Oct. 12, 2021
CD41: bitcoin privacy discussion with @stephanlivera at the nashville bitcoin meetup
Discussion at the Nashville Bitcoin Meetup.
https://www.meetup.com/nashville-bitcoin/
EPISODE: 41
BLOCK: 704718
PRICE: 1794 sats per dollar
TOPICS: bitcoin privacy discussion, KYC/AML, coinjoin, lightning, fee market, mining, circular economy, ransomware
@stephanlivera: https://twitter.com/stephanlivera
@nashbitcoiners: https://twitter.com/nashbitcoiners
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00:00 - Introduction and goal of Nashville Bitcoin Meetup
00:20 - Introduction of Matt O'Dell and Stefan Lovera
00:51 - Story about carrying cash and the importance of financial privacy
01:55 - Discussion on the importance of Bitcoin privacy
04:41 - Discussion on the implications of Bitcoin privacy for individuals and the system
08:17 - Discussion on the Oslo Freedom Forum and the importance of Bitcoin for dissidents
14:41 - Discussion on the trade-offs of using KYC exchanges and the future of Bitcoin privacy
23:59 - Discussion on the potential next battle for Bitcoin adoption
44:16 - Bitcoin and privacy
45:03 - Bitcoin mining and environmental impact
46:05 - KYC and AML regulations
WEBVTT
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:13:09 PM
Duration: 4149.133
Channels: 1
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Again for coming out. My name is Rod. One of the co organizers of the Nashville Bitcoin Meetup alongside Mills. And, our goal was just to kind of get together once a month and talk about Bitcoin. And,
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more importantly, gathering
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local Bitcoiners together as well as Bitcoiners that were traveling through,
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Nashville, Tennessee.
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If you guys don't know, this is Matt O'Dell. Matt's an independent Bitcoin and privacy advocate. He's also the cohost of Rabbit Hole Recap, which is every Thursday. He also does Citadel Dispatch, which if you go to citadel dispatch.com.
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And then Stefan Lovera, he's the managing director at Swan Bitcoin International.
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He's also got another one of the top bit Bitcoin podcasts out there that's super friendly to Bitcoin curious folks, as well as if you're really deep down the Bitcoin rabbit hole, highly recommend,
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checking out his podcast.
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Okay. Got it. You ready for a story? Yeah. Let's go. So I don't even know if you remember this. This was, about 3 or 4 years ago.
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Matt and I are in New York, and,
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and I think Marty was there as well. And we're grabbing a beer at a ball
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ahead of a dinner. And, of course, I'm I'm selfish and I wanna get credit card points.
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And so I'm like, I'll take care of the tab, you just Venmo me. No big deal.
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And then like a damn
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James Dean sociopath,
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he rolls out a, wad of cash and flips me a $20 bill and says keep the change.
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And I was like, who the fuck is this guy?
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And so, and then I was like, why do you carry cash with you? Nobody carries cash with them anymore. And then in classic Matt fashion, he goes on this huge diatribe about cash is disappearing. Cash is the last, self preservation privacy centric community of currency we have, and, like, next Cash is king. Cash is king. And so it helped me go down my,
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little journey as well. So I guess my first question, and then I'll ask Stephan as well the same, which is the topic, but specifically to you. Why does Bitcoin privacy matter?
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So financial privacy. Why is financial privacy important? Financial privacy is important because,
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if you go to a restaurant
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and you buy a sandwich,
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they shouldn't know your salary. They shouldn't know your net worth.
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And at the same time, your boss shouldn't know how much
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you know, what you're buying or what you're doing on a Friday night.
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I think that's a very simple concept for people. I think if you start to think about it, you realize that'd be ridiculous if if both of those parties knew the other information.
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And unfortunately,
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this move to credit cards has
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has had this experience where you basically have,
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these surveillance companies. They call themselves credit card companies, but you have these surveillance companies that are keeping track of every single transaction you make.
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They're selling it to marketers. They're not storing it securely
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and it's being shared around. And if you look at your credit card statement,
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you can tell everything about a person. I don't know if you've looked at it very closely,
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maybe if you have like a close friend you can look at theirs, you know, share it,
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and and have them kind of just look into that. So
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when you combine that with the fact that we're removing cash from
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the system,
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both governments are kind of pushing against it, but also just out of a convenience thing, people are choosing not to use cash, you know. In our everyday lives, what we see is we see, like, basically a privacy versus convenience trade off. You're deciding if you're gonna be more convenient versus more private.
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It's it's gonna we're I I feel that we're entering kind of a dark period and people do not realize that, and Bitcoin to me offers
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kind of an escape from that situation because you don't have to rely on the fact that a government allows you to use cash. You don't have to rely on the fact that you can get access to cash,
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because Bitcoin is non state money,
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but at the same time, Bitcoin is not default private.
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Bitcoin every Bitcoin transaction you make is on this ledger. We call it the blockchain.
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The time chain. The time chain. The block chain, we expect as Bitcoin bulls to last longer than all of us. It's gonna be forever.
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So even if you're not exposed today,
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someone could come back and look back at that chain and you could be exposed in 5 years, 6 years, and it could come back to bite you.
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So it's really important, I think, for people to realize today
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that they should take steps, and there are easy steps you can take to improve your privacy situation
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so that in the future you're not as exposed.
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Yeah. Cool. Okay. Let's see if this works. I think it's alright. Okay. So yeah. Look. I broadly agree with Matt there. I think there's a lot of personal implications
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for all of us that you we have to think about when we are stacking and spending SATs,
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and
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it could come back to bite you in the ass later if you spend in a non private way now.
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So those are things to consider.
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It could be things like
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things that are totally okay now, but imagine in 5 or 10 years time, the conversation has shifted. And now what you did 5, 10 years ago is now that's a cancelable offense.
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And so we're starting to see that as well with the pressure of things like YouTube as well. So they're trying to shut down anyone who is talking against the hysteria, shut down. And now anyone who's a climate denier, demonetized, and it starts in a certain process. Right? They'll start with demonetizing,
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and then they go to canceling.
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So
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that's that that's kind of the
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censorship
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risk that we all face in the Internet today, and essentially if they can if they silence you online,
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and especially if they locked you in your home, how are you gonna talk to anyone? So that's one angle of it. And I think just to add to that aspect, obviously, I agree with Matt on the personal privacy elements of this, but it's also as a system. Right? So if you believe in Bitcoin as a system, one of the things we talk about is this idea of Bitcoin as permissionless.
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Now what would happen
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if, say,
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it were feasible
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for mining pools to enforce white lists or black lists, meaning
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this transaction must go to a white listed address, or it may not go to a black listed address
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as an example, or to a white listed or black listed person even.
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So, well, you could see
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heuristics applied
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that actually
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block these kinds of spends. And so to the extent that we are able to spend more privately,
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it kind of defends the overall system in terms of how permission permissionless
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it really is. Because if more and more people are using coin join and pay join and all of these privacy preserving techniques,
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then it just becomes less feasible
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for for as an example, mining pools
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to sensor at the, at their level to stop a transaction going through. That's just one example. Another example could be,
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in various exchange and broker and OTC partners compliance desks. They might right now have to run all sorts of compliance checks,
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or they might start looking at, okay, coin join behavior is suspicious
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because only a small percentage of the Bitcoin population as it were uses coin join. So therefore, CoinJoin usage, you're suspicious. We're gonna stop your account. We're gonna ban you. We're gonna whatever.
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So these are some of the reasons why
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even if you don't necessarily need every single one of your transactions to be 100% private, you you still care about it as a system that it is viable in the long term as a permissionless system. Totally.
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Yeah. And so I should also put in the guidelines, we may go deep into a lot of terms and concepts.
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Do not be overwhelmed. You're gonna learn a lot through Osmosis, especially with these 2 up here, whether it's PayJoin, CoinJoin,
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and a number of other things.
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You guys touched on
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a a good good phrase, and you guys were in Miami earlier this week for the Oslo Freedom Forum. You guys were meeting a lot of dissidents. You're meeting a lot of folks that,
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Bitcoin
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could be a matter of life and death in terms of how they're using,
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Bitcoin. I don't know if there's and, you know, we're privileged here that we are able to participate in the global financial system, I assume all of us.
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Was there any kind of big takeaway or big story that you guys wanna share? First of all, I mean, we had,
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microphone issues in the beginning, so I was a little bit distracted. I do wanna thank,
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Rod and Mills for hosting us. And I wanna thank all you guys for coming out.
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It's pretty crazy how packed a crowd it is here for the 2nd Nashville Bitcoin meetup ever.
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And I wanted to thank I think Bitcoin Magazine sponsored the drinks. Right? So I wanna thank Bitcoin Magazine for sponsoring.
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Maybe I can have a quick plug there. So long term Nashville Bitcoin company Yeah. And, a massive amount of the team is here. I I absolutely love the team.
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Disclosure, I have been consulting for them for quite a while now,
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but but they've built a really great team over there, a lot of quality Bitcoiners. So if you are interested,
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in working in Bitcoin, consider applying there. And then to take it back down,
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it was really humbling being at the Oslo Freedom Forum,
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you know, as big explain that just a little bit. So the Oslo Freedom Forum is run by the Human Rights Foundation. They do it every year. They usually do it in Oslo.
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Because of COVID, everything's moving to Miami,
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including the Oslo Freedom Forum.
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So this is the first time I got to be a part of it. I was actually supposed to fly out to Oslo previously.
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The first time I worked with them was in 2019.
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I flew out to San Francisco. I helped teach activists, like, it was just 10 activists in a small little classroom.
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This time,
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Alex Gladstein, the chief strategy officer of the Human Rights Foundation, set up a whole Bitcoin Academy track,
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so they got to learn about Bitcoin from, you know, leading advocates and experts in the space,
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all sorts of different aspects of Bitcoin,
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also just the normal track of Oslo Freedom Forum as you hear from the activists around the world about their fight,
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and it's really dark.
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The reality is human rights around the world are being
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trampled on.
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These people are fighting for their lives.
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Bitcoin offers some hope.
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Unfortunately,
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there's still a lot of nuance about using it privately, and for them, you know, it really is a matter of life or death. If these authoritarians are able to track their transactions. They're able to see what their spending is. They're able to see exactly how much Bitcoin they hold.
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So, I mean,
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I think I I I'll let Stefan speak after, so I'm not gonna speak for him. But to me, it was it was just truly humbling. It it gave me more inspiration for for why I put so much effort into the Bitcoin space.
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And
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but but, honestly, like, I I felt like a complete larp. I felt like a complete larp because
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these people are literally, you know, I we talked to Bitcoiners and some Bitcoiners are like, I don't wanna try and use Bitcoin privately. Like Stefan kind of said earlier, like, maybe it puts a target on your back.
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You know, maybe I'll end up in jail if if it's considered suspicious or something like that. These people are getting thrown in jail 40, 50 times already just for being against the authoritarians that they're pushed back against. They have friends and family that have been killed, brothers who just disappeared.
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You know, I cried multiple times during their presentations,
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and I just think that the big takeaway is is that
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with Bitcoin open source tools in general,
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they provide
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an answer
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on a technical level to a lot of
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oppression we see in the world today. And to me, there's there's no more practical fight, no more important fight,
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than supporting open source development, supporting open source tools, empowering individuals,
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and, you know, just trying to make the world, at least, a slightly better place than it is today. Because for these people, like, it's not theoretical. It's it's it's already happening.
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Yeah. And, yeah, I I totally agree with what Odell was just saying. I think it's
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very motivating when you see the stories of these people who are living under these kinds of conditions where they if they based on their political views, they're getting arrested regularly. These people are regularly get being arrested, and they are essentially
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in and around circles of people who are political prisoners. They've they've not done, like, a genuine crime. They just spoke out against some kind of oppression or something wrong, and that's sent them into jail or had them disappeared and all sorts of horrific things. And so
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I had the chance to, in those side conversations,
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speak to some of the different human rights activists and they were from all around the world and some of them were now based in the US because they had been persecuted that they had to leave. And so if you talk to them and you ask them, well, what's the banking situation like for you guys? And pretty much they all get the same answer. If they get shut down, they get stopped, they get blocked, whatever it is. And so
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what I found for some of them is really seeing is believing. If you showed them, hey, pull out your phone. Let's get you set up with Moon Wallet or Phoenix or one of these Bitcoin wallets. 2 years. Yeah. And then you you set them up. Sorry, moon with 2 years. Yes. Moon with 2 years. Correct. Yes. And,
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you, you, you send them a lightning transaction and their eyes light up. And so that was really interesting for them. And I think for them it sort of shows them how real it could be. Or if you show them, hey, you can buy vouchers with this or you can take donations with this.
