July 13, 2021
CD30: bitcoin privacy and the danger of KYC with @samouraiwallet and @openoms
EPISODE: 0.3.0
BLOCK: 690746
PRICE: 3047 sats per dollar
TOPICS: bitcoin privacy, danger of KYC, whirlpool, joinmarket, wasabi, paynyms, lightning, custodial exchanges, fee market, medium of exchange vs store of value
@samouraiwallet: https://twitter.com/samouraiwallet
@openoms: https://twitter.com/openoms
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00:00 - The impact of China's actions on Bitcoin mining
02:12 - Introduction to the podcast episode
08:10 - The dangers of KYC and the importance of privacy
36:08 - The strategy of Samurai Wallet in providing privacy tools
51:52 - The importance of post-mix tools and standardization
55:21 - Civil resistance in Bitcoin implementations
56:21 - Civil resistance in Whirlpool
57:54 - Comparison of JoinMarket and Whirlpool
01:52:20 - Whirlpool's attempt to mitigate the issue of multiple pool sizes
01:53:55 - Toxic change and the rule of thumb for pool sizes
01:55:06 - The impact of adding or removing pool sizes on liquidity
01:59:23 - Integrating Whirlpool into other wallets and the benefits
02:04:53 - The potential of BIP 47 payment codes (PayNIMs)
02:12:46 - The discouragement of BIP 47 adoption and the reasons behind it
02:20:30 - The expectation of a sustained high fee environment and its impact on usage
02:26:08 - The future of Bitcoin in a sustained high fee environment
02:47:17 - Bitcoin payments and Lightning
02:48:02 - Benefits of spending via Lightning
02:49:10 - Privacy issues with Bitcoin
02:49:43 - Challenges for Lightning adoption
02:50:13 - Importance of tools for Bitcoin privacy
02:51:15 - Wrap-up and appreciation
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:11:15 PM
Duration: 10604.33
Channels: 1
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Being whipsawed by what China is doing there on the crypto front in terms of Bitcoin mining.
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Do you do we need to see that threat abate in order for for Bitcoin to
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emerge from what some people are already calling its next winter?
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Oh, yeah. Listen. Big it's been very volatile, but just let's just go back and look at it 30,000
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feet. It was roughly 8,000 last July.
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It's in the mid thirties today. If we didn't have that blow off top, I think people would have been very happy
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with Bitcoin's trajectory.
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But I think the point that you're making is that, yes, China put a hurt on Bitcoin,
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but long term, I think that's very positive. Because remember, everybody's worried about Bitcoin's effect on the environment. We just learned from the Bitcoin Mining Council
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that Bitcoin mining is now 56%
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renewable
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with China out of the picture and all those coal fired electric
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plants in in China, Melissa, out of the picture,
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that ratio is gonna continue to increase. And when you see things like what's going on in El Salvador and the continued expansion of Wall Street
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firms adopting
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Bitcoin and other funds, like Ethereum we just launched an Ethereum fund as an example
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July 1st. I'm long term positive
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on what China is doing. China getting out of the way, I think, will be a long term positive for Bitcoin.
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Happy Bitcoin Monday, freaks.
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1st Bitcoin Monday ever. Usually, we do join you on Tuesdays.
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I I appreciate all of you who are joining us today instead.
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We had to move some scheduling around to make this very important conversation happen. It's a conversation that I'm looking forward to.
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This is CIL dispatch episode 30, the interactive live show about Bitcoin distributed systems privacy and open source software.
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I just wanna do a quick shout out as I always do to the rider dive freaks who join us,
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every week in the chat, in the live chat, and make this show what it is.
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It's a very special experience having such an active
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audience that it that are just always participating
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and helping
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move this, you know, Bitcoin education forward. This show would not be the same without you guys.
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I also want to thank all of the Freak's
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who constantly support this show,
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with their stats.
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I wanna keep this show
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completely audience supported,
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with no ads and no sponsors. I think it aligns incentives the best,
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and I can't do that without your support, so I do appreciate that. The easiest way you can support the show
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is via podcasting 2 point o.
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You can look up different podcast apps that support that. That's new podcast apps.com,
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and you can stream sats directly to the show as you're listening. It's pretty cool. As I I see the day after I post it, I just see sats start coming into my wallet, just streaming in as people are listening.
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It's really fucking powerful.
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You can also support the show
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if you're watching the video stream through the l n URL
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QR code on the bottom left hand screen bottom left of your screen,
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or going to sidle dispatch.com,
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you can support via tippin.me,
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if you prefer lightning, or you can support with the samurai pay name.
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My pay name is young poetry 985. I'm pretty proud of that randomly generated,
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pay name. It's like 1 of 6 I have, and this is the one I like the best.
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So with all that said, I do appreciate all you freaks.
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We have a very important conversation today.
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We have Samir at Wallet joining us,
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someone who I've been trying to have a conversation with publicly for a while. We were kind of waiting
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for him and his cofounder,
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T Dev to to rip 1 in person.
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And we're still gonna do that, but, it's such an important conversation that I I I think,
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it needn't wait. So we're so we're here to have it, and I'm I'm very appreciative to have him here. How's it going, Samirai?
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Yeah. Thank you very much for having me, Matt. It's been a long time coming.
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As his name,
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makes it obvious, he is the cofounder of Samura Wallet,
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the the best Bitcoin privacy wallet that exists today,
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in my opinion. Thank you. Thank you for all the love, Matt. We also have I'm a user,
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and I I love your wallet.
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We also have Open Arms joining us. Open Arms is a constant return guest.
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Very big in the Bitcoin privacy scene. He's someone I respect a ton,
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very close friend.
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So I'm very happy to have him here for this conversation.
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How's it going, Open Arms?
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Hello, both. I'm very happy to be here. Hello, for all the freaks.
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Yeah. I'm I'm myself, as you can see my profile picture in there I am a pain in
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from the beginning. I've been joining Bitcoin Twitter, you know,
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and I'm a user of some of my words. I do share the opinion that it is absolutely the best on mobile,
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and it is,
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you know, absolutely
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best for the use case for the and the UX for CoinJoin is just, you know, you cannot really
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do better at the moment.
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So, yeah, let's dive into it. So, yeah, we're gonna dive into everything. Thank you both, I just have to say. That's real nice of you to say, and thank you, Matt, for all the coverage that you've given us on, on this podcast and on the rabbit hole recap as well.
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Samurai, for whatever it's worth, you know, this show is a live show, and I am realizing that I'm hearing a little bit of extra sound coming from your microphone. So I guess, the easy fix is just to keep yourself muted,
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when you're not speaking.
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I think you realize that on your own, but just double checking.
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The
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so this is kind of a follow-up conversation to, well, first of all, the first 29 dispatches, because even though we do hit different nuance topics,
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every dispatch,
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Bitcoin privacy has obviously been a major theme of Citadel dispatch to begin with. It's one of the reasons I started the show in the first place. It's a it's a topic that doesn't really get that much
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it just doesn't get that much open discussion. I think a lot of people are afraid to talk about it. I think a lot of people's incentives,
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are set up in ways that they don't want to talk about it.
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So I've taken it on myself and the rider to freaks who join us in the audience every week,
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have take we've taken on ourselves to to just talk about this more openly. I think the most important thing as Bitcoiners for us to realize is that we want to have,
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open, transparent discussions about these important topics. As soon as you stop talking about things,
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openly,
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you just you just regress.
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But it's also specifically a follow-up
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to Citadel dispatch 15,
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which was with Wasabi cofounder.
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No Power and Open Arms joined me, and Citadel Dispatch 16, where I had the 2 lead maintainers of JoinMarket on,
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Waxwing and Chris Belcher.
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So those are the 3 main,
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Bitcoin privacy tools
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that exist today.
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And fortunately
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for us,
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we've had
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we're gonna this is this is the trifecta. We have the trifecta here on Citi dispatch. As always,
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you can you can,
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listen to these episodes,
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through your favorite podcast app, or you can go to citildispatch.com,
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where you can have links to bitcoin tv.com,
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which has full video archives, which you can download. You can torrent. You can share, all for free,
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because that's the way that's the way I think it should be done.
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So I think, there's a lot of places we can start in this conversation.
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I think,
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I I think the first topic we should start with is KYC and the dangers of KYC.
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I think, you know, a lot of public Bitcoiners,
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have ties to KYC services, regulated services. KYC is is know your customer.
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It's when they when a service a regulated service
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asks you for your selfie
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and maybe your passport or your license and your address, your mailing address, and your name, and does all these different checks on you.
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And, usually, that does get combined with all your Bitcoin information that they hold, whether that's withdrawal addresses or deposit addresses, the amount you bought.
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You know, these these companies,
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these regulated companies are the most profitable businesses in the space,
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and they have long reaches, and and a lot of public Bitcoiners are tied into them, so they don't want to talk about it or talk against it.
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So, Samara, I mean, you've been very outspoken about the danger of KYC. You wanna start us off here?
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Yeah. Sure. So we've been
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outspoken about KYC, like you said, since pretty much we we started in 2015.
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And our our primary kind of cry is that KYC is a, it's a creeping disease.
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Meaning we didn't get it didn't start with us having to take photos of our, you know, selfies with our photo IDs and having to provide all this information.
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It's gradually
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worsened to this point, and it's gonna continue to get worse. So by tolerating it a little bit now, you're setting yourself up for failure in the future. You're setting yourself up for much worse protocols in the future.
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Obviously, that's like a battle cry that is doomed to fail ultimately,
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obviously. But,
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it's still an important battle cry to to be had and for users to hear because
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we're at a point now where KYC is so normalized in our in our culture that
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the concept of non k y c acquisition of Bitcoin is to some to some new coiners is is completely alien, completely foreign. They hadn't even thought of it. It never even occurred to them. So continuing to spread the message about the importance of that,
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it, you know, is important.
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Yeah. The the the risk, Asar, just just my final point. The the major risk, as Matt, you alluded to,
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in in the context of practical privacy,
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concerns is that it's it's it's not possible. It's definite that the exchange that you're using, if it's a regulated entity, is sharing that information
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with,
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a chain surveillance firm. That's chain analysis or something else.
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And so a profile is being made of you and your transaction is based on that KYC
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history. Yeah. I mean, I think you made a very important point there,
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that it especially,
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you know, more Bitcoiners that have been in the space for a longer time might not realize,
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or, like, a nuance that they don't realize is
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is for a while, Bitcoin was, like, the exception to the rule. KYC is everywhere from the day of our birth.
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You know, just constant surveillance and tagging. I was you know, even stuff like license plates. Like, you drive around and you just you you just got your little KYC plate on the front.
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So a lot of these new users, it's just what they expect. Like, if you sign up to Venmo,
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you're gonna have KYC when you sign up to Venmo. So so it's it's something that they're used to.
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But as Bitcoiners that have been around,
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we've seen it creep into the system. It was like Bitcoin was, like, one of the last bastions of
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of no KYC.
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And just over the last 2 years, even 3 years, it's just literally crept into everything. Even like the renegade exchanges and stuff, I've all basically bent the knee,
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to KYC.
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And Well, the the worst part is not even bending the knee. It's it's willingly going to the regulator and willingly over complying
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to, you know, to curry favor or perceived favor with the regulator in their country.
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We've seen a lot of that going on as well.
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100%. And, I mean, one of the things that you mentioned is
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that pretty much all of these services
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are sharing that information with these chain surveillance companies that are are providing them some kind of regulatory compliance and quotations.
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The but what also people should realize is even if you did, like even if you're coming from the angle that you trust,
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the exchange you're using or the the custodian the regulated custodian you're using, if it's a custodial wallet that requires KYC, and even if for some reason you trust the chain surveillance company,
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all this information
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is gonna get leaked eventually. Like, we've seen that as information gets stored online,
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it eventually gets leaked. I mean, I saw a headline come out that, like, Guess Clothing,
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today announced that in, like, February, they leaked a bunch of Social Security numbers and stuff because they got hacked.
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So,
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you know, it doesn't really matter where your personal information is. The one the one,
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key trend we see is that this personal information, once it's on the Internet, once it's stored and logged and one of the things with KYC information is that by regular by regulatory standards, they're expected to hold it for many years.
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So it's sitting there for a very long time,
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is that it will get leaked eventually.
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And one of the elements of Bitcoin
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is that
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people who are bullish on Bitcoin, myself included, I believe that this chain will be around forever. I think this chain is going to outlive me.
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So when you have records that tie yourself to your Bitcoin,
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at any point in the future, if that information gets out,
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there's a whole trail that they can follow if you're not if you're not practicing Bitcoin best
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Bitcoin best practices in terms of privacy.
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Absolutely. And and one of the things I think a lot of people also forget and look over is that
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Bitcoin privacy,
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it works pretty well when you're talking about,
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a system that's synonymous,
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right? And that's the system that Satoshi designed
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When you start attaching a real life record, a real life KYC record
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to the chain,
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it starts to become not not good enough at all and a privacy nightmare.
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So, you know, the dangers of KYC can't be
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overstated.
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And I think everyone has a duty to try to start to think about how they can acquire their their stack,
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through other methods. And for a lot of people,
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they're productive people. They can produce things, and they have services and and goods that they can create to offer. And they should do those things and offer those things, for Bitcoin. Earning Bitcoin is one of the most liberating things, you know, feelings in the world, I feel.
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And it it really puts this whole conversation,
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you know, into a hold in a different perspective, once you're an earner of Bitcoin.
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Yeah. I think one of the things here, right, is that,
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as a as a Bitcoin circular economy develops, kind of
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what you just mentioned, where people instead of buy Bitcoin, they earn Bitcoin, and instead of selling Bitcoin, they spend Bitcoin,
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it distributes.
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You you end up not having all these centralized,
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platforms that are the gatekeepers. Right? And and as a result,
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it'd be way more difficult to enforce KYC AML laws on all those individual actors. Like, if you're gonna, you know, enforce it on some random ass bodega,
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in downtown New York City, it's a lot different
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than trying to do that versus doing it to Binance, which is a massive multinational
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corporation now.
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But in the short term,
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it it presents a major threat to most Bitcoiners. I think, like I mean, I'm just,
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you know, speculating here, but I would say over 90% of of new new corners that come in, new Bitcoin users that come in are coming in fully KYC'd. Right?
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I mean, yeah, I would I would, assume it's a large percentage of the new coins that are coming in. Because like we said, it it's just a regularized,
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occurrence,
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and, you know, it's it's, like, it's a similar onboarding process to to Venmo
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and and PayPal and those those types of things.
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It's familiar to them.
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Open arms. Do you think we've missed any nuance here in terms of KYC? What are your thoughts?
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I've completely agree what you have said. I mean, Bitcoin is an immutable public open measure. It does it never meant to
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be paired with any kind of personal information.
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It should be
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cheap and easy to
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generate a new identity for for you or for anyone else anytime.
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And it is the
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if we do it in the the other way and we keep databases of every metadata
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we can metadata we can imagine,
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then it's it it will grow to be a surveillance tool
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we cannot
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imagine.
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So that's kind of even in a Bitcoin future, there is
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dark future,
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which is the k y c
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one.
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And indeed the the circular economy or the, you know, the normalization of the privacy tools
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is is
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the road towards the brighter future.
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So I completely agree there.
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Regarding, like, KVAC practices,
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I would like to kind of,
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point out a couple of things, which I don't know what you think about these. And,
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maybe you don't have the have it in the US that easy, but, there is this
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phenomenon which is I called KYC light,
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where you basically
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still send
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a bank transfer under your name,
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and you probably need to provide, like, an email address or
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even in case of basically, if you are doing an online transfer, you actually,
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exposing your name, uncovering your name and bank accounts,
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or your companies,
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to the seller. But this happens
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to,
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like, loads of, little services which are nowadays
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moved to
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Switzerland instead of, like, being based
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in other places. I don't want to do, like, advertisement, but, the point is there that they are not keeping any data, but they would be able to get the data from the bank
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through their bank relationships because the the
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the Swiss laws are that you need to kind of sign a message with your the private key of your address currently,
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which you are withdrawing to. So they have a proof that
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they are sending Bitcoin
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to a person who has actually initiated the bank transfer so they can have their
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data from their bank, but there is at least not an extra database which could leak. And, I mean, obviously, in case of a, like, a or some kind of
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similar situation,
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it could be still,
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you know, it's still a centralized thing which could be leaked, but it's it's it's a bit better than, like, registering on on a big
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exchange where you just need to give everything and it just sits there and sending you out marketing emails in Punch and stuff.
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We should,
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yeah. Yeah. The a lot of the, DCA,
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smaller companies use this this type of technique that Open Noms describes.
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We we should be careful of celebrating anything like this though,
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because it's just the progression
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of KYC becoming more usable and more,
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yeah, user friendly
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just shows how much further it has
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become ingrained in society.
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The reason that they allow this to happen is because they can get every detail they need
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from the bank, as you mentioned,
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in in the possibility that they may need they may need it.
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And the the issue is the,
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spectrum for
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why governments may think they they need access to this information
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is very fluid.
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And
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the EU,
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proclaims to have strong privacy laws,
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and this is where SIPA,
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you know, is used for this this type of transaction that you described,
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which is
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an EU based
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settlement and transfer system for for traditional banks in the EU.
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Yeah. So, you know,
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it's not a celebration. I I think that it's positive that you're you know, that there's not an additional database
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that is being
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maintained,
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but the underlying issue isn't that is a data storage and data hygiene issue. Then the underlying issue is it's a fundamental fundamental undermining of our freedoms
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and our freedom to transact.
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I mean, so there's a couple interesting points here.
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The first point I think that I try and highlight a lot, but it it gets glossed over, is that, obviously, this is a Bitcoin show.
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So I focus on,
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Bitcoin privacy concerns specifically.
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But our traditional payment rails are fully KYC'd
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to the hills.
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This is not a as an issue that is,
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isolated to Bitcoin.
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In a lot of ways, you know, traditional banking,
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is worse.
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And Bitcoin provides especially if you, you know, if you use Bitcoin with privacy best practices,
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provides a way for you to opt out of that system.
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Another aspect
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is, Open Arms mentioned,
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Switzerland.
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Part of that is because Switzerland's not part of the EU. The EU is, like, one of the worst places right now, I think, to to operate a Bitcoin business.
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They just keep adding more and more
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regulatory overhead. It's even worse than America, it seems now. They kinda leapfrogged us.
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The UK is also part of the EU, but they but they're part of the EU. You know, it's like one of those types of things.
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And and and they will have to implement
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a a version of AML,
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5th money laundering directive AML 5 d.
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Yeah. So that their limits are going down. Like, you know, you could do, like I I don't know the exact numbers, but you could do in a month, like, â¬10,000,
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you know, last year. Now you can only do, like, 2,000.
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And, you know, it will be going to
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go being squeezed down and, yes, this they are part of the European
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economic area, so the, like, the AMLD 5 and things are are apply just as well as it applies to the UK, but the UK
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rather puts some more on top. Indeed.
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And to add on top of that,
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you know, part of my concern and part of the reason why I think it's, you know, extra important for us to get ahead of this,
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trend in Bitcoin
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is because the usage of cash is decreasing.
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It's decreasing
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mostly because
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our peers,
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in our age group and the younger individuals,
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prefer not to use it out of convenience. They prefer to use the digital alternatives.
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But it's also decreasing because governments are trying to
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reduce its usage. So in a lot of countries,
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already we're seeing the usage of cash just being seen as suspicious even if it's completely allowed.
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Why would you use cash instead of this more convenient system where, you know, you might get points back or some bullshit like that?
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So as cash usage decreases, this becomes more and more of an issue for Bitcoiners, I think,
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because you kind of eliminate that whole cash for Bitcoin trade system,
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on the cash side. You know? A lot of the issues there,
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you know, originate from the fiat side of the equation.
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I'd also add that we have anarchyoc
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on Twitter
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who wanted to mention, he makes a very good point here, is that
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these KYC laws, you know, they end up with a lot of people in the traditional system being excluded. They can't have bank accounts. They can't have digital payment apps.
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And as a result,
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if we don't have a
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robust circular economy where people can earn Bitcoin,
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those people also get excluded from the freedom benefits that Bitcoin provides. Right?
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Yeah. Definitely. I mean, I I was gonna say, like, to to be positive about some stuff, but I don't wanna be, like, seen as as negative.
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The positive thing is KYC doesn't exist on chain, like on the blockchain itself. There's no
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it exists only on the onramps.
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Right.
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Or most of the onramps.
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So if you're able to bypass
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the onramps, the regulated onramps, you're able to interact with Bitcoin in a way that is is liberating. And it has to you know, that's why we've been hammering home for a really long time, years years,
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for users to to figure out ways to acquire Bitcoin
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outside of that system, outside of that KYC system,
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because it opens up
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it opens Bitcoin up to its full potential, and that's a censorship,
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free payment network. Right? That's a censorship free
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form of value and and,
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who that's what, I mean, that's what I got involved for.
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So, you know
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Another It's become more it's become a lot more difficult as you mentioned though. Anyone who's been involved in a for a while has seen the the dramatic shift, in the cash,
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for the cash trade,
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ecosystem.
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Another aspect here,
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that's important to mention, I think, is that
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mining remains one of the best ways to,
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obtain KYC free Bitcoin.
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Next week, I will have, diverter,
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Econa Alchemist on again. They'll both be return guests. They weren't on the same episode last time. And also Ronan Miner, who just, I just noticed Neil joined us in the live chat.
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They will all be joining us for a special civil dispatch next week to discuss No KYC Mining,
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and that will be also at a nonstandard time. That'll be on Tuesday,
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at noon EST. So
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that's, 1600
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UTC. So just,
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pay attention, freaks, for that episode coming up next. I'm also really looking forward to that conversation.
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Matt, can I jump in, based on a chat comment
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here? Yes. Read the comment first.
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It just it just came out went off my screen, but it's from, I think Winston Hecht. The second comment he made, and it's the gist of it is equating
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wanting to avoid the KYC system to wanting to evade taxes.
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And
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I would just like to point out to this gentleman,
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that the KYC system was put into place
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has nothing to do with tax evasion or taxes. It was put into place be after
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the, 2001,
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terrorist attack as a way to make sure that money laundering couldn't be used to finance another terrorist operation. So nothing to do with taxes.
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And to equate the two things is just really status thinking.
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The the point of avoiding the KYC system is because we have a fundamental right to transact freely and you cannot transact freely
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through the KYC system. And Bitcoin was created in a way where you can opt out of that system.
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And we
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all we're doing is preaching people that if they're looking for a way to opt out of that system, there exists a solution, and that's Bitcoin.
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So So what I really like about dispatch
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is
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that, you know, we have a lot of very dedicated Bitcoiners that believe in the mission,
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and they tend to
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just consume as much Bitcoin content as possible, use as many tools as possible,
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constantly educate themselves, constantly continue their learning. And as a result, what they do is,
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I've learned from
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operating the Bitcoin education space for such a long time that the easiest way for us to scale this thing
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and increase,
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you know,
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usage of of Bitcoin privacy best practices
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is to have a group of ride or dies that go out and then help their, you know, 10 or 15 people,
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that look at them as the Bitcoin guy or girl,
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to to to provide,
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you know, a solid base to those people that look to them for advice.
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But
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so so I would say that there's not a lot I I I would hope that there's not a lot of this audience who who doesn't know,
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who doesn't think privacy is important.
404
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I'd be surprised that they're still listening 30 episodes in. But I'm curious, samurai, to to the majority of Bitcoiners, I would say, like, 90% of Bitcoiners,
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who are not currently
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trying to use the tools,
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Their main
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issue or the the main roadblock is that they don't see the value in privacy to begin with. So just to pull this conversation back a little bit, I'm curious if you could say to them, you know, why they should care in the first place, why privacy matters in general, not just in Bitcoin land.
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00:29:21.330 --> 00:29:24.070
I'd be really interested on on how you would phrase that.
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00:29:25.730 --> 00:29:33.265
Well, yeah. I mean, they may they may not think that they that they value privacy, but, of course, of course, they value privacy.
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You know, they they have curtains on their windows. They have,
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they have doors. They had they put their well, they probably don't send letters, but if they did, they put them in an envelope so no
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one but the intended party could read it.
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People have a natural desire for privacy.
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And
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what the Bitcoin tools
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that are,
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available today, the
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the ones, especially that you mentioned in your intro,
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what they all attempt to do is just replicate the the same type of privacy that has existed in the cache system,
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for for, you know,
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1000 of years.
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And I don't think that's that's revolutionary or radical.
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And
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if they don't value, you know, privacy besides that, I don't try to convince them. I just think, think, you know, maybe they're just kind of they haven't had that moment yet where,
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you know,
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something happens in their life that they start to value their privacy, or maybe they're just too too far gone, and they're not the people that we need to be talking to.
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I tend to think
429
00:30:44.140 --> 00:30:53.294
for most people, they won't really get it until they get burned. Would you would you agree, like, till that moment happens where they touch the stove and they realize, fuck.
430
00:30:53.674 --> 00:30:58.575
You know, this shit is acting a lot of people. Yeah. I think a lot of people are like that.
431
00:30:59.390 --> 00:31:05.410
And I I think as we we enter this more digital world where more and more of our life goes online,
432
00:31:06.270 --> 00:31:10.145
we're gonna see more breaches, privacy breaches, and data breaches,
433
00:31:11.165 --> 00:31:12.544
that expose us,
434
00:31:13.165 --> 00:31:13.665
publicly,
435
00:31:14.445 --> 00:31:17.184
to the world, our intimate secrets and our intimate
436
00:31:17.990 --> 00:31:18.950
lifestyle choices,
437
00:31:20.470 --> 00:31:25.050
and just all matters of things that we do in our day to day lives. So the
438
00:31:26.265 --> 00:31:28.685
my my it's it's kind of sounds
439
00:31:29.305 --> 00:31:33.965
bearish short term in terms of of privacy, but I think my my bullish take
440
00:31:34.570 --> 00:31:41.630
on on people, the world caring about privacy is that so many people are gonna get burned over the next 10 years, not just in Bitcoin land,
441
00:31:42.365 --> 00:31:47.825
that they're gonna be forced into realizing the need for it, and then they'll seek out the tools. Would you agree with that?
442
00:31:49.840 --> 00:31:59.345
Yeah. I I I agree with that. I think you have for a lot of people or majority of people that they're gonna need to to have some sort of event happen to them. Right? They're gonna need to get burnt in some way.
443
00:32:00.605 --> 00:32:02.705
But, I mean, for others, I think that,
444
00:32:03.565 --> 00:32:06.225
you know, the the events of of 20,
445
00:32:07.050 --> 00:32:07.550
2020
446
00:32:08.090 --> 00:32:11.870
and and 2021 with with COVID and with the
447
00:32:12.810 --> 00:32:15.870
the the really strong government response pretty much everywhere,
448
00:32:16.895 --> 00:32:21.075
has really kind of opened up a lot of people who maybe weren't thinking about this,
449
00:32:21.695 --> 00:32:27.460
previously. So thinking that maybe this time they started taking their their privacy seriously because
450
00:32:28.080 --> 00:32:30.020
things things can change very quickly,
451
00:32:30.480 --> 00:32:33.460
and laws can can be reworked very quickly.
452
00:32:35.045 --> 00:32:35.545
So,
453
00:32:36.005 --> 00:32:36.585
you know,
454
00:32:37.365 --> 00:32:42.105
maybe more of those types of events will bring more and more people who are who care about that type of thing.
455
00:32:45.780 --> 00:32:48.280
Yeah. I I agree wholeheartedly with that.
456
00:32:48.980 --> 00:32:57.005
I mean, 20 one other point to that is, I mean, if if governments start to get or crackdown and get more repressive, especially around,
457
00:32:57.485 --> 00:33:00.305
transaction free transactional freedom, so I. E.
458
00:33:00.660 --> 00:33:01.640
Cutting off funding
459
00:33:02.340 --> 00:33:07.160
to groups that are, you know, or or even just individual content creators,
460
00:33:07.700 --> 00:33:12.105
through the platform and on YouTube who are, you know, spreading the wrong message.
461
00:33:13.045 --> 00:33:18.025
Those types of events, if this continue to happen, create a whole class of of user that
462
00:33:18.405 --> 00:33:22.060
that, you know, hopefully, would be able to use Bitcoin to route around
463
00:33:22.600 --> 00:33:27.580
that type of event, like, in the way that WikiLeaks first famously used Bitcoin as the first major
464
00:33:29.445 --> 00:33:30.025
economic participant,
465
00:33:31.284 --> 00:33:32.485
when they got their,
466
00:33:32.885 --> 00:33:35.065
you know, Visa and Mastercard donations,
467
00:33:35.845 --> 00:33:36.345
canceled.
468
00:33:38.870 --> 00:33:46.010
So you wanna have the privacy tech and you wanna have the tools available for for that, you know, potential or, you know, inevitability.
469
00:33:47.505 --> 00:33:50.245
Yeah. I mean, I think the plan should be to have the tools ready,
470
00:33:51.185 --> 00:33:54.325
have the education ready, have the resources ready,
471
00:33:55.159 --> 00:33:57.179
and when the masses realize the need,
472
00:33:58.519 --> 00:34:00.059
they'll be there for them. Right?
473
00:34:02.174 --> 00:34:02.674
Yeah.
474
00:34:04.894 --> 00:34:05.794
Open arms.
475
00:34:07.375 --> 00:34:10.355
Yeah. Any thoughts here before we dive in deeper?
476
00:34:11.130 --> 00:34:17.710
I mean, it it's it's never enough to talk about this. We always do on on on dispatch, and I I love that.
477
00:34:18.090 --> 00:34:18.750
I think
478
00:34:19.995 --> 00:34:20.395
people
479
00:34:21.675 --> 00:34:28.960
yeah. I I agree that you either have something happened to you or you come from an environment which is like, you know, has been exposed
480
00:34:29.500 --> 00:34:30.079
to problems
481
00:34:31.180 --> 00:34:32.480
connected with, like, autoriturism
482
00:34:32.780 --> 00:34:35.119
or surveillance or or, like, just
483
00:34:37.135 --> 00:34:37.635
extortions
484
00:34:38.095 --> 00:34:38.175
and,
485
00:34:39.455 --> 00:34:44.995
taking property away, which was, you know, belonging to people without any way to to kind of
486
00:34:45.780 --> 00:34:52.760
save it. I, myself, from, you know, the eastern part of Europe and and then moved to the to the very kind of comfortable
487
00:34:53.060 --> 00:34:53.560
western
488
00:34:55.484 --> 00:35:01.244
society where where people are really just like the boiling frogs, you know, who who are now about to kind of
489
00:35:02.040 --> 00:35:04.700
you know, it would be time to jump out, but they won't.
490
00:35:05.160 --> 00:35:05.660
And
491
00:35:06.839 --> 00:35:07.339
that's
492
00:35:08.119 --> 00:35:09.260
yeah. It's just
493
00:35:09.960 --> 00:35:11.580
need to need to open eyes
494
00:35:12.525 --> 00:35:13.905
to to to these things.
495
00:35:14.285 --> 00:35:25.900
But I think there will be the the real adoption. I mean, not in terms of how many 1,000,000 of dollars come in, but in terms of how many users come in will happen on the places which need
496
00:35:27.015 --> 00:35:27.515
Bitcoin
497
00:35:28.135 --> 00:35:29.195
and these technologies
498
00:35:29.495 --> 00:35:30.155
as well.
499
00:35:31.095 --> 00:35:31.835
And then,
500
00:35:32.375 --> 00:35:33.035
you know,
501
00:35:33.335 --> 00:35:39.740
now we are at the at at this at the level where people have some we will have tools to
502
00:35:40.600 --> 00:35:42.140
have for them available
503
00:35:43.075 --> 00:35:43.815
if they
504
00:35:44.195 --> 00:35:45.095
are ready to
505
00:35:45.715 --> 00:35:50.455
just search for it. You don't even need to learn much. Right? You don't need to you don't need to program anymore
506
00:35:50.800 --> 00:35:51.540
to to construct
507
00:35:52.240 --> 00:35:54.080
a coin join. Right? And,
508
00:35:56.000 --> 00:35:58.580
that that is a good thing, and we need to continue to improve
509
00:35:59.040 --> 00:36:00.100
and make it
510
00:36:01.505 --> 00:36:02.885
more easy and more accessible
511
00:36:04.464 --> 00:36:05.924
for for these people to
512
00:36:07.585 --> 00:36:11.460
to be available. And then, you know, everyone else who who doesn't want to boil
513
00:36:11.920 --> 00:36:13.619
could jump out of the water.
514
00:36:19.355 --> 00:36:20.415
Yeah. I agree.
515
00:36:22.474 --> 00:36:24.310
So with all that said,
516
00:36:24.610 --> 00:36:26.150
you know, the show is focused
517
00:36:26.770 --> 00:36:32.295
on actionable Bitcoin discussion, things that Bitcoiners today can can do to better themselves.
518
00:36:34.675 --> 00:36:37.155
So we have we we so far, we've said,
519
00:36:38.115 --> 00:36:40.135
earning Bitcoin, mining Bitcoin.
520
00:36:40.740 --> 00:36:43.640
I guess mining is earning. It kinda falls into the same subset,
521
00:36:44.420 --> 00:36:45.319
circular economy,
522
00:36:46.900 --> 00:36:48.680
just realizing the need in general.
523
00:36:49.694 --> 00:36:53.875
But then we also have what you guys have been working on over at Samurai Wallet,
524
00:36:54.575 --> 00:37:02.360
which is it's it's gonna be funny, this whole conversation, I think, because your NIM is both Samura1 Wallet and the project is also Samura1 Wallet. But,
525
00:37:04.820 --> 00:37:05.960
let's dive into,
526
00:37:06.495 --> 00:37:09.635
you know, what your strategy is over at Samurais
527
00:37:10.335 --> 00:37:13.395
and how you guys are approaching this, for everyday Bitcoiners.
528
00:37:17.950 --> 00:37:18.450
So,
529
00:37:21.150 --> 00:37:24.369
can you can you repeat the question there, Matt? I kinda lost you for a bit.
530
00:37:25.955 --> 00:37:32.855
Basically, like, what is your strategy over at Samura Wallet? Like, how are you guys approaching this issue? How are you, you know, trying to provide,
531
00:37:33.940 --> 00:37:36.839
a a toolset that is useful for Bitcoiners today?
532
00:37:37.380 --> 00:37:43.560
Right. Right. So so I guess one of the most important points about what a user can do, other than
533
00:37:44.025 --> 00:37:51.885
avoid the KYC system because as as you said, most are gonna be either they didn't hear this message early enough or there's just no other way for them,
534
00:37:52.425 --> 00:37:55.730
and they, you know, can't produce or earn for whatever reason.
535
00:37:57.390 --> 00:37:59.730
The tools that that we've we've created,
536
00:38:00.510 --> 00:38:03.175
one of the the benefits of those tools for KYC,
537
00:38:04.115 --> 00:38:04.615
UTXOs
538
00:38:05.315 --> 00:38:08.775
is that the forward looking activity of those UTXOs
539
00:38:09.155 --> 00:38:11.255
once they go through the tools that we create,
540
00:38:12.180 --> 00:38:13.240
specifically Whirlpool,
541
00:38:14.900 --> 00:38:15.720
can't be
542
00:38:16.020 --> 00:38:17.960
connected to the KYC UTXOs
543
00:38:18.635 --> 00:38:22.655
in, of the past. So it's a way of breaking the KYC record
544
00:38:23.115 --> 00:38:24.494
on chain anyway
545
00:38:27.010 --> 00:38:37.095
for them for for users who have those UTXOs. Now the KYC record will still remain, of course, with the entity where you acquired the t, the coins from,
546
00:38:37.955 --> 00:38:40.295
but the link with your
547
00:38:40.915 --> 00:38:42.055
KYC information
548
00:38:42.480 --> 00:38:47.040
to your on chain UTXO information will be severed. And I think that's,
549
00:38:47.920 --> 00:38:48.900
that's the fundamental,
550
00:38:50.385 --> 00:38:53.845
tool that we provide in Whirlpool. And every other tool that we provide
551
00:38:54.305 --> 00:38:57.285
is is essentially building on that idea.
552
00:38:58.430 --> 00:39:07.445
And we can get into the weeds if you want, but that that's the that's the gist of of our tool and and and generally all all privacy tools tools and all all the CoinJoin
553
00:39:08.145 --> 00:39:08.965
tools, specifically.
554
00:39:09.985 --> 00:39:10.485
The,
555
00:39:11.025 --> 00:39:14.140
you know, the point of CoinJoin is is what? To turn
556
00:39:14.440 --> 00:39:14.940
deterministic
557
00:39:15.240 --> 00:39:16.700
links into probabilistic
558
00:39:17.000 --> 00:39:17.500
links.
559
00:39:18.520 --> 00:39:21.980
So, you know, that's that's exactly what what we do.
560
00:39:24.825 --> 00:39:29.805
So you made an interesting point there, and I've kind of been, you know, thrown over the coals over it sometimes.
561
00:39:32.070 --> 00:39:32.810
You know,
562
00:39:33.350 --> 00:39:33.850
privacy
563
00:39:34.310 --> 00:39:35.290
focused people,
564
00:39:36.070 --> 00:39:39.770
have a lot of passion, and that's one of the reasons I love operating in the space.
565
00:39:41.145 --> 00:39:42.585
But you would agree that,
566
00:39:43.865 --> 00:39:45.325
if you are going to KYC,
567
00:39:46.744 --> 00:39:47.805
going into CoinJoin
568
00:39:48.185 --> 00:39:50.125
afterwards, using Whirlpool afterwards,
569
00:39:51.930 --> 00:39:52.990
is is strictly
570
00:39:53.450 --> 00:39:56.430
the best option to do if if you are KYC ed.
571
00:39:56.890 --> 00:40:03.785
Yeah. Yeah. And I I mean, I would extend it to all all UTXOs, whether they're KYC ed or not. I think they should go through a round of equal output coin
572
00:40:04.245 --> 00:40:04.745
joint.
573
00:40:06.085 --> 00:40:08.905
Every and it should be done, you know, relatively frequently.
574
00:40:10.120 --> 00:40:10.620
So,
575
00:40:11.080 --> 00:40:14.780
yeah, I agree completely. If if you've gone through that process of KYC,
576
00:40:16.760 --> 00:40:22.105
you need to sever the on chain footprint between your KYC record, which links real life
577
00:40:22.405 --> 00:40:23.465
with the blockchain.
578
00:40:24.645 --> 00:40:31.780
You know, the KYC record will still exist. Your tax record will still exist. The exchange will still have all the information that they had prior to
579
00:40:32.160 --> 00:40:32.980
the the whirlpool,
580
00:40:33.840 --> 00:40:34.980
but on chain,
581
00:40:35.815 --> 00:40:37.035
which is where we're concerned,
582
00:40:38.375 --> 00:40:39.835
we'll be we'll be good.
583
00:40:42.430 --> 00:40:48.290
Yeah. That's also an interest that's an interesting point that you mentioned there because a lot of people that, like, come in through Bisk or something,
584
00:40:48.910 --> 00:40:51.170
say, like, I don't see why I have the need,
585
00:40:52.415 --> 00:41:00.994
for using, these CoinJoin tools if I'm buying without KYC to begin with. But even if you're a vendor and you're receiving Bitcoin from a customer,
586
00:41:01.369 --> 00:41:03.950
you're receiving Bitcoin from someone. Someone knows
587
00:41:04.250 --> 00:41:05.869
that you're the one who got it,
588
00:41:07.530 --> 00:41:10.190
and you wanna break that link regardless. Right?
589
00:41:10.685 --> 00:41:11.185
Exactly.
590
00:41:13.405 --> 00:41:14.525
Can can I just,
591
00:41:15.085 --> 00:41:18.545
say say that, when we are focusing on on on the importance
592
00:41:18.925 --> 00:41:19.425
of
593
00:41:20.240 --> 00:41:28.099
avoiding KYC first of all, and then once you get into it, you know, try to get rid of the rid of the trail so not to have your payments tied to your identity.
594
00:41:28.785 --> 00:41:30.485
But then privacy is,
595
00:41:30.785 --> 00:41:33.285
you know, is much bigger than that. Even if you are not
596
00:41:34.465 --> 00:41:38.930
we would not have this kind of, you know, we wouldn't need to show our passports anywhere.
597
00:41:39.310 --> 00:41:40.450
Then you would still
598
00:41:40.910 --> 00:41:41.810
because of the,
599
00:41:42.670 --> 00:41:45.315
qualities of the Bitcoin block blockchain
600
00:41:45.615 --> 00:41:47.955
having every address to and from
601
00:41:48.655 --> 00:41:51.555
and the amount public, you need to
602
00:41:52.160 --> 00:41:53.300
be able to hide
603
00:41:55.440 --> 00:41:55.940
from
604
00:41:56.560 --> 00:42:06.075
the if you buy something, you don't want the seller to know what your stash is, you know, what what what is the all your money is because, you know, it was
605
00:42:06.615 --> 00:42:10.795
next time at least, it was ask for a higher price then. Or you don't want,
606
00:42:11.500 --> 00:42:18.160
someone to know what is your month monthly wage if you are being paid in Bitcoin. That is, if I understood correctly,
607
00:42:18.540 --> 00:42:19.280
that is
608
00:42:19.865 --> 00:42:21.165
the backwards looking privacy
609
00:42:21.945 --> 00:42:23.405
which can be,
610
00:42:24.265 --> 00:42:27.485
provided by Cogent. And then the 4 forward looking one
611
00:42:29.160 --> 00:42:33.820
is that your employer I mean, you don't want your employer to know exactly
612
00:42:34.200 --> 00:42:36.780
when and what and how much did you buy.
613
00:42:38.555 --> 00:42:39.055
And
614
00:42:39.435 --> 00:42:46.930
either the employer or wherever you have your Bitcoin from, that could be the the person you bought from. Also, you know, you shouldn't know about what he's
615
00:42:47.310 --> 00:42:52.370
doing. I mean, this is very basic. If it would be the case in the in the normal banking system,
616
00:42:52.750 --> 00:42:56.605
then, you know, we we cannot imagine that. But people are not
617
00:42:57.305 --> 00:42:58.445
really aware of
618
00:42:58.745 --> 00:43:00.605
the the thing of the case that
619
00:43:00.905 --> 00:43:04.365
this is the default in Bitcoin if you are not using CoinJoin
620
00:43:05.100 --> 00:43:08.560
or Lightning or swaps or, you know, other other kind of tools
621
00:43:09.100 --> 00:43:09.420
that,
622
00:43:09.980 --> 00:43:13.600
you know, everyone knows everything. They just need to look, and it's there for eternity.
623
00:43:14.464 --> 00:43:17.204
Yeah. You don't want your boss to know your spending habits. That's ridiculous.
624
00:43:20.545 --> 00:43:24.589
Yeah. Exactly. And you don't want to have the corner shop know your earning
625
00:43:25.290 --> 00:43:25.790
either.
626
00:43:26.490 --> 00:43:26.990
Exactly.
627
00:43:28.809 --> 00:43:30.020
Very well said. I
628
00:43:32.115 --> 00:43:37.495
so let's let's, you know, let's dive into I'm I'm trying to think where we should go next.
629
00:43:42.030 --> 00:43:45.170
So so one of the things you mentioned there, samurai,
630
00:43:45.710 --> 00:43:48.450
is is this idea that, like, the baseline
631
00:43:48.830 --> 00:43:50.690
should be these coin joints.
632
00:43:51.375 --> 00:43:53.875
You know, like, almost like we should just
633
00:43:55.135 --> 00:43:58.035
I've kind of come to the conclusion that almost
634
00:43:58.390 --> 00:44:01.930
everything we do in Bitcoin is is a post mix activity.
635
00:44:03.670 --> 00:44:05.930
Definitely. I've come to the same conclusion.
636
00:44:07.444 --> 00:44:09.464
So what we really wanna see
637
00:44:10.484 --> 00:44:10.984
is
638
00:44:12.005 --> 00:44:13.625
all major Bitcoin wallets
639
00:44:14.549 --> 00:44:16.730
standardize that activity and basically
640
00:44:18.069 --> 00:44:20.650
not only make every spend a coin join, but also
641
00:44:21.029 --> 00:44:23.770
make every spend a post mix out of a,
642
00:44:24.335 --> 00:44:25.714
like, a proper nondeterministic
643
00:44:26.575 --> 00:44:27.954
coinjoin rounds. Right?
644
00:44:28.815 --> 00:44:31.714
Yeah. Yeah. Definitely. I I I I think that,
645
00:44:34.900 --> 00:44:39.880
you know, if you don't wanna go as far as to say that's that there needs to be standardization
646
00:44:40.340 --> 00:44:41.960
between the protocols,
647
00:44:42.865 --> 00:44:43.345
Right?
648
00:44:43.905 --> 00:44:49.125
Then you should we can at least say that there needs to be certain attributes of the protocols
649
00:44:49.990 --> 00:44:53.210
that are demanded by by users of the protocols,
650
00:44:53.830 --> 00:44:58.330
which are no deterministic links. Right? Each mixed transaction has to be all probabilistic,
651
00:44:58.684 --> 00:45:00.305
not deterministic in any way,
652
00:45:01.325 --> 00:45:02.785
and various other qualities.
653
00:45:03.645 --> 00:45:12.880
And I think that if if those standards could be could be met on the actual mixing protocol side, then you, you know, that would be phenomenal for users.
654
00:45:13.259 --> 00:45:15.165
And then on the post mix side,
655
00:45:15.725 --> 00:45:22.145
as you as you suggest, Matt, is is it's almost as important because if you combine your post mix
656
00:45:22.560 --> 00:45:24.260
with any other UTXOs
657
00:45:24.640 --> 00:45:25.940
associated to other,
658
00:45:26.720 --> 00:45:29.700
activity, you will be linking their histories together,
659
00:45:30.335 --> 00:45:34.355
and you don't wanna do that. So it's really important for the the wallet to,
660
00:45:35.055 --> 00:45:36.755
implement a post mix strategy
661
00:45:37.135 --> 00:45:38.195
properly. Now
662
00:45:39.390 --> 00:45:40.609
the attempts at standardization
663
00:45:40.910 --> 00:45:41.650
were made,
664
00:45:42.510 --> 00:45:44.849
you know, way back in in 2016,
665
00:45:45.150 --> 00:45:45.890
I believe,
666
00:45:46.275 --> 00:45:46.775
with,
667
00:45:47.235 --> 00:45:49.495
no bar from what would become Wasabi.
668
00:45:50.195 --> 00:45:50.695
And,
669
00:45:51.555 --> 00:45:52.055
TDEVD
670
00:45:52.435 --> 00:45:54.615
was involved and various other contributors,
671
00:45:55.040 --> 00:45:57.380
some from the Open Bitcoin privacy project.
672
00:45:58.640 --> 00:45:59.280
They would,
673
00:46:00.240 --> 00:46:01.140
create the
674
00:46:01.520 --> 00:46:02.020
0
675
00:46:02.585 --> 00:46:03.644
link spec.
676
00:46:03.944 --> 00:46:09.005
And 0 link spec specifies all of these conditions of post mix, account segregation,
677
00:46:11.400 --> 00:46:13.900
the segregate, you know, the structured liquidity.
678
00:46:14.440 --> 00:46:17.420
All of these are defined in the zero link specification,
679
00:46:17.935 --> 00:46:19.875
and we believe that to be a good specification.
680
00:46:20.975 --> 00:46:26.355
And that's what Whirlpool is is built on. And we think it ticks all the boxes and, you know,
681
00:46:26.980 --> 00:46:30.040
it's been turning away now for for a few years.
682
00:46:30.500 --> 00:46:31.000
And,
683
00:46:31.860 --> 00:46:34.360
every transaction has had a 100% entropy,
684
00:46:35.515 --> 00:46:37.535
no deterministic links, and
685
00:46:37.915 --> 00:46:39.855
a solid foundation to build on.
686
00:46:48.210 --> 00:46:51.270
Sorry. I thought, Open Arms was about to jump in there. I,
687
00:46:52.464 --> 00:46:54.645
so, I mean, one of the things when we talk about,
688
00:46:55.665 --> 00:47:00.244
Bitcoin privacy is is when you track Bitcoin, right, it's a it's a probability game.
689
00:47:01.750 --> 00:47:02.250
Basically,
690
00:47:02.630 --> 00:47:11.835
external actors are looking at the chain. Maybe they're combining KYC info, other information they have. A lot of times, we suspect that these chain surveillance companies are also running nodes,
691
00:47:12.535 --> 00:47:15.595
to do active surveillance. They're mixing it with KYC information.
692
00:47:16.935 --> 00:47:17.994
But there's also
693
00:47:18.620 --> 00:47:19.680
certain spending
694
00:47:19.980 --> 00:47:20.480
methods.
695
00:47:21.420 --> 00:47:24.240
A perfect example is if you spend,
696
00:47:24.620 --> 00:47:25.680
people like sending
697
00:47:26.300 --> 00:47:27.200
round amounts.
698
00:47:27.825 --> 00:47:34.565
So if you if you send, you know, 25,000,000 sats, you send 0.25 Bitcoin, and then there's a random amount,
699
00:47:35.744 --> 00:47:36.964
that's, you know,
700
00:47:37.280 --> 00:47:38.500
8 digits long,
701
00:47:39.200 --> 00:47:40.740
as the other output,
702
00:47:41.360 --> 00:47:48.025
you can you can pretty much assume that the round amount is the actual send and the other one is the change.
703
00:47:49.765 --> 00:47:52.744
Another heuristic that a lot of people see is,
704
00:47:54.819 --> 00:47:57.720
if if if you if you spend the full the full UTXO,
705
00:47:58.660 --> 00:48:03.345
without change. So if you spend the full UTXO without change, a lot of times, it'll be assumed,
706
00:48:04.845 --> 00:48:07.505
but, of course, it's it's probability, but it'll be assumed
707
00:48:07.885 --> 00:48:10.760
that you're sending to yourself because in what situation
708
00:48:11.060 --> 00:48:12.200
in very rare situations,
709
00:48:13.780 --> 00:48:17.560
your the amount you wanna spend is exactly the same amount as your UTXO.
710
00:48:18.505 --> 00:48:23.085
Another common heuristic is a common input ownership heuristic, which is that,
711
00:48:24.265 --> 00:48:26.605
all inputs belong to the same sender,
712
00:48:27.640 --> 00:48:31.020
same person. So it it links those transactions on
713
00:48:31.400 --> 00:48:35.500
chain. So when we're talking about Bitcoin privacy on chain, we're talking about
714
00:48:35.880 --> 00:48:36.380
reducing,
715
00:48:37.775 --> 00:48:38.515
the probabilities
716
00:48:38.815 --> 00:48:40.035
of being able to basically,
717
00:48:42.095 --> 00:48:50.430
guess or estimate, you know, when when Bitcoin changes hands and and how those transactions are happening, looking at those transactions on chain.
718
00:48:50.809 --> 00:48:52.990
So one of the main aspects of that
719
00:48:53.930 --> 00:49:03.215
is that it becomes a it becomes very much a numbers game. Right? You know, you need we're you're only high your your your privacy is only as good as the crowd that you're among.
720
00:49:04.580 --> 00:49:06.520
So not only do we need to get,
721
00:49:07.140 --> 00:49:12.600
you know, private Bitcoin usage up so that there's more people that are actively doing it in the ecosystem,
722
00:49:13.684 --> 00:49:15.065
because, you know, you could be the
723
00:49:15.684 --> 00:49:19.704
you could be super focused on Bitcoin proxy, but if someone pays you with a KYC transaction,
724
00:49:21.440 --> 00:49:25.700
then you don't even you might not even realize that they paid you with a a KYC at UTXO.
725
00:49:27.680 --> 00:49:34.045
So so not only do we wanna get usage up, but, also, we have this aspect that because we have these multiple tools,
726
00:49:34.984 --> 00:49:36.445
you have separate distinct,
727
00:49:37.620 --> 00:49:43.160
basically, liquidity pools among the different implementations. Right? So there's there's always been a push
728
00:49:43.540 --> 00:49:54.670
or at least a hope that we could have, you know, at least some kind of standard. So at least, you know, whatever the subset of Bitcoin users are that are trying to practice Bitcoin best practices in terms of privacy,
729
00:49:57.070 --> 00:49:58.610
are together in that. Right?
730
00:50:01.845 --> 00:50:02.825
Yeah. Definitely.
731
00:50:05.045 --> 00:50:06.585
I think, you know, it's
732
00:50:07.125 --> 00:50:08.505
it's important to
733
00:50:10.910 --> 00:50:15.710
to have a variety of tools that are specialized for the situations that you find yourselves in.
734
00:50:16.430 --> 00:50:16.930
Whether
735
00:50:17.230 --> 00:50:22.605
it's a post mix spend or or it's getting into a equal output point join,
736
00:50:23.145 --> 00:50:26.920
or if it's doing a swap or whatever the whatever the case may be.
737
00:50:27.799 --> 00:50:28.200
But it
738
00:50:28.839 --> 00:50:31.000
as you as you mentioned, Matt, just,
739
00:50:31.559 --> 00:50:32.780
a few moments ago,
740
00:50:33.400 --> 00:50:35.339
I think that it all has to stem
741
00:50:35.905 --> 00:50:40.165
from the post mix account. So you have to go from, you know, a
742
00:50:40.545 --> 00:50:44.645
unmixed account, a deposit account, an account 0, however you call it,
743
00:50:45.750 --> 00:50:46.570
to a
744
00:50:47.430 --> 00:50:49.850
post mix account, segregated and separate.
745
00:50:52.145 --> 00:50:54.645
And that Postmates account may have different rules,
746
00:50:55.265 --> 00:50:57.765
spending rules that are in in place there.
747
00:50:58.145 --> 00:51:00.725
And then from there, all these other options,
748
00:51:01.390 --> 00:51:03.250
open up that work cohesively together,
749
00:51:04.350 --> 00:51:06.050
and and actually are solving
750
00:51:06.510 --> 00:51:08.130
problems that users are facing.
751
00:51:08.705 --> 00:51:12.965
Whether that be just a general undermining of a heuristic that you mentioned,
752
00:51:14.945 --> 00:51:16.885
or actually evading a
753
00:51:17.265 --> 00:51:17.765
a,
754
00:51:18.180 --> 00:51:18.500
you know,
755
00:51:19.300 --> 00:51:19.800
overzealous
756
00:51:20.420 --> 00:51:22.760
exchange, for example, who is known to blacklist
757
00:51:23.220 --> 00:51:23.720
UTXOs.
758
00:51:28.255 --> 00:51:32.675
So, I mean, I think let's let's let's jump in deep into how
759
00:51:33.055 --> 00:51:34.435
you guys have set up,
760
00:51:35.480 --> 00:51:39.660
Whirlpool from the entry into Whirlpool to the post mix tools.
761
00:51:41.799 --> 00:51:45.180
How does that all come together into to 1,
762
00:51:46.635 --> 00:51:50.415
a package that is becoming more and more cohesive every day with your new updates?
763
00:51:52.075 --> 00:51:56.880
Yeah. Sure. So, I mean, I guess the best way to start is to just reiterate that
764
00:51:58.140 --> 00:52:01.200
Whirlpool isn't a isn't an external service.
765
00:52:02.535 --> 00:52:05.835
It's a part of your wallet. It's an area of your wallet.
766
00:52:06.454 --> 00:52:07.195
And it's
767
00:52:07.974 --> 00:52:10.954
a protocol that allows for communication between,
768
00:52:12.230 --> 00:52:12.730
various
769
00:52:13.030 --> 00:52:14.330
collaborators of transactions,
770
00:52:15.030 --> 00:52:17.370
using a centralized coordinator that we run.
