time until recently. And now,
1334
01:21:57.469 --> 01:22:01.410
just a a couple weeks ago, we saw fees. I think they were over 300
1335
01:22:01.790 --> 01:22:03.090
SaaS per v byte.
1336
01:22:03.630 --> 01:22:04.449
And so,
1337
01:22:05.065 --> 01:22:07.565
a typical on chain transaction was approaching,
1338
01:22:07.945 --> 01:22:09.645
I think like 25, $30.
1339
01:22:10.505 --> 01:22:11.005
And
1340
01:22:11.385 --> 01:22:23.280
if you extrapolate this out and you realize, okay, maybe not this cycle, maybe 5 years from now or 10 years from now, yeah, a Bitcoin transaction could cost several $100 or even more.
1341
01:22:24.125 --> 01:22:24.785
And so,
1342
01:22:26.205 --> 01:22:29.185
how do you how do you address this? Well, there's,
1343
01:22:29.805 --> 01:22:36.750
the the fed the federated model is one way to kind of balance the equation of security and privacy and,
1344
01:22:37.530 --> 01:22:40.590
and speed and and cost and functionality. So,
1345
01:22:42.435 --> 01:22:48.215
obviously, with liquid, you know, you're trading off some of the security. You don't have the,
1346
01:22:49.075 --> 01:22:50.615
Bitcoin base layer
1347
01:22:51.079 --> 01:22:52.940
security that that blockchain provides.
1348
01:22:53.400 --> 01:22:53.900
Maybe,
1349
01:22:55.000 --> 01:23:01.485
you know, you you lose a little bit of censorship resistance. Maybe I mean, the the privacy gives you censorship resistance,
1350
01:23:01.864 --> 01:23:04.985
so it's so it's it's in a different way. If you use,
1351
01:23:05.545 --> 01:23:09.110
Liquid, then you actually gain privacy because of the confidential transactions,
1352
01:23:09.650 --> 01:23:13.670
and the fees are lower. Right? So you're kind of trading that security to gain privacy,
1353
01:23:14.290 --> 01:23:15.830
to gain cheaper fees,
1354
01:23:16.195 --> 01:23:22.295
and also speed with the one minute block times. And so you you every federated model or side chain,
1355
01:23:23.850 --> 01:23:31.950
or even other altcoin chains, they all are making trade offs. Right? Like, there's no free lunch where you get everything for free anymore.
1356
01:23:32.574 --> 01:23:36.594
The time of 0 fee transactions and even low fee transactions is,
1357
01:23:37.295 --> 01:23:38.514
probably gone. So
1358
01:23:39.215 --> 01:23:41.395
this is why we use federations. And,
1359
01:23:42.750 --> 01:23:44.130
with Bisk, for example,
1360
01:23:44.590 --> 01:23:47.730
Bisk is also a a type of a federated model where,
1361
01:23:48.829 --> 01:23:50.290
people want to trade.
1362
01:23:50.915 --> 01:23:54.135
And, obviously, Bitcoin's base layer does not support,
1363
01:23:55.155 --> 01:23:58.115
random people trading with each other. And so,
1364
01:23:58.595 --> 01:24:01.130
one one really funny thing I think is that,
1365
01:24:02.230 --> 01:24:12.155
people are really afraid of liquid. A lot of Bisq users are really afraid of liquid because it's a federated security model, but they seem to forget that best Bisc is also,
1366
01:24:12.695 --> 01:24:14.715
a type of federated security model.
1367
01:24:15.335 --> 01:24:16.715
If there's any type of
1368
01:24:17.070 --> 01:24:17.970
trade dispute,
1369
01:24:18.830 --> 01:24:25.585
so so a long time ago, Bisc originally started out with a 2 of 3 multisig model. And we talked about this on your other show,
1370
01:24:26.445 --> 01:24:29.345
Tales from the Crypt, I think about almost 2 years ago.
1371
01:24:30.045 --> 01:24:32.065
The 2 of 3 security model
1372
01:24:32.525 --> 01:24:33.025
is,
1373
01:24:34.390 --> 01:24:36.090
extremely insecure because
1374
01:24:36.550 --> 01:24:37.530
say say,
1375
01:24:38.470 --> 01:24:48.945
say Adam and Matt are going to trade some Bitcoin for some USD and, Wizz is the arbitrator here. You know? So these are the 3 key holders of our 2 of 3 multisig.
1376
01:24:49.725 --> 01:24:50.225
Well,
1377
01:24:50.820 --> 01:24:52.120
that's great if,
1378
01:24:52.500 --> 01:24:59.960
all the 3 people are actually separate people. But when you're dealing with, anonymous people on on a marketplace with like, Bisq,
1379
01:25:01.135 --> 01:25:12.830
If I'm the arbitrator, I can just go to the Bisq market and take all of the offers, and now I control 2 of the 3 keys. And I can steal all of the funds, and there's nothing that you can do about it. So
1380
01:25:13.290 --> 01:25:16.090
Bisc realized this a long time ago that the 2 of 3,
1381
01:25:16.490 --> 01:25:17.470
security model
1382
01:25:18.015 --> 01:25:19.155
with anonymous parties,
1383
01:25:19.935 --> 01:25:23.155
is not secure. And so this changed to a similar,
1384
01:25:23.535 --> 01:25:24.355
time lock,
1385
01:25:25.110 --> 01:25:26.330
trade protocol. So,
1386
01:25:27.110 --> 01:25:31.290
as Adam explained, liquid has this really cool 11 of 15 multisig
1387
01:25:32.125 --> 01:25:35.665
with a time lock that will degrade to a 2 of 3 multisig
1388
01:25:36.365 --> 01:25:39.425
after, set amount of time. I think it was 4 weeks, you said.
1389
01:25:39.805 --> 01:25:41.260
Well, bisque trades,
1390
01:25:42.520 --> 01:25:46.140
if if 2 people wanna trade with each other on BISC,
1391
01:25:47.400 --> 01:25:48.780
sometimes one person,
1392
01:25:49.240 --> 01:25:51.805
it's called it's also called like an option trade.
1393
01:25:52.905 --> 01:25:53.545
Say you,
1394
01:25:54.105 --> 01:25:56.765
take an offer to buy Bitcoin on disk,
1395
01:25:57.450 --> 01:26:01.630
But then as soon as you take the offer, the price tanks by 20%.
1396
01:26:02.330 --> 01:26:11.915
Well, maybe you change your mind and you don't wanna make that payments now. So in other words, you you want to default on the trade. Even though your security deposit was,
1397
01:26:12.475 --> 01:26:13.455
say it was 15%,
1398
01:26:13.930 --> 01:26:18.430
well, the price went down by 20%. So it actually makes sense for you to just abandon this trade.
1399
01:26:18.810 --> 01:26:22.910
Well, your security deposit and the seller's funds are locked in this,
1400
01:26:23.595 --> 01:26:24.815
2 of 2 multisig.
1401
01:26:25.675 --> 01:26:27.775
And if the other guy just disappears,
1402
01:26:28.395 --> 01:26:30.415
that would lock those funds forever.
1403
01:26:31.020 --> 01:26:35.280
So the BISK trade protocol also has a time lock where it's 2 of 2,
1404
01:26:37.260 --> 01:26:39.520
I think it's, 10 days for,
1405
01:26:40.325 --> 01:26:47.705
yeah, I think it's 20 days, is the hard time limit for a fiat to Bitcoin trade. After 20 days, it degrades to,
1406
01:26:49.192 --> 01:26:53.120
a a single sig where it just gets donated to,
1407
01:26:53.580 --> 01:26:56.320
BISC, basically. Right? So you now you're totally trusting
1408
01:26:57.225 --> 01:26:58.285
the BISC Federation,
1409
01:26:58.905 --> 01:27:00.365
in in the case of,
1410
01:27:01.385 --> 01:27:02.525
someone walking away.
1411
01:27:02.905 --> 01:27:04.125
So for the most part,
1412
01:27:04.490 --> 01:27:05.390
the bisque trades,
1413
01:27:06.250 --> 01:27:09.150
the 2 trade counterparties are financially incentivized
1414
01:27:10.490 --> 01:27:12.350
to complete the trade together
1415
01:27:12.675 --> 01:27:14.935
just between themselves. But if there is a problem,
1416
01:27:15.315 --> 01:27:17.815
then you essentially have to trust the Bisc Federation
1417
01:27:18.435 --> 01:27:20.775
with that trade capital and the security deposits,
1418
01:27:21.600 --> 01:27:27.460
that they're going to mediate and, you know, examine any evidence. Did the guy make the payments or not? And then,
1419
01:27:28.000 --> 01:27:29.540
reef you know, do a refund
1420
01:27:30.075 --> 01:27:30.795
of the,
1421
01:27:31.195 --> 01:27:34.495
trade trade capital to the the correct person.
1422
01:27:35.114 --> 01:27:38.815
And so the Bisc Federated model has its own governance structure.
1423
01:27:39.449 --> 01:27:43.870
It's not a company. It's it's it's a DAO. Right? It's a decentralized
1424
01:27:44.330 --> 01:27:45.310
autonomous organization,
1425
01:27:45.929 --> 01:27:47.230
and we you know,
1426
01:27:47.665 --> 01:27:50.565
there's only realistically, like, 15 or 20 people,
1427
01:27:51.905 --> 01:27:53.045
you know, who are the pseudonymous
1428
01:27:53.425 --> 01:27:55.605
BIS contributors that have the voting rights
1429
01:27:56.145 --> 01:27:56.645
to,
1430
01:27:57.040 --> 01:28:00.020
you know, participate in this DAO. Of course, anybody can,
1431
01:28:00.719 --> 01:28:06.500
but it's mostly the the contributors of BISC. And the more contributions you do, the more voting rights you get.
1432
01:28:07.255 --> 01:28:09.675
And so, you know, I have a few percent,
1433
01:28:10.615 --> 01:28:12.555
voting power in the Bisk DAO,
1434
01:28:12.935 --> 01:28:18.320
and maybe the the OG founders have a little bit more. You know, it depends on how much you contributed.
1435
01:28:18.860 --> 01:28:21.599
And from the DAO, you can have proposals,
1436
01:28:22.565 --> 01:28:24.264
you know, you you can make decisions,
1437
01:28:24.804 --> 01:28:28.905
without a company. And everyone's in a different jurisdiction. Some people are totally
1438
01:28:29.205 --> 01:28:33.600
pseudonymous. So that's how the BISC Federation kind of achieves this,
1439
01:28:34.860 --> 01:28:35.679
multi jurisdictional
1440
01:28:36.060 --> 01:28:37.120
censorship resistance.
1441
01:28:38.060 --> 01:28:45.305
No one country's government would be able to easily shut down the BISK DAO. And from that, we can actually,
1442
01:28:46.245 --> 01:28:47.305
have some federated,
1443
01:28:47.845 --> 01:28:53.770
seed nodes for example. Right? So in the BISK Federation, I think there are 4 seed node operators. Right? It's,
1444
01:28:54.390 --> 01:28:56.810
me, MZ, Devin, and Micah,
1445
01:28:57.165 --> 01:28:59.585
I think are the 4 guys. And we also have,
1446
01:29:00.285 --> 01:29:01.665
some other semi trusted,
1447
01:29:02.205 --> 01:29:09.630
you know, in this federated security model services like the price feed. If you put an offer on disc, the price changes ever, once per minute
1448
01:29:10.010 --> 01:29:13.070
to the bisque price index, which is our,
1449
01:29:13.995 --> 01:29:14.815
again, federated,
1450
01:29:15.995 --> 01:29:25.670
kind of price oracle service for what the price of Bitcoin is. So if you say, I wanna create a Bisk offer that's, you know, 10% premium on the market,
1451
01:29:27.010 --> 01:29:30.230
every one minute, your bisque node will connect to
1452
01:29:30.845 --> 01:29:33.345
either me or the other price server operators,
1453
01:29:33.885 --> 01:29:45.990
price services, get the price of Bitcoin that we say is the price, you know, based on the open source software running, and your bisque node will adjust the the price. Obviously, if one of the price server
1454
01:29:46.370 --> 01:29:47.590
operators was malicious,
1455
01:29:48.025 --> 01:29:51.485
they could say the price of Bitcoin is $1. Everyone would lower their
1456
01:29:51.864 --> 01:29:53.885
offers to a dollar and, you know,
1457
01:29:54.265 --> 01:30:00.170
you know, you could buy some really cheap Bitcoin. Right? So there's a lot of trust in the Bisk Federation in this,
1458
01:30:00.490 --> 01:30:00.990
Dow,
1459
01:30:02.170 --> 01:30:02.670
organization.
1460
01:30:03.290 --> 01:30:07.535
And liquid also, you know, when you use Liquid, you're trusting the federation
1461
01:30:08.315 --> 01:30:10.895
and its governance structure and its functionaries
1462
01:30:11.275 --> 01:30:11.775
to,
1463
01:30:12.290 --> 01:30:15.670
you know, do what they are entrusted to do. And,
1464
01:30:17.010 --> 01:30:19.270
that's why I just think it's so strange why,
1465
01:30:20.025 --> 01:30:24.684
Bisk traders would feel comfortable with the Bisk Federation, but not the the Liquid Federation.
1466
01:30:28.650 --> 01:30:29.130
1467
01:30:29.850 --> 01:30:32.830
1468
01:30:34.330 --> 01:30:35.390
comparable maybe
1469
01:30:36.295 --> 01:30:37.515
is people will,
1470
01:30:38.295 --> 01:30:40.475
you know, they'll use hosted wallets
1471
01:30:41.415 --> 01:30:41.915
like,
1472
01:30:42.695 --> 01:30:47.420
you know, Cash App or Exchange Wallet and things like that. Or I guess PayPal
1473
01:30:47.880 --> 01:30:52.540
is is a kind of has bought some of these things you can buy Bitcoin, but you can't draw them.
1474
01:30:53.000 --> 01:30:53.820
And so,
1475
01:30:54.575 --> 01:31:04.120
you know, some people will use that, but if they if you hear that liquid is federated, they'll say, no. I can't use that. Right? Or they'll use a single exchange capability, but they don't wanna use a federated custody. So I think
1476
01:31:04.500 --> 01:31:05.560
it's it's counterintuitive
1477
01:31:06.260 --> 01:31:06.760
and
1478
01:31:08.420 --> 01:31:13.795
Bitcoin is a benchmark. So everything new gets compared to Bitcoin and then people wanna be persuaded why it's
1479
01:31:14.415 --> 01:31:20.730
better than Bitcoin. And, of course, nothing is better than Bitcoin because if if there was a way to improve Bitcoin, it would have already done it. Right? So
1480
01:31:21.110 --> 01:31:22.490
any any layer 2
1481
01:31:23.270 --> 01:31:24.010
is generally
1482
01:31:24.950 --> 01:31:26.845
making cutting some corners, making
1483
01:31:27.325 --> 01:31:28.225
something worse
1484
01:31:29.565 --> 01:31:34.305
in one way to get some benefit in another way. So maybe not using lightning as an example.
1485
01:31:36.220 --> 01:31:36.960
You get,
1486
01:31:37.500 --> 01:31:42.800
very cheap, very fast final transactions. And so why didn't Bitcoin do that? I said, oh, yeah. Well,
1487
01:31:43.260 --> 01:31:53.915
okay. Let me tell you. Right? You've got managed channels. You've got hot wallet risk. It's okay. People start to call on the idea. But for the use of sense, it's but you just can't, like, you know, move everything out of Bitcoin into Lightning.
1488
01:31:54.489 --> 01:31:55.150
And, of course,
1489
01:31:55.530 --> 01:31:56.909
Lightning need to,
1490
01:31:57.289 --> 01:31:57.869
you know,
1491
01:31:58.170 --> 01:31:58.989
settle into
1492
01:32:00.170 --> 01:32:03.550
and do arbitration between channel court disputes or have you.
1493
01:32:04.055 --> 01:32:05.515
So and I think,
1494
01:32:07.094 --> 01:32:07.755
see this
1495
01:32:09.255 --> 01:32:09.755
similar
1496
01:32:10.135 --> 01:32:11.275
maybe with
1497
01:32:13.030 --> 01:32:14.410
a lot of old compare,
1498
01:32:15.430 --> 01:32:17.370
you know, how decentralized really
1499
01:32:18.150 --> 01:32:23.175
are many old clients? Like, look at maybe Binance Smart Chain or Ethereum
1500
01:32:23.635 --> 01:32:30.455
or EOS. And, like, dozens of them, and I'm not familiar with how they work. I mean, I guess, XRP is another one.
1501
01:32:32.180 --> 01:32:35.720
So many of these things are actually when you get down to it, federal stake
1502
01:32:36.260 --> 01:32:39.000
or one party earns, like, 70% of the coins
1503
01:32:39.455 --> 01:32:41.475
and it's proof of stake or one party,
1504
01:32:42.095 --> 01:32:43.795
you know, controls the,
1505
01:32:45.135 --> 01:32:45.955
list of,
1506
01:32:47.540 --> 01:32:50.520
what they call in XRP, like, URLs or something. So
1507
01:32:51.300 --> 01:32:54.360
I think it could make a reasonable case that Liquid is
1508
01:32:54.905 --> 01:32:55.645
more decentralized
1509
01:32:56.985 --> 01:33:00.365
than many of these things. It's just that, you know,
1510
01:33:01.065 --> 01:33:15.295
Bitcoin doesn't have a marketing department. So and and we and it doesn't have a coin to sell either. Right? So it's like, it's bitcoin. He uses you opt into this layer if the trade offs make sense to you. But there's nobody with, you know, a big marketing budget to,
1511
01:33:18.395 --> 01:33:20.390
advertise it, No. Overadvertise
1512
01:33:21.010 --> 01:33:21.910
and exaggerate
1513
01:33:22.210 --> 01:33:23.110
it. It's decentralization
1514
01:33:23.650 --> 01:33:24.150
or
1515
01:33:24.690 --> 01:33:26.230
or something. Right?
1516
01:33:27.275 --> 01:33:27.775
So
1517
01:33:28.395 --> 01:33:29.614
I think we tend
1518
01:33:29.915 --> 01:33:35.054
to fall into the same bucket as that and and various companies and individuals contributing to
1519
01:33:35.550 --> 01:33:37.650
tools and code into it and around it.
1520
01:33:38.190 --> 01:33:39.489
But there's nobody really
1521
01:33:43.105 --> 01:33:51.045
no. There's no native coin. There's no ICO. There's no, you know so it's just Bitcoin layer 2 stuff. And that has a side effect of
1522
01:33:51.490 --> 01:33:52.790
much less colorful marketing
1523
01:33:54.290 --> 01:33:55.190
and more
1524
01:33:56.610 --> 01:33:58.310
kind of focusing on the
1525
01:33:58.965 --> 01:34:00.744
technical it's kind of more engineer
1526
01:34:01.364 --> 01:34:03.945
led thinking or something, right, where there's not really much advertisement.
1527
01:34:07.860 --> 01:34:09.400
1528
01:34:10.420 --> 01:34:11.080
1529
01:34:11.780 --> 01:34:15.480
1530
01:34:16.925 --> 01:34:19.264
in the so called cryptocurrency world,
1531
01:34:20.684 --> 01:34:21.184
basically,
1532
01:34:21.804 --> 01:34:25.960
the these chains, these projects that have decided to go more centralized,
1533
01:34:27.220 --> 01:34:28.440
they're almost doomed
1534
01:34:28.980 --> 01:34:34.985
to be superseded by someone who decides to go even more centralized. And we had Ethereum Oh, absolutely.
1535
01:34:35.525 --> 01:34:38.505
It went more centralized than us. So then Binance
1536
01:34:38.885 --> 01:34:40.745
and CZ went to BSC,
1537
01:34:41.270 --> 01:34:44.810
which is the same exact Binance Smart Chain, which is the same exact,
1538
01:34:46.070 --> 01:34:46.570
APIs
1539
01:34:47.030 --> 01:34:49.290
and calls, contract calls as
1540
01:34:49.745 --> 01:34:53.205
as Ethereum, but it's even more centralized so the fees are cheaper.
1541
01:34:53.665 --> 01:34:59.679
In the case of of something like Liquid though, it's it's a way to try and channel that
1542
01:35:00.059 --> 01:35:02.559
move to a more centralized model
1543
01:35:03.099 --> 01:35:05.840
while still maintaining the Bitcoin unit of account
1544
01:35:06.145 --> 01:35:10.885
and allowing Bitcoin users to actually flex and use that. It's it's it's more complimentary
1545
01:35:11.665 --> 01:35:21.820
than a competing centralized chain. It's a it's a it's a complimentary centralized chain. It's a side chain. Right? Which is is the term that is that has been used frequently.
1546
01:35:23.965 --> 01:35:25.184
1547
01:35:25.645 --> 01:35:31.905
Something something else that people are often not aware of is that because because they will say I think it was
1548
01:35:32.285 --> 01:35:33.630
a question in the chat,
1549
01:35:34.110 --> 01:35:35.090
quite a while ago
1550
01:35:35.630 --> 01:35:36.130
about
1551
01:35:36.909 --> 01:35:39.250
talk about liquid versus lightning.