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And another important lesson even for those of us who are out there trying to talk about Bitcoin, I think one of the interesting things that HRF really do well is that they really focus on stories. Because I think stories are what motivate a lot of us, and I think in my mind it sort of reminds me every now and again I'm like, you know what? I go down these random technical rabbit holes and I don't focus enough on an actual story that's engaging
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and I think that is what can engage someone and pull them in to whatever you're trying to teach them about or advocate for. So that's probably an important lesson for all of us to think about as well.
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Yeah. Totally.
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Again, we're going pretty hard in the paint, especially on our second meetup with amazing guests around Bitcoin privacy. But I do think it's important.
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So but one thing and, you know, it's gonna be a little bit of a hot topic because probably and I'm not gonna ask who has bought Bitcoin,
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but I'm gonna venture to guess. There you go. Flip over there has bought a lot of Bitcoin. Talk to him.
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The, we all and including myself, we all all bought it on a KYC exchange. And what's KYC? It's know your customer. You have to give them your driver's license. A lot of these exchanges, you're putting your face, you're putting your passport. You may have to, like, give your child's blood a little bit or something like that.
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That was a joke.
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And so I guess why is that
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what are the trade offs, I guess? Because the ease of use is great. You know, you can buy even with strike, you know, and top up.
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What are the future trade offs that some of the folks should be concerned about? So, actually, I mean
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first of all, by a show of hands,
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who has never sent a Bitcoin transaction?
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Bartender?
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Okay. Liar? Good OPSEC?
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Let's go.
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Okay. So we we do have a good group of Bitcoiners in the crowd.
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I don't really like the term KYC. KYC stands for know your customer.
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It usually goes k y c a m l with a slash in between.
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So know your customer, anti money laundering.
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What it really is
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is every major company in the Bitcoin space,
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is keeping lists of Bitcoiners and their transaction history,
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and they're not storing it securely.
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Sometimes it is being sold to marketers. It is being shared around with different,
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surveillance firms,
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and these lists are ever growing and they're being collated. We've just recently had Coinbase,
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they had 6,000 people's full transaction history,
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home address, social security number,
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you know,
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ID, driver's license,
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all this information gets leaked.
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And then from that information, if you don't take privacy best practices into account,
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it can all your transactions can they can be tracked and they can be surveilled and they can make process of elimination decisions.
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So when we're looking at Bitcoin privacy well, before I get there,
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the common claim is it's to stop criminals.
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And what's really, really frustrating about it is it doesn't actually stop criminals.
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Criminals either use stolen KYC data to set up accounts,
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or they actually buy KYC data. 1 of the
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I guess cool is the wrong word, but one of the cool aspects about Bitcoin is it is it opens up these new markets. So there's actually markets on on Tor where you can go on to the dark net and you can buy KYC information from, like, poor Nigerians or poor Ethiopians or people in the Philippines or people in Thailand, and they'll they'll just sell you they'll just sign up to Binance for you and you just pay them $40 worth of bitcoin and then you can use their account.
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And, they just need the money so they don't really care if you use it for nefarious purposes.
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So, criminals are getting away with doing whatever criminals want to do, and law abiding citizens are being put at risk.
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And to me, I think, like, as an industry, we should take more of an example from,
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gun owners in America
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and really start to stand up against this idea that it's just normal and expected for these companies to keeping major major ever growing list of bitcoiners, their personal information, and their transaction history.
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And then on a more practical basis,
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what is basically happening is you have this blockchain data that is forever, your Bitcoin transaction data that's living on this on this ledger,
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that's gonna outlive all of us, and it's combined with external data which is these lists and this transaction history.
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And when you combine the 2, what these surveillance firms are doing is, they're basically, everything they do is
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a probability game. So they're looking at the chain and
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most of you probably realize you can send bitcoin to yourself. So what they're trying to do is figure out what the probability is that I'm actually, say, sending money to Stefan versus sending money to myself. It's a probability game. So our tools that we can use on the side, if you are going to go through one of these regulated on ramps and have your information
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connected is to try and break these heuristics that they use to reduce that probability that they know that you're actually,
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the the owner of the bitcoin is changing hands. And so, the whole fight, basically, in bitcoin privacy land is this idea of,
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reducing the ability for them to figure out a high probability score of ownership change. Correct.
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Yeah. So,
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yeah. Just to add, I guess, the trade offs with that, of course,
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and it's not like Bitcoin companies,
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you know, enjoy doing this k y c stuff. It's obviously something that has been forced on them at the risk of getting shut down. And any pretty much any financial services company lives at the risk or lives under that threat of having their license taken from them and then not being allowed to operate. And of course, there are non k y c methods of obtaining Bitcoin. You can mine it, you can earn it, you can purchase it on platforms like this can huddle huddle and others.
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But I think that I guess the other trade off on the the k y c service or AML k y c service side is that you simply won't be able to accumulate as many coins.
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But
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the trade off is
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that government data, governments can subpoena that data or even ask for that data. So in Australia, it's basically assumed like it's not even like a subpoena. It's more just like the government will just ask Australian bitcoin exchanges.
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You know. We know this guy bought, you know, we know this guy's with you. Give us his records,
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and it's basically assumed. So that's how bad it's gotten in Australia.
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So you know, you have to think about that and trade that off. And you also have to think about this idea that once purchased, that record is always there,
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Right? Even if you then coin join and get what we achieve what we call forward privacy.
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So I buy the coins on the KYC exchange. I coin join them, and then from then on, yes, assuming I do the right steps, I run it through Tor, I run it through coinjoin, etcetera.
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I have forward privacy from that point forward, but that record still exists. And so for some people who are really serious about privacy, they literally go back the way they came. Meaning, they sell on the KYC exchange, so they might have bought this amount and sold this amount and then gone and repurchased
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at their entire stack non KYC. Now
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it's a spectrum in terms of how much of a cost you're willing to pay to do that
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for you know, you have to make your own assessment.
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How many how much is the additional coins is that gonna be worth to you in 10 years time, 15 years time. If you, if we're all bullish as we are on bitcoin and we think it's going to $10,000,000 a coin, $15,000,000 a coin. Why so bear? Yeah.
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Too bearish.
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Canceled. Canceled. So,
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but so that there there are a few ideas there, but
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at the end of the day,
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it I think it's kind of like I'm sort of interested in Bitcoin as a system remaining,
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viable and sustainable. And so, you know, it also also here's the other thing.
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If we're if I'm too bearish,
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let's not forget the, the fee market or the block space market.
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The fees will rise.
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It will become more costly to use CoinJoin
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eventually.
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Eventually.
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So that's something to think about as well. The cost to be private. Because remember, Bitcoin is designed we view it more like a settlement layer. So Yep. It's gonna cost you a lot more to be private. So, Stefan, let me just jump in here real quick.
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First of all, long term,
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I think
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what we will see is we'll see more of a circular economy develop where you can go to the bar, you pay them in Bitcoin, you're not actually buying Bitcoin, you're not actually selling Bitcoin,
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you're earning Bitcoin or spending Bitcoin. And in that case, you don't have these regulated companies standing in between.
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The second thing I would add is,
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yes, these regulated companies are forced
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to comply with these laws,
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but we've watched many of them
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spend
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1,000,000 of dollars, sometimes tens of 1,000,000, 100 of 1,000,000 of dollars
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fighting for the ability to sell unregistered securities and sell shit coins,
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but they haven't pushed back against,
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this collection of information. So so I'm not saying that I expect, you know, regulated companies to just break the law, but I would like to see some more pushback. We haven't really seen much pushback.
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And then the third thing is, you mentioned it briefly, but
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right now in the current dynamic,
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mining is a very accessible thing that you can do and you can mine from home.
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It does involve
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a licensed electrician because you need 220,
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rad
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Yeah. You need 220. Right? 220, 240. Yes. 2 20240.
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I don't know personally because I don't know how to do this. But you so you need a you need a licensed electrician,
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but what's really nice about that is it's permissionless.
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And in the current market, you can kind of,
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for most people at most energy costs in America, you're able to get Bitcoin actually at a discount of using through the regulated exchanges.
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And if we have small miners
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throughout the country, they can kind of jump start that circular economy. If they need to pay their bills,
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if they need some fiat, they need some cash,
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then, you know, at a local Bitcoin meetup or something like that, they're able to trade bitcoin. So not only does it help the individual
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miner, it helps the network as a whole because we have more distributed miners rather than these large public
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corporations as miners,
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but it also helps jump start your your local Bitcoin economy.
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So as someone
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who may be scared shitless now,
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including myself,
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you look. Quick recap. So we mentioned At Home Mining.
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We mentioned coin join, go forward, pay join.
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What about lightning? Is lightning help with,
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So there's actually a lot of okay.
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Here's how I think about it.
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And by the way, lightning, if you wanna explain lightning. Okay. So for people who aren't familiar, lightning is a network of payment channels built up on top of bitcoin.
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And so you can think of it like when you open a bar tab and you close out that bar tab, that's like a very loose analogy. But think of it like it's not just that, it's actually that you don't need to open a bar tab with every person you pay. It's that there's a network and that using the magic of cryptography and bitcoin smart contracts
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that
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essentially you can route a payment across the network and the the net result being you can make payments much more cheaply, and these payments do not necessarily hit the chain, as in touch the blockchain.
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That said, there are various ways in which you can leak your privacy on the lightning network. So here's high level how how I think about it. Right? So the least private of all is a nigh what I would call a naive on chain spend. Right? Just a, you know, not even trying any privacy techniques, just spending on
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chain. Then a bit more private that more private than that is lightning because you're not necessarily putting everything onto the blockchain. It might require active surveillance or some kind of more advanced techniques for somebody to figure you out.
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And then I think most private is coin join off your own node using,
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the correct tech, like a well executed coin join flow is probably what I think of as the most
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possible the best possible privacy available in Bitcoin today. So it's kind of 123 in that order. That's how I think of it.
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So
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lightning has a lot of ways in which you can actually still be doxed. Your channel when you open that channel with somebody
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that there are various elements of your,
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coins that are being doxed out to the network because it's not just the Bitcoin blockchain.
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When we join the lightning network and we run a lightning node, there's this thing called gossip data.
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So you our lightning nodes are all talking to each other, and they're sharing information.
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And then that information
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could be used to sort of know what is your channel point, what is your on chain footprint? So there are various techniques involved. A really good article if you're interested. And, Anthony Ronning wrote this, and I think you hosted him on Citadel Dispatch. I did an episode with him as well. Episode 276 of my show. I had him first, though. Yeah. You did. You did. Oh.
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And so That's spicy. That he's, that's a really great article if you're interested in like the really technical nuances of lightning privacy.
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So there, there are a few openings or lots of, do you want to add anything?
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First off, if someone could grab me a pale ale, that would be appreciated.
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You know, he probably just confused a lot of people.
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I I I hope that Matt's a lightning bear. I Esteban's a lightning bear.
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I use it myself. I I I think when we win, it will be that you won't have,
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you know, 2 nerds sitting up here for 45 minutes talking about the nuances of Bitcoin privacy. You'll just be able to just, you know, open a mobile mobile wallet and just spend in a relatively private fashion?
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Thank you, sir.
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I would add a couple things to what Stephan said. First of all, high level,
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you know, lightning is for most people, you don't need to know about payment channels or anything. You install an app on your phone, you load it up with some Bitcoin, you're able to pay for less fees, faster transactions.
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Lightning in general at a high level has pretty strong privacy guarantees for senders.
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Most of the issues revolve around receiving lightning transactions.
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So if you're sending lightning transactions, you should get a bump up in privacy
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just across the board.
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And then last but not least, he said the 3 different ways,
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he said, naive on chain,
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Lightning, and then CoinJoin, but you can use them in combination. So what I really wanna see is the 4th one, which is
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wallets basically automate.
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You do CoinJoin, and then you CoinJoin into Lightning, and then you make spends with Lightning.
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Right. Yeah. And so there's some interesting aspects with that. I think, Anthony Ronings piece touches on some of these things of this idea that you would spin up a lightning node,
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send some coin joined money into that node, and then open one channel out of that. But then
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even from that point on, you might then dox other aspects of your setup. And so it kind of gets
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complicated. But I think
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where we're going longer term with things like taproot and with things like someday channel factories and various techniques
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that
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will,
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you know, once once they've been developed and popularized and commercialized and put into wallets and software that we use,
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it'll be it'll be better then. You know, Lightning is very new,
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and there hasn't really been much focus on privacy. It's kind of just a,
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like a secondary effect that has happened. So like there's been privacy advocates who have just kind of played around with it to try and use it as a privacy tool. So I hope more development goes into it, more privacy focus goes into it. But one of the really cool aspects of Lightning, and to be honest, you call me a lightning bear,
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One of the cool aspects of Lightning is
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Bitcoin doesn't change. Bitcoin is very difficult to change on the protocol level. And that's part of the value prop because
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being easy to
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change is an attack vector because you can you can change it in ways that make it worse money.