771
00:52:17.830 --> 00:52:19.930
The centralized coordinator is blinded.
772
00:52:20.405 --> 00:52:20.905
However,
773
00:52:21.445 --> 00:52:26.105
so it can't really it can't read the message it's passing, but it is passing messages.
774
00:52:28.010 --> 00:52:28.510
So
775
00:52:28.970 --> 00:52:29.470
the
776
00:52:30.569 --> 00:52:34.109
the start a user would go through is what a process called the TX 0.
777
00:52:34.569 --> 00:52:36.190
This is where they take their
778
00:52:36.535 --> 00:52:37.035
their,
779
00:52:37.895 --> 00:52:38.395
unmixed
780
00:52:39.335 --> 00:52:45.755
source coins that they want to mix. They they wanna end up with mixed coins. They take these source coins from their
781
00:52:46.090 --> 00:52:47.070
external account,
782
00:52:47.690 --> 00:52:49.790
and they send them to an address,
783
00:52:52.490 --> 00:52:53.470
and they're automatically
784
00:52:54.025 --> 00:52:54.845
split into
785
00:52:55.545 --> 00:53:02.045
like amount types based on the pool you choose. And there's various denomination pools ranging from 5 BTC
786
00:53:02.950 --> 00:53:03.609
to 001
787
00:53:03.990 --> 00:53:04.490
BTC.
788
00:53:08.070 --> 00:53:09.690
So it creates these these,
789
00:53:10.150 --> 00:53:10.650
like,
790
00:53:11.095 --> 00:53:16.154
amount denominations. This is why it's called equal output coin join because all the outputs are equal in the transaction,
791
00:53:17.174 --> 00:53:21.740
and queues them for what's what what we call a mixing cycle or a cycle.
792
00:53:25.400 --> 00:53:37.184
Each cycle has certain or each cycle has certain rules to it, and this is this is what we term as structured liquidity, meaning that you're gonna be each one of these UTXOs that you have that, let's say, are 0 point
793
00:53:38.020 --> 00:53:39.080
5 BTC,
794
00:53:40.980 --> 00:53:42.440
are gonna be mixed individually
795
00:53:43.300 --> 00:53:46.599
with other participants. They're not gonna be mixed together in the same transaction.
796
00:53:47.585 --> 00:53:48.085
Likewise,
797
00:53:48.625 --> 00:53:50.885
no other participant in that transaction
798
00:53:51.345 --> 00:53:52.065
is gonna be
799
00:53:54.440 --> 00:54:02.300
have been seen together in a previous transaction as well. So every transaction every UTXO that in there is fresh and never seen together before.
800
00:54:03.395 --> 00:54:05.335
This is an important aspect of Whirlpool,
801
00:54:06.195 --> 00:54:12.299
that is not shared by, I don't think, any of the other implementations, and it's an important aspect to to creating,
802
00:54:13.400 --> 00:54:14.460
the highest entropy
803
00:54:15.480 --> 00:54:18.220
Bitcoin transactions that you can that you can create.
804
00:54:19.615 --> 00:54:22.835
I mean, from there, once the mix has been occur has been achieved,
805
00:54:23.375 --> 00:54:30.730
I will actually, I let me rewind a bit. The the downside of structured liquidity, I might I should bring in, is that it could be slower
806
00:54:31.030 --> 00:54:32.569
because of the strict rules
807
00:54:32.925 --> 00:54:33.245
that,
808
00:54:33.725 --> 00:54:40.705
stop mixes from triggering if these conditions haven't been met. You need constant fresh liquidity coming into the mixing pools,
809
00:54:41.485 --> 00:54:45.359
and that can produce ebb and flow type patterns where some,
810
00:54:45.900 --> 00:54:51.440
sometimes it's, you know, very inactive. There's not a lot of liquidity coming in, and sometimes there's a huge amount coming.
811
00:54:52.505 --> 00:54:55.165
But we feel it's worthwhile for the privacy benefits.
812
00:54:55.625 --> 00:54:58.045
So let me just jump in real quick before we continue.
813
00:55:00.240 --> 00:55:05.380
With with CoinJoin tools, the the main threat to a CoinJoin user is,
814
00:55:05.840 --> 00:55:08.095
something called a Sybil attack. And it's when a
815
00:55:08.395 --> 00:55:10.255
external attacker is coming in,
816
00:55:10.795 --> 00:55:12.975
and they're flooding the CoinJoin rounds,
817
00:55:14.290 --> 00:55:21.349
with their own transactions. And then through process of elimination, they're able to have a higher probability of tracking your transactions. Right?
818
00:55:21.650 --> 00:55:22.150
So
819
00:55:22.815 --> 00:55:25.075
one of the main aspects that all of these implementations
820
00:55:25.935 --> 00:55:31.714
seek to target is civil resistance. This idea that if you have an honest actor,
821
00:55:32.910 --> 00:55:37.650
it'll cost less for that honest actor than it will for a civil attacker. An actual,
822
00:55:39.315 --> 00:55:42.215
a monetary cost to try and attack the rounds,
823
00:55:42.675 --> 00:55:47.655
as basically a spam prevention mechanism, the same idea that Bitcoin transaction fees in general
824
00:55:48.860 --> 00:55:49.260
operate under.
825
00:55:50.780 --> 00:55:50.940
The
826
00:55:52.380 --> 00:55:54.000
so so the goal of Whirlpool,
827
00:55:54.380 --> 00:55:55.920
as currently laid out,
828
00:55:56.265 --> 00:56:00.925
is to try and reduce that's create create a situation where it becomes
829
00:56:01.705 --> 00:56:04.365
onerously expensive for a civil attacker to attack.
830
00:56:05.579 --> 00:56:05.900
The downside I've
831
00:56:07.420 --> 00:56:09.680
I'm the the downside is
832
00:56:10.220 --> 00:56:12.160
that because it's a centralized coordinator
833
00:56:12.780 --> 00:56:14.960
and the main civil resistance is
834
00:56:15.805 --> 00:56:16.545
the transaction
835
00:56:16.925 --> 00:56:20.065
the not the well, right now, transaction fees are nothing,
836
00:56:20.845 --> 00:56:28.410
basically nothing. The main civil resistance is the actual coin joint fee, the Whirlpool fee that is paid, to you guys at Samurais.
837
00:56:28.950 --> 00:56:30.010
So as a result,
838
00:56:30.790 --> 00:56:33.690
it doesn't provide civil resistance against you guys,
839
00:56:34.505 --> 00:56:37.885
but it does provide civil resistance against an external attacker,
840
00:56:39.464 --> 00:56:46.569
with the caveat that if fees ever rise and I actually do kinda wanna have a conversation about fees, but we'll have that later, transaction fees on the network,
841
00:56:46.950 --> 00:56:55.285
then that would also provide some level of civil resistance against you guys as well because you would still have to pay on chain transaction fees. Did I get that correct?
842
00:56:56.224 --> 00:56:58.964
Yeah. From what I heard, that was entirely correct.
843
00:57:00.410 --> 00:57:01.869
Awesome. Okay. Let's continue.
844
00:57:02.250 --> 00:57:03.450
One one thing that,
845
00:57:04.410 --> 00:57:05.869
I can add on to that,
846
00:57:07.625 --> 00:57:10.925
We I mean, all all of our revenue that we generate in Samurai
847
00:57:11.385 --> 00:57:11.885
is
848
00:57:13.385 --> 00:57:16.605
is on chain, so it can be viewed and tracked
849
00:57:18.310 --> 00:57:19.930
by anyone who wants to look.
850
00:57:20.310 --> 00:57:20.810
And
851
00:57:22.700 --> 00:57:23.770
we tend to
852
00:57:24.415 --> 00:57:35.060
not immediately put it we do put it through Whirlpool eventually, but we don't do it immediately. It's usually 3 months, 4 months, 5 months. So if anyone wanted to, they could actually watch our, you know, addresses
853
00:57:35.840 --> 00:57:36.980
move into Whirlpool,
854
00:57:38.400 --> 00:57:41.460
so they would know exactly when samurai is entering the,
855
00:57:42.320 --> 00:57:42.980
the pool.
856
00:57:48.305 --> 00:57:53.030
That makes sense. Open Arms, anything you wanna add on before we continue here?
857
00:57:54.150 --> 00:57:54.890
Well, I
858
00:57:55.270 --> 00:58:01.370
I really cannot tell, you know, more about Verpo than, like, some of my wallet does. Right?
859
00:58:02.240 --> 00:58:10.525
What what I would be interested to go in is is, like, the specifics of join market, which is, you know, another
860
00:58:11.640 --> 00:58:12.620
is it is it is
861
00:58:13.240 --> 00:58:15.420
it, correct or it's not a zero link implementation,
862
00:58:15.800 --> 00:58:17.740
but it is a coin joint implementation
863
00:58:18.120 --> 00:58:22.135
quite long existing before started before the actual zeroing specification.
864
00:58:23.955 --> 00:58:24.355
And,
865
00:58:26.275 --> 00:58:31.750
and there are a couple of things that she does differently, differently, and I'm not saying it's overall better or worse. It's just
866
00:58:32.130 --> 00:58:34.550
has use cases that it's more useful.
867
00:58:35.490 --> 00:58:35.990
And
868
00:58:38.365 --> 00:58:40.785
most of the time, it is more difficult to use
869
00:58:41.325 --> 00:58:42.865
and gives you more freedom,
870
00:58:43.405 --> 00:58:44.145
which means
871
00:58:45.329 --> 00:58:50.150
there is more possibility to shoot your yourself on the feet, but also,
872
00:58:51.970 --> 00:58:55.975
can do things which you cannot do with, like, fixed bills
873
00:58:59.395 --> 00:59:00.375
and the way
874
00:59:01.230 --> 00:59:03.329
the accounts are separated in in summary.
875
00:59:03.869 --> 00:59:04.369
Like,
876
00:59:04.829 --> 00:59:07.890
just just short example. I don't want to, like, you know, go into
877
00:59:08.430 --> 00:59:16.045
every little thing. But the account separation, I think, that is the most important thing you need to do, which is you are not
878
00:59:16.960 --> 00:59:18.420
merging your transactions.
879
00:59:19.200 --> 00:59:20.260
You're not merging
880
00:59:20.560 --> 00:59:24.340
the outputs which are coming from a coin join with the change
881
00:59:25.565 --> 00:59:28.705
from your inputs. So, basically, you're not mixing the unmixed
882
00:59:29.245 --> 00:59:34.225
not merging the unmixed change with the coin join outputs. And that is that is
883
00:59:35.520 --> 00:59:41.220
very strictly done in samurai wallet. You have the deposit wallet and then you have the post mix wallet, and you can't
884
00:59:41.770 --> 00:59:42.270
cannot
885
00:59:42.775 --> 00:59:45.435
achieve it in the in the GUI to
886
00:59:45.895 --> 00:59:48.635
spend them together. And same same is
887
00:59:49.015 --> 00:59:51.035
done in join markets by having
888
00:59:51.390 --> 00:59:51.890
5
889
00:59:52.430 --> 00:59:55.090
accounts, which are not specifically named to be deposits,
890
00:59:55.390 --> 00:59:55.890
postmates,
891
00:59:56.190 --> 00:59:57.010
bad bank,
892
00:59:58.510 --> 00:59:59.010
but
893
01:00:00.164 --> 01:00:00.825
they are
894
01:00:01.365 --> 01:00:03.464
fulfilling all the roles in a in
895
01:00:03.845 --> 01:00:08.025
a rolling manner. But the separation happens during coin joints
896
01:00:08.369 --> 01:00:09.109
that when
897
01:00:09.730 --> 01:00:16.885
a coin join happens, the coin join output goes to a separate account and the unmix change stays back in the same.
898
01:00:17.525 --> 01:00:20.185
And then through the 5 mix steps,
899
01:00:21.605 --> 01:00:28.980
this is happening in circular ways. So once some funds goes through 5 coin joints they get get back to the first one and,
900
01:00:29.920 --> 01:00:31.780
I mean, obviously there are 5
901
01:00:32.135 --> 01:00:37.434
to minimize the possibility that there would be this kind of appealing chain where they would get back to
902
01:00:38.135 --> 01:00:45.380
to the same change they were they were starting from. But, I mean, that doesn't really make sense because it's all already been through 5 coin jobs. So
903
01:00:45.780 --> 01:00:47.319
and that that kind of structure,
904
01:00:47.855 --> 01:00:48.675
but it's not liquidity
905
01:00:49.055 --> 01:00:49.555
structure,
906
01:00:49.935 --> 01:00:50.755
but the
907
01:00:52.015 --> 01:00:53.455
the the coin joint kind of,
908
01:00:54.335 --> 01:00:57.315
like, tumbling through. That's why we call the
909
01:00:57.680 --> 01:00:59.780
script which is doing this in one go
910
01:01:01.520 --> 01:01:09.605
through 9, 10 coin joints, a tumbler because the the fines the fines kind of tumbles through the mixups. It's like a waterfall of coin joints then.
911
01:01:11.905 --> 01:01:16.580
And, you know, the very important other difference is that you don't need to
912
01:01:17.300 --> 01:01:18.760
there are no fixed tours,
913
01:01:19.220 --> 01:01:22.040
which means no fixed amounts. So you can
914
01:01:24.020 --> 01:01:25.320
coinjoin any amount,
915
01:01:26.085 --> 01:01:36.400
which means you have a possibility to not create change in in in in transactions. When you are depositing your funds, you can just go and join the whole thing minus the fees. And that's what
916
01:01:37.260 --> 01:01:39.760
you have coming out of it. There will
917
01:01:40.060 --> 01:01:41.120
be no exchange
918
01:01:42.140 --> 01:01:45.395
at all. Right? And this is true for, like,
919
01:01:45.795 --> 01:01:46.295
slightly
920
01:01:46.835 --> 01:01:49.655
I mean, the 100 k kind of pool is kind
921
01:01:50.035 --> 01:01:51.255
of, you know, is a
922
01:01:52.275 --> 01:01:55.820
realistic lower level where it would work to kind of put anything in,
923
01:01:56.680 --> 01:01:58.540
or or break UTXs up,
924
01:01:59.560 --> 01:02:01.660
to that kind of small small size.
925
01:02:05.085 --> 01:02:05.585
And
926
01:02:07.085 --> 01:02:07.905
so the communication
927
01:02:09.724 --> 01:02:11.025
happens all over. Thor
928
01:02:11.390 --> 01:02:14.609
as as with somewhere well, with as well.
929
01:02:17.950 --> 01:02:21.275
And there was a point I I was I was trying to get to,
930
01:02:21.975 --> 01:02:27.275
whichever I'm sure I will I will make later. But the thing these these things are just
931
01:02:27.655 --> 01:02:28.180
kind of
932
01:02:29.300 --> 01:02:34.599
you can you can use both, right, and that and that's what I'm doing as well because I I oftentimes
933
01:02:35.059 --> 01:02:35.960
I like to
934
01:02:36.625 --> 01:02:37.125
use
935
01:02:37.505 --> 01:02:41.605
something which creates me a range of different kind of UTXOs especially
936
01:02:41.905 --> 01:02:43.925
for, like, you know, running lightning.
937
01:02:44.385 --> 01:02:44.885
And
938
01:02:45.720 --> 01:02:52.380
also, the possibility to pay with CoinJoin means that I I'm not only able to when I'm doing a pay peer to peer transaction,
939
01:02:52.954 --> 01:03:01.670
I can do that with summarize as well, but that would be a 2 participant coin join. With joymarketer, I can do, you know, 7 to 9 15 participant coin join
940
01:03:02.869 --> 01:03:05.609
to the destination address, or that could
941
01:03:06.150 --> 01:03:09.049
be a code storage address as well, which would
942
01:03:10.125 --> 01:03:11.665
make it look like it never
943
01:03:12.365 --> 01:03:15.725
got out of that kind of coin joint liquidity pool, so it could be just,
944
01:03:16.445 --> 01:03:17.105
you know,
945
01:03:18.490 --> 01:03:20.250
go on again. But it's not that
946
01:03:20.970 --> 01:03:23.550
the the drawback is that it's not that,
947
01:03:23.930 --> 01:03:24.830
kind of homogenic
948
01:03:25.530 --> 01:03:26.030
as
949
01:03:26.665 --> 01:03:37.860
the Somerai Virpura UTXs are that the same kind of size in, same size of out, and it's just just going I mean, after a couple of runs there is not really a big difference
950
01:03:38.400 --> 01:03:44.180
if you mix I mean, to to my view if you mix 5 times, 10 times, or a 100 times
951
01:03:44.555 --> 01:03:47.695
you basically have a quite I mean, that's
952
01:03:48.395 --> 01:03:49.055
that is,
953
01:03:50.235 --> 01:03:53.215
that broke the chain, right, in in in verbal.
954
01:03:54.570 --> 01:03:59.390
But, obviously, if you if you're not doing that with this kind of same in same out fashion,
955
01:03:59.930 --> 01:04:00.430
then
956
01:04:01.085 --> 01:04:02.545
you might need a bit more
957
01:04:03.164 --> 01:04:04.704
more rounds to kind of,
958
01:04:05.884 --> 01:04:06.384
reliably
959
01:04:07.164 --> 01:04:09.505
break these chains, and you
960
01:04:10.080 --> 01:04:12.900
won't be ease won't be that easy to prove it either.
961
01:04:13.520 --> 01:04:14.420
So there is,
962
01:04:15.200 --> 01:04:20.954
you know, you can go go deep into comparing these, but, yeah, useful tools.
963
01:04:21.575 --> 01:04:24.474
And, yeah, please continue. I don't want to kind of, you know, hijack all this.
964
01:04:26.070 --> 01:04:27.690
No. I think that was a great comparison.
965
01:04:28.790 --> 01:04:31.370
That that was perfectly put, and,
966
01:04:31.830 --> 01:04:32.890
I think, you know,
967
01:04:34.025 --> 01:04:34.745
Joy Market,
968
01:04:35.145 --> 01:04:39.645
is is the OG. It's been around for what correct me if I'm wrong, but 2015,
969
01:04:39.945 --> 01:04:42.525
I wanna say. 15. Yes. Correct. Yeah. 2015.
970
01:04:44.150 --> 01:04:51.210
And, you know, when we first started Samurai, which was, I I believe, just a few months before enjoy before joint market got announced,
971
01:04:52.775 --> 01:04:59.015
It definitely served as something of the inspiration to try to replicate and figure out a way. I think, actually, our first,
972
01:04:59.575 --> 01:05:08.240
designs were how to be a mobile join market interface, but back then it was so primitive that it was nearly impossible to do. It was still so early.
973
01:05:09.099 --> 01:05:11.500
But but in any case, yeah, you know, join market is,
974
01:05:12.285 --> 01:05:15.905
has a great design choices in the, account segregation
975
01:05:16.685 --> 01:05:17.505
as you mentioned,
976
01:05:18.045 --> 01:05:19.905
announced. And, you know, that's
977
01:05:20.430 --> 01:05:24.290
true. It was true in 2015, and it's true today. That's the
978
01:05:26.030 --> 01:05:30.645
probably the one of the most important aspects of the coin joint is maintaining that that separation.
979
01:05:31.505 --> 01:05:33.285
So it really should be in every,
980
01:05:33.905 --> 01:05:36.085
coin joint implementation. It should be mandatory
981
01:05:36.625 --> 01:05:38.645
for the, client to do that.
982
01:05:39.720 --> 01:05:42.940
You know, if I was to if I was to disagree with anything,
983
01:05:44.040 --> 01:05:50.145
nothing when in what you said, but if I was to disagree with the protocol, I would say in since 2015, we've learned,
984
01:05:51.005 --> 01:05:54.385
a lot of things about on chain analysis. We've learned
985
01:05:54.790 --> 01:05:55.930
how how chain,
986
01:05:56.470 --> 01:05:58.170
chain analysis companies are,
987
01:05:58.790 --> 01:06:00.970
processing the blockchain, how they're reading the blockchain,
988
01:06:01.430 --> 01:06:02.970
and we we understand
989
01:06:04.075 --> 01:06:06.095
that it's about the flows of UTXOs.
990
01:06:07.355 --> 01:06:07.855
And
991
01:06:09.115 --> 01:06:11.934
it's my personal opinion that in in 2020,
992
01:06:13.089 --> 01:06:16.630
you need to be going with equal output coin joins,
993
01:06:17.250 --> 01:06:17.750
not,
994
01:06:19.329 --> 01:06:20.470
coin join spends,
995
01:06:21.335 --> 01:06:25.195
because it doesn't reliably break the, transaction grab.
996
01:06:25.495 --> 01:06:29.990
And you you mentioned this with saying that you you need to do more rounds, many more rounds,
997
01:06:30.630 --> 01:06:35.369
and that, you know, that that's true. The the rounds can help you, but they can also hurt you,
998
01:06:36.470 --> 01:06:40.955
as well because of the presence of on mixed change within the mixed transactions.
999
01:06:41.815 --> 01:06:50.900
So I mean, if I was if I was joined market, I would change one thing, and that would be getting rid of the unmixed change that follows along the mixed transactions, and that'd be a huge
1000
01:06:51.440 --> 01:06:53.280
huge win for that protocol. And,
1001
01:06:53.839 --> 01:06:59.875
I completely agree, use both. There's absolutely no reason why you shouldn't use use both, both tools to check them out.
1002
01:07:00.895 --> 01:07:04.435
So so in in in you mean getting clear of the omnichannel
1003
01:07:04.815 --> 01:07:06.115
change in terms of
1004
01:07:06.495 --> 01:07:06.995
the
1005
01:07:07.760 --> 01:07:09.380
5 accounts wouldn't be cyclical.
1006
01:07:10.800 --> 01:07:16.579
So it never gets back to a previous change because, I mean, it it gets rid of it in in the terms of
1007
01:07:17.925 --> 01:07:19.225
it always separated
1008
01:07:19.845 --> 01:07:21.145
to another account.
1009
01:07:21.445 --> 01:07:22.825
But then yes.
1010
01:07:24.245 --> 01:07:26.105
But they'll be in a mixed transaction,
1011
01:07:27.569 --> 01:07:29.670
a a follow along mixed transaction possibly?
1012
01:07:31.170 --> 01:07:39.155
Yes. They I mean, yes. They could they could enter the same mix that once the ARM exchange has been in another coin join. It could,
1013
01:07:40.015 --> 01:07:44.410
enter through that coin join, it could enter to to the same mix that it's.
1014
01:07:45.049 --> 01:07:48.510
Right. And and we know that you can and we know that you can
1015
01:07:48.970 --> 01:07:49.470
combine,
1016
01:07:51.289 --> 01:07:54.005
both accounts in the client, in the joint market client.
1017
01:07:54.484 --> 01:07:57.785
That's as we said, they segregate the unmixed change from the
1018
01:07:58.085 --> 01:07:58.744
the mixed,
1019
01:07:59.125 --> 01:08:00.265
the mixed outputs.
1020
01:08:00.724 --> 01:08:02.825
So we know that the mixed outputs in
1021
01:08:03.140 --> 01:08:03.960
a joint market transaction
1022
01:08:04.980 --> 01:08:09.000
can't be the same entity that owns the unmixed change that are a part of that transaction.
1023
01:08:09.540 --> 01:08:16.094
Right? So so all my all my point is and I and I don't wanna make this a versus thing or anything like that because that's not what what we came here to do,
1024
01:08:16.555 --> 01:08:19.535
is that this was and it still is a good solution.
1025
01:08:20.350 --> 01:08:22.850
But, you know, our our feeling is that the strongest,
1026
01:08:24.110 --> 01:08:29.330
the strongest coin joints have no deterministic links, and these unmixed chains that follow along
1027
01:08:30.034 --> 01:08:30.855
in the transaction
1028
01:08:31.315 --> 01:08:40.929
are on do create certain deterministic links within the coin joint transaction. Now there's plenty of probabilistic links. The Enjoy Market does work. It breaks up,
1029
01:08:41.430 --> 01:08:44.489
and adds probability to the ownership of inputs to outputs.
1030
01:08:45.110 --> 01:08:48.215
But there's certain transactions that are UTXOs that are linked
1031
01:08:49.014 --> 01:08:49.514
mathematically,
1032
01:08:50.375 --> 01:08:50.875
and
1033
01:08:51.494 --> 01:08:57.994
getting rid of all of those actual linked mathematically UTXOs from the actual mix transaction itself is in our opinion,
1034
01:08:58.840 --> 01:09:01.660
you know, needs to be the de facto or should be the de facto.
1035
01:09:02.280 --> 01:09:05.100
Anything after that, like go go oh, sorry. Go ahead.
1036
01:09:05.614 --> 01:09:10.094
No. I I, I agree, and I completely, you know, do respect it. What
1037
01:09:10.735 --> 01:09:19.530
how this kind of structure is being built in and how clean or kind of, you know, straightforward it is, how how kind of the TX 0 creates these
1038
01:09:20.070 --> 01:09:22.650
equal amounts. And then, basically, once they entered
1039
01:09:24.935 --> 01:09:47.015
the virtual mix, once they have been through the first one, then they their amount is just does it just doesn't change completely. So it's not even just equal output as in the joint market, but also a single equal input within within the pool. So that that makes it it makes it just completely kind of formogenic as as as I would see it. It's as you usually,
1040
01:09:48.870 --> 01:10:00.165
when people talk about like chain analysis chain surveillance companies looking at to the airport and, you know, some if they say funds enter into that, they just forget it. There is no probabilities to look for. Whereas
1041
01:10:01.025 --> 01:10:05.445
probably like in your market let's just say there could be some things to try
1042
01:10:05.780 --> 01:10:06.280
and,
1043
01:10:06.740 --> 01:10:08.360
I mean, yes, probabilities
1044
01:10:09.220 --> 01:10:17.215
very low or yes. Could could be there. Yeah. Like metadata, you know, and, you know, you would still have to work to put these things together.
1045
01:10:17.675 --> 01:10:20.094
It's not like it's out there on a dish for you,
1046
01:10:20.715 --> 01:10:25.770
but but it's still there. And and that's again, I'm not, like, I'm not shitting on joint market at all
1047
01:10:26.710 --> 01:10:30.250
because we have to remember, joint market's from 2015. The fundamental
1048
01:10:30.710 --> 01:10:34.495
working on joint market in terms of how it breaks the chain
1049
01:10:35.035 --> 01:10:37.535
hasn't changed since then. It's pretty much the same
1050
01:10:37.995 --> 01:10:38.495
protocol,
1051
01:10:39.675 --> 01:10:41.135
in terms of the chain breaking.
1052
01:10:42.050 --> 01:10:50.390
You know, so I I I think that we have we've learned things since then. And we we certainly have built on the shoulders of giants, you know, in terms of what we've learned,
1053
01:10:51.005 --> 01:10:53.665
as a community and and and and the privacy community.
1054
01:10:54.685 --> 01:11:02.280
Yes. Sure. So it's yes. The the recommendation from and some protocol changes has has has changed since, like, 2015,
1055
01:11:02.580 --> 01:11:03.480
including the,
1056
01:11:03.860 --> 01:11:07.400
you know, that kind of hugely interesting kind of analysis,
1057
01:11:07.865 --> 01:11:10.525
which was the analysis of transactions from 2015,
1058
01:11:11.785 --> 01:11:16.685
regarding this Grinchin case, which, the the kind of samurai
1059
01:11:18.330 --> 01:11:18.830
research,
1060
01:11:19.850 --> 01:11:21.710
or is it is it OTX
1061
01:11:22.090 --> 01:11:25.470
Research? Oh, yeah. Yeah. OTX. Yeah. The grid chain. Yes.
1062
01:11:26.305 --> 01:11:34.725
So, yeah, that was interesting, and then it was, like, a a very good response to and discussion following that as well, like, waxing and, you know, there was a bit of back and forth,
1063
01:11:35.119 --> 01:11:36.900
I think to the to the positive.
1064
01:11:38.639 --> 01:11:39.139
And
1065
01:11:39.440 --> 01:11:44.579
what what did they change since? What jaw market has changed that there is more I mean, in the tumbler,
1066
01:11:45.105 --> 01:11:47.525
So in this waterfall kind of type
1067
01:11:48.945 --> 01:11:49.925
of coin join
1068
01:11:51.985 --> 01:11:53.445
script, which does,
1069
01:11:54.310 --> 01:11:55.530
which is the most efficient
1070
01:11:56.070 --> 01:11:58.890
way of doing it is it does include
1071
01:11:59.830 --> 01:12:06.665
transactions from the start, the first transaction and then a couple more which does not create this exchange at all
1072
01:12:07.364 --> 01:12:08.265
but uses
1073
01:12:08.725 --> 01:12:15.770
uses all UTXOs. So it kind of kind of tries to kind of prevent this this problem. And then that is the same
1074
01:12:16.150 --> 01:12:17.290
kind of recommendation
1075
01:12:17.750 --> 01:12:30.530
when someone uses join market which is obviously, you know, you cannot check people to do this. But to be to act as like a a taker, the initiator of the coin joint transaction, you can do the sweep transactions. When you
1076
01:12:30.910 --> 01:12:37.105
are using the ability to coin joint any amount, you're just going to join all the amount available in that account, and then you are not,
1077
01:12:37.505 --> 01:12:38.965
creating any any exchange.
1078
01:12:39.345 --> 01:12:46.750
And and, again, this is not, like, built into the protocol. This is something which has I mean, not not in the kind of non Tumblr
1079
01:12:47.210 --> 01:12:48.430
protocol, but,
1080
01:12:49.370 --> 01:12:52.350
it's something which any user could do and, you know, it's recommended
1081
01:12:52.785 --> 01:12:56.405
to do, especially during, like, you know, times where you have, like,
1082
01:12:56.785 --> 01:12:58.325
one one set to buy transactions
1083
01:12:59.025 --> 01:13:00.885
and, like, plenty of plenty of liquidity,
1084
01:13:01.345 --> 01:13:05.760
available as well. And, just one other thing I I would I would want I wanted
1085
01:13:07.739 --> 01:13:10.560
to touch on that, you have this so
1086
01:13:10.935 --> 01:13:13.515
so obviously this is this is this is the issue. Right? I mean,
1087
01:13:13.895 --> 01:13:16.375
I'm I'm certain we will we will speak about this that,
1088
01:13:18.534 --> 01:13:19.034
Verpool
1089
01:13:19.335 --> 01:13:19.835
basically
1090
01:13:23.070 --> 01:13:28.850
tries to solve this omniscient problem by just just separating and basically disposing those funds,
1091
01:13:29.255 --> 01:13:32.475
putting them in a in a not to use kind of wallet.
1092
01:13:34.055 --> 01:13:35.675
Not to use part of the wallet,
1093
01:13:36.135 --> 01:13:44.800
which which would be the arm exchange and the which would be tied to all the inputs which have entered entered the in the t x zero.
1094
01:13:45.585 --> 01:13:46.085
And,
1095
01:13:46.705 --> 01:13:48.405
and that's those are the things
1096
01:13:49.265 --> 01:13:50.565
I I really would like to,
1097
01:13:51.105 --> 01:13:55.800
kind of go into and hear hear from you what what we'll do about this.
1098
01:13:57.619 --> 01:14:01.320
But that's another thing which show markets gives you a bit more flexibility
1099
01:14:01.699 --> 01:14:06.755
that you have, like, 5 of these mixed debts by default. I mean, you can even increase them, but,
1100
01:14:07.235 --> 01:14:08.375
this is kind of a
1101
01:14:09.155 --> 01:14:10.695
a good trade off number.
1102
01:14:11.599 --> 01:14:12.099
And
1103
01:14:12.880 --> 01:14:15.440
funds from different sources, you can also just,
1104
01:14:16.559 --> 01:14:25.125
deposit into the into the different accounts freely, like, different new addresses in in different accounts. And that what it means that
1105
01:14:25.665 --> 01:14:34.410
they won't, like, enter into a t x zero just by themselves or just, like, merged when they are entering the t x zero because, obviously, the incentive with
1106
01:14:35.110 --> 01:14:37.130
with Verpool is that the bigger
1107
01:14:37.590 --> 01:14:38.090
amount
1108
01:14:38.470 --> 01:14:38.970
you
1109
01:14:39.325 --> 01:14:40.145
throw in there,
1110
01:14:40.845 --> 01:14:43.425
proportion less fees you are you are,
1111
01:14:45.085 --> 01:14:47.425
paying, which is which is great great
1112
01:14:48.205 --> 01:14:49.105
incentive, but
1113
01:14:49.630 --> 01:14:53.650
people will tend to merge their funds from different sources, I would think,
1114
01:14:54.429 --> 01:14:57.650
unless, you know, obviously being known and then you have, like, you
1115
01:14:58.375 --> 01:15:00.715
being warned about this and the you have
1116
01:15:01.415 --> 01:15:08.139
the idea of this multipart, GTX zeros, and things which are coming. I'm sure that's that's the thing as well. But churn market gives
1117
01:15:08.840 --> 01:15:11.260
this option to kind of, from the start,
1118
01:15:11.639 --> 01:15:14.365
separate. So inside one wallet, you have 5 accounts
1119
01:15:14.685 --> 01:15:17.185
and just separate your different sources to different accounts.
1120
01:15:17.485 --> 01:15:20.865
And that's that's just another unique thing which
1121
01:15:21.325 --> 01:15:22.385
which it can do.
1122
01:15:23.219 --> 01:15:24.280
And, yeah,
1123
01:15:24.739 --> 01:15:32.415
please I mean, please go on, you know, on the comments and, you know, what what what what are you If I could just jump in If I could just jump in real quick here.
1124
01:15:33.455 --> 01:15:40.275
I mean, everything has trade offs. Right? And, JoinMarket and Whirlpool have a lot of similarities, but they're also very different.
1125
01:15:40.640 --> 01:15:43.460
And they've selected very different, trade off balances.
1126
01:15:45.040 --> 01:15:48.980
The main one being that joint market doesn't rely on a centralized coordinator,
1127
01:15:50.705 --> 01:15:52.324
while Samurai Whirlpool does.
1128
01:15:52.864 --> 01:15:55.525
So you do have that issue where you don't have,
1129
01:15:55.985 --> 01:15:58.324
civil resistance against the coordinator itself.
1130
01:15:58.625 --> 01:16:00.005
You also have the issue
1131
01:16:00.390 --> 01:16:00.890
that,
1132
01:16:01.909 --> 01:16:05.370
I think when join market was was initially conceived,
1133
01:16:05.989 --> 01:16:07.290
was this idea that,
1134
01:16:08.245 --> 01:16:10.345
maybe, like, no company could actually,
1135
01:16:11.125 --> 01:16:16.025
in the upcoming regulatory environment, run a known coordinator, you know, run a centralized coordinator.
1136
01:16:16.770 --> 01:16:19.750
Fortunately, that hasn't been the case yet, but it could be in the future.
1137
01:16:20.610 --> 01:16:24.470
And then you have we as as we were talking earlier, is is the main
1138
01:16:25.305 --> 01:16:32.765
the main threat vector that these implementations should be solving for is this idea of civil resistance against an external attacker.
1139
01:16:34.450 --> 01:16:36.550
And JoinMarket accomplishes this,
1140
01:16:37.250 --> 01:16:39.750
by it has a maker taker system,
1141
01:16:40.450 --> 01:16:41.830
where people post liquidity,
1142
01:16:42.525 --> 01:16:46.145
as makers, and they receive a fee for providing that maker liquidity.
1143
01:16:47.805 --> 01:16:53.199
And the taker constructs the transaction. So the taker's basically the coordinator in the transaction.
1144
01:16:54.139 --> 01:16:55.519
And so so the
1145
01:16:55.900 --> 01:16:57.280
the the way that
1146
01:16:57.659 --> 01:16:59.119
civil resistance is
1147
01:16:59.985 --> 01:17:04.645
is is attempted to be achieved there is by going through multiple makers because
1148
01:17:05.025 --> 01:17:11.280
the worry has always been that a maker could be chain surveillance companies, that chain surveillance companies could be running many makers.
1149
01:17:12.460 --> 01:17:12.960
And
1150
01:17:13.820 --> 01:17:24.030
the other thing that has has been added recently or is about to be added is this idea of fidelity bonds, right, where Yep. The makers have to if you're an honest maker,
1151
01:17:24.810 --> 01:17:35.595
it'll cost you less than if you're a civil attacker maker where you you have to run basically multiple makers. So you're gonna end up paying you're gonna end up locking up more Bitcoin. Right?
1152
01:17:36.295 --> 01:17:41.520
Basically. Yeah. Basically, you create a wallet where you where you, like, could provably,
1153
01:17:42.380 --> 01:17:45.040
time lock some funds, let it be, you know,
1154
01:17:45.580 --> 01:17:49.680
a month or even up to a couple of years, and exponentially
1155
01:17:50.215 --> 01:17:51.114
to the
1156
01:17:53.094 --> 01:17:53.594
deposited
1157
01:17:53.974 --> 01:17:59.275
the amount of deposited front funds time to times to time, you will have a higher chance
1158
01:17:59.710 --> 01:18:01.090
to be chosen
1159
01:18:01.550 --> 01:18:07.410
by the takers because the takers would have an incentive, and that will be in the in the kind of protocol
1160
01:18:07.965 --> 01:18:17.920
change as well that, the takers will have the incentive to choose people who have deposited more and more funds. And, you know, that you have if you deposit
1161
01:18:18.220 --> 01:18:18.960
if you
1162
01:18:19.660 --> 01:18:24.160
time lock, not just deposit because that's outside of what you're offering for coin joining.
1163
01:18:25.265 --> 01:18:25.765
If
1164
01:18:26.225 --> 01:18:27.365
if you dip deposit,
1165
01:18:27.905 --> 01:18:29.045
5 times more
1166
01:18:30.705 --> 01:18:33.205
funds, then you will have 25 times more
1167
01:18:34.230 --> 01:18:35.450
chance to get
1168
01:18:36.710 --> 01:18:37.850
to get to be chosen.
1169
01:18:38.310 --> 01:18:41.325
And, you know, this will make it kind of exponentially,
1170
01:18:42.505 --> 01:18:50.770
more expensive to kind of just run multiple accounts, but it would burst burst it much more to just run one account with your with your funds. So this kind of sibling
1171
01:18:51.550 --> 01:18:52.530
would would be,
1172
01:18:53.230 --> 01:18:55.010
you know, would need to,
1173
01:18:55.870 --> 01:18:58.130
lock a lot more funds to
1174
01:18:58.775 --> 01:18:59.275
to
1175
01:18:59.974 --> 01:19:02.155
be a a significant part of the order book.
1176
01:19:02.614 --> 01:19:13.020
So that and that's the idea. It's it's coming with the next release. It's being heavily tested now, and they just about to kind of, being merged and and coming with the next major release,
1177
01:19:13.960 --> 01:19:25.094
the. So it's every anyone wants to have a look or test, it this is a very good time to do it because there is, like, a live discussion and, and and still kind of influx, but almost ready.
1178
01:19:25.830 --> 01:19:30.330
Right. And then so on on the Whirlpool side, the central coordinator centralized coordinator
1179
01:19:30.950 --> 01:19:31.930
allows for,
1180
01:19:32.870 --> 01:19:33.850
first of all,
1181
01:19:34.695 --> 01:19:42.394
you know, a a chain surveillance company is gonna have to pay their Whirlpool fees if they want to try and civil the mixes. They're able to to add this
1182
01:19:42.760 --> 01:19:46.860
this additional sybil resistance that you can't do in a noncentralized fashion.
1183
01:19:47.720 --> 01:19:50.140
It allows for a structured liquidity pool,
1184
01:19:50.905 --> 01:19:55.245
where you have these equal output coin joins that are designed to
1185
01:19:55.625 --> 01:19:56.765
to be as nondeterministic
1186
01:19:57.225 --> 01:19:57.885
as possible.
1187
01:20:01.760 --> 01:20:04.980
And and you have a I I I feel like nondeterministic.
1188
01:20:05.520 --> 01:20:06.420
They are nondeterministic.
1189
01:20:07.120 --> 01:20:08.075
Well, I mean,
1190
01:20:08.555 --> 01:20:09.935
yeah, I guess. They're nondeterministic
1191
01:20:10.395 --> 01:20:11.935
without any external data.
1192
01:20:12.795 --> 01:20:17.295
Correct. They're on chain. But there's external data everywhere. But, yeah, I agree on that.
1193
01:20:17.850 --> 01:20:19.710
Thank you for the correction. And then the
1194
01:20:21.530 --> 01:20:26.510
the the also, the advantage, I would say, of a centralized coordinator, which is kind of a nuanced advantage,
1195
01:20:27.565 --> 01:20:29.025
is that you end up with
1196
01:20:29.485 --> 01:20:31.185
a a a better user experience.
1197
01:20:31.725 --> 01:20:32.445
I feel like it's
1198
01:20:35.330 --> 01:20:38.230
it it not only does it reward
1199
01:20:39.090 --> 01:20:42.070
the service provider that's providing the centralized
1200
01:20:42.375 --> 01:20:46.235
coordination with fees, which goes towards improving the project.
1201
01:20:48.054 --> 01:20:49.675
But it provides a
1202
01:20:51.350 --> 01:20:53.290
the, like, the communication mechanism,
1203
01:20:54.310 --> 01:20:56.810
because you're going to a centralized server,
1204
01:20:57.270 --> 01:21:05.065
via Tor, but you're going to a centralized server is a a smoother communication system rather than going through, like, the modified IRC
1205
01:21:05.445 --> 01:21:05.945
communication
1206
01:21:06.405 --> 01:21:07.705
that join market uses.
1207
01:21:08.739 --> 01:21:14.420
Oh, yeah. Yeah. Of course. It's like, I mean, it's like any any service. Right? A centralized service is generally gonna be
1208
01:21:14.980 --> 01:21:18.119
is offer a better experience than a noncentralized service.
1209
01:21:19.145 --> 01:21:32.020
The the difference with Whirlpool is there's nothing mission critical critical about what the centralized service is doing. So it's not taking custody. It's not taking private keys. It's not reading reading messages. It's just a message passer. It's it's essentially
1210
01:21:33.200 --> 01:21:34.935
the same coordination that
1211
01:21:35.895 --> 01:21:37.995
join market or Saba or anything uses.
1212
01:21:38.695 --> 01:21:39.275
It's just
1213
01:21:39.815 --> 01:21:43.115
a join market is non custodial. I'm sorry. It's it's
1214
01:21:43.680 --> 01:21:46.900
it's a decentralized because it routes via the modified IRC,
1215
01:21:48.960 --> 01:21:50.420
which is itself a
1216
01:21:52.000 --> 01:21:53.380
a decentralized network.
1217
01:21:53.815 --> 01:21:59.115
Yep. But it also comes to rate limiting, which is a lot of That that has its own trade offs.
1218
01:22:00.375 --> 01:22:09.650
And and this is but, honestly it's amazing how how far the joint market has progressed over the years using IRC to coordinate. It's it's very cool.
1219
01:22:10.065 --> 01:22:14.005
It was it was a cool idea and its deployment is very nice to see.
1220
01:22:14.545 --> 01:22:20.719
I we actually think that join market could could make very good use of Soroban for coordination,
1221
01:22:22.699 --> 01:22:27.760
especially in a federated type of model that we're we're kind of considering, but that's that's besides the point.
1222
01:22:29.644 --> 01:22:34.144
And one one clarification I think needs to be made, Matt, and that is that
1223
01:22:34.525 --> 01:22:41.480
it's not our primary objective to to stop civil attacks. That's that's a you know, it's kind of a fundamental to given.
1224
01:22:42.420 --> 01:22:52.525
The coordinator needs to make sure that they're not being civil attacks because the fundamental objective is to make sure the user is obtaining the best possible mix they can they can achieve.
1225
01:22:53.450 --> 01:22:53.950
And
1226
01:22:54.570 --> 01:22:56.750
preventing civil attacks falls under
1227
01:22:57.210 --> 01:22:58.030
that umbrella.
1228
01:22:59.370 --> 01:23:02.275
But the way you described it is correct. Yes.
1229
01:23:03.875 --> 01:23:05.015
They would have to pay
1230
01:23:05.475 --> 01:23:07.415
the coordinator fee to us,
1231
01:23:07.795 --> 01:23:10.534
and that is a method of civil resistance. The second
1232
01:23:10.940 --> 01:23:14.240
second issue is the, concept of structured liquidity,
1233
01:23:15.180 --> 01:23:17.360
meaning that a chain analysis,
1234
01:23:18.060 --> 01:23:18.560
UTXO
1235
01:23:19.175 --> 01:23:20.715
will only be able to poison,
1236
01:23:21.895 --> 01:23:23.355
one mix at a time.
1237
01:23:24.855 --> 01:23:25.835
And that's that's,
1238
01:23:26.190 --> 01:23:28.210
you know, counter to their objectives there.
1239
01:23:28.909 --> 01:23:29.409
And
1240
01:23:30.110 --> 01:23:33.489
any any kind of modified clients or any kind of
1241
01:23:34.815 --> 01:23:39.235
notice that a UTXO might be connected to another UTXO that's coming in
1242
01:23:39.695 --> 01:23:48.900
to the pool as a on a, on a different client, the coordinator will will keep note of that, will keep an eye out on that and automatically blacklist, those UTXOs.
1243
01:23:49.280 --> 01:23:53.060
So, you know, we take our our job as coordinator very, very seriously
1244
01:23:54.445 --> 01:23:56.545
in creating a creating an environment
1245
01:23:57.165 --> 01:23:57.985
that is,
1246
01:23:58.525 --> 01:24:05.850
gonna create the best possible mixes for our users because, fundamentally, what matters the end of the day is the tracks you leave behind on chain.
1247
01:24:06.950 --> 01:24:11.844
And, you know, we need our chain our our mixes on chain to be as strong as possible.
1248
01:24:12.945 --> 01:24:14.485
Yeah. So you can say the civil
1249
01:24:15.265 --> 01:24:21.800
civil resistance is like the question of, preventing the the real time ongoing surveillance.
1250
01:24:22.180 --> 01:24:22.680
Right?
1251
01:24:23.860 --> 01:24:25.160
But what remains
1252
01:24:25.540 --> 01:24:27.640
forever is is the
1253
01:24:28.485 --> 01:24:29.465
track on the chain,
1254
01:24:30.485 --> 01:24:32.585
which can be looked back at any time
1255
01:24:33.364 --> 01:24:35.705
Absolutely. Even 5 years later to
1256
01:24:38.040 --> 01:24:40.620
try to, yeah, track back some events.
1257
01:24:44.575 --> 01:24:52.355
It's it's the difference between an active attacker versus a passive attacker that might come in in 2 years or 3 years or something like that.
1258
01:24:55.150 --> 01:25:02.610
Yeah. Well, real I mean, real real time real time trying to kind of, cheat the system is is much more expensive and much more kind of
1259
01:25:05.535 --> 01:25:06.355
much more energy,
1260
01:25:08.255 --> 01:25:19.780
requirement is needed for that much more work than just, you know, spinning up an algorithm later on, which they are getting better and better, and they will be able to go deeper and deeper into the connections.
1261
01:25:20.835 --> 01:25:25.094
And then, you know, they might find us even more than what they do now
1262
01:25:26.355 --> 01:25:27.815
later on on the chain.
1263
01:25:28.700 --> 01:25:31.440
So, yeah, the mix quality is obviously is a is a
1264
01:25:31.820 --> 01:25:34.880
hugely important aspect and, you know, that it's
1265
01:25:35.340 --> 01:25:37.840
something you might pay you might consider paying
1266
01:25:38.445 --> 01:25:39.344
more as
1267
01:25:44.445 --> 01:25:47.340
well. Yeah. Just to just to roll back just a few,
1268
01:25:48.460 --> 01:25:52.000
conversation point ago, open up, I forgot to get to respond to you.
1269
01:25:53.340 --> 01:26:02.324
I'm happy to hear that the OXT report on the grid chain was useful, for the community, and those changes were made. I wasn't I wasn't aware that those changes had been made.
1270
01:26:03.370 --> 01:26:05.550
And I think that's, you know, a perfect example
1271
01:26:06.250 --> 01:26:06.750
of,
1272
01:26:07.370 --> 01:26:13.435
how, you know, those research reports are supposed to be used, you know, to improve the privacy,
1273
01:26:14.534 --> 01:26:15.915
prospect for the users,
1274
01:26:17.255 --> 01:26:27.500
you know, for the developers of the protocol. You know, not to take it with blind faith, but to explore the findings for themselves and see what they, you know, what they find and if if they need to create a
1275
01:26:28.520 --> 01:26:30.140
a change or a fix or whatever.
1276
01:26:30.735 --> 01:26:41.340
So I'm I'm happy to hear that, and, I'm happy to hear that OXC research was useful on that. Oh, I mean, the discussion was was hugely useful, and and, you know, it was it a stick. I think it it pointed out,
1277
01:26:42.040 --> 01:26:51.085
this toxic recall attack was you know, it's pointed out something which which, you know, people wouldn't have before, so it was kind of a concept which was not known. But just to be clear, the changes
1278
01:26:52.185 --> 01:26:54.605
within the Tumblr protocol and,
1279
01:26:55.545 --> 01:27:02.280
yeah, exactly that was introduced, like, in 2016. So it was shortly after the transactions which have been
1280
01:27:02.580 --> 01:27:09.975
like, you know, it was introduced after the transaction which have been analyzed I understand. Okay. In in in the research. But then,
1281
01:27:10.675 --> 01:27:14.390
there is on Webexchange blog, there is, like, a
1282
01:27:15.090 --> 01:27:23.270
good couple of pages response, not as detailed as the research, but, you know, trying to make Indian points. And there is, like, a good recommendation of usage, which includes
1283
01:27:24.195 --> 01:27:26.535
the recommendation to do this kind of thing, which,
1284
01:27:27.315 --> 01:27:28.135
is to
1285
01:27:29.715 --> 01:27:36.070
alternate the taker and the maker roles. So initiate some coin joints and, and avoid the exchange in
1286
01:27:36.470 --> 01:27:38.090
with, with sweeping
1287
01:27:38.950 --> 01:27:41.530
UTXs and and mix ups occasionally.
1288
01:27:43.145 --> 01:27:43.805
Got it.
1289
01:27:47.625 --> 01:27:50.285
So, I mean, I guess, like, we found ourselves,
1290
01:27:51.270 --> 01:27:53.449
talking CoinJoin implementations here,
1291
01:27:54.150 --> 01:27:56.730
and the trade offs of the different CoinJoin implementations.
1292
01:27:57.510 --> 01:28:00.010
I mean, I guess it it would only make sense
1293
01:28:00.495 --> 01:28:02.675
to jump into Wasabi for a little bit,
1294
01:28:03.295 --> 01:28:04.915
since it is probably
1295
01:28:06.015 --> 01:28:09.475
partially because of my doing as a major Wasabi promoter,
1296
01:28:10.579 --> 01:28:12.840
that has since retracted my endorsement,
1297
01:28:14.260 --> 01:28:18.360
of the tool. I, you know, I I personally think it's a a waste of money and
1298
01:28:19.085 --> 01:28:20.385
is dangerous to users.
1299
01:28:22.765 --> 01:28:30.560
Should we should we jump into the concerns about using Wasabi and and what, I mean, what joint market and and Whirlpool,
1300
01:28:30.940 --> 01:28:33.840
you know, how how they differ from Wasabi in that regard?
1301
01:28:36.195 --> 01:28:37.415
Yeah. Sure. I mean,
1302
01:28:38.435 --> 01:28:41.475
in the same way that we published a OXC report on,
1303
01:28:42.115 --> 01:28:44.455
on joint market and the grid chain case, we published
1304
01:28:45.060 --> 01:28:46.600
about 3 OST reports
1305
01:28:47.540 --> 01:28:48.760
on, Wasabi
1306
01:28:49.460 --> 01:28:49.700
and
1307
01:28:50.420 --> 01:28:51.720
in in great detail.
1308
01:28:52.675 --> 01:28:56.614
And, you know, the the conclusion that we've come to is the same,
1309
01:28:56.995 --> 01:29:01.655
as you, that it's it's not safe for users to use to obtain any reasonable amount of privacy.
1310
01:29:02.809 --> 01:29:03.630
They're fundamentally
1311
01:29:04.489 --> 01:29:05.949
and architecturally flawed,
1312
01:29:06.570 --> 01:29:09.565
and I think they know it, though they won't admit it.
1313
01:29:10.525 --> 01:29:14.625
And they're hoping to to fix the issues in their second version,
1314
01:29:15.885 --> 01:29:17.665
to be determined when that is released.
1315
01:29:19.389 --> 01:29:25.790
You know, as to what the flaws are in particular, you know, I'm not gonna go into great great detail because everything is,
1316
01:29:26.190 --> 01:29:28.290
is freely available. We made everything,
1317
01:29:29.235 --> 01:29:30.295
and published everything
1318
01:29:30.595 --> 01:29:31.095
reproducibly
1319
01:29:31.635 --> 01:29:34.535
so users can can check it out for themselves. But,
1320
01:29:35.475 --> 01:29:37.335
the the major issues again,
1321
01:29:38.930 --> 01:29:43.750
fundamentally are well, I guess you have to start at the most basic level is that there's there's rampant
1322
01:29:44.130 --> 01:29:46.790
address fees on both, on a systemic level
1323
01:29:47.125 --> 01:29:51.785
within the Wasabi client, not a modified client, the Wasabi client.
1324
01:29:53.365 --> 01:29:56.745
It still to this day occurs. We don't they don't explain why,
1325
01:29:57.430 --> 01:30:08.034
You get address for use on both sides of the same mixed transaction. You'll see one address on the input side and the same exact address on the output side. That's absolutely not normal for any,
1326
01:30:08.815 --> 01:30:11.074
anything, but let alone a coin joint transaction.
1327
01:30:12.415 --> 01:30:15.260
To to bigger issues like, again,
1328
01:30:16.840 --> 01:30:24.215
unmixed change following you around creating this peeling chain. Again, not a serious issue by itself as we were discussing earlier, but
1329
01:30:24.835 --> 01:30:25.975
a a piece of metadata
1330
01:30:26.515 --> 01:30:27.175
that is
1331
01:30:27.635 --> 01:30:28.035
used,
1332
01:30:28.675 --> 01:30:30.375
to further undermine
1333
01:30:30.675 --> 01:30:33.095
the quality of these mixes with all the other issues,
1334
01:30:34.870 --> 01:30:37.610
you know, at play in in the Wasabi client.
1335
01:30:40.550 --> 01:30:42.490
Gosh. Where where where else?
1336
01:30:42.805 --> 01:30:45.145
If I could just jump in here, real quick.
1337
01:30:45.765 --> 01:30:51.945
First of all, one of the you know, not only is does it end up in a in a poor quality mix if you,
1338
01:30:52.810 --> 01:30:58.830
have reused addresses with Wasabi, but it also means that the user is paying more because the Wasabi fee structure,
1339
01:30:59.605 --> 01:31:02.025
whilst the the Wasabi implementation
1340
01:31:02.405 --> 01:31:08.425
the the most similar aspect it has to Whirlpool is that it relies on a centrally centralized coordinator that's blinded,
1341
01:31:09.350 --> 01:31:10.570
that runs through Tor.
1342
01:31:11.909 --> 01:31:15.290
The fee structure is completely different. So with the fee structure of Wasabi,
1343
01:31:16.205 --> 01:31:18.785
you're literally paying for the amount of
1344
01:31:20.285 --> 01:31:22.785
perceived other users that are in your mix,
1345
01:31:23.800 --> 01:31:31.340
the the amount of other UTXOs that are in your mix with you, and it scales based on that. So if you have users that are reusing addresses,
1346
01:31:32.195 --> 01:31:35.175
you're not getting any benefit from them participating
1347
01:31:35.554 --> 01:31:36.054
in
1348
01:31:36.355 --> 01:31:40.855
the in the mix, but you are paying Wasabi for them being part of it.