1552
01:35:39.949 --> 01:35:54.090
And so they think people will tend to think about it as, like, it's a choice or it's there's some positive competition between Bitcoin and Liquid and Lightning. Like, you know, if Lightning wins, that's good because it sucks transactions off Bitcoin. It makes Bitcoin transactions cheaper and faster
1553
01:35:54.950 --> 01:35:59.370
and creates more value for those users. But what they didn't realize is that actually
1554
01:36:00.295 --> 01:36:00.795
lightning
1555
01:36:01.735 --> 01:36:03.355
is a kind of caching layer
1556
01:36:03.974 --> 01:36:04.474
and
1557
01:36:05.255 --> 01:36:09.434
while it works on top of Bitcoin, it also works on top of liquid confusingly.
1558
01:36:10.340 --> 01:36:10.840
So
1559
01:36:11.540 --> 01:36:13.800
the c lightning implementation is that this
1560
01:36:14.180 --> 01:36:19.535
there were originally 3 main implementation lightning. I think there might be 4 or 5 now. But
1561
01:36:20.735 --> 01:36:28.915
the c lightning, which is by Rusty Russell, who's a ex Linux kernel developer that works for Blockstream. And Christian Decker, Lisa and I got
1562
01:36:29.330 --> 01:36:32.390
are our 3 developers working on that. And that implementation
1563
01:36:32.770 --> 01:36:33.910
is called c lightning.
1564
01:36:34.850 --> 01:36:38.710
You know, it's it's it works on Bitcoin, but it also works on liquid.
1565
01:36:39.505 --> 01:36:41.765
And so you can establish a
1566
01:36:42.705 --> 01:36:43.205
liquid
1567
01:36:44.385 --> 01:36:44.885
Bitcoin
1568
01:36:45.585 --> 01:36:46.565
lightning channel
1569
01:36:48.070 --> 01:36:53.770
by funding it with liquid Bitcoin. And, of course, the fees are cheap and the channel setup is fast.
1570
01:36:55.645 --> 01:36:59.264
And the enclose is fast and cheap, and closing channels
1571
01:36:59.965 --> 01:37:06.349
would escalate compared to when you opened it can be problematic. Like, that's that's a pain point sometimes for
1572
01:37:07.530 --> 01:37:14.035
It's a major pain point. Yeah. So I think it's an interesting trade off potentially because
1573
01:37:15.455 --> 01:37:17.075
people are typically not putting
1574
01:37:17.535 --> 01:37:19.235
huge amounts of money into liquid.
1575
01:37:19.700 --> 01:37:21.320
Sorry, into into lightning.
1576
01:37:21.780 --> 01:37:24.600
So maybe you could accept the kinda are.
1577
01:37:25.380 --> 01:37:28.600
Reduced well, yeah. Simple luck in Well, it's still Adam Adam.
1578
01:37:29.554 --> 01:37:33.815
1579
01:37:34.434 --> 01:37:38.295
has so so one of the things I think liquid could be useful for is,
1580
01:37:38.840 --> 01:37:40.300
we have a bunch of outputs.
1581
01:37:41.560 --> 01:37:46.380
We care about privacy. I don't wanna consolidate them because I'm gonna link all of them together,
1582
01:37:47.554 --> 01:37:50.935
but fees are rising. Right? And I'm worried about fees increasing.
1583
01:37:51.715 --> 01:37:54.215
Is is there a scenario where a user
1584
01:37:54.755 --> 01:37:56.295
does an atomic swap
1585
01:37:56.980 --> 01:37:58.760
from a my chain UTXO.
1586
01:37:59.220 --> 01:38:13.945
My I'm worried I'm worried about this UTXO. I wanna consolidate it, but I I don't wanna link it to my other UTXOs. I do an atomic swap into liquid. I open a liquid lightning channel, and then in liquid lightning, I do an atomic swap into Bitcoin lightning.
1587
01:38:15.940 --> 01:38:20.440
Is that a reasonable scenario? Is that something that we could see in the future, or am I just
1588
01:38:21.060 --> 01:38:22.040
being crazy?
1589
01:38:22.755 --> 01:38:28.615
1590
01:38:31.750 --> 01:38:32.730
sort of accumulate.
1591
01:38:33.110 --> 01:38:36.490
I saw somebody in the side swap channel saying they were doing this. They would
1592
01:38:37.275 --> 01:38:39.695
buy liquid Bitcoin in small amounts
1593
01:38:40.075 --> 01:38:41.855
Yeah. And store them in a liquid wallet.
1594
01:38:42.395 --> 01:38:47.620
And then, you know, that was like the daily stock or the weekly stock. And after they built it up
1595
01:38:48.160 --> 01:38:54.420
a bit more, they take it out to the main chain and cold store it. And they felt that that, you know, cheaper partial custody
1596
01:38:54.925 --> 01:38:59.505
and they take it to real cold custody when they got enough to make it worth paying the main change in fees.
1597
01:39:01.405 --> 01:39:02.225
So that's cool.
1598
01:39:02.605 --> 01:39:03.345
1599
01:39:04.040 --> 01:39:16.755
That that that's gonna happen. That that it makes sense to me that the stacker and this is my audience. Right? Is is the guy who's doing he's he's doing his daily his daily stack of $10, $15. He does that into liquid,
1600
01:39:17.135 --> 01:39:29.675
and then he he comes back on chain. Because if he tries to do that on if he tries to do that on lightning, self custodial, it it he has to deal with inbound liquidity and stuff. It becomes a major pain point, but you could do it on liquid easily.
1601
01:39:30.775 --> 01:39:32.215
1602
01:39:33.255 --> 01:39:34.795
I guess, has
1603
01:39:35.820 --> 01:39:36.320
simplicity
1604
01:39:36.780 --> 01:39:37.280
advantages
1605
01:39:37.740 --> 01:39:40.000
in user experience because you don't have to manage channels.
1606
01:39:40.620 --> 01:39:46.225
You can receive money when you're offline. You can store the coins in a in a hover wallet, things like that. So
1607
01:39:46.605 --> 01:39:49.105
it feels a lot more familiar to Bitcoin.
1608
01:39:50.364 --> 01:39:53.744
Not quite as cheap or fast as Lightning, but that's a trade off.
1609
01:39:55.620 --> 01:39:56.840
And because you get confidentiality
1610
01:39:57.220 --> 01:40:03.720
too, but Lightning has, you know, onion routing and privacy in a different way. So but then what you were saying about
1611
01:40:04.765 --> 01:40:08.305
liquids lightning on liquid connecting with lightning on Bitcoin,
1612
01:40:09.885 --> 01:40:11.090
that's like,
1613
01:40:11.489 --> 01:40:12.630
it it should be possible
1614
01:40:13.010 --> 01:40:13.750
to have
1615
01:40:14.449 --> 01:40:15.590
a lightning route
1616
01:40:15.969 --> 01:40:21.795
where hops in the lightning route are different. You know. First hop is Bitcoin, next hop
1617
01:40:22.335 --> 01:40:24.595
is liquid lightning, the next hop
1618
01:40:25.375 --> 01:40:26.435
is main chain lightning.
1619
01:40:27.050 --> 01:40:28.830
And, you know, you get paid
1620
01:40:29.450 --> 01:40:31.790
in Bitcoin or in liquid and you, you know,
1621
01:40:32.090 --> 01:40:34.350
it gets sort of converted along the way because
1622
01:40:35.690 --> 01:40:36.425
there are a lot
1623
01:40:37.465 --> 01:40:40.204
of places where you can basically do one for
1624
01:40:40.585 --> 01:40:47.739
paying any network fees for liquid Bitcoin versus Bitcoin. So it's not like you know, if if if you were to do that
1625
01:40:48.680 --> 01:40:53.260
where one hop was tether on liquids, and you can certainly make,
1626
01:40:53.960 --> 01:40:58.365
you know, a liquid channel that's funded with liquid tether or something.
1627
01:40:59.865 --> 01:41:01.565
I'm just curious. But
1628
01:41:02.000 --> 01:41:09.619
if you do that, then the lightning node needs to be like a trading bot or something to hedge it. Right? Because it doesn't really want to sell Bitcoin.
1629
01:41:10.375 --> 01:41:17.114
So if the channel's all Bitcoin, but some of the hops are liquid Bitcoin, some of them are mentioned Bitcoin, you could have a mixed
1630
01:41:17.830 --> 01:41:18.810
liquid and lightning
1631
01:41:19.590 --> 01:41:24.010
network with channels that go through it. I think that could be interesting.
1632
01:41:24.525 --> 01:41:25.025
And,
1633
01:41:25.805 --> 01:41:28.305
you know, if if people are using
1634
01:41:28.605 --> 01:41:29.105
lightning
1635
01:41:30.525 --> 01:41:31.025
for
1636
01:41:32.130 --> 01:41:33.830
lower values in the user dimension,
1637
01:41:35.490 --> 01:41:36.390
maybe the
1638
01:41:37.410 --> 01:41:38.150
trade off
1639
01:41:38.690 --> 01:41:39.430
of lightning
1640
01:41:39.885 --> 01:41:42.865
on top of liquid makes sense. Right? Because if they're putting
1641
01:41:43.405 --> 01:41:45.105
a $100 into it,
1642
01:41:45.565 --> 01:41:48.145
maybe they're happy putting that into liquid. And then
1643
01:41:51.600 --> 01:41:53.220
the lightning channel will be,
1644
01:41:54.560 --> 01:41:59.945
you know, it feel nicer. Right? It'll be cheaper to set up. It'll be cheaper to shut down. 100%.
1645
01:42:00.725 --> 01:42:01.225
Yeah.
1646
01:42:02.405 --> 01:42:07.784
1647
01:42:08.630 --> 01:42:11.610
shout out to our boy, Chaz. I was on his show,
1648
01:42:11.990 --> 01:42:13.930
Ellen Junkies, lightning junkies.
1649
01:42:14.390 --> 01:42:17.450
Obviously, they're a little bit biased towards lightning over there.
1650
01:42:18.385 --> 01:42:20.405
The biggest cost to using Lightning
1651
01:42:21.105 --> 01:42:24.085
is when you have to hit the chain, right, when you open.
1652
01:42:24.680 --> 01:42:28.220
Yeah. If you're a new user, you're trying to onboard new users,
1653
01:42:28.680 --> 01:42:29.980
and fees are crazy,
1654
01:42:30.360 --> 01:42:32.220
and Bitcoin's trading at $200,000
1655
01:42:32.920 --> 01:42:33.580
a coin,
1656
01:42:34.885 --> 01:42:38.264
then then, like, they have to hit the chain to open a channel at
1657
01:42:38.645 --> 01:42:39.465
$50 in
1658
01:42:39.925 --> 01:42:40.425
transaction
1659
01:42:40.965 --> 01:42:42.985
or something, $60 a transaction.
1660
01:42:43.560 --> 01:42:46.219
If they could do that through liquid, that's a major advantage.
1661
01:42:48.280 --> 01:42:48.780
1662
01:42:49.640 --> 01:42:53.260
So somebody's asking a question. What about stablecoins like USDC?
1663
01:42:54.465 --> 01:42:58.565
Also, there are some stable coins on liquids. There is LCAT, which is,
1664
01:42:59.265 --> 01:43:02.085
Canadian dollars issued by Bull Bitcoin, which is a Canadian
1665
01:43:02.550 --> 01:43:08.090
kind of stacking also stacking Great exchange. Buying Bitcoin. So, yeah, the really Bitcoin that goes. And
1666
01:43:08.470 --> 01:43:10.730
so they're the issuer of the LCAS and it's,
1667
01:43:11.514 --> 01:43:18.094
it's a very fun stablecoin. Because it's not really a stablecoin. It's a voucher, and the only way to redeem it is to buy Bitcoin with it.
1668
01:43:18.610 --> 01:43:22.310
So you can't, like, get your Canadian dollars back. You just have to convert it into Bitcoin.
1669
01:43:23.090 --> 01:43:28.475
But you can it's stable in the price of Canadian dollars while you have it. And so people actually use it a little bit to,
1670
01:43:29.094 --> 01:43:30.534
kind of pay Canadian dollars around.
1671
01:43:31.415 --> 01:43:33.435
And there's Tether is on liquids
1672
01:43:33.975 --> 01:43:34.475
and
1673
01:43:35.570 --> 01:43:37.350
Eurex, which is a euro,
1674
01:43:38.530 --> 01:43:42.150
1675
01:43:43.010 --> 01:43:44.630
1676
01:43:45.495 --> 01:43:48.875
those are the big ones, but there's a Japanese Adam, Adam. Stablecoin.
1677
01:43:49.495 --> 01:43:52.155
1678
01:43:52.540 --> 01:43:55.920
On this show on this show, we don't we don't like to talk about,
1679
01:43:56.540 --> 01:43:58.079
the trusted third party,
1680
01:43:58.619 --> 01:44:00.800
stay so called stable coins.
1681
01:44:01.175 --> 01:44:13.190
As far as I'm concerned, they call them stable coins, but they only go down, and they call Bitcoin not a stable coin. They call Sats not a stable coin, but it only goes up. So as far as I'm concerned, I would prefer the stable coin that only goes up.
1682
01:44:13.890 --> 01:44:15.590
Yeah. But all that said,
1683
01:44:16.530 --> 01:44:17.830
so so liquid,
1684
01:44:18.405 --> 01:44:20.665
if we go into liquid into lightning,
1685
01:44:24.085 --> 01:44:31.620
this this makes a lot of sense to me. This I this idea of using Liquid as a way to onboard onto Lightning if
1686
01:44:31.920 --> 01:44:33.860
if you're of a lower value
1687
01:44:34.525 --> 01:44:36.065
lower value user.
1688
01:44:38.045 --> 01:44:46.170
Am I correct in thinking that it's easier to do atomic swaps once we have them on Lightning, whether that's Liquid Lightning or
1689
01:44:46.710 --> 01:44:47.610
On Chain Lightning,
1690
01:44:48.150 --> 01:44:49.449
like, regular Lightning?
1691
01:44:51.324 --> 01:44:56.305
1692
01:44:56.765 --> 01:44:57.265
sideswap
1693
01:44:57.725 --> 01:44:58.545
can do
1694
01:44:59.340 --> 01:45:03.119
main chain swaps, and I guess they're gonna get more trustless over time,
1695
01:45:03.659 --> 01:45:04.800
liquid for Bitcoin.
1696
01:45:05.179 --> 01:45:06.800
And the there is,
1697
01:45:07.915 --> 01:45:08.415
Lightning
1698
01:45:09.435 --> 01:45:14.735
on Liquid. Grubles has some channels and stuff. It's not very big network, and it needs to be
1699
01:45:15.275 --> 01:45:16.655
integrated into more wallets.
1700
01:45:17.020 --> 01:45:19.040
So it's using the kind of c lightning,
1701
01:45:19.739 --> 01:45:23.199
which is a command like, Linux command line kind of lightning space.
1702
01:45:23.900 --> 01:45:26.835
So but, you know, it it should be fairly easy for
1703
01:45:27.575 --> 01:45:28.075
somebody
1704
01:45:28.815 --> 01:45:32.675
who can I mean, many of the lightning wallets open source? Right? And
1705
01:45:33.135 --> 01:45:33.635
lightning
1706
01:45:34.640 --> 01:45:38.820
on liquid is plus or minus the same as lightning on bitcoin. So for somebody
1707
01:45:39.360 --> 01:45:41.620
with the right skill set, they could basically fork
1708
01:45:42.554 --> 01:45:48.094
a main chain lightning wallet and make a liquid lightning wallet with it. And then there's another
1709
01:45:48.635 --> 01:46:03.795
interesting thing, which we're discussing there, which is, well, why not go further and make a combined lightning network that can route between the 2? So that would be a cool thing, but it's a project for something to do. I think, you know, it it should work, but there's a little bit of development work in there.
1710
01:46:09.220 --> 01:46:11.320
1711
01:46:12.020 --> 01:46:12.340
1712
01:46:13.860 --> 01:46:14.740
okay. So
1713
01:46:16.325 --> 01:46:21.264
yeah. There's a lot of topics to to kinda touch on. Right? I mean, it
1714
01:46:22.005 --> 01:46:22.505
okay.
1715
01:46:22.965 --> 01:46:24.585
Another thing about the,
1716
01:46:25.380 --> 01:46:26.440
I guess, the
1717
01:46:27.300 --> 01:46:33.880
well, okay. So one of the first points made was Liquid was originally created for exchanges, but then they kind of opened up
1718
01:46:35.825 --> 01:46:37.445
the full node software,
1719
01:46:38.065 --> 01:46:40.165
to everyone. So any user can now,
1720
01:46:41.745 --> 01:46:42.725
use LVTC
1721
01:46:43.265 --> 01:46:43.765
and,
1722
01:46:44.710 --> 01:46:54.295
you know, issue assets or do any, really, you know, confidential transactions, which is which is really cool. But, especially for the the use case of this,
1723
01:46:55.415 --> 01:46:58.855
or or even, like, before we even get into that, like, there's this,
1724
01:46:59.815 --> 01:47:11.635
I don't know. There's, like, this meme on on Twitter I saw. Like, someone said, like, oh, Liquid is a shitcoin, and I thought that I thought that was funny. Liquid is not even a a coin. Liquid is just a blockchain. I guess they were referring to, like, LBTC,
1725
01:47:12.494 --> 01:47:18.034
but this is, this was said by someone who has coins on, like, Kraken or some centralized exchange.
1726
01:47:18.430 --> 01:47:20.690
And if you don't understand the,
1727
01:47:22.270 --> 01:47:24.610
it it's kind of like this progression of
1728
01:47:26.034 --> 01:47:33.655
so a lot of people say, like, I want I want something to be trustless. Right? But there's if you think about it, there's actually really no such thing as, like, trustlessness.
1729
01:47:34.370 --> 01:47:39.510
All you really ever do is spread the trust around to more people and,
1730
01:47:40.530 --> 01:47:49.755
add more checks or, slow it down with more time locks, but you can never, like, eliminate trust. So for example, if you walk up to a vending machine
1731
01:47:50.110 --> 01:47:57.650
and you put a coin in the vending machine, you're trusting the machine that it's gonna actually dispense the drink and not just steal your money. And likewise, when you,
1732
01:47:58.525 --> 01:48:03.425
you know, sit down at a restaurant and order some food, the restaurant is trusting you that you're going to,
1733
01:48:03.965 --> 01:48:05.744
pay the bill at the end of the meal.
1734
01:48:06.340 --> 01:48:11.619
And if there is a dispute, you know, they would call the police or take you to court or something, and there's some kind of,
1735
01:48:12.980 --> 01:48:15.239
dispute resolution process in all this.
1736
01:48:15.755 --> 01:48:17.375
And the way you,
1737
01:48:18.875 --> 01:48:23.295
the way you typically solve this problem in the real world, in the fiat world,
1738
01:48:23.670 --> 01:48:27.290
is by introducing a trusted third party. So for example,
1739
01:48:27.590 --> 01:48:32.970
if I go to the restaurant and I have, you know, an American Express credit card,
1740
01:48:33.945 --> 01:48:38.105
I don't trust the restaurant and rest restaurants doesn't trust me, but we both trust the,
1741
01:48:38.905 --> 01:48:40.045
bank to,
1742
01:48:40.800 --> 01:48:41.940
guarantee the transaction
1743
01:48:42.400 --> 01:48:43.140
and to,
1744
01:48:44.000 --> 01:48:47.140
sell everything. And of course, the bank takes their cut.
1745
01:48:47.520 --> 01:48:48.020
So
1746
01:48:48.395 --> 01:48:50.655
now when you extend that into the crypto,
1747
01:48:51.835 --> 01:48:52.335
space,
1748
01:48:53.835 --> 01:48:55.295
even on the Bitcoin blockchain,
1749
01:48:56.074 --> 01:48:58.300
you have, miners. Right? Like,
1750
01:48:58.860 --> 01:49:06.400
everyone knows the risk of a 51% attack. If the you're you're always trusting that the majority of Hash Power
1751
01:49:07.205 --> 01:49:07.705
will,
1752
01:49:08.805 --> 01:49:11.625
not just mine empty blocks, and they'll actually mine
1753
01:49:11.925 --> 01:49:15.865
your transactions and everyone's transactions in into the blocks.
1754
01:49:16.540 --> 01:49:17.040
And
1755
01:49:17.659 --> 01:49:18.140
this,
1756
01:49:18.540 --> 01:49:20.480
1757
01:49:21.179 --> 01:49:21.679
What?
1758
01:49:22.995 --> 01:49:28.695
Wait. There there's 2 different things. Right? There's a 51% attack, and there's the chance of
1759
01:49:29.555 --> 01:49:44.055
of miners not mining your blocks, and not mining your transaction. Right? But but but if you raise your fees, if you we we can have we can have a censorship situation without a 51% attack, and we can have a censorship position with a 51% attack, but it's a different scenario.