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So we have Bitcoin, which has very conservative development, and then we have layer 2 networks on top, like Lightning being the most
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most used one and most famous one, that have very rapid change. And they're able to change very quickly, develop very quickly.
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So hopefully, we see development there
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keep improving and and keep making it more private and just a better experience.
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But at the same time, if lightning fails, we'll have other layer 2 networks, it won't be the end of the world.
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And to me that's the most bullish part about lightning. The most bullish part about lightning is
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it could disappear tomorrow, and it wouldn't it wouldn't be the end of the end of Bitcoin. And I should have probably prefaced it by saying you cycle through bearishness,
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skepticism, bullishness.
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It's true. Bearishness, skepticism. And then he was talking about the fee market. I got pie on my face earlier in the year because
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I basically got fee FOMO and I was like, the fees are just gonna keep going up. And then they just went all the way down. You can, like, send a transaction now for like a 120 sets. It's like what is it? Like, 20¢ or something? 10¢?
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Yeah. Exactly. And
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Catan was right, unfortunately. Yeah. Our our buddy
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Catan completely owned me on that one,
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but I do ex I do expect fees to go up. Otherwise, we we probably have some issues on our hands. Of course. Yeah. I mean, if the fees don't go up by say, you know, so 99% of the bit all the bitcoins that will ever be mined will be issued in
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2035. So if the fee market and block space market rather doesn't happen by then, well, maybe the security element maybe might be a little bit more in question, but honestly, You
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know,
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you're
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using
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if
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especially
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if
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you're
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using
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a KYC, You know, you're using if
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especially if you're using a KYC custodian,
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like, they're holding your keys. They can see all of your transactions. They know your balances. They can seize all your money. And I think part of the reason why we've seen the fee market,
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not really developed yet is because so many people just buy Bitcoin and they just hold it in the custodial wallet. They never actually withdraw it. And if they do withdraw it, they just do one transaction out. They don't take any privacy precautions.
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So so the amount of transactions that are actually getting settled on the Bitcoin network are significantly lower because of these custodial platforms.
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Yeah. I agree with you there. I think there's a few factors going into it. I think the Segwit and batching also made a big difference. And the for example, blockchain dot info having enabled Segwit for a long time, they were not doing it.
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So that on the margin, that was a lot of transactions because a lot of people are using blockchain dot info. So I think that was part of it. I think lightning's taken a little bit off. I think more people using stable coins,
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and maybe there's less and less of a
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transactional culture in Bitcoin. It's it's sort of became more and more of a saving. Do not use blockchain dot info.
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Yeah. That goes without saying.
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So,
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one thing, and I lost my train of thought, but I'll ask one more question and then maybe we open it up for the audience to have some questions as well. You know, one thing I was thinking about that New York story, you know, someone's probably in the audience like, well, why don't you just pay them, you know, the $20 in Bitcoin and use Lightning? I mean, back 3 years ago, Lightning wallets
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didn't really exist. I mean, we had to go to a terminal and, like, you know, hard code a transaction basically.
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And then if I sent you a transaction on chain, $20, it would have been, like, $7 worth of fees. So that $20 worth of cash was, was a okay.
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I guess I'll close with, you know, can the Bitcoin
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protocol, so layer 1 privacy, you mentioned Taproot, you mentioned a couple of these other things, Can we get more private by default?
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So the current hope
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is
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there's a few. So Taproot will help in small ways.
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It will make certain transactions look the same.
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There is a hope of this idea of cross input signature aggregation, although that's like a very far off, and we don't know if we'll ever get that.
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There's also another kind of more far off idea of confidential transactions,
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which would help in terms of some of the privacy heuristics.
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But currently, the trade offs associated to get confidential transactions
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just make it untenable in terms of getting the users and the developers over the line in terms of getting them to agree with that. But, I did a recent episode with Adam Backupset 300 talking about some those trade offs if you're interested about that.
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But Is that the only time you had him on? For episode 42 is my first episode. Damn. You beat me on that one. What about 83?
366
00:33:50.385 --> 00:33:55.685
Is that Connor? I can't remember. I don't remember the name of this. I can't remember them all. What about Citadel dispatch 31?
367
00:33:56.850 --> 00:34:01.250
That was the mining episode. Dope. But anyway, continue. I didn't mean to cut you off. I'm sorry. Yeah.
368
00:34:02.450 --> 00:34:07.455
So the hope now one one positive hope that I have that that's kind of recent
369
00:34:07.915 --> 00:34:10.175
is seeing Sparrow wallet integrate Whirlpool.
370
00:34:10.475 --> 00:34:13.295
Now I think this is really cool for a number of reasons because,
371
00:34:13.710 --> 00:34:26.155
you know, you guys might have seen that meme video of the first follower, right? Like this guy, there's the first guy dancing crazy and whatever. Maybe in that analogy, it's like samurai wallet of the crazy ones and Sparrow wallet was the first follower, and maybe some of the other wallets will actually
372
00:34:26.694 --> 00:34:35.100
integrate Whirlpool as well. And so then we'd have all these different wallets all mixing through the same protocol and becoming part of the same anonymity set and liquidity
373
00:34:35.480 --> 00:34:47.125
set, if you will. So that could be a positive development, and we might see more and more people using bitcoin more privately in that way, and it's got some interesting features that previously were not easy. So for example, mixing to your cold storage.
374
00:34:47.579 --> 00:34:58.204
That was something that was very difficult to do if you're just on your Samura wallet on your mobile, but now with Sparrow, you can do that. Oh, actually previously, you could have done something similar with join market, but, again, join market is not as accessible.
375
00:34:58.825 --> 00:35:02.765
So I'm hopeful there that with some of the application level
376
00:35:03.145 --> 00:35:05.404
technology and software and hardware potentially,
377
00:35:05.750 --> 00:35:07.830
that will get more privacy that way,
378
00:35:08.230 --> 00:35:12.810
but it's it's kind of up in the air right now. Joy Market was one of the first CoinJoin,
379
00:35:13.190 --> 00:35:13.690
implementations.
380
00:35:15.145 --> 00:35:18.845
They're working to make it more accessible. I've actually been working with Human Rights Foundation.
381
00:35:19.145 --> 00:35:24.710
We set up a bounty so that it's easy to set up on your own node. All these node packages, whether it's raspiblitz
382
00:35:25.330 --> 00:35:26.150
or Umbrel,
383
00:35:27.010 --> 00:35:29.830
or myNode, you'll be able to easily use join market.
384
00:35:30.930 --> 00:35:38.015
I I I just I like to privacy projects in the space. I am very, very excited about Sparrow. That's Sparrow wallet dot com.
385
00:35:39.035 --> 00:35:47.589
Craig Raw from South Africa developed it. He basically made a wallet that he wanted to use. It has very few dependencies. It's very reliable. It it's just very efficient.
386
00:35:48.465 --> 00:35:51.925
I actually convinced him on CIDO Dispatch Live to add,
387
00:35:52.705 --> 00:35:54.485
Whirlpool, which is pretty cool.
388
00:35:55.745 --> 00:35:59.140
I do not remember the number even though I've had way less episodes than you,
389
00:35:59.680 --> 00:36:01.620
but you can just check it if you want.
390
00:36:03.120 --> 00:36:03.620
But
391
00:36:04.275 --> 00:36:10.375
I don't think confidential transactions will ever happen. The the idea of confidential transactions is that the amount is blinded,
392
00:36:10.675 --> 00:36:26.085
not the sender receiver, but the amount is blind. And what's nice about that is all CoinJoin implementations up until this point relied on equal amounts. So when you send a CoinJoin transaction a CoinJoin transaction at its core is a collaborative transaction. It's this idea that you send a transaction with multiple people,
393
00:36:26.625 --> 00:36:29.125
and you all get increased privacy because
394
00:36:29.490 --> 00:36:31.830
that probability game, like we were talking about earlier,
395
00:36:32.370 --> 00:36:37.270
it breaks the probability. You don't know which one is which person because you all shared it together.
396
00:36:38.025 --> 00:36:41.805
If you add confidential transactions to the mix and you can't see the amount,
397
00:36:42.424 --> 00:36:50.670
then they don't have to be the equal amounts. Right now, the CoinJoin implementations rely on the fact that you're all coming in at equal amounts because the amounts can be seen.
398
00:36:50.970 --> 00:36:51.950
All that said,
399
00:36:52.330 --> 00:36:55.790
I highly doubt confidential transactions are ever gonna happen on Bitcoin.
400
00:36:56.245 --> 00:37:01.225
So the dream is really on the app level and that's what Stephane was talking about earlier.
401
00:37:02.405 --> 00:37:05.910
Apps like Sparrow Wallet, apps like Samura, apps like JoinMarket
402
00:37:06.530 --> 00:37:12.310
can implement it on the wallet level as more people start using it on the wallet level. Everyone gets increased privacy.
403
00:37:14.694 --> 00:37:19.595
And what I expect is I'm actually really bullish on Bitcoin privacy long term,
404
00:37:19.950 --> 00:37:26.450
because I think regardless of privacy, Bitcoin is gonna take over the world. And that's one of the reasons why there's a lot of,
405
00:37:27.150 --> 00:37:28.930
so called, like, privacy coins
406
00:37:29.445 --> 00:37:35.625
where, like, these coins focus on trying to make private transactions, and I don't focus my time on them because
407
00:37:36.085 --> 00:37:38.345
Bitcoin's gonna win regardless of what happens.
408
00:37:38.800 --> 00:37:42.260
So the goal should be to try and make Bitcoin as private as possible.
409
00:37:42.720 --> 00:37:50.255
And what I think happens is what's gonna happen in all of our everyday lives is that as more of our lives become digital, as more of our lives,
410
00:37:51.035 --> 00:37:55.830
start to use Bitcoin, as more of our lives just and every day you buy a concert ticket, you
411
00:37:57.830 --> 00:38:01.130
buy this, you buy something on Amazon, goes digital, we're gonna get burned. And we're all gonna start to get burned.
412
00:38:01.590 --> 00:38:05.385
The leaks are gonna get worse. We just had Facebook. I think it was, like, 1,800,000,000
413
00:38:06.645 --> 00:38:09.945
people's records got compromised on on Facebook.
414
00:38:11.420 --> 00:38:15.599
As people start to get burned, they're gonna realize the need to increase their privacy.
415
00:38:16.300 --> 00:38:17.119
And I think
416
00:38:17.565 --> 00:38:19.825
Bitcoin as this open permissionless
417
00:38:20.204 --> 00:38:28.280
way of innovation, like you can innovate on top of Bitcoin and no one can stop you, will result in kind of market forces that push people
418
00:38:28.580 --> 00:38:30.520
into these better privacy solutions.
419
00:38:31.140 --> 00:38:35.655
So the way I look at it is Bitcoin will be easy to use privately,
420
00:38:36.355 --> 00:38:36.855
eventually.
421
00:38:37.715 --> 00:38:38.215
And
422
00:38:39.075 --> 00:38:43.460
the difference is it'll either be really messy in the middle and we'll all get burned,
423
00:38:43.840 --> 00:38:46.340
or we avoid that process. But at the end,
424
00:38:46.800 --> 00:38:54.005
it'll be easy to use it privately. Like, that's kind of how I view it. Yeah. Interesting. And actually, let me ask you a question as well because you said,
425
00:38:54.545 --> 00:38:56.085
Bitcoin's gonna win regardless,
426
00:38:56.545 --> 00:38:57.525
which I agree with.
427
00:38:58.200 --> 00:39:04.380
There is an interesting hypothetical, and I think put this one up a while back. But he said this idea of imagine if every sat was KYC'd.
428
00:39:05.214 --> 00:39:12.994
And would you regard Bitcoin as a as a failure at that point, or would you still see it as a like, would you still see it as a set as a an improvement?
429
00:39:13.860 --> 00:39:15.160
Well, that will never happen.
430
00:39:15.940 --> 00:39:24.335
But in that theoretical, then then we've we've we Bitcoin is no longer permissionless. If if you have to ask permission to spend your Bitcoin, it's not your Bitcoin.
431
00:39:25.275 --> 00:39:27.694
And if every transaction is known,
432
00:39:30.380 --> 00:39:30.880
then
433
00:39:31.500 --> 00:39:33.280
people will self censor themselves.
434
00:39:34.620 --> 00:39:38.080
They they can get their like, the thing is, like, Bitcoin's hard to seize,
435
00:39:38.715 --> 00:39:47.535
but it's not hard to throw you in jail for doing a transaction you weren't allowed to do in the first place. Right? So privacy is key to the censorship resistant aspect of Bitcoin.