1349
01:31:41.940 --> 01:31:45.160
And one of the main benefits of a centralized coordinator
1350
01:31:46.020 --> 01:31:49.960
is that you do get benefit of them enforcing structural liquidity.
1351
01:31:50.915 --> 01:32:03.880
So the you know, one of the reasons why you'd want to use, a centralized coordinator over something like join market is that they prevent something like that from happening. It it is even though it's blinded, it can completely stop reused addresses from happening,
1352
01:32:05.355 --> 01:32:07.855
but they haven't implemented anything in that regard.
1353
01:32:09.035 --> 01:32:11.935
And it's curious because they do get paid more in that result.
1354
01:32:13.250 --> 01:32:16.150
I think an interesting case for us to talk about, and I have,
1355
01:32:16.929 --> 01:32:21.190
I have a screenshot of it on the screen for anyone watching the video,
1356
01:32:21.695 --> 01:32:24.115
was, the the Twitter, hacker,
1357
01:32:24.655 --> 01:32:31.395
which everyone, you know, news these days. It just goes in one ear or out the other everyone forgets about the Twitter hacker when,
1358
01:32:32.450 --> 01:32:34.630
they got access to the god mode at Twitter
1359
01:32:35.170 --> 01:32:41.350
and was compromising all the different major accounts. I think he even tweeted from Biden's account, before Biden was president.
1360
01:32:43.475 --> 01:32:45.255
So he used Wasabi,
1361
01:32:46.995 --> 01:32:55.400
and what's interesting here is a lot of a lot of talk devolves into user error with Wasabi, this idea that you shouldn't
1362
01:32:58.045 --> 01:32:58.864
you you shouldn't
1363
01:32:59.724 --> 01:33:00.784
obviously combine,
1364
01:33:01.565 --> 01:33:02.945
your unmixed change
1365
01:33:03.485 --> 01:33:03.985
with
1366
01:33:06.160 --> 01:33:07.219
with your mixed,
1367
01:33:07.680 --> 01:33:08.180
UTXOs
1368
01:33:08.560 --> 01:33:09.600
after they go through,
1369
01:33:10.160 --> 01:33:13.219
the mixing process. But in the case of the Wasabi
1370
01:33:14.215 --> 01:33:18.315
hack I mean, the case of the Twitter hacker used Wasabi, he didn't actually combine,
1371
01:33:20.454 --> 01:33:22.474
he didn't combine his unmixed change
1372
01:33:23.230 --> 01:33:25.010
with his post mix.
1373
01:33:25.390 --> 01:33:33.574
What he did was because he didn't remix, and correct me if I'm wrong, and that's what this shows here on the screen, is because he didn't remix and
1374
01:33:34.035 --> 01:33:36.295
the unmixed change went through
1375
01:33:36.915 --> 01:33:40.295
as a as a as a peeling chain and went through with the mix,
1376
01:33:41.429 --> 01:33:45.849
you could do you could do basic math with the unmixed change and his consolidated
1377
01:33:46.230 --> 01:33:50.895
post mix. He only what he did was he consolidated his post mix transactions,
1378
01:33:51.355 --> 01:34:01.580
but he didn't consolidate it with the unmixed change. But if you just did the math, you saw his input go in, and you did the math, and with high probability, those consolidated mix outputs are hits. Right?
1379
01:34:02.520 --> 01:34:06.460
Mhmm. Yeah. I think this I think I did this graphic if I if I remember correctly,
1380
01:34:06.885 --> 01:34:09.145
and your explanation is, spot on.
1381
01:34:10.245 --> 01:34:15.705
This is this is like I said, this is the metadata, right, that follows along the transaction. So that unmixed change,
1382
01:34:16.070 --> 01:34:16.570
2.159
1383
01:34:17.430 --> 01:34:21.850
shouldn't be there. It shouldn't be in a mixed transaction. So this has nothing to do with the user.
1384
01:34:22.230 --> 01:34:23.530
This isn't user error.
1385
01:34:24.815 --> 01:34:27.075
And, you know, in in Whirlpool, we don't allow,
1386
01:34:29.055 --> 01:34:33.770
for more than one UTXO to be in a single mix. So this guy had 3 UTXOs
1387
01:34:34.070 --> 01:34:35.290
here at least,
1388
01:34:35.910 --> 01:34:37.450
in this in this mix.
1389
01:34:38.390 --> 01:34:41.805
That wouldn't happen with Whirlpool. Right? He would have one UTXO in each individual
1390
01:34:45.245 --> 01:34:49.105
mix spend, you know, there's a risk that you could, you know,
1391
01:34:49.640 --> 01:34:51.820
analyze that post mix spend and,
1392
01:34:53.239 --> 01:34:56.620
have some degree of certainty that maybe it came from this initial deposit,
1393
01:34:57.844 --> 01:34:59.784
but not as much as you have here.
1394
01:35:00.405 --> 01:35:11.340
So, you know, that that's it a little bit does come down to the user and their post mix activity, but in the case that we're looking at right here, the user couldn't have done anything different. They just used the protocol as it was designed.
1395
01:35:14.895 --> 01:35:21.395
Yeah. And and from my usage of wasabi, it does warn you if you consol if you try and,
1396
01:35:22.659 --> 01:35:28.040
mix the unmixed chain if you try and combine the unmixed change with your post mix,
1397
01:35:28.500 --> 01:35:33.305
but it doesn't warn you if you consolidate post mix together, I believe.
1398
01:35:35.365 --> 01:35:37.785
Just Yeah. And and and a level of consolidation
1399
01:35:38.085 --> 01:35:51.735
needs to be assumed that, you know, users, you know, is at some point gonna have to consolidate some UTXOs and post mix together to make a spend. Now in a good mix, that shouldn't necessarily matter too much. Right? If you if you're only
1400
01:35:52.195 --> 01:35:59.335
doing a small amount, a subset of your total amount that you've put in, there's not gonna be an amount of correlation analysis
1401
01:36:00.810 --> 01:36:01.550
done there.
1402
01:36:03.369 --> 01:36:10.185
If you're if you're putting in, like, you know, 500 BTC and taking out 500 BTC a couple days later,
1403
01:36:10.645 --> 01:36:18.260
you know, an analyst is gonna look at that and go, well, I can't say for certain, but I'm pretty sure that's the guy. Right? And they're gonna keep an eye on it and wait for more clues.
1404
01:36:19.760 --> 01:36:21.220
You know, so if you're
1405
01:36:22.010 --> 01:36:22.510
but,
1406
01:36:22.845 --> 01:36:25.025
you know, a small amount of consolidation
1407
01:36:25.405 --> 01:36:28.625
shouldn't harm you if the mix quality is is good.
1408
01:36:31.239 --> 01:36:33.980
So so, I mean, part of this comes into play,
1409
01:36:34.440 --> 01:36:38.059
with the Whirlpool implementation is this idea that, first of all,
1410
01:36:38.875 --> 01:36:42.015
something we talk about a lot, in this space is incentives.
1411
01:36:43.915 --> 01:36:46.335
And Whirlpool incentivizes remixing
1412
01:36:46.795 --> 01:36:47.295
because
1413
01:36:47.710 --> 01:36:51.969
you only pay when you enter the liquidity pool. You don't pay for subsequent mixes.
1414
01:36:54.030 --> 01:36:59.005
With Wasabi, you pay for every remix. So and the default is just one
1415
01:36:59.305 --> 01:37:05.325
one mix, basically. The default is an an onset of 50. So if you do one round of 50 or more UTXOs,
1416
01:37:06.630 --> 01:37:08.730
it's just gonna default to a single round.
1417
01:37:09.590 --> 01:37:10.090
So
1418
01:37:10.790 --> 01:37:13.370
you have a couple things there. You have defaults.
1419
01:37:14.265 --> 01:37:15.245
You have incentives.
1420
01:37:16.344 --> 01:37:21.885
And then the third thing is this idea of post mix tools. And and by default with Whirlpool,
1421
01:37:22.185 --> 01:37:23.565
which I think is really cool,
1422
01:37:24.250 --> 01:37:27.550
is that when you make a transaction out of
1423
01:37:28.409 --> 01:37:29.389
the post mix,
1424
01:37:30.329 --> 01:37:32.989
you know, especially a consolidation transaction,
1425
01:37:33.445 --> 01:37:37.145
it will default to something you guys call Stonewall, which is a,
1426
01:37:38.645 --> 01:37:39.385
an imitation,
1427
01:37:41.060 --> 01:37:47.640
2 or more person coin join. This this idea that on chain, it looks like a 2 person coin join, and that is
1428
01:37:50.375 --> 01:37:51.895
that only works because
1429
01:37:52.614 --> 01:37:54.554
that only works as a deception
1430
01:37:54.855 --> 01:37:59.380
because in the wallet, you also have the option of doing something you call Stonewall 2 x
1431
01:37:59.680 --> 01:38:02.980
as opposed to just regular Stonewall, and that's when you actually do
1432
01:38:03.360 --> 01:38:04.580
a person to person,
1433
01:38:05.440 --> 01:38:06.340
coin join,
1434
01:38:06.825 --> 01:38:07.805
as a spend,
1435
01:38:08.825 --> 01:38:12.125
and and that is done without the centralized coordinator. So
1436
01:38:12.505 --> 01:38:17.310
correct me if I'm wrong. Part of the idea is this main trade off that we have with a centralized coordinator,
1437
01:38:19.610 --> 01:38:23.950
where there's no there there's no real civil resistance against the centralized coordinator
1438
01:38:24.490 --> 01:38:25.390
is is
1439
01:38:26.745 --> 01:38:27.485
is mitigated
1440
01:38:28.105 --> 01:38:34.605
because this idea that after you do the post mix, you're able to then do a coin join easily,
1441
01:38:35.360 --> 01:38:43.140
without the coordinator. And even if you do don't do a coin join, the coordinator doesn't know if you did a coin join or not because it looks on chain like it was a coin join. Right?
1442
01:38:43.915 --> 01:38:46.094
Yep. Yeah. You you explained it perfectly.
1443
01:38:46.474 --> 01:38:50.094
It's identical to so you have Stonewall, you have a Stonewall x 2,
1444
01:38:50.954 --> 01:38:51.920
or times 2.
1445
01:38:52.480 --> 01:38:55.620
And that's exactly what it means. It's a Stonewall with an additional participant,
1446
01:38:56.400 --> 01:39:00.660
that looks exactly like Stonewall, and you can't distinguish it on chain or not. And
1447
01:39:01.705 --> 01:39:04.125
it's the a broader concept of
1448
01:39:04.585 --> 01:39:16.090
that once once mixing has been achieved and the the user isn't, you know, it's never finished. The user is in a constant state of remixing for as long as those UTXOs are in the samurai wallet.
1449
01:39:17.375 --> 01:39:19.715
Those UTXOs are available for remixing.
1450
01:39:20.974 --> 01:39:29.210
When it comes time for the inevitable event where the user needs to spend, whether that's to a merchant or to cold storage or to whatever,
1451
01:39:29.590 --> 01:39:33.770
our our our theory is that there needs to be a variety of different tools,
1452
01:39:34.185 --> 01:39:36.125
which we call post mix spend tools.
1453
01:39:36.825 --> 01:39:38.285
And these tools
1454
01:39:38.665 --> 01:39:40.125
will solve different problems.
1455
01:39:42.350 --> 01:39:45.730
One one problem being consolidating too many UTXOs,
1456
01:39:47.070 --> 01:39:48.130
to make a
1457
01:39:48.830 --> 01:39:52.085
a send to, you know, an external third party,
1458
01:39:52.425 --> 01:39:53.165
not yourself.
1459
01:39:53.625 --> 01:39:54.844
And that's what Stonewall,
1460
01:39:55.145 --> 01:39:59.869
Stonewall X2 aims to aims to help. There's still a level of consolidation
1461
01:40:00.170 --> 01:40:02.110
happening, but there's there's,
1462
01:40:02.889 --> 01:40:04.989
what we what's termed as entropy
1463
01:40:05.425 --> 01:40:08.085
associated with that transaction, meaning the number of combinations
1464
01:40:08.705 --> 01:40:10.085
of inputs to outputs
1465
01:40:10.785 --> 01:40:14.165
are are are dramatically more than a normal,
1466
01:40:14.630 --> 01:40:16.809
quote, unquote, simple Bitcoin transaction.
1467
01:40:17.750 --> 01:40:22.730
But that's just one of the tools we have. The other tool we have, of course, is stowaway, and this is useful when you're sending
1468
01:40:23.035 --> 01:40:23.535
to
1469
01:40:25.035 --> 01:40:33.350
someone of 1 who has samurai, so it's a limited pool already. But, 2, when you wanna send to that person and you want that person to be involved
1470
01:40:33.890 --> 01:40:35.750
as a participant in the transaction.
1471
01:40:36.610 --> 01:40:41.590
The the the biggest benefit of this is it looks like a simple transaction on the blockchain,
1472
01:40:42.855 --> 01:40:43.355
and,
1473
01:40:44.455 --> 01:40:46.075
the amount that's been transacted
1474
01:40:46.775 --> 01:40:48.475
isn't visible on the blockchain.
1475
01:40:48.855 --> 01:40:54.780
And, of course, join market users will be familiar with this functionality because I believe it's in the joint market,
1476
01:40:55.239 --> 01:40:57.340
wallet as as, PayJoin.
1477
01:40:57.800 --> 01:41:04.775
Yep. PayJoin. P to p to p. Yeah. It's an Pay to endpoint. So it's it's a different implementation, but it's it's very, very similar,
1478
01:41:05.395 --> 01:41:05.895
functionality.
1479
01:41:07.955 --> 01:41:19.605
Yep. Yes. On the yes. I mean, in in your market, it is like it it it so it has multiple implementations, compatible implementations, including BTCPay, which is, like, the biggest kind
1480
01:41:20.465 --> 01:41:20.965
of
1481
01:41:21.505 --> 01:41:23.925
thing where the which the actual merchants
1482
01:41:24.225 --> 01:41:24.725
use.
1483
01:41:26.930 --> 01:41:32.070
And, obviously, donations and, you know, lots of lots of sites can use
1484
01:41:33.965 --> 01:41:36.224
b d c pay which supports point
1485
01:41:36.525 --> 01:41:37.025
PayJoin.
1486
01:41:37.565 --> 01:41:42.704
Obviously, it needs to run a hot wallet on a server, so there is a bit of a disincent disincentive
1487
01:41:43.085 --> 01:41:46.910
there. And I think there are some mobile wallets which have implemented it, like,
1488
01:41:48.890 --> 01:41:57.685
I yeah. There is, like, a table on Bitcoin Wiki, which is, I think, blue wallet and and maybe the green wallet does it as well, but or or they're just planning.
1489
01:41:58.145 --> 01:41:58.645
But,
1490
01:41:59.505 --> 01:42:09.340
yeah, that's yes. I mean, Postmates tools are like are are just like the tools you you so is like, in joint market, there's no strict separation between,
1491
01:42:10.305 --> 01:42:16.305
CoinJoin tools and Postmates tools. It's a page on a visit that is only when you're sending to someone. But,
1492
01:42:16.865 --> 01:42:18.485
the fact that you are able to
1493
01:42:19.780 --> 01:42:21.240
to, pay with the coin join,
1494
01:42:23.300 --> 01:42:25.880
finding peers in that, you know, encrypted IRC
1495
01:42:26.525 --> 01:42:27.025
chat,
1496
01:42:27.725 --> 01:42:29.025
with with your bot
1497
01:42:29.325 --> 01:42:32.785
is is gives you the ability to to kind of
1498
01:42:33.800 --> 01:42:39.179
go down go go after go after cold storage. And that that's something I'd like to
1499
01:42:39.719 --> 01:42:44.755
what I'd like to ask you about would like to, like, hear more about it. What's your kind of,
1500
01:42:45.795 --> 01:42:47.255
you know, long
1501
01:42:47.715 --> 01:42:49.095
term vision of
1502
01:42:49.475 --> 01:42:52.775
of you know, how how do you imagine that people will
1503
01:42:53.460 --> 01:42:53.960
if
1504
01:42:54.739 --> 01:43:01.480
it picks up I mean, if if the privacy kind of tools usage would pick up and then, you know, we would really
1505
01:43:02.155 --> 01:43:04.255
see every transaction as a coin join.
1506
01:43:04.875 --> 01:43:09.055
Do you think it's do you think that is really possible? Or do you think it is,
1507
01:43:10.320 --> 01:43:13.300
or are you working for the current kind kind of environment
1508
01:43:13.600 --> 01:43:14.739
serving your users
1509
01:43:15.680 --> 01:43:16.180
you
1510
01:43:17.005 --> 01:43:23.265
have at the moment and, you know, making the best out of the circumstances, and it might be very much different in, like, 5 years.
1511
01:43:25.860 --> 01:43:33.945
That's a that's a good question. I I think that when I say make every spend of coins when I'm talking to our users and I'm talking to the people who
1512
01:43:34.405 --> 01:43:34.905
who
1513
01:43:35.605 --> 01:43:40.585
want to use Bitcoin and wanna use it privately for whatever reason. There's a multitude of reasons.
1514
01:43:41.020 --> 01:43:41.760
I'm not necessarily
1515
01:43:42.540 --> 01:43:44.080
talking to the mass market.
1516
01:43:44.620 --> 01:43:49.120
You know, I even if I believe that even if I believe that all, you know,
1517
01:43:50.095 --> 01:43:59.540
spends should be a coin join, then we have the tools to make, you know, quote, unquote all, you know, spends a coin join. I know that it's not you know, it's not gonna be the case.
1518
01:44:00.400 --> 01:44:05.140
But I also know that a lot of transactions are Whirlpool transactions currently
1519
01:44:05.745 --> 01:44:08.165
on on chain. So I think that,
1520
01:44:08.625 --> 01:44:13.205
you know, there is a demand from users, and our users are you know, they grow
1521
01:44:13.610 --> 01:44:14.430
all the time,
1522
01:44:15.130 --> 01:44:17.790
month over month in terms of user base. And
1523
01:44:19.690 --> 01:44:20.910
it costs them
1524
01:44:21.585 --> 01:44:22.085
BTC
1525
01:44:22.465 --> 01:44:27.925
to do this. Right? Like, that's a that's a very clear indicator that
1526
01:44:28.900 --> 01:44:31.160
something we're doing something right there, and
1527
01:44:31.540 --> 01:44:34.200
they want what we're providing there.
1528
01:44:35.460 --> 01:44:39.545
So we're we're we're bullish on in that regard. We're definitely bullish in that regard,
1529
01:44:40.085 --> 01:44:42.505
because that that really is, you know,
1530
01:44:43.285 --> 01:44:45.865
paying like, showing like, voting with your wallet. Right?
1531
01:44:48.270 --> 01:44:53.969
Yeah. So, you know, I no. Not everyone, but whoever needs to hear it, that's basically who.
1532
01:44:56.055 --> 01:44:56.555
Right.
1533
01:44:59.255 --> 01:44:59.755
What
1534
01:45:00.855 --> 01:45:01.175
I
1535
01:45:01.975 --> 01:45:02.475
so
1536
01:45:03.810 --> 01:45:05.410
what I love the most about,
1537
01:45:05.890 --> 01:45:07.590
about using, you know, multiple
1538
01:45:07.890 --> 01:45:08.390
tools
1539
01:45:08.850 --> 01:45:09.970
is that,
1540
01:45:10.690 --> 01:45:21.750
I mean, one thing is the selection of different size of c t x's. I mean, you know, having multiple ports is already a great start. I mean, you know, just point one Bitcoin is is not good. I mean, that's just
1541
01:45:22.150 --> 01:45:25.210
it it it is good, like, when the price was, like, you know,
1542
01:45:26.550 --> 01:45:27.050
3,000
1543
01:45:27.670 --> 01:45:28.570
or, like, even
1544
01:45:29.505 --> 01:45:32.405
even, like, in between that. But but now
1545
01:45:33.345 --> 01:45:35.365
what's point 1 bitcoins? Like, $3,000?
1546
01:45:35.745 --> 01:45:37.765
I mean, you know, what do I do with that?
1547
01:45:39.950 --> 01:45:44.210
It's not useful for too much to to to many kind of applications. So,
1548
01:45:44.510 --> 01:45:45.250
like, having
1549
01:45:46.085 --> 01:45:46.585
multiple
1550
01:45:46.885 --> 01:45:47.385
100,000,
1551
01:45:48.085 --> 01:45:49.305
1,000,000, 5,000,000,000,
1552
01:45:50.325 --> 01:45:53.385
and 50,000,000 is is is very useful,
1553
01:45:53.925 --> 01:45:54.425
but
1554
01:45:55.830 --> 01:45:59.690
I love to have, like, a selection of these. And then also
1555
01:46:00.230 --> 01:46:01.450
what I really
1556
01:46:02.480 --> 01:46:02.980
because
1557
01:46:03.975 --> 01:46:06.475
my kind of view of how spending
1558
01:46:06.855 --> 01:46:08.395
would be and,
1559
01:46:08.775 --> 01:46:16.690
you know, at the same time we are looking at this manpower chart which is like com it's like it's it's it's it is a ghost that way, you know, there are like multiple
1560
01:46:17.309 --> 01:46:20.369
multiple non full blocks coming up in the in the previous
1561
01:46:20.670 --> 01:46:27.954
previous blocks. So in this case, you know, I would like to have every every every spend as a coin join but,
1562
01:46:29.074 --> 01:46:31.735
and every transaction as a coin join but not when,
1563
01:46:32.100 --> 01:46:35.960
you know, the fees are in the multiple 100 sets per byte. And then
1564
01:46:36.340 --> 01:46:36.840
then
1565
01:46:37.460 --> 01:46:39.239
the activity does visibly
1566
01:46:39.675 --> 01:46:42.815
fall down as well as well as in Whirlpool as well as in Joy Market.
1567
01:46:44.395 --> 01:46:44.895
It's
1568
01:46:45.435 --> 01:46:48.575
perceivable that you don't have that many transactions today.
1569
01:46:49.950 --> 01:46:51.010
So then
1570
01:46:51.550 --> 01:46:52.290
it comes
1571
01:46:53.550 --> 01:46:57.170
the time of these scaling tools which is like the main is lightning.
1572
01:46:57.635 --> 01:47:03.415
And also you can do swaps into lightning which do break the chain to,
1573
01:47:04.275 --> 01:47:06.300
to to a good extent as well.
1574
01:47:06.780 --> 01:47:07.280
And
1575
01:47:08.780 --> 01:47:13.679
what my vision is, how I like to feel it most most efficient to
1576
01:47:14.219 --> 01:47:15.040
use Bitcoin
1577
01:47:15.420 --> 01:47:17.704
is have this private UTXOs and
1578
01:47:19.204 --> 01:47:19.704
just
1579
01:47:21.284 --> 01:47:27.440
fund a lightning channel with them and then basically that is the best transaction from which I can fairly
1580
01:47:28.460 --> 01:47:28.960
comfortably
1581
01:47:29.980 --> 01:47:30.880
can spend.
1582
01:47:32.255 --> 01:47:33.855
Because it is it is
1583
01:47:34.335 --> 01:47:41.395
spending with lightning is is quite private. I mean, it has this aspect of the ongoing surveillance. It can be it can be
1584
01:47:43.679 --> 01:47:44.320
done, but,
1585
01:47:44.880 --> 01:47:45.699
quite unlikely.
1586
01:47:46.400 --> 01:47:46.900
And
1587
01:47:47.520 --> 01:47:56.205
it's even less than, you know, the problem with CBR and C coagens and things. So especially if you have, like, just one channel, there is no no way of probing that,
1588
01:47:57.145 --> 01:48:01.409
if if if there are no, like, payments payments are going through the node.
1589
01:48:02.349 --> 01:48:11.875
So what you're doing when you're opening a a lightning channel is basically batching all those transactions that you have done on lightning to those 2 transactions, which is opening and closing.
1590
01:48:12.255 --> 01:48:13.955
And then you can make those
1591
01:48:14.335 --> 01:48:16.755
those the UTXO basically completely
1592
01:48:17.135 --> 01:48:17.635
disappear
1593
01:48:17.980 --> 01:48:20.719
on this second layer when you spend
1594
01:48:21.100 --> 01:48:22.000
all of it
1595
01:48:22.540 --> 01:48:23.840
on on lightning
1596
01:48:24.300 --> 01:48:24.800
or
1597
01:48:25.515 --> 01:48:29.775
and when you close the channel, there is no change. If there is change, then, you know, change
1598
01:48:30.155 --> 01:48:33.034
would belong into CoinJoin again and not,
1599
01:48:33.675 --> 01:48:34.335
you know,
1600
01:48:34.739 --> 01:48:41.560
should not be merged together with, like, especially transactions on that node or with, you know, other kinds of funds.
1601
01:48:42.755 --> 01:48:43.255
So
1602
01:48:43.715 --> 01:48:45.715
that's what I see. And I and I
1603
01:48:46.195 --> 01:48:49.415
to to be the best the best way, and I'm not expecting
1604
01:48:51.380 --> 01:48:54.200
kind of, similar wallet to be able to
1605
01:48:54.580 --> 01:49:00.645
or not to be able to to work on, you know, implementing lightning because just crazy. Like, you know, let's see what what, like, Alex and Waller did. You know?
1606
01:49:01.585 --> 01:49:04.165
They worked on it for, like, a year or more
1607
01:49:06.099 --> 01:49:11.000
and, compared to disregarding any other thing. And they got an implementation, which is I mean,
1608
01:49:11.540 --> 01:49:24.730
I'm sure it's very exciting as a programmer and a developer, but I don't know anyone who actually uses, like, lightning in Electrum. Right? Because it's nowhere near as good as as the dedicated lightning implementation. So it's
1609
01:49:25.190 --> 01:49:27.050
not best to kind of,
1610
01:49:28.150 --> 01:49:29.210
suddenly change
1611
01:49:29.695 --> 01:49:30.995
change your mind and just
1612
01:49:31.615 --> 01:49:35.645
divide all the all the resources you have to to to to move to
1613
01:49:36.980 --> 01:49:45.400
work on something else even if you would know you you would think it's it's useful, but I know your position might be a bit different. But what I like to do
1614
01:49:45.755 --> 01:49:48.415
is to have the freedom to be able to kind of
1615
01:49:49.195 --> 01:49:49.695
sign
1616
01:49:50.235 --> 01:49:53.535
transactions, which then got to be, like, in channels.
1617
01:49:54.080 --> 01:49:54.400
So,
1618
01:49:55.040 --> 01:50:00.020
at the moment, it's somewhere around what you can you can do sign, like, a little transactions, which can be,
1619
01:50:01.815 --> 01:50:02.955
like, it's a couple
1620
01:50:03.575 --> 01:50:08.955
going through a couple of hoops can be generated bits like, you know, Electrum or or like
1621
01:50:09.360 --> 01:50:11.940
even even inspected or, like, involving
1622
01:50:13.280 --> 01:50:14.500
involving sentinel
1623
01:50:15.280 --> 01:50:23.554
and things like that a bit in a in a clunky way. But do you are you planning to, like, fully support the kind of PSBT formats which can be
1624
01:50:23.855 --> 01:50:28.470
then, you know, make it more flexible, and you don't need to support lightning to be able to,
1625
01:50:28.850 --> 01:50:30.690
you know, send the post next to
1626
01:50:31.570 --> 01:50:33.030
straight to a lightning channel.
1627
01:50:34.505 --> 01:50:35.724
Oh, yeah. Yeah. Definitely.
1628
01:50:37.304 --> 01:50:44.360
The SPT support is largely implemented in Samura. It's just not hooked up to any of the, to any UI or anything like that currently.
1629
01:50:45.619 --> 01:50:50.019
But, yeah, we have we have clients for full PSVT support. We we supported it,
1630
01:50:50.659 --> 01:50:53.844
when it was first proposed and started implementing it then.
1631
01:50:54.305 --> 01:50:57.364
We're just a little delayed because it needs it needs to be implemented,
1632
01:50:58.065 --> 01:51:07.200
on the Sentinel side of things as well, And they a proper UI needs to be created because as you stated, it's there's quite a few hoops and it's a little clunky right now.
1633
01:51:08.545 --> 01:51:10.885
But yes. So you a user will definitely be able
1634
01:51:11.505 --> 01:51:13.925
to to process and and create the SPTs.
1635
01:51:15.960 --> 01:51:19.260
That's great. I mean, I I think if I could jump in here real quick,
1636
01:51:20.040 --> 01:51:26.255
I mean, I think we'd all agree that Lightning is a post mix tool just to go back to our earlier conversation. Yeah. 100%.
1637
01:51:27.435 --> 01:51:30.575
Like everything else, it should it's a post mix tool.
1638
01:51:32.395 --> 01:51:32.895
The
1639
01:51:35.520 --> 01:51:39.060
the Open Arms in the beginning also made an interesting point about
1640
01:51:39.600 --> 01:51:50.025
he didn't say it specifically, but he was referring to the fact that Wasabi has this single equal output pool size, which is 0.1 Bitcoin, 10,000,000 sats, which is $35100.
1641
01:51:50.885 --> 01:51:52.090
So, basically,
1642
01:51:53.190 --> 01:51:55.690
you're saying to users, you know, you have to
1643
01:51:55.990 --> 01:51:56.730
have $35100
1644
01:51:57.430 --> 01:51:59.765
in order to use this privacy tool,
1645
01:52:00.485 --> 01:52:04.985
which to me is, like, a incredible nonstarter if you're trying to increase usage.
1646
01:52:06.405 --> 01:52:09.750
And and with these equal output coin joins, whether it's
1647
01:52:10.150 --> 01:52:11.530
Wasabi or Whirlpool,
1648
01:52:12.310 --> 01:52:15.770
you have this issue where you have this equal output, and anything,
1649
01:52:16.710 --> 01:52:20.375
that's left over is this idea of toxic change. Right?
1650
01:52:20.755 --> 01:52:22.855
And Whirlpool has accomplished,
1651
01:52:23.395 --> 01:52:25.815
Whirlpool has attempted to mitigate this fact
1652
01:52:26.150 --> 01:52:28.010
by adding multiple pool sizes.
1653
01:52:28.390 --> 01:52:34.810
So what we see with a lot of users is they might go into the largest pool size. They go into the 50,000,000 sat pool size,
1654
01:52:35.155 --> 01:52:46.450
and then they take their change, and then they go into the the next pool size, the the the 5,000,000 sat pool size. And then they go into the 1,000,000 sat pool size. And then they take the remaining change, and they go into the 100000
1655
01:52:46.830 --> 01:52:47.890
sat pool size.
1656
01:52:48.750 --> 01:52:49.970
And they're left over
1657
01:52:50.350 --> 01:52:52.530
with UTXOs, a bunch of UTXOs,
1658
01:52:53.605 --> 01:52:55.705
that are under a 100000 sets.
1659
01:52:59.844 --> 01:53:01.705
You know, so so
1660
01:53:02.440 --> 01:53:06.780
one of the things that I was really bullish on was this idea of,
1661
01:53:08.440 --> 01:53:13.185
and and the problem is so you could theoretically, in Samura Wallet,
1662
01:53:13.725 --> 01:53:14.785
then take those
1663
01:53:15.965 --> 01:53:18.525
that toxic change that is that that has,
1664
01:53:18.845 --> 01:53:19.905
that that is
1665
01:53:20.800 --> 01:53:29.225
is is linked to whatever source that it originated from, and you can combine that with your other toxic change to go into a larger pool size. But that's obviously,
1666
01:53:30.485 --> 01:53:31.785
bad practice because,
1667
01:53:33.525 --> 01:53:38.770
you you link those transactions together on chain. It's the common input ownership heuristic all over again.
1668
01:53:40.850 --> 01:53:41.350
The,
1669
01:53:44.370 --> 01:53:44.870
so
1670
01:53:45.415 --> 01:53:54.990
one of one of the So rule rule of thumb is just don't do that. But, you know, unless you know what you're doing and you're combining from the same source and all this stuff. The rule of thumb is don't do that.
1671
01:53:55.710 --> 01:54:03.735
Right. It's it's more than rule of thumb. In the wallet itself, when you do it, it says, do you wanna mark this unspendable as toxic change? And, basically,
1672
01:54:04.675 --> 01:54:21.370
the default is to just leave it there. Now you had this there there was this concept being floated around, and I haven't heard much about it since, but this idea of multiparty transaction zeros, where you you go in with a, like, a couple trusted buddies because they can obviously see your transactions that you add,
1673
01:54:22.055 --> 01:54:24.635
and you all go into a new round together
1674
01:54:25.095 --> 01:54:28.795
so that common input ownership heuristic is broken. So no one knows
1675
01:54:30.380 --> 01:54:45.715
if it's if it's 4 people going into a transaction 0 together with their toxic change or if it's one person that's combining toxic change and going into a transaction 0. Is that still something that is on the samurai road map, or has that been discarded as a concept?
1676
01:54:46.255 --> 01:54:52.450
No. No. That's certainly on the road map, but I believe it's been coded, and I believe it's in the testing process. So
1677
01:54:54.770 --> 01:54:55.750
Well, that's awesome.
1678
01:54:56.210 --> 01:55:04.255
Another aspect of the multiple pools is that and I I brought it up earlier to the people watching the video stream, and I'll bring it up one more time.
1679
01:55:06.560 --> 01:55:07.540
Freak Typerboli,
1680
01:55:08.480 --> 01:55:10.020
created this tracking website.
1681
01:55:10.960 --> 01:55:11.780
It's bitcoinkpis.com/privacy,
1682
01:55:15.025 --> 01:55:17.045
And he's tracking, the different,
1683
01:55:18.065 --> 01:55:21.284
activity among the different pool sizes. And one of the aspects
1684
01:55:21.664 --> 01:55:22.885
here is that
1685
01:55:23.620 --> 01:55:28.040
they're they're distinct liquidity pools. So as you add more pool sizes,
1686
01:55:29.300 --> 01:55:31.320
you're really you're breaking up the liquidity
1687
01:55:31.940 --> 01:55:38.205
of the user base. And so you're breaking up the total and onset that the user can achieve in any given pool.
1688
01:55:38.825 --> 01:55:41.485
So I'm curious, like, how much thought is given into
1689
01:55:42.100 --> 01:55:48.100
when you add additional pools? You know, what what size you know, like, what what is your thinking in regard to,
1690
01:55:49.905 --> 01:55:53.845
you know, adding more pool sizes or removing pool sizes, stuff like that?
1691
01:55:54.785 --> 01:55:59.265
Yeah. It's a great question. No. We're very conservative when it comes to adding,
1692
01:56:00.290 --> 01:56:06.950
pools. You theoretically could remove a pool, but it's kinda like one of those things, like, it'd be really a real pain to do it.
1693
01:56:08.085 --> 01:56:11.385
So, you know, I'll we like to take that once a pool's there. It's always there.
1694
01:56:12.085 --> 01:56:13.385
So we wanna be careful,
1695
01:56:13.925 --> 01:56:14.425
when
1696
01:56:14.730 --> 01:56:19.949
when issuing or or launching in pool because it's very easy to do, but we don't wanna fracture liquidity.
1697
01:56:20.730 --> 01:56:24.275
So one of the bare minimum things that we do is make sure
1698
01:56:24.975 --> 01:56:25.475
that
1699
01:56:26.175 --> 01:56:26.675
the
1700
01:56:27.375 --> 01:56:30.115
the the pools that are closest in proximity to the denomination
1701
01:56:30.735 --> 01:56:31.235
are,
1702
01:56:32.175 --> 01:56:32.675
stable
1703
01:56:33.469 --> 01:56:41.170
and are, you know, flowing freely, so to speak. So the when we added the the the newest pool we have is the
1704
01:56:42.094 --> 01:56:42.594
0.001
1705
01:56:43.614 --> 01:56:44.114
pool,
1706
01:56:44.655 --> 01:56:45.155
and
1707
01:56:46.335 --> 01:56:47.554
that was added
1708
01:56:50.960 --> 01:56:52.739
once we once we were comfortable
1709
01:56:53.040 --> 01:56:54.420
with the 0.01
1710
01:56:55.120 --> 01:56:56.580
pool in terms of
1711
01:56:57.040 --> 01:57:01.535
how many mixes it it was getting a day, the average kind of waiting time a premixer,
1712
01:57:02.635 --> 01:57:03.375
could expect.
1713
01:57:03.915 --> 01:57:23.705
And you you you always worry a little bit that it's gonna cannibalize the other pools, but so far we don't see we don't see that because it certainly doesn't harm the non sense because for the most part, users are staying in the pool that they they initially went into with the UTXOs and engaging in free remixing because that's what the incentives kind of align towards.
1714
01:57:26.840 --> 01:57:32.140
So it's about it's about taking away new liquidity liquidity that would have gone to
1715
01:57:32.824 --> 01:57:35.405
the the pool, but now there's another option.
1716
01:57:36.344 --> 01:57:49.360
And that was the that was the primary worry, but so far it hasn't been a, it hasn't been realized. The the zero zero one pool has been very popular and it brings it bring with with brand new users
1717
01:57:49.735 --> 01:57:57.335
who are just totally priced out of Whirlpool to begin with. You know? So it really just opened the doors to to a brand new, user base who
1718
01:57:58.120 --> 01:58:00.540
which is what our goal was with that pool.
1719
01:58:01.480 --> 01:58:11.205
Not that that and that's the same exact reason why we won't open a larger pool yet, which we get we get requests all the time for, like, a 1 Bitcoin pool or even larger.
1720
01:58:12.065 --> 01:58:19.980
But we don't feel that the 0.5 pool has reached that level of of maturity. You know, it's still it's still too unpredictable.
1721
01:58:25.114 --> 01:58:27.114
Appreciate that answer. We so we
1722
01:58:27.755 --> 01:58:28.955
last week, we had,
1723
01:58:29.435 --> 01:58:30.415
Craig Ron
1724
01:58:31.150 --> 01:58:33.490
of Sparrow Wallet, and we had,
1725
01:58:34.030 --> 01:58:39.650
Kita Miner on. And one of the discussions was this idea of integrating Whirlpool into,
1726
01:58:40.495 --> 01:58:41.475
Sparrow Wallet.
1727
01:58:41.935 --> 01:58:44.255
And, I I feel like it's a
1728
01:58:47.270 --> 01:58:53.610
it's it's an under discussed aspect of your aspirations with Whirlpool, this idea that you can easily
1729
01:58:54.285 --> 01:58:58.925
implement Whirlpool into other wallets and provide an incentive for those wallet devs in terms of,
1730
01:59:01.380 --> 01:59:03.720
they get a they get a portion of their users',
1731
01:59:04.260 --> 01:59:05.240
Whirlpool fees.
1732
01:59:06.580 --> 01:59:07.880
You wanted like,
1733
01:59:08.554 --> 01:59:11.695
is is this this this is some is this something that you're actively
1734
01:59:14.395 --> 01:59:22.230
you would like to see, that you you would like to see other wallets implement Whirlpool as well so that they're part of the same liquidity pool as as Samura users?
1735
01:59:22.610 --> 01:59:25.510
Oh, absolutely. Yeah. The I mean, it was it was designed
1736
01:59:25.885 --> 01:59:27.505
like that from the get go.
1737
01:59:27.885 --> 01:59:30.945
It was designed to be to be able to be,
1738
01:59:32.365 --> 01:59:34.065
used by multiple clients, multiple,
1739
01:59:34.685 --> 01:59:35.585
diverse clients,
1740
01:59:37.230 --> 01:59:40.770
if we could get other people to use it. So we're we're very happy to,
1741
01:59:41.550 --> 01:59:44.130
talk with any wallets who wanna implement it.
1742
01:59:44.885 --> 01:59:49.225
It's a great way to bring 1, you know, fantastic privacy to their users,
1743
01:59:50.005 --> 01:59:51.785
to to monetize their wallets.
1744
01:59:52.610 --> 01:59:57.909
Because as you said, the the coordinator fee can be shared between the 2 wallet developers.
1745
02:00:00.745 --> 02:00:01.565
And and
1746
02:00:01.865 --> 02:00:03.885
it's a it's it's a great way
1747
02:00:04.265 --> 02:00:05.165
to diversify
1748
02:00:05.705 --> 02:00:10.940
the liquidity pool of of the Whirlpool for all users. It's, you know, so it's essentially
1749
02:00:11.480 --> 02:00:15.020
like adding a bunch of new dojo only users
1750
02:00:15.495 --> 02:00:19.995
to the Whirlpool coordinator. Right? You can kinda think of it like that because
1751
02:00:20.375 --> 02:00:23.675
the samurai wallet server for non Dojo users
1752
02:00:24.170 --> 02:00:24.989
knows the XPubs
1753
02:00:25.530 --> 02:00:31.070
of those users. The the Whirlpool server doesn't. But since, you know, we operate both servers though they're independent,
1754
02:00:31.815 --> 02:00:37.514
some users are concerned about that. So the mitigation, of course, is to run Dojo. But if you don't run Dojo,
1755
02:00:38.135 --> 02:00:41.034
you, you know, samurai server has your XPub.
1756
02:00:41.780 --> 02:00:47.480
The mitigation in this sense of other wallets implementing Whirlpool is there's a whole new,
1757
02:00:48.340 --> 02:00:49.400
entrance of liquidity
1758
02:00:50.145 --> 02:00:50.645
from
1759
02:00:51.105 --> 02:00:59.780
a and the samurai wallet server has no knowledge of those those those wallets, their balances, their UTXOs, their addresses, or anything about them.
1760
02:01:00.340 --> 02:01:03.639
And the Whirlpool coordinator, of course, doesn't need to know any of that stuff.
1761
02:01:03.940 --> 02:01:06.679
Right? It doesn't need to know wallet history or anything.
1762
02:01:07.675 --> 02:01:11.695
So it's it's it's a really solid benefit for us as coordinator
1763
02:01:11.995 --> 02:01:18.690
to get a divide a a more diverse liquidity pool. There's nice incentive for the external wallet developers,
1764
02:01:20.430 --> 02:01:26.555
and it's an overall win for users. And and even if the wallet developers wanted to like, we're hypercompetitive
1765
02:01:27.015 --> 02:01:28.875
with each other, like, you know, let's say,
1766
02:01:29.175 --> 02:01:38.590
we, know, we were competing for the exact same user and we were we were on desktop as well and, you know, we had a contentious relationship or something like that. They could still build it in,
1767
02:01:39.045 --> 02:01:47.145
and the market could could determine based on the quality of post mix tools, based on all these different aspects of the wallet, but at the core fundamental
1768
02:01:48.170 --> 02:01:53.150
mixing, the user is getting the best in class mixing in both. You know? You you kinda know what I mean there.
1769
02:01:53.610 --> 02:02:01.515
So we're super, you know, interested in anyone reaching out to us, but but, specifically, Frank because it's both it's a Java,
1770
02:02:01.915 --> 02:02:08.710
implementation, and he has a Java wallet. You know, it's kind of a match made in heaven. It'd be a very I think it'd be a very easy implementation.
1771
02:02:10.770 --> 02:02:16.494
Right. Even if even I mean, in in Sparrow, it's different because he doesn't run his own servers.
1772
02:02:16.875 --> 02:02:18.255
By default, it chooses,
1773
02:02:18.715 --> 02:02:24.230
Electrum servers, and I he has a recommended list of, public Electrum Servers that he thinks,
1774
02:02:25.010 --> 02:02:27.270
have good reputations in terms of privacy.
1775
02:02:28.130 --> 02:02:30.295
And you obviously can also use your own node.
1776
02:02:31.255 --> 02:02:32.135
And with with the
1777
02:02:33.015 --> 02:02:38.715
I've repeated this many times on the show, but if you don't use your own node, you're trusting someone else's node,
1778
02:02:39.560 --> 02:02:43.179
with your with your transactions, and and there's a privacy concern.
1779
02:02:44.840 --> 02:02:47.639
If even even if there was a wallet like,
1780
02:02:49.065 --> 02:02:52.525
like Ledger Live, where it's default lite client wallet,
1781
02:02:53.225 --> 02:02:55.085
it helps mitigate that risk
1782
02:02:55.385 --> 02:02:55.885
of
1783
02:02:57.160 --> 02:03:00.700
of of basically a lot of a lot of Samura Lite client users
1784
02:03:01.080 --> 02:03:05.020
all being in a in the pools together because you'd also have
1785
02:03:05.475 --> 02:03:10.855
Ledger Live like client users or you'd have, you know, BlueWallet like client users or whatever.
1786
02:03:11.315 --> 02:03:13.590
Exactly. Yeah. It just creates a very diverse,
1787
02:03:14.630 --> 02:03:20.170
diverse pool. So it's it's great. So, again, that that's the thing about Whirlpool. It's agnostic to how,
1788
02:03:20.630 --> 02:03:22.170
you know, the client derives
1789
02:03:28.395 --> 02:03:38.470
you know, you know, Sparrow can do it one way, and then all these other wallets, maybe one's an SPV wallet. It does it that way. The other wallet, you know, has another type of thing.
1790
02:03:39.135 --> 02:03:42.034
Doesn't matter. They can all tie into Whirlpool. And
1791
02:03:42.494 --> 02:03:47.474
for from the user perspective, their liquidity pool has grown, and it's it they're all from different,
1792
02:03:47.855 --> 02:03:48.355
services.
1793
02:03:48.869 --> 02:03:53.690
Right? And all all the different providers would have to basically collude to reduce the onset,
1794
02:03:54.309 --> 02:03:55.290
behind these things.
1795
02:03:55.965 --> 02:04:04.530
Yeah. Just to to I would like to see that more. Yeah. It it's just it's it's a perfect I think it's perfectly aligned incentives for wallet developers to implement it.
1796
02:04:05.170 --> 02:04:10.389
We think that the the proof is in is in the pudding with in terms of Whirlpool transactions. We think they're proven,
1797
02:04:10.929 --> 02:04:11.670
they're effective,
1798
02:04:12.210 --> 02:04:13.190
they're high entropy.
1799
02:04:14.675 --> 02:04:28.280
We we'll eventually be at the point, we're not there yet, where we can start to increase the number of inputs and outputs. So instead, maybe we'll see a a 7 input, 7 out turn a Whirlpool transaction soon, maybe a 10 in, 10 out. That just increases the number of combinations,
1800
02:04:29.860 --> 02:04:32.360
amount of entropy that are in the transactions. So
1801
02:04:33.135 --> 02:04:35.795
I think it's a bright future and especially as
1802
02:04:36.175 --> 02:04:37.315
more wallet developers
1803
02:04:37.695 --> 02:04:40.675
realize that that this is a solid way to
1804
02:04:41.070 --> 02:04:46.050
to grow their wallet, get support for their wallet, and and provide their users a valuable tool.
1805
02:04:46.430 --> 02:04:50.305
So they can contact us anytime. We'll we'll definitely talk about about implementations.
1806
02:04:51.485 --> 02:04:51.985
Awesome.
1807
02:04:53.325 --> 02:04:55.105
Another another thing we discussed
1808
02:04:55.405 --> 02:04:58.465
on, last week's show was this idea of,
1809
02:04:59.010 --> 02:05:02.550
the BIP 47 payment codes. You call them Pay NIMs.
1810
02:05:04.210 --> 02:05:06.150
They are it's this idea that
1811
02:05:06.515 --> 02:05:09.735
in a in a relatively private way, you can have,
1812
02:05:11.235 --> 02:05:15.150
a static text string that allows you to to send transactions,
1813
02:05:15.770 --> 02:05:16.270
repeatedly,
1814
02:05:17.290 --> 02:05:23.375
whether that's a friend or a business partner or if it's donations. I think a big one is donations. I I mean, obviously,
1815
02:05:24.474 --> 02:05:26.014
this show runs on donations,
1816
02:05:26.474 --> 02:05:33.020
so that that is one reason why I'm focused on it, but it's also because I've I've been doing a lot of work in
1817
02:05:33.480 --> 02:05:36.620
activist circles, and they don't wanna run a BTC pay server.
1818
02:05:37.160 --> 02:05:41.805
They don't wanna they don't wanna run something so heavy in order to have some kind of private,
1819
02:05:42.985 --> 02:05:48.045
donations received to them. You know? They they and and they operate in in situations that have,
1820
02:05:48.840 --> 02:05:50.940
in a lot of ways, way way,
1821
02:05:52.200 --> 02:06:00.325
more dangerous threat models because they have, you know, authoritarian regimes or whatnot that they're working against, and they're they're doing active surveillance against them.
1822
02:06:01.185 --> 02:06:05.890
So I one of the things that Keydominer said, and I had never really considered this,
1823
02:06:07.150 --> 02:06:10.610
is in the the the way the spec works
1824
02:06:11.045 --> 02:06:14.264
is it provide there's a there's way more node overhead,
1825
02:06:15.525 --> 02:06:18.824
on a user's node or even worse, a public node,
1826
02:06:20.330 --> 02:06:21.530
if if you have many,
1827
02:06:23.930 --> 02:06:33.295
if you have many, you know, peers that you're using PayNIMs with, because you have to track the addresses of each individual peer as well to make sure that you received the payment or not.
1828
02:06:33.675 --> 02:06:34.415
I'm curious
1829
02:06:35.840 --> 02:06:38.260
if if this is something that, you know,
1830
02:06:38.800 --> 02:06:40.340
you guys have struggled with,
1831
02:06:41.280 --> 02:06:42.739
you know, in terms of
1832
02:06:43.635 --> 02:06:47.895
paying them usage? Because, I mean, that is you know, you're the only wallet that supports it right now.
1833
02:06:48.515 --> 02:06:52.215
I wouldn't say we've struggled with it. I I know I wouldn't say that it
1834
02:06:53.020 --> 02:06:54.720
that it increases overhead,
1835
02:06:55.180 --> 02:06:56.400
so to speak. I mean,
1836
02:06:56.860 --> 02:07:02.315
maybe in a way it does, but, I mean, any user's Dojo is already handling
1837
02:07:02.695 --> 02:07:03.335
this this,
1838
02:07:04.215 --> 02:07:06.635
this, and they're doing it's doing it, fine.
1839
02:07:08.120 --> 02:07:15.320
The in Dojo language, we use the term loose address. So what the Dojo knows about or the samurai server knows about is,
1840
02:07:16.465 --> 02:07:23.490
what your wallet the the address that your wallet has derived that is unique between your payment code and your counterpart's payment code.
1841
02:07:24.690 --> 02:07:31.990
And that doesn't gets it's because this this address is outside of your XPub space. This isn't associated with an XPub at all. It's completely
1842
02:07:32.635 --> 02:07:33.855
different, model.
1843
02:07:34.555 --> 02:07:39.215
So this would be stored by the Dojo. And when the wallet makes the call to retrieve
1844
02:07:39.730 --> 02:07:42.070
balances and transactions and UTXOs
1845
02:07:42.450 --> 02:07:44.230
from from your Dojo,
1846
02:07:44.530 --> 02:07:46.310
it would ask for your xPubs,
1847
02:07:47.295 --> 02:07:49.875
but also include these loose addresses.
1848
02:07:50.175 --> 02:07:51.875
So the overhead isn't that much.
1849
02:07:52.175 --> 02:07:54.340
It's just some more addresses to keep track of.
1850
02:07:55.300 --> 02:07:59.560
So Dojo is fine and can handle it fine. I think we're serving something like,
1851
02:08:00.989 --> 02:08:01.489
well,
1852
02:08:02.695 --> 02:08:03.195
400,000
1853
02:08:03.735 --> 02:08:05.034
payments right now,
1854
02:08:07.014 --> 02:08:08.954
you know, of varying usage.
1855
02:08:09.660 --> 02:08:10.560
You know, currently,
1856
02:08:11.420 --> 02:08:13.120
I will say that there are
1857
02:08:13.900 --> 02:08:20.415
there are usability challenges within Samurais Wallet for for, traditional payments,
1858
02:08:21.355 --> 02:08:22.574
that we're aware of.
1859
02:08:23.034 --> 02:08:27.935
We we've implemented payment right from the start, so we have version 1 of the spec and we're working on,
1860
02:08:28.460 --> 02:08:31.020
implementing version 3 of the spec, which which,
1861
02:08:32.300 --> 02:08:34.640
takes care a lot of, of a lot of the usability
1862
02:08:36.885 --> 02:08:37.385
challenges
1863
02:08:37.925 --> 02:08:40.025
associated with payments today.
1864
02:08:40.405 --> 02:08:41.465
But, overall,
1865
02:08:42.965 --> 02:08:45.945
no. It's not a it's not a huge challenge to overcome.
1866
02:08:46.460 --> 02:08:52.239
You don't hear from, like, Dojo users saying that their node is struggling from from BIP 47 usage?
1867
02:08:52.860 --> 02:08:58.385
No. No. Not not at all. I mean, the most we'll see is something like my my Dojo
1868
02:08:58.685 --> 02:08:59.745
missed that transaction.
1869
02:09:00.205 --> 02:09:26.450
Right? So they need to rescan and so it can find it again. And It's more of a UX issue. Yeah. Exactly. Or or or something is timed out perhaps in one of the requests from the wallet to the Dojo, and that can just be due to Tor being kind of flaky. It can be it can be a bug in our code that we haven't found yet where that killed the connection. So, you know, it could that could be a number of things. But but as as far as far as string, no. I mean, if you're running like a Ronin node, for example, you have
1870
02:09:26.830 --> 02:09:28.210
pretty phenomenal uptime,
1871
02:09:28.989 --> 02:09:41.730
on pretty pretty modest hardware, You know? So I I think most people with normal pain and activity are are not having any issues at all with with that particular aspect of it. Well, that's great. I mean, for me, the main issue I have,
1872
02:09:42.590 --> 02:09:43.710
with with,
1873
02:09:44.030 --> 02:09:46.210
Pay NIMs is that it's samurai only.
1874
02:09:47.315 --> 02:09:50.935
Obviously, that means that someone who's donating needs to be,
1875
02:09:51.315 --> 02:09:53.640
an Android user that's using samurai wallet.
1876
02:09:54.520 --> 02:09:57.340
In your opinion, why do you think that we haven't seen,
1877
02:09:58.200 --> 02:10:02.700
more BIP 47 adoption? Like, why don't we have PayNIMs in other wallets right now?
1878
02:10:03.705 --> 02:10:06.765
Yeah. I think it it's kind of a tough bit to implement,
1879
02:10:08.025 --> 02:10:12.365
or and it has been that has been true for a long time. There was never any
1880
02:10:13.690 --> 02:10:17.230
complete library support in any of the major languages.
1881
02:10:18.010 --> 02:10:18.989
There there was
1882
02:10:19.530 --> 02:10:28.295
attempts to start and then, you know, the project kind of fizzled out because it was just, like, a lone contributor, but they did they made good progress and hopefully someone pick it up, that kind of thing.
1883
02:10:28.995 --> 02:10:29.495
TDEV
1884
02:10:30.670 --> 02:10:31.890
wrote the early,
1885
02:10:32.350 --> 02:10:34.449
test vectors for the bit,
1886
02:10:35.070 --> 02:10:36.530
replicated the the
1887
02:10:37.150 --> 02:10:38.130
the test vectors.
1888
02:10:38.715 --> 02:10:43.695
So there has been working code, but you would have to go through, you know, the the repo,
1889
02:10:44.235 --> 02:10:48.789
parse the Java, and then convert it to whatever language you're working with.