1760
01:49:45.395 --> 01:49:49.155
1761
01:49:49.875 --> 01:49:50.560
kind of
1762
01:49:52.320 --> 01:49:57.060
the the the combat to that is the financial incentives. Right? So by putting
1763
01:49:57.440 --> 01:49:58.580
transaction fees,
1764
01:49:59.784 --> 01:50:01.405
on your transaction, you're,
1765
01:50:02.025 --> 01:50:10.950
you know, you're saying, I'll, you know, you're putting, like, a bribe or or a bounty on your transaction. If anybody minds this, they can get the fee. And that's why
1766
01:50:11.330 --> 01:50:12.310
miners will
1767
01:50:12.770 --> 01:50:18.015
prefer to mine blocks full of transactions instead of empty transaction. There's also the, like, inherent,
1768
01:50:19.355 --> 01:50:19.855
incentive
1769
01:50:20.955 --> 01:50:23.535
that if the miners just mined empty blocks,
1770
01:50:24.155 --> 01:50:26.719
they would kind of destroy the,
1771
01:50:27.040 --> 01:50:34.020
the net the value of the token in the network, which is, something they would have had to invest in by building their, mining
1772
01:50:34.675 --> 01:50:35.255
hash power,
1773
01:50:35.635 --> 01:50:42.215
facilities and hardware. So there there's a lot of incentives which make the miners always wanna mine full blocks as much as possible.
1774
01:50:42.910 --> 01:50:46.290
And if you take that if you start with that point,
1775
01:50:47.230 --> 01:50:48.130
and you say,
1776
01:50:48.750 --> 01:50:58.594
okay. I'm I'm gonna trust literally any miner out there with hash power. I don't care who it is, but I will, you know, you you're trusting the majority. You're trusting the collective,
1777
01:50:59.855 --> 01:51:01.074
community of miners
1778
01:51:01.699 --> 01:51:04.679
to be honest and do your transaction to a block.
1779
01:51:04.980 --> 01:51:09.239
And then if you if you kind of trade off that a little bit and you,
1780
01:51:10.100 --> 01:51:11.000
say, okay.
1781
01:51:11.575 --> 01:51:21.080
Maybe I don't need to trust, you know, thousands of people. Maybe I only need to trust, like, hundreds of people or or thousands of anonymous people. Maybe I only need to trust, like,
1782
01:51:21.560 --> 01:51:29.820
a 100 reputable people or something. Right? Like, I I know that if I give my Bitcoin to, you know, Mark Carpelles,
1783
01:51:30.355 --> 01:51:33.094
you know, he can gox me. But if I
1784
01:51:33.554 --> 01:51:37.255
spread that trust around to 15, 20, a 100 people,
1785
01:51:37.715 --> 01:51:39.494
and they're all checking each other,
1786
01:51:40.380 --> 01:51:44.220
it's much much less likely that, you do this. So there's a lot of,
1787
01:51:46.060 --> 01:51:50.885
gray, like not gray area, but, like, this is like the spectrum of sliding scale where you start
1788
01:51:51.185 --> 01:51:52.324
with a single
1789
01:51:52.864 --> 01:51:53.364
centralized
1790
01:51:53.665 --> 01:51:54.965
trusted third party.
1791
01:51:55.380 --> 01:51:57.320
You move up to a multisig
1792
01:51:57.700 --> 01:52:01.400
model or you, you know, from beyond that, you move up to a federated model.
1793
01:52:02.100 --> 01:52:06.295
From beyond that, you move up to, like, decentralized model and then at the very top
1794
01:52:06.675 --> 01:52:08.135
would be a fully distributed,
1795
01:52:09.155 --> 01:52:09.975
like bitcoin
1796
01:52:10.675 --> 01:52:12.935
mining base layer level of security.
1797
01:52:13.810 --> 01:52:14.550
And so,
1798
01:52:14.930 --> 01:52:15.430
obviously,
1799
01:52:15.890 --> 01:52:19.990
Bitcoin is optimized for maximum security, but it's extremely expensive
1800
01:52:20.770 --> 01:52:21.270
to
1801
01:52:21.935 --> 01:52:24.915
pay all of those miners to, you know I mean,
1802
01:52:25.295 --> 01:52:27.475
Adam knows this even better than I do. I mean,
1803
01:52:27.775 --> 01:52:31.650
to build a mining facility is like, alright. Start by buying some land,
1804
01:52:32.030 --> 01:52:33.010
building a building,
1805
01:52:33.390 --> 01:52:35.810
high voltage power lines, high voltage transformers.
1806
01:52:36.575 --> 01:52:42.755
You're essentially building a data center just without any redundancy. So, you know, it's you could easily spend 1,000,000 of dollars
1807
01:52:44.540 --> 01:52:48.800
in your facility. And so the Bitcoin security is the most expensive,
1808
01:52:49.420 --> 01:52:49.980
but it's,
1809
01:52:50.460 --> 01:52:51.920
probably the most secure,
1810
01:52:52.665 --> 01:53:00.285
system that humans have ever figured out how to build. And so if you don't need that level of security, if you're just doing if you just wanna stack a $100,
1811
01:53:00.990 --> 01:53:03.170
you know, maybe you don't need
1812
01:53:03.550 --> 01:53:03.950
this,
1813
01:53:04.750 --> 01:53:07.650
Bitcoin based layer on security. Maybe you're fine with just trusting
1814
01:53:08.030 --> 01:53:08.850
20 reputable,
1815
01:53:09.915 --> 01:53:15.135
friends or companies or or whatever. Right? And so this is kind of why I think liquid is cool is because
1816
01:53:15.435 --> 01:53:16.974
especially with dynamic federations,
1817
01:53:19.310 --> 01:53:20.370
you can just
1818
01:53:21.470 --> 01:53:30.835
trade off. You can you can have that option. Right? And if you, you know, if you're gonna do a $1,000,000 transaction, then, of course, you're gonna use a Bitcoin based layer. If you're gonna do, like, a medium
1819
01:53:31.135 --> 01:53:32.035
sized transaction,
1820
01:53:32.655 --> 01:53:33.475
maybe you wanna,
1821
01:53:34.895 --> 01:53:45.230
use something like liquid. If you're gonna do a $5 transaction at the at the cafe for coffee, maybe a lightning channel is best you hit, and it's always about using the right tool for the job. So
1822
01:53:45.610 --> 01:53:49.085
with what you when you talk about liquid as a technology,
1823
01:53:49.785 --> 01:53:51.485
I believe it's like the best,
1824
01:53:52.505 --> 01:53:53.005
middle
1825
01:53:53.600 --> 01:53:54.100
balanced,
1826
01:53:55.040 --> 01:53:59.380
trade off where you trade off a little bit of security for a ton of additional,
1827
01:54:00.405 --> 01:54:18.335
privacy and new use cases and lower fees and faster confirmation times. It makes sense for a lot of use cases, not all use cases. Like you said, a lot of people will always prefer when when you talk about cold storage, yeah, you should you're not gonna use liquid as your, you know, to store your entire life savings.
1828
01:54:18.955 --> 01:54:19.915
It's kinda like,
1829
01:54:20.554 --> 01:54:23.730
a hot wallet in a in a way or maybe a warm wallet. There's some
1830
01:54:24.370 --> 01:54:27.590
maybe there's no terminology for this yet. But if you keep, like,
1831
01:54:27.970 --> 01:54:29.510
95% of your money
1832
01:54:30.130 --> 01:54:31.750
in offline multisig
1833
01:54:32.255 --> 01:54:37.235
cold storage on the Bitcoin base layer, but you have, like, 5% of your money in
1834
01:54:37.855 --> 01:54:42.880
a bank account, in fiat currency, or lightning channels, or, you know, liquid,
1835
01:54:43.280 --> 01:54:44.900
banking liquidity. Dollars.
1836
01:54:45.920 --> 01:54:47.460
Exactly. Like, that,
1837
01:54:48.560 --> 01:54:49.425
makes sense,
1838
01:54:50.145 --> 01:54:51.264
to have that kind of,
1839
01:54:51.824 --> 01:54:55.605
the best tool for the like, when you go to the supermarket and you wanna buy some food,
1840
01:54:56.224 --> 01:54:58.244
you know, you're not gonna be doing a Bitcoin
1841
01:54:59.010 --> 01:55:06.230
1842
01:55:07.055 --> 01:55:09.555
So if in a hyper Bitcoinized world,
1843
01:55:10.015 --> 01:55:12.595
we have trusted options on top of Bitcoin
1844
01:55:13.455 --> 01:55:19.810
that are better than the current trusted options because at least you have proof of reserves, at least you have certain guarantees,
1845
01:55:20.989 --> 01:55:25.215
that's not the end of the world. Like, this idea that, like, everything needs to be
1846
01:55:25.675 --> 01:55:31.455
at the same level as Bitcoin on chain is just untenable. It's not a thing that's gonna happen,
1847
01:55:31.910 --> 01:55:36.890
and that's fine. These are things that give give Bitcoin users more options. Right?
1848
01:55:38.070 --> 01:55:41.885
1849
01:55:42.285 --> 01:55:49.080
now, you know, you could get a Raspberry Pi and throw Umbrel on there and run bitcoin core and even elements
1850
01:55:49.380 --> 01:55:55.880
core, and a dozen or so apps all on this very very cheap computer, and you can fully verify everything.
1851
01:55:56.415 --> 01:56:04.675
And if, you know, this goes back to the block size of it. If you make the blocks big for some reason to try and make the transaction fees less,
1852
01:56:05.080 --> 01:56:08.140
then, you know, you probably can't run-in a Raspberry Pi anymore,
1853
01:56:08.520 --> 01:56:16.055
and it leads to centralization, etcetera, etcetera. So there has to be a balance for everything. Not not just the the Bitcoin,
1854
01:56:17.335 --> 01:56:18.475
block size itself,
1855
01:56:18.855 --> 01:56:26.100
but for middle transactions and for coffee transactions. There's, there's the right tool for the for the job for every type of transaction.
1856
01:56:26.560 --> 01:56:27.060
And
1857
01:56:27.360 --> 01:56:30.100
those are so far, I think we've only, mostly
1858
01:56:30.400 --> 01:56:31.220
talked about
1859
01:56:31.685 --> 01:56:32.985
simple payment transactions.
1860
01:56:33.685 --> 01:56:39.225
But if you wanna talk about, maybe the cooler features of liquid like simplicity where you you can actually do some,
1861
01:56:39.739 --> 01:56:41.040
smart contract functionality
1862
01:56:41.820 --> 01:56:46.000
or issuing some assets for some reason. Like, say, I have a coffee shop
1863
01:56:46.380 --> 01:56:50.635
and, you know, I'm gonna issue coffee coffee tokens. So if you have one of these,
1864
01:56:51.175 --> 01:56:56.475
wiz coffee tokens, you can come to my coffee shop and redeem it for a coffee, that type of utility token.
1865
01:56:57.700 --> 01:57:02.440
It's so cool to just be able to issue that on the liquid side chain. It eliminates
1866
01:57:02.900 --> 01:57:04.520
the need for so many,
1867
01:57:05.475 --> 01:57:10.615
you know, shit coins out there that all they do is just issue tokens. And
1868
01:57:11.235 --> 01:57:16.719
it's so nice to be able to have a liquid side chain with Bitcoin as its native token,
1869
01:57:17.179 --> 01:57:21.039
but also the the ability to do, more interesting use cases,
1870
01:57:21.659 --> 01:57:25.145
with, you know, different levels of privacy and,
1871
01:57:25.925 --> 01:57:27.545
speed and and lower cost.
1872
01:57:30.460 --> 01:57:32.320
1873
01:57:32.699 --> 01:57:33.440
an interesting
1874
01:57:33.980 --> 01:57:36.480
comment. So, like, not Grubbles on Twitter about
1875
01:57:39.015 --> 01:57:39.515
the,
1876
01:57:40.935 --> 01:57:42.475
so some debate about
1877
01:57:44.910 --> 01:57:46.290
swapping into altcoins
1878
01:57:46.910 --> 01:57:52.290
and and, like, a justification for altcoins privacy coins. And so he he made the point that,
1879
01:57:52.935 --> 01:57:58.715
you know, if you if you swap into an old coin, you're now exposed to its its price.
1880
01:57:59.415 --> 01:58:03.489
And there is no peg. Right? So, you know, you have to you have to do a
1881
01:58:04.110 --> 01:58:05.650
trade. So it's kind of like,
1882
01:58:07.150 --> 01:58:07.810
you know,
1883
01:58:09.905 --> 01:58:12.005
there's some analogy basically that
1884
01:58:12.385 --> 01:58:16.405
there is no peg, but there's a market. Right? So you have to find somewhere to trade it,
1885
01:58:16.785 --> 01:58:18.725
and you're exposed to its price movements.
1886
01:58:19.710 --> 01:58:20.210
And
1887
01:58:20.989 --> 01:58:27.810
if the coin was centralized in it, stopped allowing transactions or something, you'd have a kind of a different problem.
1888
01:58:31.905 --> 01:58:33.364
Yeah. So I think
1889
01:58:34.625 --> 01:58:35.125
that
1890
01:58:35.929 --> 01:58:37.469
if Bitcoin gets
1891
01:58:39.210 --> 01:58:40.409
too, you know, too
1892
01:58:43.130 --> 01:58:46.705
I mean, I guess I guess the point is people sometimes mistake
1893
01:58:47.645 --> 01:58:49.185
technology limits for intent.
1894
01:58:49.725 --> 01:58:53.825
So by intent, because we all like Bitcoin and censorship resistance
1895
01:58:54.630 --> 01:58:56.650
and bearer of properties and so on,
1896
01:58:57.110 --> 01:59:00.410
that we would like everybody to enjoy those benefits
1897
01:59:01.030 --> 01:59:08.155
and be able to afford it for their use case because people are, you know, have different amounts of income and savings in terms of the world.
1898
01:59:10.614 --> 01:59:12.395
But then the technology has limits.
1899
01:59:12.775 --> 01:59:13.594
So then
1900
01:59:14.360 --> 01:59:15.980
it has I mean, basically,
1901
01:59:16.760 --> 01:59:17.820
prices there
1902
01:59:18.520 --> 01:59:19.580
is the thing that
1903
01:59:19.960 --> 01:59:21.500
distinguishes. Right? So
1904
01:59:22.055 --> 01:59:24.315
but I think there might be a future where
1905
01:59:25.175 --> 01:59:30.155
new technology arises that that creates a different problem. You know? Like,
1906
01:59:31.020 --> 01:59:34.639
if there are very scalable Snarks so that the,
1907
01:59:36.619 --> 01:59:41.065
the blockchain is doesn't include all the transactions. It just includes, you know,
1908
01:59:41.605 --> 01:59:45.065
a few 100 kilobytes of snark proofs or something and that proves
1909
01:59:45.925 --> 01:59:51.120
anything. You know, it proves that every every transaction in the block was valid and then the coins are
1910
01:59:51.660 --> 01:59:52.960
just proofs that
1911
01:59:53.260 --> 01:59:54.480
their transaction was
1912
01:59:55.020 --> 01:59:55.840
in that block,
1913
01:59:56.565 --> 01:59:57.065
then,
1914
01:59:58.645 --> 02:00:00.185
you know, maybe maybe you have
1915
02:00:00.725 --> 02:00:03.385
a chance to make it very scalable,
1916
02:00:06.250 --> 02:00:08.670
and it'll be hard to get anybody pay for fees
1917
02:00:09.450 --> 02:00:09.950
because,
1918
02:00:11.425 --> 02:00:12.565
you know, there's no limit.
1919
02:00:13.185 --> 02:00:16.085
1920
02:00:16.705 --> 02:00:22.699
on that topic, like, where do where does the liquid fee market come into play? Because right now,
1921
02:00:23.320 --> 02:00:34.355
I can pay 0.1 sats per byte for a transaction, which is Yeah. By the way, makes me feel like a fucking baller that I can just pay that for a transaction, and then it just gets confirmed right away.
1922
02:00:36.000 --> 02:00:47.125
The way I look at it is the whole point that we have the transaction fees is because me, humble node runner, who's running a node through fucking Tor on a Raspberry Pi
1923
02:00:47.585 --> 02:00:51.925
needs to be protected so that I'm allowed to run it, which I completely respect
1924
02:00:52.560 --> 02:00:54.660
on chain. But with Liquid,
1925
02:00:55.440 --> 02:00:57.860
you have these these federation members
1926
02:00:58.400 --> 02:01:02.925
that are running high performance hardware connected to very high bandwidth connections.
1927
02:01:03.865 --> 02:01:08.045
So what is the limit? Right? Like, if liquid gets successful,
1928
02:01:08.910 --> 02:01:17.890
do do does the block size increase on liquid very easily? Like, why why would there what situation ends up where there's fees on liquid
1929
02:01:18.375 --> 02:01:19.275
that are high?
1930
02:01:21.335 --> 02:01:22.875
1931
02:01:23.895 --> 02:01:25.355
the blockchain is a hard scale.
1932
02:01:26.720 --> 02:01:29.120
So you could push it a bit further because
1933
02:01:29.680 --> 02:01:31.060
but I think you do want
1934
02:01:32.160 --> 02:01:34.665
power users to be able to verify, you know,
1935
02:01:35.385 --> 02:01:39.005
to absorb that receive that much information over a reasonably fast
1936
02:01:39.385 --> 02:01:40.765
consumer Internet connection
1937
02:01:42.060 --> 02:01:46.080
and buy, you know, a gaming PC or something that can keep up,
1938
02:01:46.620 --> 02:01:47.200
you know,
1939
02:01:47.580 --> 02:01:50.320
sync a chain from scratch and then keep up with it
1940
02:01:51.005 --> 02:01:54.864
in, you know, like, a week or something. Right? And so
1941
02:01:55.405 --> 02:01:57.505
that will start to puzzle in it.
1942
02:01:57.890 --> 02:02:06.070
If you if you go beyond that, I mean, you know, it's just a bit of base at that point. Right? So you just won't give up. I think the verifiability is important because
1943
02:02:06.370 --> 02:02:08.315
so I mean, another thing that is
1944
02:02:09.975 --> 02:02:11.835
not so intuitive is that,
1945
02:02:14.070 --> 02:02:16.890
at least for the assets on on liquids,
1946
02:02:17.750 --> 02:02:18.250
the
1947
02:02:18.630 --> 02:02:20.730
the people with the full nerds could
1948
02:02:21.675 --> 02:02:22.815
fire the block signers
1949
02:02:23.515 --> 02:02:30.495
and, you know, elect new ones amongst themselves and resume the chain from the lost good state. So let's say the the block signers
1950
02:02:31.290 --> 02:02:36.989
start doing something that, you know, a bunch of users didn't like or some of the businesses relying on it didn't like.
1951
02:02:37.690 --> 02:02:39.230
They could take the chain and resume.
1952
02:02:39.925 --> 02:02:40.745
Now, of course,
1953
02:02:41.285 --> 02:02:47.225
they could take, you know, tethers and assets and things with them, but the Bitcoins, they'd have to peg out. And,
1954
02:02:47.620 --> 02:02:52.840
you know, if if the box signs refuse to give them their coins out, that's that's a different problem. But generally speaking,
1955
02:02:53.460 --> 02:02:55.000
they can resume the chain.
1956
02:02:55.614 --> 02:02:56.114
And
1957
02:02:56.735 --> 02:03:00.514
so it's important for them to be able to run a full node to check
1958
02:03:00.815 --> 02:03:06.840
that the blocks are valid. You know, the blocks the blocks are signing about and don't have double spends and so on.
1959
02:03:07.940 --> 02:03:13.695
1960
02:03:14.075 --> 02:03:19.055
like Tether or NFTs or whatever pegged asset you wanna talk about,
1961
02:03:19.550 --> 02:03:21.810
you know, EuroX or whatever, LCAD,
1962
02:03:23.630 --> 02:03:27.245
those things, it really doesn't matter what chain they're on because
1963
02:03:27.785 --> 02:03:28.525
the centralization
1964
02:03:28.825 --> 02:03:44.280
risk is is happening at the issuer side. So they can move if if if they're angry at at the Liquid Federation, they can move to whatever fucking chain they wanna move to. And we and we've already seen that happen. We've seen that happen with Tether. They went to Ethereum, then Ethereum fees went up, then they went to Tron.
1965
02:03:44.645 --> 02:03:46.665
You know? Now they're coming back to liquid.
1966
02:03:47.925 --> 02:03:55.969
They they can go wherever they want because, ultimately, what you are doing, you're trusting Tether. You're trusting Right. The people that are holding the USD.
1967
02:03:57.949 --> 02:03:58.449
So,
1968
02:03:59.550 --> 02:04:01.810
I mean I mean, with with all that said,
1969
02:04:04.675 --> 02:04:06.695
the the the the point
1970
02:04:07.235 --> 02:04:07.735
is
1971
02:04:08.275 --> 02:04:09.655
is if we're
1972
02:04:11.640 --> 02:04:12.620
talking about
1973
02:04:13.240 --> 02:04:16.700
this this idea of of of trust,
1974
02:04:19.245 --> 02:04:21.025
How does a how does a user
1975
02:04:21.725 --> 02:04:22.625
level that?