436
00:39:48.410 --> 00:39:48.910
So
437
00:39:49.530 --> 00:39:52.349
in that straw man theoretical and every
438
00:39:52.730 --> 00:39:55.710
every every UTXO, every status k y seed,
439
00:39:56.895 --> 00:39:59.875
to me, Bitcoin will have failed. The price still might pump,
440
00:40:01.055 --> 00:40:01.555
but,
441
00:40:02.175 --> 00:40:13.205
I I would hope that there'd be pushback before we got to that point. Yeah. Yeah. And look, it is it is an unrealistic hypothetical. I agree. I it's just an interesting thought I think. Would would Bitcoin have failed at that point?
442
00:40:13.525 --> 00:40:14.345
I think
443
00:40:14.645 --> 00:40:17.625
the main problem is more about the
444
00:40:18.005 --> 00:40:25.069
government's tentacles getting into a lot of things because the government is what forces AML and sanctions controls onto all these businesses.
445
00:40:25.530 --> 00:40:26.270
I think
446
00:40:28.329 --> 00:40:46.810
it would. Yeah. So like you were saying, it's an unrealistic hypothetical in that not every sat will be k y c'd. But here's the other thing, it might be that there are different countries or jurisdictions or citadels, as we might say, that have different rules and maybe some of them it is kyc, but you just, you're allowed to just spend what you want. And so
447
00:40:47.375 --> 00:40:53.860
it might allow more of a competitive jurisdiction aspect and that in turn might give people more freedom in a way that
448
00:40:54.340 --> 00:40:54.840
maybe
449
00:40:55.300 --> 00:41:01.320
is not implied. It's not the same future that you have implied. Yeah. I think it's a pretty shitty thought experiment, to be honest.
450
00:41:01.765 --> 00:41:03.945
I find interesting. Thanks, Stefan. Yeah. No. Just kidding.
451
00:41:04.485 --> 00:41:08.745
Any questions from the audience? We can do this. Yes. Emily, you enunciate. I'll repeat.
452
00:41:09.180 --> 00:41:09.839
The next frontier
453
00:41:10.460 --> 00:41:11.280
for Bitcoin,
454
00:41:11.660 --> 00:41:15.920
assuming it's taken over the world, where is that next battle? Is that a fair
455
00:41:16.444 --> 00:41:17.585
recap? Okay.
456
00:41:20.045 --> 00:41:28.740
I think it'll be those countries that really go hard on Bitcoin first. You know, maybe El Salvador will be one of the first places where if they if they stick with this thing,
457
00:41:29.120 --> 00:41:35.605
a lot of people in that country will get a lot richer than people in other countries because they will have been day to day native using Bitcoin.
458
00:41:36.385 --> 00:41:55.350
That's one example. But I think it's also just people who hold a lot of coin right now will will kind of drive that competitive pressure amongst the different states and maybe some of the smallest like so might not, it might not necessarily be like the Australia, US, UK, Canada. It might be some of the smaller nations that are maybe a little bit more nimble and actually offer a bit more freedom. Who knows?
459
00:41:55.830 --> 00:41:58.890
Yeah. I mean, I think in general, what you see with Bitcoin is it's
460
00:41:59.190 --> 00:42:07.945
it's the challengers that adopt Bitcoin first and and end up benefiting from it more. So you you tend to see disadvantaged people get it first.
461
00:42:08.645 --> 00:42:18.299
You see tend to see the secondary companies, not the top tier company isn't the first one who adopts it. It's a secondary company. You see countries like El Salvador adopt it before a large GDP nation.
462
00:42:19.960 --> 00:42:21.980
And at some point that will change,
463
00:42:22.605 --> 00:42:26.065
but in the short to medium term, it'll probably continue to be
464
00:42:26.605 --> 00:42:29.265
kind of, you know, countries, companies,
465
00:42:29.740 --> 00:42:33.040
individuals that have something to prove, something to truly fight for,
466
00:42:33.580 --> 00:42:40.745
that will adopt it first. And that's kind of, you know, that's one of the most beautiful aspects of Bitcoin to me, at least in the adoption cycle,
467
00:42:41.685 --> 00:42:43.945
because, you know, Bitcoin doesn't, like, magically
468
00:42:44.325 --> 00:42:45.785
fix income inequality
469
00:42:46.085 --> 00:42:46.585
or,
470
00:42:47.400 --> 00:42:48.619
make the world necessarily,
471
00:42:48.920 --> 00:42:51.180
you know, more financially equal,
472
00:42:51.799 --> 00:42:54.299
but it does guarantee you a fair money,
473
00:42:54.685 --> 00:42:59.745
and it it guarantees you the ability to fight on a fair playing field where the money isn't necessarily,
474
00:43:00.845 --> 00:43:04.790
working against you or being co opted by super powerful forces.
475
00:43:05.730 --> 00:43:06.630
Thank you, Emily.
476
00:43:07.170 --> 00:43:08.710
Yeah. Gentleman in the back.
477
00:43:10.965 --> 00:43:11.785
So with
478
00:43:12.245 --> 00:43:17.785
Chinese miners coming over, especially to Texas, especially with flare gas in West Texas,
479
00:43:18.400 --> 00:43:20.980
seeing the federal versus the state level,
480
00:43:21.280 --> 00:43:23.380
you see, like, a Texas, Wyoming,
481
00:43:23.839 --> 00:43:24.339
Tennessee,
482
00:43:24.640 --> 00:43:25.140
hopefully,
483
00:43:25.465 --> 00:43:28.845
North Dakota, South Dakota kind of saying, hey, we're gonna create our own rules
484
00:43:29.305 --> 00:43:39.640
versus the federal coming down with a federal mandate. Is that fair to go? Well, we see, like, the states' rights base he's basically asking will we see, like, states' rights become a a bigger issue in Bitcoin? Well, we're seeing Wyoming too.
485
00:43:41.765 --> 00:43:42.265
You,
486
00:43:43.765 --> 00:43:44.265
say
487
00:43:44.725 --> 00:43:45.225
make
488
00:43:45.685 --> 00:43:51.400
some states, I guess, more likely to try and execute that strategy. Right? Would you say that's a fair? And who are the
489
00:43:51.940 --> 00:43:52.440
players?
490
00:43:54.020 --> 00:44:23.265
Oh, okay. As in which would they support the privacy aspect of it as well? That's probably more complicated. I think in terms of just broadly supporting Bitcoin, I think if there are a lot of jobs in that area, then the politicians will be a lot more inclined to be amenable to that. So Texas and having a lot of bitcoin mining, people like Ted Cruz and others who will be out there saying, yeah, look, let's let's rah rah Bitcoin. Right? So there might be a bit of that. But in terms of the privacy angle, that's probably a harder question. I don't really, I don't think I could offer an intelligent,
491
00:44:23.930 --> 00:44:24.330
so
492
00:44:24.730 --> 00:44:29.630
Yeah. You know, first of all, I think Bitcoin is private Bitcoin usage is protected,
493
00:44:30.410 --> 00:44:32.750
by the constitution of the United States,
494
00:44:33.115 --> 00:44:36.575
the first and fourth amendment, the first being free speech,
495
00:44:37.115 --> 00:44:46.060
and the fourth being unreasonable search and seizure. If you're not using a third party because we have the 3rd party doctrine, which is why it's important to use it with your own node, holding your own keys,
496
00:44:46.440 --> 00:44:49.180
and I would like to see more constitutional fights on that level.
497
00:44:49.655 --> 00:44:53.915
But you also have, I believe it's the 14th amendment, which is states' rights,
498
00:44:54.775 --> 00:44:58.800
and I wanna see it protected on that level as well. So I wanna see more constitutional
499
00:44:59.660 --> 00:45:00.800
law kind of,
500
00:45:01.340 --> 00:45:02.400
plays with Bitcoin.
501
00:45:03.180 --> 00:45:13.325
I expect states to start doing it. I expect, once again, to go back to the previous question, the challenger states to kinda step up first, who have less to lose, who have been, you know, completely,
502
00:45:14.025 --> 00:45:16.285
destroyed economically in a lot of ways.
503
00:45:18.010 --> 00:45:19.069
But with Texas,
504
00:45:19.530 --> 00:45:22.670
you know, it's a very interesting beast because they are a powerhouse.
505
00:45:23.450 --> 00:45:23.950
And
506
00:45:24.835 --> 00:45:26.295
while it's nice to see
507
00:45:26.595 --> 00:45:31.095
the mining industry grow down there, and I I very much support the use of,
508
00:45:32.250 --> 00:45:35.230
we didn't repeat that part of the question, but waste natural gas,
509
00:45:35.690 --> 00:45:43.685
that's just being put out into the atmosphere and it's horrible for the environment. There's actually an incentive now to to be better for the environment, a direct financial incentive
510
00:45:43.985 --> 00:45:47.205
by capturing that that waste gas and turning it into Bitcoin.
511
00:45:48.960 --> 00:45:50.579
We are the land of KYC.
512
00:45:51.119 --> 00:45:53.220
And when you look at international exchanges,
513
00:45:54.000 --> 00:45:58.339
a lot of times it's not their own governments that force them into complying with,
514
00:45:58.945 --> 00:46:05.525
KYC laws and lists of Bitcoiners. It's the American government that does it. We had a major exchange called BitMEX. Right?
515
00:46:05.850 --> 00:46:09.950
BitMEX didn't wanna implement KYC AML. They were based in the Seychelles.
516
00:46:11.130 --> 00:46:14.750
They were forced to implement it because the US government said to them,
517
00:46:15.065 --> 00:46:15.965
if you don't implement
518
00:46:16.265 --> 00:46:31.770
KYC, Americans might use it. So you have to KYC every single one of your customers to make sure the Americans don't use it. And then we used, you know, our 8 aircraft carriers or whatever to make sure that that policy was enforced. Right? They threw 2 of the founders in jail.
519
00:46:32.265 --> 00:46:37.244
The 3rd founder ultimately bent the knee and settled with them, and now they're fully KYC'd AML'd.
520
00:46:37.545 --> 00:46:41.085
So the more miners we have in America, that becomes more of a risk to me.
521
00:46:41.910 --> 00:46:47.530
And, you know, as much as I love this country, I think it's important for us as Americans to, like, keep our guard up
522
00:46:47.830 --> 00:46:48.150
and,
523
00:46:48.630 --> 00:46:50.970
at least at the very least, you know,
524
00:46:51.655 --> 00:46:52.555
try and
525
00:46:53.494 --> 00:46:54.955
support, you know, mining
526
00:46:55.415 --> 00:46:58.075
firms that are pushing back against
527
00:46:58.770 --> 00:46:59.270
unwarranted,
528
00:47:01.250 --> 00:47:08.915
regulation against them that is that is ultimately worse for Americans and worse for people around the world. Yeah. I'll just add there as well. Even with the,
529
00:47:09.635 --> 00:47:28.755
international censorship pressures, you got FADF. Right? Financial Action Task Force. And so sometimes it goes either way. So one one of my episodes with, Jake Shevinsky, he talks about how it kind of sometimes it's pushed from the country level, and in other cases, it's pushed from, like, a FADF level because the FATF will then push it down to that country and say, oh, look, you naughty little country. You're not doing enough.
530
00:47:29.055 --> 00:47:30.275
KYC, AML,
531
00:47:30.660 --> 00:47:37.560
you're a Europe. You're on the blacklist, and we're gonna try to stop you in terms of banking. And so then that country now faces pressure,
532
00:47:38.195 --> 00:47:51.800
either the legislators or the regulators of that country have pressure on them. We need to push KOC onto our banks, financial services, and to Bitcoin companies. And so that's a bit of that pressure game that goes on there. But
533
00:47:52.420 --> 00:47:54.599
maybe an interesting example though is,
534
00:47:55.115 --> 00:47:59.855
Bekele with El Salvador sort of almost giving him the middle finger to the IMF.
535
00:48:00.395 --> 00:48:05.329
Maybe there is a scenario where maybe some country governor or state governor
536
00:48:06.190 --> 00:48:07.890
starts giving the middle finger to FATF.
537
00:48:08.510 --> 00:48:09.410
We don't know.
538
00:48:10.430 --> 00:48:10.930
Yeah.
539
00:48:11.230 --> 00:48:11.890
Go ahead.
540
00:48:15.015 --> 00:48:16.474
So the question was,
541
00:48:17.335 --> 00:48:18.395
countries, authoritarian
542
00:48:18.775 --> 00:48:21.835
countries like, the Democratic Republic of Congo,
543
00:48:23.730 --> 00:48:29.349
just shut down internet, shut down text messages. They go the full 9 yards to to try and
544
00:48:30.065 --> 00:48:35.845
quash any kind of, opposition to them. And how can Bitcoin be more robust against that?