1890
02:10:49.329 --> 02:10:51.429
So I I think that's there's been,
1891
02:10:51.730 --> 02:11:01.145
you know, a a challenge on the implementation side of things. And and the fact that it it's not a it's, like, again, a straightforward implementation. There's a lot of crypto that's involved,
1892
02:11:02.245 --> 02:11:04.505
you know, so low level crypto,
1893
02:11:05.159 --> 02:11:08.780
especially with version 1 and the notification address and exchanging,
1894
02:11:10.119 --> 02:11:11.900
signatures and all this sort of thing.
1895
02:11:14.215 --> 02:11:15.675
I think that the
1896
02:11:16.055 --> 02:11:18.075
discouragement by the core development,
1897
02:11:19.895 --> 02:11:23.970
or developers of of around the time that the proposal was first introduced.
1898
02:11:24.670 --> 02:11:27.410
Also, kinda, just dampened the enthusiasm
1899
02:11:28.110 --> 02:11:28.930
around it,
1900
02:11:30.975 --> 02:11:40.755
for the exception of us and a few other wallets who went ahead with implementing it, but unfortunately, it's no longer around. They they folded few, you know, couple years after.
1901
02:11:41.250 --> 02:11:43.350
So we're the only wallet that has it currently,
1902
02:11:44.050 --> 02:11:48.950
and, you know, it's just one of the one of those things that hopefully other wallets will realize that their users
1903
02:11:50.325 --> 02:11:56.505
can be really well served by this type of this type of functionality. And it is a perfect use case for donations,
1904
02:11:57.000 --> 02:12:02.860
And it's a perfect use case for Bitcoin businesses who wanna pay their their staff salary on or their payrolls,
1905
02:12:04.525 --> 02:12:13.665
or or or any other, kind of payments like that. So there's a lot of potential. It can be used as an identity system. It can be used in in all sorts of ways,
1906
02:12:14.680 --> 02:12:18.220
and we've only scratched the surface of bit, bit 47.
1907
02:12:19.080 --> 02:12:21.185
So we're looking forward to exploring that further.
1908
02:12:22.145 --> 02:12:23.365
So, I mean, you mentioned,
1909
02:12:23.985 --> 02:12:25.525
the discouragement of usage,
1910
02:12:26.065 --> 02:12:26.565
by,
1911
02:12:28.305 --> 02:12:30.300
Bitcoin core developers at the time.
1912
02:12:30.780 --> 02:12:32.800
If I recall correctly, the main
1913
02:12:33.340 --> 02:12:34.480
concern was,
1914
02:12:35.099 --> 02:12:40.079
chain space usage, that it was inefficient in terms of chain space usage. And if fees go up,
1915
02:12:40.845 --> 02:12:42.705
it would get prohibitively expensive.
1916
02:12:45.565 --> 02:12:46.385
Is that correct?
1917
02:12:46.845 --> 02:12:48.145
That was one of the
1918
02:12:48.980 --> 02:12:53.720
the arguments. It was specifically that there was an opportune transaction required,
1919
02:12:54.340 --> 02:12:58.040
for what is termed in the BIP as the notification transaction.
1920
02:12:58.955 --> 02:13:01.695
This is the on chain transaction that exists
1921
02:13:01.995 --> 02:13:07.055
that allows both both clients to retrieve the payment state or payment data,
1922
02:13:07.679 --> 02:13:13.699
from a monomonic restore. Right? So without the use of a central third party server, they can use a blockchain to restore
1923
02:13:14.000 --> 02:13:16.465
and and get their pain and connection,
1924
02:13:17.245 --> 02:13:17.985
that way.
1925
02:13:19.325 --> 02:13:20.785
I'm not opposed to the blockchain,
1926
02:13:21.565 --> 02:13:28.650
or opportune transaction. I'm opposed to it because it's a UX nightmare. You know, the user first has to initiate this this transaction,
1927
02:13:30.550 --> 02:13:36.215
before then before like, kind of set up their channel, quote, unquote, to send to this person later.
1928
02:13:37.155 --> 02:13:39.335
It's it's a, you know,
1929
02:13:39.715 --> 02:13:42.695
it's it inhibits the use of the feature. So
1930
02:13:43.170 --> 02:13:45.110
I don't think that's a reason to
1931
02:13:45.489 --> 02:13:51.349
discourage use of stealth addresses in Bitcoin. I think that both by and large stealth addresses with the trade also
1932
02:13:51.650 --> 02:13:54.605
are a win either way, and that's what Pay and M's provide.
1933
02:13:55.784 --> 02:13:58.525
But luckily in version 3,
1934
02:13:58.985 --> 02:14:04.739
that whole concept of the notification transaction is dramatically altered and it's gotten away. It's taken away,
1935
02:14:05.360 --> 02:14:17.425
and I I believe Craig went into this already on the last episode, but it's it's a, bare multisig transaction that's replaced and that can be a part of any transaction that the wallet is creating. It can kinda just hop along,
1936
02:14:18.540 --> 02:14:19.840
and and be completely,
1937
02:14:21.340 --> 02:14:25.200
you know, scalable in that sense and not cost the user anything
1938
02:14:25.565 --> 02:14:29.105
other than the just the small amount of added weight to the transaction.
1939
02:14:31.485 --> 02:14:33.985
So, you know, these things solve themselves over time,
1940
02:14:35.030 --> 02:14:38.409
but that was one of the reasons for discouragement was the off return transaction.
1941
02:14:39.110 --> 02:14:40.170
And that was primarily,
1942
02:14:40.949 --> 02:14:41.449
Luke
1943
02:14:42.065 --> 02:14:44.165
junior, I believe. And then,
1944
02:14:44.705 --> 02:14:46.245
Gregory Maxwell had
1945
02:14:46.785 --> 02:14:50.560
a objection to it, but there was a fundamental misunderstanding
1946
02:14:51.020 --> 02:14:51.920
in his objection
1947
02:14:52.300 --> 02:14:53.360
because he conflated
1948
02:14:54.219 --> 02:14:54.719
paynim.is,
1949
02:14:55.980 --> 02:15:03.715
which is a centralized name server that we run where we take a payment code that the wallet on client side generates
1950
02:15:04.440 --> 02:15:11.180
and apply a algorithm to provide a SHA 256 representation in the form of an image,
1951
02:15:11.525 --> 02:15:13.065
There the the robot images
1952
02:15:13.605 --> 02:15:25.270
of that payment code. That's all I can the image it's put the image and the, like, the user readable name. Right? Like, young creature 985 or whatever instead of the long ass string that's the payment the real payment code.
1953
02:15:25.890 --> 02:15:27.670
Right. So but his his criticism
1954
02:15:28.290 --> 02:15:28.790
conflated
1955
02:15:29.235 --> 02:15:31.574
panin.is, which is a centralized database,
1956
02:15:32.114 --> 02:15:33.655
with the requirement
1957
02:15:34.034 --> 02:15:36.855
of the user to use that centralized database,
1958
02:15:37.960 --> 02:15:40.940
to restore and get the the the state of the UTXOs,
1959
02:15:41.320 --> 02:15:48.765
which is ironic because that was the exact thing that Luke Junior was against in the form of the notification transaction, which provides that
1960
02:15:49.225 --> 02:15:50.285
blockchain based
1961
02:15:50.905 --> 02:15:51.405
state.
1962
02:15:51.705 --> 02:15:57.159
So You can restore it from seed, and you can still get everything because it's on it's because it's on it's on the chain.
1963
02:15:57.699 --> 02:16:05.505
Correct. Right. That was the that was the whole idea of this notification transaction. So it was a what was looked at as a necessary evil that would hopefully
1964
02:16:05.885 --> 02:16:06.385
be
1965
02:16:06.765 --> 02:16:14.989
taken care of later on. Right? And lo and behold, later on has occurred, and it has been taken care of. So that's no longer an issue.
1966
02:16:16.090 --> 02:16:19.310
Users for the last few years have had to put up with
1967
02:16:19.615 --> 02:16:22.435
the burden of creating this opportune transaction,
1968
02:16:23.535 --> 02:16:25.155
and paying a little bit more,
1969
02:16:25.935 --> 02:16:39.596
to get stealth addresses. But they still got stealth addresses, and we've never had a complaint from users. They all the the only complaint we've had is that it was a cumbersome process that is it's hard to onboard new users too, and we completely agree.
1970
02:16:40.695 --> 02:16:43.115
So, hopefully, it will be get better soon. Yeah.
1971
02:16:43.460 --> 02:16:46.439
I think I think there is there was just another kind
1972
02:16:47.460 --> 02:16:48.120
of criticism
1973
02:16:48.740 --> 02:16:51.080
I I am aware of, which is
1974
02:16:52.346 --> 02:16:53.005
the practical
1975
02:16:54.266 --> 02:16:58.605
kind of usage or implementation of it that it's it doesn't really matter
1976
02:16:59.360 --> 02:17:01.780
much that we are doing all this computation
1977
02:17:02.880 --> 02:17:09.725
overhead. I mean, there will be, like, some added scanning to the chain and, you know, needing to kind of filter all blocks,
1978
02:17:11.064 --> 02:17:14.125
or or transactions through looking for these kind
1979
02:17:14.745 --> 02:17:15.245
of,
1980
02:17:16.345 --> 02:17:17.885
hidden message messages,
1981
02:17:19.530 --> 02:17:24.670
which wouldn't be in the, like, the block header, so that would be a a deeper kind of parsing of the blocks.
1982
02:17:26.854 --> 02:17:28.715
But on the end, if the user
1983
02:17:29.175 --> 02:17:31.194
takes and just merges
1984
02:17:31.654 --> 02:17:32.954
all the
1985
02:17:33.681 --> 02:17:36.261
outputs which have been received through these payments,
1986
02:17:36.641 --> 02:17:42.261
then, you know, the whole sales and the thing would lose its, kind of main
1987
02:17:44.205 --> 02:17:48.225
purpose. Right? I mean, obviously, this can be discouraged
1988
02:17:49.005 --> 02:17:52.945
and education, etcetera, but that's I think that was another thing which was
1989
02:17:54.270 --> 02:17:55.170
kind of came up
1990
02:17:55.631 --> 02:17:56.450
in the discussion.
1991
02:17:59.070 --> 02:18:07.975
Yeah. Yeah. I I mean, that and and it's all these are valid points of discussion and and exactly what the bid process is for to discuss these things in the open.
1992
02:18:08.595 --> 02:18:15.530
But I think what the what what what hampered the development of bit 47 or at least the excitement amongst wallet developers
1993
02:18:16.070 --> 02:18:18.811
wasn't any of those reasons. It was the label
1994
02:18:19.270 --> 02:18:21.051
that the bit maintainer applied
1995
02:18:21.635 --> 02:18:23.574
that was, quote unquote, unanimously
1996
02:18:23.954 --> 02:18:25.095
discouraged for implementation.
1997
02:18:26.114 --> 02:18:27.255
And I think that
1998
02:18:27.635 --> 02:18:37.550
that was enough to kinda just well, actually, you have to rewind a bit to the era, and this was in the the height or the start of the block size wars and the b cash wars.
1999
02:18:38.065 --> 02:18:40.165
And the author of the bit
2000
02:18:40.785 --> 02:18:52.140
was a big blocker, so he already had that going against him. So there was already prejudice against him for that. And it may sound silly to viewers now, but that's the reality at the time that that he was looked at suspiciously.
2001
02:18:52.600 --> 02:18:53.100
And
2002
02:18:54.346 --> 02:18:56.365
despite the fact that he had a valid proposal,
2003
02:18:58.186 --> 02:18:59.965
it was it was moved to the state.
2004
02:19:02.069 --> 02:19:07.290
Another bit that was unanimously discouraged for implementation, of course, was BIP 39.
2005
02:19:07.670 --> 02:19:10.226
Now luckily, that hasn't had the
2006
02:19:10.605 --> 02:19:14.865
same response. The wallet developers implemented it anyway because it's a fundamentally
2007
02:19:15.245 --> 02:19:15.745
better
2008
02:19:16.525 --> 02:19:17.985
better structure for for
2009
02:19:19.050 --> 02:19:20.109
implementing these manomic,
2010
02:19:20.729 --> 02:19:22.009
words. It's a standardized
2011
02:19:22.649 --> 02:19:26.909
speed backups. The secret Sorry. Yeah. So this is manomic words specifically.
2012
02:19:27.965 --> 02:19:29.985
Your secret word phrase, freaks.
2013
02:19:31.005 --> 02:19:36.065
Yeah. So so that's also by the same, you know, by the same most of the same developers
2014
02:19:37.090 --> 02:19:38.150
applied the label,
2015
02:19:38.770 --> 02:19:40.630
unanimously discouraged for implementation.
2016
02:19:41.090 --> 02:19:46.205
Now I'm you know, I I think that to an extent, the the core developers
2017
02:19:46.745 --> 02:19:53.080
who and the people who reply on these bit threads to form a consensus need to be able to have
2018
02:19:53.400 --> 02:19:56.140
opinions that are that are contrary
2019
02:19:56.440 --> 02:19:57.180
and critical.
2020
02:19:57.480 --> 02:20:04.335
You have to be able to fight it out in the in the comments and get your ideas out there, and ultimately, the market will decide.
2021
02:20:08.380 --> 02:20:22.234
We you know, and that's what was our thinking. Well, we're not gonna wait for an approval from anyone. We're gonna do it because we see the potential there. Now it's just hopefully with version 3, it's more it's gonna be easier to implement for wallet developers. I think maybe there's gonna be more libraries available,
2022
02:20:23.050 --> 02:20:26.351
which just make it 10 times easier for developers to implement.
2023
02:20:26.811 --> 02:20:33.404
And we'll see we'll see other wallets implementing it, and I think that would be fantastic. And and another thing that, you know, we welcome
2024
02:20:33.705 --> 02:20:35.725
anyone to use the pay them dot is,
2025
02:20:36.825 --> 02:20:40.891
database directory if they want to supply payment codes and get back a,
2026
02:20:41.431 --> 02:20:44.090
a bot image and name for their users.
2027
02:20:45.431 --> 02:20:48.705
Those aren't wallet Samari Wallet specific or they have to be.
2028
02:20:49.484 --> 02:20:52.305
That's great. I I mean, I think this is all very insightful.
2029
02:20:52.845 --> 02:20:54.225
To me, personally,
2030
02:20:54.604 --> 02:20:59.050
my biggest concern has been on chain fees, and it's also been my concern with CoinJoin,
2031
02:20:59.670 --> 02:21:00.729
as well because
2032
02:21:01.109 --> 02:21:02.970
if on chain fees go up,
2033
02:21:03.990 --> 02:21:06.010
both become prohibitively expensive,
2034
02:21:06.556 --> 02:21:08.815
which is why for, like, the last 6 months,
2035
02:21:09.195 --> 02:21:10.815
I've been more focused on
2036
02:21:11.275 --> 02:21:15.480
basically that are trying to accomplish a similar case but use lightning,
2037
02:21:16.820 --> 02:21:19.320
you know, such as l l or q send.
2038
02:21:20.740 --> 02:21:21.240
I
2039
02:21:22.555 --> 02:21:28.095
am not a perfect person, and I'm I'm my understanding of Bitcoin continues every day.
2040
02:21:29.350 --> 02:21:34.409
I one of the reasons I love this show is because I learn alongside the freaks, and we all learn together.
2041
02:21:35.430 --> 02:21:41.945
And I have admitted that I have pie on my face right now because as you can see, if you're watching the video stream,
2042
02:21:42.405 --> 02:21:45.145
1 sat per byte is confirming in the next transaction.
2043
02:21:47.045 --> 02:21:47.545
So
2044
02:21:48.439 --> 02:21:50.860
I'm curious on what your viewpoint
2045
02:21:51.640 --> 02:21:52.280
is because,
2046
02:21:53.080 --> 02:21:59.784
OpenOps mentioned it earlier as well, talking about using Lightning as a post mix tool, right, which is idea that even, you know, you use Whirlpool,
2047
02:22:00.165 --> 02:22:02.505
you have, like, a nice 5000000 sat UTXO,
2048
02:22:03.045 --> 02:22:10.170
you put it in a node, and you you use that for spending, and then, you know, after a certain amount of time, you burn it and do a new node,
2049
02:22:10.790 --> 02:22:14.890
to to try and use Lightning as a as a post mix tool that has,
2050
02:22:15.395 --> 02:22:16.615
reduced fee burden.
2051
02:22:17.235 --> 02:22:19.016
I'm curious on your opinion here.
2052
02:22:19.795 --> 02:22:26.550
Do you think that fees will rise over time? Do you think we'll have a sustained high fee environment, or do you think,
2053
02:22:27.010 --> 02:22:28.790
you know, in 2 years, 3 years,
2054
02:22:29.330 --> 02:22:31.750
there'll be periods where you're gonna be able to,
2055
02:22:32.925 --> 02:22:35.745
you know, get one step per byte into the next lock.
2056
02:22:36.925 --> 02:22:37.425
Well,
2057
02:22:37.885 --> 02:22:44.221
fees better rise over time because, I don't know how else the network is gonna be secured once the subsidy runs out.
2058
02:22:45.080 --> 02:22:53.155
The block reward runs out. So, you know, the idea has always been that a fee market, quote, unquote, would be developing or developed by this point.
2059
02:22:54.095 --> 02:22:56.641
We don't we don't see that necessarily now,
2060
02:22:57.020 --> 02:22:58.480
as you as you mentioned.
2061
02:23:00.540 --> 02:23:08.205
But, you know, we didn't expect it. We I think you've you've mentioned that we predicted the kind of a low fee environment for a little while still.
2062
02:23:09.465 --> 02:23:10.605
And that's because
2063
02:23:12.240 --> 02:23:13.700
I think part of it's because
2064
02:23:14.560 --> 02:23:17.700
the de facto layer 2 has become the custodial
2065
02:23:19.625 --> 02:23:22.444
providers like Cash App and Robinhood and
2066
02:23:22.745 --> 02:23:26.125
Grayscale and and and whatnot. These are the
2067
02:23:26.904 --> 02:23:28.765
the true layer 2 of Bitcoin.
2068
02:23:29.899 --> 02:23:33.600
And you're getting a lot of your number your number go up crowd,
2069
02:23:34.460 --> 02:23:35.920
onboarding via these
2070
02:23:36.355 --> 02:23:37.096
these methods,
2071
02:23:37.715 --> 02:23:38.215
and
2072
02:23:39.315 --> 02:23:52.440
that's taking pressure off the main chain. Yeah. I agree a 100% on that. I I think and and that's what's funny about dispatch is we get all into the weeds. Right? But the first step is, like, we need people to fucking take their coins off of these custodial platforms.
2073
02:23:54.245 --> 02:24:02.425
But so so so you agree with me that you you think at least a a healthy Bitcoin is 1 in it that's gonna end up in a sustained
2074
02:24:02.730 --> 02:24:04.351
a sustained high fee environment.
2075
02:24:05.690 --> 02:24:09.695
Well, my understanding of Bitcoin is that it has to ultimately end up in that state.
2076
02:24:10.176 --> 02:24:12.195
You you there has to be a fee environment.
2077
02:24:12.976 --> 02:24:17.395
So miners are incentivized to continue mining when they don't have a a block reward.
2078
02:24:18.495 --> 02:24:21.870
So I, a 100%, agree. So so
2079
02:24:22.569 --> 02:24:24.189
what are your thoughts on,
2080
02:24:24.729 --> 02:24:31.104
you know, CoinJoin usage? Private private Bitcoin usage in general is going to have a higher on chain burden,
2081
02:24:32.604 --> 02:24:39.030
you know, whether that's a pay join or whether that's a Stonewall transaction or whether that's a a Whirlpool transaction
2082
02:24:39.650 --> 02:24:42.950
or whether that's a PayNim transaction. So I'm curious
2083
02:24:43.385 --> 02:24:45.005
Where do you where do you see,
2084
02:24:46.185 --> 02:24:50.045
you know, we're struggling to get to get users? I mean, it's it's
2085
02:24:50.641 --> 02:24:52.020
it's been good to see,
2086
02:24:52.561 --> 02:24:53.780
usage go up,
2087
02:24:54.880 --> 02:24:56.340
of these tools, but
2088
02:24:56.721 --> 02:24:59.940
in a high fee environment, are you concerned at all about
2089
02:25:00.625 --> 02:25:01.125
usage,
2090
02:25:01.585 --> 02:25:09.444
getting limited because it gets just so cost prohibitive? And and if if that's the case, you know, what do you have a strategy, or is the idea just,
2091
02:25:09.910 --> 02:25:14.490
you know, it's it's it's still a little bit off, and and we'll cross that bridge when we cross it?
2092
02:25:15.350 --> 02:25:22.926
Well, I think it's a little bit of both. I mean, you have we've we've sustained pretty high fee environments for for quite a few,
2093
02:25:23.386 --> 02:25:29.210
quite a long time. You know, we were we were around during the Roger Ver block size wars
2094
02:25:29.750 --> 02:25:33.290
where he potentially spanned the network or someone spanned the network for
2095
02:25:33.670 --> 02:25:35.130
a good year and a half,
2096
02:25:36.495 --> 02:25:38.436
if not longer, and created,
2097
02:25:39.055 --> 02:25:47.480
you know, really just awful awful conditions as a pretext for, you know, needing bigger blocks, basically, was the idea behind that.
2098
02:25:48.580 --> 02:25:52.520
And, you know, that's that that was a strain on not only our infrastructure,
2099
02:25:53.445 --> 02:25:54.345
but on users,
2100
02:25:55.285 --> 02:26:00.825
usage, but really not to a huge degree. We expected it to be a bigger drain on usage.
2101
02:26:01.770 --> 02:26:06.189
It was more of a drain on infrastructure. So we've shored up infrastructure. We know we can handle
2102
02:26:06.970 --> 02:26:09.149
sustained periods of of
2103
02:26:09.585 --> 02:26:13.845
blocks in terms of having chains of unconfirmed transactions and,
2104
02:26:14.305 --> 02:26:19.045
transactions dropping from the mempool. Like, we you know, we're experiencing all of these,
2105
02:26:19.859 --> 02:26:21.080
events at this point.
2106
02:26:22.020 --> 02:26:24.040
In terms of becoming too cost prohibitive,
2107
02:26:24.420 --> 02:26:27.000
I, you know, I don't see it happening in the near
2108
02:26:27.784 --> 02:26:34.604
immediate future or the the medium to long term future. I think it's actually a it's gonna become a real problem for Bitcoin,
2109
02:26:35.560 --> 02:26:39.960
that we need to that, you know, as a community, we need to need to look at and discuss,
2110
02:26:40.280 --> 02:26:44.060
as, you know, the layer twos continue to strengthen
2111
02:26:46.074 --> 02:26:49.535
the custodial layer twos that I'm talking about, the PayPal's and whatnot.
2112
02:26:50.555 --> 02:26:51.694
This is gonna be
2113
02:26:52.750 --> 02:26:53.250
exacerbated.
2114
02:26:54.350 --> 02:26:54.850
But,
2115
02:26:55.710 --> 02:26:57.890
you know, second or third to all that,
2116
02:26:58.430 --> 02:27:05.785
we are focused on chain, and that's been our mission statement from day 1. So if if it means that our users are gonna have to,
2117
02:27:06.485 --> 02:27:15.180
you know, at that point in the future, become a different type of user who's more comfortable spending a different amount to be able to interact with the Bitcoin
2118
02:27:15.880 --> 02:27:16.700
main chain,
2119
02:27:17.335 --> 02:27:25.505
I think that will be a success for Bitcoin. That'll be a good as to be in. We'll see if our users are are are willing to do that or if we're willing to,
2120
02:27:27.029 --> 02:27:31.450
attract users who are willing to do that because I think there will always be a market for on chain transactions.
2121
02:27:33.350 --> 02:27:33.850
And,
2122
02:27:35.585 --> 02:27:39.205
yeah, and, you know, that's where our our our primary interest is.
2123
02:27:43.729 --> 02:27:55.285
Yeah. Can I can I just say that I'm and here is, I'm just looking at the the Clark Moses dashboard and it it says that average fee average fees per block is point
2124
02:27:55.665 --> 02:27:56.065
08
2125
02:27:56.625 --> 02:27:57.605
sorry? Point
2126
02:27:59.060 --> 02:28:02.359
38 BTC. So, like, 1 third BTC, and
2127
02:28:02.739 --> 02:28:03.640
average fees
2128
02:28:04.500 --> 02:28:06.555
versus reward is, like, 5.6%.
2129
02:28:07.255 --> 02:28:09.755
So even with this kind of, you know, empty blocks coming,
2130
02:28:11.414 --> 02:28:12.795
you have still, like, 5%
2131
02:28:13.414 --> 02:28:14.234
of the
2132
02:28:14.630 --> 02:28:17.450
block reward is is is coming from the fees.
2133
02:28:18.229 --> 02:28:21.450
So I'm just thinking that, yes,
2134
02:28:22.470 --> 02:28:23.930
I expect more pressure
2135
02:28:24.255 --> 02:28:25.075
on the blocks
2136
02:28:25.935 --> 02:28:31.234
as well, but I can also see that if for like a real fee market, you might
2137
02:28:31.610 --> 02:28:34.590
have periods when you would need smaller blocks. Right?
2138
02:28:35.690 --> 02:28:39.310
But the most important thing is I I don't think that we would change either
2139
02:28:39.770 --> 02:28:40.270
direction.
2140
02:28:41.096 --> 02:28:43.596
They would just, you know, block size just
2141
02:28:43.976 --> 02:28:47.355
just stays as it is. But the purchasing value of Bitcoin
2142
02:28:47.895 --> 02:28:48.395
does
2143
02:28:49.510 --> 02:28:55.130
go up as we know. And if we are talking about, like, you know, halving epochs
2144
02:28:55.590 --> 02:28:57.850
of 4, 8, 12 years,
2145
02:28:58.150 --> 02:29:01.965
then for example, in 12 years, the purchasing value will be likely
2146
02:29:02.585 --> 02:29:03.085
to
2147
02:29:03.545 --> 02:29:04.045
cover
2148
02:29:04.425 --> 02:29:05.485
a quite similar
2149
02:29:07.820 --> 02:29:10.960
block reward in purchasing value as it is now
2150
02:29:11.740 --> 02:29:12.400
of which
2151
02:29:12.915 --> 02:29:14.375
now there is only 5%
2152
02:29:14.835 --> 02:29:17.335
fees are. But we have a 5th you know, 20
2153
02:29:18.035 --> 02:29:25.390
times increase in the purchasing value, then then, you know, how much do you want to spend on security? Like, you know, hardware gets more efficient,
2154
02:29:26.890 --> 02:29:27.390
etcetera.
2155
02:29:29.475 --> 02:29:30.615
It might not be
2156
02:29:32.995 --> 02:29:39.160
that necessary. Right? I mean, we don't know if it if it happened, and we don't know if it is a problem if it isn't,
2157
02:29:39.780 --> 02:29:40.280
right?
2158
02:29:42.980 --> 02:29:46.440
So that means that the on chain privacy tools
2159
02:29:46.976 --> 02:29:48.035
will just remain
2160
02:29:49.136 --> 02:29:54.275
to be used and, you know, they might take up the majority of the of the on chain usage
2161
02:29:54.990 --> 02:29:58.370
at some point because then, you know, you go for layer
2162
02:29:58.830 --> 02:30:00.050
2 for convenience
2163
02:30:00.351 --> 02:30:00.830
as well as
2164
02:30:02.245 --> 02:30:03.545
well, I mean, if
2165
02:30:03.925 --> 02:30:05.865
we've mentioned the
2166
02:30:07.205 --> 02:30:08.905
also need to improve and improving
2167
02:30:09.285 --> 02:30:09.785
privacy
2168
02:30:11.050 --> 02:30:19.975
aspects of lightning, but you also people also use lightning because it's this fast instant settlement and, you know, which you don't have on chain.
2169
02:30:22.935 --> 02:30:23.435
So,
2170
02:30:24.455 --> 02:30:25.435
you know Yeah.
2171
02:30:25.975 --> 02:30:27.170
Go ahead, Matt. Sorry.
2172
02:30:27.650 --> 02:30:29.729
So I'm I mean, Sam, right, we have you here.
2173
02:30:30.530 --> 02:30:31.590
You know, I
2174
02:30:32.689 --> 02:30:36.150
I I tend to agree with OpenOM's premise.
2175
02:30:38.115 --> 02:30:45.520
I have gotten a lot of of shit from the samurai crew for not not the official samurai crew, but,
2176
02:30:46.479 --> 02:30:49.380
the many group chats that I participated in with you guys,
2177
02:30:50.640 --> 02:30:53.060
for my vocalization of my expectation
2178
02:30:53.995 --> 02:30:56.975
that Bitcoin purchasing power will increase with adoption,
2179
02:30:59.274 --> 02:31:02.655
which is the expectation that Open Arms just,
2180
02:31:03.630 --> 02:31:04.770
mentioned. And
2181
02:31:07.630 --> 02:31:11.010
do do you think that is an that is an expectation
2182
02:31:11.385 --> 02:31:13.725
we should not be operating under? Or
2183
02:31:14.185 --> 02:31:21.245
No. I mean, I think on your views. We've seen it in action now for a number of years that it it's it's it's waves. You know?
2184
02:31:21.610 --> 02:31:24.430
So we have adoption waves that correspond to,
2185
02:31:25.610 --> 02:31:27.790
number go up or ramp up in price.
2186
02:31:28.570 --> 02:31:35.535
You'll, of course, lose some of the people that that came on for the ride, but you're all you're always left with a larger group of people.
2187
02:31:36.555 --> 02:31:37.855
That's how it's played out
2188
02:31:38.395 --> 02:31:39.135
so far.
2189
02:31:41.189 --> 02:31:50.284
I don't think I I I think there's a lot of there's a lot of UTXOs out there, from Bitcoin services that do operate on chain, and there's lots of them, you know, that are not publicly
2190
02:31:50.904 --> 02:31:55.085
vocal. They're on Twitter. They're, you know, you don't know about them, but they're out there doing their thing.
2191
02:31:56.860 --> 02:31:59.600
They collect fees. They do however they monetize.
2192
02:32:00.460 --> 02:32:04.720
There's a lot of UTXOs that many would consider close to dust or or
2193
02:32:06.015 --> 02:32:08.436
or, you know, pushing it there and and certainly
2194
02:32:08.895 --> 02:32:12.595
will become a lot more, worth a lot more as the
2195
02:32:13.479 --> 02:32:16.040
the value of Bitcoin increases in terms of,
2196
02:32:16.360 --> 02:32:17.100
US dollar.
2197
02:32:18.520 --> 02:32:21.100
And there's gonna be an incentive to to,
2198
02:32:21.686 --> 02:32:26.266
you know, be able to efficiently move those transactions whether that be to a second layer,
2199
02:32:26.806 --> 02:32:27.545
or not.
2200
02:32:28.245 --> 02:32:32.391
They they need to be moved to that second layer. So it has to be an on chain transaction.
2201
02:32:33.490 --> 02:32:36.471
So I don't I I think that there's still incentive to to
2202
02:32:36.851 --> 02:32:37.750
and there's still,
2203
02:32:38.610 --> 02:32:42.295
innovative things that haven't even occurred yet or even been thought of yet,
2204
02:32:42.915 --> 02:32:45.175
that can occur on the main chain on the base layer.
2205
02:32:48.101 --> 02:32:52.601
And, personally, I mean, I'm not as you know, I'm not very bullish on lightning.
2206
02:32:53.540 --> 02:32:57.475
You know, I think that as it was described by OpenNoms was accurate,
2207
02:32:58.575 --> 02:33:03.235
but I don't necessarily see it as a privacy tool. I see I see it as a bank ready tool,
2208
02:33:04.255 --> 02:33:04.755
and
2209
02:33:05.909 --> 02:33:09.529
I see the majority of usage being via custodial methods.
2210
02:33:10.069 --> 02:33:13.529
And I think that that's only going to increase and grow over time,
2211
02:33:13.875 --> 02:33:16.535
And I don't necessarily necessarily think that
2212
02:33:16.995 --> 02:33:22.615
that should have been the the quote, unquote, blessed scaling solution. I think it was available
2213
02:33:23.400 --> 02:33:28.700
at a time in Bitcoin's history where a scaling solution was drastically needed,
2214
02:33:29.320 --> 02:33:30.540
to counter a narrative.
2215
02:33:31.075 --> 02:33:37.335
I don't necessarily think a scaling well, we can see look at the mempool. A scaling solution wasn't drastically needed.
2216
02:33:38.595 --> 02:33:39.095
But
2217
02:33:39.770 --> 02:33:47.630
Bitcoin the Bitcoin committee took that bait and said, hey. Well, we have lightning in it. This wasn't ready, and no one had really examined the
2218
02:33:48.854 --> 02:33:49.175
the,
2219
02:33:49.895 --> 02:33:57.675
consequences of a system like this, building a system in this way, and the potential for regulatory capture. So I'm I'm just not very bullish on lightning.
2220
02:33:58.181 --> 02:33:59.000
If it succeeds
2221
02:33:59.700 --> 02:34:02.681
and it's primarily done in a noncustodial
2222
02:34:03.061 --> 02:34:05.801
way, I I'll I'll chalk it up as a win for Bitcoin.
2223
02:34:06.784 --> 02:34:08.324
But I I do
2224
02:34:08.705 --> 02:34:14.244
look I do wonder about the potentials that were missed out on in terms of other projects or other layer 2,
2225
02:34:15.490 --> 02:34:16.710
ideas that maybe
2226
02:34:17.170 --> 02:34:20.391
had we had the benefit of time and not being rushed into something
2227
02:34:20.770 --> 02:34:21.750
could have emerged.
2228
02:34:22.765 --> 02:34:28.145
But, you know or, you know, that could always merge in the future still. So, you know, nothing's written and stolen here.
2229
02:34:29.245 --> 02:34:33.110
But I, yeah, I I don't see lightning as that escape route off the,
2230
02:34:33.649 --> 02:34:34.870
from the main chain.
2231
02:34:35.729 --> 02:34:37.990
You know, I see it as a just another
2232
02:34:39.810 --> 02:34:41.990
gonna another swift in the making,
2233
02:34:42.596 --> 02:34:43.096
really.
2234
02:34:52.570 --> 02:34:56.270
Yeah. I mean, I I think me and Open Arms share similar concerns.
2235
02:34:59.104 --> 02:35:04.725
I mean, I don't wanna speak for OpenOMS, but that's one of the reasons why I've been pushing for more sovereign Lightning usage,
2236
02:35:05.585 --> 02:35:07.925
because it it is quite obvious
2237
02:35:08.330 --> 02:35:11.470
that, a significant amount of the usage is either custodial
2238
02:35:12.010 --> 02:35:13.070
or even worse,
2239
02:35:13.450 --> 02:35:14.750
like, regulated custodian.
2240
02:35:16.064 --> 02:35:18.725
Exactly. So that that's really bad on Lightning.
2241
02:35:21.505 --> 02:35:24.725
And so so so far, it is completely permissionless
2242
02:35:25.330 --> 02:35:28.530
and keeps growing in terms of sovereignty. And people just,
2243
02:35:29.090 --> 02:35:31.030
people not even using it from need,
2244
02:35:31.490 --> 02:35:32.790
but it keeps growing
2245
02:35:33.170 --> 02:35:33.910
even without
2246
02:35:34.415 --> 02:35:40.115
the need because how I sell Lightning to people, I mean, you know, why do I run the news? You know? I mean,
2247
02:35:42.095 --> 02:35:43.075
why why should someone
2248
02:35:43.460 --> 02:35:46.200
go on and use lightning is
2249
02:35:46.899 --> 02:35:47.399
basically
2250
02:35:48.100 --> 02:35:49.000
the availability
2251
02:35:49.460 --> 02:35:51.640
of the instant settlement, which is not
2252
02:35:53.556 --> 02:35:54.855
possible in a
2253
02:35:55.556 --> 02:35:59.176
there are only more trusted ways which is possible
2254
02:35:59.795 --> 02:36:00.295
and
2255
02:36:02.061 --> 02:36:05.120
and also the saving on fees. I mean even okay I mean
2256
02:36:05.660 --> 02:36:08.561
if you want to send you know 100 sets around
2257
02:36:09.365 --> 02:36:17.945
you still won't be able to to do it. If you if you if you see if you send, like, you know, 10,000 sets around, you still won't be able to do it on chain efficiently.
2258
02:36:20.340 --> 02:36:23.700
So, again, coming down coming back to, like, the,
2259
02:36:24.260 --> 02:36:24.760
original
2260
02:36:25.220 --> 02:36:30.825
or the where our conversation started that, you know, what kind of communities people would adopt,
2261
02:36:32.405 --> 02:36:32.905
Bitcoin
2262
02:36:33.525 --> 02:36:34.025
faster
2263
02:36:34.726 --> 02:36:35.545
and earlier,
2264
02:36:36.110 --> 02:36:44.610
it is quite likely that we'll be the ones who are who who who won't be the whales, you know, who won't have the that much fiat money available
2265
02:36:45.035 --> 02:36:45.535
that,
2266
02:36:45.915 --> 02:36:46.655
you know,
2267
02:36:47.354 --> 02:36:58.199
they will care about that even the 100 even the 100 satoshis or the 200 500 satoshis they need send on a need to spend on a on an on chain transaction when they are,
2268
02:36:59.779 --> 02:37:00.439
you know,
2269
02:37:01.060 --> 02:37:03.960
sending those minuscule kind of values around.
2270
02:37:05.995 --> 02:37:10.655
So I think it's incredibly important in that sense, and and it and it's
2271
02:37:13.410 --> 02:37:14.930
not everyone can
2272
02:37:15.410 --> 02:37:15.890
and not
2273
02:37:17.650 --> 02:37:23.425
so even we have, like, what, 8,000,000,000 people, even if, like, you know, couple of 1,000,000,000 adopts Bitcoin,
2274
02:37:23.806 --> 02:37:26.465
they won't just get the u t one UTXO
2275
02:37:26.846 --> 02:37:28.450
per, you know, a
2276
02:37:28.989 --> 02:37:32.370
person. They would have a need to be like a family or a village controlling,
2277
02:37:32.830 --> 02:37:35.970
like, a UTXO and how else could it be
2278
02:37:36.346 --> 02:37:38.926
other than other than a layer 2 solution?
2279
02:37:41.705 --> 02:37:43.006
I I agree.
2280
02:37:44.000 --> 02:37:51.700
Open up to that. I I I I've always said that it's we've known from the start that, you know, for Bitcoin to scale to any sort of mass
2281
02:37:52.025 --> 02:37:55.805
mass number of people, there has to be layer 2 or even layer 3 technologies.
2282
02:37:56.985 --> 02:38:00.525
My my point of contention is that I don't necessarily think that lightning,
2283
02:38:01.420 --> 02:38:02.240
you know,
2284
02:38:02.700 --> 02:38:03.439
is that
2285
02:38:03.740 --> 02:38:05.439
the best solution for the job.
2286
02:38:06.140 --> 02:38:11.256
But to reiterate your first point, first thing you said, it's a not, you know, it's a permissionless system and
2287
02:38:11.636 --> 02:38:16.775
absolutely a 100% agree. And I respect anyone who's working on it in that way.
2288
02:38:18.670 --> 02:38:19.490
A 100%.
2289
02:38:20.270 --> 02:38:34.690
We just we just don't see a future with it in in Samurai. But, you know, we don't we don't wish to discourage anyone from working on it or using it. In fact, many of our users use Lightning, and they incorporate Lightning into their post next strategy. So, you know,
2290
02:38:35.091 --> 02:38:40.070
it's it's nothing like like that. The the only thing I'll take issue with what you said,
2291
02:38:40.530 --> 02:38:43.910
and and this is a broader kind of point is but I've made,
2292
02:38:44.355 --> 02:38:47.415
you know, I've made 100 of thousands of transactions,
2293
02:38:48.035 --> 02:38:53.015
like peer to peers transactions to a merchant, you know, for for goods and or services.
2294
02:38:53.660 --> 02:38:54.160
And
2295
02:38:54.620 --> 02:39:02.560
I can't honestly say that I've ever had a single time where I was wishing for the finality of that transaction to be instant.
2296
02:39:02.925 --> 02:39:05.345
You know, I don't really ever remember
2297
02:39:06.125 --> 02:39:10.625
an issue waiting for a few confirmations or 6 confirmations or 12 confirmations.
2298
02:39:12.149 --> 02:39:19.529
If it's an online transaction, even more so. And if it's an in person low value transaction, I've never had a bar or cafe
2299
02:39:20.035 --> 02:39:25.815
ask me to wait around for the transaction to confirm. Just just as just in practice when I've when I've spent,
2300
02:39:26.835 --> 02:39:29.655
over the years since since, 2012.
2301
02:39:31.061 --> 02:39:35.000
So I don't think that that aspect is necessarily important to users.
2302
02:39:35.460 --> 02:39:39.480
I think the aspect of saving on fees is what's important to users.
2303
02:39:40.345 --> 02:39:43.726
But even during the high fee environment that we experienced
2304
02:39:44.105 --> 02:39:47.645
in the earlier parts of the year and and last year,
2305
02:39:47.980 --> 02:39:50.240
we did not really see a large
2306
02:39:50.620 --> 02:39:52.240
increase in lightning transactions,
2307
02:39:53.261 --> 02:39:54.801
you know, inbound into lightning.
2308
02:39:55.365 --> 02:39:59.225
You would've we would've and I expected to see a larger increase.
2309
02:39:59.845 --> 02:40:05.119
So there there's another disconnect there. So we know that users want to save on fees,
2310
02:40:05.659 --> 02:40:07.920
but users on a large scale
2311
02:40:08.859 --> 02:40:17.745
either don't know about Lightning or have determined that Lightning doesn't work for them even if on chain fees are in the 1 to 300 satabyte,
2312
02:40:18.364 --> 02:40:19.345
per byte region.
2313
02:40:19.740 --> 02:40:22.160
So that's a little you know, that requires
2314
02:40:22.620 --> 02:40:23.120
deeper
2315
02:40:23.740 --> 02:40:24.240
introspection,
2316
02:40:24.780 --> 02:40:29.120
I suppose. It's yeah. I I think it has a lagging effect. The the high the
2317
02:40:29.545 --> 02:40:35.885
high fee environment, which we have seen a couple of months ago or, like, in in in for a couple of months, a couple of weeks ago, or
2318
02:40:37.150 --> 02:40:37.650
so,
2319
02:40:38.910 --> 02:40:44.931
so that's not a good time to deploy liquidity to Lightning. Right? So, you know, it didn't grow then because it was
2320
02:40:45.275 --> 02:40:48.016
obviously needing an needing, you know, multiple
2321
02:40:48.395 --> 02:40:51.056
transactions to to kind of, like, build up a node
2322
02:40:51.436 --> 02:40:57.030
to serve others and, you know, things like that would be significant spending then. But now
2323
02:40:57.570 --> 02:41:00.150
after this event, you know, even then the
2324
02:41:00.770 --> 02:41:03.270
the overall interest in, like, Bitcoin is not
2325
02:41:04.485 --> 02:41:06.585
looking to be very high at the moment,
2326
02:41:06.965 --> 02:41:08.585
but the growth
2327
02:41:08.965 --> 02:41:10.345
of the network
2328
02:41:10.726 --> 02:41:13.500
has picked up to a level it wasn't,
2329
02:41:15.000 --> 02:41:20.860
you know, seen before. Like, you know, the the capacity is, like, what, like, 8 18
2330
02:41:22.985 --> 02:41:27.006
100 BTC just now. I'm I'm looking at it with, like, 23%
2331
02:41:27.386 --> 02:41:28.445
growth in the week.
2332
02:41:28.825 --> 02:41:29.565
That is
2333
02:41:30.330 --> 02:41:36.490
that is not, like, you know, the usual number. So it it seems like that now that people have this time to
2334
02:41:38.444 --> 02:41:39.505
they have experienced
2335
02:41:40.444 --> 02:41:44.145
that they had high fees, and now there is a period. Now they can deploy,
2336
02:41:44.765 --> 02:41:49.060
and, you know, open those channels and get ready for the next wave of of,
2337
02:41:50.479 --> 02:41:52.340
you know, peaking usage and
2338
02:41:52.720 --> 02:41:54.500
on of of the on chain,
2339
02:41:55.920 --> 02:41:56.420
space.
2340
02:41:57.285 --> 02:42:05.604
So yeah. I think that's true. I think that's true, but only to a small extent. I think I mean, I think it's a wider I think it's a wider problem that
2341
02:42:06.530 --> 02:42:12.710
I mean, it's it's maybe it's a problem. It depends on your perspective. But I think that Bitcoin users in 2021,
2342
02:42:13.811 --> 02:42:20.895
and it's been true for a long time, just aren't spending on stuff. They don't buy things with Bitcoin and transact in Bitcoin.
2343
02:42:21.355 --> 02:42:23.695
They primarily are buying Bitcoin,
2344
02:42:24.619 --> 02:42:25.359
sending it
2345
02:42:25.899 --> 02:42:30.079
the the best case is sending it to themselves in a cold storage, but
2346
02:42:30.460 --> 02:42:34.045
a lot of them are just buying a lot of them are just buying Bitcoin and storing it on the
2347
02:42:35.165 --> 02:42:38.705
exchange. But there's not a lot of transactional activity occurring,
2348
02:42:39.564 --> 02:42:40.705
I think. And,
2349
02:42:41.140 --> 02:42:44.520
you know, that that that comes from, you know, the the huddle mentality.
2350
02:42:45.140 --> 02:42:46.439
That comes from the
2351
02:42:46.819 --> 02:42:47.319
the
2352
02:42:48.155 --> 02:42:57.056
number go up kind of mentality. But, ultimately, it just comes from the point where that users just don't need to to spend it. Right? They don't see the value in spending it when
2353
02:42:57.660 --> 02:43:09.705
when they can appreciate in value by letting it sit there. Whereas there's there's a whole class of users and a lot of them are samurai users and I would consider myself one of them that require it. We need to spend it because
2354
02:43:10.085 --> 02:43:11.545
we earn it primarily.
2355
02:43:12.085 --> 02:43:23.010
We don't have another method, so spending is is essential. And and we've been doing that for for all these years, and I just think the the available pool of users who wanna interact with Bitcoin in that way,
2356
02:43:23.765 --> 02:43:28.165
has has been has shrink you know, shrunk since all of the new,
2357
02:43:28.565 --> 02:43:29.065
entrants.
2358
02:43:31.391 --> 02:43:32.851
Like, shrunk in in,
2359
02:43:33.551 --> 02:43:34.051
versus
2360
02:43:34.511 --> 02:43:35.170
the overall
2361
02:43:35.551 --> 02:43:41.375
users or the overall Yeah. Yeah. Yeah. Exactly. With with people who have that as their core kind of, you know,
2362
02:43:42.314 --> 02:43:47.774
proposition. Their their their reason for being here, right, is they maybe they're opting out of the system.
2363
02:43:48.190 --> 02:43:49.650
Maybe they require,
2364
02:43:50.510 --> 02:44:04.585
transactional privacy for a transaction that is taboo in their country. Whatever the, you know, whatever the the reasons are. They're they're they're, you know, they're still around, but there's more people who are using it as an investment asset versus
2365
02:44:05.364 --> 02:44:07.225
a transactional asset when
2366
02:44:07.720 --> 02:44:17.975
as far like, in my head, it's both. You know? And I need my my investment asset in the short term just as much as I need it in the long term, So I spend more.
2367
02:44:18.994 --> 02:44:22.935
And I think it's it's kinda based on when you got into Bitcoin, I think,
2368
02:44:23.475 --> 02:44:32.439
that can kinda predict how often you transact with Bitcoin. Like, true transactions. Maybe it's buying web hosting. Maybe it's domain names. What whatever. You know?
2369
02:44:37.185 --> 02:44:42.165
Yes. But, yeah, the same way, I think, the the usage in as a medium of exchange
2370
02:44:42.545 --> 02:44:43.045
would
2371
02:44:43.425 --> 02:44:43.925
make
2372
02:44:44.520 --> 02:44:46.380
lightning usage higher as well
2373
02:44:46.760 --> 02:44:51.900
as, you know, as well as the on chain. So it it it it goes kind of parallel.
2374
02:44:52.325 --> 02:44:53.925
And you do it and as, like,
2375
02:44:54.725 --> 02:44:57.945
watch the comments, like, about the center you said, you know, it's it's not
2376
02:44:59.330 --> 02:45:05.030
it's not efficient to have, like, a high lightning capacity. There is is is you cannot really compare it to,
2377
02:45:06.130 --> 02:45:06.870
for example,
2378
02:45:07.205 --> 02:45:10.585
the the amount of liquidity which is sitting in in in,
2379
02:45:11.685 --> 02:45:15.785
or, like, even offered in joint market, you know, or or what people are,
2380
02:45:17.061 --> 02:45:19.620
you know, holding in their in in their in their,
2381
02:45:20.341 --> 02:45:32.745
cost storage wallets because it's just a very kind of specific use case which you need and it can serve, you know, an unlimited amount of transactions in a in a quite big mesh network already.
2382
02:45:33.359 --> 02:45:33.859
So,
2383
02:45:35.840 --> 02:45:38.420
I hope to see I I hope to see more
2384
02:45:38.800 --> 02:45:40.979
more lightning usage, but it won't necessarily
2385
02:45:41.585 --> 02:45:42.965
will be obvious from
2386
02:45:43.345 --> 02:46:00.675
from looking at the kind of capacity growing. But it will be just obvious from the services and the things you will be able to do with with lightning and on lightning. And even now speaking, you know, with, like, the from, like, DRCs to, like, you know, clear and site filtering on on
2387
02:46:02.975 --> 02:46:10.520
with, like, RGB and, you know, all all these kind of things which are which are made possible with the with the technology with the payment channel channel technology.
2388
02:46:11.620 --> 02:46:13.641
But, that doesn't, you know,
2389
02:46:14.035 --> 02:46:15.975
obviously, that doesn't invalidate the
2390
02:46:17.635 --> 02:46:21.495
the the on chain usage and the and the way that you can be the most private
2391
02:46:22.030 --> 02:46:38.490
with, you know, the coin joints and the posting tools and things like that that you you need to always fall back to that, and that's the foundation to build on. And, you know, I I very much like to see, like, you know, somewhere at wallet continue to con concentrate on it. And, you know, we'll be using on it because it's the right tool for the job.
2392
02:46:39.450 --> 02:46:44.190
Just to jump in here real quick. I mean, I think a lot of this is growing pains on both sides.
2393
02:46:45.050 --> 02:46:47.311
I think it's you know, I'm not saying,
2394
02:46:48.495 --> 02:46:52.515
and I will never say that Lightning is a sure thing and maybe it's the wrong tool.
2395
02:46:54.345 --> 02:46:54.845
But,
2396
02:46:55.891 --> 02:47:03.030
you know, I I think first of all, I think Bitcoin's use as a medium exchange will only go up. It's it's had some bad years recently,
2397
02:47:03.904 --> 02:47:10.645
but I think, like, as as users, as people start realizing, especially with the the decline of cash, start realizing
2398
02:47:11.070 --> 02:47:13.010
the need for censorship resistant payments,
2399
02:47:13.630 --> 02:47:19.945
more people will spend Bitcoin as they realize that need, and they have no other option. You know? Bitcoin is is meant for those payments.
2400
02:47:20.485 --> 02:47:24.105
Unless you earn a 100% Bitcoin, it's meant for those payments you can't make otherwise.
2401
02:47:24.806 --> 02:47:30.460
So I expect that to increase. Also, you know, with Lightning, it's still very early, you know, so I think it'll take some time.
2402
02:47:30.761 --> 02:47:33.775
I think on the privacy side, just one, you know,
2403
02:47:34.335 --> 02:47:39.155
you know, Bitcoin, Lightning has a lot of difficulties in terms of receiving privately,
2404
02:47:39.936 --> 02:47:42.676
which concern me. But on the sending side,
2405
02:47:43.290 --> 02:47:46.189
especially if you're a more technical user and you realize,
2406
02:47:46.729 --> 02:47:51.390
the trade offs that are being made, which is part of the UX hurdle of Lightning as it currently stands,
2407
02:47:52.675 --> 02:48:01.255
and you take certain precautions in terms of, you know, not holding a long standing balance or a long standing node, and you use it basically as a batch spend for post mix.
2408
02:48:02.640 --> 02:48:05.460
My single favorite part about spending via Lightning
2409
02:48:05.840 --> 02:48:07.460
is that there's no change output.
2410
02:48:09.040 --> 02:48:11.220
And because that change output is, like,
2411
02:48:11.935 --> 02:48:19.795
from a UX from a UX side, I mean, we didn't we're so far into here now. I mean, we didn't even talk about, like, coin control or labeling,
2412
02:48:20.150 --> 02:48:23.530
which most wallets don't have. But, like, you spend to
2413
02:48:24.070 --> 02:48:31.685
a a merchant or, even worse, you deposit into a a regulated exchange, and you have that change output. That change output's just sitting there waiting to,
2414
02:48:33.205 --> 02:48:36.665
fuck you privacy wise, but you don't have that with Lightning.
2415
02:48:40.619 --> 02:48:47.965
Yeah. Yeah. The change output is, you know, it's a subject or it's a product of the UTXO architecture, and it's a challenge to be overcome.
2416
02:48:48.825 --> 02:48:49.325
Luckily,
2417
02:48:50.265 --> 02:48:53.705
if if it's, you know, above 0 0 1 BTC, then,
2418
02:48:54.665 --> 02:48:55.725
throw it into Whirlpool.
2419
02:48:56.410 --> 02:49:02.750
Yeah. I mean, samurai samurai is unique in that regard because you have, you know, very good advanced coin control, and you have labeling,
2420
02:49:03.525 --> 02:49:08.665
but most wallets do not. Yeah. No. It's a serious issue. I mean, it's a serious privacy issue with Bitcoin,
2421
02:49:09.285 --> 02:49:13.780
currently. And it's something that, you know, ultimately could be solved in the protocol,
2422
02:49:14.400 --> 02:49:16.660
layer with confidential transactions.
2423
02:49:17.120 --> 02:49:24.034
But let's be honest, that's not gonna happen. There's various reasons for that. So we have to deal with it on the application side. And,
2424
02:49:24.595 --> 02:49:27.875
you know, that's what Samurai does. That's what, Joyn,
2425
02:49:28.515 --> 02:49:29.574
Joyn Market does.
2426
02:49:30.034 --> 02:49:30.534
And
2427
02:49:31.620 --> 02:49:36.280
which is all we can do is continue to make those tools. I, you know, I I don't know that the
2428
02:49:36.900 --> 02:49:39.561
the this this awakening is gonna happen,
2429
02:49:39.945 --> 02:49:43.245
and they're all gonna go on to, like, the layer 2, like lightning.
2430
02:49:43.865 --> 02:49:48.525
I think that lightning is designed for a mass market, and I just I think the reality is the mass market
2431
02:49:49.270 --> 02:49:51.610
rather use something that's easier like Venmo.
2432
02:49:52.070 --> 02:50:02.515
You know? And I I just think it's gonna be it's gonna have the uphill battle unless it finds, like, a real niche and and great use case and that that hasn't been discovered again. Like you said, it's still early, so it still can be discovered.
2433
02:50:03.774 --> 02:50:08.320
That that makes it, like, really, really compelling. I just I don't know. I don't see it growing,
2434
02:50:09.200 --> 02:50:11.780
past a certain, you know, plat plateau.
2435
02:50:13.040 --> 02:50:18.945
And as Opendom said, the only way we can really tell is with the numbers that get released by services,
2436
02:50:19.805 --> 02:50:33.585
like Bitrefill and and others who have implemented Lightning for many years now, and they tend to do that yearly. So I know I mean, last year, it was something like, you know, Dash had more transaction volume in Bitrefill than than Lightning did. You know?