1976
02:04:22.925 --> 02:04:24.625
Like like, I I don't understand
1977
02:04:25.165 --> 02:04:27.265
exactly how a user realizes
1978
02:04:30.770 --> 02:04:33.429
what they're what they're gonna do in terms of,
1979
02:04:34.130 --> 02:04:37.190
like, do they trust Onchain versus Liquid?
1980
02:04:37.615 --> 02:04:38.335
Does Liquid
1981
02:04:38.735 --> 02:04:41.395
the the key is is is with Liquid,
1982
02:04:42.415 --> 02:04:46.435
I'm I'm trying to I'm trying to figure out how does the federation
1983
02:04:47.619 --> 02:04:50.679
like like, why would you be a federation member
1984
02:04:51.540 --> 02:04:56.119
if your fees aren't going to go up over time? How how does
1985
02:04:56.494 --> 02:04:58.994
like, where does where does the game theory
1986
02:04:59.454 --> 02:05:01.554
follow where the federation member
1987
02:05:01.855 --> 02:05:03.395
wants to secure the network
1988
02:05:03.850 --> 02:05:06.590
if if their fees are are just staying,
1989
02:05:07.290 --> 02:05:10.270
you know, at at their basis? Yeah. I mean,
1990
02:05:10.810 --> 02:05:11.310
1991
02:05:15.875 --> 02:05:19.895
I mean, today, the fees don't actually go to the federation members. They go to Blockstream.
1992
02:05:20.500 --> 02:05:23.640
But then Blockstream is using them to offset
1993
02:05:24.180 --> 02:05:25.960
some of the peg wallet,
1994
02:05:27.140 --> 02:05:28.200
transaction costs.
1995
02:05:29.335 --> 02:05:29.835
And
1996
02:05:30.935 --> 02:05:34.235
I think you need I mean, you need fees to avoid spam,
1997
02:05:34.695 --> 02:05:46.805
and so the fees need to be in Bitcoin. They can't be in assets because they make a print, you know, ridiculous number of assets and pull up the chain using those fees. So I think Bitcoin is Liquid Bitcoin is the right asset to use for
1998
02:05:47.665 --> 02:05:48.165
fees.
1999
02:05:49.025 --> 02:05:54.250
But I don't you know, nobody's really trying to make money from the fees directly because they don't have mining costs
2000
02:05:54.550 --> 02:05:56.570
to be free. Right? So it's more like,
2001
02:05:57.030 --> 02:05:58.970
you know, the spamming, the people being
2002
02:05:59.990 --> 02:06:01.750
functionaries and block signers are
2003
02:06:02.390 --> 02:06:04.625
you know, they're trying to run a business. They're like
2004
02:06:05.485 --> 02:06:05.985
sideswap
2005
02:06:06.364 --> 02:06:07.105
that is
2006
02:06:07.804 --> 02:06:08.304
charging
2007
02:06:08.844 --> 02:06:10.545
swap fees. It's like 0.1%
2008
02:06:11.245 --> 02:06:12.065
swap fees.
2009
02:06:12.750 --> 02:06:15.890
Some of those swaps you can do yourself cheaper, but they're less convenient.
2010
02:06:16.910 --> 02:06:18.450
Or exchanges. So they're getting
2011
02:06:19.070 --> 02:06:22.465
kind of more use case use out of it. So they're willing to
2012
02:06:22.925 --> 02:06:28.705
or they're philosophically interested. Right? So they're they're running a node, but the node isn't like a profit center.
2013
02:06:29.290 --> 02:06:31.310
It's more the the indirect benefit.
2014
02:06:34.090 --> 02:06:36.350
So, yeah, that's that's the fees. And
2015
02:06:36.685 --> 02:06:39.185
oh, one thing to say about the fees as well. So 0.1
2016
02:06:40.605 --> 02:06:46.989
sets per v byte, but, they're confidential transactions, so they're a bit bigger. But still, you know, it works out,
2017
02:06:48.570 --> 02:06:51.870
like, less than 1 I think a little less than 1 set of byte,
2018
02:06:52.330 --> 02:06:54.665
but that always works kind of thing at the moment.
2019
02:06:55.145 --> 02:06:58.925
So I think your your general point, though, I agree with, which is
2020
02:06:59.465 --> 02:07:01.085
it would be a reasonable thing
2021
02:07:02.185 --> 02:07:02.685
to
2022
02:07:03.330 --> 02:07:04.949
increase the block size a bit
2023
02:07:05.330 --> 02:07:05.989
on liquids
2024
02:07:06.369 --> 02:07:10.310
if if the feast, you know, if it filled up and the feast started to get annoying.
2025
02:07:12.505 --> 02:07:16.525
But you can't you can't go kind of crazy. Right? Because the CPU
2026
02:07:18.240 --> 02:07:24.180
cost would get out of control. The bandwidth cost will get out of control. And if if nobody can verify it, then it's not really a blockchain anymore.
2027
02:07:24.640 --> 02:07:35.695
2028
02:07:36.700 --> 02:07:43.520
2029
02:07:45.005 --> 02:07:50.304
they're making these commissions on the trades in the wallet. Right? So the swap they're sort of accelerating swaps and facilitating
2030
02:07:51.324 --> 02:07:52.045
Bitcoin to
2031
02:07:52.660 --> 02:07:54.440
liquid Bitcoin to liquid Tether
2032
02:07:55.540 --> 02:07:57.240
or Bitcoin to liquid Bitcoin
2033
02:07:57.780 --> 02:08:02.040
cross chain, and they're taking commissions on it. So that's how they make their money. And so,
2034
02:08:04.005 --> 02:08:11.785
I think the other part of it is, you know, they wanna be able to trust the network security. And one way to do that is to be to be part of it.
2035
02:08:12.090 --> 02:08:18.910
So to to operate, you know, 1 15th of it or something. Right. And look look around it who else is doing that. So there are people that have hypothesized
2036
02:08:19.370 --> 02:08:19.870
that
2037
02:08:21.245 --> 02:08:23.905
in a very far future where Bitcoin doesn't have
2038
02:08:24.365 --> 02:08:26.465
any subsidy left and it's all fees
2039
02:08:27.245 --> 02:08:33.290
that, you know, once it one hope is that while the fees will come will provide enough money for the miners to,
2040
02:08:34.070 --> 02:08:39.284
you know, make a profit, continue to operate, and provide security to the network. But another theory could be
2041
02:08:41.344 --> 02:08:47.930
that people who run Bitcoin related businesses maybe wanna do a bit of mining just keep the network secure and protect their Bitcoin related investment.
2042
02:08:49.430 --> 02:08:53.050
So that's the theory I did some Bitcoin mining on. I was like, well,
2043
02:08:54.305 --> 02:08:58.885
you know, here here is me complaining that Bitcoin is too Bitcoin mining is too centralized.
2044
02:08:59.665 --> 02:09:04.630
It's Bitcoin. There's never to complain to. So I guess I better do some mining. So, you know, I figured
2045
02:09:06.130 --> 02:09:09.110
a percentage of what I was comfortable with doing mining.
2046
02:09:09.730 --> 02:09:27.340
And I put some I put some money into mining. And that way, I felt like I mean, of course, I didn't make a dent, you know, like, turning fraction to a percent, but I figured that it doesn't take that much. I think it's like, you know, a few percent of Bitcoin's total market cap, you know, completely decentralized Bitcoin hash rate.
2047
02:09:28.915 --> 02:09:30.775
So I think something like that could apply
2048
02:09:31.235 --> 02:09:31.975
kind of thinking
2049
02:09:33.235 --> 02:09:38.420
is the more present and liquid because there is no mine. Right? I mean, there's there's no reward
2050
02:09:38.960 --> 02:09:39.620
as such.
2051
02:09:40.480 --> 02:09:48.745
So the it's already jump started to that situate, and they're not doing for the fees. They're doing it for well, because we're running we need to run a business on it, and we need to build trust
2052
02:09:49.125 --> 02:09:51.145
what's going on. So we're gonna we're gonna do it.
2053
02:09:52.245 --> 02:09:53.225
So it's kind of
2054
02:09:53.739 --> 02:09:58.239
jump start jump there to that. I mean, some sometimes layer twos and altcoins
2055
02:09:58.699 --> 02:10:09.454
experience that would only happen in the far future for Bitcoin. So it's kinda done one of those, I guess. And it seems to, you know, people there seems to be a queue of people that wanna get, you know, like, get function rates. So as soon as Dynafed
2056
02:10:10.290 --> 02:10:13.510
is ready, there are people that are, you know, keen to operate 1.
2057
02:10:18.585 --> 02:10:20.445
2058
02:10:24.570 --> 02:10:29.070
I mean, there's incentives to be a a a liquid
2059
02:10:29.449 --> 02:10:30.590
federation member.
2060
02:10:31.050 --> 02:10:37.554
The those incentives aren't the fee. It isn't the fees. Like, you're not becoming a federation member to make fees.
2061
02:10:38.415 --> 02:10:38.915
Right.
2062
02:10:39.775 --> 02:10:42.355
2063
02:10:43.280 --> 02:10:45.619
kind of weird conflict too. Right? If if
2064
02:10:46.400 --> 02:10:47.539
if there were fees
2065
02:10:48.239 --> 02:10:49.219
and no rewards,
2066
02:10:52.215 --> 02:10:55.594
maybe some of the federation members want the blocks to be as small as possible.
2067
02:10:56.135 --> 02:10:57.435
The fees are really high.
2068
02:10:58.320 --> 02:11:04.980
Other ones like, no, our use case needs retail payments. You're killing the use case for us. You're getting some complex. So
2069
02:11:05.605 --> 02:11:06.985
the way it is at the moment,
2070
02:11:07.445 --> 02:11:11.705
nobody's really they just they just want to work, work reliably, spoil lots of use cases.
2071
02:11:13.100 --> 02:11:16.000
And to act as, I guess, in a way, I kind of,
2072
02:11:17.580 --> 02:11:18.560
sort of reduce,
2073
02:11:20.380 --> 02:11:21.440
you know, off
2074
02:11:22.844 --> 02:11:23.585
that can
2075
02:11:23.965 --> 02:11:28.385
support bigger blocks and, you know, more CPU to verify all these
2076
02:11:30.460 --> 02:11:32.160
confidential transaction proofs.
2077
02:11:33.100 --> 02:11:35.760
But that would be a problem on the main chain because it
2078
02:11:36.765 --> 02:11:39.824
would be, you know, censorship risk. But for a side chain,
2079
02:11:40.125 --> 02:11:42.065
you know, it's opt in. Right? So
2080
02:11:45.130 --> 02:11:51.310
people don't have to you know, they can tolerate it being more centralized because that's up to the people that opt into it.
2081
02:11:53.335 --> 02:11:53.835
2082
02:11:54.295 --> 02:11:56.215
2083
02:11:56.614 --> 02:12:00.155
why become a member of the Liquid Federation and what are the incentives,
2084
02:12:00.935 --> 02:12:01.515
I think
2085
02:12:02.980 --> 02:12:07.159
it it's funny. I actually saw something on Twitter that made me laugh. Someone said,
2086
02:12:07.940 --> 02:12:08.440
Wiz
2087
02:12:08.980 --> 02:12:09.415
is,
2088
02:12:09.895 --> 02:12:14.075
part of, like, the liquid cartel, so he's trying to hijack Bisk
2089
02:12:14.535 --> 02:12:17.355
and make it use liquid or something
2090
02:12:17.815 --> 02:12:18.315
hilarious.
2091
02:12:18.775 --> 02:12:22.390
And they don't realize the reason I joined liquid was
2092
02:12:22.930 --> 02:12:23.910
to be able
2093
02:12:24.370 --> 02:12:27.270
to represent, like, the interest of the BIS community,
2094
02:12:27.730 --> 02:12:28.390
you know,
2095
02:12:29.574 --> 02:12:34.155
by participating in the governance on the board or just being able to, like, verify
2096
02:12:34.534 --> 02:12:35.034
things,
2097
02:12:36.260 --> 02:12:37.080
you know, internally
2098
02:12:37.940 --> 02:12:39.240
or being able to,
2099
02:12:40.180 --> 02:12:41.960
you know, provide liquidity
2100
02:12:42.580 --> 02:12:49.305
or something. I will. Right? Exactly. Like, those those are the incentives, right, is to participate in the network,
2101
02:12:50.245 --> 02:12:54.900
as a as a member. Not not for any direct financial incentives. Right?
2102
02:12:55.440 --> 02:12:58.660
Obviously, I run a lot of stuff for Bisc. And so,
2103
02:12:59.520 --> 02:13:01.300
I also want to be able to,
2104
02:13:02.185 --> 02:13:05.005
provide this, you know, similar services or maybe
2105
02:13:05.385 --> 02:13:07.705
bridge services between the liquid and bisque,
2106
02:13:08.185 --> 02:13:09.245
community. So
2107
02:13:09.830 --> 02:13:15.449
that was the incentive for me. I don't know. It's kind of like, okay, on the Internet, the Internet also has governance.
2108
02:13:16.230 --> 02:13:20.905
Not to, like, go off topic, but the Internet being a peer to peer network,
2109
02:13:21.525 --> 02:13:23.545
does have a governance structure. And,
2110
02:13:24.470 --> 02:13:25.850
you know, I've even, like,
2111
02:13:26.630 --> 02:13:27.350
tried to,
2112
02:13:27.990 --> 02:13:36.625
get elected to the executive council of the Internet in Asia Pacific and, you know, other, like, fun stuff. But it but just being a part of the Internet, you kind of want to
2113
02:13:37.405 --> 02:13:37.905
participate
2114
02:13:38.285 --> 02:13:42.100
in the the policies or the governance. You you kinda wanna have a say,
2115
02:13:42.720 --> 02:13:46.260
in how things work and not only and then the other side, you want to
2116
02:13:47.335 --> 02:13:48.635
be part of the discussion
2117
02:13:49.015 --> 02:13:56.395
or you wanna, you know, just just have a have a say in things, how they're running. So the I would say from a membership perspective, those are,
2118
02:13:57.420 --> 02:14:01.760
the incentives. Then, of course, I think, Matt, you would agree as well. Before you
2119
02:14:02.460 --> 02:14:15.205
recommend your friends to use something, you also wanna be intimately familiar with how it works and 100%. Verify it yourself. Yeah. So so that was, you know, before I suggested to Bisk that we should consider adding,
2120
02:14:16.020 --> 02:14:18.280
you know, support for the liquid chain,
2121
02:14:18.660 --> 02:14:24.520
I I wanted to, like, fully verify it myself and and, get comfortable with how it works. And
2122
02:14:24.835 --> 02:14:26.455
that was cool. Like, even when there was,
2123
02:14:27.155 --> 02:14:31.415
that issue that, Adam mentioned earlier with the, the time lock,
2124
02:14:32.070 --> 02:14:40.735
2 weeks versus 4 weeks thing. I actually asked Adam. I was like, can you send me the the source code for this thing? I kinda wanna verify it. And sure enough, you know,
2125
02:14:42.175 --> 02:14:47.955
you know, I was able to get all the source code and actually verify what was what was going on. And I thought that was
2126
02:14:48.470 --> 02:14:50.170
that was really cool to be able to,
2127
02:14:50.630 --> 02:14:53.530
2128
02:14:53.910 --> 02:14:55.290
like, you're you're
2129
02:14:56.165 --> 02:14:59.065
I appreciate the fuck out of you. I mean, you're hosting bitcointv.com,
2130
02:14:59.845 --> 02:15:04.585
which hosts its hosts all of our archives for civil dispatch,
2131
02:15:05.900 --> 02:15:08.880
and we've had issues with people hosting that shit.
2132
02:15:10.460 --> 02:15:12.320
I mean, like, you're
2133
02:15:13.615 --> 02:15:21.715
you there there's there's no clear financial incentive for you to do what you do. You're putting yourself in a more vulnerable situation,
2134
02:15:23.010 --> 02:15:28.390
being a Liquid Federation member. I I cannot I work through all the different scenarios.
2135
02:15:29.865 --> 02:15:32.445
Yes. I'm a little bit biased because Wiz is a friend,
2136
02:15:33.065 --> 02:15:39.325
and he's been on dispatch multiple times. But, like, honestly, like, there's there's no way for him to make
2137
02:15:39.740 --> 02:15:44.160
money here. Like, the like, if anything, he's losing money being a federation member.
2138
02:15:44.700 --> 02:15:47.600
You put it all together, that's that's how it comes out.
2139
02:15:50.855 --> 02:15:53.195
I I I wanted to Adam,
2140
02:15:53.574 --> 02:15:55.195
while I have you, and
2141
02:15:55.600 --> 02:16:04.100
I appreciate the fuck out of you. Like, it's fantastic that you've been here for this conversation. I think this has been a really very conversation for the audience.
2142
02:16:07.155 --> 02:16:07.655
6102.
2143
02:16:08.195 --> 02:16:11.735
This has been famously called the 6102 Bitcoin show,
2144
02:16:12.380 --> 02:16:12.880
because
2145
02:16:13.500 --> 02:16:19.360
he refuses to dox himself. He's only doxed himself once on voice, and that was on the Stephane Levera podcast.
2146
02:16:20.035 --> 02:16:23.015
But besides that, he's never actually doxed his voice.
2147
02:16:23.395 --> 02:16:25.095
And and he wants to know,
2148
02:16:26.275 --> 02:16:30.840
and I'm very curious as well. So so he did channel me in this question.
2149
02:16:31.300 --> 02:16:34.520
Is it possible for us to do a multiparty transaction
2150
02:16:34.980 --> 02:16:35.640
on Liquid,
2151
02:16:36.420 --> 02:16:36.920
without
2152
02:16:37.954 --> 02:16:41.095
doxing the information, like, doxing the amounts,
2153
02:16:41.954 --> 02:16:55.085
and the destination of the individual transactions to the other people of the party. Basically, the idea is, is it possible to do a coin join without unblinding your confidential transactions?
2154
02:16:56.604 --> 02:17:01.825
2155
02:17:02.525 --> 02:17:03.025
So
2156
02:17:03.920 --> 02:17:06.740
I think you don't really need to know anything
2157
02:17:07.360 --> 02:17:07.860
about
2158
02:17:09.440 --> 02:17:14.325
the types of values of the other parties, just that you get out the same amount that you put in.
2159
02:17:14.785 --> 02:17:17.045
And you have to do some kind of, you know,
2160
02:17:17.985 --> 02:17:22.630
coordination game where partially signed messages are passed backwards and forwards. So there's,
2161
02:17:24.529 --> 02:17:25.590
for people doing
2162
02:17:25.970 --> 02:17:34.505
some kinds of Bitcoin stuff, you come across PSVT, which is a kind of file format for partially signed Bitcoin transaction. So there's an extension to that called,
2163
02:17:34.985 --> 02:17:35.485
PSET,
2164
02:17:36.665 --> 02:17:37.565
which is by,
2165
02:17:38.665 --> 02:17:46.909
actually, Andrew Chow is the person who worked on both of those, and he works at Blockstream. So he's been working on PSET, which is a way to, you know, adds
2166
02:17:47.770 --> 02:17:49.310
liquid extensions to
2167
02:17:49.835 --> 02:17:51.295
this, kind of
2168
02:17:51.755 --> 02:17:57.215
message format and adds blinding factors and things like that to it. So something like that should be possible.
2169
02:17:59.431 --> 02:17:59.931
And
2170
02:18:00.711 --> 02:18:02.971
yeah. I mean, the the intuition is basically
2171
02:18:03.990 --> 02:18:04.811
with the blinding
2172
02:18:05.431 --> 02:18:05.931
stuff,
2173
02:18:06.895 --> 02:18:07.636
the the
2174
02:18:08.335 --> 02:18:09.875
in Bitcoin, the
2175
02:18:10.815 --> 02:18:16.115
inputs, you know, the values of the inputs have to add up to the value of the outputs plus the fees. And in liquid,
2176
02:18:17.280 --> 02:18:22.181
the value of the inputs of each type have to add up the same value of the same type
2177
02:18:22.881 --> 02:18:27.125
and that, you know, there could be multiple types in there. Right? But the inputs have to add to the outputs.
2178
02:18:27.984 --> 02:18:28.484
And
2179
02:18:28.944 --> 02:18:34.245
the way that happens with the blinding factors is the blinding factors have to sort of cancel out on each side. So
2180
02:18:34.880 --> 02:18:36.979
it's it's mathematically possible to,
2181
02:18:37.439 --> 02:18:41.460
you know, join with something where you don't really know what it is or how much it is.