545
00:48:36.145 --> 00:48:45.010
I would say that, you know, when people see a need, a true need, and this is one of the things I, you know, I really took away from the Oslo Freedom Forum by the HRF,
546
00:48:46.185 --> 00:48:48.765
is they they will find a way. Right? And
547
00:48:49.145 --> 00:48:50.045
I I think,
548
00:48:50.345 --> 00:49:02.610
you know, for people in those types of situations, you don't have to explain the need for Bitcoin. You can skip that whole first step. You just have to explain to them and help them how how can they access it, how can they use it.
549
00:49:03.150 --> 00:49:03.650
And
550
00:49:03.984 --> 00:49:09.605
I think the important part is, you know, at least on our side, me and Stefan's side, like,
551
00:49:10.065 --> 00:49:11.685
you wanna support the tools,
552
00:49:12.380 --> 00:49:13.119
you wanna
553
00:49:13.420 --> 00:49:19.040
make the education, you wanna have it there for people. So when they realize that need, they can come
554
00:49:19.744 --> 00:49:28.964
and and and learn for themselves and take their own journey and try and make it happen. But I think, ultimately, like, every attack against Bitcoin makes the network more more robust.
555
00:49:30.240 --> 00:49:34.580
And, frankly, to be honest, you know, between the competition between countries,
556
00:49:35.920 --> 00:49:36.420
between,
557
00:49:37.455 --> 00:49:40.835
like, the the way that the Bitcoin network is now, I think it's
558
00:49:41.455 --> 00:49:45.395
extremely robust. Like, I think we're we're we're very well situated
559
00:49:45.695 --> 00:49:46.755
in terms of
560
00:49:47.519 --> 00:49:48.420
state resistance,
561
00:49:49.519 --> 00:49:54.980
on the network level. My my bigger concern is on the actual individual user level.
562
00:49:55.455 --> 00:49:57.395
And, you know, if you're a developed country,
563
00:49:58.095 --> 00:49:58.595
like,
564
00:49:59.055 --> 00:50:04.835
you know, that that's a weapon of mass destruction shutting off the Internet for your whole for for for everything. Right?
565
00:50:05.440 --> 00:50:08.660
So so the really the low hanging fruit is you attack users,
566
00:50:09.119 --> 00:50:11.060
and specifically what you do is,
567
00:50:11.680 --> 00:50:23.285
and hopefully this is not prescient, you attack the the users that are outspoken about these causes like me and Stefan, and then you make an example out of us, and then everyone else kinda just falls in line and complies.
568
00:50:23.850 --> 00:50:25.950
Right? Because that's, you know, unfortunately,
569
00:50:26.410 --> 00:50:44.390
especially over the last 2 years, that's the unfortunate reality. The unfortunate reality is if you if you scare people enough, you make examples out of a few people, the majority of people will will fall in line, and you don't have to go through those drastic measures in the first place. Yeah. So just to add to that, I think it's about building a social movement that there's enough,
570
00:50:44.769 --> 00:51:00.480
there's enough people out there who just want their freedom and chase it. One other thing I'll just add on the developing country. Like, I just came from Sri Lanka recently as well. So I was there. I was born there. Right? So I have I I was raised in Australia, so I had the the luck to be to be raised in a Western world nation.
571
00:51:01.020 --> 00:51:02.560
And talking to some of my cousins,
572
00:51:03.260 --> 00:51:13.915
it it's bleak when your income is really low. You just can't save. Right? So with the average, you know, a person in Sri Lanka might be earning. If I were to US dollarize that income, it might be 5 or $6,000
573
00:51:14.295 --> 00:51:14.955
a year
574
00:51:15.280 --> 00:51:33.575
or maybe a little bit more. Right? But it's imagine living on $6,000 a year. Like, you just it's very hard for you to save when your income is just simply that low. And it's even it might even be difficult for you to use Bitcoin non custodially when your income is that low. And so that's why in El Salvador, we're seeing things like Bitcoin Beach, by Galloy,
575
00:51:34.280 --> 00:51:46.235
doing this idea of like a community lightning bank and things like that because you just can't afford it otherwise. And so that's one of the difficulties there. But I think education and over time and especially
576
00:51:46.615 --> 00:51:53.560
this might be like my friend Hasma Cook with his DCA army message of, you know, if enough people start stacking sats hard,
577
00:51:53.940 --> 00:52:00.280
you monetize Bitcoin globally, and then that's actually how you can save people in the developed in the, developing countries. Because
578
00:52:01.055 --> 00:52:02.994
quite frankly, there's a wealth and income
579
00:52:03.615 --> 00:52:05.075
disparity that is just so
580
00:52:05.455 --> 00:52:05.955
immense.
581
00:52:06.575 --> 00:52:12.710
He also called privacy dev spooks though. Yeah. So, look, I don't agree with his views there, but I agree on his DCA army.
582
00:52:13.089 --> 00:52:13.589
CK.
583
00:52:14.450 --> 00:52:22.315
So the question was, how big does the anonymity set have to get in terms of coin join or privacy techniques, privacy users, users who are using privacy techniques,
584
00:52:23.175 --> 00:52:25.220
for this basically to be a viable thing.
585
00:52:25.619 --> 00:52:26.119
Anonymity
586
00:52:26.820 --> 00:52:29.720
set being, like, this idea in privacy that
587
00:52:30.020 --> 00:52:34.920
you're only as private as the crowd that you're among. If only, like, 10 people are seeking privacy,
588
00:52:35.285 --> 00:52:36.745
it's very easy to just
589
00:52:37.045 --> 00:52:50.090
realize those 10 people are using, you know, the privacy methods. That's not just a Bitcoin thing. That's just a a a normal you know, it's a it's a it's a privacy meme almost, but it's a it's a real it's a real aspect to privacy in general.
590
00:52:51.030 --> 00:52:51.770
And then
591
00:52:52.630 --> 00:52:54.265
he c k asked,
592
00:52:54.964 --> 00:52:58.025
like, when can we see larger Bitcoin anonymity set,
593
00:52:59.204 --> 00:53:00.424
specifically with CoinJoin?
594
00:53:00.724 --> 00:53:05.280
I think it's gonna be a while, you know. I've spent, you know, 2 years not shutting up about it
595
00:53:05.980 --> 00:53:06.480
and,
596
00:53:07.020 --> 00:53:10.815
it's grown quite a bit. I mean, Whirlpool right now It's at 34,000
597
00:53:11.115 --> 00:53:13.055
Bitcoin? No. It's at like 43100
598
00:53:13.835 --> 00:53:14.635
Bitcoin and,
599
00:53:15.435 --> 00:53:21.569
I see some, you know, people wearing their their Apple Watches. I know some of you had the Bitcoin price on there.
600
00:53:23.069 --> 00:53:28.875
Bitcoin price is up right now, so I think it's at a all time high both in dollar terms and Bitcoin terms. It's probably like a
601
00:53:29.994 --> 00:53:31.355
what is that? What is,
602
00:53:32.154 --> 00:53:38.280
I I am horrible at live, Matt. Alright. Let's do it. So 40, mate, how do you call it? 200 Bitcoin at 55 k a 1000.
603
00:53:38.740 --> 00:53:39.720
55 k.
604
00:53:41.460 --> 00:53:43.000
Is I think a quarter of a1000000?
605
00:53:43.915 --> 00:53:46.815
Yeah. It's a quarter of a1000000. It was great math.
606
00:53:48.714 --> 00:54:15.430
A quarter of a1000000000. Yeah. That was Mass that's pretty big. That's pretty big. That's pretty big. But, we need to see that number go up. And I think ultimately, and it just goes back to the previous the previous question, ultimately, like, people just need to get burned really before they start to realize the need. I think the tools have improved, so it is easier to use now. And we were talking about Sparrow Wallet. It's extremely easy to use. You install the wallet. You connect it to your own node. You can just use it with Bitcoin Core if you want.
607
00:54:15.970 --> 00:54:17.510
Super easy to use now,
608
00:54:18.275 --> 00:54:19.415
relatively cheap,
609
00:54:20.115 --> 00:54:20.615
and
610
00:54:21.395 --> 00:54:27.650
that should help it increase. But ultimately, people need to get burned, I think, before before that number really goes up significantly.
611
00:54:27.950 --> 00:54:28.930
Yeah. Bull Rogers.
612
00:54:29.950 --> 00:54:34.130
Three tips to improve your Bitcoin privacy. If you really if you if privacy is important,
613
00:54:34.555 --> 00:54:37.695
then step 1, acquire the coins non non KYC.
614
00:54:38.395 --> 00:54:39.275
Step 2 is,
615
00:54:39.915 --> 00:54:43.270
run your own bitcoin node. And step 3 is, like, use CoinJoin,
616
00:54:43.970 --> 00:54:46.290
wallets like Samura Wallet and Sparrow Wallet,
617
00:54:46.690 --> 00:54:48.790
would probably be my kind of easy
618
00:54:49.145 --> 00:54:52.525
1, 2, 3 steps. Avoid KYC as much as possible.
619
00:54:53.065 --> 00:54:55.485
Hold your own keys. Use your own known.
620
00:54:56.220 --> 00:54:57.600
Learn privacy best practices.
621
00:54:57.900 --> 00:55:00.000
Cell phones are horrible for privacy.
622
00:55:01.420 --> 00:55:03.600
We're literally just walking around with surveillance,
623
00:55:04.300 --> 00:55:10.005
trackers on us. I mentioned the Apple Watch. It's just a modern day cattle tag that you guys all have on you.
624
00:55:11.505 --> 00:55:17.670
There are certain techniques you can use with your cell phones to improve your privacy situation. I have covered them on SITO Dispatch.
625
00:55:18.130 --> 00:55:20.950
I really like Kallix OS, which is an open source,
626
00:55:21.730 --> 00:55:28.205
fork of Android with Google removed from it. It's still a surveillance device, but at least it reduces it somewhat.
627
00:55:29.545 --> 00:55:32.845
And it's just all about that privacy versus convenience trade off.
628
00:55:33.690 --> 00:55:35.470
The the the true privacy advocates
629
00:55:35.930 --> 00:55:37.230
don't have a phone, period.
630
00:55:38.330 --> 00:55:46.725
I run Kallix, you know, I got my face on here, you know. The privacy advocate that talks publicly about privacy. He's also the co founder of Bitcoin TV.
631
00:55:47.105 --> 00:55:53.260
The The question is, what do we think of ransomware and governments going after Bitcoin and our privacy to fight ransomware
632
00:55:53.720 --> 00:55:57.825
and how that should how how we expect that to play out? Yeah. So
633
00:55:59.005 --> 00:56:08.869
some of it, I mean, some of it is a real risk, right? But I also see it like I could imagine that being a big flat angle. I could imagine that being a big, oh, look, look at these illegal hackers and
634
00:56:09.250 --> 00:56:21.045
see how bad bitcoin is. It's being used by the hackers and so on. So there will be a bit of a narrative battle about that and I think people who are advocating and from a human rights point of view and from
635
00:56:21.789 --> 00:56:25.010
an anti inflation or anti fiat money point of view, we'll have to,
636
00:56:25.470 --> 00:56:26.190
make that case.
637
00:56:27.789 --> 00:56:37.855
I think there will be a lot of resources put into chain surveillance. So, you know, Coinbase are putting money into that. The chain analysis of the world are getting government contracts
638
00:56:38.220 --> 00:56:48.035
to do spying on people and to have that sort of exchange relationship. So these are all yeah. They're a bit concerning and, what you'll see is actually really interesting on this sort of stuff as well is,
639
00:56:48.915 --> 00:57:00.540
Ergo BTC from the samurai camp. He's a part of OXT research. He often does some research reports on some of these hacks and he'll trace it through. And funnily enough, he ends up tracing it through some exchanges and being like,
640
00:57:00.920 --> 00:57:02.300
this money went to Binance.
641
00:57:02.680 --> 00:57:04.620
So someone knows who this person is.
642
00:57:04.945 --> 00:57:07.525
So, certainly very interesting guy to follow,
643
00:57:08.385 --> 00:57:15.880
in terms of his ability to trace things on chain. He's like a white hat on chain analyst, so he's an interesting perspective there.
644
00:57:16.980 --> 00:57:17.480
Yeah.
645
00:57:17.940 --> 00:57:23.655
I mean, ransomware increasing ransomware attacks will be used against Bitcoin, will be used against Bitcoin privacy.
646
00:57:23.955 --> 00:57:26.775
Advocates and people who attempt to use Bitcoin privately,
647
00:57:27.395 --> 00:57:29.575
will be a u used as an excuse to
648
00:57:29.900 --> 00:57:34.079
enforce greater KYC laws and make them even more burdensome and more dangerous.
649
00:57:35.099 --> 00:57:36.880
Ransomware is not Bitcoin's fault.