2437
02:50:34.524 --> 02:50:35.824
We'll see if the 2021
2438
02:50:36.125 --> 02:50:38.385
numbers are any different at the end of the year.
2439
02:50:39.165 --> 02:50:45.100
I would expect it goes up a little bit, but nothing dramatic because I don't think the use case is there for Bitcoin.
2440
02:50:46.600 --> 02:50:53.284
And if so if there is that awakening, you better you better hope that all of these tools that we, you know, that we're and
2441
02:50:54.064 --> 02:50:57.765
and join market and the others are prepared, you know, and have done enough,
2442
02:50:58.225 --> 02:50:59.925
in the time that we have had
2443
02:51:02.590 --> 02:51:13.074
because it's gonna they're gonna need the tools and they're not gonna be sophisticated. They're not gonna know about the coin control like you said. They're not gonna know about these things. They're just gonna be looking for solutions to problems.
2444
02:51:14.495 --> 02:51:22.950
Yeah. A 100%. I mean, we have Anthony in the comments. You know, Anthony Ronning, he was also on the show, and he's mentioning that you still have issues with the actual
2445
02:51:24.905 --> 02:51:28.604
open close on chain with lightning. There's a lot of privacy gotchas,
2446
02:51:30.185 --> 02:51:37.270
and we do talk about them a lot on dispatch, and I and I don't wanna diminish that. All things in Bitcoin. Yeah. That's everything in Bitcoin. Privacy gotchas everywhere.
2447
02:51:37.891 --> 02:51:42.790
Exactly. Guys, so, I mean, we're nearing 3 hours. I think this has been a fantastic conversation.
2448
02:51:43.265 --> 02:51:47.845
I really appreciate both of you. I hope the freaks appreciated this conversation. I think they will.
2449
02:51:49.425 --> 02:51:53.450
Do you you guys have anything you want to discuss before we wrap this up?
2450
02:51:57.910 --> 02:52:05.625
I have nothing, nothing to announce or anything like that, but it's been a a great discussion. I was happy to to be here and and great to to
2451
02:52:06.245 --> 02:52:07.705
to chat with you open dogs.
2452
02:52:08.325 --> 02:52:11.305
And, with that, you, Matt, for the first time.
2453
02:52:15.030 --> 02:52:20.891
Yes. Same same with me. It was a it was a really good, really good discussion, and we, you know, covered a lot of things.
2454
02:52:21.645 --> 02:52:21.886
And,
2455
02:52:22.525 --> 02:52:23.745
yes. Thank you.
2456
02:52:24.686 --> 02:52:27.825
It's been an absolute pleasure, guys. I appreciate you.
2457
02:52:29.040 --> 02:52:34.660
Just one more shout out for our guests. That's at samurai wallet on Twitter and at openoms on Twitter.
2458
02:52:36.645 --> 02:52:39.625
To the freaks, I hope you found this conversation useful.
2459
02:52:40.565 --> 02:52:42.105
Privacy is extremely important.
2460
02:52:42.645 --> 02:52:48.601
We expect Bitcoin to be around for a long fucking time. We expect the chain to be around for a long fucking time. Please
2461
02:52:48.980 --> 02:52:50.200
care about your privacy.
2462
02:52:50.900 --> 02:52:58.926
Please start seeking out resources and trying to learn how to use the tools before you absolutely need them because when you need them, it might be too late.
2463
02:53:00.426 --> 02:53:01.565
With this discussion,
2464
02:53:02.190 --> 02:53:05.730
all 3 major coin join implementations have been discussed on
2465
02:53:06.670 --> 02:53:07.570
ciddle dispatch.
2466
02:53:09.070 --> 02:53:11.811
You can go back Wasabi at ciddle dispatch
2467
02:53:14.814 --> 02:53:16.354
15, do your own research,
2468
02:53:16.895 --> 02:53:20.114
look into all this stuff, and just try and advance yourself.
2469
02:53:20.700 --> 02:53:22.479
Thank you, guys. Appreciate you all.
2470
02:53:24.460 --> 02:53:25.200
Thank you.
2471
02:53:25.979 --> 02:53:27.520
Hope to be back again soon.
2472
02:53:28.380 --> 02:53:29.840
Yeah. We're gonna make that happen.
2473
02:53:31.484 --> 02:53:32.785
Cheers, guys. Looking forward.
2474
02:53:35.645 --> 02:53:36.625
You like to sing?
2475
02:53:38.790 --> 02:53:40.569
It's all right. I can't hear you.
2476
02:53:43.590 --> 02:53:45.050
Is our latest record?
2477
02:53:49.525 --> 02:53:52.905
Or our latest electronic noise depending on whose side you're on.
2478
02:53:54.740 --> 02:53:59.560
Anyhow, we'd like to carry on with it. It's the last number. We'd like to thank you all for being so wonderful.
2479
02:54:00.980 --> 02:54:02.680
And it's called Help.
2480
02:54:03.176 --> 02:54:05.195
1, 2, 3, 4. Help.
2481
02:54:07.655 --> 02:54:08.716
Not just anybody.
2482
02:54:10.056 --> 02:54:11.115
You know, I need
2483
02:56:34.729 --> 02:56:39.790
Cheers, freaks. I hope you enjoyed that conversation. Love you all. See you on rabbit hole recap on Thursday.
2484
02:56:40.165 --> 02:56:41.145
Stay on bone
2485
02:56:44.325 --> 02:56:44.330
stack.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:11:15 PM
Duration: 10604.33
Channels: 1
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2
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Do you do we need to see that threat abate in order for for Bitcoin to
3
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emerge from what some people are already calling its next winter?
4
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5
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feet. It was roughly 8,000 last July.
6
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It's in the mid thirties today. If we didn't have that blow off top, I think people would have been very happy
7
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with Bitcoin's trajectory.
8
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But I think the point that you're making is that, yes, China put a hurt on Bitcoin,
9
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but long term, I think that's very positive. Because remember, everybody's worried about Bitcoin's effect on the environment. We just learned from the Bitcoin Mining Council
10
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that Bitcoin mining is now 56%
11
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renewable
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with China out of the picture and all those coal fired electric
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plants in in China, Melissa, out of the picture,
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that ratio is gonna continue to increase. And when you see things like what's going on in El Salvador and the continued expansion of Wall Street
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firms adopting
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Bitcoin and other funds, like Ethereum we just launched an Ethereum fund as an example
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July 1st. I'm long term positive
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on what China is doing. China getting out of the way, I think, will be a long term positive for Bitcoin.
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20
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1st Bitcoin Monday ever. Usually, we do join you on Tuesdays.
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I I appreciate all of you who are joining us today instead.
22
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We had to move some scheduling around to make this very important conversation happen. It's a conversation that I'm looking forward to.
23
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This is CIL dispatch episode 30, the interactive live show about Bitcoin distributed systems privacy and open source software.
24
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I just wanna do a quick shout out as I always do to the rider dive freaks who join us,
25
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every week in the chat, in the live chat, and make this show what it is.
26
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It's a very special experience having such an active
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audience that it that are just always participating
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and helping
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move this, you know, Bitcoin education forward. This show would not be the same without you guys.
30
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I also want to thank all of the Freak's
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who constantly support this show,
32
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with their stats.
33
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I wanna keep this show
34
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completely audience supported,
35
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with no ads and no sponsors. I think it aligns incentives the best,
36
00:03:02.900 --> 00:03:08.364
and I can't do that without your support, so I do appreciate that. The easiest way you can support the show
37
00:03:08.665 --> 00:03:10.924
is via podcasting 2 point o.
38
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You can look up different podcast apps that support that. That's new podcast apps.com,
39
00:03:15.944 --> 00:03:26.265
and you can stream sats directly to the show as you're listening. It's pretty cool. As I I see the day after I post it, I just see sats start coming into my wallet, just streaming in as people are listening.
40
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It's really fucking powerful.
41
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You can also support the show
42
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if you're watching the video stream through the l n URL
43
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QR code on the bottom left hand screen bottom left of your screen,
44
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or going to sidle dispatch.com,
45
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you can support via tippin.me,
46
00:03:41.815 --> 00:03:45.275
if you prefer lightning, or you can support with the samurai pay name.
47
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My pay name is young poetry 985. I'm pretty proud of that randomly generated,
48
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pay name. It's like 1 of 6 I have, and this is the one I like the best.
49
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So with all that said, I do appreciate all you freaks.
50
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We have a very important conversation today.
51
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We have Samir at Wallet joining us,
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someone who I've been trying to have a conversation with publicly for a while. We were kind of waiting
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for him and his cofounder,
54
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T Dev to to rip 1 in person.
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And we're still gonna do that, but, it's such an important conversation that I I I think,
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it needn't wait. So we're so we're here to have it, and I'm I'm very appreciative to have him here. How's it going, Samirai?
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makes it obvious, he is the cofounder of Samura Wallet,
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the the best Bitcoin privacy wallet that exists today,
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in my opinion. Thank you. Thank you for all the love, Matt. We also have I'm a user,
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and I I love your wallet.
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We also have Open Arms joining us. Open Arms is a constant return guest.
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Very big in the Bitcoin privacy scene. He's someone I respect a ton,
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very close friend.
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So I'm very happy to have him here for this conversation.
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How's it going, Open Arms?
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69
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Yeah. I'm I'm myself, as you can see my profile picture in there I am a pain in
70
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from the beginning. I've been joining Bitcoin Twitter, you know,
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and I'm a user of some of my words. I do share the opinion that it is absolutely the best on mobile,
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and it is,
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you know, absolutely
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best for the use case for the and the UX for CoinJoin is just, you know, you cannot really
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do better at the moment.
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77
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78
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when you're not speaking.
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I think you realize that on your own, but just double checking.
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The
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so this is kind of a follow-up conversation to, well, first of all, the first 29 dispatches, because even though we do hit different nuance topics,
82
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every dispatch,
83
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Bitcoin privacy has obviously been a major theme of Citadel dispatch to begin with. It's one of the reasons I started the show in the first place. It's a it's a topic that doesn't really get that much
84
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it just doesn't get that much open discussion. I think a lot of people are afraid to talk about it. I think a lot of people's incentives,
85
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are set up in ways that they don't want to talk about it.
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So I've taken it on myself and the rider to freaks who join us in the audience every week,
87
00:06:54.905 --> 00:07:02.845
have take we've taken on ourselves to to just talk about this more openly. I think the most important thing as Bitcoiners for us to realize is that we want to have,
88
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open, transparent discussions about these important topics. As soon as you stop talking about things,
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openly,
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you just you just regress.
91
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But it's also specifically a follow-up
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to Citadel dispatch 15,
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which was with Wasabi cofounder.
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No Power and Open Arms joined me, and Citadel Dispatch 16, where I had the 2 lead maintainers of JoinMarket on,
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Waxwing and Chris Belcher.
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So those are the 3 main,
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Bitcoin privacy tools
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that exist today.
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And fortunately
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for us,
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we've had
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we're gonna this is this is the trifecta. We have the trifecta here on Citi dispatch. As always,
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you can you can,
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listen to these episodes,
105
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through your favorite podcast app, or you can go to citildispatch.com,
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00:07:52.500 --> 00:07:54.520
where you can have links to bitcoin tv.com,
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which has full video archives, which you can download. You can torrent. You can share, all for free,
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because that's the way that's the way I think it should be done.
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So I think, there's a lot of places we can start in this conversation.
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I think,
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00:08:13.960 --> 00:08:19.100
I I think the first topic we should start with is KYC and the dangers of KYC.
112
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I think, you know, a lot of public Bitcoiners,
113
00:08:25.225 --> 00:08:30.740
have ties to KYC services, regulated services. KYC is is know your customer.
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00:08:32.080 --> 00:08:35.620
It's when they when a service a regulated service
115
00:08:36.115 --> 00:08:37.735
asks you for your selfie
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and maybe your passport or your license and your address, your mailing address, and your name, and does all these different checks on you.
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And, usually, that does get combined with all your Bitcoin information that they hold, whether that's withdrawal addresses or deposit addresses, the amount you bought.
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You know, these these companies,
119
00:08:58.464 --> 00:09:02.884
these regulated companies are the most profitable businesses in the space,
120
00:09:04.190 --> 00:09:11.895
and they have long reaches, and and a lot of public Bitcoiners are tied into them, so they don't want to talk about it or talk against it.
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So, Samara, I mean, you've been very outspoken about the danger of KYC. You wanna start us off here?
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outspoken about KYC, like you said, since pretty much we we started in 2015.
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And our our primary kind of cry is that KYC is a, it's a creeping disease.
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Meaning we didn't get it didn't start with us having to take photos of our, you know, selfies with our photo IDs and having to provide all this information.
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It's gradually
127
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worsened to this point, and it's gonna continue to get worse. So by tolerating it a little bit now, you're setting yourself up for failure in the future. You're setting yourself up for much worse protocols in the future.
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Obviously, that's like a battle cry that is doomed to fail ultimately,
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obviously. But,
130
00:10:02.360 --> 00:10:07.695
it's still an important battle cry to to be had and for users to hear because
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00:10:08.154 --> 00:10:13.135
we're at a point now where KYC is so normalized in our in our culture that
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00:10:13.879 --> 00:10:28.575
the concept of non k y c acquisition of Bitcoin is to some to some new coiners is is completely alien, completely foreign. They hadn't even thought of it. It never even occurred to them. So continuing to spread the message about the importance of that,
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it, you know, is important.
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Yeah. The the the risk, Asar, just just my final point. The the major risk, as Matt, you alluded to,
135
00:10:38.320 --> 00:10:41.135
in in the context of practical privacy,
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concerns is that it's it's it's not possible. It's definite that the exchange that you're using, if it's a regulated entity, is sharing that information
137
00:10:50.540 --> 00:10:51.020
with,
138
00:10:51.580 --> 00:10:55.280
a chain surveillance firm. That's chain analysis or something else.
139
00:10:55.740 --> 00:10:59.755
And so a profile is being made of you and your transaction is based on that KYC
140
00:11:00.774 --> 00:11:03.735
141
00:11:04.295 --> 00:11:05.355
that it especially,
142
00:11:07.720 --> 00:11:12.060
you know, more Bitcoiners that have been in the space for a longer time might not realize,
143
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or, like, a nuance that they don't realize is
144
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is for a while, Bitcoin was, like, the exception to the rule. KYC is everywhere from the day of our birth.
145
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You know, just constant surveillance and tagging. I was you know, even stuff like license plates. Like, you drive around and you just you you just got your little KYC plate on the front.
146
00:11:31.330 --> 00:11:35.165
So a lot of these new users, it's just what they expect. Like, if you sign up to Venmo,
147
00:11:35.705 --> 00:11:40.365
you're gonna have KYC when you sign up to Venmo. So so it's it's something that they're used to.
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But as Bitcoiners that have been around,
149
00:11:45.420 --> 00:11:50.235
we've seen it creep into the system. It was like Bitcoin was, like, one of the last bastions of
150
00:11:50.875 --> 00:11:51.595
of no KYC.
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And just over the last 2 years, even 3 years, it's just literally crept into everything. Even like the renegade exchanges and stuff, I've all basically bent the knee,
152
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to KYC.
153
00:12:03.910 --> 00:12:11.745
154
00:12:12.125 --> 00:12:17.425
to, you know, to curry favor or perceived favor with the regulator in their country.
155
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We've seen a lot of that going on as well.
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157
00:12:24.805 --> 00:12:27.065
that pretty much all of these services
158
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are sharing that information with these chain surveillance companies that are are providing them some kind of regulatory compliance and quotations.
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The but what also people should realize is even if you did, like even if you're coming from the angle that you trust,
160
00:12:43.305 --> 00:12:52.365
the exchange you're using or the the custodian the regulated custodian you're using, if it's a custodial wallet that requires KYC, and even if for some reason you trust the chain surveillance company,
161
00:12:53.690 --> 00:12:54.750
all this information
162
00:12:55.370 --> 00:12:59.390
is gonna get leaked eventually. Like, we've seen that as information gets stored online,
163
00:13:00.145 --> 00:13:04.885
it eventually gets leaked. I mean, I saw a headline come out that, like, Guess Clothing,
164
00:13:06.065 --> 00:13:11.310
today announced that in, like, February, they leaked a bunch of Social Security numbers and stuff because they got hacked.
165
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So,
166
00:13:12.970 --> 00:13:17.709
you know, it doesn't really matter where your personal information is. The one the one,
167
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key trend we see is that this personal information, once it's on the Internet, once it's stored and logged and one of the things with KYC information is that by regular by regulatory standards, they're expected to hold it for many years.
168
00:13:32.650 --> 00:13:34.830
So it's sitting there for a very long time,
169
00:13:35.714 --> 00:13:37.495
is that it will get leaked eventually.
170
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And one of the elements of Bitcoin
171
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is that
172
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people who are bullish on Bitcoin, myself included, I believe that this chain will be around forever. I think this chain is going to outlive me.
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So when you have records that tie yourself to your Bitcoin,
174
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at any point in the future, if that information gets out,
175
00:13:59.820 --> 00:14:04.380
there's a whole trail that they can follow if you're not if you're not practicing Bitcoin best
176
00:14:05.180 --> 00:14:07.440
Bitcoin best practices in terms of privacy.
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178
00:14:13.805 --> 00:14:14.785
Bitcoin privacy,
179
00:14:15.245 --> 00:14:18.019
it works pretty well when you're talking about,
180
00:14:18.959 --> 00:14:20.660
a system that's synonymous,
181
00:14:21.040 --> 00:14:23.380
right? And that's the system that Satoshi designed
182
00:14:23.985 --> 00:14:27.845
When you start attaching a real life record, a real life KYC record
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to the chain,
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it starts to become not not good enough at all and a privacy nightmare.
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So, you know, the dangers of KYC can't be
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overstated.
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And I think everyone has a duty to try to start to think about how they can acquire their their stack,
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through other methods. And for a lot of people,
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they're productive people. They can produce things, and they have services and and goods that they can create to offer. And they should do those things and offer those things, for Bitcoin. Earning Bitcoin is one of the most liberating things, you know, feelings in the world, I feel.
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And it it really puts this whole conversation,
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you know, into a hold in a different perspective, once you're an earner of Bitcoin.
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as a as a Bitcoin circular economy develops, kind of
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what you just mentioned, where people instead of buy Bitcoin, they earn Bitcoin, and instead of selling Bitcoin, they spend Bitcoin,
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it distributes.
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You you end up not having all these centralized,
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platforms that are the gatekeepers. Right? And and as a result,
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it'd be way more difficult to enforce KYC AML laws on all those individual actors. Like, if you're gonna, you know, enforce it on some random ass bodega,
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in downtown New York City, it's a lot different
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than trying to do that versus doing it to Binance, which is a massive multinational
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corporation now.
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But in the short term,
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it it presents a major threat to most Bitcoiners. I think, like I mean, I'm just,
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you know, speculating here, but I would say over 90% of of new new corners that come in, new Bitcoin users that come in are coming in fully KYC'd. Right?
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occurrence,
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and, you know, it's it's, like, it's a similar onboarding process to to Venmo
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and and PayPal and those those types of things.
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It's familiar to them.
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be paired with any kind of personal information.
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It should be
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cheap and easy to
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generate a new identity for for you or for anyone else anytime.
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And it is the
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if we do it in the the other way and we keep databases of every metadata
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we can metadata we can imagine,
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then it's it it will grow to be a surveillance tool
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we cannot
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imagine.
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So that's kind of even in a Bitcoin future, there is
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dark future,
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which is the k y c
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one.
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And indeed the the circular economy or the, you know, the normalization of the privacy tools
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is is
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the road towards the brighter future.
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So I completely agree there.
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Regarding, like, KVAC practices,
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I would like to kind of,
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point out a couple of things, which I don't know what you think about these. And,
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maybe you don't have the have it in the US that easy, but, there is this
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phenomenon which is I called KYC light,
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where you basically
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still send
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a bank transfer under your name,
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and you probably need to provide, like, an email address or
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even in case of basically, if you are doing an online transfer, you actually,
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exposing your name, uncovering your name and bank accounts,
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or your companies,
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to the seller. But this happens
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to,
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like, loads of, little services which are nowadays
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moved to
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Switzerland instead of, like, being based
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in other places. I don't want to do, like, advertisement, but, the point is there that they are not keeping any data, but they would be able to get the data from the bank
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through their bank relationships because the the
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the Swiss laws are that you need to kind of sign a message with your the private key of your address currently,
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which you are withdrawing to. So they have a proof that
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they are sending Bitcoin
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to a person who has actually initiated the bank transfer so they can have their
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data from their bank, but there is at least not an extra database which could leak. And, I mean, obviously, in case of a, like, a or some kind of
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similar situation,
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it could be still,
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you know, it's still a centralized thing which could be leaked, but it's it's it's a bit better than, like, registering on on a big
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exchange where you just need to give everything and it just sits there and sending you out marketing emails in Punch and stuff.
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yeah. Yeah. The a lot of the, DCA,
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smaller companies use this this type of technique that Open Noms describes.
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We we should be careful of celebrating anything like this though,
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because it's just the progression
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of KYC becoming more usable and more,
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yeah, user friendly
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just shows how much further it has
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become ingrained in society.
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The reason that they allow this to happen is because they can get every detail they need
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from the bank, as you mentioned,
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in in the possibility that they may need they may need it.
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And the the issue is the,
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spectrum for
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why governments may think they they need access to this information
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is very fluid.
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And
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the EU,
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proclaims to have strong privacy laws,
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and this is where SIPA,
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you know, is used for this this type of transaction that you described,
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which is
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an EU based
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settlement and transfer system for for traditional banks in the EU.
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Yeah. So, you know,
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it's not a celebration. I I think that it's positive that you're you know, that there's not an additional database
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that is being
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maintained,
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but the underlying issue isn't that is a data storage and data hygiene issue. Then the underlying issue is it's a fundamental fundamental undermining of our freedoms
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and our freedom to transact.
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The first point I think that I try and highlight a lot, but it it gets glossed over, is that, obviously, this is a Bitcoin show.
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So I focus on,
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Bitcoin privacy concerns specifically.
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But our traditional payment rails are fully KYC'd
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to the hills.
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This is not a as an issue that is,
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isolated to Bitcoin.
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In a lot of ways, you know, traditional banking,
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is worse.
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And Bitcoin provides especially if you, you know, if you use Bitcoin with privacy best practices,
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provides a way for you to opt out of that system.
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Another aspect
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is, Open Arms mentioned,
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Switzerland.
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Part of that is because Switzerland's not part of the EU. The EU is, like, one of the worst places right now, I think, to to operate a Bitcoin business.
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They just keep adding more and more
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regulatory overhead. It's even worse than America, it seems now. They kinda leapfrogged us.
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And and and they will have to implement
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a a version of AML,
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5th money laundering directive AML 5 d.
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you know, last year. Now you can only do, like, 2,000.
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And, you know, it will be going to
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go being squeezed down and, yes, this they are part of the European
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economic area, so the, like, the AMLD 5 and things are are apply just as well as it applies to the UK, but the UK
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rather puts some more on top. Indeed.
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you know, part of my concern and part of the reason why I think it's, you know, extra important for us to get ahead of this,
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trend in Bitcoin
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is because the usage of cash is decreasing.
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It's decreasing
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mostly because
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our peers,
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in our age group and the younger individuals,
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prefer not to use it out of convenience. They prefer to use the digital alternatives.
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But it's also decreasing because governments are trying to
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reduce its usage. So in a lot of countries,
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already we're seeing the usage of cash just being seen as suspicious even if it's completely allowed.
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Why would you use cash instead of this more convenient system where, you know, you might get points back or some bullshit like that?
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So as cash usage decreases, this becomes more and more of an issue for Bitcoiners, I think,
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because you kind of eliminate that whole cash for Bitcoin trade system,
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on the cash side. You know? A lot of the issues there,
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you know, originate from the fiat side of the equation.
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I'd also add that we have anarchyoc
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on Twitter
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who wanted to mention, he makes a very good point here, is that
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these KYC laws, you know, they end up with a lot of people in the traditional system being excluded. They can't have bank accounts. They can't have digital payment apps.
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And as a result,
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if we don't have a
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robust circular economy where people can earn Bitcoin,
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those people also get excluded from the freedom benefits that Bitcoin provides. Right?
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The positive thing is KYC doesn't exist on chain, like on the blockchain itself. There's no
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it exists only on the onramps.
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Right.
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Or most of the onramps.
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So if you're able to bypass
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the onramps, the regulated onramps, you're able to interact with Bitcoin in a way that is is liberating. And it has to you know, that's why we've been hammering home for a really long time, years years,
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for users to to figure out ways to acquire Bitcoin
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outside of that system, outside of that KYC system,
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because it opens up
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it opens Bitcoin up to its full potential, and that's a censorship,
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free payment network. Right? That's a censorship free
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form of value and and,
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who that's what, I mean, that's what I got involved for.
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So, you know
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Another It's become more it's become a lot more difficult as you mentioned though. Anyone who's been involved in a for a while has seen the the dramatic shift, in the cash,
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for the cash trade,
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ecosystem.
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that's important to mention, I think, is that
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mining remains one of the best ways to,
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obtain KYC free Bitcoin.
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Next week, I will have, diverter,
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Econa Alchemist on again. They'll both be return guests. They weren't on the same episode last time. And also Ronan Miner, who just, I just noticed Neil joined us in the live chat.
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They will all be joining us for a special civil dispatch next week to discuss No KYC Mining,
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and that will be also at a nonstandard time. That'll be on Tuesday,
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at noon EST. So
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that's, 1600
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UTC. So just,
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pay attention, freaks, for that episode coming up next. I'm also really looking forward to that conversation.
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373
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wanting to avoid the KYC system to wanting to evade taxes.
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And
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I would just like to point out to this gentleman,
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that the KYC system was put into place
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has nothing to do with tax evasion or taxes. It was put into place be after
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the, 2001,
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terrorist attack as a way to make sure that money laundering couldn't be used to finance another terrorist operation. So nothing to do with taxes.
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And to equate the two things is just really status thinking.
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The the point of avoiding the KYC system is because we have a fundamental right to transact freely and you cannot transact freely
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through the KYC system. And Bitcoin was created in a way where you can opt out of that system.
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And we
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all we're doing is preaching people that if they're looking for a way to opt out of that system, there exists a solution, and that's Bitcoin.
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387
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is
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that, you know, we have a lot of very dedicated Bitcoiners that believe in the mission,
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and they tend to
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just consume as much Bitcoin content as possible, use as many tools as possible,
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constantly educate themselves, constantly continue their learning. And as a result, what they do is,
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I've learned from
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operating the Bitcoin education space for such a long time that the easiest way for us to scale this thing
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and increase,
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you know,
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usage of of Bitcoin privacy best practices
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is to have a group of ride or dies that go out and then help their, you know, 10 or 15 people,
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that look at them as the Bitcoin guy or girl,
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to to to provide,
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you know, a solid base to those people that look to them for advice.
401
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But
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so so I would say that there's not a lot I I I would hope that there's not a lot of this audience who who doesn't know,
403
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who doesn't think privacy is important.
404
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I'd be surprised that they're still listening 30 episodes in. But I'm curious, samurai, to to the majority of Bitcoiners, I would say, like, 90% of Bitcoiners,
405
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who are not currently
406
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trying to use the tools,
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Their main
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issue or the the main roadblock is that they don't see the value in privacy to begin with. So just to pull this conversation back a little bit, I'm curious if you could say to them, you know, why they should care in the first place, why privacy matters in general, not just in Bitcoin land.
409
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I'd be really interested on on how you would phrase that.
410
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411
00:29:33.885 --> 00:29:36.860
You know, they they have curtains on their windows. They have,
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they have doors. They had they put their well, they probably don't send letters, but if they did, they put them in an envelope so no
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one but the intended party could read it.
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People have a natural desire for privacy.
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And
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what the Bitcoin tools
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that are,
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available today, the
419
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the ones, especially that you mentioned in your intro,
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what they all attempt to do is just replicate the the same type of privacy that has existed in the cache system,
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for for, you know,
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1000 of years.
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And I don't think that's that's revolutionary or radical.
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And
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if they don't value, you know, privacy besides that, I don't try to convince them. I just think, think, you know, maybe they're just kind of they haven't had that moment yet where,
426
00:30:31.240 --> 00:30:31.899
you know,
427
00:30:33.080 --> 00:30:41.304
something happens in their life that they start to value their privacy, or maybe they're just too too far gone, and they're not the people that we need to be talking to.
428
00:30:42.780 --> 00:30:43.840
429
00:30:44.140 --> 00:30:53.294
for most people, they won't really get it until they get burned. Would you would you agree, like, till that moment happens where they touch the stove and they realize, fuck.
430
00:30:53.674 --> 00:30:58.575
431
00:30:59.390 --> 00:31:05.410
432
00:31:06.270 --> 00:31:10.145
we're gonna see more breaches, privacy breaches, and data breaches,
433
00:31:11.165 --> 00:31:12.544
that expose us,
434
00:31:13.165 --> 00:31:13.665
publicly,
435
00:31:14.445 --> 00:31:17.184
to the world, our intimate secrets and our intimate
436
00:31:17.990 --> 00:31:18.950
lifestyle choices,
437
00:31:20.470 --> 00:31:25.050
and just all matters of things that we do in our day to day lives. So the
438
00:31:26.265 --> 00:31:28.685
my my it's it's kind of sounds
439
00:31:29.305 --> 00:31:33.965
bearish short term in terms of of privacy, but I think my my bullish take
440
00:31:34.570 --> 00:31:41.630
on on people, the world caring about privacy is that so many people are gonna get burned over the next 10 years, not just in Bitcoin land,
441
00:31:42.365 --> 00:31:47.825
that they're gonna be forced into realizing the need for it, and then they'll seek out the tools. Would you agree with that?
442
00:31:49.840 --> 00:31:59.345
443
00:32:00.605 --> 00:32:02.705
But, I mean, for others, I think that,
444
00:32:03.565 --> 00:32:06.225
you know, the the events of of 20,
445
00:32:07.050 --> 00:32:07.550
2020
446
00:32:08.090 --> 00:32:11.870
and and 2021 with with COVID and with the
447
00:32:12.810 --> 00:32:15.870
the the really strong government response pretty much everywhere,
448
00:32:16.895 --> 00:32:21.075
has really kind of opened up a lot of people who maybe weren't thinking about this,
449
00:32:21.695 --> 00:32:27.460
previously. So thinking that maybe this time they started taking their their privacy seriously because
450
00:32:28.080 --> 00:32:30.020
things things can change very quickly,
451
00:32:30.480 --> 00:32:33.460
and laws can can be reworked very quickly.
452
00:32:35.045 --> 00:32:35.545
So,
453
00:32:36.005 --> 00:32:36.585
you know,
454
00:32:37.365 --> 00:32:42.105
maybe more of those types of events will bring more and more people who are who care about that type of thing.
455
00:32:45.780 --> 00:32:48.280
456
00:32:48.980 --> 00:32:57.005
457
00:32:57.485 --> 00:33:00.305
transaction free transactional freedom, so I. E.
458
00:33:00.660 --> 00:33:01.640
Cutting off funding
459
00:33:02.340 --> 00:33:07.160
to groups that are, you know, or or even just individual content creators,
460
00:33:07.700 --> 00:33:12.105
through the platform and on YouTube who are, you know, spreading the wrong message.
461
00:33:13.045 --> 00:33:18.025
Those types of events, if this continue to happen, create a whole class of of user that
462
00:33:18.405 --> 00:33:22.060
that, you know, hopefully, would be able to use Bitcoin to route around
463
00:33:22.600 --> 00:33:27.580
that type of event, like, in the way that WikiLeaks first famously used Bitcoin as the first major
464
00:33:29.445 --> 00:33:30.025
economic participant,
465
00:33:31.284 --> 00:33:32.485
when they got their,
466
00:33:32.885 --> 00:33:35.065
you know, Visa and Mastercard donations,
467
00:33:35.845 --> 00:33:36.345
canceled.
468
00:33:38.870 --> 00:33:46.010
So you wanna have the privacy tech and you wanna have the tools available for for that, you know, potential or, you know, inevitability.
469
00:33:47.505 --> 00:33:50.245
470
00:33:51.185 --> 00:33:54.325
have the education ready, have the resources ready,
471
00:33:55.159 --> 00:33:57.179
and when the masses realize the need,
472
00:33:58.519 --> 00:34:00.059
they'll be there for them. Right?
473
00:34:02.174 --> 00:34:02.674
Yeah.
474
00:34:04.894 --> 00:34:05.794
Open arms.
475
00:34:07.375 --> 00:34:10.355
Yeah. Any thoughts here before we dive in deeper?
476
00:34:11.130 --> 00:34:17.710
477
00:34:18.090 --> 00:34:18.750
I think
478
00:34:19.995 --> 00:34:20.395
people
479
00:34:21.675 --> 00:34:28.960
yeah. I I agree that you either have something happened to you or you come from an environment which is like, you know, has been exposed
480
00:34:29.500 --> 00:34:30.079
to problems
481
00:34:31.180 --> 00:34:32.480
connected with, like, autoriturism
482
00:34:32.780 --> 00:34:35.119
or surveillance or or, like, just
483
00:34:37.135 --> 00:34:37.635
extortions
484
00:34:38.095 --> 00:34:38.175
and,
485
00:34:39.455 --> 00:34:44.995
taking property away, which was, you know, belonging to people without any way to to kind of
486
00:34:45.780 --> 00:34:52.760
save it. I, myself, from, you know, the eastern part of Europe and and then moved to the to the very kind of comfortable
487
00:34:53.060 --> 00:34:53.560
western
488
00:34:55.484 --> 00:35:01.244
society where where people are really just like the boiling frogs, you know, who who are now about to kind of
489
00:35:02.040 --> 00:35:04.700
you know, it would be time to jump out, but they won't.
490
00:35:05.160 --> 00:35:05.660
And
491
00:35:06.839 --> 00:35:07.339
that's
492
00:35:08.119 --> 00:35:09.260
yeah. It's just
493
00:35:09.960 --> 00:35:11.580
need to need to open eyes
494
00:35:12.525 --> 00:35:13.905
to to to these things.
495
00:35:14.285 --> 00:35:25.900
But I think there will be the the real adoption. I mean, not in terms of how many 1,000,000 of dollars come in, but in terms of how many users come in will happen on the places which need
496
00:35:27.015 --> 00:35:27.515
Bitcoin
497
00:35:28.135 --> 00:35:29.195
and these technologies
498
00:35:29.495 --> 00:35:30.155
as well.
499
00:35:31.095 --> 00:35:31.835
And then,
500
00:35:32.375 --> 00:35:33.035
you know,
501
00:35:33.335 --> 00:35:39.740
now we are at the at at this at the level where people have some we will have tools to
502
00:35:40.600 --> 00:35:42.140
have for them available
503
00:35:43.075 --> 00:35:43.815
if they
504
00:35:44.195 --> 00:35:45.095
are ready to
505
00:35:45.715 --> 00:35:50.455
just search for it. You don't even need to learn much. Right? You don't need to you don't need to program anymore
506
00:35:50.800 --> 00:35:51.540
to to construct
507
00:35:52.240 --> 00:35:54.080
a coin join. Right? And,
508
00:35:56.000 --> 00:35:58.580
that that is a good thing, and we need to continue to improve
509
00:35:59.040 --> 00:36:00.100
and make it
510
00:36:01.505 --> 00:36:02.885
more easy and more accessible
511
00:36:04.464 --> 00:36:05.924
for for these people to
512
00:36:07.585 --> 00:36:11.460
to be available. And then, you know, everyone else who who doesn't want to boil
513
00:36:11.920 --> 00:36:13.619
could jump out of the water.
514
00:36:19.355 --> 00:36:20.415
515
00:36:22.474 --> 00:36:24.310
516
00:36:24.610 --> 00:36:26.150
you know, the show is focused
517
00:36:26.770 --> 00:36:32.295
on actionable Bitcoin discussion, things that Bitcoiners today can can do to better themselves.
518
00:36:34.675 --> 00:36:37.155
So we have we we so far, we've said,
519
00:36:38.115 --> 00:36:40.135
earning Bitcoin, mining Bitcoin.
520
00:36:40.740 --> 00:36:43.640
I guess mining is earning. It kinda falls into the same subset,
521
00:36:44.420 --> 00:36:45.319
circular economy,
522
00:36:46.900 --> 00:36:48.680
just realizing the need in general.
523
00:36:49.694 --> 00:36:53.875
But then we also have what you guys have been working on over at Samurai Wallet,
524
00:36:54.575 --> 00:37:02.360
which is it's it's gonna be funny, this whole conversation, I think, because your NIM is both Samura1 Wallet and the project is also Samura1 Wallet. But,
525
00:37:04.820 --> 00:37:05.960
let's dive into,
526
00:37:06.495 --> 00:37:09.635
you know, what your strategy is over at Samurais
527
00:37:10.335 --> 00:37:13.395
and how you guys are approaching this, for everyday Bitcoiners.
528
00:37:17.950 --> 00:37:18.450
529
00:37:21.150 --> 00:37:24.369
can you can you repeat the question there, Matt? I kinda lost you for a bit.
530
00:37:25.955 --> 00:37:32.855
531
00:37:33.940 --> 00:37:36.839
a a toolset that is useful for Bitcoiners today?
532
00:37:37.380 --> 00:37:43.560
533
00:37:44.025 --> 00:37:51.885
avoid the KYC system because as as you said, most are gonna be either they didn't hear this message early enough or there's just no other way for them,
534
00:37:52.425 --> 00:37:55.730
and they, you know, can't produce or earn for whatever reason.
535
00:37:57.390 --> 00:37:59.730
The tools that that we've we've created,
536
00:38:00.510 --> 00:38:03.175
one of the the benefits of those tools for KYC,
537
00:38:04.115 --> 00:38:04.615
UTXOs
538
00:38:05.315 --> 00:38:08.775
is that the forward looking activity of those UTXOs
539
00:38:09.155 --> 00:38:11.255
once they go through the tools that we create,
540
00:38:12.180 --> 00:38:13.240
specifically Whirlpool,
541
00:38:14.900 --> 00:38:15.720
can't be
542
00:38:16.020 --> 00:38:17.960
connected to the KYC UTXOs
543
00:38:18.635 --> 00:38:22.655
in, of the past. So it's a way of breaking the KYC record
544
00:38:23.115 --> 00:38:24.494
on chain anyway
545
00:38:27.010 --> 00:38:37.095
for them for for users who have those UTXOs. Now the KYC record will still remain, of course, with the entity where you acquired the t, the coins from,
546
00:38:37.955 --> 00:38:40.295
but the link with your
547
00:38:40.915 --> 00:38:42.055
KYC information
548
00:38:42.480 --> 00:38:47.040
to your on chain UTXO information will be severed. And I think that's,
549
00:38:47.920 --> 00:38:48.900
that's the fundamental,
550
00:38:50.385 --> 00:38:53.845
tool that we provide in Whirlpool. And every other tool that we provide
551
00:38:54.305 --> 00:38:57.285
is is essentially building on that idea.
552
00:38:58.430 --> 00:39:07.445
And we can get into the weeds if you want, but that that's the that's the gist of of our tool and and and generally all all privacy tools tools and all all the CoinJoin
553
00:39:08.145 --> 00:39:08.965
tools, specifically.
554
00:39:09.985 --> 00:39:10.485
The,
555
00:39:11.025 --> 00:39:14.140
you know, the point of CoinJoin is is what? To turn
556
00:39:14.440 --> 00:39:14.940
deterministic
557
00:39:15.240 --> 00:39:16.700
links into probabilistic
558
00:39:17.000 --> 00:39:17.500
links.
559
00:39:18.520 --> 00:39:21.980
So, you know, that's that's exactly what what we do.
560
00:39:24.825 --> 00:39:29.805
561
00:39:32.070 --> 00:39:32.810
You know,
562
00:39:33.350 --> 00:39:33.850
privacy
563
00:39:34.310 --> 00:39:35.290
focused people,
564
00:39:36.070 --> 00:39:39.770
have a lot of passion, and that's one of the reasons I love operating in the space.
565
00:39:41.145 --> 00:39:42.585
But you would agree that,
566
00:39:43.865 --> 00:39:45.325
if you are going to KYC,
567
00:39:46.744 --> 00:39:47.805
going into CoinJoin
568
00:39:48.185 --> 00:39:50.125
afterwards, using Whirlpool afterwards,
569
00:39:51.930 --> 00:39:52.990
is is strictly
570
00:39:53.450 --> 00:39:56.430
the best option to do if if you are KYC ed.
571
00:39:56.890 --> 00:40:03.785
572
00:40:04.245 --> 00:40:04.745
joint.
573
00:40:06.085 --> 00:40:08.905
Every and it should be done, you know, relatively frequently.
574
00:40:10.120 --> 00:40:10.620
So,
575
00:40:11.080 --> 00:40:14.780
yeah, I agree completely. If if you've gone through that process of KYC,
576
00:40:16.760 --> 00:40:22.105
you need to sever the on chain footprint between your KYC record, which links real life
577
00:40:22.405 --> 00:40:23.465
with the blockchain.
578
00:40:24.645 --> 00:40:31.780
You know, the KYC record will still exist. Your tax record will still exist. The exchange will still have all the information that they had prior to
579
00:40:32.160 --> 00:40:32.980
the the whirlpool,
580
00:40:33.840 --> 00:40:34.980
but on chain,
581
00:40:35.815 --> 00:40:37.035
which is where we're concerned,
582
00:40:38.375 --> 00:40:39.835
we'll be we'll be good.
583
00:40:42.430 --> 00:40:48.290
584
00:40:48.910 --> 00:40:51.170
say, like, I don't see why I have the need,
585
00:40:52.415 --> 00:41:00.994
for using, these CoinJoin tools if I'm buying without KYC to begin with. But even if you're a vendor and you're receiving Bitcoin from a customer,
586
00:41:01.369 --> 00:41:03.950
you're receiving Bitcoin from someone. Someone knows
587
00:41:04.250 --> 00:41:05.869
that you're the one who got it,
588
00:41:07.530 --> 00:41:10.190
and you wanna break that link regardless. Right?
589
00:41:10.685 --> 00:41:11.185
590
00:41:13.405 --> 00:41:14.525
591
00:41:15.085 --> 00:41:18.545
say say that, when we are focusing on on on the importance
592
00:41:18.925 --> 00:41:19.425
of
593
00:41:20.240 --> 00:41:28.099
avoiding KYC first of all, and then once you get into it, you know, try to get rid of the rid of the trail so not to have your payments tied to your identity.
594
00:41:28.785 --> 00:41:30.485
But then privacy is,
595
00:41:30.785 --> 00:41:33.285
you know, is much bigger than that. Even if you are not
596
00:41:34.465 --> 00:41:38.930
we would not have this kind of, you know, we wouldn't need to show our passports anywhere.
597
00:41:39.310 --> 00:41:40.450
Then you would still
598
00:41:40.910 --> 00:41:41.810
because of the,
599
00:41:42.670 --> 00:41:45.315
qualities of the Bitcoin block blockchain
600
00:41:45.615 --> 00:41:47.955
having every address to and from
601
00:41:48.655 --> 00:41:51.555
and the amount public, you need to
602
00:41:52.160 --> 00:41:53.300
be able to hide
603
00:41:55.440 --> 00:41:55.940
from
604
00:41:56.560 --> 00:42:06.075
the if you buy something, you don't want the seller to know what your stash is, you know, what what what is the all your money is because, you know, it was
605
00:42:06.615 --> 00:42:10.795
next time at least, it was ask for a higher price then. Or you don't want,
606
00:42:11.500 --> 00:42:18.160
someone to know what is your month monthly wage if you are being paid in Bitcoin. That is, if I understood correctly,
607
00:42:18.540 --> 00:42:19.280
that is
608
00:42:19.865 --> 00:42:21.165
the backwards looking privacy
609
00:42:21.945 --> 00:42:23.405
which can be,
610
00:42:24.265 --> 00:42:27.485
provided by Cogent. And then the 4 forward looking one
611
00:42:29.160 --> 00:42:33.820
is that your employer I mean, you don't want your employer to know exactly
612
00:42:34.200 --> 00:42:36.780
when and what and how much did you buy.
613
00:42:38.555 --> 00:42:39.055
And
614
00:42:39.435 --> 00:42:46.930
either the employer or wherever you have your Bitcoin from, that could be the the person you bought from. Also, you know, you shouldn't know about what he's
615
00:42:47.310 --> 00:42:52.370
doing. I mean, this is very basic. If it would be the case in the in the normal banking system,
616
00:42:52.750 --> 00:42:56.605
then, you know, we we cannot imagine that. But people are not
617
00:42:57.305 --> 00:42:58.445
really aware of
618
00:42:58.745 --> 00:43:00.605
the the thing of the case that
619
00:43:00.905 --> 00:43:04.365
this is the default in Bitcoin if you are not using CoinJoin
620
00:43:05.100 --> 00:43:08.560
or Lightning or swaps or, you know, other other kind of tools
621
00:43:09.100 --> 00:43:09.420
that,
622
00:43:09.980 --> 00:43:13.600
you know, everyone knows everything. They just need to look, and it's there for eternity.
623
00:43:14.464 --> 00:43:17.204
624
00:43:20.545 --> 00:43:24.589
625
00:43:25.290 --> 00:43:25.790
626
00:43:26.490 --> 00:43:26.990
Exactly.
627
00:43:28.809 --> 00:43:30.020
Very well said. I
628
00:43:32.115 --> 00:43:37.495
so let's let's, you know, let's dive into I'm I'm trying to think where we should go next.
629
00:43:42.030 --> 00:43:45.170
So so one of the things you mentioned there, samurai,
630
00:43:45.710 --> 00:43:48.450
is is this idea that, like, the baseline
631
00:43:48.830 --> 00:43:50.690
should be these coin joints.
632
00:43:51.375 --> 00:43:53.875
You know, like, almost like we should just
633
00:43:55.135 --> 00:43:58.035
I've kind of come to the conclusion that almost
634
00:43:58.390 --> 00:44:01.930
everything we do in Bitcoin is is a post mix activity.
635
00:44:03.670 --> 00:44:05.930
636
00:44:07.444 --> 00:44:09.464
637
00:44:10.484 --> 00:44:10.984
is
638
00:44:12.005 --> 00:44:13.625
all major Bitcoin wallets
639
00:44:14.549 --> 00:44:16.730
standardize that activity and basically
640
00:44:18.069 --> 00:44:20.650
not only make every spend a coin join, but also
641
00:44:21.029 --> 00:44:23.770
make every spend a post mix out of a,
642
00:44:24.335 --> 00:44:25.714
like, a proper nondeterministic
643
00:44:26.575 --> 00:44:27.954
coinjoin rounds. Right?
644
00:44:28.815 --> 00:44:31.714
645
00:44:34.900 --> 00:44:39.880
you know, if you don't wanna go as far as to say that's that there needs to be standardization
646
00:44:40.340 --> 00:44:41.960
between the protocols,
647
00:44:42.865 --> 00:44:43.345
Right?
648
00:44:43.905 --> 00:44:49.125
Then you should we can at least say that there needs to be certain attributes of the protocols
649
00:44:49.990 --> 00:44:53.210
that are demanded by by users of the protocols,
650
00:44:53.830 --> 00:44:58.330
which are no deterministic links. Right? Each mixed transaction has to be all probabilistic,
651
00:44:58.684 --> 00:45:00.305
not deterministic in any way,
652
00:45:01.325 --> 00:45:02.785
and various other qualities.
653
00:45:03.645 --> 00:45:12.880
And I think that if if those standards could be could be met on the actual mixing protocol side, then you, you know, that would be phenomenal for users.
654
00:45:13.259 --> 00:45:15.165
And then on the post mix side,
655
00:45:15.725 --> 00:45:22.145
as you as you suggest, Matt, is is it's almost as important because if you combine your post mix
656
00:45:22.560 --> 00:45:24.260
with any other UTXOs
657
00:45:24.640 --> 00:45:25.940
associated to other,
658
00:45:26.720 --> 00:45:29.700
activity, you will be linking their histories together,
659
00:45:30.335 --> 00:45:34.355
and you don't wanna do that. So it's really important for the the wallet to,
660
00:45:35.055 --> 00:45:36.755
implement a post mix strategy
661
00:45:37.135 --> 00:45:38.195
properly. Now
662
00:45:39.390 --> 00:45:40.609
the attempts at standardization
663
00:45:40.910 --> 00:45:41.650
were made,
664
00:45:42.510 --> 00:45:44.849
you know, way back in in 2016,
665
00:45:45.150 --> 00:45:45.890
I believe,
666
00:45:46.275 --> 00:45:46.775
with,
667
00:45:47.235 --> 00:45:49.495
no bar from what would become Wasabi.
668
00:45:50.195 --> 00:45:50.695
And,
669
00:45:51.555 --> 00:45:52.055
TDEVD
670
00:45:52.435 --> 00:45:54.615
was involved and various other contributors,
671
00:45:55.040 --> 00:45:57.380
some from the Open Bitcoin privacy project.
672
00:45:58.640 --> 00:45:59.280
They would,
673
00:46:00.240 --> 00:46:01.140
create the
674
00:46:01.520 --> 00:46:02.020
0
675
00:46:02.585 --> 00:46:03.644
link spec.
676
00:46:03.944 --> 00:46:09.005
And 0 link spec specifies all of these conditions of post mix, account segregation,
677
00:46:11.400 --> 00:46:13.900
the segregate, you know, the structured liquidity.
678
00:46:14.440 --> 00:46:17.420
All of these are defined in the zero link specification,
679
00:46:17.935 --> 00:46:19.875
and we believe that to be a good specification.
680
00:46:20.975 --> 00:46:26.355
And that's what Whirlpool is is built on. And we think it ticks all the boxes and, you know,
681
00:46:26.980 --> 00:46:30.040
it's been turning away now for for a few years.
682
00:46:30.500 --> 00:46:31.000
And,
683
00:46:31.860 --> 00:46:34.360
every transaction has had a 100% entropy,
684
00:46:35.515 --> 00:46:37.535
no deterministic links, and
685
00:46:37.915 --> 00:46:39.855
a solid foundation to build on.
686
00:46:48.210 --> 00:46:51.270
687
00:46:52.464 --> 00:46:54.645
so, I mean, one of the things when we talk about,
688
00:46:55.665 --> 00:47:00.244
Bitcoin privacy is is when you track Bitcoin, right, it's a it's a probability game.
689
00:47:01.750 --> 00:47:02.250
Basically,
690
00:47:02.630 --> 00:47:11.835
external actors are looking at the chain. Maybe they're combining KYC info, other information they have. A lot of times, we suspect that these chain surveillance companies are also running nodes,
691
00:47:12.535 --> 00:47:15.595
to do active surveillance. They're mixing it with KYC information.
692
00:47:16.935 --> 00:47:17.994
But there's also
693
00:47:18.620 --> 00:47:19.680
certain spending
694
00:47:19.980 --> 00:47:20.480
methods.
695
00:47:21.420 --> 00:47:24.240
A perfect example is if you spend,
696
00:47:24.620 --> 00:47:25.680
people like sending
697
00:47:26.300 --> 00:47:27.200
round amounts.
698
00:47:27.825 --> 00:47:34.565
So if you if you send, you know, 25,000,000 sats, you send 0.25 Bitcoin, and then there's a random amount,
699
00:47:35.744 --> 00:47:36.964
that's, you know,
700
00:47:37.280 --> 00:47:38.500
8 digits long,
701
00:47:39.200 --> 00:47:40.740
as the other output,
702
00:47:41.360 --> 00:47:48.025
you can you can pretty much assume that the round amount is the actual send and the other one is the change.
703
00:47:49.765 --> 00:47:52.744
Another heuristic that a lot of people see is,
704
00:47:54.819 --> 00:47:57.720
if if if you if you spend the full the full UTXO,
705
00:47:58.660 --> 00:48:03.345
without change. So if you spend the full UTXO without change, a lot of times, it'll be assumed,
706
00:48:04.845 --> 00:48:07.505
but, of course, it's it's probability, but it'll be assumed
707
00:48:07.885 --> 00:48:10.760
that you're sending to yourself because in what situation
708
00:48:11.060 --> 00:48:12.200
in very rare situations,
709
00:48:13.780 --> 00:48:17.560
your the amount you wanna spend is exactly the same amount as your UTXO.
710
00:48:18.505 --> 00:48:23.085
Another common heuristic is a common input ownership heuristic, which is that,
711
00:48:24.265 --> 00:48:26.605
all inputs belong to the same sender,
712
00:48:27.640 --> 00:48:31.020
same person. So it it links those transactions on
713
00:48:31.400 --> 00:48:35.500
chain. So when we're talking about Bitcoin privacy on chain, we're talking about
714
00:48:35.880 --> 00:48:36.380
reducing,
715
00:48:37.775 --> 00:48:38.515
the probabilities
716
00:48:38.815 --> 00:48:40.035
of being able to basically,
717
00:48:42.095 --> 00:48:50.430
guess or estimate, you know, when when Bitcoin changes hands and and how those transactions are happening, looking at those transactions on chain.
718
00:48:50.809 --> 00:48:52.990
So one of the main aspects of that
719
00:48:53.930 --> 00:49:03.215
is that it becomes a it becomes very much a numbers game. Right? You know, you need we're you're only high your your your privacy is only as good as the crowd that you're among.
720
00:49:04.580 --> 00:49:06.520
So not only do we need to get,
721
00:49:07.140 --> 00:49:12.600
you know, private Bitcoin usage up so that there's more people that are actively doing it in the ecosystem,
722
00:49:13.684 --> 00:49:15.065
because, you know, you could be the
723
00:49:15.684 --> 00:49:19.704
you could be super focused on Bitcoin proxy, but if someone pays you with a KYC transaction,
724
00:49:21.440 --> 00:49:25.700
then you don't even you might not even realize that they paid you with a a KYC at UTXO.
725
00:49:27.680 --> 00:49:34.045
So so not only do we wanna get usage up, but, also, we have this aspect that because we have these multiple tools,
726
00:49:34.984 --> 00:49:36.445
you have separate distinct,
727
00:49:37.620 --> 00:49:43.160
basically, liquidity pools among the different implementations. Right? So there's there's always been a push
728
00:49:43.540 --> 00:49:54.670
or at least a hope that we could have, you know, at least some kind of standard. So at least, you know, whatever the subset of Bitcoin users are that are trying to practice Bitcoin best practices in terms of privacy,
729
00:49:57.070 --> 00:49:58.610
are together in that. Right?
730
00:50:01.845 --> 00:50:02.825
731
00:50:05.045 --> 00:50:06.585
I think, you know, it's
732
00:50:07.125 --> 00:50:08.505
it's important to
733
00:50:10.910 --> 00:50:15.710
to have a variety of tools that are specialized for the situations that you find yourselves in.
734
00:50:16.430 --> 00:50:16.930
Whether
735
00:50:17.230 --> 00:50:22.605
it's a post mix spend or or it's getting into a equal output point join,
736
00:50:23.145 --> 00:50:26.920
or if it's doing a swap or whatever the whatever the case may be.
737
00:50:27.799 --> 00:50:28.200
But it
738
00:50:28.839 --> 00:50:31.000
as you as you mentioned, Matt, just,
739
00:50:31.559 --> 00:50:32.780
a few moments ago,
740
00:50:33.400 --> 00:50:35.339
I think that it all has to stem
741
00:50:35.905 --> 00:50:40.165
from the post mix account. So you have to go from, you know, a
742
00:50:40.545 --> 00:50:44.645
unmixed account, a deposit account, an account 0, however you call it,
743
00:50:45.750 --> 00:50:46.570
to a
744
00:50:47.430 --> 00:50:49.850
post mix account, segregated and separate.