2182
02:18:44.235 --> 02:18:47.135
2183
02:18:50.080 --> 02:18:56.580
2184
02:18:57.040 --> 02:18:57.540
coincidentally,
2185
02:18:58.560 --> 02:18:58.810
the,
2186
02:19:00.305 --> 02:19:01.445
confidential transactions
2187
02:19:01.825 --> 02:19:03.525
is the building block
2188
02:19:05.585 --> 02:19:09.010
used in a in a few different things, including
2189
02:19:09.311 --> 02:19:10.210
member Wimble.
2190
02:19:12.510 --> 02:19:13.010
So
2191
02:19:13.710 --> 02:19:14.210
when,
2192
02:19:15.465 --> 02:19:19.405
Greg Maxwell used to be the CTO of Blockstream but is now, you know, independent,
2193
02:19:20.024 --> 02:19:20.524
he,
2194
02:19:21.225 --> 02:19:23.885
he was implementing it. I've mentioned to him that,
2195
02:19:24.990 --> 02:19:27.650
you know, with this range proof, you wouldn't need
2196
02:19:28.510 --> 02:19:32.130
a signature because the range proof itself is kind of proof of ownership.
2197
02:19:32.655 --> 02:19:37.075
And that is, you know, like a a first step along the way to Mimble.
2198
02:19:37.615 --> 02:19:38.436
Mimble was
2199
02:19:38.976 --> 02:19:41.555
sprung on the log by another pseudonym actually.
2200
02:19:42.930 --> 02:19:43.430
But
2201
02:19:43.810 --> 02:19:47.590
as a site liquid basically has the building blocks in it already
2202
02:19:48.130 --> 02:19:51.944
to do member wonderful like behavior, which is instead of doing a transaction
2203
02:19:53.205 --> 02:19:54.265
with a signature
2204
02:19:55.045 --> 02:19:59.145
and binding factor, you just, you know, make an opt true transaction. There's no signature.
2205
02:20:00.000 --> 02:20:00.500
And
2206
02:20:01.841 --> 02:20:03.301
knowing the blinding factors,
2207
02:20:04.080 --> 02:20:07.700
is what enables you to spend. And you and you have to know the blinding factors to spend.
2208
02:20:08.275 --> 02:20:12.455
And then you need to, you know, you need to do something and you need to make a wallet
2209
02:20:12.995 --> 02:20:16.535
that understands this kind of different way to use the liquid
2210
02:20:17.360 --> 02:20:21.300
blockchain formats. So that's another thing that could be done potentially in wallets.
2211
02:20:22.800 --> 02:20:24.900
And then the, you know, the only
2212
02:20:25.615 --> 02:20:36.560
thing missing for Liquid for mimble and bull then would be that it's not, you know, making you some mathematical properties that lets you delete the history of mimble and bull transactions. But it's kind of curious that you get the,
2213
02:20:37.500 --> 02:20:39.760
you know, the kind of claimed
2214
02:20:40.300 --> 02:20:44.386
privacy benefits from them or something. It should be possible today even.
2215
02:20:45.485 --> 02:20:50.945
2216
02:20:51.450 --> 02:20:52.330
what's gonna be,
2217
02:20:52.730 --> 02:20:54.110
possible with this
2218
02:20:54.890 --> 02:20:56.830
basically new global financial
2219
02:20:57.370 --> 02:20:57.870
system.
2220
02:20:59.675 --> 02:21:08.976
There's this, very famous post by Hal Finney on the Bitcoin talk forums where he's talking about, the future of Bitcoin banks and Bitcoin banking.
2221
02:21:09.471 --> 02:21:10.210
And I think,
2222
02:21:11.070 --> 02:21:12.851
Adam also tweeted about this,
2223
02:21:13.230 --> 02:21:16.530
in the past too when, Hodo Hodo implemented their
2224
02:21:17.065 --> 02:21:19.565
decentralized lending platform on top of Liquid.
2225
02:21:20.105 --> 02:21:21.805
And it's and it's kind of like,
2226
02:21:23.226 --> 02:21:24.905
this is this is the future of,
2227
02:21:25.670 --> 02:21:28.890
Bitcoin banking is is some kind of side chain with liquid
2228
02:21:29.430 --> 02:21:30.970
that, of course, settles,
2229
02:21:32.070 --> 02:21:34.495
on the base base layer Bitcoin blockchain
2230
02:21:34.955 --> 02:21:36.555
and uses Bitcoin as its,
2231
02:21:37.035 --> 02:21:41.215
token of accounts, as a unit of account. But the side chain itself
2232
02:21:42.091 --> 02:21:44.910
can do all kinds of really cool stuff
2233
02:21:45.290 --> 02:21:47.230
that the Bitcoin base layer wouldn't,
2234
02:21:48.490 --> 02:21:49.471
be able to do.
2235
02:21:49.851 --> 02:21:50.351
And
2236
02:21:51.275 --> 02:21:56.255
this is this is also why I'm so interested in liquid. Right? Because we're just we're just seeing the surface of,
2237
02:21:57.195 --> 02:22:01.061
you know, what new op codes or what new contract functionalities.
2238
02:22:01.761 --> 02:22:07.301
And and, maybe this is a good time to to talk about Biscuit a little bit, like, with with,
2239
02:22:08.105 --> 02:22:08.605
you
2240
02:22:09.945 --> 02:22:11.726
know, we we talked about the
2241
02:22:12.905 --> 02:22:15.165
the the kind of, okay, coffee transactions
2242
02:22:15.625 --> 02:22:24.560
or day to day transactions for daily stack or, you know, large settlement transactions that batch batch a lot of things. That's like the obvious
2243
02:22:25.455 --> 02:22:34.915
use case of a side chain or or any of these things is, okay, Bitcoin base layer fees are getting high, so let's batch a bunch of transactions on liquid or lightning
2244
02:22:35.280 --> 02:22:38.160
to get the fees down. And then we'll settle on chain,
2245
02:22:38.480 --> 02:22:46.256
eventually at some point. But the real other side of the cool stuff you can do with a side chain like liquid is the new functionality.
2246
02:22:46.796 --> 02:22:51.660
Right? And this is this is, like, where you can you can just, you know, imagine the future of,
2247
02:22:52.300 --> 02:22:56.560
like, hold to hold to lend is a cool example. Right? They if you're not familiar, they have this,
2248
02:22:58.125 --> 02:23:00.945
on chain on in a liquid contract. They'll lock
2249
02:23:01.405 --> 02:23:08.040
up Bitcoin or they'll do some kind of atomic swap. I'm not too familiar with the technical details, but your, LVTC
2250
02:23:08.660 --> 02:23:09.720
and your USDT,
2251
02:23:11.300 --> 02:23:13.800
are in this really cool, multisig swap,
2252
02:23:14.564 --> 02:23:18.905
contract. Right? So you can you can fully verify everything. And I think that's the real key
2253
02:23:19.445 --> 02:23:19.945
to,
2254
02:23:21.641 --> 02:23:26.540
the future of Bitcoin banking is that okay. Back in the day, if you go back to the gold standard,
2255
02:23:27.240 --> 02:23:28.460
you know, you would have,
2256
02:23:29.045 --> 02:23:38.560
a bank vault. A bank has a vault with a bunch of gold bars in it. Well, how many gold bars do they have in the vault? Nobody can really verify that easily. But more importantly,
2257
02:23:39.260 --> 02:23:45.520
how many gold certificates did they issue out? Right? Are they a fractional reserve or is it a full reserve?
2258
02:23:45.875 --> 02:23:46.535
Is it,
2259
02:23:48.115 --> 02:23:50.295
I think they're, you know, like are they fully,
2260
02:23:50.835 --> 02:23:56.560
are they do they have a 100% reserves or not? And that's the really cool feature about Liquid that's underrated.
2261
02:23:56.939 --> 02:23:58.560
Is that if you imagine Liquid
2262
02:23:59.020 --> 02:24:00.399
as some kind of bank,
2263
02:24:01.655 --> 02:24:08.476
that's issuing like, not gold certificates, but like Bitcoin certificates or Bitcoin I use like with with the LVTC token,
2264
02:24:09.096 --> 02:24:15.080
essentially is is that you can fully verify not only the holdings of this
2265
02:24:15.460 --> 02:24:16.359
Liquid Federated
2266
02:24:16.820 --> 02:24:17.320
Bank,
2267
02:24:17.985 --> 02:24:24.165
but also the liabilities. And I don't know of any other system where this is really possible, where you can fully
2268
02:24:24.545 --> 02:24:26.805
verify both the assets and the liabilities
2269
02:24:27.610 --> 02:24:29.130
of, this type of,
2270
02:24:30.170 --> 02:24:31.870
side chain. So that's really cool,
2271
02:24:32.649 --> 02:24:34.430
that you can do that with Bitcoin
2272
02:24:34.915 --> 02:24:36.854
or more accurately on top of Bitcoin
2273
02:24:37.715 --> 02:24:41.895
to enable actual banking use cases like peer to peer lending
2274
02:24:42.354 --> 02:24:42.854
or,
2275
02:24:43.450 --> 02:24:51.955
you know, Bisc is another good example. Bisc on top of Liquid with more privacy and and lower fees. That's where Liquid is really going to shine. And that's,
2276
02:24:52.355 --> 02:24:56.936
why I'm bullish on the future of of, liquid for this, functionality.
2277
02:25:00.030 --> 02:25:08.210
2278
02:25:08.695 --> 02:25:16.075
2279
02:25:16.649 --> 02:25:19.790
2280
02:25:20.490 --> 02:25:21.550
trustless escrow,
2281
02:25:22.170 --> 02:25:22.670
and
2282
02:25:23.689 --> 02:25:24.750
it's quite
2283
02:25:25.565 --> 02:25:26.065
a
2284
02:25:26.445 --> 02:25:29.825
low risk way to collect interest on US dollars because
2285
02:25:30.445 --> 02:25:35.930
the person who borrows them has to over collateralize it with Bitcoin. And as the lender, you get one of the keys
2286
02:25:36.270 --> 02:25:36.770
for
2287
02:25:37.109 --> 02:25:39.689
the for the s for the, collateral.
2288
02:25:40.069 --> 02:25:40.890
And so,
2289
02:25:41.315 --> 02:25:48.295
you know, unlike the other lending platforms where you you basically give money to a middleman, you don't know what they do with it. Yeah. If it's like
2290
02:25:49.020 --> 02:25:52.880
laying out, you know, what risk is. You can actually see the the coins
2291
02:25:53.181 --> 02:25:53.681
called,
2292
02:25:55.740 --> 02:25:58.080
guaranteeing the loan. And
2293
02:25:59.225 --> 02:26:01.005
so, yep, it seems to be,
2294
02:26:01.625 --> 02:26:07.965
you know, there's more people wanting to borrow than there's dollars to borrow. So any any money that goes in there just gets used up immediately.
2295
02:26:08.670 --> 02:26:09.891
So, you know,
2296
02:26:10.351 --> 02:26:10.750
it's,
2297
02:26:12.270 --> 02:26:15.091
it seems to be pretty active. And actually, the main
2298
02:26:18.444 --> 02:26:18.944
borrowing
2299
02:26:19.805 --> 02:26:20.305
they
2300
02:26:21.005 --> 02:26:22.625
have tether on,
2301
02:26:24.365 --> 02:26:28.610
a couple of net liquid is the one that gets misused on that one for some reason.
2302
02:26:29.390 --> 02:26:30.210
2303
02:26:30.990 --> 02:26:34.030
they get a lot of shit. They get actually get a lot of shit about,
2304
02:26:34.430 --> 02:26:35.410
supporting Altcoin.
2305
02:26:38.575 --> 02:26:39.075
Altcoin
2306
02:26:39.535 --> 02:26:40.975
supported I see.
2307
02:26:41.455 --> 02:26:42.755
Or AltJade supported,
2308
02:26:43.136 --> 02:26:43.636
like,
2309
02:26:44.016 --> 02:26:44.516
stablecoins.
2310
02:26:45.750 --> 02:26:52.091
Yes. They What's interesting is what's interesting is they actually have a lot of trouble with the confidential transactions.
2311
02:26:53.515 --> 02:26:58.654
Yeah. It it actually ruins their setup. It makes it way more difficult for them to use,
2312
02:26:59.595 --> 02:27:00.895
liquid USDT
2313
02:27:01.690 --> 02:27:03.230
versus regular USDT.
2314
02:27:04.010 --> 02:27:13.285
2315
02:27:14.145 --> 02:27:20.940
It's kinda great. I love that. You have to. So we added a feature. I mean, we needed to add it anyway, but we kinda rushed it for them, which is
2316
02:27:21.400 --> 02:27:22.540
in the green wallet.
2317
02:27:23.160 --> 02:27:25.980
You there's, you know, you click on it. It takes you to the explorer,
2318
02:27:26.745 --> 02:27:31.725
but it's still confidential. And we made another a new feature for the explorer, which is you click on it,
2319
02:27:32.185 --> 02:27:33.564
and it sends the
2320
02:27:33.865 --> 02:27:34.925
blinding key
2321
02:27:36.030 --> 02:27:46.505
in a in a URL path as a, you know, comment field. So the the web server doesn't see it, but there's JavaScript in the browser to decrypt it, and then you can see it. So you can share that with Huddl Huddl,
2322
02:27:46.806 --> 02:27:50.425
and then they can see what who's telling the truth, basically.
2323
02:27:51.285 --> 02:27:55.200
But without that feature, they would kind of, who do we believe here?
2324
02:27:56.140 --> 02:27:59.500
2325
02:27:59.980 --> 02:28:09.025
2326
02:28:09.690 --> 02:28:10.190
and
2327
02:28:10.650 --> 02:28:13.931
if you wanna you the the burden of proof is on the,
2328
02:28:14.891 --> 02:28:18.351
buyer in this case. They need to prove to the mediator
2329
02:28:18.875 --> 02:28:27.620
that they sent the LBTC to the certain address, and the only way to do that is exactly what you just said by revealing the lining key. That's why originally when we launched,
2330
02:28:28.020 --> 02:28:30.980
LBTC trading on BISK, we actually had to,
2331
02:28:31.780 --> 02:28:35.240
require the users to use, like, an element's core full node because
2332
02:28:35.926 --> 02:28:38.266
at the time, the green wallet didn't have that feature.
2333
02:28:39.365 --> 02:28:41.445
2334
02:28:42.325 --> 02:28:45.250
won't send to a non confidential address either. It's kind of,
2335
02:28:46.369 --> 02:28:55.204
it really wants you to use I mean, the network would support non confidential addresses and elements can, which elements is kinda like Bikki, but for liquid.
2336
02:28:56.944 --> 02:28:58.244
But Green and Aqua
2337
02:28:58.625 --> 02:29:00.085
are confident only, basically.
2338
02:29:01.101 --> 02:29:04.160
So yeah. But now that there's a a URL
2339
02:29:04.540 --> 02:29:07.761
on the explorer that can encrypt it in JavaScript, so it's kinda nice.
2340
02:29:08.115 --> 02:29:16.455
2341
02:29:17.211 --> 02:29:20.431
Like, if you already implement Bitcoin, it's super easy to implement,
2342
02:29:21.211 --> 02:29:22.110
Liquid. Right?
2343
02:29:22.570 --> 02:29:27.056
2344
02:29:28.155 --> 02:29:29.596
on on one of the
2345
02:29:30.075 --> 02:29:31.775
2346
02:29:32.250 --> 02:29:33.150
2347
02:29:33.689 --> 02:29:37.050
he was talking I guess he's talked about in a couple of places. But, anyway, basically, what you're saying,
2348
02:29:37.610 --> 02:29:44.056
you know, liquid is very easy to do because all the API calls are the same. There's some small extensions to do the confidentiality.
2349
02:29:44.995 --> 02:29:47.415
But once you adapted for that, basically,
2350
02:29:47.955 --> 02:29:49.495
you know, there's your tool chain,
2351
02:29:49.900 --> 02:29:51.200
your application stack.
2352
02:29:51.900 --> 02:29:53.601
It it all works in its low friction.
2353
02:29:54.300 --> 02:29:55.120
And so
2354
02:29:55.500 --> 02:29:55.980
he was,
2355
02:29:57.260 --> 02:29:57.840
you know,
2356
02:29:58.495 --> 02:30:03.955
the one thing you need is the is the crypto library for confidential transactions. So Bitcoin has
2357
02:30:04.814 --> 02:30:08.340
the main library that it uses is Libsec p, which is all crypto.
2358
02:30:09.040 --> 02:30:09.540
And
2359
02:30:10.399 --> 02:30:11.220
the same
2360
02:30:11.760 --> 02:30:13.620
developers that work on Libsec p
2361
02:30:14.135 --> 02:30:16.074
added the confidential transactions implementation.
2362
02:30:17.175 --> 02:30:19.435
So there's a link sec p version with,
2363
02:30:20.535 --> 02:30:22.234
sec p's. So it has the
2364
02:30:22.940 --> 02:30:25.360
confidential transaction range proofs and things. So
2365
02:30:25.980 --> 02:30:28.080
he figures the main challenge is to,
2366
02:30:29.740 --> 02:30:35.556
you know, get that running on a cold card, and it feels like the rest will be quite simple. So that'll be pretty cool if,
2367
02:30:36.275 --> 02:30:37.800
you could support in cold card
2368
02:30:38.359 --> 02:30:39.100
as well.
2369
02:30:40.760 --> 02:30:44.700
Yeah. That's for now. There is already a liquid support in,
2370
02:30:45.560 --> 02:30:46.060
Ledger,
2371
02:30:48.475 --> 02:30:52.095
not like, the ledger hardware works as well, like, in NOS.
2372
02:30:52.795 --> 02:30:56.335
And, of course, Blockstream made the, you know, the
2373
02:30:56.860 --> 02:30:58.480
Jade as well to have,
2374
02:30:59.900 --> 02:31:02.480
content transaction support. And, actually,
2375
02:31:03.100 --> 02:31:05.840
it turns out that the hardware wallets have, like, rather
2376
02:31:06.726 --> 02:31:10.025
small memories and slow CPUs. So JADE is
2377
02:31:10.726 --> 02:31:12.665
significantly faster and more memory
2378
02:31:13.285 --> 02:31:20.649
because it can do well, I mean, it has a QR code reader on it as well, which which takes more resources because it has a camera and screen. And
2379
02:31:21.430 --> 02:31:21.830
it has
2380
02:31:23.485 --> 02:31:27.585
yeah. We we knew that we would wanna do confidential transactions on the
2381
02:31:28.365 --> 02:31:32.226
on the processor as well. So it's got, like, a kind of dual core 32 bit
2382
02:31:32.770 --> 02:31:33.591
wrist chip.
2383
02:31:34.370 --> 02:31:40.975
2384
02:31:41.614 --> 02:31:44.175
want on their wish list if they were gonna,
2385
02:31:45.055 --> 02:31:49.730
use Jade would be, like, an easier ability to self host everything on, like,
2386
02:31:50.690 --> 02:31:53.431
for example, like, if they have a Raspberry Pi at home,
2387
02:31:54.370 --> 02:31:58.370
maybe Blockstream could make an app for the Umbrell App Store that's like the Jade,
2388
02:31:58.931 --> 02:32:00.295
how do you call it? PIN,
2389
02:32:01.234 --> 02:32:03.895
server side PIN back end? Is that what it was called?
2390
02:32:04.595 --> 02:32:08.135
2391
02:32:08.580 --> 02:32:13.080
So, actually, I mean, we should explain what that is. Hey. Most hardware wallets are,
2392
02:32:15.785 --> 02:32:18.444
you know, I can cite it. It's protected by a pin,
2393
02:32:19.145 --> 02:32:19.885
but particularly
2394
02:32:20.824 --> 02:32:24.364
it's showing none of them are that great mostly. But, you know, if if you
2395
02:32:24.900 --> 02:32:26.120
if if somebody steals
2396
02:32:26.740 --> 02:32:31.400
it and they've got a lab, there's a chance they could get get your keys out of it and steal the coins.
2397
02:32:31.955 --> 02:32:35.975
And so some of them have HSMs oh, sorry. Secure elements
2398
02:32:36.275 --> 02:32:38.455
that are supposed to be hard to extract keys from.
2399
02:32:38.835 --> 02:32:40.354
But it turns out most of them
2400
02:32:41.940 --> 02:32:47.641
there's 2 CPUs, there's a secure element and MCU, a kind of general purpose CPU. And what happens is when you power it up,
2401
02:32:48.020 --> 02:32:55.175
you give the PIN to the secure element and it gives the mnemonic and the keys to the application processor, and then it's already in the application processor.
2402
02:32:56.595 --> 02:33:02.240
So the distinction is not that great to the different models, you know, whether it's a serial element or not.
2403
02:33:02.780 --> 02:33:04.400
The application processor ends
2404
02:33:04.860 --> 02:33:08.880
up doing the signature because serial elements don't have, like, DSA signing capabilities.