650
00:57:37.345 --> 00:57:43.205
We've entered the era of digital money. There's no going back now. These companies need to secure their data better.
651
00:57:43.505 --> 00:57:45.365
They shouldn't get hacked in the first place.
652
00:57:45.690 --> 00:57:52.590
The rent no one blames cash when, someone gets kidnapped and you you have a double bag of cash to pay the kidnapper.
653
00:57:53.285 --> 00:57:58.345
If anything, bitcoin makes the ransom more safe because you don't have to actually have that physical transaction.
654
00:57:59.444 --> 00:58:01.545
And then the ultimate irony of ransomware
655
00:58:02.300 --> 00:58:02.800
is,
656
00:58:04.220 --> 00:58:09.119
the really dangerous ransomware is So the basic ransomware is a hacker
657
00:58:09.420 --> 00:58:11.280
gets access to corporate systems,
658
00:58:11.595 --> 00:58:19.855
they encrypt all of your data. So they don't actually steal your data, they just encrypt it and then they have the key. So to get the key back, you have to pay them.
659
00:58:20.500 --> 00:58:24.839
And once you pay them, they actually most of the time they'll give you the key because
660
00:58:25.300 --> 00:58:38.470
they just they just wanna get the easy payment and they want people to know that if you keep paying them, if they do it at scale, that you can pay them and you can reliably get the key back. The new breed of ransomware actually a lot of times takes the data hostage as well.
661
00:58:39.090 --> 00:58:39.590
And
662
00:58:40.130 --> 00:58:41.990
the unfortunate reality is
663
00:58:42.530 --> 00:58:46.550
ransomware is gonna be used as a reason to collect more information on people,
664
00:58:47.045 --> 00:58:50.825
And then that information is gonna get stolen by the ransomware hackers
665
00:58:51.285 --> 00:58:56.470
and make ransomware even more profitable for them because then they can go and sell that data. So so
666
00:58:57.250 --> 00:59:01.190
the the strategy that's gonna be used, unfortunately, to try and fight ransomware
667
00:59:01.569 --> 00:59:07.095
is actually gonna be making ransomware more dangerous and and increase the incentive for it in the first place.
668
00:59:07.395 --> 00:59:08.515
And, you know, I just,
669
00:59:10.515 --> 00:59:17.530
I I I just when when these ultimate these ultimately, it's used as an attack against Bitcoin and just, you know, encryption in general,
670
00:59:17.910 --> 00:59:23.595
I hope that, you know, enough people will start pushing back and and saying that it's unreasonable and puts Americans at risk.
671
00:59:24.055 --> 00:59:25.675
Maybe we wrap up with 2 questions,
672
00:59:25.975 --> 00:59:35.880
Ben. K. So the question is, what are the top two things we would like to see Bitcoin open source developers do to improve privacy? Or wallets and exchanges. Wallets and exchanges.
673
00:59:38.365 --> 00:59:40.464
You're giving this one to me first. Yeah.
674
00:59:41.484 --> 00:59:48.960
I wanna see I wanna see more privacy development, you know. I I don't think, you know, we need, like, the 28th KYC on ramp.
675
00:59:49.340 --> 00:59:52.160
You know, like, let's I and I'm, you know, maybe
676
00:59:52.620 --> 00:59:59.335
maybe I'm being a little bit of a dick because I'm not coding it, you know. So I so I just get up here and just push for it. But,
677
00:59:59.635 --> 01:00:00.535
you know, I
678
01:00:01.075 --> 01:00:02.454
I I I want to support
679
01:00:02.914 --> 01:00:06.500
developers that are focused on privacy in a free open source way,
680
01:00:08.180 --> 01:00:09.720
And I wanna see less,
681
01:00:10.420 --> 01:00:16.360
you know, money going to these, just the 28th, 29th, 30th KYC on ramp that's regulated.
682
01:00:16.885 --> 01:00:22.425
And then the second thing is it's not even a development thing. I wanna see the existing regulated companies
683
01:00:23.045 --> 01:00:24.185
start putting money
684
01:00:25.119 --> 01:00:33.460
on the side to fight for users' privacy. Like I I I expect them to comply with the laws, but, you know, you know, pay up and fight.
685
01:00:33.895 --> 01:00:43.560
Like, actually try and and push back and try and reduce some of these, you know, oversteps because all we've seen is it get worse and worse and worse and worse. We haven't seen any pullback.
686
01:00:45.160 --> 01:00:45.800
Yeah. So,
687
01:00:46.760 --> 01:00:50.700
I think yeah. So privacy development maybe an example might be
688
01:00:51.615 --> 01:00:59.660
lightning privacy stuff like opening channels with a coin join. I don't know. People like Lisa and I go to talking about stuff like that, dual funded channels and things. Or maybe like
689
01:01:00.059 --> 01:01:08.559
lightning wallets that also combine coin join. But right now there's no one that sort of you either do one or the other world. There's no one who's sort of doing both. Maybe that's an angle.
690
01:01:09.765 --> 01:01:27.765
So I would love to see that. That that coin joint plus lightning could be really interesting. Like imagine if you had, like, samurai wallet plus, I don't know, Zeus or some something like that. You know? Like, that might be a interesting I literally pressured Evan, the lead maintainer of Zeus, while we were on stage at HRF. I was like, he's gonna be the 1st lightning wallet to implement coin joint.
691
01:01:28.224 --> 01:01:32.244
So now he has no choice. That's right. So that's one idea. And,
692
01:01:33.159 --> 01:01:42.865
I Yeah. I think some of the, like, the lobbying stuff I think is like I I think people get frustrated because they they sort of
693
01:01:43.244 --> 01:01:43.744
sense,
694
01:01:44.925 --> 01:02:05.230
like, there's not much you can do about it, but the like, these people in this government are just putting out this more regulation, more regulation, and they're kind of creeping and creeping. Even, now this new thing of every transaction on the what is that? $600? $600. Yeah. Right? So, like it's not even just a bitcoin thing, it's just a life and just financial services in general. They're just closing the doors, closing and shutting the gates and try to
695
01:02:06.910 --> 01:02:08.210
yeah, push everyone. So
696
01:02:08.830 --> 01:02:15.645
I will say one thing is think big and acts a little small. You're probably there's somebody that's connected to some politician,
697
01:02:16.105 --> 01:02:16.605
somebody
698
01:02:17.065 --> 01:02:18.445
that owns one of these companies.
699
01:02:18.905 --> 01:02:25.140
Have those conversations. We've invited a number of local politicians, and I hope they are gonna come to these future meetups,
700
01:02:25.760 --> 01:02:27.060
and just have these conversations,
701
01:02:27.520 --> 01:02:34.565
get them to use Bitcoin, get them to understand Bitcoin. Because once you use it I mean, we have senator Lummis that disclosed, I think it was today or yesterday,
702
01:02:34.865 --> 01:02:46.365
her purchase of Bitcoin. And she's continuing to to fight the good fight. And she was fighting the $600 thing as well. Totally. Totally. And the $600 thing is a very interesting point. Like, I know, like, we kind of sounded like Debbie Downers up here.
703
01:02:47.085 --> 01:02:48.705
I wanna be absolutely clear,
704
01:02:50.765 --> 01:02:52.945
that Bitcoin is a massive step improvement
705
01:02:54.049 --> 01:03:05.775
over the legacy financial system. Like, if you use Venmo, you have no privacy. Like, the majority of my peers are using Venmo and credit cards and Cash App, and they just have no privacy whatsoever. Disclose it. So
706
01:03:06.395 --> 01:03:08.575
well, when I'm talking shit, I don't have to disclose.
707
01:03:09.435 --> 01:03:11.055
Cash App sponsored the podcast.
708
01:03:14.540 --> 01:03:18.320
So bitcoin is a is a step improvement, a massive step improvement,
709
01:03:18.895 --> 01:03:22.515
And, we already have tools that make it easier to use Bitcoin privately.
710
01:03:22.895 --> 01:03:24.275
Those tools will get better.
711
01:03:25.055 --> 01:03:28.860
Improvements will be made. Those will make the tools even better. And,
712
01:03:29.340 --> 01:03:33.920
I'm I'm definitely optimistic long term, and I think Bitcoin is a massive net benefit,
713
01:03:34.220 --> 01:03:47.200
for for privacy in general. So maybe I'll make a few announcements and then maybe ask you guys just to have some closing thoughts and and so on. So thanks again for everybody coming out. We alluded to a number of topics. We alluded to custody,
714
01:03:47.900 --> 01:03:57.335
mining, lightning. So our next meetup for this group, you know, whoever wants to sign up, it's gonna be on, November 10th. The topic is gonna be why is custody
715
01:03:57.955 --> 01:03:59.815
your why is custodying Bitcoin yourself
716
01:04:00.115 --> 01:04:01.575
super vital and important?
717
01:04:01.990 --> 01:04:05.290
We're gonna have some folks from Unchained, River potentially, and others
718
01:04:05.590 --> 01:04:06.490
coming in town.
719
01:04:06.790 --> 01:04:13.005
And then on December 8th, it's gonna be At Home Mining. Doctor Fomo and I, gonna work on that. That's you, buddy.
720
01:04:14.105 --> 01:04:15.805
And, and then in,
721
01:04:16.184 --> 01:04:29.170
January 12th, it's gonna be lightning focused. So the reason why I was super excited, and thanks thanks to these guys again for spending time with us, is to really set the base around why Bitcoin privacy is so important
722
01:04:29.595 --> 01:04:31.935
before we accumulate as much
723
01:04:32.555 --> 01:04:37.215
as many stats as humanly possible and live a super awesome life. So,
724
01:04:38.130 --> 01:04:42.310
and one other thing, David Bailey in the back. Yeah, I saw you sneak in.
725
01:04:42.770 --> 01:04:55.255
He's the CEO, and he was my queue, by the way, to give the Bitcoin Magazine guys a shout out. But, thanks again to them for sponsoring the drinks tonight. They are literally, not to dox them, but it's on Google. So they're right across the street.
726
01:04:55.880 --> 01:05:01.100
And they're a huge, huge Bitcoin company here in Nashville, Tennessee. So thanks again to those guys.
727
01:05:05.465 --> 01:05:06.845
Do you wanna make an announcement?
728
01:05:10.265 --> 01:05:10.765
Okay.
729
01:05:11.590 --> 01:05:15.130
They got something cool in the works. Potentially, it'll be on Twitter tomorrow.
730
01:05:15.590 --> 01:05:18.250
And thanks to Jackalope. Please tip your bartenders.
731
01:05:18.845 --> 01:05:19.744
They are awesome,
732
01:05:20.285 --> 01:05:21.005
to work with,
733
01:05:21.565 --> 01:05:23.424
here as well. So, Matt.
734
01:05:24.045 --> 01:05:25.005
Thank you, Rod.
735
01:05:25.325 --> 01:05:28.224
I wanna thank Mills as well, the co host of,
736
01:05:28.830 --> 01:05:32.370
Nashville Bit Corners. I wanna thank Nashville. I love your city. It's a great city.
737
01:05:34.110 --> 01:05:37.010
I just you know, I don't want I don't want people to be discouraged.
738
01:05:39.345 --> 01:05:44.805
I think, you know, take your own journey. Don't get overwhelmed. Small steps, small improvements help.
739
01:05:46.220 --> 01:05:47.359
Every little thing
740
01:05:47.900 --> 01:05:57.145
you can you can cut out of your life that hurts your privacy does help. It does make a difference. You know, unplug your Alexa, unplug your Google Home, take off the smartwatch,
741
01:05:58.405 --> 01:06:00.345
the little things, it's it's important.
742
01:06:00.920 --> 01:06:03.660
I wanna thank Bitcoin Magazine for sponsoring.
743
01:06:04.920 --> 01:06:08.859
I literally spent, like, 7 hours at their office today going over Bitcoin 2022.
744
01:06:09.405 --> 01:06:13.265
It's gonna be absolutely insane. It's gonna be in Miami April 6 through 9th.
745
01:06:14.925 --> 01:06:15.425
55,000
746
01:06:15.725 --> 01:06:23.980
people. They they tell me no, but I think it's gonna be 50 5,000 people, the largest bitcoin only conference in the world. I don't know your track record on price predictions. You can. And,
747
01:06:24.940 --> 01:06:27.280
we're gonna be over 200 k by congress today.
748
01:06:29.445 --> 01:06:31.225
You can buy your ticket at b.tc/conference.
749
01:06:32.885 --> 01:06:34.425
If you use code 1 trillion,
750
01:06:34.910 --> 01:06:44.484
you get 21% off. You pay with Bitcoin, you get a discount. I don't think that price will ever be cheaper than it is today. You will get FOMO in, like, May. No, May's afterwards.