745
00:50:52.145 --> 00:50:54.645
And that Postmates account may have different rules,
746
00:50:55.265 --> 00:50:57.765
spending rules that are in in place there.
747
00:50:58.145 --> 00:51:00.725
And then from there, all these other options,
748
00:51:01.390 --> 00:51:03.250
open up that work cohesively together,
749
00:51:04.350 --> 00:51:06.050
and and actually are solving
750
00:51:06.510 --> 00:51:08.130
problems that users are facing.
751
00:51:08.705 --> 00:51:12.965
Whether that be just a general undermining of a heuristic that you mentioned,
752
00:51:14.945 --> 00:51:16.885
or actually evading a
753
00:51:17.265 --> 00:51:17.765
a,
754
00:51:18.180 --> 00:51:18.500
you know,
755
00:51:19.300 --> 00:51:19.800
overzealous
756
00:51:20.420 --> 00:51:22.760
exchange, for example, who is known to blacklist
757
00:51:23.220 --> 00:51:23.720
UTXOs.
758
00:51:28.255 --> 00:51:32.675
759
00:51:33.055 --> 00:51:34.435
you guys have set up,
760
00:51:35.480 --> 00:51:39.660
Whirlpool from the entry into Whirlpool to the post mix tools.
761
00:51:41.799 --> 00:51:45.180
How does that all come together into to 1,
762
00:51:46.635 --> 00:51:50.415
a package that is becoming more and more cohesive every day with your new updates?
763
00:51:52.075 --> 00:51:56.880
764
00:51:58.140 --> 00:52:01.200
Whirlpool isn't a isn't an external service.
765
00:52:02.535 --> 00:52:05.835
It's a part of your wallet. It's an area of your wallet.
766
00:52:06.454 --> 00:52:07.195
And it's
767
00:52:07.974 --> 00:52:10.954
a protocol that allows for communication between,
768
00:52:12.230 --> 00:52:12.730
various
769
00:52:13.030 --> 00:52:14.330
collaborators of transactions,
770
00:52:15.030 --> 00:52:17.370
using a centralized coordinator that we run.
771
00:52:17.830 --> 00:52:19.930
The centralized coordinator is blinded.
772
00:52:20.405 --> 00:52:20.905
However,
773
00:52:21.445 --> 00:52:26.105
so it can't really it can't read the message it's passing, but it is passing messages.
774
00:52:28.010 --> 00:52:28.510
So
775
00:52:28.970 --> 00:52:29.470
the
776
00:52:30.569 --> 00:52:34.109
the start a user would go through is what a process called the TX 0.
777
00:52:34.569 --> 00:52:36.190
This is where they take their
778
00:52:36.535 --> 00:52:37.035
their,
779
00:52:37.895 --> 00:52:38.395
unmixed
780
00:52:39.335 --> 00:52:45.755
source coins that they want to mix. They they wanna end up with mixed coins. They take these source coins from their
781
00:52:46.090 --> 00:52:47.070
external account,
782
00:52:47.690 --> 00:52:49.790
and they send them to an address,
783
00:52:52.490 --> 00:52:53.470
and they're automatically
784
00:52:54.025 --> 00:52:54.845
split into
785
00:52:55.545 --> 00:53:02.045
like amount types based on the pool you choose. And there's various denomination pools ranging from 5 BTC
786
00:53:02.950 --> 00:53:03.609
to 001
787
00:53:03.990 --> 00:53:04.490
BTC.
788
00:53:08.070 --> 00:53:09.690
So it creates these these,
789
00:53:10.150 --> 00:53:10.650
like,
790
00:53:11.095 --> 00:53:16.154
amount denominations. This is why it's called equal output coin join because all the outputs are equal in the transaction,
791
00:53:17.174 --> 00:53:21.740
and queues them for what's what what we call a mixing cycle or a cycle.
792
00:53:25.400 --> 00:53:37.184
Each cycle has certain or each cycle has certain rules to it, and this is this is what we term as structured liquidity, meaning that you're gonna be each one of these UTXOs that you have that, let's say, are 0 point
793
00:53:38.020 --> 00:53:39.080
5 BTC,
794
00:53:40.980 --> 00:53:42.440
are gonna be mixed individually
795
00:53:43.300 --> 00:53:46.599
with other participants. They're not gonna be mixed together in the same transaction.
796
00:53:47.585 --> 00:53:48.085
Likewise,
797
00:53:48.625 --> 00:53:50.885
no other participant in that transaction
798
00:53:51.345 --> 00:53:52.065
is gonna be
799
00:53:54.440 --> 00:54:02.300
have been seen together in a previous transaction as well. So every transaction every UTXO that in there is fresh and never seen together before.
800
00:54:03.395 --> 00:54:05.335
This is an important aspect of Whirlpool,
801
00:54:06.195 --> 00:54:12.299
that is not shared by, I don't think, any of the other implementations, and it's an important aspect to to creating,
802
00:54:13.400 --> 00:54:14.460
the highest entropy
803
00:54:15.480 --> 00:54:18.220
Bitcoin transactions that you can that you can create.
804
00:54:19.615 --> 00:54:22.835
I mean, from there, once the mix has been occur has been achieved,
805
00:54:23.375 --> 00:54:30.730
I will actually, I let me rewind a bit. The the downside of structured liquidity, I might I should bring in, is that it could be slower
806
00:54:31.030 --> 00:54:32.569
because of the strict rules
807
00:54:32.925 --> 00:54:33.245
that,
808
00:54:33.725 --> 00:54:40.705
stop mixes from triggering if these conditions haven't been met. You need constant fresh liquidity coming into the mixing pools,
809
00:54:41.485 --> 00:54:45.359
and that can produce ebb and flow type patterns where some,
810
00:54:45.900 --> 00:54:51.440
sometimes it's, you know, very inactive. There's not a lot of liquidity coming in, and sometimes there's a huge amount coming.
811
00:54:52.505 --> 00:54:55.165
But we feel it's worthwhile for the privacy benefits.
812
00:54:55.625 --> 00:54:58.045
813
00:55:00.240 --> 00:55:05.380
With with CoinJoin tools, the the main threat to a CoinJoin user is,
814
00:55:05.840 --> 00:55:08.095
something called a Sybil attack. And it's when a
815
00:55:08.395 --> 00:55:10.255
external attacker is coming in,
816
00:55:10.795 --> 00:55:12.975
and they're flooding the CoinJoin rounds,
817
00:55:14.290 --> 00:55:21.349
with their own transactions. And then through process of elimination, they're able to have a higher probability of tracking your transactions. Right?
818
00:55:21.650 --> 00:55:22.150
So
819
00:55:22.815 --> 00:55:25.075
one of the main aspects that all of these implementations
820
00:55:25.935 --> 00:55:31.714
seek to target is civil resistance. This idea that if you have an honest actor,
821
00:55:32.910 --> 00:55:37.650
it'll cost less for that honest actor than it will for a civil attacker. An actual,
822
00:55:39.315 --> 00:55:42.215
a monetary cost to try and attack the rounds,
823
00:55:42.675 --> 00:55:47.655
as basically a spam prevention mechanism, the same idea that Bitcoin transaction fees in general
824
00:55:48.860 --> 00:55:49.260
operate under.
825
00:55:50.780 --> 00:55:50.940
The
826
00:55:52.380 --> 00:55:54.000
so so the goal of Whirlpool,
827
00:55:54.380 --> 00:55:55.920
as currently laid out,
828
00:55:56.265 --> 00:56:00.925
is to try and reduce that's create create a situation where it becomes
829
00:56:01.705 --> 00:56:04.365
onerously expensive for a civil attacker to attack.
830
00:56:05.579 --> 00:56:05.900
The downside I've
831
00:56:07.420 --> 00:56:09.680
I'm the the downside is
832
00:56:10.220 --> 00:56:12.160
that because it's a centralized coordinator
833
00:56:12.780 --> 00:56:14.960
and the main civil resistance is
834
00:56:15.805 --> 00:56:16.545
the transaction
835
00:56:16.925 --> 00:56:20.065
the not the well, right now, transaction fees are nothing,
836
00:56:20.845 --> 00:56:28.410
basically nothing. The main civil resistance is the actual coin joint fee, the Whirlpool fee that is paid, to you guys at Samurais.
837
00:56:28.950 --> 00:56:30.010
So as a result,
838
00:56:30.790 --> 00:56:33.690
it doesn't provide civil resistance against you guys,
839
00:56:34.505 --> 00:56:37.885
but it does provide civil resistance against an external attacker,
840
00:56:39.464 --> 00:56:46.569
with the caveat that if fees ever rise and I actually do kinda wanna have a conversation about fees, but we'll have that later, transaction fees on the network,
841
00:56:46.950 --> 00:56:55.285
then that would also provide some level of civil resistance against you guys as well because you would still have to pay on chain transaction fees. Did I get that correct?
842
00:56:56.224 --> 00:56:58.964
843
00:57:00.410 --> 00:57:01.869
844
00:57:02.250 --> 00:57:03.450
845
00:57:04.410 --> 00:57:05.869
I can add on to that,
846
00:57:07.625 --> 00:57:10.925
We I mean, all all of our revenue that we generate in Samurai
847
00:57:11.385 --> 00:57:11.885
is
848
00:57:13.385 --> 00:57:16.605
is on chain, so it can be viewed and tracked
849
00:57:18.310 --> 00:57:19.930
by anyone who wants to look.
850
00:57:20.310 --> 00:57:20.810
And
851
00:57:22.700 --> 00:57:23.770
we tend to
852
00:57:24.415 --> 00:57:35.060
not immediately put it we do put it through Whirlpool eventually, but we don't do it immediately. It's usually 3 months, 4 months, 5 months. So if anyone wanted to, they could actually watch our, you know, addresses
853
00:57:35.840 --> 00:57:36.980
move into Whirlpool,
854
00:57:38.400 --> 00:57:41.460
so they would know exactly when samurai is entering the,
855
00:57:42.320 --> 00:57:42.980
the pool.
856
00:57:48.305 --> 00:57:53.030
857
00:57:54.150 --> 00:57:54.890
858
00:57:55.270 --> 00:58:01.370
I really cannot tell, you know, more about Verpo than, like, some of my wallet does. Right?
859
00:58:02.240 --> 00:58:10.525
What what I would be interested to go in is is, like, the specifics of join market, which is, you know, another
860
00:58:11.640 --> 00:58:12.620
is it is it is
861
00:58:13.240 --> 00:58:15.420
it, correct or it's not a zero link implementation,
862
00:58:15.800 --> 00:58:17.740
but it is a coin joint implementation
863
00:58:18.120 --> 00:58:22.135
quite long existing before started before the actual zeroing specification.
864
00:58:23.955 --> 00:58:24.355
And,
865
00:58:26.275 --> 00:58:31.750
and there are a couple of things that she does differently, differently, and I'm not saying it's overall better or worse. It's just
866
00:58:32.130 --> 00:58:34.550
has use cases that it's more useful.
867
00:58:35.490 --> 00:58:35.990
And
868
00:58:38.365 --> 00:58:40.785
most of the time, it is more difficult to use
869
00:58:41.325 --> 00:58:42.865
and gives you more freedom,
870
00:58:43.405 --> 00:58:44.145
which means
871
00:58:45.329 --> 00:58:50.150
there is more possibility to shoot your yourself on the feet, but also,
872
00:58:51.970 --> 00:58:55.975
can do things which you cannot do with, like, fixed bills
873
00:58:59.395 --> 00:59:00.375
and the way
874
00:59:01.230 --> 00:59:03.329
the accounts are separated in in summary.
875
00:59:03.869 --> 00:59:04.369
Like,
876
00:59:04.829 --> 00:59:07.890
just just short example. I don't want to, like, you know, go into
877
00:59:08.430 --> 00:59:16.045
every little thing. But the account separation, I think, that is the most important thing you need to do, which is you are not
878
00:59:16.960 --> 00:59:18.420
merging your transactions.
879
00:59:19.200 --> 00:59:20.260
You're not merging
880
00:59:20.560 --> 00:59:24.340
the outputs which are coming from a coin join with the change
881
00:59:25.565 --> 00:59:28.705
from your inputs. So, basically, you're not mixing the unmixed
882
00:59:29.245 --> 00:59:34.225
not merging the unmixed change with the coin join outputs. And that is that is
883
00:59:35.520 --> 00:59:41.220
very strictly done in samurai wallet. You have the deposit wallet and then you have the post mix wallet, and you can't
884
00:59:41.770 --> 00:59:42.270
cannot
885
00:59:42.775 --> 00:59:45.435
achieve it in the in the GUI to
886
00:59:45.895 --> 00:59:48.635
spend them together. And same same is
887
00:59:49.015 --> 00:59:51.035
done in join markets by having
888
00:59:51.390 --> 00:59:51.890
5
889
00:59:52.430 --> 00:59:55.090
accounts, which are not specifically named to be deposits,
890
00:59:55.390 --> 00:59:55.890
postmates,
891
00:59:56.190 --> 00:59:57.010
bad bank,
892
00:59:58.510 --> 00:59:59.010
but
893
01:00:00.164 --> 01:00:00.825
they are
894
01:00:01.365 --> 01:00:03.464
fulfilling all the roles in a in
895
01:00:03.845 --> 01:00:08.025
a rolling manner. But the separation happens during coin joints
896
01:00:08.369 --> 01:00:09.109
that when
897
01:00:09.730 --> 01:00:16.885
a coin join happens, the coin join output goes to a separate account and the unmix change stays back in the same.
898
01:00:17.525 --> 01:00:20.185
And then through the 5 mix steps,
899
01:00:21.605 --> 01:00:28.980
this is happening in circular ways. So once some funds goes through 5 coin joints they get get back to the first one and,
900
01:00:29.920 --> 01:00:31.780
I mean, obviously there are 5
901
01:00:32.135 --> 01:00:37.434
to minimize the possibility that there would be this kind of appealing chain where they would get back to
902
01:00:38.135 --> 01:00:45.380
to the same change they were they were starting from. But, I mean, that doesn't really make sense because it's all already been through 5 coin jobs. So
903
01:00:45.780 --> 01:00:47.319
and that that kind of structure,
904
01:00:47.855 --> 01:00:48.675
but it's not liquidity
905
01:00:49.055 --> 01:00:49.555
structure,
906
01:00:49.935 --> 01:00:50.755
but the
907
01:00:52.015 --> 01:00:53.455
the the coin joint kind of,
908
01:00:54.335 --> 01:00:57.315
like, tumbling through. That's why we call the
909
01:00:57.680 --> 01:00:59.780
script which is doing this in one go
910
01:01:01.520 --> 01:01:09.605
through 9, 10 coin joints, a tumbler because the the fines the fines kind of tumbles through the mixups. It's like a waterfall of coin joints then.
911
01:01:11.905 --> 01:01:16.580
And, you know, the very important other difference is that you don't need to
912
01:01:17.300 --> 01:01:18.760
there are no fixed tours,
913
01:01:19.220 --> 01:01:22.040
which means no fixed amounts. So you can
914
01:01:24.020 --> 01:01:25.320
coinjoin any amount,
915
01:01:26.085 --> 01:01:36.400
which means you have a possibility to not create change in in in in transactions. When you are depositing your funds, you can just go and join the whole thing minus the fees. And that's what
916
01:01:37.260 --> 01:01:39.760
you have coming out of it. There will
917
01:01:40.060 --> 01:01:41.120
be no exchange
918
01:01:42.140 --> 01:01:45.395
at all. Right? And this is true for, like,
919
01:01:45.795 --> 01:01:46.295
slightly
920
01:01:46.835 --> 01:01:49.655
I mean, the 100 k kind of pool is kind
921
01:01:50.035 --> 01:01:51.255
of, you know, is a
922
01:01:52.275 --> 01:01:55.820
realistic lower level where it would work to kind of put anything in,
923
01:01:56.680 --> 01:01:58.540
or or break UTXs up,
924
01:01:59.560 --> 01:02:01.660
to that kind of small small size.
925
01:02:05.085 --> 01:02:05.585
And
926
01:02:07.085 --> 01:02:07.905
so the communication
927
01:02:09.724 --> 01:02:11.025
happens all over. Thor
928
01:02:11.390 --> 01:02:14.609
as as with somewhere well, with as well.
929
01:02:17.950 --> 01:02:21.275
And there was a point I I was I was trying to get to,
930
01:02:21.975 --> 01:02:27.275
whichever I'm sure I will I will make later. But the thing these these things are just
931
01:02:27.655 --> 01:02:28.180
kind of
932
01:02:29.300 --> 01:02:34.599
you can you can use both, right, and that and that's what I'm doing as well because I I oftentimes
933
01:02:35.059 --> 01:02:35.960
I like to
934
01:02:36.625 --> 01:02:37.125
use
935
01:02:37.505 --> 01:02:41.605
something which creates me a range of different kind of UTXOs especially
936
01:02:41.905 --> 01:02:43.925
for, like, you know, running lightning.
937
01:02:44.385 --> 01:02:44.885
And
938
01:02:45.720 --> 01:02:52.380
also, the possibility to pay with CoinJoin means that I I'm not only able to when I'm doing a pay peer to peer transaction,
939
01:02:52.954 --> 01:03:01.670
I can do that with summarize as well, but that would be a 2 participant coin join. With joymarketer, I can do, you know, 7 to 9 15 participant coin join
940
01:03:02.869 --> 01:03:05.609
to the destination address, or that could
941
01:03:06.150 --> 01:03:09.049
be a code storage address as well, which would
942
01:03:10.125 --> 01:03:11.665
make it look like it never
943
01:03:12.365 --> 01:03:15.725
got out of that kind of coin joint liquidity pool, so it could be just,
944
01:03:16.445 --> 01:03:17.105
you know,
945
01:03:18.490 --> 01:03:20.250
go on again. But it's not that
946
01:03:20.970 --> 01:03:23.550
the the drawback is that it's not that,
947
01:03:23.930 --> 01:03:24.830
kind of homogenic
948
01:03:25.530 --> 01:03:26.030
as
949
01:03:26.665 --> 01:03:37.860
the Somerai Virpura UTXs are that the same kind of size in, same size of out, and it's just just going I mean, after a couple of runs there is not really a big difference
950
01:03:38.400 --> 01:03:44.180
if you mix I mean, to to my view if you mix 5 times, 10 times, or a 100 times
951
01:03:44.555 --> 01:03:47.695
you basically have a quite I mean, that's
952
01:03:48.395 --> 01:03:49.055
that is,
953
01:03:50.235 --> 01:03:53.215
that broke the chain, right, in in in verbal.
954
01:03:54.570 --> 01:03:59.390
But, obviously, if you if you're not doing that with this kind of same in same out fashion,
955
01:03:59.930 --> 01:04:00.430
then
956
01:04:01.085 --> 01:04:02.545
you might need a bit more
957
01:04:03.164 --> 01:04:04.704
more rounds to kind of,
958
01:04:05.884 --> 01:04:06.384
reliably
959
01:04:07.164 --> 01:04:09.505
break these chains, and you
960
01:04:10.080 --> 01:04:12.900
won't be ease won't be that easy to prove it either.
961
01:04:13.520 --> 01:04:14.420
So there is,
962
01:04:15.200 --> 01:04:20.954
you know, you can go go deep into comparing these, but, yeah, useful tools.
963
01:04:21.575 --> 01:04:24.474
And, yeah, please continue. I don't want to kind of, you know, hijack all this.
964
01:04:26.070 --> 01:04:27.690
965
01:04:28.790 --> 01:04:31.370
That that was perfectly put, and,
966
01:04:31.830 --> 01:04:32.890
I think, you know,
967
01:04:34.025 --> 01:04:34.745
Joy Market,
968
01:04:35.145 --> 01:04:39.645
is is the OG. It's been around for what correct me if I'm wrong, but 2015,
969
01:04:39.945 --> 01:04:42.525
I wanna say. 15. Yes. Correct. Yeah. 2015.
970
01:04:44.150 --> 01:04:51.210
And, you know, when we first started Samurai, which was, I I believe, just a few months before enjoy before joint market got announced,
971
01:04:52.775 --> 01:04:59.015
It definitely served as something of the inspiration to try to replicate and figure out a way. I think, actually, our first,
972
01:04:59.575 --> 01:05:08.240
designs were how to be a mobile join market interface, but back then it was so primitive that it was nearly impossible to do. It was still so early.
973
01:05:09.099 --> 01:05:11.500
But but in any case, yeah, you know, join market is,
974
01:05:12.285 --> 01:05:15.905
has a great design choices in the, account segregation
975
01:05:16.685 --> 01:05:17.505
as you mentioned,
976
01:05:18.045 --> 01:05:19.905
announced. And, you know, that's
977
01:05:20.430 --> 01:05:24.290
true. It was true in 2015, and it's true today. That's the
978
01:05:26.030 --> 01:05:30.645
probably the one of the most important aspects of the coin joint is maintaining that that separation.
979
01:05:31.505 --> 01:05:33.285
So it really should be in every,
980
01:05:33.905 --> 01:05:36.085
coin joint implementation. It should be mandatory
981
01:05:36.625 --> 01:05:38.645
for the, client to do that.
982
01:05:39.720 --> 01:05:42.940
You know, if I was to if I was to disagree with anything,
983
01:05:44.040 --> 01:05:50.145
nothing when in what you said, but if I was to disagree with the protocol, I would say in since 2015, we've learned,
984
01:05:51.005 --> 01:05:54.385
a lot of things about on chain analysis. We've learned
985
01:05:54.790 --> 01:05:55.930
how how chain,
986
01:05:56.470 --> 01:05:58.170
chain analysis companies are,
987
01:05:58.790 --> 01:06:00.970
processing the blockchain, how they're reading the blockchain,
988
01:06:01.430 --> 01:06:02.970
and we we understand
989
01:06:04.075 --> 01:06:06.095
that it's about the flows of UTXOs.
990
01:06:07.355 --> 01:06:07.855
And
991
01:06:09.115 --> 01:06:11.934
it's my personal opinion that in in 2020,
992
01:06:13.089 --> 01:06:16.630
you need to be going with equal output coin joins,
993
01:06:17.250 --> 01:06:17.750
not,
994
01:06:19.329 --> 01:06:20.470
coin join spends,
995
01:06:21.335 --> 01:06:25.195
because it doesn't reliably break the, transaction grab.
996
01:06:25.495 --> 01:06:29.990
And you you mentioned this with saying that you you need to do more rounds, many more rounds,
997
01:06:30.630 --> 01:06:35.369
and that, you know, that that's true. The the rounds can help you, but they can also hurt you,
998
01:06:36.470 --> 01:06:40.955
as well because of the presence of on mixed change within the mixed transactions.
999
01:06:41.815 --> 01:06:50.900
So I mean, if I was if I was joined market, I would change one thing, and that would be getting rid of the unmixed change that follows along the mixed transactions, and that'd be a huge
1000
01:06:51.440 --> 01:06:53.280
huge win for that protocol. And,
1001
01:06:53.839 --> 01:06:59.875
I completely agree, use both. There's absolutely no reason why you shouldn't use use both, both tools to check them out.
1002
01:07:00.895 --> 01:07:04.435
1003
01:07:04.815 --> 01:07:06.115
change in terms of
1004
01:07:06.495 --> 01:07:06.995
the
1005
01:07:07.760 --> 01:07:09.380
5 accounts wouldn't be cyclical.
1006
01:07:10.800 --> 01:07:16.579
So it never gets back to a previous change because, I mean, it it gets rid of it in in the terms of
1007
01:07:17.925 --> 01:07:19.225
it always separated
1008
01:07:19.845 --> 01:07:21.145
to another account.
1009
01:07:21.445 --> 01:07:22.825
But then yes.
1010
01:07:24.245 --> 01:07:26.105
1011
01:07:27.569 --> 01:07:29.670
a a follow along mixed transaction possibly?
1012
01:07:31.170 --> 01:07:39.155
1013
01:07:40.015 --> 01:07:44.410
enter through that coin join, it could enter to to the same mix that it's.
1014
01:07:45.049 --> 01:07:48.510
1015
01:07:48.970 --> 01:07:49.470
combine,
1016
01:07:51.289 --> 01:07:54.005
both accounts in the client, in the joint market client.
1017
01:07:54.484 --> 01:07:57.785
That's as we said, they segregate the unmixed change from the
1018
01:07:58.085 --> 01:07:58.744
the mixed,
1019
01:07:59.125 --> 01:08:00.265
the mixed outputs.
1020
01:08:00.724 --> 01:08:02.825
So we know that the mixed outputs in
1021
01:08:03.140 --> 01:08:03.960
a joint market transaction
1022
01:08:04.980 --> 01:08:09.000
can't be the same entity that owns the unmixed change that are a part of that transaction.
1023
01:08:09.540 --> 01:08:16.094
Right? So so all my all my point is and I and I don't wanna make this a versus thing or anything like that because that's not what what we came here to do,
1024
01:08:16.555 --> 01:08:19.535
is that this was and it still is a good solution.
1025
01:08:20.350 --> 01:08:22.850
But, you know, our our feeling is that the strongest,
1026
01:08:24.110 --> 01:08:29.330
the strongest coin joints have no deterministic links, and these unmixed chains that follow along
1027
01:08:30.034 --> 01:08:30.855
in the transaction
1028
01:08:31.315 --> 01:08:40.929
are on do create certain deterministic links within the coin joint transaction. Now there's plenty of probabilistic links. The Enjoy Market does work. It breaks up,
1029
01:08:41.430 --> 01:08:44.489
and adds probability to the ownership of inputs to outputs.
1030
01:08:45.110 --> 01:08:48.215
But there's certain transactions that are UTXOs that are linked
1031
01:08:49.014 --> 01:08:49.514
mathematically,
1032
01:08:50.375 --> 01:08:50.875
and
1033
01:08:51.494 --> 01:08:57.994
getting rid of all of those actual linked mathematically UTXOs from the actual mix transaction itself is in our opinion,
1034
01:08:58.840 --> 01:09:01.660
you know, needs to be the de facto or should be the de facto.
1035
01:09:02.280 --> 01:09:05.100
Anything after that, like go go oh, sorry. Go ahead.
1036
01:09:05.614 --> 01:09:10.094
1037
01:09:10.735 --> 01:09:19.530
how this kind of structure is being built in and how clean or kind of, you know, straightforward it is, how how kind of the TX 0 creates these
1038
01:09:20.070 --> 01:09:22.650
equal amounts. And then, basically, once they entered
1039
01:09:24.935 --> 01:09:47.015
the virtual mix, once they have been through the first one, then they their amount is just does it just doesn't change completely. So it's not even just equal output as in the joint market, but also a single equal input within within the pool. So that that makes it it makes it just completely kind of formogenic as as as I would see it. It's as you usually,
1040
01:09:48.870 --> 01:10:00.165
when people talk about like chain analysis chain surveillance companies looking at to the airport and, you know, some if they say funds enter into that, they just forget it. There is no probabilities to look for. Whereas
1041
01:10:01.025 --> 01:10:05.445
probably like in your market let's just say there could be some things to try
1042
01:10:05.780 --> 01:10:06.280
and,
1043
01:10:06.740 --> 01:10:08.360
I mean, yes, probabilities
1044
01:10:09.220 --> 01:10:17.215
1045
01:10:17.675 --> 01:10:20.094
It's not like it's out there on a dish for you,
1046
01:10:20.715 --> 01:10:25.770
but but it's still there. And and that's again, I'm not, like, I'm not shitting on joint market at all
1047
01:10:26.710 --> 01:10:30.250
because we have to remember, joint market's from 2015. The fundamental
1048
01:10:30.710 --> 01:10:34.495
working on joint market in terms of how it breaks the chain
1049
01:10:35.035 --> 01:10:37.535
hasn't changed since then. It's pretty much the same
1050
01:10:37.995 --> 01:10:38.495
protocol,
1051
01:10:39.675 --> 01:10:41.135
in terms of the chain breaking.
1052
01:10:42.050 --> 01:10:50.390
You know, so I I I think that we have we've learned things since then. And we we certainly have built on the shoulders of giants, you know, in terms of what we've learned,
1053
01:10:51.005 --> 01:10:53.665
as a community and and and and the privacy community.
1054
01:10:54.685 --> 01:11:02.280
1055
01:11:02.580 --> 01:11:03.480
including the,
1056
01:11:03.860 --> 01:11:07.400
you know, that kind of hugely interesting kind of analysis,
1057
01:11:07.865 --> 01:11:10.525
which was the analysis of transactions from 2015,
1058
01:11:11.785 --> 01:11:16.685
regarding this Grinchin case, which, the the kind of samurai
1059
01:11:18.330 --> 01:11:18.830
research,
1060
01:11:19.850 --> 01:11:21.710
or is it is it OTX
1061
01:11:22.090 --> 01:11:25.470
1062
01:11:26.305 --> 01:11:34.725
1063
01:11:35.119 --> 01:11:36.900
I think to the to the positive.
1064
01:11:38.639 --> 01:11:39.139
And
1065
01:11:39.440 --> 01:11:44.579
what what did they change since? What jaw market has changed that there is more I mean, in the tumbler,
1066
01:11:45.105 --> 01:11:47.525
So in this waterfall kind of type
1067
01:11:48.945 --> 01:11:49.925
of coin join
1068
01:11:51.985 --> 01:11:53.445
script, which does,
1069
01:11:54.310 --> 01:11:55.530
which is the most efficient
1070
01:11:56.070 --> 01:11:58.890
way of doing it is it does include
1071
01:11:59.830 --> 01:12:06.665
transactions from the start, the first transaction and then a couple more which does not create this exchange at all
1072
01:12:07.364 --> 01:12:08.265
but uses
1073
01:12:08.725 --> 01:12:15.770
uses all UTXOs. So it kind of kind of tries to kind of prevent this this problem. And then that is the same
1074
01:12:16.150 --> 01:12:17.290
kind of recommendation
1075
01:12:17.750 --> 01:12:30.530
when someone uses join market which is obviously, you know, you cannot check people to do this. But to be to act as like a a taker, the initiator of the coin joint transaction, you can do the sweep transactions. When you
1076
01:12:30.910 --> 01:12:37.105
are using the ability to coin joint any amount, you're just going to join all the amount available in that account, and then you are not,
1077
01:12:37.505 --> 01:12:38.965
creating any any exchange.
1078
01:12:39.345 --> 01:12:46.750
And and, again, this is not, like, built into the protocol. This is something which has I mean, not not in the kind of non Tumblr
1079
01:12:47.210 --> 01:12:48.430
protocol, but,
1080
01:12:49.370 --> 01:12:52.350
it's something which any user could do and, you know, it's recommended
1081
01:12:52.785 --> 01:12:56.405
to do, especially during, like, you know, times where you have, like,
1082
01:12:56.785 --> 01:12:58.325
one one set to buy transactions
1083
01:12:59.025 --> 01:13:00.885
and, like, plenty of plenty of liquidity,
1084
01:13:01.345 --> 01:13:05.760
available as well. And, just one other thing I I would I would want I wanted
1085
01:13:07.739 --> 01:13:10.560
to touch on that, you have this so
1086
01:13:10.935 --> 01:13:13.515
so obviously this is this is this is the issue. Right? I mean,
1087
01:13:13.895 --> 01:13:16.375
I'm I'm certain we will we will speak about this that,
1088
01:13:18.534 --> 01:13:19.034
Verpool
1089
01:13:19.335 --> 01:13:19.835
basically
1090
01:13:23.070 --> 01:13:28.850
tries to solve this omniscient problem by just just separating and basically disposing those funds,
1091
01:13:29.255 --> 01:13:32.475
putting them in a in a not to use kind of wallet.
1092
01:13:34.055 --> 01:13:35.675
Not to use part of the wallet,
1093
01:13:36.135 --> 01:13:44.800
which which would be the arm exchange and the which would be tied to all the inputs which have entered entered the in the t x zero.
1094
01:13:45.585 --> 01:13:46.085
And,
1095
01:13:46.705 --> 01:13:48.405
and that's those are the things
1096
01:13:49.265 --> 01:13:50.565
I I really would like to,
1097
01:13:51.105 --> 01:13:55.800
kind of go into and hear hear from you what what we'll do about this.
1098
01:13:57.619 --> 01:14:01.320
But that's another thing which show markets gives you a bit more flexibility
1099
01:14:01.699 --> 01:14:06.755
that you have, like, 5 of these mixed debts by default. I mean, you can even increase them, but,
1100
01:14:07.235 --> 01:14:08.375
this is kind of a
1101
01:14:09.155 --> 01:14:10.695
a good trade off number.
1102
01:14:11.599 --> 01:14:12.099
And
1103
01:14:12.880 --> 01:14:15.440
funds from different sources, you can also just,
1104
01:14:16.559 --> 01:14:25.125
deposit into the into the different accounts freely, like, different new addresses in in different accounts. And that what it means that
1105
01:14:25.665 --> 01:14:34.410
they won't, like, enter into a t x zero just by themselves or just, like, merged when they are entering the t x zero because, obviously, the incentive with
1106
01:14:35.110 --> 01:14:37.130
with Verpool is that the bigger
1107
01:14:37.590 --> 01:14:38.090
amount
1108
01:14:38.470 --> 01:14:38.970
you
1109
01:14:39.325 --> 01:14:40.145
throw in there,
1110
01:14:40.845 --> 01:14:43.425
proportion less fees you are you are,
1111
01:14:45.085 --> 01:14:47.425
paying, which is which is great great
1112
01:14:48.205 --> 01:14:49.105
incentive, but
1113
01:14:49.630 --> 01:14:53.650
people will tend to merge their funds from different sources, I would think,
1114
01:14:54.429 --> 01:14:57.650
unless, you know, obviously being known and then you have, like, you
1115
01:14:58.375 --> 01:15:00.715
being warned about this and the you have
1116
01:15:01.415 --> 01:15:08.139
the idea of this multipart, GTX zeros, and things which are coming. I'm sure that's that's the thing as well. But churn market gives
1117
01:15:08.840 --> 01:15:11.260
this option to kind of, from the start,
1118
01:15:11.639 --> 01:15:14.365
separate. So inside one wallet, you have 5 accounts
1119
01:15:14.685 --> 01:15:17.185
and just separate your different sources to different accounts.
1120
01:15:17.485 --> 01:15:20.865
And that's that's just another unique thing which
1121
01:15:21.325 --> 01:15:22.385
which it can do.
1122
01:15:23.219 --> 01:15:24.280
And, yeah,
1123
01:15:24.739 --> 01:15:32.415
please I mean, please go on, you know, on the comments and, you know, what what what what are you If I could just jump in If I could just jump in real quick here.
1124
01:15:33.455 --> 01:15:40.275
1125
01:15:40.640 --> 01:15:43.460
And they've selected very different, trade off balances.
1126
01:15:45.040 --> 01:15:48.980
The main one being that joint market doesn't rely on a centralized coordinator,
1127
01:15:50.705 --> 01:15:52.324
while Samurai Whirlpool does.
1128
01:15:52.864 --> 01:15:55.525
So you do have that issue where you don't have,
1129
01:15:55.985 --> 01:15:58.324
civil resistance against the coordinator itself.
1130
01:15:58.625 --> 01:16:00.005
You also have the issue
1131
01:16:00.390 --> 01:16:00.890
that,
1132
01:16:01.909 --> 01:16:05.370
I think when join market was was initially conceived,
1133
01:16:05.989 --> 01:16:07.290
was this idea that,
1134
01:16:08.245 --> 01:16:10.345
maybe, like, no company could actually,
1135
01:16:11.125 --> 01:16:16.025
in the upcoming regulatory environment, run a known coordinator, you know, run a centralized coordinator.
1136
01:16:16.770 --> 01:16:19.750
Fortunately, that hasn't been the case yet, but it could be in the future.
1137
01:16:20.610 --> 01:16:24.470
And then you have we as as we were talking earlier, is is the main
1138
01:16:25.305 --> 01:16:32.765
the main threat vector that these implementations should be solving for is this idea of civil resistance against an external attacker.
1139
01:16:34.450 --> 01:16:36.550
And JoinMarket accomplishes this,
1140
01:16:37.250 --> 01:16:39.750
by it has a maker taker system,
1141
01:16:40.450 --> 01:16:41.830
where people post liquidity,
1142
01:16:42.525 --> 01:16:46.145
as makers, and they receive a fee for providing that maker liquidity.
1143
01:16:47.805 --> 01:16:53.199
And the taker constructs the transaction. So the taker's basically the coordinator in the transaction.
1144
01:16:54.139 --> 01:16:55.519
And so so the
1145
01:16:55.900 --> 01:16:57.280
the the way that
1146
01:16:57.659 --> 01:16:59.119
civil resistance is
1147
01:16:59.985 --> 01:17:04.645
is is attempted to be achieved there is by going through multiple makers because
1148
01:17:05.025 --> 01:17:11.280
the worry has always been that a maker could be chain surveillance companies, that chain surveillance companies could be running many makers.
1149
01:17:12.460 --> 01:17:12.960
And
1150
01:17:13.820 --> 01:17:24.030
the other thing that has has been added recently or is about to be added is this idea of fidelity bonds, right, where Yep. The makers have to if you're an honest maker,
1151
01:17:24.810 --> 01:17:35.595
it'll cost you less than if you're a civil attacker maker where you you have to run basically multiple makers. So you're gonna end up paying you're gonna end up locking up more Bitcoin. Right?
1152
01:17:36.295 --> 01:17:41.520
1153
01:17:42.380 --> 01:17:45.040
time lock some funds, let it be, you know,
1154
01:17:45.580 --> 01:17:49.680
a month or even up to a couple of years, and exponentially
1155
01:17:50.215 --> 01:17:51.114
to the
1156
01:17:53.094 --> 01:17:53.594
deposited
1157
01:17:53.974 --> 01:17:59.275
the amount of deposited front funds time to times to time, you will have a higher chance
1158
01:17:59.710 --> 01:18:01.090
to be chosen
1159
01:18:01.550 --> 01:18:07.410
by the takers because the takers would have an incentive, and that will be in the in the kind of protocol
1160
01:18:07.965 --> 01:18:17.920
change as well that, the takers will have the incentive to choose people who have deposited more and more funds. And, you know, that you have if you deposit
1161
01:18:18.220 --> 01:18:18.960
if you
1162
01:18:19.660 --> 01:18:24.160
time lock, not just deposit because that's outside of what you're offering for coin joining.
1163
01:18:25.265 --> 01:18:25.765
If
1164
01:18:26.225 --> 01:18:27.365
if you dip deposit,
1165
01:18:27.905 --> 01:18:29.045
5 times more
1166
01:18:30.705 --> 01:18:33.205
funds, then you will have 25 times more
1167
01:18:34.230 --> 01:18:35.450
chance to get
1168
01:18:36.710 --> 01:18:37.850
to get to be chosen.
1169
01:18:38.310 --> 01:18:41.325
And, you know, this will make it kind of exponentially,
1170
01:18:42.505 --> 01:18:50.770
more expensive to kind of just run multiple accounts, but it would burst burst it much more to just run one account with your with your funds. So this kind of sibling
1171
01:18:51.550 --> 01:18:52.530
would would be,
1172
01:18:53.230 --> 01:18:55.010
you know, would need to,
1173
01:18:55.870 --> 01:18:58.130
lock a lot more funds to
1174
01:18:58.775 --> 01:18:59.275
to
1175
01:18:59.974 --> 01:19:02.155
be a a significant part of the order book.
1176
01:19:02.614 --> 01:19:13.020
So that and that's the idea. It's it's coming with the next release. It's being heavily tested now, and they just about to kind of, being merged and and coming with the next major release,
1177
01:19:13.960 --> 01:19:25.094
the. So it's every anyone wants to have a look or test, it this is a very good time to do it because there is, like, a live discussion and, and and still kind of influx, but almost ready.
1178
01:19:25.830 --> 01:19:30.330
1179
01:19:30.950 --> 01:19:31.930
allows for,
1180
01:19:32.870 --> 01:19:33.850
first of all,
1181
01:19:34.695 --> 01:19:42.394
you know, a a chain surveillance company is gonna have to pay their Whirlpool fees if they want to try and civil the mixes. They're able to to add this
1182
01:19:42.760 --> 01:19:46.860
this additional sybil resistance that you can't do in a noncentralized fashion.
1183
01:19:47.720 --> 01:19:50.140
It allows for a structured liquidity pool,
1184
01:19:50.905 --> 01:19:55.245
where you have these equal output coin joins that are designed to
1185
01:19:55.625 --> 01:19:56.765
to be as nondeterministic
1186
01:19:57.225 --> 01:19:57.885
as possible.
1187
01:20:01.760 --> 01:20:04.980
And and you have a I I I feel like nondeterministic.
1188
01:20:05.520 --> 01:20:06.420
1189
01:20:07.120 --> 01:20:08.075
1190
01:20:08.555 --> 01:20:09.935
yeah, I guess. They're nondeterministic
1191
01:20:10.395 --> 01:20:11.935
without any external data.
1192
01:20:12.795 --> 01:20:17.295
Correct. They're on chain. But there's external data everywhere. But, yeah, I agree on that.
1193
01:20:17.850 --> 01:20:19.710
Thank you for the correction. And then the
1194
01:20:21.530 --> 01:20:26.510
the the also, the advantage, I would say, of a centralized coordinator, which is kind of a nuanced advantage,
1195
01:20:27.565 --> 01:20:29.025
is that you end up with
1196
01:20:29.485 --> 01:20:31.185
a a a better user experience.
1197
01:20:31.725 --> 01:20:32.445
I feel like it's
1198
01:20:35.330 --> 01:20:38.230
it it not only does it reward
1199
01:20:39.090 --> 01:20:42.070
the service provider that's providing the centralized
1200
01:20:42.375 --> 01:20:46.235
coordination with fees, which goes towards improving the project.
1201
01:20:48.054 --> 01:20:49.675
But it provides a
1202
01:20:51.350 --> 01:20:53.290
the, like, the communication mechanism,
1203
01:20:54.310 --> 01:20:56.810
because you're going to a centralized server,
1204
01:20:57.270 --> 01:21:05.065
via Tor, but you're going to a centralized server is a a smoother communication system rather than going through, like, the modified IRC
1205
01:21:05.445 --> 01:21:05.945
communication
1206
01:21:06.405 --> 01:21:07.705
that join market uses.
1207
01:21:08.739 --> 01:21:14.420
1208
01:21:14.980 --> 01:21:18.119
is offer a better experience than a noncentralized service.
1209
01:21:19.145 --> 01:21:32.020
The the difference with Whirlpool is there's nothing mission critical critical about what the centralized service is doing. So it's not taking custody. It's not taking private keys. It's not reading reading messages. It's just a message passer. It's it's essentially
1210
01:21:33.200 --> 01:21:34.935
the same coordination that
1211
01:21:35.895 --> 01:21:37.995
join market or Saba or anything uses.
1212
01:21:38.695 --> 01:21:39.275
It's just
1213
01:21:39.815 --> 01:21:43.115
a join market is non custodial. I'm sorry. It's it's
1214
01:21:43.680 --> 01:21:46.900
it's a decentralized because it routes via the modified IRC,
1215
01:21:48.960 --> 01:21:50.420
which is itself a
1216
01:21:52.000 --> 01:21:53.380
a decentralized network.
1217
01:21:53.815 --> 01:21:59.115
1218
01:22:00.375 --> 01:22:09.650
1219
01:22:10.065 --> 01:22:14.005
It was it was a cool idea and its deployment is very nice to see.
1220
01:22:14.545 --> 01:22:20.719
I we actually think that join market could could make very good use of Soroban for coordination,
1221
01:22:22.699 --> 01:22:27.760
especially in a federated type of model that we're we're kind of considering, but that's that's besides the point.
1222
01:22:29.644 --> 01:22:34.144
And one one clarification I think needs to be made, Matt, and that is that
1223
01:22:34.525 --> 01:22:41.480
it's not our primary objective to to stop civil attacks. That's that's a you know, it's kind of a fundamental to given.
1224
01:22:42.420 --> 01:22:52.525
The coordinator needs to make sure that they're not being civil attacks because the fundamental objective is to make sure the user is obtaining the best possible mix they can they can achieve.
1225
01:22:53.450 --> 01:22:53.950
And
1226
01:22:54.570 --> 01:22:56.750
preventing civil attacks falls under
1227
01:22:57.210 --> 01:22:58.030
that umbrella.
1228
01:22:59.370 --> 01:23:02.275
But the way you described it is correct. Yes.
1229
01:23:03.875 --> 01:23:05.015
They would have to pay
1230
01:23:05.475 --> 01:23:07.415
the coordinator fee to us,
1231
01:23:07.795 --> 01:23:10.534
and that is a method of civil resistance. The second
1232
01:23:10.940 --> 01:23:14.240
second issue is the, concept of structured liquidity,
1233
01:23:15.180 --> 01:23:17.360
meaning that a chain analysis,
1234
01:23:18.060 --> 01:23:18.560
UTXO
1235
01:23:19.175 --> 01:23:20.715
will only be able to poison,
1236
01:23:21.895 --> 01:23:23.355
one mix at a time.
1237
01:23:24.855 --> 01:23:25.835
And that's that's,
1238
01:23:26.190 --> 01:23:28.210
you know, counter to their objectives there.
1239
01:23:28.909 --> 01:23:29.409
And
1240
01:23:30.110 --> 01:23:33.489
any any kind of modified clients or any kind of
1241
01:23:34.815 --> 01:23:39.235
notice that a UTXO might be connected to another UTXO that's coming in
1242
01:23:39.695 --> 01:23:48.900
to the pool as a on a, on a different client, the coordinator will will keep note of that, will keep an eye out on that and automatically blacklist, those UTXOs.
1243
01:23:49.280 --> 01:23:53.060
So, you know, we take our our job as coordinator very, very seriously
1244
01:23:54.445 --> 01:23:56.545
in creating a creating an environment
1245
01:23:57.165 --> 01:23:57.985
that is,
1246
01:23:58.525 --> 01:24:05.850
gonna create the best possible mixes for our users because, fundamentally, what matters the end of the day is the tracks you leave behind on chain.
1247
01:24:06.950 --> 01:24:11.844
And, you know, we need our chain our our mixes on chain to be as strong as possible.
1248
01:24:12.945 --> 01:24:14.485
1249
01:24:15.265 --> 01:24:21.800
civil resistance is like the question of, preventing the the real time ongoing surveillance.
1250
01:24:22.180 --> 01:24:22.680
Right?
1251
01:24:23.860 --> 01:24:25.160
But what remains
1252
01:24:25.540 --> 01:24:27.640
forever is is the
1253
01:24:28.485 --> 01:24:29.465
track on the chain,
1254
01:24:30.485 --> 01:24:32.585
which can be looked back at any time
1255
01:24:33.364 --> 01:24:35.705
Absolutely. Even 5 years later to
1256
01:24:38.040 --> 01:24:40.620
try to, yeah, track back some events.
1257
01:24:44.575 --> 01:24:52.355
1258
01:24:55.150 --> 01:25:02.610
1259
01:25:05.535 --> 01:25:06.355
much more energy,
1260
01:25:08.255 --> 01:25:19.780
requirement is needed for that much more work than just, you know, spinning up an algorithm later on, which they are getting better and better, and they will be able to go deeper and deeper into the connections.
1261
01:25:20.835 --> 01:25:25.094
And then, you know, they might find us even more than what they do now
1262
01:25:26.355 --> 01:25:27.815
later on on the chain.
1263
01:25:28.700 --> 01:25:31.440
So, yeah, the mix quality is obviously is a is a
1264
01:25:31.820 --> 01:25:34.880
hugely important aspect and, you know, that it's
1265
01:25:35.340 --> 01:25:37.840
something you might pay you might consider paying
1266
01:25:38.445 --> 01:25:39.344
more as
1267
01:25:44.445 --> 01:25:47.340
1268
01:25:48.460 --> 01:25:52.000
conversation point ago, open up, I forgot to get to respond to you.
1269
01:25:53.340 --> 01:26:02.324
I'm happy to hear that the OXT report on the grid chain was useful, for the community, and those changes were made. I wasn't I wasn't aware that those changes had been made.
1270
01:26:03.370 --> 01:26:05.550
And I think that's, you know, a perfect example
1271
01:26:06.250 --> 01:26:06.750
of,
1272
01:26:07.370 --> 01:26:13.435
how, you know, those research reports are supposed to be used, you know, to improve the privacy,
1273
01:26:14.534 --> 01:26:15.915
prospect for the users,
1274
01:26:17.255 --> 01:26:27.500
you know, for the developers of the protocol. You know, not to take it with blind faith, but to explore the findings for themselves and see what they, you know, what they find and if if they need to create a
1275
01:26:28.520 --> 01:26:30.140
a change or a fix or whatever.
1276
01:26:30.735 --> 01:26:41.340
1277
01:26:42.040 --> 01:26:51.085
this toxic recall attack was you know, it's pointed out something which which, you know, people wouldn't have before, so it was kind of a concept which was not known. But just to be clear, the changes
1278
01:26:52.185 --> 01:26:54.605
within the Tumblr protocol and,
1279
01:26:55.545 --> 01:27:02.280
yeah, exactly that was introduced, like, in 2016. So it was shortly after the transactions which have been
1280
01:27:02.580 --> 01:27:09.975
like, you know, it was introduced after the transaction which have been analyzed I understand. Okay. In in in the research. But then,
1281
01:27:10.675 --> 01:27:14.390
there is on Webexchange blog, there is, like, a
1282
01:27:15.090 --> 01:27:23.270
good couple of pages response, not as detailed as the research, but, you know, trying to make Indian points. And there is, like, a good recommendation of usage, which includes
1283
01:27:24.195 --> 01:27:26.535
the recommendation to do this kind of thing, which,
1284
01:27:27.315 --> 01:27:28.135
is to
1285
01:27:29.715 --> 01:27:36.070
alternate the taker and the maker roles. So initiate some coin joints and, and avoid the exchange in
1286
01:27:36.470 --> 01:27:38.090
with, with sweeping
1287
01:27:38.950 --> 01:27:41.530
UTXs and and mix ups occasionally.
1288
01:27:43.145 --> 01:27:43.805
Got it.
1289
01:27:47.625 --> 01:27:50.285
1290
01:27:51.270 --> 01:27:53.449
talking CoinJoin implementations here,
1291
01:27:54.150 --> 01:27:56.730
and the trade offs of the different CoinJoin implementations.
1292
01:27:57.510 --> 01:28:00.010
I mean, I guess it it would only make sense
1293
01:28:00.495 --> 01:28:02.675
to jump into Wasabi for a little bit,
1294
01:28:03.295 --> 01:28:04.915
since it is probably
1295
01:28:06.015 --> 01:28:09.475
partially because of my doing as a major Wasabi promoter,
1296
01:28:10.579 --> 01:28:12.840
that has since retracted my endorsement,
1297
01:28:14.260 --> 01:28:18.360
of the tool. I, you know, I I personally think it's a a waste of money and
1298
01:28:19.085 --> 01:28:20.385
is dangerous to users.
1299
01:28:22.765 --> 01:28:30.560
Should we should we jump into the concerns about using Wasabi and and what, I mean, what joint market and and Whirlpool,
1300
01:28:30.940 --> 01:28:33.840
you know, how how they differ from Wasabi in that regard?
1301
01:28:36.195 --> 01:28:37.415
1302
01:28:38.435 --> 01:28:41.475
in the same way that we published a OXC report on,
1303
01:28:42.115 --> 01:28:44.455
on joint market and the grid chain case, we published
1304
01:28:45.060 --> 01:28:46.600
about 3 OST reports
1305
01:28:47.540 --> 01:28:48.760
on, Wasabi
1306
01:28:49.460 --> 01:28:49.700
and
1307
01:28:50.420 --> 01:28:51.720
in in great detail.
1308
01:28:52.675 --> 01:28:56.614
And, you know, the the conclusion that we've come to is the same,
1309
01:28:56.995 --> 01:29:01.655
as you, that it's it's not safe for users to use to obtain any reasonable amount of privacy.
1310
01:29:02.809 --> 01:29:03.630
They're fundamentally
1311
01:29:04.489 --> 01:29:05.949
and architecturally flawed,
1312
01:29:06.570 --> 01:29:09.565
and I think they know it, though they won't admit it.
1313
01:29:10.525 --> 01:29:14.625
And they're hoping to to fix the issues in their second version,
1314
01:29:15.885 --> 01:29:17.665
to be determined when that is released.
1315
01:29:19.389 --> 01:29:25.790
You know, as to what the flaws are in particular, you know, I'm not gonna go into great great detail because everything is,
1316
01:29:26.190 --> 01:29:28.290
is freely available. We made everything,
1317
01:29:29.235 --> 01:29:30.295
and published everything
1318
01:29:30.595 --> 01:29:31.095
reproducibly
1319
01:29:31.635 --> 01:29:34.535
so users can can check it out for themselves. But,
1320
01:29:35.475 --> 01:29:37.335
the the major issues again,
1321
01:29:38.930 --> 01:29:43.750
fundamentally are well, I guess you have to start at the most basic level is that there's there's rampant
1322
01:29:44.130 --> 01:29:46.790
address fees on both, on a systemic level
1323
01:29:47.125 --> 01:29:51.785
within the Wasabi client, not a modified client, the Wasabi client.
1324
01:29:53.365 --> 01:29:56.745
It still to this day occurs. We don't they don't explain why,
1325
01:29:57.430 --> 01:30:08.034
You get address for use on both sides of the same mixed transaction. You'll see one address on the input side and the same exact address on the output side. That's absolutely not normal for any,
1326
01:30:08.815 --> 01:30:11.074
anything, but let alone a coin joint transaction.
1327
01:30:12.415 --> 01:30:15.260
To to bigger issues like, again,
1328
01:30:16.840 --> 01:30:24.215
unmixed change following you around creating this peeling chain. Again, not a serious issue by itself as we were discussing earlier, but
1329
01:30:24.835 --> 01:30:25.975
a a piece of metadata
1330
01:30:26.515 --> 01:30:27.175
that is
1331
01:30:27.635 --> 01:30:28.035
used,
1332
01:30:28.675 --> 01:30:30.375
to further undermine
1333
01:30:30.675 --> 01:30:33.095
the quality of these mixes with all the other issues,
1334
01:30:34.870 --> 01:30:37.610
you know, at play in in the Wasabi client.
1335
01:30:40.550 --> 01:30:42.490
Gosh. Where where where else?
1336
01:30:42.805 --> 01:30:45.145
1337
01:30:45.765 --> 01:30:51.945
First of all, one of the you know, not only is does it end up in a in a poor quality mix if you,
1338
01:30:52.810 --> 01:30:58.830
have reused addresses with Wasabi, but it also means that the user is paying more because the Wasabi fee structure,
1339
01:30:59.605 --> 01:31:02.025
whilst the the Wasabi implementation
1340
01:31:02.405 --> 01:31:08.425
the the most similar aspect it has to Whirlpool is that it relies on a centrally centralized coordinator that's blinded,
1341
01:31:09.350 --> 01:31:10.570
that runs through Tor.
1342
01:31:11.909 --> 01:31:15.290
The fee structure is completely different. So with the fee structure of Wasabi,
1343
01:31:16.205 --> 01:31:18.785
you're literally paying for the amount of
1344
01:31:20.285 --> 01:31:22.785
perceived other users that are in your mix,
1345
01:31:23.800 --> 01:31:31.340
the the amount of other UTXOs that are in your mix with you, and it scales based on that. So if you have users that are reusing addresses,
1346
01:31:32.195 --> 01:31:35.175
you're not getting any benefit from them participating
1347
01:31:35.554 --> 01:31:36.054
in
1348
01:31:36.355 --> 01:31:40.855
the in the mix, but you are paying Wasabi for them being part of it.