2405
02:33:10.495 --> 02:33:11.635
So in any case,
2406
02:33:12.015 --> 02:33:13.234
you know, JAD is
2407
02:33:13.854 --> 02:33:20.190
partly one of one of the thought processes we wanted to be that I can fully open source hardware that
2408
02:33:21.450 --> 02:33:26.270
you could buy off the shelf hardware and run it on it. So buy like a m 5 stack
2409
02:33:26.815 --> 02:33:27.315
type
2410
02:33:27.775 --> 02:33:30.595
of variants. There's a variance like a fire that you can
2411
02:33:31.135 --> 02:33:36.380
get down with the firmware open source and flash it yourself. And now you have, like, a Jade functionality.
2412
02:33:37.560 --> 02:33:38.060
And,
2413
02:33:39.560 --> 02:33:44.815
but then it's not gonna have a secure element. So we we figured, well, what can we do about this? And the thought was
2414
02:33:45.596 --> 02:33:46.895
to use a challenge response
2415
02:33:48.155 --> 02:33:57.199
protocol with a server so that if you get the PIN wrong three times, then you can't decrypt what's on it. And so the mnemonic and keys are encrypted.
2416
02:33:57.979 --> 02:34:00.720
And they're encrypted with a key that's kind of, you know,
2417
02:34:01.335 --> 02:34:05.435
split between the server and the client. So the server couldn't decrypt your stuff either.
2418
02:34:06.935 --> 02:34:17.065
But you can't decrypt it without challenge response to a server. And so if you fail 3 times, the server will say no. And then you you can recover it. You just have to reset it and put your mnemonic in again.
2419
02:34:17.785 --> 02:34:31.210
But it protects you against somebody attacking it even though it doesn't have a screw on it. But the question there is so what Wizz was saying is, well, what if I wanna run my own PIN server and I don't wanna rely on this, you know, Internet has to PIN server.
2420
02:34:31.830 --> 02:34:39.266
And, yeah, we we released the source code for it, and it's pretty small. It's like a bit Python code that, you know, answers this challenge response,
2421
02:34:40.101 --> 02:34:44.040
counts down to 0, and then locks you out and deletes the keys or what have you.
2422
02:34:44.900 --> 02:34:50.555
So it's pretty cool actually to, you know, to put that on a Raspberry Pi and hide it somewhere and you connect to it over
2423
02:34:51.255 --> 02:34:55.835
Tor. And then, you know, if somebody gets your hardware wallet, it's gonna be pretty hard to
2424
02:34:56.694 --> 02:34:57.734
override the pin lock out,
2425
02:34:59.590 --> 02:35:00.729
if you can't find it.
2426
02:35:02.150 --> 02:35:03.850
That way, you have one less dependency.
2427
02:35:04.550 --> 02:35:05.050
So,
2428
02:35:05.910 --> 02:35:08.010
yeah, that's possible. I think we need another,
2429
02:35:08.756 --> 02:35:09.335
we need
2430
02:35:09.795 --> 02:35:10.455
to to
2431
02:35:10.835 --> 02:35:13.335
have another firmware update for Jade to
2432
02:35:14.756 --> 02:35:18.490
to add the configuration option, but the server part is open source already
2433
02:35:19.910 --> 02:35:22.810
2434
02:35:24.150 --> 02:35:25.450
change the hard coded,
2435
02:35:26.235 --> 02:35:28.914
PIN server back end URL in the
2436
02:35:29.354 --> 02:35:36.080
2437
02:35:36.460 --> 02:35:39.760
make it so that even with the stock, like, pre flash jade,
2438
02:35:40.061 --> 02:35:42.720
that you'd be able to change it your own server.
2439
02:35:43.725 --> 02:35:45.345
2440
02:35:45.805 --> 02:35:50.944
Like, a lot of friends will ask me to be, like, their, key buddy. Right? So they'll say, like,
2441
02:35:51.500 --> 02:35:55.340
can you just hold on to one of my keys of my multisig setup or,
2442
02:35:56.380 --> 02:36:06.965
you know, Raspberry Pi. Can you just, like, host my Raspberry Pi for me on your network or something like this? Mhmm. I think that would be a and it's a good service. Right? Because I have plausible deniability. I don't know,
2443
02:36:07.700 --> 02:36:11.239
what they're doing. I'm just, like, you know, hosting service.
2444
02:36:12.100 --> 02:36:13.640
But, that would be a cool
2445
02:36:14.819 --> 02:36:15.479
kind of
2446
02:36:16.936 --> 02:36:23.436
service to to provide is that, kinda like a self hosted Casa or something like this, where you you have a multisig,
2447
02:36:24.615 --> 02:36:32.359
signing, and then you could define whatever rules. And I think, with NVK's product, like, the cold card or something that you you could add, like,
2448
02:36:32.965 --> 02:36:34.345
Right. You could add multiple,
2449
02:36:35.284 --> 02:36:35.784
devices
2450
02:36:36.085 --> 02:36:38.984
in, like, multiple jurisdictions to create your own,
2451
02:36:40.164 --> 02:36:43.500
you know, cool, like, multisig setup. So
2452
02:36:43.880 --> 02:36:50.836
you could have 1 Raspberry Pi in one country with this hardware device and then in a different country, you know. And that way,
2453
02:36:52.655 --> 02:36:55.556
you you know, you're much more seizure resistant. Right?
2454
02:36:56.096 --> 02:36:57.875
2455
02:36:58.370 --> 02:37:05.670
with cold cards in every jurisdiction that you want to put them in. Right. But then you have to actually travel to those countries. Right? Right.
2456
02:37:06.065 --> 02:37:11.686
But, like, but it's it's only him. Like, he's the only one, like, fucking going with this shit.
2457
02:37:12.065 --> 02:37:14.085
But I love him for it. You know?
2458
02:37:15.060 --> 02:37:16.200
2459
02:37:16.660 --> 02:37:18.520
2460
02:37:21.060 --> 02:37:29.245
Yeah. This is fantastic. I so so, Adam, before we leave here, I I wanna talk about, the blockchain satellite.
2461
02:37:30.105 --> 02:37:32.445
Oh, yeah. I think it's a very cool
2462
02:37:33.529 --> 02:37:35.229
thing you guys are working on.
2463
02:37:36.010 --> 02:37:40.510
I I think we should talk to the freaks, talk to the audience about how,
2464
02:37:41.735 --> 02:37:45.676
it does require trust, but it doesn't require as much trust as you would think.
2465
02:37:46.936 --> 02:37:48.955
You wanna talk about this a little bit?
2466
02:37:49.600 --> 02:37:50.900
2467
02:37:51.280 --> 02:37:51.780
actually,
2468
02:37:53.120 --> 02:37:54.020
it's a
2469
02:37:54.720 --> 02:37:55.220
common
2470
02:37:56.575 --> 02:37:57.075
question
2471
02:37:58.095 --> 02:37:58.595
because,
2472
02:37:59.855 --> 02:38:03.395
you know, the satellites I mean, people don't necessarily know the details about
2473
02:38:04.069 --> 02:38:11.609
what outline of how satellites work, but they're basically quite there's not much intelligence in the satellite. So most intelligence is on the ground on a on the uplink.
2474
02:38:11.910 --> 02:38:13.210
And so we're running,
2475
02:38:14.585 --> 02:38:15.885
several physical
2476
02:38:16.505 --> 02:38:18.125
uplink sites that we control.
2477
02:38:18.665 --> 02:38:24.869
And, I mean, a lot of people will rent space in a satellite uplink colocation or something, but we have our own uplink.
2478
02:38:25.489 --> 02:38:25.989
And
2479
02:38:26.609 --> 02:38:31.350
that gives us a bit more independent control that maybe is, you know, interfering with our equipment.
2480
02:38:33.314 --> 02:38:34.935
And, we run a full nodes
2481
02:38:35.395 --> 02:38:36.455
on on those
2482
02:38:38.515 --> 02:38:40.535
and include the data in a way that,
2483
02:38:41.410 --> 02:38:45.030
gives redundancy for the satellite and upload it. And so
2484
02:38:45.410 --> 02:38:51.455
then you get the client equipment or different types of equipment, most recently in the base station, which is a kind
2485
02:38:52.075 --> 02:38:53.295
of power over Ethernet
2486
02:38:53.995 --> 02:38:56.415
flat panel dish. So you pretty much
2487
02:38:56.955 --> 02:38:57.855
connect it,
2488
02:38:59.210 --> 02:39:04.270
mount it, point it the satellite, and connect it with the Ethernet cable to your router.
2489
02:39:04.811 --> 02:39:05.530
If you have,
2490
02:39:06.170 --> 02:39:07.790
you have a p power of Ethernet
2491
02:39:08.295 --> 02:39:11.515
capable router. If you don't have, you just plug in the power injector.
2492
02:39:12.774 --> 02:39:14.395
And it it relays,
2493
02:39:15.255 --> 02:39:15.755
basically,
2494
02:39:16.800 --> 02:39:21.060
lots of stuff about Bitcoin, you know, real time transactions, blocks us in their mind,
2495
02:39:21.680 --> 02:39:23.380
and a full block history actually
2496
02:39:24.355 --> 02:39:25.535
lightning gossip,
2497
02:39:26.436 --> 02:39:27.255
data updates,
2498
02:39:27.715 --> 02:39:31.255
and the Bitcoin client source code as well, vertically.
2499
02:39:33.110 --> 02:39:40.250
And all of a lot of redundancy and error correction so that, you know, you can get a power cut for an hour and you still recover and all that kind of stuff.
2500
02:39:41.975 --> 02:39:48.315
So then the question that arises is, well, wait a minute. Now I'm trusting Blockstream for this data, and they could send me,
2501
02:39:49.069 --> 02:39:55.250
you know, bad blocks or sends us a sends the transactions and send trusting one person is is a bad idea. And
2502
02:39:56.114 --> 02:39:58.694
so and what Matt was saying is that counterintuitively,
2503
02:39:59.154 --> 02:39:59.895
it's actually
2504
02:40:00.595 --> 02:40:02.694
not really trusting us very much because
2505
02:40:03.770 --> 02:40:06.430
the Bitcoin blockchain is kind of signed
2506
02:40:06.810 --> 02:40:10.910
by miners in a way, you know, all the all the proof of work on it.
2507
02:40:11.609 --> 02:40:12.430
So for
2508
02:40:13.035 --> 02:40:17.535
for us as the node operator to to modify anything, we would have
2509
02:40:18.155 --> 02:40:21.055
to do a lot of, you know, we have to do a lot of money. Right?
2510
02:40:22.230 --> 02:40:23.051
And so,
2511
02:40:23.511 --> 02:40:26.570
you know, the data that comes out of the block site, you feed it into,
2512
02:40:27.910 --> 02:40:31.051
a Bitcoin node that is extended with this
2513
02:40:32.565 --> 02:40:34.025
forward error correction decoding.
2514
02:40:34.485 --> 02:40:37.705
Actually, the data that comes out of the box set is UDP.
2515
02:40:39.365 --> 02:40:40.105
And then
2516
02:40:40.561 --> 02:40:41.940
you feed those UDP
2517
02:40:42.480 --> 02:40:43.860
forward error correction packets
2518
02:40:45.681 --> 02:40:46.181
into,
2519
02:40:47.681 --> 02:40:49.620
Bitcoin that's been extended with
2520
02:40:50.025 --> 02:40:50.525
fiber,
2521
02:40:51.945 --> 02:40:55.005
optimized for satellite use, and it decodes it, basically.
2522
02:40:57.040 --> 02:41:02.580
And you get a full node. So the full node's verifying the proof of work and the transaction validity, so we can't do very much.
2523
02:41:02.960 --> 02:41:04.580
And the other thing you can do
2524
02:41:05.215 --> 02:41:05.715
is
2525
02:41:07.055 --> 02:41:09.234
verify it with very low bandwidth.
2526
02:41:09.774 --> 02:41:12.195
So if you just get something to give you a recent,
2527
02:41:12.840 --> 02:41:19.420
you know, block hash more recent block, and you can check it's in your blockchain, and you know everything is correct up to that point.
2528
02:41:20.065 --> 02:41:24.645
And there are and that you know, you could get them to read you that over a phone call or
2529
02:41:25.505 --> 02:41:26.485
there is a
2530
02:41:28.341 --> 02:41:35.160
there's a phone number that Grubles has in his profile. I think it's, like, 1800 BLK hash or something like that. And if you call that number,
2531
02:41:35.965 --> 02:41:36.285
it,
2532
02:41:36.766 --> 02:41:40.065
it reads you the the most recent block hash, like a time service.
2533
02:41:41.005 --> 02:41:44.306
You can go to that. So that's that's kind of idea. And
2534
02:41:45.190 --> 02:41:46.891
a little bit analogous to
2535
02:41:47.910 --> 02:41:54.011
being on a Bitcoin pitch, you know. If if one of your have on average 8 peers, and if one of them
2536
02:41:54.870 --> 02:41:59.755
I was trying to figure which is invalid data, you would just read by the other ones.
2537
02:42:00.455 --> 02:42:01.995
Ah, yes. The number is 1833
2538
02:42:02.694 --> 02:42:06.790
BLK hash. So if you call that, it will read you stuff about the
2539
02:42:07.091 --> 02:42:08.471
most recent block hash.
2540
02:42:10.450 --> 02:42:11.351
Yeah. So
2541
02:42:12.556 --> 02:42:25.430
if if you're on a peer to peer network and you've got, you know, 8 neighbors and one of them is very fast in feeding you most of the data, but you realize it's it's lying to you, you'll discover that because one of your low bandwidth neighbors will feed you,
2542
02:42:25.810 --> 02:42:30.695
you know, a more work block that conflicts with it. And then you'll you'll realize something's wrong
2543
02:42:31.655 --> 02:42:32.556
and, you know,
2544
02:42:33.096 --> 02:42:36.315
disconnect the fast node or ignore what it's saying.
2545
02:42:38.120 --> 02:42:49.365
So it's the idea. So the the block site is kind of like that. Right? It's a it's an extreme version of that, which is a very fast node single there, and then you have, you know, a very slow kind of
2546
02:42:50.386 --> 02:42:50.886
almost
2547
02:42:51.266 --> 02:43:02.010
human speeds that will check someone. And and some people use it, you know, they're not fully offline. They just use it, you know, you you could use it on a multiple network. So you could have other peers,
2548
02:43:02.645 --> 02:43:07.945
but just with very low bandwidth. So then you would automatically get that kind of cross check and just save on
2549
02:43:09.046 --> 02:43:10.025
Internet traffic.
2550
02:43:10.485 --> 02:43:11.365
And I think the main
2551
02:43:12.260 --> 02:43:15.720
know, for a lot of people, the interesting another interesting about the box set is
2552
02:43:17.140 --> 02:43:21.815
privacy because it's it's received only. Nobody knows your IP address. There's no
2553
02:43:22.375 --> 02:43:22.875
Bitcoin,
2554
02:43:24.296 --> 02:43:27.995
you know, other Bitcoin node in the IP address, so you've got very strong privacy.
2555
02:43:29.335 --> 02:43:29.835
And
2556
02:43:30.750 --> 02:43:31.250
it,
2557
02:43:32.350 --> 02:43:33.810
protects you, you know,
2558
02:43:34.830 --> 02:43:35.890
if you serve it.
2559
02:43:38.555 --> 02:43:39.375
Those can be,
2560
02:43:39.914 --> 02:43:42.095
you know, political or just
2561
02:43:42.795 --> 02:43:43.295
accidents.
2562
02:43:44.475 --> 02:43:45.694
Day before we released
2563
02:43:46.590 --> 02:43:47.410
base station
2564
02:43:48.351 --> 02:43:52.530
version, there's a Canadian lost its Internet connection because of beaver 8 through the,
2565
02:43:54.855 --> 02:44:00.715
like, a kit like a rodent 8 through the fiber cable to the whole app. So stuff stuff happens. Right?
2566
02:44:03.020 --> 02:44:03.520
Yeah.
2567
02:44:06.380 --> 02:44:07.520
2568
02:44:08.780 --> 02:44:09.680
I I think
2569
02:44:11.016 --> 02:44:12.235
I think people underestimate
2570
02:44:12.695 --> 02:44:16.315
how powerful it is that we have a satellite just literally broadcasting,
2571
02:44:17.095 --> 02:44:19.516
Bitcoin block data nonstop 247.
2572
02:44:20.561 --> 02:44:23.860
2573
02:44:24.641 --> 02:44:32.355
not competing, but a complimentary service? So, like, you don't have to just trust the Blockstream satellite, but you can get, like, multiple satellite peers.
2574
02:44:33.135 --> 02:44:34.515
2575
02:44:36.500 --> 02:44:39.160
once there is one I mean, people often ask,
2576
02:44:39.620 --> 02:44:40.120
will
2577
02:44:40.740 --> 02:44:42.280
the blocks that become redundant
2578
02:44:42.740 --> 02:44:44.120
after Starlink is,
2579
02:44:44.660 --> 02:44:47.005
you know, more widely deployed than available?
2580
02:44:47.865 --> 02:44:59.180
And the answer actually is no because Starlink is a routed network. It's kinda like you know, GSM or 4 g data in the sky. So it's, you know, there
2581
02:44:59.560 --> 02:45:00.380
are uplink
2582
02:45:01.079 --> 02:45:03.420
and then satellite satellite laser links.
2583
02:45:03.925 --> 02:45:10.860
And so it's not really broadcast. It's it's point to point, and the data is only available to subscribers. So they could selectively cut you off.
2584
02:45:11.660 --> 02:45:15.360
You have to probably identify yourself to pay to sign up for it. Whereas
2585
02:45:16.221 --> 02:45:22.274
and so the same day, if lots of people downloaded it, it would, like, use a lot of data because I mean, we've done it, you know, like, on the Internet.
2586
02:45:23.375 --> 02:45:24.675
Whereas the box that is
2587
02:45:25.694 --> 02:45:26.354
just surplus.
2588
02:45:26.740 --> 02:45:29.320
Yeah. And it I mean, there's there's, like, you know,
2589
02:45:30.101 --> 02:45:31.000
4 satellites
2590
02:45:32.101 --> 02:45:33.160
and 5 transponders
2591
02:45:33.620 --> 02:45:35.080
covering most of the globe.
2592
02:45:35.415 --> 02:45:39.435
And so we just got massive coverage areas that are literally receiving the same data.
2593
02:45:40.295 --> 02:45:42.555
And then there are some areas where there are 2
2594
02:45:43.160 --> 02:45:46.620
2 different satellites covering the same area, and then we send different,
2595
02:45:47.640 --> 02:45:48.700
forward error correction
2596
02:45:49.319 --> 02:45:49.819
code
2597
02:45:50.425 --> 02:46:03.130
of the same data. So if you if you receive both, you can you can buy, like, 2 dishes or 2 2 base stations. And then you'll get the block history twice as fast, and you'll get blocks and half the latency and stuff like that. So it can assemble
2598
02:46:04.010 --> 02:46:09.950
you know, you can receive from either one and it works. But if you receive both of them, you just get the data faster. So it's kind of a neat
2599
02:46:10.935 --> 02:46:12.955
trick of forward air correction codes.
2600
02:46:16.694 --> 02:46:20.319
2601
02:46:20.779 --> 02:46:22.159
2602
02:46:22.939 --> 02:46:27.040
We don't either. They're they're, like, very expensive. We're leasing bandwidth on,
2603
02:46:27.395 --> 02:46:30.936
on, like, commercial satellites that have satellite TV and other, like,
2604
02:46:31.556 --> 02:46:33.415
industrial, like, data uses.
2605
02:46:34.115 --> 02:46:38.510
So we have probably about an HDTV channels worth of bandwidth and which
2606
02:46:39.130 --> 02:46:39.630
is,
2607
02:46:40.010 --> 02:46:40.750
you know,
2608
02:46:42.170 --> 02:46:42.670
optimizing,
2609
02:46:43.530 --> 02:46:44.030
like,
2610
02:46:45.015 --> 02:46:46.715
custom compressor for
2611
02:46:47.175 --> 02:46:48.154
Bitcoin transactions.
2612
02:46:49.255 --> 02:46:53.274
So it's actually kinda cool. Like, Peter will work on a bit and
2613
02:46:53.641 --> 02:46:54.601
implemented it. And,
2614
02:46:56.601 --> 02:46:58.681
the question is on the Bitcoin network. It it's,
2615
02:46:59.160 --> 02:47:00.940
basically, losslessly compresses
2616
02:47:01.320 --> 02:47:02.221
Bitcoin transactions
2617
02:47:03.175 --> 02:47:05.274
with, you know, just with the transaction context.
2618
02:47:05.895 --> 02:47:07.354
So that saves a bit of space.
2619
02:47:09.654 --> 02:47:12.820
So there's there's lots of optimizations that went into it. And
2620
02:47:14.080 --> 02:47:18.900
yeah. So we can squeeze, you know, full stuff out of, 1.5,
2621
02:47:20.720 --> 02:47:21.220
megabits
2622
02:47:22.625 --> 02:47:34.030
of, raw raw data. But it it will Right. Fully sync a node from scratch, which is kinda surprising. Right? You just plug this thing and leave it there for, I don't know, week or so, and you'll have a synced node from scratch.