751
01:06:44.785 --> 01:06:51.765
You will get FOMO in, like, February, March, and end up paying way more money to go. So consider buying your ticket now.
752
01:06:52.990 --> 01:07:03.765
My two shows are Citadel Dispatch and Tales from the Crypt. Open up your favorite podcast app, ideally a podcasting 2.0 app so you can stream sats using lightning, just load it up with sats, go to new podcastapps.com.
753
01:07:04.705 --> 01:07:10.130
You can look up the podcasting 2.0 apps. Once again, thank you all. I really do appreciate you.
754
01:07:10.990 --> 01:07:15.730
Bitcoin is going to the fucking moon. We're gonna change the fucking world together. Stay humble, Stack Sats.
755
01:07:16.270 --> 01:07:16.770
Yeah.
756
01:07:19.765 --> 01:07:20.985
So yeah. I think,
757
01:07:22.245 --> 01:07:22.905
there are
758
01:07:23.525 --> 01:07:29.500
different ways you can go about this. Right? You can start by just earning non KYC if that's if that's, important.
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01:07:29.960 --> 01:07:30.619
You can
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01:07:30.920 --> 01:07:31.420
use
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01:07:31.720 --> 01:07:35.500
easy wallets like Sparrow. You can use Samurai Wallet, and you just get started
762
01:07:35.985 --> 01:07:36.645
and then
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01:07:37.425 --> 01:07:52.455
step up to things like, say, Ronin Dojo running that as your own backing node for your samurai wallet or run your own Electrum server as the backing for your own Sparrow wallet. So these are some steps you can take along the way if you're interested in the non k y c element of this.
764
01:07:53.015 --> 01:07:56.955
And, you know, it doesn't have to be all or nothing. Right? So you can have, like,
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01:07:57.255 --> 01:08:08.589
not everyone agrees with with me on this, but you can have, like, some k y c coins and some non k y c coins. So I think you can you can sort of have a foot in both worlds there. So that's another idea that you can take from that.
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01:08:09.665 --> 01:08:26.440
So at the end of the day, I think it comes back to what I was saying before about the overall system that if it's permissionless and censorship resistant, then that's gonna help make bitcoin more successful in the long run. That it's like if the coins are and you can spend it in a way that's actually fungible and not doxing your stack or doxing
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01:08:26.765 --> 01:08:47.345
your wallet to people when you every time you make a spend or you receive coins. So there's there are a few interesting elements just for you guys to think about. And of course, if you're interested, I've got lots of episodes on my show or, you know, I've interviewed many privacy advocates and privacy developers. People like Matt, people like samurai wallet, people like ergo, various others who are working on this. So you can find me online, stephanlovera.com,
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01:08:48.365 --> 01:08:50.030
and of course, swanbitcoin.com
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01:08:50.730 --> 01:08:55.370
as well. I work for Swan, so you can buy with us, and we're bitcoin only. So you can send them to us.
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01:08:56.475 --> 01:09:04.975
It for me. Thanks. Thanks for having us. Thanks to bitcoin magazine for sponsoring. Thanks to Rod and Mills for hosting us. Thank you guys for showing up. Thank you, everybody. Cheers.
NOTE
Transcription provided by Podhome.fm
Created: 3/17/2024 8:13:09 PM
Duration: 4149.133
Channels: 1
1
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2
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more importantly, gathering
3
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local Bitcoiners together as well as Bitcoiners that were traveling through,
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Nashville, Tennessee.
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If you guys don't know, this is Matt O'Dell. Matt's an independent Bitcoin and privacy advocate. He's also the cohost of Rabbit Hole Recap, which is every Thursday. He also does Citadel Dispatch, which if you go to citadel dispatch.com.
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And then Stefan Lovera, he's the managing director at Swan Bitcoin International.
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He's also got another one of the top bit Bitcoin podcasts out there that's super friendly to Bitcoin curious folks, as well as if you're really deep down the Bitcoin rabbit hole, highly recommend,
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checking out his podcast.
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Okay. Got it. You ready for a story? Yeah. Let's go. So I don't even know if you remember this. This was, about 3 or 4 years ago.
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Matt and I are in New York, and,
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and I think Marty was there as well. And we're grabbing a beer at a ball
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ahead of a dinner. And, of course, I'm I'm selfish and I wanna get credit card points.
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And so I'm like, I'll take care of the tab, you just Venmo me. No big deal.
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And then like a damn
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James Dean sociopath,
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he rolls out a, wad of cash and flips me a $20 bill and says keep the change.
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And I was like, who the fuck is this guy?
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And so, and then I was like, why do you carry cash with you? Nobody carries cash with them anymore. And then in classic Matt fashion, he goes on this huge diatribe about cash is disappearing. Cash is the last, self preservation privacy centric community of currency we have, and, like, next Cash is king. Cash is king. And so it helped me go down my,
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little journey as well. So I guess my first question, and then I'll ask Stephan as well the same, which is the topic, but specifically to you. Why does Bitcoin privacy matter?
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if you go to a restaurant
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and you buy a sandwich,
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they shouldn't know your salary. They shouldn't know your net worth.
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And at the same time, your boss shouldn't know how much
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you know, what you're buying or what you're doing on a Friday night.
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I think that's a very simple concept for people. I think if you start to think about it, you realize that'd be ridiculous if if both of those parties knew the other information.
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And unfortunately,
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this move to credit cards has
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has had this experience where you basically have,
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these surveillance companies. They call themselves credit card companies, but you have these surveillance companies that are keeping track of every single transaction you make.
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They're selling it to marketers. They're not storing it securely
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and it's being shared around. And if you look at your credit card statement,
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you can tell everything about a person. I don't know if you've looked at it very closely,
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maybe if you have like a close friend you can look at theirs, you know, share it,
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and and have them kind of just look into that. So
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when you combine that with the fact that we're removing cash from
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the system,
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both governments are kind of pushing against it, but also just out of a convenience thing, people are choosing not to use cash, you know. In our everyday lives, what we see is we see, like, basically a privacy versus convenience trade off. You're deciding if you're gonna be more convenient versus more private.
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It's it's gonna we're I I feel that we're entering kind of a dark period and people do not realize that, and Bitcoin to me offers
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kind of an escape from that situation because you don't have to rely on the fact that a government allows you to use cash. You don't have to rely on the fact that you can get access to cash,
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because Bitcoin is non state money,
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but at the same time, Bitcoin is not default private.
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Bitcoin every Bitcoin transaction you make is on this ledger. We call it the blockchain.
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The time chain. The time chain. The block chain, we expect as Bitcoin bulls to last longer than all of us. It's gonna be forever.
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So even if you're not exposed today,
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someone could come back and look back at that chain and you could be exposed in 5 years, 6 years, and it could come back to bite you.
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So it's really important, I think, for people to realize today
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that they should take steps, and there are easy steps you can take to improve your privacy situation
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so that in the future you're not as exposed.
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for all of us that you we have to think about when we are stacking and spending SATs,
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and
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it could come back to bite you in the ass later if you spend in a non private way now.
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So those are things to consider.
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It could be things like
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things that are totally okay now, but imagine in 5 or 10 years time, the conversation has shifted. And now what you did 5, 10 years ago is now that's a cancelable offense.
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And so we're starting to see that as well with the pressure of things like YouTube as well. So they're trying to shut down anyone who is talking against the hysteria, shut down. And now anyone who's a climate denier, demonetized, and it starts in a certain process. Right? They'll start with demonetizing,
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and then they go to canceling.
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So
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that's that that's kind of the
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censorship
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risk that we all face in the Internet today, and essentially if they can if they silence you online,
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and especially if they locked you in your home, how are you gonna talk to anyone? So that's one angle of it. And I think just to add to that aspect, obviously, I agree with Matt on the personal privacy elements of this, but it's also as a system. Right? So if you believe in Bitcoin as a system, one of the things we talk about is this idea of Bitcoin as permissionless.
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Now what would happen
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if, say,
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it were feasible
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for mining pools to enforce white lists or black lists, meaning
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this transaction must go to a white listed address, or it may not go to a black listed address
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as an example, or to a white listed or black listed person even.
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So, well, you could see
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heuristics applied
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that actually
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block these kinds of spends. And so to the extent that we are able to spend more privately,
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it kind of defends the overall system in terms of how permission permissionless
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it really is. Because if more and more people are using coin join and pay join and all of these privacy preserving techniques,
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then it just becomes less feasible
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for for as an example, mining pools
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to sensor at the, at their level to stop a transaction going through. That's just one example. Another example could be,
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in various exchange and broker and OTC partners compliance desks. They might right now have to run all sorts of compliance checks,
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or they might start looking at, okay, coin join behavior is suspicious
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because only a small percentage of the Bitcoin population as it were uses coin join. So therefore, CoinJoin usage, you're suspicious. We're gonna stop your account. We're gonna ban you. We're gonna whatever.
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So these are some of the reasons why
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even if you don't necessarily need every single one of your transactions to be 100% private, you you still care about it as a system that it is viable in the long term as a permissionless system. Totally.
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Do not be overwhelmed. You're gonna learn a lot through Osmosis, especially with these 2 up here, whether it's PayJoin, CoinJoin,
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and a number of other things.
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You guys touched on
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a a good good phrase, and you guys were in Miami earlier this week for the Oslo Freedom Forum. You guys were meeting a lot of dissidents. You're meeting a lot of folks that,
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Bitcoin
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could be a matter of life and death in terms of how they're using,
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Bitcoin. I don't know if there's and, you know, we're privileged here that we are able to participate in the global financial system, I assume all of us.
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Was there any kind of big takeaway or big story that you guys wanna share? First of all, I mean, we had,
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Rod and Mills for hosting us. And I wanna thank all you guys for coming out.
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It's pretty crazy how packed a crowd it is here for the 2nd Nashville Bitcoin meetup ever.
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And I wanted to thank I think Bitcoin Magazine sponsored the drinks. Right? So I wanna thank Bitcoin Magazine for sponsoring.
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Maybe I can have a quick plug there. So long term Nashville Bitcoin company Yeah. And, a massive amount of the team is here. I I absolutely love the team.
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Disclosure, I have been consulting for them for quite a while now,
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but but they've built a really great team over there, a lot of quality Bitcoiners. So if you are interested,
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in working in Bitcoin, consider applying there. And then to take it back down,
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it was really humbling being at the Oslo Freedom Forum,
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you know, as big explain that just a little bit. So the Oslo Freedom Forum is run by the Human Rights Foundation. They do it every year. They usually do it in Oslo.
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Because of COVID, everything's moving to Miami,
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including the Oslo Freedom Forum.
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So this is the first time I got to be a part of it. I was actually supposed to fly out to Oslo previously.
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The first time I worked with them was in 2019.
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I flew out to San Francisco. I helped teach activists, like, it was just 10 activists in a small little classroom.
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This time,
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Alex Gladstein, the chief strategy officer of the Human Rights Foundation, set up a whole Bitcoin Academy track,
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so they got to learn about Bitcoin from, you know, leading advocates and experts in the space,
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all sorts of different aspects of Bitcoin,
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also just the normal track of Oslo Freedom Forum as you hear from the activists around the world about their fight,
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and it's really dark.
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The reality is human rights around the world are being
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trampled on.
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These people are fighting for their lives.
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Bitcoin offers some hope.
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Unfortunately,
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there's still a lot of nuance about using it privately, and for them, you know, it really is a matter of life or death. If these authoritarians are able to track their transactions. They're able to see what their spending is. They're able to see exactly how much Bitcoin they hold.
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So, I mean,
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I think I I I'll let Stefan speak after, so I'm not gonna speak for him. But to me, it was it was just truly humbling. It it gave me more inspiration for for why I put so much effort into the Bitcoin space.
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And
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but but, honestly, like, I I felt like a complete larp. I felt like a complete larp because
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these people are literally, you know, I we talked to Bitcoiners and some Bitcoiners are like, I don't wanna try and use Bitcoin privately. Like Stefan kind of said earlier, like, maybe it puts a target on your back.
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You know, maybe I'll end up in jail if if it's considered suspicious or something like that. These people are getting thrown in jail 40, 50 times already just for being against the authoritarians that they're pushed back against. They have friends and family that have been killed, brothers who just disappeared.
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You know, I cried multiple times during their presentations,
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and I just think that the big takeaway is is that
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with Bitcoin open source tools in general,
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they provide
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an answer
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on a technical level to a lot of
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oppression we see in the world today. And to me, there's there's no more practical fight, no more important fight,
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than supporting open source development, supporting open source tools, empowering individuals,
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and, you know, just trying to make the world, at least, a slightly better place than it is today. Because for these people, like, it's not theoretical. It's it's it's already happening.