1349
01:31:41.940 --> 01:31:45.160
And one of the main benefits of a centralized coordinator
1350
01:31:46.020 --> 01:31:49.960
is that you do get benefit of them enforcing structural liquidity.
1351
01:31:50.915 --> 01:32:03.880
So the you know, one of the reasons why you'd want to use, a centralized coordinator over something like join market is that they prevent something like that from happening. It it is even though it's blinded, it can completely stop reused addresses from happening,
1352
01:32:05.355 --> 01:32:07.855
but they haven't implemented anything in that regard.
1353
01:32:09.035 --> 01:32:11.935
And it's curious because they do get paid more in that result.
1354
01:32:13.250 --> 01:32:16.150
I think an interesting case for us to talk about, and I have,
1355
01:32:16.929 --> 01:32:21.190
I have a screenshot of it on the screen for anyone watching the video,
1356
01:32:21.695 --> 01:32:24.115
was, the the Twitter, hacker,
1357
01:32:24.655 --> 01:32:31.395
which everyone, you know, news these days. It just goes in one ear or out the other everyone forgets about the Twitter hacker when,
1358
01:32:32.450 --> 01:32:34.630
they got access to the god mode at Twitter
1359
01:32:35.170 --> 01:32:41.350
and was compromising all the different major accounts. I think he even tweeted from Biden's account, before Biden was president.
1360
01:32:43.475 --> 01:32:45.255
So he used Wasabi,
1361
01:32:46.995 --> 01:32:55.400
and what's interesting here is a lot of a lot of talk devolves into user error with Wasabi, this idea that you shouldn't
1362
01:32:58.045 --> 01:32:58.864
you you shouldn't
1363
01:32:59.724 --> 01:33:00.784
obviously combine,
1364
01:33:01.565 --> 01:33:02.945
your unmixed change
1365
01:33:03.485 --> 01:33:03.985
with
1366
01:33:06.160 --> 01:33:07.219
with your mixed,
1367
01:33:07.680 --> 01:33:08.180
UTXOs
1368
01:33:08.560 --> 01:33:09.600
after they go through,
1369
01:33:10.160 --> 01:33:13.219
the mixing process. But in the case of the Wasabi
1370
01:33:14.215 --> 01:33:18.315
hack I mean, the case of the Twitter hacker used Wasabi, he didn't actually combine,
1371
01:33:20.454 --> 01:33:22.474
he didn't combine his unmixed change
1372
01:33:23.230 --> 01:33:25.010
with his post mix.
1373
01:33:25.390 --> 01:33:33.574
What he did was because he didn't remix, and correct me if I'm wrong, and that's what this shows here on the screen, is because he didn't remix and
1374
01:33:34.035 --> 01:33:36.295
the unmixed change went through
1375
01:33:36.915 --> 01:33:40.295
as a as a as a peeling chain and went through with the mix,
1376
01:33:41.429 --> 01:33:45.849
you could do you could do basic math with the unmixed change and his consolidated
1377
01:33:46.230 --> 01:33:50.895
post mix. He only what he did was he consolidated his post mix transactions,
1378
01:33:51.355 --> 01:34:01.580
but he didn't consolidate it with the unmixed change. But if you just did the math, you saw his input go in, and you did the math, and with high probability, those consolidated mix outputs are hits. Right?
1379
01:34:02.520 --> 01:34:06.460
1380
01:34:06.885 --> 01:34:09.145
and your explanation is, spot on.
1381
01:34:10.245 --> 01:34:15.705
This is this is like I said, this is the metadata, right, that follows along the transaction. So that unmixed change,
1382
01:34:16.070 --> 01:34:16.570
2.159
1383
01:34:17.430 --> 01:34:21.850
shouldn't be there. It shouldn't be in a mixed transaction. So this has nothing to do with the user.
1384
01:34:22.230 --> 01:34:23.530
This isn't user error.
1385
01:34:24.815 --> 01:34:27.075
And, you know, in in Whirlpool, we don't allow,
1386
01:34:29.055 --> 01:34:33.770
for more than one UTXO to be in a single mix. So this guy had 3 UTXOs
1387
01:34:34.070 --> 01:34:35.290
here at least,
1388
01:34:35.910 --> 01:34:37.450
in this in this mix.
1389
01:34:38.390 --> 01:34:41.805
That wouldn't happen with Whirlpool. Right? He would have one UTXO in each individual
1390
01:34:45.245 --> 01:34:49.105
mix spend, you know, there's a risk that you could, you know,
1391
01:34:49.640 --> 01:34:51.820
analyze that post mix spend and,
1392
01:34:53.239 --> 01:34:56.620
have some degree of certainty that maybe it came from this initial deposit,
1393
01:34:57.844 --> 01:34:59.784
but not as much as you have here.
1394
01:35:00.405 --> 01:35:11.340
So, you know, that that's it a little bit does come down to the user and their post mix activity, but in the case that we're looking at right here, the user couldn't have done anything different. They just used the protocol as it was designed.
1395
01:35:14.895 --> 01:35:21.395
1396
01:35:22.659 --> 01:35:28.040
mix the unmixed chain if you try and combine the unmixed change with your post mix,
1397
01:35:28.500 --> 01:35:33.305
but it doesn't warn you if you consolidate post mix together, I believe.
1398
01:35:35.365 --> 01:35:37.785
1399
01:35:38.085 --> 01:35:51.735
needs to be assumed that, you know, users, you know, is at some point gonna have to consolidate some UTXOs and post mix together to make a spend. Now in a good mix, that shouldn't necessarily matter too much. Right? If you if you're only
1400
01:35:52.195 --> 01:35:59.335
doing a small amount, a subset of your total amount that you've put in, there's not gonna be an amount of correlation analysis
1401
01:36:00.810 --> 01:36:01.550
done there.
1402
01:36:03.369 --> 01:36:10.185
If you're if you're putting in, like, you know, 500 BTC and taking out 500 BTC a couple days later,
1403
01:36:10.645 --> 01:36:18.260
you know, an analyst is gonna look at that and go, well, I can't say for certain, but I'm pretty sure that's the guy. Right? And they're gonna keep an eye on it and wait for more clues.
1404
01:36:19.760 --> 01:36:21.220
You know, so if you're
1405
01:36:22.010 --> 01:36:22.510
but,
1406
01:36:22.845 --> 01:36:25.025
you know, a small amount of consolidation
1407
01:36:25.405 --> 01:36:28.625
shouldn't harm you if the mix quality is is good.
1408
01:36:31.239 --> 01:36:33.980
1409
01:36:34.440 --> 01:36:38.059
with the Whirlpool implementation is this idea that, first of all,
1410
01:36:38.875 --> 01:36:42.015
something we talk about a lot, in this space is incentives.
1411
01:36:43.915 --> 01:36:46.335
And Whirlpool incentivizes remixing
1412
01:36:46.795 --> 01:36:47.295
because
1413
01:36:47.710 --> 01:36:51.969
you only pay when you enter the liquidity pool. You don't pay for subsequent mixes.
1414
01:36:54.030 --> 01:36:59.005
With Wasabi, you pay for every remix. So and the default is just one
1415
01:36:59.305 --> 01:37:05.325
one mix, basically. The default is an an onset of 50. So if you do one round of 50 or more UTXOs,
1416
01:37:06.630 --> 01:37:08.730
it's just gonna default to a single round.
1417
01:37:09.590 --> 01:37:10.090
So
1418
01:37:10.790 --> 01:37:13.370
you have a couple things there. You have defaults.
1419
01:37:14.265 --> 01:37:15.245
You have incentives.
1420
01:37:16.344 --> 01:37:21.885
And then the third thing is this idea of post mix tools. And and by default with Whirlpool,
1421
01:37:22.185 --> 01:37:23.565
which I think is really cool,
1422
01:37:24.250 --> 01:37:27.550
is that when you make a transaction out of
1423
01:37:28.409 --> 01:37:29.389
the post mix,
1424
01:37:30.329 --> 01:37:32.989
you know, especially a consolidation transaction,
1425
01:37:33.445 --> 01:37:37.145
it will default to something you guys call Stonewall, which is a,
1426
01:37:38.645 --> 01:37:39.385
an imitation,
1427
01:37:41.060 --> 01:37:47.640
2 or more person coin join. This this idea that on chain, it looks like a 2 person coin join, and that is
1428
01:37:50.375 --> 01:37:51.895
that only works because
1429
01:37:52.614 --> 01:37:54.554
that only works as a deception
1430
01:37:54.855 --> 01:37:59.380
because in the wallet, you also have the option of doing something you call Stonewall 2 x
1431
01:37:59.680 --> 01:38:02.980
as opposed to just regular Stonewall, and that's when you actually do
1432
01:38:03.360 --> 01:38:04.580
a person to person,
1433
01:38:05.440 --> 01:38:06.340
coin join,
1434
01:38:06.825 --> 01:38:07.805
as a spend,
1435
01:38:08.825 --> 01:38:12.125
and and that is done without the centralized coordinator. So
1436
01:38:12.505 --> 01:38:17.310
correct me if I'm wrong. Part of the idea is this main trade off that we have with a centralized coordinator,
1437
01:38:19.610 --> 01:38:23.950
where there's no there there's no real civil resistance against the centralized coordinator
1438
01:38:24.490 --> 01:38:25.390
is is
1439
01:38:26.745 --> 01:38:27.485
is mitigated
1440
01:38:28.105 --> 01:38:34.605
because this idea that after you do the post mix, you're able to then do a coin join easily,
1441
01:38:35.360 --> 01:38:43.140
without the coordinator. And even if you do don't do a coin join, the coordinator doesn't know if you did a coin join or not because it looks on chain like it was a coin join. Right?
1442
01:38:43.915 --> 01:38:46.094
1443
01:38:46.474 --> 01:38:50.094
It's identical to so you have Stonewall, you have a Stonewall x 2,
1444
01:38:50.954 --> 01:38:51.920
or times 2.
1445
01:38:52.480 --> 01:38:55.620
And that's exactly what it means. It's a Stonewall with an additional participant,
1446
01:38:56.400 --> 01:39:00.660
that looks exactly like Stonewall, and you can't distinguish it on chain or not. And
1447
01:39:01.705 --> 01:39:04.125
it's the a broader concept of
1448
01:39:04.585 --> 01:39:16.090
that once once mixing has been achieved and the the user isn't, you know, it's never finished. The user is in a constant state of remixing for as long as those UTXOs are in the samurai wallet.
1449
01:39:17.375 --> 01:39:19.715
Those UTXOs are available for remixing.
1450
01:39:20.974 --> 01:39:29.210
When it comes time for the inevitable event where the user needs to spend, whether that's to a merchant or to cold storage or to whatever,
1451
01:39:29.590 --> 01:39:33.770
our our our theory is that there needs to be a variety of different tools,
1452
01:39:34.185 --> 01:39:36.125
which we call post mix spend tools.
1453
01:39:36.825 --> 01:39:38.285
And these tools
1454
01:39:38.665 --> 01:39:40.125
will solve different problems.
1455
01:39:42.350 --> 01:39:45.730
One one problem being consolidating too many UTXOs,
1456
01:39:47.070 --> 01:39:48.130
to make a
1457
01:39:48.830 --> 01:39:52.085
a send to, you know, an external third party,
1458
01:39:52.425 --> 01:39:53.165
not yourself.
1459
01:39:53.625 --> 01:39:54.844
And that's what Stonewall,
1460
01:39:55.145 --> 01:39:59.869
Stonewall X2 aims to aims to help. There's still a level of consolidation
1461
01:40:00.170 --> 01:40:02.110
happening, but there's there's,
1462
01:40:02.889 --> 01:40:04.989
what we what's termed as entropy
1463
01:40:05.425 --> 01:40:08.085
associated with that transaction, meaning the number of combinations
1464
01:40:08.705 --> 01:40:10.085
of inputs to outputs
1465
01:40:10.785 --> 01:40:14.165
are are are dramatically more than a normal,
1466
01:40:14.630 --> 01:40:16.809
quote, unquote, simple Bitcoin transaction.
1467
01:40:17.750 --> 01:40:22.730
But that's just one of the tools we have. The other tool we have, of course, is stowaway, and this is useful when you're sending
1468
01:40:23.035 --> 01:40:23.535
to
1469
01:40:25.035 --> 01:40:33.350
someone of 1 who has samurai, so it's a limited pool already. But, 2, when you wanna send to that person and you want that person to be involved
1470
01:40:33.890 --> 01:40:35.750
as a participant in the transaction.
1471
01:40:36.610 --> 01:40:41.590
The the the biggest benefit of this is it looks like a simple transaction on the blockchain,
1472
01:40:42.855 --> 01:40:43.355
and,
1473
01:40:44.455 --> 01:40:46.075
the amount that's been transacted
1474
01:40:46.775 --> 01:40:48.475
isn't visible on the blockchain.
1475
01:40:48.855 --> 01:40:54.780
And, of course, join market users will be familiar with this functionality because I believe it's in the joint market,
1476
01:40:55.239 --> 01:40:57.340
wallet as as, PayJoin.
1477
01:40:57.800 --> 01:41:04.775
Yep. PayJoin. P to p to p. Yeah. It's an Pay to endpoint. So it's it's a different implementation, but it's it's very, very similar,
1478
01:41:05.395 --> 01:41:05.895
functionality.
1479
01:41:07.955 --> 01:41:19.605
1480
01:41:20.465 --> 01:41:20.965
of
1481
01:41:21.505 --> 01:41:23.925
thing where the which the actual merchants
1482
01:41:24.225 --> 01:41:24.725
use.
1483
01:41:26.930 --> 01:41:32.070
And, obviously, donations and, you know, lots of lots of sites can use
1484
01:41:33.965 --> 01:41:36.224
b d c pay which supports point
1485
01:41:36.525 --> 01:41:37.025
PayJoin.
1486
01:41:37.565 --> 01:41:42.704
Obviously, it needs to run a hot wallet on a server, so there is a bit of a disincent disincentive
1487
01:41:43.085 --> 01:41:46.910
there. And I think there are some mobile wallets which have implemented it, like,
1488
01:41:48.890 --> 01:41:57.685
I yeah. There is, like, a table on Bitcoin Wiki, which is, I think, blue wallet and and maybe the green wallet does it as well, but or or they're just planning.
1489
01:41:58.145 --> 01:41:58.645
But,
1490
01:41:59.505 --> 01:42:09.340
yeah, that's yes. I mean, Postmates tools are like are are just like the tools you you so is like, in joint market, there's no strict separation between,
1491
01:42:10.305 --> 01:42:16.305
CoinJoin tools and Postmates tools. It's a page on a visit that is only when you're sending to someone. But,
1492
01:42:16.865 --> 01:42:18.485
the fact that you are able to
1493
01:42:19.780 --> 01:42:21.240
to, pay with the coin join,
1494
01:42:23.300 --> 01:42:25.880
finding peers in that, you know, encrypted IRC
1495
01:42:26.525 --> 01:42:27.025
chat,
1496
01:42:27.725 --> 01:42:29.025
with with your bot
1497
01:42:29.325 --> 01:42:32.785
is is gives you the ability to to kind of
1498
01:42:33.800 --> 01:42:39.179
go down go go after go after cold storage. And that that's something I'd like to
1499
01:42:39.719 --> 01:42:44.755
what I'd like to ask you about would like to, like, hear more about it. What's your kind of,
1500
01:42:45.795 --> 01:42:47.255
you know, long
1501
01:42:47.715 --> 01:42:49.095
term vision of
1502
01:42:49.475 --> 01:42:52.775
of you know, how how do you imagine that people will
1503
01:42:53.460 --> 01:42:53.960
if
1504
01:42:54.739 --> 01:43:01.480
it picks up I mean, if if the privacy kind of tools usage would pick up and then, you know, we would really
1505
01:43:02.155 --> 01:43:04.255
see every transaction as a coin join.
1506
01:43:04.875 --> 01:43:09.055
Do you think it's do you think that is really possible? Or do you think it is,
1507
01:43:10.320 --> 01:43:13.300
or are you working for the current kind kind of environment
1508
01:43:13.600 --> 01:43:14.739
serving your users
1509
01:43:15.680 --> 01:43:16.180
you
1510
01:43:17.005 --> 01:43:23.265
have at the moment and, you know, making the best out of the circumstances, and it might be very much different in, like, 5 years.
1511
01:43:25.860 --> 01:43:33.945
1512
01:43:34.405 --> 01:43:34.905
who
1513
01:43:35.605 --> 01:43:40.585
want to use Bitcoin and wanna use it privately for whatever reason. There's a multitude of reasons.
1514
01:43:41.020 --> 01:43:41.760
I'm not necessarily
1515
01:43:42.540 --> 01:43:44.080
talking to the mass market.
1516
01:43:44.620 --> 01:43:49.120
You know, I even if I believe that even if I believe that all, you know,
1517
01:43:50.095 --> 01:43:59.540
spends should be a coin join, then we have the tools to make, you know, quote, unquote all, you know, spends a coin join. I know that it's not you know, it's not gonna be the case.
1518
01:44:00.400 --> 01:44:05.140
But I also know that a lot of transactions are Whirlpool transactions currently
1519
01:44:05.745 --> 01:44:08.165
on on chain. So I think that,
1520
01:44:08.625 --> 01:44:13.205
you know, there is a demand from users, and our users are you know, they grow
1521
01:44:13.610 --> 01:44:14.430
all the time,
1522
01:44:15.130 --> 01:44:17.790
month over month in terms of user base. And
1523
01:44:19.690 --> 01:44:20.910
it costs them
1524
01:44:21.585 --> 01:44:22.085
BTC
1525
01:44:22.465 --> 01:44:27.925
to do this. Right? Like, that's a that's a very clear indicator that
1526
01:44:28.900 --> 01:44:31.160
something we're doing something right there, and
1527
01:44:31.540 --> 01:44:34.200
they want what we're providing there.
1528
01:44:35.460 --> 01:44:39.545
So we're we're we're bullish on in that regard. We're definitely bullish in that regard,
1529
01:44:40.085 --> 01:44:42.505
because that that really is, you know,
1530
01:44:43.285 --> 01:44:45.865
paying like, showing like, voting with your wallet. Right?
1531
01:44:48.270 --> 01:44:53.969
Yeah. So, you know, I no. Not everyone, but whoever needs to hear it, that's basically who.
1532
01:44:56.055 --> 01:44:56.555
1533
01:44:59.255 --> 01:44:59.755
What
1534
01:45:00.855 --> 01:45:01.175
I
1535
01:45:01.975 --> 01:45:02.475
so
1536
01:45:03.810 --> 01:45:05.410
what I love the most about,
1537
01:45:05.890 --> 01:45:07.590
about using, you know, multiple
1538
01:45:07.890 --> 01:45:08.390
tools
1539
01:45:08.850 --> 01:45:09.970
is that,
1540
01:45:10.690 --> 01:45:21.750
I mean, one thing is the selection of different size of c t x's. I mean, you know, having multiple ports is already a great start. I mean, you know, just point one Bitcoin is is not good. I mean, that's just
1541
01:45:22.150 --> 01:45:25.210
it it it is good, like, when the price was, like, you know,
1542
01:45:26.550 --> 01:45:27.050
3,000
1543
01:45:27.670 --> 01:45:28.570
or, like, even
1544
01:45:29.505 --> 01:45:32.405
even, like, in between that. But but now
1545
01:45:33.345 --> 01:45:35.365
what's point 1 bitcoins? Like, $3,000?
1546
01:45:35.745 --> 01:45:37.765
I mean, you know, what do I do with that?
1547
01:45:39.950 --> 01:45:44.210
It's not useful for too much to to to many kind of applications. So,
1548
01:45:44.510 --> 01:45:45.250
like, having
1549
01:45:46.085 --> 01:45:46.585
multiple
1550
01:45:46.885 --> 01:45:47.385
100,000,
1551
01:45:48.085 --> 01:45:49.305
1,000,000, 5,000,000,000,
1552
01:45:50.325 --> 01:45:53.385
and 50,000,000 is is is very useful,
1553
01:45:53.925 --> 01:45:54.425
but
1554
01:45:55.830 --> 01:45:59.690
I love to have, like, a selection of these. And then also
1555
01:46:00.230 --> 01:46:01.450
what I really
1556
01:46:02.480 --> 01:46:02.980
because
1557
01:46:03.975 --> 01:46:06.475
my kind of view of how spending
1558
01:46:06.855 --> 01:46:08.395
would be and,
1559
01:46:08.775 --> 01:46:16.690
you know, at the same time we are looking at this manpower chart which is like com it's like it's it's it's it is a ghost that way, you know, there are like multiple
1560
01:46:17.309 --> 01:46:20.369
multiple non full blocks coming up in the in the previous
1561
01:46:20.670 --> 01:46:27.954
previous blocks. So in this case, you know, I would like to have every every every spend as a coin join but,
1562
01:46:29.074 --> 01:46:31.735
and every transaction as a coin join but not when,
1563
01:46:32.100 --> 01:46:35.960
you know, the fees are in the multiple 100 sets per byte. And then
1564
01:46:36.340 --> 01:46:36.840
then
1565
01:46:37.460 --> 01:46:39.239
the activity does visibly
1566
01:46:39.675 --> 01:46:42.815
fall down as well as well as in Whirlpool as well as in Joy Market.
1567
01:46:44.395 --> 01:46:44.895
It's
1568
01:46:45.435 --> 01:46:48.575
perceivable that you don't have that many transactions today.
1569
01:46:49.950 --> 01:46:51.010
So then
1570
01:46:51.550 --> 01:46:52.290
it comes
1571
01:46:53.550 --> 01:46:57.170
the time of these scaling tools which is like the main is lightning.
1572
01:46:57.635 --> 01:47:03.415
And also you can do swaps into lightning which do break the chain to,
1573
01:47:04.275 --> 01:47:06.300
to to a good extent as well.
1574
01:47:06.780 --> 01:47:07.280
And
1575
01:47:08.780 --> 01:47:13.679
what my vision is, how I like to feel it most most efficient to
1576
01:47:14.219 --> 01:47:15.040
use Bitcoin
1577
01:47:15.420 --> 01:47:17.704
is have this private UTXOs and
1578
01:47:19.204 --> 01:47:19.704
just
1579
01:47:21.284 --> 01:47:27.440
fund a lightning channel with them and then basically that is the best transaction from which I can fairly
1580
01:47:28.460 --> 01:47:28.960
comfortably
1581
01:47:29.980 --> 01:47:30.880
can spend.
1582
01:47:32.255 --> 01:47:33.855
Because it is it is
1583
01:47:34.335 --> 01:47:41.395
spending with lightning is is quite private. I mean, it has this aspect of the ongoing surveillance. It can be it can be
1584
01:47:43.679 --> 01:47:44.320
done, but,
1585
01:47:44.880 --> 01:47:45.699
quite unlikely.
1586
01:47:46.400 --> 01:47:46.900
And
1587
01:47:47.520 --> 01:47:56.205
it's even less than, you know, the problem with CBR and C coagens and things. So especially if you have, like, just one channel, there is no no way of probing that,
1588
01:47:57.145 --> 01:48:01.409
if if if there are no, like, payments payments are going through the node.
1589
01:48:02.349 --> 01:48:11.875
So what you're doing when you're opening a a lightning channel is basically batching all those transactions that you have done on lightning to those 2 transactions, which is opening and closing.
1590
01:48:12.255 --> 01:48:13.955
And then you can make those
1591
01:48:14.335 --> 01:48:16.755
those the UTXO basically completely
1592
01:48:17.135 --> 01:48:17.635
disappear
1593
01:48:17.980 --> 01:48:20.719
on this second layer when you spend
1594
01:48:21.100 --> 01:48:22.000
all of it
1595
01:48:22.540 --> 01:48:23.840
on on lightning
1596
01:48:24.300 --> 01:48:24.800
or
1597
01:48:25.515 --> 01:48:29.775
and when you close the channel, there is no change. If there is change, then, you know, change
1598
01:48:30.155 --> 01:48:33.034
would belong into CoinJoin again and not,
1599
01:48:33.675 --> 01:48:34.335
you know,
1600
01:48:34.739 --> 01:48:41.560
should not be merged together with, like, especially transactions on that node or with, you know, other kinds of funds.
1601
01:48:42.755 --> 01:48:43.255
So
1602
01:48:43.715 --> 01:48:45.715
that's what I see. And I and I
1603
01:48:46.195 --> 01:48:49.415
to to be the best the best way, and I'm not expecting
1604
01:48:51.380 --> 01:48:54.200
kind of, similar wallet to be able to
1605
01:48:54.580 --> 01:49:00.645
or not to be able to to work on, you know, implementing lightning because just crazy. Like, you know, let's see what what, like, Alex and Waller did. You know?
1606
01:49:01.585 --> 01:49:04.165
They worked on it for, like, a year or more
1607
01:49:06.099 --> 01:49:11.000
and, compared to disregarding any other thing. And they got an implementation, which is I mean,
1608
01:49:11.540 --> 01:49:24.730
I'm sure it's very exciting as a programmer and a developer, but I don't know anyone who actually uses, like, lightning in Electrum. Right? Because it's nowhere near as good as as the dedicated lightning implementation. So it's
1609
01:49:25.190 --> 01:49:27.050
not best to kind of,
1610
01:49:28.150 --> 01:49:29.210
suddenly change
1611
01:49:29.695 --> 01:49:30.995
change your mind and just
1612
01:49:31.615 --> 01:49:35.645
divide all the all the resources you have to to to to move to
1613
01:49:36.980 --> 01:49:45.400
work on something else even if you would know you you would think it's it's useful, but I know your position might be a bit different. But what I like to do
1614
01:49:45.755 --> 01:49:48.415
is to have the freedom to be able to kind of
1615
01:49:49.195 --> 01:49:49.695
sign
1616
01:49:50.235 --> 01:49:53.535
transactions, which then got to be, like, in channels.
1617
01:49:54.080 --> 01:49:54.400
So,
1618
01:49:55.040 --> 01:50:00.020
at the moment, it's somewhere around what you can you can do sign, like, a little transactions, which can be,
1619
01:50:01.815 --> 01:50:02.955
like, it's a couple
1620
01:50:03.575 --> 01:50:08.955
going through a couple of hoops can be generated bits like, you know, Electrum or or like
1621
01:50:09.360 --> 01:50:11.940
even even inspected or, like, involving
1622
01:50:13.280 --> 01:50:14.500
involving sentinel
1623
01:50:15.280 --> 01:50:23.554
and things like that a bit in a in a clunky way. But do you are you planning to, like, fully support the kind of PSBT formats which can be
1624
01:50:23.855 --> 01:50:28.470
then, you know, make it more flexible, and you don't need to support lightning to be able to,
1625
01:50:28.850 --> 01:50:30.690
you know, send the post next to
1626
01:50:31.570 --> 01:50:33.030
straight to a lightning channel.
1627
01:50:34.505 --> 01:50:35.724
1628
01:50:37.304 --> 01:50:44.360
The SPT support is largely implemented in Samura. It's just not hooked up to any of the, to any UI or anything like that currently.
1629
01:50:45.619 --> 01:50:50.019
But, yeah, we have we have clients for full PSVT support. We we supported it,
1630
01:50:50.659 --> 01:50:53.844
when it was first proposed and started implementing it then.
1631
01:50:54.305 --> 01:50:57.364
We're just a little delayed because it needs it needs to be implemented,
1632
01:50:58.065 --> 01:51:07.200
on the Sentinel side of things as well, And they a proper UI needs to be created because as you stated, it's there's quite a few hoops and it's a little clunky right now.
1633
01:51:08.545 --> 01:51:10.885
But yes. So you a user will definitely be able
1634
01:51:11.505 --> 01:51:13.925
to to process and and create the SPTs.
1635
01:51:15.960 --> 01:51:19.260
1636
01:51:20.040 --> 01:51:26.255
I mean, I think we'd all agree that Lightning is a post mix tool just to go back to our earlier conversation. Yeah. 100%.
1637
01:51:27.435 --> 01:51:30.575
Like everything else, it should it's a post mix tool.
1638
01:51:32.395 --> 01:51:32.895
The
1639
01:51:35.520 --> 01:51:39.060
the Open Arms in the beginning also made an interesting point about
1640
01:51:39.600 --> 01:51:50.025
he didn't say it specifically, but he was referring to the fact that Wasabi has this single equal output pool size, which is 0.1 Bitcoin, 10,000,000 sats, which is $35100.
1641
01:51:50.885 --> 01:51:52.090
So, basically,
1642
01:51:53.190 --> 01:51:55.690
you're saying to users, you know, you have to
1643
01:51:55.990 --> 01:51:56.730
have $35100
1644
01:51:57.430 --> 01:51:59.765
in order to use this privacy tool,
1645
01:52:00.485 --> 01:52:04.985
which to me is, like, a incredible nonstarter if you're trying to increase usage.
1646
01:52:06.405 --> 01:52:09.750
And and with these equal output coin joins, whether it's
1647
01:52:10.150 --> 01:52:11.530
Wasabi or Whirlpool,
1648
01:52:12.310 --> 01:52:15.770
you have this issue where you have this equal output, and anything,
1649
01:52:16.710 --> 01:52:20.375
that's left over is this idea of toxic change. Right?
1650
01:52:20.755 --> 01:52:22.855
And Whirlpool has accomplished,
1651
01:52:23.395 --> 01:52:25.815
Whirlpool has attempted to mitigate this fact
1652
01:52:26.150 --> 01:52:28.010
by adding multiple pool sizes.
1653
01:52:28.390 --> 01:52:34.810
So what we see with a lot of users is they might go into the largest pool size. They go into the 50,000,000 sat pool size,
1654
01:52:35.155 --> 01:52:46.450
and then they take their change, and then they go into the the next pool size, the the the 5,000,000 sat pool size. And then they go into the 1,000,000 sat pool size. And then they take the remaining change, and they go into the 100000
1655
01:52:46.830 --> 01:52:47.890
sat pool size.
1656
01:52:48.750 --> 01:52:49.970
And they're left over
1657
01:52:50.350 --> 01:52:52.530
with UTXOs, a bunch of UTXOs,
1658
01:52:53.605 --> 01:52:55.705
that are under a 100000 sets.
1659
01:52:59.844 --> 01:53:01.705
You know, so so
1660
01:53:02.440 --> 01:53:06.780
one of the things that I was really bullish on was this idea of,
1661
01:53:08.440 --> 01:53:13.185
and and the problem is so you could theoretically, in Samura Wallet,
1662
01:53:13.725 --> 01:53:14.785
then take those
1663
01:53:15.965 --> 01:53:18.525
that toxic change that is that that has,
1664
01:53:18.845 --> 01:53:19.905
that that is
1665
01:53:20.800 --> 01:53:29.225
is is linked to whatever source that it originated from, and you can combine that with your other toxic change to go into a larger pool size. But that's obviously,
1666
01:53:30.485 --> 01:53:31.785
bad practice because,
1667
01:53:33.525 --> 01:53:38.770
you you link those transactions together on chain. It's the common input ownership heuristic all over again.
1668
01:53:40.850 --> 01:53:41.350
The,
1669
01:53:44.370 --> 01:53:44.870
so
1670
01:53:45.415 --> 01:53:54.990
1671
01:53:55.710 --> 01:54:03.735
1672
01:54:04.675 --> 01:54:21.370
the default is to just leave it there. Now you had this there there was this concept being floated around, and I haven't heard much about it since, but this idea of multiparty transaction zeros, where you you go in with a, like, a couple trusted buddies because they can obviously see your transactions that you add,
1673
01:54:22.055 --> 01:54:24.635
and you all go into a new round together
1674
01:54:25.095 --> 01:54:28.795
so that common input ownership heuristic is broken. So no one knows
1675
01:54:30.380 --> 01:54:45.715
if it's if it's 4 people going into a transaction 0 together with their toxic change or if it's one person that's combining toxic change and going into a transaction 0. Is that still something that is on the samurai road map, or has that been discarded as a concept?
1676
01:54:46.255 --> 01:54:52.450
1677
01:54:54.770 --> 01:54:55.750
1678
01:54:56.210 --> 01:55:04.255
Another aspect of the multiple pools is that and I I brought it up earlier to the people watching the video stream, and I'll bring it up one more time.
1679
01:55:06.560 --> 01:55:07.540
Freak Typerboli,
1680
01:55:08.480 --> 01:55:10.020
created this tracking website.
1681
01:55:10.960 --> 01:55:11.780
It's bitcoinkpis.com/privacy,
1682
01:55:15.025 --> 01:55:17.045
And he's tracking, the different,
1683
01:55:18.065 --> 01:55:21.284
activity among the different pool sizes. And one of the aspects
1684
01:55:21.664 --> 01:55:22.885
here is that
1685
01:55:23.620 --> 01:55:28.040
they're they're distinct liquidity pools. So as you add more pool sizes,
1686
01:55:29.300 --> 01:55:31.320
you're really you're breaking up the liquidity
1687
01:55:31.940 --> 01:55:38.205
of the user base. And so you're breaking up the total and onset that the user can achieve in any given pool.
1688
01:55:38.825 --> 01:55:41.485
So I'm curious, like, how much thought is given into
1689
01:55:42.100 --> 01:55:48.100
when you add additional pools? You know, what what size you know, like, what what is your thinking in regard to,
1690
01:55:49.905 --> 01:55:53.845
you know, adding more pool sizes or removing pool sizes, stuff like that?
1691
01:55:54.785 --> 01:55:59.265
1692
01:56:00.290 --> 01:56:06.950
pools. You theoretically could remove a pool, but it's kinda like one of those things, like, it'd be really a real pain to do it.
1693
01:56:08.085 --> 01:56:11.385
So, you know, I'll we like to take that once a pool's there. It's always there.
1694
01:56:12.085 --> 01:56:13.385
So we wanna be careful,
1695
01:56:13.925 --> 01:56:14.425
when
1696
01:56:14.730 --> 01:56:19.949
when issuing or or launching in pool because it's very easy to do, but we don't wanna fracture liquidity.
1697
01:56:20.730 --> 01:56:24.275
So one of the bare minimum things that we do is make sure
1698
01:56:24.975 --> 01:56:25.475
that
1699
01:56:26.175 --> 01:56:26.675
the
1700
01:56:27.375 --> 01:56:30.115
the the pools that are closest in proximity to the denomination
1701
01:56:30.735 --> 01:56:31.235
are,
1702
01:56:32.175 --> 01:56:32.675
stable
1703
01:56:33.469 --> 01:56:41.170
and are, you know, flowing freely, so to speak. So the when we added the the the newest pool we have is the
1704
01:56:42.094 --> 01:56:42.594
0.001
1705
01:56:43.614 --> 01:56:44.114
pool,
1706
01:56:44.655 --> 01:56:45.155
and
1707
01:56:46.335 --> 01:56:47.554
that was added
1708
01:56:50.960 --> 01:56:52.739
once we once we were comfortable
1709
01:56:53.040 --> 01:56:54.420
with the 0.01
1710
01:56:55.120 --> 01:56:56.580
pool in terms of
1711
01:56:57.040 --> 01:57:01.535
how many mixes it it was getting a day, the average kind of waiting time a premixer,
1712
01:57:02.635 --> 01:57:03.375
could expect.
1713
01:57:03.915 --> 01:57:23.705
And you you you always worry a little bit that it's gonna cannibalize the other pools, but so far we don't see we don't see that because it certainly doesn't harm the non sense because for the most part, users are staying in the pool that they they initially went into with the UTXOs and engaging in free remixing because that's what the incentives kind of align towards.
1714
01:57:26.840 --> 01:57:32.140
So it's about it's about taking away new liquidity liquidity that would have gone to
1715
01:57:32.824 --> 01:57:35.405
the the pool, but now there's another option.
1716
01:57:36.344 --> 01:57:49.360
And that was the that was the primary worry, but so far it hasn't been a, it hasn't been realized. The the zero zero one pool has been very popular and it brings it bring with with brand new users
1717
01:57:49.735 --> 01:57:57.335
who are just totally priced out of Whirlpool to begin with. You know? So it really just opened the doors to to a brand new, user base who
1718
01:57:58.120 --> 01:58:00.540
which is what our goal was with that pool.
1719
01:58:01.480 --> 01:58:11.205
Not that that and that's the same exact reason why we won't open a larger pool yet, which we get we get requests all the time for, like, a 1 Bitcoin pool or even larger.
1720
01:58:12.065 --> 01:58:19.980
But we don't feel that the 0.5 pool has reached that level of of maturity. You know, it's still it's still too unpredictable.
1721
01:58:25.114 --> 01:58:27.114
1722
01:58:27.755 --> 01:58:28.955
last week, we had,
1723
01:58:29.435 --> 01:58:30.415
Craig Ron
1724
01:58:31.150 --> 01:58:33.490
of Sparrow Wallet, and we had,
1725
01:58:34.030 --> 01:58:39.650
Kita Miner on. And one of the discussions was this idea of integrating Whirlpool into,
1726
01:58:40.495 --> 01:58:41.475
Sparrow Wallet.
1727
01:58:41.935 --> 01:58:44.255
And, I I feel like it's a
1728
01:58:47.270 --> 01:58:53.610
it's it's an under discussed aspect of your aspirations with Whirlpool, this idea that you can easily
1729
01:58:54.285 --> 01:58:58.925
implement Whirlpool into other wallets and provide an incentive for those wallet devs in terms of,
1730
01:59:01.380 --> 01:59:03.720
they get a they get a portion of their users',
1731
01:59:04.260 --> 01:59:05.240
Whirlpool fees.
1732
01:59:06.580 --> 01:59:07.880
You wanted like,
1733
01:59:08.554 --> 01:59:11.695
is is this this this is some is this something that you're actively
1734
01:59:14.395 --> 01:59:22.230
you would like to see, that you you would like to see other wallets implement Whirlpool as well so that they're part of the same liquidity pool as as Samura users?
1735
01:59:22.610 --> 01:59:25.510
1736
01:59:25.885 --> 01:59:27.505
like that from the get go.
1737
01:59:27.885 --> 01:59:30.945
It was designed to be to be able to be,
1738
01:59:32.365 --> 01:59:34.065
used by multiple clients, multiple,
1739
01:59:34.685 --> 01:59:35.585
diverse clients,
1740
01:59:37.230 --> 01:59:40.770
if we could get other people to use it. So we're we're very happy to,
1741
01:59:41.550 --> 01:59:44.130
talk with any wallets who wanna implement it.
1742
01:59:44.885 --> 01:59:49.225
It's a great way to bring 1, you know, fantastic privacy to their users,
1743
01:59:50.005 --> 01:59:51.785
to to monetize their wallets.
1744
01:59:52.610 --> 01:59:57.909
Because as you said, the the coordinator fee can be shared between the 2 wallet developers.
1745
02:00:00.745 --> 02:00:01.565
And and
1746
02:00:01.865 --> 02:00:03.885
it's a it's it's a great way
1747
02:00:04.265 --> 02:00:05.165
to diversify
1748
02:00:05.705 --> 02:00:10.940
the liquidity pool of of the Whirlpool for all users. It's, you know, so it's essentially
1749
02:00:11.480 --> 02:00:15.020
like adding a bunch of new dojo only users
1750
02:00:15.495 --> 02:00:19.995
to the Whirlpool coordinator. Right? You can kinda think of it like that because
1751
02:00:20.375 --> 02:00:23.675
the samurai wallet server for non Dojo users
1752
02:00:24.170 --> 02:00:24.989
knows the XPubs
1753
02:00:25.530 --> 02:00:31.070
of those users. The the Whirlpool server doesn't. But since, you know, we operate both servers though they're independent,
1754
02:00:31.815 --> 02:00:37.514
some users are concerned about that. So the mitigation, of course, is to run Dojo. But if you don't run Dojo,
1755
02:00:38.135 --> 02:00:41.034
you, you know, samurai server has your XPub.
1756
02:00:41.780 --> 02:00:47.480
The mitigation in this sense of other wallets implementing Whirlpool is there's a whole new,
1757
02:00:48.340 --> 02:00:49.400
entrance of liquidity
1758
02:00:50.145 --> 02:00:50.645
from
1759
02:00:51.105 --> 02:00:59.780
a and the samurai wallet server has no knowledge of those those those wallets, their balances, their UTXOs, their addresses, or anything about them.
1760
02:01:00.340 --> 02:01:03.639
And the Whirlpool coordinator, of course, doesn't need to know any of that stuff.
1761
02:01:03.940 --> 02:01:06.679
Right? It doesn't need to know wallet history or anything.
1762
02:01:07.675 --> 02:01:11.695
So it's it's it's a really solid benefit for us as coordinator
1763
02:01:11.995 --> 02:01:18.690
to get a divide a a more diverse liquidity pool. There's nice incentive for the external wallet developers,
1764
02:01:20.430 --> 02:01:26.555
and it's an overall win for users. And and even if the wallet developers wanted to like, we're hypercompetitive
1765
02:01:27.015 --> 02:01:28.875
with each other, like, you know, let's say,
1766
02:01:29.175 --> 02:01:38.590
we, know, we were competing for the exact same user and we were we were on desktop as well and, you know, we had a contentious relationship or something like that. They could still build it in,
1767
02:01:39.045 --> 02:01:47.145
and the market could could determine based on the quality of post mix tools, based on all these different aspects of the wallet, but at the core fundamental
1768
02:01:48.170 --> 02:01:53.150
mixing, the user is getting the best in class mixing in both. You know? You you kinda know what I mean there.
1769
02:01:53.610 --> 02:02:01.515
So we're super, you know, interested in anyone reaching out to us, but but, specifically, Frank because it's both it's a Java,
1770
02:02:01.915 --> 02:02:08.710
implementation, and he has a Java wallet. You know, it's kind of a match made in heaven. It'd be a very I think it'd be a very easy implementation.
1771
02:02:10.770 --> 02:02:16.494
1772
02:02:16.875 --> 02:02:18.255
By default, it chooses,
1773
02:02:18.715 --> 02:02:24.230
Electrum servers, and I he has a recommended list of, public Electrum Servers that he thinks,
1774
02:02:25.010 --> 02:02:27.270
have good reputations in terms of privacy.
1775
02:02:28.130 --> 02:02:30.295
And you obviously can also use your own node.
1776
02:02:31.255 --> 02:02:32.135
And with with the
1777
02:02:33.015 --> 02:02:38.715
I've repeated this many times on the show, but if you don't use your own node, you're trusting someone else's node,
1778
02:02:39.560 --> 02:02:43.179
with your with your transactions, and and there's a privacy concern.
1779
02:02:44.840 --> 02:02:47.639
If even even if there was a wallet like,
1780
02:02:49.065 --> 02:02:52.525
like Ledger Live, where it's default lite client wallet,
1781
02:02:53.225 --> 02:02:55.085
it helps mitigate that risk
1782
02:02:55.385 --> 02:02:55.885
of
1783
02:02:57.160 --> 02:03:00.700
of of basically a lot of a lot of Samura Lite client users
1784
02:03:01.080 --> 02:03:05.020
all being in a in the pools together because you'd also have
1785
02:03:05.475 --> 02:03:10.855
Ledger Live like client users or you'd have, you know, BlueWallet like client users or whatever.
1786
02:03:11.315 --> 02:03:13.590
1787
02:03:14.630 --> 02:03:20.170
diverse pool. So it's it's great. So, again, that that's the thing about Whirlpool. It's agnostic to how,
1788
02:03:20.630 --> 02:03:22.170
you know, the client derives
1789
02:03:28.395 --> 02:03:38.470
you know, you know, Sparrow can do it one way, and then all these other wallets, maybe one's an SPV wallet. It does it that way. The other wallet, you know, has another type of thing.
1790
02:03:39.135 --> 02:03:42.034
Doesn't matter. They can all tie into Whirlpool. And
1791
02:03:42.494 --> 02:03:47.474
for from the user perspective, their liquidity pool has grown, and it's it they're all from different,
1792
02:03:47.855 --> 02:03:48.355
services.
1793
02:03:48.869 --> 02:03:53.690
1794
02:03:54.309 --> 02:03:55.290
behind these things.
1795
02:03:55.965 --> 02:04:04.530
1796
02:04:05.170 --> 02:04:10.389
We think that the the proof is in is in the pudding with in terms of Whirlpool transactions. We think they're proven,
1797
02:04:10.929 --> 02:04:11.670
they're effective,
1798
02:04:12.210 --> 02:04:13.190
they're high entropy.
1799
02:04:14.675 --> 02:04:28.280
We we'll eventually be at the point, we're not there yet, where we can start to increase the number of inputs and outputs. So instead, maybe we'll see a a 7 input, 7 out turn a Whirlpool transaction soon, maybe a 10 in, 10 out. That just increases the number of combinations,
1800
02:04:29.860 --> 02:04:32.360
amount of entropy that are in the transactions. So
1801
02:04:33.135 --> 02:04:35.795
I think it's a bright future and especially as
1802
02:04:36.175 --> 02:04:37.315
more wallet developers
1803
02:04:37.695 --> 02:04:40.675
realize that that this is a solid way to
1804
02:04:41.070 --> 02:04:46.050
to grow their wallet, get support for their wallet, and and provide their users a valuable tool.
1805
02:04:46.430 --> 02:04:50.305
So they can contact us anytime. We'll we'll definitely talk about about implementations.
1806
02:04:51.485 --> 02:04:51.985
1807
02:04:53.325 --> 02:04:55.105
Another another thing we discussed
1808
02:04:55.405 --> 02:04:58.465
on, last week's show was this idea of,
1809
02:04:59.010 --> 02:05:02.550
the BIP 47 payment codes. You call them Pay NIMs.
1810
02:05:04.210 --> 02:05:06.150
They are it's this idea that
1811
02:05:06.515 --> 02:05:09.735
in a in a relatively private way, you can have,
1812
02:05:11.235 --> 02:05:15.150
a static text string that allows you to to send transactions,
1813
02:05:15.770 --> 02:05:16.270
repeatedly,
1814
02:05:17.290 --> 02:05:23.375
whether that's a friend or a business partner or if it's donations. I think a big one is donations. I I mean, obviously,
1815
02:05:24.474 --> 02:05:26.014
this show runs on donations,
1816
02:05:26.474 --> 02:05:33.020
so that that is one reason why I'm focused on it, but it's also because I've I've been doing a lot of work in
1817
02:05:33.480 --> 02:05:36.620
activist circles, and they don't wanna run a BTC pay server.
1818
02:05:37.160 --> 02:05:41.805
They don't wanna they don't wanna run something so heavy in order to have some kind of private,
1819
02:05:42.985 --> 02:05:48.045
donations received to them. You know? They they and and they operate in in situations that have,
1820
02:05:48.840 --> 02:05:50.940
in a lot of ways, way way,
1821
02:05:52.200 --> 02:06:00.325
more dangerous threat models because they have, you know, authoritarian regimes or whatnot that they're working against, and they're they're doing active surveillance against them.
1822
02:06:01.185 --> 02:06:05.890
So I one of the things that Keydominer said, and I had never really considered this,
1823
02:06:07.150 --> 02:06:10.610
is in the the the way the spec works
1824
02:06:11.045 --> 02:06:14.264
is it provide there's a there's way more node overhead,
1825
02:06:15.525 --> 02:06:18.824
on a user's node or even worse, a public node,
1826
02:06:20.330 --> 02:06:21.530
if if you have many,
1827
02:06:23.930 --> 02:06:33.295
if you have many, you know, peers that you're using PayNIMs with, because you have to track the addresses of each individual peer as well to make sure that you received the payment or not.
1828
02:06:33.675 --> 02:06:34.415
I'm curious
1829
02:06:35.840 --> 02:06:38.260
if if this is something that, you know,
1830
02:06:38.800 --> 02:06:40.340
you guys have struggled with,
1831
02:06:41.280 --> 02:06:42.739
you know, in terms of
1832
02:06:43.635 --> 02:06:47.895
paying them usage? Because, I mean, that is you know, you're the only wallet that supports it right now.
1833
02:06:48.515 --> 02:06:52.215
1834
02:06:53.020 --> 02:06:54.720
that it increases overhead,
1835
02:06:55.180 --> 02:06:56.400
so to speak. I mean,
1836
02:06:56.860 --> 02:07:02.315
maybe in a way it does, but, I mean, any user's Dojo is already handling
1837
02:07:02.695 --> 02:07:03.335
this this,
1838
02:07:04.215 --> 02:07:06.635
this, and they're doing it's doing it, fine.
1839
02:07:08.120 --> 02:07:15.320
The in Dojo language, we use the term loose address. So what the Dojo knows about or the samurai server knows about is,
1840
02:07:16.465 --> 02:07:23.490
what your wallet the the address that your wallet has derived that is unique between your payment code and your counterpart's payment code.
1841
02:07:24.690 --> 02:07:31.990
And that doesn't gets it's because this this address is outside of your XPub space. This isn't associated with an XPub at all. It's completely
1842
02:07:32.635 --> 02:07:33.855
different, model.
1843
02:07:34.555 --> 02:07:39.215
So this would be stored by the Dojo. And when the wallet makes the call to retrieve
1844
02:07:39.730 --> 02:07:42.070
balances and transactions and UTXOs
1845
02:07:42.450 --> 02:07:44.230
from from your Dojo,
1846
02:07:44.530 --> 02:07:46.310
it would ask for your xPubs,
1847
02:07:47.295 --> 02:07:49.875
but also include these loose addresses.
1848
02:07:50.175 --> 02:07:51.875
So the overhead isn't that much.
1849
02:07:52.175 --> 02:07:54.340
It's just some more addresses to keep track of.
1850
02:07:55.300 --> 02:07:59.560
So Dojo is fine and can handle it fine. I think we're serving something like,
1851
02:08:00.989 --> 02:08:01.489
well,
1852
02:08:02.695 --> 02:08:03.195
400,000
1853
02:08:03.735 --> 02:08:05.034
payments right now,
1854
02:08:07.014 --> 02:08:08.954
you know, of varying usage.
1855
02:08:09.660 --> 02:08:10.560
You know, currently,
1856
02:08:11.420 --> 02:08:13.120
I will say that there are
1857
02:08:13.900 --> 02:08:20.415
there are usability challenges within Samurais Wallet for for, traditional payments,
1858
02:08:21.355 --> 02:08:22.574
that we're aware of.
1859
02:08:23.034 --> 02:08:27.935
We we've implemented payment right from the start, so we have version 1 of the spec and we're working on,
1860
02:08:28.460 --> 02:08:31.020
implementing version 3 of the spec, which which,
1861
02:08:32.300 --> 02:08:34.640
takes care a lot of, of a lot of the usability
1862
02:08:36.885 --> 02:08:37.385
challenges
1863
02:08:37.925 --> 02:08:40.025
associated with payments today.
1864
02:08:40.405 --> 02:08:41.465
But, overall,
1865
02:08:42.965 --> 02:08:45.945
no. It's not a it's not a huge challenge to overcome.
1866
02:08:46.460 --> 02:08:52.239
1867
02:08:52.860 --> 02:08:58.385
1868
02:08:58.685 --> 02:08:59.745
missed that transaction.
1869
02:09:00.205 --> 02:09:26.450
Right? So they need to rescan and so it can find it again. And It's more of a UX issue. Yeah. Exactly. Or or or something is timed out perhaps in one of the requests from the wallet to the Dojo, and that can just be due to Tor being kind of flaky. It can be it can be a bug in our code that we haven't found yet where that killed the connection. So, you know, it could that could be a number of things. But but as as far as far as string, no. I mean, if you're running like a Ronin node, for example, you have
1870
02:09:26.830 --> 02:09:28.210
pretty phenomenal uptime,
1871
02:09:28.989 --> 02:09:41.730
on pretty pretty modest hardware, You know? So I I think most people with normal pain and activity are are not having any issues at all with with that particular aspect of it. Well, that's great. I mean, for me, the main issue I have,
1872
02:09:42.590 --> 02:09:43.710
1873
02:09:44.030 --> 02:09:46.210
Pay NIMs is that it's samurai only.
1874
02:09:47.315 --> 02:09:50.935
Obviously, that means that someone who's donating needs to be,
1875
02:09:51.315 --> 02:09:53.640
an Android user that's using samurai wallet.
1876
02:09:54.520 --> 02:09:57.340
In your opinion, why do you think that we haven't seen,
1877
02:09:58.200 --> 02:10:02.700
more BIP 47 adoption? Like, why don't we have PayNIMs in other wallets right now?
1878
02:10:03.705 --> 02:10:06.765
1879
02:10:08.025 --> 02:10:12.365
or and it has been that has been true for a long time. There was never any
1880
02:10:13.690 --> 02:10:17.230
complete library support in any of the major languages.
1881
02:10:18.010 --> 02:10:18.989
There there was
1882
02:10:19.530 --> 02:10:28.295
attempts to start and then, you know, the project kind of fizzled out because it was just, like, a lone contributor, but they did they made good progress and hopefully someone pick it up, that kind of thing.
1883
02:10:28.995 --> 02:10:29.495
TDEV
1884
02:10:30.670 --> 02:10:31.890
wrote the early,
1885
02:10:32.350 --> 02:10:34.449
test vectors for the bit,
1886
02:10:35.070 --> 02:10:36.530
replicated the the
1887
02:10:37.150 --> 02:10:38.130
the test vectors.
1888
02:10:38.715 --> 02:10:43.695
So there has been working code, but you would have to go through, you know, the the repo,
1889
02:10:44.235 --> 02:10:48.789
parse the Java, and then convert it to whatever language you're working with.
1890
02:10:49.329 --> 02:10:51.429
So I I think that's there's been,
1891
02:10:51.730 --> 02:11:01.145
you know, a a challenge on the implementation side of things. And and the fact that it it's not a it's, like, again, a straightforward implementation. There's a lot of crypto that's involved,
1892
02:11:02.245 --> 02:11:04.505
you know, so low level crypto,
1893
02:11:05.159 --> 02:11:08.780
especially with version 1 and the notification address and exchanging,
1894
02:11:10.119 --> 02:11:11.900
signatures and all this sort of thing.
1895
02:11:14.215 --> 02:11:15.675
I think that the
1896
02:11:16.055 --> 02:11:18.075
discouragement by the core development,
1897
02:11:19.895 --> 02:11:23.970
or developers of of around the time that the proposal was first introduced.
1898
02:11:24.670 --> 02:11:27.410
Also, kinda, just dampened the enthusiasm
1899
02:11:28.110 --> 02:11:28.930
around it,
1900
02:11:30.975 --> 02:11:40.755
for the exception of us and a few other wallets who went ahead with implementing it, but unfortunately, it's no longer around. They they folded few, you know, couple years after.
1901
02:11:41.250 --> 02:11:43.350
So we're the only wallet that has it currently,
1902
02:11:44.050 --> 02:11:48.950
and, you know, it's just one of the one of those things that hopefully other wallets will realize that their users
1903
02:11:50.325 --> 02:11:56.505
can be really well served by this type of this type of functionality. And it is a perfect use case for donations,
1904
02:11:57.000 --> 02:12:02.860
And it's a perfect use case for Bitcoin businesses who wanna pay their their staff salary on or their payrolls,
1905
02:12:04.525 --> 02:12:13.665
or or or any other, kind of payments like that. So there's a lot of potential. It can be used as an identity system. It can be used in in all sorts of ways,
1906
02:12:14.680 --> 02:12:18.220
and we've only scratched the surface of bit, bit 47.
1907
02:12:19.080 --> 02:12:21.185
So we're looking forward to exploring that further.