2623
02:47:34.729 --> 02:47:36.510
2624
02:47:37.315 --> 02:47:41.096
I mean, I guess credit to the big the blockchain marketing strategy,
2625
02:47:42.596 --> 02:47:44.056
is this idea that
2626
02:47:45.529 --> 02:47:50.750
if if a government wanted to stop the blockchain satellite, they'd have to take out TV.
2627
02:47:51.210 --> 02:47:52.670
They'd have to take out other
2628
02:47:53.140 --> 02:47:55.414
Well, one thing that's it's not like just your satellite.
2629
02:47:55.954 --> 02:48:00.694
2630
02:48:02.620 --> 02:48:06.000
Yeah. I mean, we also because there are some overlapping
2631
02:48:06.460 --> 02:48:08.480
coverage zones, we try to get
2632
02:48:09.725 --> 02:48:10.944
because because the satellites
2633
02:48:11.245 --> 02:48:13.345
are owned and operated by different
2634
02:48:14.444 --> 02:48:16.305
international companies. And
2635
02:48:17.165 --> 02:48:17.665
so
2636
02:48:18.170 --> 02:48:23.069
we tried to get different operators for overlapping satellites. So if one
2637
02:48:24.410 --> 02:48:25.050
if one got
2638
02:48:26.515 --> 02:48:28.835
like, it fall back on the other one or something like that.
2639
02:48:29.234 --> 02:48:33.415
The satellites is they are we'll say, well, what happens if the Internet connection
2640
02:48:34.680 --> 02:48:36.380
goes down at the uplink site.
2641
02:48:37.560 --> 02:48:39.819
We actually have satellite redundancy for that because
2642
02:48:41.080 --> 02:48:43.814
the west uplink is looking at the east
2643
02:48:44.274 --> 02:48:44.774
downlink.
2644
02:48:45.075 --> 02:48:46.215
You know? So
2645
02:48:46.835 --> 02:48:47.575
if the
2646
02:48:48.115 --> 02:48:51.015
if the Internet connection goes down on the west uplink,
2647
02:48:51.360 --> 02:48:53.220
which is heading out towards,
2648
02:48:54.320 --> 02:48:55.700
Europe and Africa,
2649
02:48:57.440 --> 02:49:03.205
then what will happen is the latency will get worse, but it will get the data from the, you know, the next satellite over.
2650
02:49:03.665 --> 02:49:09.511
Like, it will go up and down and up again kind of thing. So we wanna eventually get another one,
2651
02:49:10.370 --> 02:49:15.431
like another uplink site in Europe or Asia so that we can make a full circle. So we got 3,
2652
02:49:16.290 --> 02:49:17.030
you know,
2653
02:49:18.025 --> 02:49:18.845
3 ground
2654
02:49:19.385 --> 02:49:19.885
uplinks
2655
02:49:20.985 --> 02:49:27.245
so that if there's Internet at any one, then the whole system would keep running. At the moment, it's, you know, it's only double redundancy.
2656
02:49:29.330 --> 02:49:38.335
That's so cool. Is that why you named the company Blockstream? And Google No. That was, like, coincidental, but it does seem appropriate in that context. Yeah.
2657
02:49:39.035 --> 02:49:40.815
2658
02:49:42.075 --> 02:49:43.855
satellites around the Earth or something.
2659
02:49:44.610 --> 02:49:45.351
2660
02:49:45.730 --> 02:49:48.391
kinda sound like a stream of blocks, I guess.
2661
02:49:52.805 --> 02:49:55.385
2662
02:49:56.165 --> 02:49:58.024
yeah. Hit us, Adam. Go.
2663
02:49:58.645 --> 02:50:02.505
2664
02:50:03.910 --> 02:50:09.690
we know we're working on supply chain, so we should we should be able to get back on preorder within a couple of weeks, hopefully.
2665
02:50:13.795 --> 02:50:14.455
And yeah.
2666
02:50:15.314 --> 02:50:19.015
And I guess I guess they're also a nice price point at $40.
2667
02:50:19.475 --> 02:50:21.415
So our thinking is really the,
2668
02:50:21.910 --> 02:50:29.770
you know, we want to make it open source compatible so people can run their own, like, build their own. So it might be a way to avoid supply chain risks.
2669
02:50:30.230 --> 02:50:36.755
And, you know, they got the source code so they can add, submit features, or, you know, do other things with it
2670
02:50:37.375 --> 02:50:37.875
and
2671
02:50:38.391 --> 02:50:41.210
keep the cost down. So we've managed to make it
2672
02:50:42.230 --> 02:50:46.650
arguably similar security as a secure element without having the cost of a secure element.
2673
02:50:48.345 --> 02:50:55.385
2674
02:50:56.320 --> 02:50:59.380
there was some kind of jade app for the Raspberry Pi,
2675
02:51:00.720 --> 02:51:01.860
for the the ping,
2676
02:51:02.320 --> 02:51:03.840
back end server. That would be a cool,
2677
02:51:04.835 --> 02:51:08.694
kind of Christmas gift or present for new Bitcoiner friends
2678
02:51:09.154 --> 02:51:13.650
to help them get started in, like, a self sovereign way. That way they would be able to do,
2679
02:51:15.570 --> 02:51:16.390
like, Bitcoin
2680
02:51:16.770 --> 02:51:19.910
or liquid Bitcoin or lightning or,
2681
02:51:20.965 --> 02:51:27.545
even, like, Tether kind of assets on top of liquid, all with their same Raspberry Pi and Jade Wallet setup. Right?
2682
02:51:28.405 --> 02:51:28.905
2683
02:51:30.340 --> 02:51:30.840
Yeah.
2684
02:51:32.020 --> 02:51:32.520
There's
2685
02:51:33.699 --> 02:51:37.960
a number of different, there's a company called Start 9, which which makes
2686
02:51:39.035 --> 02:51:43.455
right, like, Bitcoin full nodes, and they have some sort of decentralized
2687
02:51:44.314 --> 02:51:45.615
peer hosted apps.
2688
02:51:46.140 --> 02:51:48.939
I think it's like a chat app. I think they have,
2689
02:51:50.460 --> 02:51:53.279
an elements node on it or or an option to install
2690
02:51:53.806 --> 02:51:55.905
2691
02:51:56.285 --> 02:52:00.785
full node product doesn't use an external s SSD yet. So,
2692
02:52:01.811 --> 02:52:03.431
they're, like, they use a prunes,
2693
02:52:03.891 --> 02:52:06.710
Bitcoin d note on the SD card only.
2694
02:52:07.250 --> 02:52:07.910
I see.
2695
02:52:08.290 --> 02:52:14.765
So I guess that's to get the cost down or maybe just make it easier. But I could see why you would wanna combine that with,
2696
02:52:15.864 --> 02:52:19.725
like, the Jade device to get the the overall cost down. And, also,
2697
02:52:21.500 --> 02:52:22.800
we're working on the mempool,
2698
02:52:23.660 --> 02:52:24.720
Explorer app
2699
02:52:25.100 --> 02:52:26.540
for the start 9 Labs,
2700
02:52:27.180 --> 02:52:29.359
res not Raspberry Pi platform.
2701
02:52:30.005 --> 02:52:35.465
So that would be really cool. Since they have that liquid node, we could actually have the mempool explorer
2702
02:52:35.925 --> 02:52:40.930
on both the main chain and, liquid side chain all on that Raspberry Pi.
2703
02:52:42.189 --> 02:52:46.210
2704
02:52:47.525 --> 02:52:49.465
2705
02:52:49.766 --> 02:52:50.266
2706
02:52:52.885 --> 02:52:54.266
Also good for privacy.
2707
02:52:55.909 --> 02:53:01.689
2708
02:53:03.029 --> 02:53:12.064
fork of electris for our, production server back end. But when we wanted to get it working for home users on Raspberry Pi,
2709
02:53:13.110 --> 02:53:18.971
it's just too heavy. Right? It's it's meant for, like, high performance server. So we had to do a lot of work to
2710
02:53:19.585 --> 02:53:23.365
kind of, get it working with the Roman z Electris,
2711
02:53:24.145 --> 02:53:24.645
which
2712
02:53:25.505 --> 02:53:34.370
which can run on a Raspberry Pi. But if if you're trying to, like, explore an address with more than a 100 transactions or so, it'll just,
2713
02:53:34.750 --> 02:53:36.290
give up. Right? Because
2714
02:53:37.025 --> 02:53:37.745
it doesn't have,
2715
02:53:38.385 --> 02:53:42.805
2716
02:53:43.345 --> 02:53:43.845
Electrum.
2717
02:53:45.960 --> 02:53:48.380
I mean, Electrum's being a kind of
2718
02:53:50.120 --> 02:53:51.260
a back end for
2719
02:53:52.454 --> 02:53:52.954
indexing
2720
02:53:53.574 --> 02:53:55.274
Bitcoin data, basically.
2721
02:53:56.694 --> 02:54:01.940
And there are a few different like from personal server, they they export like Electron Pro. So Blockstreams,
2722
02:54:04.880 --> 02:54:11.865
open source explorer is also an Electrum server. So, actually, the Aqua Wallet is an Electrum client, and it connects
2723
02:54:12.965 --> 02:54:17.625
to the Blockstream as an Electrum server. But you can you can point Electra other Electrum clients at
2724
02:54:18.260 --> 02:54:18.760
Blockstreams,
2725
02:54:19.779 --> 02:54:21.000
Black Explorer, actually.
2726
02:54:22.739 --> 02:54:25.239
But in terms of the the footprint
2727
02:54:26.745 --> 02:54:28.846
of the thing, I think it's
2728
02:54:29.865 --> 02:54:32.125
the, fastest and most scalable
2729
02:54:32.745 --> 02:54:38.360
Electrum server you can get at the moment, but it's it's a bit of a beast. Right? It indexes everything can
2730
02:54:39.780 --> 02:54:45.445
because everything. So it chews up or it doesn't fit in Raspberry Pi very well, and it's it's kinda overkill for, like, a personal use.
2731
02:54:45.926 --> 02:54:47.785
It's it's designed to, like, you know,
2732
02:54:50.245 --> 02:54:52.186
through thousands of thousands of user.
2733
02:54:53.420 --> 02:54:56.960
So, yeah, I think it's right. Yeah. I mean, that's what we use for the production.
2734
02:54:57.900 --> 02:54:58.400
2735
02:54:59.100 --> 02:54:59.600
2736
02:55:00.585 --> 02:55:04.904
2737
02:55:05.545 --> 02:55:09.564
And and I I, it's really cool, though, that it has its own,
2738
02:55:09.960 --> 02:55:12.060
like, REST API, and a lot of,
2739
02:55:12.760 --> 02:55:14.620
applications and Bitcoin wallets
2740
02:55:15.399 --> 02:55:17.899
all integrate, like, a lot of, transaction,
2741
02:55:18.600 --> 02:55:19.100
broadcast
2742
02:55:19.596 --> 02:55:20.096
services.
2743
02:55:21.115 --> 02:55:25.375
A a lot of, people use this API. I would actually estimate that the
2744
02:55:25.756 --> 02:55:28.096
the Blockstream, Electris API that
2745
02:55:28.930 --> 02:55:33.029
you use on, Blockstreams Explorer and that we also use on the Mempool Space Explorer
2746
02:55:33.409 --> 02:55:37.510
is probably, like, at least 10 times as popular as the actual,
2747
02:55:38.534 --> 02:55:39.354
Block Explorer,
2748
02:55:40.215 --> 02:55:43.734
website itself. Right? Just because of all the other integrations and,
2749
02:55:44.375 --> 02:55:51.260
and wallet apps. And and also because, it's available on the Tor hidden service onion. So Mhmm.
2750
02:55:52.020 --> 02:55:54.040
Anybody can can query
2751
02:55:54.886 --> 02:55:59.306
transactions or addresses in their custom application or broadcast transactions,
2752
02:55:59.766 --> 02:56:03.465
but over Tor so their, privacy is protected. I think that's,
2753
02:56:04.450 --> 02:56:07.170
really cool, and more people need to to run these,
2754
02:56:07.730 --> 02:56:09.510
Explora API servers.
2755
02:56:10.370 --> 02:56:13.030
2756
02:56:13.525 --> 02:56:15.625
it wouldn't be that hard to,
2757
02:56:18.085 --> 02:56:18.585
mirror
2758
02:56:19.846 --> 02:56:20.346
blockchain
2759
02:56:21.490 --> 02:56:22.950
dot infos APIs
2760
02:56:23.811 --> 02:56:35.546
so that people could run their own blockchain dot info kind of, right? Because it it has a few rest APIs that are just coincidentally a little bit different to the Explorer ones. But, you know, the Blockstream Explorer has,
2761
02:56:36.086 --> 02:56:39.170
like, a send API. You can send transactions through it.
2762
02:56:39.729 --> 02:56:40.229
2763
02:56:42.370 --> 02:56:44.710
2764
02:56:45.890 --> 02:56:46.390
like,
2765
02:56:48.155 --> 02:56:51.855
gets a bit out of date. You know, I think it it it all nodes.
2766
02:56:54.635 --> 02:56:57.070
It doesn't appear to be made well at times. So
2767
02:56:57.551 --> 02:57:02.051
it could be good for people because there there were, like, you know, actual wallets and services that rely on its APIs.
2768
02:57:02.670 --> 02:57:05.650
So I think it might be good for them to sort of self host,
2769
02:57:05.955 --> 02:57:10.935
and so it'll be easier for them to self host if the APIs were the same. So that's the kind of missing
2770
02:57:12.354 --> 02:57:16.489
2771
02:57:17.189 --> 02:57:17.850
to mempool's,
2772
02:57:19.109 --> 02:57:23.045
app getting so popular is that for the fee estimation, we,
2773
02:57:23.525 --> 02:57:26.505
implemented the same API as I think earn.com.
2774
02:57:27.285 --> 02:57:34.500
And then, of course, since we're using your back end, we we support the same API as the Blockstream Explorer. So it's nice to be able to,
2775
02:57:35.520 --> 02:57:37.220
now on the Raspberry Pi,
2776
02:57:37.600 --> 02:57:38.420
App Store,
2777
02:57:38.755 --> 02:57:43.575
you know, distributions to be able to have normal home users just do, like, a one click
2778
02:57:43.955 --> 02:57:44.455
installation
2779
02:57:44.995 --> 02:57:47.495
and have that API back end up and running
2780
02:57:48.120 --> 02:57:49.020
quickly and very easily.
2781
02:57:49.480 --> 02:57:54.140
And then now what we're seeing is a lot of, wallet apps. I think Specter supports,
2782
02:57:55.480 --> 02:57:57.185
of course, they support blockstream.info
2783
02:57:57.885 --> 02:57:58.545
and mempool.space,
2784
02:57:59.085 --> 02:58:07.790
but more importantly, they support the next option, which is, like, self hosted mempool space back end. Right? So you can just point it to your Raspberry Pi. And I think that's,
2785
02:58:08.570 --> 02:58:15.605
that was kinda like the vision for the for the project, right, is to be able to empower individuals to self host very easily.
2786
02:58:16.785 --> 02:58:20.965
2787
02:58:21.345 --> 02:58:21.845
sometimes
2788
02:58:23.300 --> 02:58:24.279
people write
2789
02:58:25.140 --> 02:58:26.600
kind of web mash up applications,
2790
02:58:27.540 --> 02:58:29.720
and then they rely on third party
2791
02:58:30.100 --> 02:58:32.520
service and APIs, and they cannot import,
2792
02:58:33.256 --> 02:58:35.995
accidentally import trust or service
2793
02:58:36.855 --> 02:58:37.995
reliability risk,
2794
02:58:38.455 --> 02:58:38.955
basically.
2795
02:58:43.120 --> 02:58:46.820
2796
02:58:47.440 --> 02:58:47.760
But,
2797
02:58:48.755 --> 02:58:58.520
2798
02:58:58.980 --> 02:58:59.480
about,
2799
02:59:01.860 --> 02:59:09.145
us missing us missing this. But I I I think it's very important. I think Bisk is the one of the most important projects in Bitcoin.
2800
02:59:09.846 --> 02:59:11.546
We've been very clear about that
2801
02:59:12.085 --> 02:59:13.546
here at Cielo Dispatch.
2802
02:59:14.800 --> 02:59:18.340
So hit us with it. You know? What what what is the future of BISC?
2803
02:59:18.880 --> 02:59:23.475
What where where do we have to be concerned, and and where are you coming at it?
2804
02:59:25.555 --> 02:59:26.055
2805
02:59:26.515 --> 02:59:28.854
it's interesting you say Biscuit is one of the most,
2806
02:59:29.635 --> 02:59:36.569
important projects. It it's probably the only project that touches actual fiat money. Right? Like,
2807
02:59:37.029 --> 02:59:38.090
all of the other,
2808
02:59:39.430 --> 02:59:39.930
cool
2809
02:59:40.855 --> 02:59:42.395
Bitcoin projects are
2810
02:59:42.775 --> 02:59:47.275
kind of like crypto to crypto or layer 2 or side chain
2811
02:59:47.990 --> 02:59:49.370
or or basically,
2812
02:59:50.150 --> 02:59:50.650
using
2813
02:59:51.590 --> 02:59:54.410
almost all, crypt cryptography based.
2814
02:59:54.845 --> 02:59:58.225
And Bisk is is like the only project that dared to,
2815
02:59:59.165 --> 03:00:03.230
touch actual fiat money. And so it it's a really unique challenge to,
2816
03:00:05.310 --> 03:00:06.770
to, like, make Bisc work,
2817
03:00:07.790 --> 03:00:13.354
I mean, for a number of reasons. Like, obviously, the the fiat payment systems in every country are totally different
2818
03:00:13.734 --> 03:00:16.475
and, every fiat currency has its own markets,
2819
03:00:17.814 --> 03:00:27.725
with its own with their own challenges and and stuff. But but more so than all that, you're taking all of that and you're trying to implement it in a decentralized and censorship resistant way.
2820
03:00:28.205 --> 03:00:28.705
And,
2821
03:00:29.404 --> 03:00:32.705
that's like, we we talked about liquid a lot and and other,
2822
03:00:33.645 --> 03:00:35.984
systems for censorship resistance, but,
2823
03:00:37.320 --> 03:00:38.460
it seems like
2824
03:00:39.561 --> 03:00:43.500
the the on chain fees are going to pump forever.
2825
03:00:43.960 --> 03:00:45.500
And so, unfortunately,
2826
03:00:46.085 --> 03:00:47.145
since Bisk was
2827
03:00:47.604 --> 03:00:51.705
developed a very long time ago, it's, like, over 6 years old now, I think.
2828
03:00:52.645 --> 03:00:55.225
Bisk was developed in this time where
2829
03:00:56.070 --> 03:01:04.250
the the thought of of an on chain fee market was like a very distant future away. And now that it that it's kind of here,
2830
03:01:05.375 --> 03:01:09.155
you know, Bisc is is kind of forced to to figure out some,
2831
03:01:10.335 --> 03:01:10.835
scaling,
2832
03:01:12.670 --> 03:01:14.689
you know, options. And and and
2833
03:01:15.069 --> 03:01:15.569
understandably,
2834
03:01:15.949 --> 03:01:16.449
like,
2835
03:01:17.069 --> 03:01:26.944
the it it's not it's not an easy, problem to solve. Right? Because Bisc is really Bisc users are really enjoying the, the security and the privacy
2836
03:01:27.324 --> 03:01:31.345
and the low transaction fees. But now that the the fees go up,
2837
03:01:31.790 --> 03:01:33.810
they're gonna have to, you know,
2838
03:01:34.190 --> 03:01:41.665
like, if you wanna do a $100 trade on bisque, you're not gonna spend 20 or $30 for on chain fees. Right? It just totally prices out
2839
03:01:42.145 --> 03:01:44.485
a lot of these use cases. And so
2840
03:01:45.185 --> 03:01:47.685
now the users are in a situation where,
2841
03:01:48.545 --> 03:01:52.000
we kinda have to go back to the drawing board and say, okay. Well, how can we
2842
03:01:52.540 --> 03:01:54.800
how can we make bisque version 2,
2843
03:01:56.380 --> 03:01:58.240
you know, to to solve
2844
03:01:58.755 --> 03:02:02.694
not only the fees issue, but a lot of the other issues that DISC,
2845
03:02:03.154 --> 03:02:05.814
has encountered over the past several years.
2846
03:02:06.850 --> 03:02:09.830
Maybe, you know, maybe we can try to improve the user experience.
2847
03:02:10.370 --> 03:02:11.570
Maybe we can try and,
2848
03:02:12.450 --> 03:02:19.495
make it more social or more community oriented. And and it's it's a challenge. Right? Because everything is is a balance. And if you,
2849
03:02:20.435 --> 03:02:22.535
you know, say say you implement
2850
03:02:24.210 --> 03:02:28.950
support for liquid as a base layer, as an optional second base layer,
2851
03:02:29.410 --> 03:02:30.790
then, you know,
2852
03:02:31.386 --> 03:02:32.926
maybe you have to, like,
2853
03:02:33.705 --> 03:02:39.710
maybe you have to bootstrap a new market because now you're not just doing, like, Bitcoin to USD. You would have to have, like, an
2854
03:02:40.030 --> 03:02:40.530
LBTC
2855
03:02:40.910 --> 03:02:43.330
to USD market. And so,
2856
03:02:44.670 --> 03:02:53.795
you know, market makers will show up and provide liquidity, but it it it just gets more and more difficult. Right? And then you you also have, like, the the technical,
2857
03:02:54.415 --> 03:02:58.210
implementation under the hood. You have to support multiple blockchains now
2858
03:02:58.670 --> 03:02:59.170
and,
2859
03:02:59.551 --> 03:03:03.091
that increases, like, the computational cost. Like, Bisc is already,
2860
03:03:03.630 --> 03:03:09.045
pretty heavy app. But now if you, you know, add support for a different base layer, what are you gonna use? More CPU.
2861
03:03:09.585 --> 03:03:13.170
So then the UX also could suffer. So it it's very,
2862
03:03:13.810 --> 03:03:16.550
difficult to to solve this problem without,
2863
03:03:17.650 --> 03:03:18.550
you know, really
2864
03:03:21.074 --> 03:03:21.574
sacrificing,
2865
03:03:22.515 --> 03:03:24.375
some some important points.
2866
03:03:24.995 --> 03:03:25.734
And so,
2867
03:03:26.755 --> 03:03:32.970
yeah, it's it's a it's a difficult problem. And I think the future of this, like, in the version 2, will probably be more
2868
03:03:33.829 --> 03:03:34.649
like a generic
2869
03:03:35.109 --> 03:03:35.609
contract
2870
03:03:35.989 --> 03:03:36.489
execution
2871
03:03:37.430 --> 03:03:37.930
system.
2872
03:03:39.436 --> 03:03:45.615
So maybe the security will even be not part of the basic protocol. This is this is still, like,
2873
03:03:46.840 --> 03:03:50.140
conceptual and and being discussed and proposed. But,
2874
03:03:51.399 --> 03:03:51.899
say
2875
03:03:52.439 --> 03:03:52.939
say,
2876
03:03:54.455 --> 03:03:57.516
Matt, you and I wanna trade some Bitcoin for some Fiat,
2877
03:03:57.895 --> 03:03:59.915
and, we kinda know each other,
2878
03:04:00.375 --> 03:04:03.890
but we you know? So so you there's some reputational,
2879
03:04:05.630 --> 03:04:07.650
clout there. Like, maybe that,
2880
03:04:08.725 --> 03:04:10.345
you know, that that's that's, like,
2881
03:04:10.725 --> 03:04:15.225
good for some use cases, but bad for privacy. Right? Like, you wanna be able to trade
2882
03:04:15.931 --> 03:04:21.690
anonymously with other anonymous individuals, but still have security. Right? So so you want to,
2883
03:04:22.655 --> 03:04:30.675
you don't maybe you don't want a reputation system. Right? Or maybe you want a pseudonymous reputation system. So these are all the kinds of decisions that
2884
03:04:31.570 --> 03:04:36.950
we're gonna have to figure out in version 2. And I think for now, the only real optimizations we can do are,
2885
03:04:37.971 --> 03:04:38.471
obviously,
2886
03:04:38.995 --> 03:04:44.535
adding support for layer 2 stuff like liquid, which is, similar to Bitcoin. So it's not
2887
03:04:44.915 --> 03:04:48.990
super difficult to to add that, but it still is, a big challenge. And then
2888
03:04:49.610 --> 03:04:50.110
optimizing
2889
03:04:50.570 --> 03:04:51.070
the,
2890
03:04:51.770 --> 03:04:54.590
the on chain usage on the on the main chain. Right? So
2891
03:04:55.050 --> 03:04:55.550
maybe,
2892
03:04:56.016 --> 03:04:59.556
you know, maybe Biscuit is still gonna be very popular if you wanna buy $10,000
2893
03:05:00.016 --> 03:05:04.275
worth of Bitcoin. You don't mind paying 20 or $30. Right? But for the $100 trades,
2894
03:05:04.760 --> 03:05:06.300
maybe those guys will,
2895
03:05:07.079 --> 03:05:11.020
decide to go to liquid or some some other, you know,
2896
03:05:13.226 --> 03:05:15.465
some other venues. So it it's a really tricky,
2897
03:05:15.865 --> 03:05:17.245
problem to solve. Right?
2898
03:05:26.140 --> 03:05:26.640
2899
03:05:27.695 --> 03:05:31.235
2900
03:05:31.775 --> 03:05:34.895
I I 100% agree. I think BISC is
2901
03:05:35.830 --> 03:05:39.930
like I said, I think it's one of the most important projects that we have in the space.
2902
03:05:41.910 --> 03:05:45.925
I appreciate you going in into detail about it,
2903
03:05:46.865 --> 03:05:48.085
because I feel like,
2904
03:05:48.625 --> 03:05:51.045
people take it for granted. People don't realize,
2905
03:05:53.770 --> 03:05:58.990
people don't realize what the stakeholders of each of these projects put forward
2906
03:06:00.274 --> 03:06:03.015
to to make those projects what they are.
2907
03:06:05.475 --> 03:06:09.335
And at the end of the day, like, we can talk all about censorship resistance.
2908
03:06:09.851 --> 03:06:11.311
We can talk about distribution,
2909
03:06:11.851 --> 03:06:18.511
but it comes down to people. Like, people are running this shit. Right? And and if you talk about it at scale, people are running
2910
03:06:19.506 --> 03:06:22.645
people are running shit, man. And and and they're they're vulnerable.
2911
03:06:24.545 --> 03:06:26.085
Wiz is one of those people,
2912
03:06:26.960 --> 03:06:31.940
and he just fucking throws himself out there. So I I appreciate everything he fucking does.
2913
03:06:33.761 --> 03:06:35.780
I appreciate what bisque
2914
03:06:36.285 --> 03:06:39.505
what they what the stakeholders are bisque working on,
2915
03:06:40.845 --> 03:06:47.560
and I look forward to what they have in store for us. I I I would say to you is is I look forward to seeing you in Miami.
2916
03:06:48.660 --> 03:06:51.560
We're going to have a live civil dispatch
2917
03:06:51.860 --> 03:06:54.439
directly from our citadel in Miami.
2918
03:06:56.885 --> 03:07:00.265
That will be a rented citadel, but it'll be a fantastic dispatch.
2919
03:07:01.205 --> 03:07:04.665
So I look forward to that. I mean, we're we're gonna be talking about
2920
03:07:06.870 --> 03:07:10.410
the the best needs to transition, basically.
2921
03:07:11.030 --> 03:07:14.250
Best needs to transition from a low fee environment
2922
03:07:15.165 --> 03:07:17.824
to a high fee sustained environment.
2923
03:07:18.765 --> 03:07:19.265
And,
2924
03:07:20.685 --> 03:07:25.130
that's going to be a messy transition, but it's a transition that has to happen.
2925
03:07:25.830 --> 03:07:29.050
And we are gonna watch that happen here at dispatch,
2926
03:07:29.670 --> 03:07:31.529
and we're gonna try and
2927
03:07:34.455 --> 03:07:36.075
we're gonna try and explain
2928
03:07:36.855 --> 03:07:40.636
where all the stakeholders are coming from, basically. Would you agree, Wiz?
2929
03:07:41.600 --> 03:07:43.779
2930
03:07:44.720 --> 03:07:49.785
I don't think anyone appreciates, like, the amount of, hard work by really smart people,
2931
03:07:50.165 --> 03:07:53.705
at Blockstream that went into, like, the element side chain project
2932
03:07:54.085 --> 03:07:57.225
and how much work goes into, you know, coordinating
2933
03:07:57.720 --> 03:07:58.699
the liquid federation,
2934
03:08:00.600 --> 03:08:05.340
or, you know, how much hard work went into the bisque, project. Like, everyone kinda
2935
03:08:06.405 --> 03:08:15.705
naturally takes the the tools for granted or the on chain fees, like, the low fee environment for granted. Everyone takes the security of Bitcoin for granted. Right? It's just,
2936
03:08:16.790 --> 03:08:19.050
so easy to do right now, like,
2937
03:08:19.990 --> 03:08:20.650
5 sat,
2938
03:08:21.030 --> 03:08:23.931
you know, on chain transaction and have it confirmed. But,
2939
03:08:24.955 --> 03:08:26.495
once those fees get up,
2940
03:08:27.115 --> 03:08:28.155
people get really,
2941
03:08:30.636 --> 03:08:31.136
yeah.
2942
03:08:31.730 --> 03:08:35.270
Then that's actually the stated mission of the the mempool project, is to,
2943
03:08:35.890 --> 03:08:41.190
help the Bitcoin community transition to a multilayer ecosystem, right, where we have these
2944
03:08:41.556 --> 03:08:43.415
layer 2 or even layer 3
2945
03:08:45.155 --> 03:08:50.455
systems that enable new use cases like like liquid and bisk,
2946
03:08:51.220 --> 03:08:55.240
new new banking. Right? You can do peer to peer lending or you can do,
2947
03:08:56.580 --> 03:09:01.385
trading of of different fiat currencies even. Right? That's,
2948
03:09:01.845 --> 03:09:03.465
that's the real future because,
2949
03:09:04.805 --> 03:09:06.745
in my opinion, KYC is
2950
03:09:08.160 --> 03:09:10.880
the illicit activity. Right? And,
2951
03:09:11.359 --> 03:09:13.779
all of these layer 2 and layer 3
2952
03:09:15.465 --> 03:09:16.605
banking systems
2953
03:09:17.226 --> 03:09:24.365
basically implement similar banking services that you would get from a traditional fiat bank but without KYC. Right? If you want do it?
2954
03:09:26.520 --> 03:09:29.260
2955
03:09:31.239 --> 03:09:33.180
2956
03:09:33.846 --> 03:09:35.865
They collect your personal information
2957
03:09:36.726 --> 03:09:38.585
and jeopardize your privacy.
2958
03:09:40.006 --> 03:09:42.800
K y c is the illicit activity.
2959
03:09:44.700 --> 03:09:46.000
This is open source.
2960
03:09:46.460 --> 03:09:48.480
It does not collect user data.
2961
03:09:48.940 --> 03:09:50.800
You keep your private keys.
2962
03:10:03.970 --> 03:10:04.949
I love that.
2963
03:10:08.449 --> 03:10:09.510
Shout out to Pedro.
2964
03:10:10.176 --> 03:10:11.155
2965
03:10:11.615 --> 03:10:14.756
2966
03:10:15.295 --> 03:10:16.355
that's the real
2967
03:10:17.430 --> 03:10:20.550
that's the real future, right, of of all of this hard work is that,
2968
03:10:21.030 --> 03:10:23.770
we get to we get to rebuild the banking system,
2969
03:10:25.245 --> 03:10:31.104
on our own terms using cryptography and and decentralized systems. And we get to decide
2970
03:10:31.570 --> 03:10:37.750
what is the correct balance of security and privacy and censorship resistance and cost and speed
2971
03:10:38.370 --> 03:10:41.190
and user experience. Like, we get to
2972
03:10:41.556 --> 03:10:43.495
build all of these new things. And,
2973
03:10:45.075 --> 03:10:57.220
it's honestly it's like a sometimes it's a thankless job. Right? Like, when you see these trolls on Twitter saying liquid is a shit coin or bisks it's like, come on, guys. Like, we're we're trying to build a new system for everyone here,
2974
03:10:57.680 --> 03:11:04.176
and it has challenges like any other project, but even more challenges because you're trying to build something in a decentralized
2975
03:11:04.556 --> 03:11:08.176
way, in a censorship resistant way, where you know the government's going to,
2976
03:11:09.390 --> 03:11:24.350
not be happy about what you're building. Right? And Adam is the, you know, the OG cypherpunk here, you know, doing he he's been doing it longer than any of us, like printing source code on t shirts, right, and and all kinds of crazy stuff. This this war is not
2977
03:11:25.130 --> 03:11:25.790
a new,
2978
03:11:26.810 --> 03:11:30.750
war. Right? It it's it's all about freedom for the people and,
2979
03:11:31.654 --> 03:11:33.194
freeing them not only from
2980
03:11:33.895 --> 03:11:41.680
fiat debt slavery, but also from mass surveillance and and capital controls and and and all of these horrible things. So,
2981
03:11:43.580 --> 03:11:45.199
we're doing this for the community,
2982
03:11:46.220 --> 03:11:49.195
and, you know, maybe have a maybe have a little bit more
2983
03:11:49.815 --> 03:11:51.035
respect for one another,
2984
03:11:51.415 --> 03:11:58.760
you know, developers in the space. Like, let's not troll each other so much. We're all on the same team here. If if one project is making a privacy,
2985
03:11:59.779 --> 03:12:12.895
enhancing tool, that's great. You know? Like, let's let's collaborate and work together. Let's not, troll each other and and, fight with one another. It's just a waste of all of our time. We should be working together because we're all on the same team.
2986
03:12:22.235 --> 03:12:22.735
2987
03:12:23.595 --> 03:12:24.095
100%.
2988
03:12:24.635 --> 03:12:25.535
Fuck yes.
2989
03:12:25.915 --> 03:12:26.415
Adam,
2990
03:12:28.210 --> 03:12:35.030
appreciate you coming and coming on the show. I think the show has been fantastic. I think this was a great episode of dispatch.
2991
03:12:35.735 --> 03:12:38.715
I think it it perfectly fits episode 20.
2992
03:12:41.095 --> 03:12:44.190
It's been a long time, guys. It's been a long time, Freaks.
2993
03:12:44.650 --> 03:12:48.910
Every Bitcoin Tuesday, I think of you guys, and we're gonna continue this forever,
2994
03:12:49.931 --> 03:12:50.431
because
2995
03:12:50.976 --> 03:12:56.755
you support the show. It's a 100% community funded. We don't have sponsors. We don't have ads,
2996
03:12:58.729 --> 03:13:01.229
And you guys you guys make it what it is.
2997
03:13:02.090 --> 03:13:05.470
Adam, thank you for joining us. You're a fucking legend.
2998
03:13:05.815 --> 03:13:10.636
We appreciate everything you do. Do you have any final comments for the freaks before we end this?
2999
03:13:14.510 --> 03:13:15.330
Very quiet.
3000
03:13:19.230 --> 03:13:25.155
3001
03:13:25.695 --> 03:13:31.395
you know, more privacy and fungibility in, Bitcoin layer 1 or layer 2 is gonna be interesting to see,
3002
03:13:32.070 --> 03:13:33.610
and we wanna see it.
3003
03:13:34.710 --> 03:13:35.350
So let's,
3004
03:13:35.750 --> 03:13:36.729
see how that goes.
3005
03:13:37.189 --> 03:13:38.090
3006
03:13:40.604 --> 03:13:49.665
3007
03:13:50.270 --> 03:13:51.730
altcoins, no advertisements,
3008
03:13:52.190 --> 03:13:52.690
no,
3009
03:13:53.710 --> 03:13:58.690
you know, you can't degrade any of that things. No KYC. Right? Like, that's the real
3010
03:13:59.895 --> 03:14:04.875
important thing is to to give the community exactly what it wants, and, that's what the show is.
3011
03:14:05.335 --> 03:14:06.270
And that's what,
3012
03:14:06.829 --> 03:14:12.529
all the the projects that Blockstream is putting out and and all of the community projects. It's just for the people.
3013
03:14:13.915 --> 03:14:16.335
3014
03:14:16.875 --> 03:14:18.015
I'm a like,
3015
03:14:18.555 --> 03:14:19.615
I've decided
3016
03:14:21.171 --> 03:14:23.431
that our future is gonna be dominated
3017
03:14:23.891 --> 03:14:24.391
by
3018
03:14:25.250 --> 03:14:29.431
free open source projects. And I mean when I say dominated, I mean
3019
03:14:30.075 --> 03:14:35.615
we will fail. We will we will be in a horrible situation if we don't have free open source projects,
3020
03:14:37.035 --> 03:14:38.735
there to support us.
3021
03:14:39.790 --> 03:14:41.410
And I want to run this
3022
03:14:42.350 --> 03:14:44.530
show as a free open source project.
3023
03:14:44.910 --> 03:14:50.125
And as a result, there'll be no ads, no sponsors. I want this to be a 100% community funded.
3024
03:14:51.945 --> 03:14:53.726
I I I also want to announce
3025
03:14:54.280 --> 03:14:56.460
that we've officially launched opensats.org,
3026
03:14:59.561 --> 03:15:00.860
the proper Bitcoiner,
3027
03:15:02.285 --> 03:15:03.985
free open source foundation.
3028
03:15:05.405 --> 03:15:07.186
It is called Open Sats Initiative,
3029
03:15:08.365 --> 03:15:11.346
but we are a foundation, but we're we're an initiative.
3030
03:15:11.949 --> 03:15:16.370
And the idea is is that you can contribute as a Bitcoiner, you contribute,
3031
03:15:16.830 --> 03:15:20.930
and we're gonna provide it to open source projects, all free open source projects,
3032
03:15:22.415 --> 03:15:28.035
not, quote, unquote, open source projects, free open source projects. We have a very strong board.
3033
03:15:28.870 --> 03:15:33.449
We will argue, and we'll make sure that your stats go to the right place.
3034
03:15:33.750 --> 03:15:36.409
And even if you donate fiat, we will
3035
03:15:36.735 --> 03:15:42.436
we will automatically convert that over to Bitcoin and hold that as Bitcoin. All grants will be provided
3036
03:15:43.135 --> 03:15:43.875
in sats.
3037
03:15:44.575 --> 03:15:45.476
So that's opensats.org.
3038
03:15:47.520 --> 03:15:50.579
Literally officially launched as of 45 minutes ago,
3039
03:15:51.359 --> 03:15:55.460
and we're about to go really fucking hard. This is an this is an initiative
3040
03:15:55.855 --> 03:16:00.115
that I've been very excited about, but I had to be very quiet about.
3041
03:16:01.136 --> 03:16:02.516
So there you go.
3042
03:16:02.976 --> 03:16:05.315
I wanna do a big thanks for Adam back,
3043
03:16:06.090 --> 03:16:13.391
for joining us. Big thanks for Wiz for joining us a second time. I love you both. Thank you for all the work you've done.
3044
03:16:15.765 --> 03:16:18.104
You're my people. Appreciate you both.
3045
03:16:19.685 --> 03:16:22.024
Thank you for joining. This has been fantastic.
3046
03:16:24.330 --> 03:16:25.470
3047
03:16:25.850 --> 03:16:26.350
Thanks.
3048
03:16:27.450 --> 03:16:28.350
3049
03:19:52.410 --> 03:19:55.550
I love you freaks. That was a fucking great fucking dispatch.
3050
03:19:57.015 --> 03:20:02.555
For the record, I'm gonna be bringing a bunch of hats to Bitcoin Miami,
3051
03:20:03.150 --> 03:20:03.650
Bitcoin
3052
03:20:04.270 --> 03:20:06.050
2021, June 4th, 5th.
3053
03:20:07.710 --> 03:20:09.330
So if you want a hat,
3054
03:20:10.110 --> 03:20:12.050
reach out to me on Keybase or Telegram.
3055
03:20:13.125 --> 03:20:14.985
I will mail them out as well
3056
03:20:16.405 --> 03:20:23.780
if you must. If you're not gonna be if you're not gonna be there, it'll be a shame, but I will mail them out. So just reach out to me on Telegram
3057
03:20:24.960 --> 03:20:28.660
or Keybase, and I will send you a lending invoice, and we'll make it happen.
3058
03:20:29.985 --> 03:20:31.686
If you want a dispatch hat.
3059
03:20:32.465 --> 03:20:34.085
Besides that, quinsolo.comquinsolo
3060
03:20:38.561 --> 03:20:39.061
dotcom
3061
03:20:40.400 --> 03:20:41.940
has a solo dispatch
3062
03:20:43.440 --> 03:20:44.660
fucking flask
3063
03:20:45.895 --> 03:20:48.155
that is up for giveaway.
3064
03:20:49.015 --> 03:20:52.235
And the only way you can get it is if you
3065
03:20:52.940 --> 03:20:55.200
message in the sphinx tribe
3066
03:20:56.061 --> 03:21:02.561
of Scylla Dispatch. The Scylla Dispatch Sphinx tribe, the first one to message stack or die,
3067
03:21:03.086 --> 03:21:03.745
gets it.
3068
03:21:04.926 --> 03:21:06.466
So cheers to all of you.
3069
03:21:06.846 --> 03:21:10.145
Appreciate all you guys who came in and and listened to this,
3070
03:21:10.869 --> 03:21:17.930
and, stay on both Stack SaaS. I'll see you guys on Thursday for a rapid hold recap, and I'll see you next Tuesday for the next
3071
03:21:18.795 --> 03:21:19.775
Bitcoin Tuesday.
3072
03:21:20.635 --> 03:21:21.615
So dispatch.
3073
03:21:22.795 --> 03:21:24.335
Love you all. Peace.