1908
02:12:22.145 --> 02:12:23.365
1909
02:12:23.985 --> 02:12:25.525
the discouragement of usage,
1910
02:12:26.065 --> 02:12:26.565
by,
1911
02:12:28.305 --> 02:12:30.300
Bitcoin core developers at the time.
1912
02:12:30.780 --> 02:12:32.800
If I recall correctly, the main
1913
02:12:33.340 --> 02:12:34.480
concern was,
1914
02:12:35.099 --> 02:12:40.079
chain space usage, that it was inefficient in terms of chain space usage. And if fees go up,
1915
02:12:40.845 --> 02:12:42.705
it would get prohibitively expensive.
1916
02:12:45.565 --> 02:12:46.385
Is that correct?
1917
02:12:46.845 --> 02:12:48.145
1918
02:12:48.980 --> 02:12:53.720
the arguments. It was specifically that there was an opportune transaction required,
1919
02:12:54.340 --> 02:12:58.040
for what is termed in the BIP as the notification transaction.
1920
02:12:58.955 --> 02:13:01.695
This is the on chain transaction that exists
1921
02:13:01.995 --> 02:13:07.055
that allows both both clients to retrieve the payment state or payment data,
1922
02:13:07.679 --> 02:13:13.699
from a monomonic restore. Right? So without the use of a central third party server, they can use a blockchain to restore
1923
02:13:14.000 --> 02:13:16.465
and and get their pain and connection,
1924
02:13:17.245 --> 02:13:17.985
that way.
1925
02:13:19.325 --> 02:13:20.785
I'm not opposed to the blockchain,
1926
02:13:21.565 --> 02:13:28.650
or opportune transaction. I'm opposed to it because it's a UX nightmare. You know, the user first has to initiate this this transaction,
1927
02:13:30.550 --> 02:13:36.215
before then before like, kind of set up their channel, quote, unquote, to send to this person later.
1928
02:13:37.155 --> 02:13:39.335
It's it's a, you know,
1929
02:13:39.715 --> 02:13:42.695
it's it inhibits the use of the feature. So
1930
02:13:43.170 --> 02:13:45.110
I don't think that's a reason to
1931
02:13:45.489 --> 02:13:51.349
discourage use of stealth addresses in Bitcoin. I think that both by and large stealth addresses with the trade also
1932
02:13:51.650 --> 02:13:54.605
are a win either way, and that's what Pay and M's provide.
1933
02:13:55.784 --> 02:13:58.525
But luckily in version 3,
1934
02:13:58.985 --> 02:14:04.739
that whole concept of the notification transaction is dramatically altered and it's gotten away. It's taken away,
1935
02:14:05.360 --> 02:14:17.425
and I I believe Craig went into this already on the last episode, but it's it's a, bare multisig transaction that's replaced and that can be a part of any transaction that the wallet is creating. It can kinda just hop along,
1936
02:14:18.540 --> 02:14:19.840
and and be completely,
1937
02:14:21.340 --> 02:14:25.200
you know, scalable in that sense and not cost the user anything
1938
02:14:25.565 --> 02:14:29.105
other than the just the small amount of added weight to the transaction.
1939
02:14:31.485 --> 02:14:33.985
So, you know, these things solve themselves over time,
1940
02:14:35.030 --> 02:14:38.409
but that was one of the reasons for discouragement was the off return transaction.
1941
02:14:39.110 --> 02:14:40.170
And that was primarily,
1942
02:14:40.949 --> 02:14:41.449
Luke
1943
02:14:42.065 --> 02:14:44.165
junior, I believe. And then,
1944
02:14:44.705 --> 02:14:46.245
Gregory Maxwell had
1945
02:14:46.785 --> 02:14:50.560
a objection to it, but there was a fundamental misunderstanding
1946
02:14:51.020 --> 02:14:51.920
in his objection
1947
02:14:52.300 --> 02:14:53.360
because he conflated
1948
02:14:54.219 --> 02:14:54.719
paynim.is,
1949
02:14:55.980 --> 02:15:03.715
which is a centralized name server that we run where we take a payment code that the wallet on client side generates
1950
02:15:04.440 --> 02:15:11.180
and apply a algorithm to provide a SHA 256 representation in the form of an image,
1951
02:15:11.525 --> 02:15:13.065
There the the robot images
1952
02:15:13.605 --> 02:15:25.270
1953
02:15:25.890 --> 02:15:27.670
1954
02:15:28.290 --> 02:15:28.790
conflated
1955
02:15:29.235 --> 02:15:31.574
panin.is, which is a centralized database,
1956
02:15:32.114 --> 02:15:33.655
with the requirement
1957
02:15:34.034 --> 02:15:36.855
of the user to use that centralized database,
1958
02:15:37.960 --> 02:15:40.940
to restore and get the the the state of the UTXOs,
1959
02:15:41.320 --> 02:15:48.765
which is ironic because that was the exact thing that Luke Junior was against in the form of the notification transaction, which provides that
1960
02:15:49.225 --> 02:15:50.285
blockchain based
1961
02:15:50.905 --> 02:15:51.405
state.
1962
02:15:51.705 --> 02:15:57.159
1963
02:15:57.699 --> 02:16:05.505
1964
02:16:05.885 --> 02:16:06.385
be
1965
02:16:06.765 --> 02:16:14.989
taken care of later on. Right? And lo and behold, later on has occurred, and it has been taken care of. So that's no longer an issue.
1966
02:16:16.090 --> 02:16:19.310
Users for the last few years have had to put up with
1967
02:16:19.615 --> 02:16:22.435
the burden of creating this opportune transaction,
1968
02:16:23.535 --> 02:16:25.155
and paying a little bit more,
1969
02:16:25.935 --> 02:16:39.596
to get stealth addresses. But they still got stealth addresses, and we've never had a complaint from users. They all the the only complaint we've had is that it was a cumbersome process that is it's hard to onboard new users too, and we completely agree.
1970
02:16:40.695 --> 02:16:43.115
So, hopefully, it will be get better soon. Yeah.
1971
02:16:43.460 --> 02:16:46.439
1972
02:16:47.460 --> 02:16:48.120
of criticism
1973
02:16:48.740 --> 02:16:51.080
I I am aware of, which is
1974
02:16:52.346 --> 02:16:53.005
the practical
1975
02:16:54.266 --> 02:16:58.605
kind of usage or implementation of it that it's it doesn't really matter
1976
02:16:59.360 --> 02:17:01.780
much that we are doing all this computation
1977
02:17:02.880 --> 02:17:09.725
overhead. I mean, there will be, like, some added scanning to the chain and, you know, needing to kind of filter all blocks,
1978
02:17:11.064 --> 02:17:14.125
or or transactions through looking for these kind
1979
02:17:14.745 --> 02:17:15.245
of,
1980
02:17:16.345 --> 02:17:17.885
hidden message messages,
1981
02:17:19.530 --> 02:17:24.670
which wouldn't be in the, like, the block header, so that would be a a deeper kind of parsing of the blocks.
1982
02:17:26.854 --> 02:17:28.715
But on the end, if the user
1983
02:17:29.175 --> 02:17:31.194
takes and just merges
1984
02:17:31.654 --> 02:17:32.954
all the
1985
02:17:33.681 --> 02:17:36.261
outputs which have been received through these payments,
1986
02:17:36.641 --> 02:17:42.261
then, you know, the whole sales and the thing would lose its, kind of main
1987
02:17:44.205 --> 02:17:48.225
purpose. Right? I mean, obviously, this can be discouraged
1988
02:17:49.005 --> 02:17:52.945
and education, etcetera, but that's I think that was another thing which was
1989
02:17:54.270 --> 02:17:55.170
kind of came up
1990
02:17:55.631 --> 02:17:56.450
in the discussion.
1991
02:17:59.070 --> 02:18:07.975
1992
02:18:08.595 --> 02:18:15.530
But I think what the what what what hampered the development of bit 47 or at least the excitement amongst wallet developers
1993
02:18:16.070 --> 02:18:18.811
wasn't any of those reasons. It was the label
1994
02:18:19.270 --> 02:18:21.051
that the bit maintainer applied
1995
02:18:21.635 --> 02:18:23.574
that was, quote unquote, unanimously
1996
02:18:23.954 --> 02:18:25.095
discouraged for implementation.
1997
02:18:26.114 --> 02:18:27.255
And I think that
1998
02:18:27.635 --> 02:18:37.550
that was enough to kinda just well, actually, you have to rewind a bit to the era, and this was in the the height or the start of the block size wars and the b cash wars.
1999
02:18:38.065 --> 02:18:40.165
And the author of the bit
2000
02:18:40.785 --> 02:18:52.140
was a big blocker, so he already had that going against him. So there was already prejudice against him for that. And it may sound silly to viewers now, but that's the reality at the time that that he was looked at suspiciously.
2001
02:18:52.600 --> 02:18:53.100
And
2002
02:18:54.346 --> 02:18:56.365
despite the fact that he had a valid proposal,
2003
02:18:58.186 --> 02:18:59.965
it was it was moved to the state.
2004
02:19:02.069 --> 02:19:07.290
Another bit that was unanimously discouraged for implementation, of course, was BIP 39.
2005
02:19:07.670 --> 02:19:10.226
Now luckily, that hasn't had the
2006
02:19:10.605 --> 02:19:14.865
same response. The wallet developers implemented it anyway because it's a fundamentally
2007
02:19:15.245 --> 02:19:15.745
better
2008
02:19:16.525 --> 02:19:17.985
better structure for for
2009
02:19:19.050 --> 02:19:20.109
implementing these manomic,
2010
02:19:20.729 --> 02:19:22.009
words. It's a standardized
2011
02:19:22.649 --> 02:19:26.909
speed backups. The secret Sorry. Yeah. So this is manomic words specifically.
2012
02:19:27.965 --> 02:19:29.985
2013
02:19:31.005 --> 02:19:36.065
2014
02:19:37.090 --> 02:19:38.150
applied the label,
2015
02:19:38.770 --> 02:19:40.630
unanimously discouraged for implementation.
2016
02:19:41.090 --> 02:19:46.205
Now I'm you know, I I think that to an extent, the the core developers
2017
02:19:46.745 --> 02:19:53.080
who and the people who reply on these bit threads to form a consensus need to be able to have
2018
02:19:53.400 --> 02:19:56.140
opinions that are that are contrary
2019
02:19:56.440 --> 02:19:57.180
and critical.
2020
02:19:57.480 --> 02:20:04.335
You have to be able to fight it out in the in the comments and get your ideas out there, and ultimately, the market will decide.
2021
02:20:08.380 --> 02:20:22.234
We you know, and that's what was our thinking. Well, we're not gonna wait for an approval from anyone. We're gonna do it because we see the potential there. Now it's just hopefully with version 3, it's more it's gonna be easier to implement for wallet developers. I think maybe there's gonna be more libraries available,
2022
02:20:23.050 --> 02:20:26.351
which just make it 10 times easier for developers to implement.
2023
02:20:26.811 --> 02:20:33.404
And we'll see we'll see other wallets implementing it, and I think that would be fantastic. And and another thing that, you know, we welcome
2024
02:20:33.705 --> 02:20:35.725
anyone to use the pay them dot is,
2025
02:20:36.825 --> 02:20:40.891
database directory if they want to supply payment codes and get back a,
2026
02:20:41.431 --> 02:20:44.090
a bot image and name for their users.
2027
02:20:45.431 --> 02:20:48.705
Those aren't wallet Samari Wallet specific or they have to be.
2028
02:20:49.484 --> 02:20:52.305
2029
02:20:52.845 --> 02:20:54.225
To me, personally,
2030
02:20:54.604 --> 02:20:59.050
my biggest concern has been on chain fees, and it's also been my concern with CoinJoin,
2031
02:20:59.670 --> 02:21:00.729
as well because
2032
02:21:01.109 --> 02:21:02.970
if on chain fees go up,
2033
02:21:03.990 --> 02:21:06.010
both become prohibitively expensive,
2034
02:21:06.556 --> 02:21:08.815
which is why for, like, the last 6 months,
2035
02:21:09.195 --> 02:21:10.815
I've been more focused on
2036
02:21:11.275 --> 02:21:15.480
basically that are trying to accomplish a similar case but use lightning,
2037
02:21:16.820 --> 02:21:19.320
you know, such as l l or q send.
2038
02:21:20.740 --> 02:21:21.240
I
2039
02:21:22.555 --> 02:21:28.095
am not a perfect person, and I'm I'm my understanding of Bitcoin continues every day.
2040
02:21:29.350 --> 02:21:34.409
I one of the reasons I love this show is because I learn alongside the freaks, and we all learn together.
2041
02:21:35.430 --> 02:21:41.945
And I have admitted that I have pie on my face right now because as you can see, if you're watching the video stream,
2042
02:21:42.405 --> 02:21:45.145
1 sat per byte is confirming in the next transaction.
2043
02:21:47.045 --> 02:21:47.545
So
2044
02:21:48.439 --> 02:21:50.860
I'm curious on what your viewpoint
2045
02:21:51.640 --> 02:21:52.280
is because,
2046
02:21:53.080 --> 02:21:59.784
OpenOps mentioned it earlier as well, talking about using Lightning as a post mix tool, right, which is idea that even, you know, you use Whirlpool,
2047
02:22:00.165 --> 02:22:02.505
you have, like, a nice 5000000 sat UTXO,
2048
02:22:03.045 --> 02:22:10.170
you put it in a node, and you you use that for spending, and then, you know, after a certain amount of time, you burn it and do a new node,
2049
02:22:10.790 --> 02:22:14.890
to to try and use Lightning as a as a post mix tool that has,
2050
02:22:15.395 --> 02:22:16.615
reduced fee burden.
2051
02:22:17.235 --> 02:22:19.016
I'm curious on your opinion here.
2052
02:22:19.795 --> 02:22:26.550
Do you think that fees will rise over time? Do you think we'll have a sustained high fee environment, or do you think,
2053
02:22:27.010 --> 02:22:28.790
you know, in 2 years, 3 years,
2054
02:22:29.330 --> 02:22:31.750
there'll be periods where you're gonna be able to,
2055
02:22:32.925 --> 02:22:35.745
you know, get one step per byte into the next lock.
2056
02:22:36.925 --> 02:22:37.425
2057
02:22:37.885 --> 02:22:44.221
fees better rise over time because, I don't know how else the network is gonna be secured once the subsidy runs out.
2058
02:22:45.080 --> 02:22:53.155
The block reward runs out. So, you know, the idea has always been that a fee market, quote, unquote, would be developing or developed by this point.
2059
02:22:54.095 --> 02:22:56.641
We don't we don't see that necessarily now,
2060
02:22:57.020 --> 02:22:58.480
as you as you mentioned.
2061
02:23:00.540 --> 02:23:08.205
But, you know, we didn't expect it. We I think you've you've mentioned that we predicted the kind of a low fee environment for a little while still.
2062
02:23:09.465 --> 02:23:10.605
And that's because
2063
02:23:12.240 --> 02:23:13.700
I think part of it's because
2064
02:23:14.560 --> 02:23:17.700
the de facto layer 2 has become the custodial
2065
02:23:19.625 --> 02:23:22.444
providers like Cash App and Robinhood and
2066
02:23:22.745 --> 02:23:26.125
Grayscale and and and whatnot. These are the
2067
02:23:26.904 --> 02:23:28.765
the true layer 2 of Bitcoin.
2068
02:23:29.899 --> 02:23:33.600
And you're getting a lot of your number your number go up crowd,
2069
02:23:34.460 --> 02:23:35.920
onboarding via these
2070
02:23:36.355 --> 02:23:37.096
these methods,
2071
02:23:37.715 --> 02:23:38.215
and
2072
02:23:39.315 --> 02:23:52.440
2073
02:23:54.245 --> 02:24:02.425
But so so so you agree with me that you you think at least a a healthy Bitcoin is 1 in it that's gonna end up in a sustained
2074
02:24:02.730 --> 02:24:04.351
a sustained high fee environment.
2075
02:24:05.690 --> 02:24:09.695
2076
02:24:10.176 --> 02:24:12.195
You you there has to be a fee environment.
2077
02:24:12.976 --> 02:24:17.395
So miners are incentivized to continue mining when they don't have a a block reward.
2078
02:24:18.495 --> 02:24:21.870
2079
02:24:22.569 --> 02:24:24.189
what are your thoughts on,
2080
02:24:24.729 --> 02:24:31.104
you know, CoinJoin usage? Private private Bitcoin usage in general is going to have a higher on chain burden,
2081
02:24:32.604 --> 02:24:39.030
you know, whether that's a pay join or whether that's a Stonewall transaction or whether that's a a Whirlpool transaction
2082
02:24:39.650 --> 02:24:42.950
or whether that's a PayNim transaction. So I'm curious
2083
02:24:43.385 --> 02:24:45.005
Where do you where do you see,
2084
02:24:46.185 --> 02:24:50.045
you know, we're struggling to get to get users? I mean, it's it's
2085
02:24:50.641 --> 02:24:52.020
it's been good to see,
2086
02:24:52.561 --> 02:24:53.780
usage go up,
2087
02:24:54.880 --> 02:24:56.340
of these tools, but
2088
02:24:56.721 --> 02:24:59.940
in a high fee environment, are you concerned at all about
2089
02:25:00.625 --> 02:25:01.125
usage,
2090
02:25:01.585 --> 02:25:09.444
getting limited because it gets just so cost prohibitive? And and if if that's the case, you know, what do you have a strategy, or is the idea just,
2091
02:25:09.910 --> 02:25:14.490
you know, it's it's it's still a little bit off, and and we'll cross that bridge when we cross it?
2092
02:25:15.350 --> 02:25:22.926
2093
02:25:23.386 --> 02:25:29.210
quite a long time. You know, we were we were around during the Roger Ver block size wars
2094
02:25:29.750 --> 02:25:33.290
where he potentially spanned the network or someone spanned the network for
2095
02:25:33.670 --> 02:25:35.130
a good year and a half,
2096
02:25:36.495 --> 02:25:38.436
if not longer, and created,
2097
02:25:39.055 --> 02:25:47.480
you know, really just awful awful conditions as a pretext for, you know, needing bigger blocks, basically, was the idea behind that.
2098
02:25:48.580 --> 02:25:52.520
And, you know, that's that that was a strain on not only our infrastructure,
2099
02:25:53.445 --> 02:25:54.345
but on users,
2100
02:25:55.285 --> 02:26:00.825
usage, but really not to a huge degree. We expected it to be a bigger drain on usage.
2101
02:26:01.770 --> 02:26:06.189
It was more of a drain on infrastructure. So we've shored up infrastructure. We know we can handle
2102
02:26:06.970 --> 02:26:09.149
sustained periods of of
2103
02:26:09.585 --> 02:26:13.845
blocks in terms of having chains of unconfirmed transactions and,
2104
02:26:14.305 --> 02:26:19.045
transactions dropping from the mempool. Like, we you know, we're experiencing all of these,
2105
02:26:19.859 --> 02:26:21.080
events at this point.
2106
02:26:22.020 --> 02:26:24.040
In terms of becoming too cost prohibitive,
2107
02:26:24.420 --> 02:26:27.000
I, you know, I don't see it happening in the near
2108
02:26:27.784 --> 02:26:34.604
immediate future or the the medium to long term future. I think it's actually a it's gonna become a real problem for Bitcoin,
2109
02:26:35.560 --> 02:26:39.960
that we need to that, you know, as a community, we need to need to look at and discuss,
2110
02:26:40.280 --> 02:26:44.060
as, you know, the layer twos continue to strengthen
2111
02:26:46.074 --> 02:26:49.535
the custodial layer twos that I'm talking about, the PayPal's and whatnot.
2112
02:26:50.555 --> 02:26:51.694
This is gonna be
2113
02:26:52.750 --> 02:26:53.250
exacerbated.
2114
02:26:54.350 --> 02:26:54.850
But,
2115
02:26:55.710 --> 02:26:57.890
you know, second or third to all that,
2116
02:26:58.430 --> 02:27:05.785
we are focused on chain, and that's been our mission statement from day 1. So if if it means that our users are gonna have to,
2117
02:27:06.485 --> 02:27:15.180
you know, at that point in the future, become a different type of user who's more comfortable spending a different amount to be able to interact with the Bitcoin
2118
02:27:15.880 --> 02:27:16.700
main chain,
2119
02:27:17.335 --> 02:27:25.505
I think that will be a success for Bitcoin. That'll be a good as to be in. We'll see if our users are are are willing to do that or if we're willing to,
2120
02:27:27.029 --> 02:27:31.450
attract users who are willing to do that because I think there will always be a market for on chain transactions.
2121
02:27:33.350 --> 02:27:33.850
And,
2122
02:27:35.585 --> 02:27:39.205
yeah, and, you know, that's where our our our primary interest is.
2123
02:27:43.729 --> 02:27:55.285
2124
02:27:55.665 --> 02:27:56.065
08
2125
02:27:56.625 --> 02:27:57.605
sorry? Point
2126
02:27:59.060 --> 02:28:02.359
38 BTC. So, like, 1 third BTC, and
2127
02:28:02.739 --> 02:28:03.640
average fees
2128
02:28:04.500 --> 02:28:06.555
versus reward is, like, 5.6%.
2129
02:28:07.255 --> 02:28:09.755
So even with this kind of, you know, empty blocks coming,
2130
02:28:11.414 --> 02:28:12.795
you have still, like, 5%
2131
02:28:13.414 --> 02:28:14.234
of the
2132
02:28:14.630 --> 02:28:17.450
block reward is is is coming from the fees.
2133
02:28:18.229 --> 02:28:21.450
So I'm just thinking that, yes,
2134
02:28:22.470 --> 02:28:23.930
I expect more pressure
2135
02:28:24.255 --> 02:28:25.075
on the blocks
2136
02:28:25.935 --> 02:28:31.234
as well, but I can also see that if for like a real fee market, you might
2137
02:28:31.610 --> 02:28:34.590
have periods when you would need smaller blocks. Right?
2138
02:28:35.690 --> 02:28:39.310
But the most important thing is I I don't think that we would change either
2139
02:28:39.770 --> 02:28:40.270
direction.
2140
02:28:41.096 --> 02:28:43.596
They would just, you know, block size just
2141
02:28:43.976 --> 02:28:47.355
just stays as it is. But the purchasing value of Bitcoin
2142
02:28:47.895 --> 02:28:48.395
does
2143
02:28:49.510 --> 02:28:55.130
go up as we know. And if we are talking about, like, you know, halving epochs
2144
02:28:55.590 --> 02:28:57.850
of 4, 8, 12 years,
2145
02:28:58.150 --> 02:29:01.965
then for example, in 12 years, the purchasing value will be likely
2146
02:29:02.585 --> 02:29:03.085
to
2147
02:29:03.545 --> 02:29:04.045
cover
2148
02:29:04.425 --> 02:29:05.485
a quite similar
2149
02:29:07.820 --> 02:29:10.960
block reward in purchasing value as it is now
2150
02:29:11.740 --> 02:29:12.400
of which
2151
02:29:12.915 --> 02:29:14.375
now there is only 5%
2152
02:29:14.835 --> 02:29:17.335
fees are. But we have a 5th you know, 20
2153
02:29:18.035 --> 02:29:25.390
times increase in the purchasing value, then then, you know, how much do you want to spend on security? Like, you know, hardware gets more efficient,
2154
02:29:26.890 --> 02:29:27.390
etcetera.
2155
02:29:29.475 --> 02:29:30.615
It might not be
2156
02:29:32.995 --> 02:29:39.160
that necessary. Right? I mean, we don't know if it if it happened, and we don't know if it is a problem if it isn't,
2157
02:29:39.780 --> 02:29:40.280
right?
2158
02:29:42.980 --> 02:29:46.440
So that means that the on chain privacy tools
2159
02:29:46.976 --> 02:29:48.035
will just remain
2160
02:29:49.136 --> 02:29:54.275
to be used and, you know, they might take up the majority of the of the on chain usage
2161
02:29:54.990 --> 02:29:58.370
at some point because then, you know, you go for layer
2162
02:29:58.830 --> 02:30:00.050
2 for convenience
2163
02:30:00.351 --> 02:30:00.830
as well as
2164
02:30:02.245 --> 02:30:03.545
well, I mean, if
2165
02:30:03.925 --> 02:30:05.865
we've mentioned the
2166
02:30:07.205 --> 02:30:08.905
also need to improve and improving
2167
02:30:09.285 --> 02:30:09.785
privacy
2168
02:30:11.050 --> 02:30:19.975
aspects of lightning, but you also people also use lightning because it's this fast instant settlement and, you know, which you don't have on chain.
2169
02:30:22.935 --> 02:30:23.435
2170
02:30:24.455 --> 02:30:25.435
you know Yeah.
2171
02:30:25.975 --> 02:30:27.170
2172
02:30:27.650 --> 02:30:29.729
2173
02:30:30.530 --> 02:30:31.590
You know, I
2174
02:30:32.689 --> 02:30:36.150
I I tend to agree with OpenOM's premise.
2175
02:30:38.115 --> 02:30:45.520
I have gotten a lot of of shit from the samurai crew for not not the official samurai crew, but,
2176
02:30:46.479 --> 02:30:49.380
the many group chats that I participated in with you guys,
2177
02:30:50.640 --> 02:30:53.060
for my vocalization of my expectation
2178
02:30:53.995 --> 02:30:56.975
that Bitcoin purchasing power will increase with adoption,
2179
02:30:59.274 --> 02:31:02.655
which is the expectation that Open Arms just,
2180
02:31:03.630 --> 02:31:04.770
mentioned. And
2181
02:31:07.630 --> 02:31:11.010
do do you think that is an that is an expectation
2182
02:31:11.385 --> 02:31:13.725
we should not be operating under? Or
2183
02:31:14.185 --> 02:31:21.245
2184
02:31:21.610 --> 02:31:24.430
So we have adoption waves that correspond to,
2185
02:31:25.610 --> 02:31:27.790
number go up or ramp up in price.
2186
02:31:28.570 --> 02:31:35.535
You'll, of course, lose some of the people that that came on for the ride, but you're all you're always left with a larger group of people.
2187
02:31:36.555 --> 02:31:37.855
That's how it's played out
2188
02:31:38.395 --> 02:31:39.135
so far.
2189
02:31:41.189 --> 02:31:50.284
I don't think I I I think there's a lot of there's a lot of UTXOs out there, from Bitcoin services that do operate on chain, and there's lots of them, you know, that are not publicly
2190
02:31:50.904 --> 02:31:55.085
vocal. They're on Twitter. They're, you know, you don't know about them, but they're out there doing their thing.
2191
02:31:56.860 --> 02:31:59.600
They collect fees. They do however they monetize.
2192
02:32:00.460 --> 02:32:04.720
There's a lot of UTXOs that many would consider close to dust or or
2193
02:32:06.015 --> 02:32:08.436
or, you know, pushing it there and and certainly
2194
02:32:08.895 --> 02:32:12.595
will become a lot more, worth a lot more as the
2195
02:32:13.479 --> 02:32:16.040
the value of Bitcoin increases in terms of,
2196
02:32:16.360 --> 02:32:17.100
US dollar.
2197
02:32:18.520 --> 02:32:21.100
And there's gonna be an incentive to to,
2198
02:32:21.686 --> 02:32:26.266
you know, be able to efficiently move those transactions whether that be to a second layer,
2199
02:32:26.806 --> 02:32:27.545
or not.
2200
02:32:28.245 --> 02:32:32.391
They they need to be moved to that second layer. So it has to be an on chain transaction.
2201
02:32:33.490 --> 02:32:36.471
So I don't I I think that there's still incentive to to
2202
02:32:36.851 --> 02:32:37.750
and there's still,
2203
02:32:38.610 --> 02:32:42.295
innovative things that haven't even occurred yet or even been thought of yet,
2204
02:32:42.915 --> 02:32:45.175
that can occur on the main chain on the base layer.
2205
02:32:48.101 --> 02:32:52.601
And, personally, I mean, I'm not as you know, I'm not very bullish on lightning.
2206
02:32:53.540 --> 02:32:57.475
You know, I think that as it was described by OpenNoms was accurate,
2207
02:32:58.575 --> 02:33:03.235
but I don't necessarily see it as a privacy tool. I see I see it as a bank ready tool,
2208
02:33:04.255 --> 02:33:04.755
and
2209
02:33:05.909 --> 02:33:09.529
I see the majority of usage being via custodial methods.
2210
02:33:10.069 --> 02:33:13.529
And I think that that's only going to increase and grow over time,
2211
02:33:13.875 --> 02:33:16.535
And I don't necessarily necessarily think that
2212
02:33:16.995 --> 02:33:22.615
that should have been the the quote, unquote, blessed scaling solution. I think it was available
2213
02:33:23.400 --> 02:33:28.700
at a time in Bitcoin's history where a scaling solution was drastically needed,
2214
02:33:29.320 --> 02:33:30.540
to counter a narrative.
2215
02:33:31.075 --> 02:33:37.335
I don't necessarily think a scaling well, we can see look at the mempool. A scaling solution wasn't drastically needed.
2216
02:33:38.595 --> 02:33:39.095
But
2217
02:33:39.770 --> 02:33:47.630
Bitcoin the Bitcoin committee took that bait and said, hey. Well, we have lightning in it. This wasn't ready, and no one had really examined the
2218
02:33:48.854 --> 02:33:49.175
the,
2219
02:33:49.895 --> 02:33:57.675
consequences of a system like this, building a system in this way, and the potential for regulatory capture. So I'm I'm just not very bullish on lightning.
2220
02:33:58.181 --> 02:33:59.000
If it succeeds
2221
02:33:59.700 --> 02:34:02.681
and it's primarily done in a noncustodial
2222
02:34:03.061 --> 02:34:05.801
way, I I'll I'll chalk it up as a win for Bitcoin.
2223
02:34:06.784 --> 02:34:08.324
But I I do
2224
02:34:08.705 --> 02:34:14.244
look I do wonder about the potentials that were missed out on in terms of other projects or other layer 2,
2225
02:34:15.490 --> 02:34:16.710
ideas that maybe
2226
02:34:17.170 --> 02:34:20.391
had we had the benefit of time and not being rushed into something
2227
02:34:20.770 --> 02:34:21.750
could have emerged.
2228
02:34:22.765 --> 02:34:28.145
But, you know or, you know, that could always merge in the future still. So, you know, nothing's written and stolen here.
2229
02:34:29.245 --> 02:34:33.110
But I, yeah, I I don't see lightning as that escape route off the,
2230
02:34:33.649 --> 02:34:34.870
from the main chain.
2231
02:34:35.729 --> 02:34:37.990
You know, I see it as a just another
2232
02:34:39.810 --> 02:34:41.990
gonna another swift in the making,
2233
02:34:42.596 --> 02:34:43.096
really.
2234
02:34:52.570 --> 02:34:56.270
2235
02:34:59.104 --> 02:35:04.725
I mean, I don't wanna speak for OpenOMS, but that's one of the reasons why I've been pushing for more sovereign Lightning usage,
2236
02:35:05.585 --> 02:35:07.925
because it it is quite obvious
2237
02:35:08.330 --> 02:35:11.470
that, a significant amount of the usage is either custodial
2238
02:35:12.010 --> 02:35:13.070
or even worse,
2239
02:35:13.450 --> 02:35:14.750
like, regulated custodian.
2240
02:35:16.064 --> 02:35:18.725
2241
02:35:21.505 --> 02:35:24.725
2242
02:35:25.330 --> 02:35:28.530
and keeps growing in terms of sovereignty. And people just,
2243
02:35:29.090 --> 02:35:31.030
people not even using it from need,
2244
02:35:31.490 --> 02:35:32.790
but it keeps growing
2245
02:35:33.170 --> 02:35:33.910
even without
2246
02:35:34.415 --> 02:35:40.115
the need because how I sell Lightning to people, I mean, you know, why do I run the news? You know? I mean,
2247
02:35:42.095 --> 02:35:43.075
why why should someone
2248
02:35:43.460 --> 02:35:46.200
go on and use lightning is
2249
02:35:46.899 --> 02:35:47.399
basically
2250
02:35:48.100 --> 02:35:49.000
the availability
2251
02:35:49.460 --> 02:35:51.640
of the instant settlement, which is not
2252
02:35:53.556 --> 02:35:54.855
possible in a
2253
02:35:55.556 --> 02:35:59.176
there are only more trusted ways which is possible
2254
02:35:59.795 --> 02:36:00.295
and
2255
02:36:02.061 --> 02:36:05.120
and also the saving on fees. I mean even okay I mean
2256
02:36:05.660 --> 02:36:08.561
if you want to send you know 100 sets around
2257
02:36:09.365 --> 02:36:17.945
you still won't be able to to do it. If you if you if you see if you send, like, you know, 10,000 sets around, you still won't be able to do it on chain efficiently.
2258
02:36:20.340 --> 02:36:23.700
So, again, coming down coming back to, like, the,
2259
02:36:24.260 --> 02:36:24.760
original
2260
02:36:25.220 --> 02:36:30.825
or the where our conversation started that, you know, what kind of communities people would adopt,
2261
02:36:32.405 --> 02:36:32.905
Bitcoin
2262
02:36:33.525 --> 02:36:34.025
faster
2263
02:36:34.726 --> 02:36:35.545
and earlier,
2264
02:36:36.110 --> 02:36:44.610
it is quite likely that we'll be the ones who are who who who won't be the whales, you know, who won't have the that much fiat money available
2265
02:36:45.035 --> 02:36:45.535
that,
2266
02:36:45.915 --> 02:36:46.655
you know,
2267
02:36:47.354 --> 02:36:58.199
they will care about that even the 100 even the 100 satoshis or the 200 500 satoshis they need send on a need to spend on a on an on chain transaction when they are,
2268
02:36:59.779 --> 02:37:00.439
you know,
2269
02:37:01.060 --> 02:37:03.960
sending those minuscule kind of values around.
2270
02:37:05.995 --> 02:37:10.655
So I think it's incredibly important in that sense, and and it and it's
2271
02:37:13.410 --> 02:37:14.930
not everyone can
2272
02:37:15.410 --> 02:37:15.890
and not
2273
02:37:17.650 --> 02:37:23.425
so even we have, like, what, 8,000,000,000 people, even if, like, you know, couple of 1,000,000,000 adopts Bitcoin,
2274
02:37:23.806 --> 02:37:26.465
they won't just get the u t one UTXO
2275
02:37:26.846 --> 02:37:28.450
per, you know, a
2276
02:37:28.989 --> 02:37:32.370
person. They would have a need to be like a family or a village controlling,
2277
02:37:32.830 --> 02:37:35.970
like, a UTXO and how else could it be
2278
02:37:36.346 --> 02:37:38.926
other than other than a layer 2 solution?
2279
02:37:41.705 --> 02:37:43.006
2280
02:37:44.000 --> 02:37:51.700
Open up to that. I I I I've always said that it's we've known from the start that, you know, for Bitcoin to scale to any sort of mass
2281
02:37:52.025 --> 02:37:55.805
mass number of people, there has to be layer 2 or even layer 3 technologies.
2282
02:37:56.985 --> 02:38:00.525
My my point of contention is that I don't necessarily think that lightning,
2283
02:38:01.420 --> 02:38:02.240
you know,
2284
02:38:02.700 --> 02:38:03.439
is that
2285
02:38:03.740 --> 02:38:05.439
the best solution for the job.
2286
02:38:06.140 --> 02:38:11.256
But to reiterate your first point, first thing you said, it's a not, you know, it's a permissionless system and
2287
02:38:11.636 --> 02:38:16.775
absolutely a 100% agree. And I respect anyone who's working on it in that way.
2288
02:38:18.670 --> 02:38:19.490
A 100%.
2289
02:38:20.270 --> 02:38:34.690
We just we just don't see a future with it in in Samurai. But, you know, we don't we don't wish to discourage anyone from working on it or using it. In fact, many of our users use Lightning, and they incorporate Lightning into their post next strategy. So, you know,
2290
02:38:35.091 --> 02:38:40.070
it's it's nothing like like that. The the only thing I'll take issue with what you said,
2291
02:38:40.530 --> 02:38:43.910
and and this is a broader kind of point is but I've made,
2292
02:38:44.355 --> 02:38:47.415
you know, I've made 100 of thousands of transactions,
2293
02:38:48.035 --> 02:38:53.015
like peer to peers transactions to a merchant, you know, for for goods and or services.
2294
02:38:53.660 --> 02:38:54.160
And
2295
02:38:54.620 --> 02:39:02.560
I can't honestly say that I've ever had a single time where I was wishing for the finality of that transaction to be instant.
2296
02:39:02.925 --> 02:39:05.345
You know, I don't really ever remember
2297
02:39:06.125 --> 02:39:10.625
an issue waiting for a few confirmations or 6 confirmations or 12 confirmations.
2298
02:39:12.149 --> 02:39:19.529
If it's an online transaction, even more so. And if it's an in person low value transaction, I've never had a bar or cafe
2299
02:39:20.035 --> 02:39:25.815
ask me to wait around for the transaction to confirm. Just just as just in practice when I've when I've spent,
2300
02:39:26.835 --> 02:39:29.655
over the years since since, 2012.
2301
02:39:31.061 --> 02:39:35.000
So I don't think that that aspect is necessarily important to users.
2302
02:39:35.460 --> 02:39:39.480
I think the aspect of saving on fees is what's important to users.
2303
02:39:40.345 --> 02:39:43.726
But even during the high fee environment that we experienced
2304
02:39:44.105 --> 02:39:47.645
in the earlier parts of the year and and last year,
2305
02:39:47.980 --> 02:39:50.240
we did not really see a large
2306
02:39:50.620 --> 02:39:52.240
increase in lightning transactions,
2307
02:39:53.261 --> 02:39:54.801
you know, inbound into lightning.
2308
02:39:55.365 --> 02:39:59.225
You would've we would've and I expected to see a larger increase.
2309
02:39:59.845 --> 02:40:05.119
So there there's another disconnect there. So we know that users want to save on fees,
2310
02:40:05.659 --> 02:40:07.920
but users on a large scale
2311
02:40:08.859 --> 02:40:17.745
either don't know about Lightning or have determined that Lightning doesn't work for them even if on chain fees are in the 1 to 300 satabyte,
2312
02:40:18.364 --> 02:40:19.345
per byte region.
2313
02:40:19.740 --> 02:40:22.160
So that's a little you know, that requires
2314
02:40:22.620 --> 02:40:23.120
deeper
2315
02:40:23.740 --> 02:40:24.240
introspection,
2316
02:40:24.780 --> 02:40:29.120
2317
02:40:29.545 --> 02:40:35.885
high fee environment, which we have seen a couple of months ago or, like, in in in for a couple of months, a couple of weeks ago, or
2318
02:40:37.150 --> 02:40:37.650
so,
2319
02:40:38.910 --> 02:40:44.931
so that's not a good time to deploy liquidity to Lightning. Right? So, you know, it didn't grow then because it was
2320
02:40:45.275 --> 02:40:48.016
obviously needing an needing, you know, multiple
2321
02:40:48.395 --> 02:40:51.056
transactions to to kind of, like, build up a node
2322
02:40:51.436 --> 02:40:57.030
to serve others and, you know, things like that would be significant spending then. But now
2323
02:40:57.570 --> 02:41:00.150
after this event, you know, even then the
2324
02:41:00.770 --> 02:41:03.270
the overall interest in, like, Bitcoin is not
2325
02:41:04.485 --> 02:41:06.585
looking to be very high at the moment,
2326
02:41:06.965 --> 02:41:08.585
but the growth
2327
02:41:08.965 --> 02:41:10.345
of the network
2328
02:41:10.726 --> 02:41:13.500
has picked up to a level it wasn't,
2329
02:41:15.000 --> 02:41:20.860
you know, seen before. Like, you know, the the capacity is, like, what, like, 8 18
2330
02:41:22.985 --> 02:41:27.006
100 BTC just now. I'm I'm looking at it with, like, 23%
2331
02:41:27.386 --> 02:41:28.445
growth in the week.
2332
02:41:28.825 --> 02:41:29.565
That is
2333
02:41:30.330 --> 02:41:36.490
that is not, like, you know, the usual number. So it it seems like that now that people have this time to
2334
02:41:38.444 --> 02:41:39.505
they have experienced
2335
02:41:40.444 --> 02:41:44.145
that they had high fees, and now there is a period. Now they can deploy,
2336
02:41:44.765 --> 02:41:49.060
and, you know, open those channels and get ready for the next wave of of,
2337
02:41:50.479 --> 02:41:52.340
you know, peaking usage and
2338
02:41:52.720 --> 02:41:54.500
on of of the on chain,
2339
02:41:55.920 --> 02:41:56.420
space.
2340
02:41:57.285 --> 02:42:05.604
2341
02:42:06.530 --> 02:42:12.710
I mean, it's it's maybe it's a problem. It depends on your perspective. But I think that Bitcoin users in 2021,
2342
02:42:13.811 --> 02:42:20.895
and it's been true for a long time, just aren't spending on stuff. They don't buy things with Bitcoin and transact in Bitcoin.
2343
02:42:21.355 --> 02:42:23.695
They primarily are buying Bitcoin,
2344
02:42:24.619 --> 02:42:25.359
sending it
2345
02:42:25.899 --> 02:42:30.079
the the best case is sending it to themselves in a cold storage, but
2346
02:42:30.460 --> 02:42:34.045
a lot of them are just buying a lot of them are just buying Bitcoin and storing it on the
2347
02:42:35.165 --> 02:42:38.705
exchange. But there's not a lot of transactional activity occurring,
2348
02:42:39.564 --> 02:42:40.705
I think. And,
2349
02:42:41.140 --> 02:42:44.520
you know, that that that comes from, you know, the the huddle mentality.
2350
02:42:45.140 --> 02:42:46.439
That comes from the
2351
02:42:46.819 --> 02:42:47.319
the
2352
02:42:48.155 --> 02:42:57.056
number go up kind of mentality. But, ultimately, it just comes from the point where that users just don't need to to spend it. Right? They don't see the value in spending it when
2353
02:42:57.660 --> 02:43:09.705
when they can appreciate in value by letting it sit there. Whereas there's there's a whole class of users and a lot of them are samurai users and I would consider myself one of them that require it. We need to spend it because
2354
02:43:10.085 --> 02:43:11.545
we earn it primarily.
2355
02:43:12.085 --> 02:43:23.010
We don't have another method, so spending is is essential. And and we've been doing that for for all these years, and I just think the the available pool of users who wanna interact with Bitcoin in that way,
2356
02:43:23.765 --> 02:43:28.165
has has been has shrink you know, shrunk since all of the new,
2357
02:43:28.565 --> 02:43:29.065
entrants.
2358
02:43:31.391 --> 02:43:32.851
2359
02:43:33.551 --> 02:43:34.051
versus
2360
02:43:34.511 --> 02:43:35.170
the overall
2361
02:43:35.551 --> 02:43:41.375
2362
02:43:42.314 --> 02:43:47.774
proposition. Their their their reason for being here, right, is they maybe they're opting out of the system.
2363
02:43:48.190 --> 02:43:49.650
Maybe they require,
2364
02:43:50.510 --> 02:44:04.585
transactional privacy for a transaction that is taboo in their country. Whatever the, you know, whatever the the reasons are. They're they're they're, you know, they're still around, but there's more people who are using it as an investment asset versus
2365
02:44:05.364 --> 02:44:07.225
a transactional asset when
2366
02:44:07.720 --> 02:44:17.975
as far like, in my head, it's both. You know? And I need my my investment asset in the short term just as much as I need it in the long term, So I spend more.
2367
02:44:18.994 --> 02:44:22.935
And I think it's it's kinda based on when you got into Bitcoin, I think,
2368
02:44:23.475 --> 02:44:32.439
that can kinda predict how often you transact with Bitcoin. Like, true transactions. Maybe it's buying web hosting. Maybe it's domain names. What whatever. You know?
2369
02:44:37.185 --> 02:44:42.165
2370
02:44:42.545 --> 02:44:43.045
would
2371
02:44:43.425 --> 02:44:43.925
make
2372
02:44:44.520 --> 02:44:46.380
lightning usage higher as well
2373
02:44:46.760 --> 02:44:51.900
as, you know, as well as the on chain. So it it it it goes kind of parallel.
2374
02:44:52.325 --> 02:44:53.925
And you do it and as, like,
2375
02:44:54.725 --> 02:44:57.945
watch the comments, like, about the center you said, you know, it's it's not
2376
02:44:59.330 --> 02:45:05.030
it's not efficient to have, like, a high lightning capacity. There is is is you cannot really compare it to,
2377
02:45:06.130 --> 02:45:06.870
for example,
2378
02:45:07.205 --> 02:45:10.585
the the amount of liquidity which is sitting in in in,
2379
02:45:11.685 --> 02:45:15.785
or, like, even offered in joint market, you know, or or what people are,
2380
02:45:17.061 --> 02:45:19.620
you know, holding in their in in their in their,
2381
02:45:20.341 --> 02:45:32.745
cost storage wallets because it's just a very kind of specific use case which you need and it can serve, you know, an unlimited amount of transactions in a in a quite big mesh network already.
2382
02:45:33.359 --> 02:45:33.859
So,
2383
02:45:35.840 --> 02:45:38.420
I hope to see I I hope to see more
2384
02:45:38.800 --> 02:45:40.979
more lightning usage, but it won't necessarily
2385
02:45:41.585 --> 02:45:42.965
will be obvious from
2386
02:45:43.345 --> 02:46:00.675
from looking at the kind of capacity growing. But it will be just obvious from the services and the things you will be able to do with with lightning and on lightning. And even now speaking, you know, with, like, the from, like, DRCs to, like, you know, clear and site filtering on on
2387
02:46:02.975 --> 02:46:10.520
with, like, RGB and, you know, all all these kind of things which are which are made possible with the with the technology with the payment channel channel technology.
2388
02:46:11.620 --> 02:46:13.641
But, that doesn't, you know,
2389
02:46:14.035 --> 02:46:15.975
obviously, that doesn't invalidate the
2390
02:46:17.635 --> 02:46:21.495
the the on chain usage and the and the way that you can be the most private
2391
02:46:22.030 --> 02:46:38.490
with, you know, the coin joints and the posting tools and things like that that you you need to always fall back to that, and that's the foundation to build on. And, you know, I I very much like to see, like, you know, somewhere at wallet continue to con concentrate on it. And, you know, we'll be using on it because it's the right tool for the job.
2392
02:46:39.450 --> 02:46:44.190
2393
02:46:45.050 --> 02:46:47.311
I think it's you know, I'm not saying,
2394
02:46:48.495 --> 02:46:52.515
and I will never say that Lightning is a sure thing and maybe it's the wrong tool.
2395
02:46:54.345 --> 02:46:54.845
But,
2396
02:46:55.891 --> 02:47:03.030
you know, I I think first of all, I think Bitcoin's use as a medium exchange will only go up. It's it's had some bad years recently,
2397
02:47:03.904 --> 02:47:10.645
but I think, like, as as users, as people start realizing, especially with the the decline of cash, start realizing
2398
02:47:11.070 --> 02:47:13.010
the need for censorship resistant payments,
2399
02:47:13.630 --> 02:47:19.945
more people will spend Bitcoin as they realize that need, and they have no other option. You know? Bitcoin is is meant for those payments.
2400
02:47:20.485 --> 02:47:24.105
Unless you earn a 100% Bitcoin, it's meant for those payments you can't make otherwise.
2401
02:47:24.806 --> 02:47:30.460
So I expect that to increase. Also, you know, with Lightning, it's still very early, you know, so I think it'll take some time.
2402
02:47:30.761 --> 02:47:33.775
I think on the privacy side, just one, you know,
2403
02:47:34.335 --> 02:47:39.155
you know, Bitcoin, Lightning has a lot of difficulties in terms of receiving privately,
2404
02:47:39.936 --> 02:47:42.676
which concern me. But on the sending side,
2405
02:47:43.290 --> 02:47:46.189
especially if you're a more technical user and you realize,
2406
02:47:46.729 --> 02:47:51.390
the trade offs that are being made, which is part of the UX hurdle of Lightning as it currently stands,
2407
02:47:52.675 --> 02:48:01.255
and you take certain precautions in terms of, you know, not holding a long standing balance or a long standing node, and you use it basically as a batch spend for post mix.
2408
02:48:02.640 --> 02:48:05.460
My single favorite part about spending via Lightning
2409
02:48:05.840 --> 02:48:07.460
is that there's no change output.
2410
02:48:09.040 --> 02:48:11.220
And because that change output is, like,
2411
02:48:11.935 --> 02:48:19.795
from a UX from a UX side, I mean, we didn't we're so far into here now. I mean, we didn't even talk about, like, coin control or labeling,
2412
02:48:20.150 --> 02:48:23.530
which most wallets don't have. But, like, you spend to
2413
02:48:24.070 --> 02:48:31.685
a a merchant or, even worse, you deposit into a a regulated exchange, and you have that change output. That change output's just sitting there waiting to,
2414
02:48:33.205 --> 02:48:36.665
fuck you privacy wise, but you don't have that with Lightning.
2415
02:48:40.619 --> 02:48:47.965
2416
02:48:48.825 --> 02:48:49.325
Luckily,
2417
02:48:50.265 --> 02:48:53.705
if if it's, you know, above 0 0 1 BTC, then,
2418
02:48:54.665 --> 02:48:55.725
throw it into Whirlpool.
2419
02:48:56.410 --> 02:49:02.750
2420
02:49:03.525 --> 02:49:08.665
2421
02:49:09.285 --> 02:49:13.780
currently. And it's something that, you know, ultimately could be solved in the protocol,
2422
02:49:14.400 --> 02:49:16.660
layer with confidential transactions.
2423
02:49:17.120 --> 02:49:24.034
But let's be honest, that's not gonna happen. There's various reasons for that. So we have to deal with it on the application side. And,
2424
02:49:24.595 --> 02:49:27.875
you know, that's what Samurai does. That's what, Joyn,
2425
02:49:28.515 --> 02:49:29.574
Joyn Market does.
2426
02:49:30.034 --> 02:49:30.534
And
2427
02:49:31.620 --> 02:49:36.280
which is all we can do is continue to make those tools. I, you know, I I don't know that the
2428
02:49:36.900 --> 02:49:39.561
the this this awakening is gonna happen,
2429
02:49:39.945 --> 02:49:43.245
and they're all gonna go on to, like, the layer 2, like lightning.
2430
02:49:43.865 --> 02:49:48.525
I think that lightning is designed for a mass market, and I just I think the reality is the mass market
2431
02:49:49.270 --> 02:49:51.610
rather use something that's easier like Venmo.
2432
02:49:52.070 --> 02:50:02.515
You know? And I I just think it's gonna be it's gonna have the uphill battle unless it finds, like, a real niche and and great use case and that that hasn't been discovered again. Like you said, it's still early, so it still can be discovered.
2433
02:50:03.774 --> 02:50:08.320
That that makes it, like, really, really compelling. I just I don't know. I don't see it growing,
2434
02:50:09.200 --> 02:50:11.780
past a certain, you know, plat plateau.
2435
02:50:13.040 --> 02:50:18.945
And as Opendom said, the only way we can really tell is with the numbers that get released by services,
2436
02:50:19.805 --> 02:50:33.585
like Bitrefill and and others who have implemented Lightning for many years now, and they tend to do that yearly. So I know I mean, last year, it was something like, you know, Dash had more transaction volume in Bitrefill than than Lightning did. You know?
2437
02:50:34.524 --> 02:50:35.824
We'll see if the 2021
2438
02:50:36.125 --> 02:50:38.385
numbers are any different at the end of the year.
2439
02:50:39.165 --> 02:50:45.100
I would expect it goes up a little bit, but nothing dramatic because I don't think the use case is there for Bitcoin.
2440
02:50:46.600 --> 02:50:53.284
And if so if there is that awakening, you better you better hope that all of these tools that we, you know, that we're and
2441
02:50:54.064 --> 02:50:57.765
and join market and the others are prepared, you know, and have done enough,
2442
02:50:58.225 --> 02:50:59.925
in the time that we have had
2443
02:51:02.590 --> 02:51:13.074
because it's gonna they're gonna need the tools and they're not gonna be sophisticated. They're not gonna know about the coin control like you said. They're not gonna know about these things. They're just gonna be looking for solutions to problems.
2444
02:51:14.495 --> 02:51:22.950
2445
02:51:24.905 --> 02:51:28.604
open close on chain with lightning. There's a lot of privacy gotchas,
2446
02:51:30.185 --> 02:51:37.270
2447
02:51:37.891 --> 02:51:42.790
2448
02:51:43.265 --> 02:51:47.845
I really appreciate both of you. I hope the freaks appreciated this conversation. I think they will.
2449
02:51:49.425 --> 02:51:53.450
Do you you guys have anything you want to discuss before we wrap this up?
2450
02:51:57.910 --> 02:52:05.625
2451
02:52:06.245 --> 02:52:07.705
to chat with you open dogs.
2452
02:52:08.325 --> 02:52:11.305
And, with that, you, Matt, for the first time.
2453
02:52:15.030 --> 02:52:20.891
2454
02:52:21.645 --> 02:52:21.886
And,
2455
02:52:22.525 --> 02:52:23.745
yes. Thank you.
2456
02:52:24.686 --> 02:52:27.825
2457
02:52:29.040 --> 02:52:34.660
Just one more shout out for our guests. That's at samurai wallet on Twitter and at openoms on Twitter.
2458
02:52:36.645 --> 02:52:39.625
To the freaks, I hope you found this conversation useful.
2459
02:52:40.565 --> 02:52:42.105
Privacy is extremely important.
2460
02:52:42.645 --> 02:52:48.601
We expect Bitcoin to be around for a long fucking time. We expect the chain to be around for a long fucking time. Please
2461
02:52:48.980 --> 02:52:50.200
care about your privacy.
2462
02:52:50.900 --> 02:52:58.926
Please start seeking out resources and trying to learn how to use the tools before you absolutely need them because when you need them, it might be too late.
2463
02:53:00.426 --> 02:53:01.565
With this discussion,
2464
02:53:02.190 --> 02:53:05.730
all 3 major coin join implementations have been discussed on
2465
02:53:06.670 --> 02:53:07.570
ciddle dispatch.
2466
02:53:09.070 --> 02:53:11.811
You can go back Wasabi at ciddle dispatch
2467
02:53:14.814 --> 02:53:16.354
15, do your own research,
2468
02:53:16.895 --> 02:53:20.114
look into all this stuff, and just try and advance yourself.
2469
02:53:20.700 --> 02:53:22.479
Thank you, guys. Appreciate you all.
2470
02:53:24.460 --> 02:53:25.200
2471
02:53:25.979 --> 02:53:27.520
Hope to be back again soon.
2472
02:53:28.380 --> 02:53:29.840
2473
02:53:31.484 --> 02:53:32.785
2474
02:53:35.645 --> 02:53:36.625
2475
02:53:38.790 --> 02:53:40.569
It's all right. I can't hear you.
2476
02:53:43.590 --> 02:53:45.050
Is our latest record?
2477
02:53:49.525 --> 02:53:52.905
Or our latest electronic noise depending on whose side you're on.
2478
02:53:54.740 --> 02:53:59.560
Anyhow, we'd like to carry on with it. It's the last number. We'd like to thank you all for being so wonderful.
2479
02:54:00.980 --> 02:54:02.680
And it's called Help.
2480
02:54:03.176 --> 02:54:05.195
1, 2, 3, 4. Help.
2481
02:54:07.655 --> 02:54:08.716
Not just anybody.
2482
02:54:10.056 --> 02:54:11.115
You know, I need
2483
02:56:34.729 --> 02:56:39.790
2484
02:56:40.165 --> 02:56:41.145
Stay on bone
2485
02:56:44.325 --> 02:56:44.330