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very motivating when you see the stories of these people who are living under these kinds of conditions where they if they based on their political views, they're getting arrested regularly. These people are regularly get being arrested, and they are essentially
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in and around circles of people who are political prisoners. They've they've not done, like, a genuine crime. They just spoke out against some kind of oppression or something wrong, and that's sent them into jail or had them disappeared and all sorts of horrific things. And so
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I had the chance to, in those side conversations,
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speak to some of the different human rights activists and they were from all around the world and some of them were now based in the US because they had been persecuted that they had to leave. And so if you talk to them and you ask them, well, what's the banking situation like for you guys? And pretty much they all get the same answer. If they get shut down, they get stopped, they get blocked, whatever it is. And so
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what I found for some of them is really seeing is believing. If you showed them, hey, pull out your phone. Let's get you set up with Moon Wallet or Phoenix or one of these Bitcoin wallets. 2 years. Yeah. And then you you set them up. Sorry, moon with 2 years. Yes. Moon with 2 years. Correct. Yes. And,
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you, you, you send them a lightning transaction and their eyes light up. And so that was really interesting for them. And I think for them it sort of shows them how real it could be. Or if you show them, hey, you can buy vouchers with this or you can take donations with this.
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And another important lesson even for those of us who are out there trying to talk about Bitcoin, I think one of the interesting things that HRF really do well is that they really focus on stories. Because I think stories are what motivate a lot of us, and I think in my mind it sort of reminds me every now and again I'm like, you know what? I go down these random technical rabbit holes and I don't focus enough on an actual story that's engaging
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and I think that is what can engage someone and pull them in to whatever you're trying to teach them about or advocate for. So that's probably an important lesson for all of us to think about as well.
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Again, we're going pretty hard in the paint, especially on our second meetup with amazing guests around Bitcoin privacy. But I do think it's important.
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So but one thing and, you know, it's gonna be a little bit of a hot topic because probably and I'm not gonna ask who has bought Bitcoin,
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but I'm gonna venture to guess. There you go. Flip over there has bought a lot of Bitcoin. Talk to him.
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The, we all and including myself, we all all bought it on a KYC exchange. And what's KYC? It's know your customer. You have to give them your driver's license. A lot of these exchanges, you're putting your face, you're putting your passport. You may have to, like, give your child's blood a little bit or something like that.
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That was a joke.
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And so I guess why is that
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what are the trade offs, I guess? Because the ease of use is great. You know, you can buy even with strike, you know, and top up.
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What are the future trade offs that some of the folks should be concerned about? So, actually, I mean
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who has never sent a Bitcoin transaction?
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Bartender?
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Okay. Liar? Good OPSEC?
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Let's go.
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Okay. So we we do have a good group of Bitcoiners in the crowd.
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I don't really like the term KYC. KYC stands for know your customer.
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It usually goes k y c a m l with a slash in between.
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So know your customer, anti money laundering.
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What it really is
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is every major company in the Bitcoin space,
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is keeping lists of Bitcoiners and their transaction history,
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and they're not storing it securely.
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Sometimes it is being sold to marketers. It is being shared around with different,
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surveillance firms,
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and these lists are ever growing and they're being collated. We've just recently had Coinbase,
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they had 6,000 people's full transaction history,
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home address, social security number,
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you know,
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ID, driver's license,
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all this information gets leaked.
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And then from that information, if you don't take privacy best practices into account,
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it can all your transactions can they can be tracked and they can be surveilled and they can make process of elimination decisions.
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So when we're looking at Bitcoin privacy well, before I get there,
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the common claim is it's to stop criminals.
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And what's really, really frustrating about it is it doesn't actually stop criminals.
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Criminals either use stolen KYC data to set up accounts,
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or they actually buy KYC data. 1 of the
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I guess cool is the wrong word, but one of the cool aspects about Bitcoin is it is it opens up these new markets. So there's actually markets on on Tor where you can go on to the dark net and you can buy KYC information from, like, poor Nigerians or poor Ethiopians or people in the Philippines or people in Thailand, and they'll they'll just sell you they'll just sign up to Binance for you and you just pay them $40 worth of bitcoin and then you can use their account.
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And, they just need the money so they don't really care if you use it for nefarious purposes.
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So, criminals are getting away with doing whatever criminals want to do, and law abiding citizens are being put at risk.
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And to me, I think, like, as an industry, we should take more of an example from,
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gun owners in America
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and really start to stand up against this idea that it's just normal and expected for these companies to keeping major major ever growing list of bitcoiners, their personal information, and their transaction history.
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And then on a more practical basis,
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what is basically happening is you have this blockchain data that is forever, your Bitcoin transaction data that's living on this on this ledger,
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that's gonna outlive all of us, and it's combined with external data which is these lists and this transaction history.
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And when you combine the 2, what these surveillance firms are doing is, they're basically, everything they do is
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a probability game. So they're looking at the chain and
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most of you probably realize you can send bitcoin to yourself. So what they're trying to do is figure out what the probability is that I'm actually, say, sending money to Stefan versus sending money to myself. It's a probability game. So our tools that we can use on the side, if you are going to go through one of these regulated on ramps and have your information
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connected is to try and break these heuristics that they use to reduce that probability that they know that you're actually,
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the the owner of the bitcoin is changing hands. And so, the whole fight, basically, in bitcoin privacy land is this idea of,
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reducing the ability for them to figure out a high probability score of ownership change. Correct.
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yeah. Just to add, I guess, the trade offs with that, of course,
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and it's not like Bitcoin companies,
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you know, enjoy doing this k y c stuff. It's obviously something that has been forced on them at the risk of getting shut down. And any pretty much any financial services company lives at the risk or lives under that threat of having their license taken from them and then not being allowed to operate. And of course, there are non k y c methods of obtaining Bitcoin. You can mine it, you can earn it, you can purchase it on platforms like this can huddle huddle and others.
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But I think that I guess the other trade off on the the k y c service or AML k y c service side is that you simply won't be able to accumulate as many coins.
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But
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the trade off is
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that government data, governments can subpoena that data or even ask for that data. So in Australia, it's basically assumed like it's not even like a subpoena. It's more just like the government will just ask Australian bitcoin exchanges.
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You know. We know this guy bought, you know, we know this guy's with you. Give us his records,
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and it's basically assumed. So that's how bad it's gotten in Australia.
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So you know, you have to think about that and trade that off. And you also have to think about this idea that once purchased, that record is always there,
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Right? Even if you then coin join and get what we achieve what we call forward privacy.
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So I buy the coins on the KYC exchange. I coin join them, and then from then on, yes, assuming I do the right steps, I run it through Tor, I run it through coinjoin, etcetera.
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I have forward privacy from that point forward, but that record still exists. And so for some people who are really serious about privacy, they literally go back the way they came. Meaning, they sell on the KYC exchange, so they might have bought this amount and sold this amount and then gone and repurchased
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at their entire stack non KYC. Now
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it's a spectrum in terms of how much of a cost you're willing to pay to do that
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for you know, you have to make your own assessment.
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How many how much is the additional coins is that gonna be worth to you in 10 years time, 15 years time. If you, if we're all bullish as we are on bitcoin and we think it's going to $10,000,000 a coin, $15,000,000 a coin. Why so bear? Yeah.
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Too bearish.
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Canceled. Canceled. So,
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but so that there there are a few ideas there, but
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at the end of the day,
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it I think it's kind of like I'm sort of interested in Bitcoin as a system remaining,
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viable and sustainable. And so, you know, it also also here's the other thing.
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If we're if I'm too bearish,
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let's not forget the, the fee market or the block space market.
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The fees will rise.
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It will become more costly to use CoinJoin
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eventually.
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Eventually.
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So that's something to think about as well. The cost to be private. Because remember, Bitcoin is designed we view it more like a settlement layer. So Yep. It's gonna cost you a lot more to be private. So, Stefan, let me just jump in here real quick.
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I think
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what we will see is we'll see more of a circular economy develop where you can go to the bar, you pay them in Bitcoin, you're not actually buying Bitcoin, you're not actually selling Bitcoin,
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you're earning Bitcoin or spending Bitcoin. And in that case, you don't have these regulated companies standing in between.
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The second thing I would add is,
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yes, these regulated companies are forced
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to comply with these laws,
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but we've watched many of them
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spend
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1,000,000 of dollars, sometimes tens of 1,000,000, 100 of 1,000,000 of dollars
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fighting for the ability to sell unregistered securities and sell shit coins,
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but they haven't pushed back against,
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this collection of information. So so I'm not saying that I expect, you know, regulated companies to just break the law, but I would like to see some more pushback. We haven't really seen much pushback.
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And then the third thing is, you mentioned it briefly, but
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right now in the current dynamic,
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mining is a very accessible thing that you can do and you can mine from home.
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It does involve
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a licensed electrician because you need 220,
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rad
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Yeah. You need 220. Right? 220, 240. Yes. 2 20240.
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I don't know personally because I don't know how to do this. But you so you need a you need a licensed electrician,
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but what's really nice about that is it's permissionless.
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And in the current market, you can kind of,
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for most people at most energy costs in America, you're able to get Bitcoin actually at a discount of using through the regulated exchanges.
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And if we have small miners
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throughout the country, they can kind of jump start that circular economy. If they need to pay their bills,
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if they need some fiat, they need some cash,
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then, you know, at a local Bitcoin meetup or something like that, they're able to trade bitcoin. So not only does it help the individual
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miner, it helps the network as a whole because we have more distributed miners rather than these large public
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corporations as miners,
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but it also helps jump start your your local Bitcoin economy.
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who may be scared shitless now,
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including myself,
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you look. Quick recap. So we mentioned At Home Mining.
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We mentioned coin join, go forward, pay join.
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What about lightning? Is lightning help with,
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So there's actually a lot of okay.
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And by the way, lightning, if you wanna explain lightning. Okay. So for people who aren't familiar, lightning is a network of payment channels built up on top of bitcoin.
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And so you can think of it like when you open a bar tab and you close out that bar tab, that's like a very loose analogy. But think of it like it's not just that, it's actually that you don't need to open a bar tab with every person you pay. It's that there's a network and that using the magic of cryptography and bitcoin smart contracts
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that
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essentially you can route a payment across the network and the the net result being you can make payments much more cheaply, and these payments do not necessarily hit the chain, as in touch the blockchain.
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That said, there are various ways in which you can leak your privacy on the lightning network. So here's high level how how I think about it. Right? So the least private of all is a nigh what I would call a naive on chain spend. Right? Just a, you know, not even trying any privacy techniques, just spending on
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chain. Then a bit more private that more private than that is lightning because you're not necessarily putting everything onto the blockchain. It might require active surveillance or some kind of more advanced techniques for somebody to figure you out.
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And then I think most private is coin join off your own node using,
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the correct tech, like a well executed coin join flow is probably what I think of as the most
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possible the best possible privacy available in Bitcoin today. So it's kind of 123 in that order. That's how I think of it.
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So
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lightning has a lot of ways in which you can actually still be doxed. Your channel when you open that channel with somebody
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that there are various elements of your,
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coins that are being doxed out to the network because it's not just the Bitcoin blockchain.
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When we join the lightning network and we run a lightning node, there's this thing called gossip data.
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So you our lightning nodes are all talking to each other, and they're sharing information.
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And then that information
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could be used to sort of know what is your channel point, what is your on chain footprint? So there are various techniques involved. A really good article if you're interested. And, Anthony Ronning wrote this, and I think you hosted him on Citadel Dispatch. I did an episode with him as well. Episode 276 of my show. I had him first, though. Yeah. You did. You did. Oh.
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And so That's spicy. That he's, that's a really great article if you're interested in like the really technical nuances of lightning privacy.
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So there, there are a few openings or lots of, do you want to add anything?
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You know, he probably just confused a lot of people.
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you know, 2 nerds sitting up here for 45 minutes talking about the nuances of Bitcoin privacy. You'll just be able to just, you know, open a mobile mobile wallet and just spend in a relatively private fashion?
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Thank you, sir.
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I would add a couple things to what Stephan said. First of all, high level,
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you know, lightning is for most people, you don't need to know about payment channels or anything. You install an app on your phone, you load it up with some Bitcoin, you're able to pay for less fees, faster transactions.
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Lightning in general at a high level has pretty strong privacy guarantees for senders.
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Most of the issues revolve around receiving lightning transactions.
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So if you're sending lightning transactions, you should get a bump up in privacy
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just across the board.
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And then last but not least, he said the 3 different ways,
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he said, naive on chain,
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Lightning, and then CoinJoin, but you can use them in combination. So what I really wanna see is the 4th one, which is
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wallets basically automate.
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You do CoinJoin, and then you CoinJoin into Lightning, and then you make spends with Lightning.
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send some coin joined money into that node, and then open one channel out of that. But then
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even from that point on, you might then dox other aspects of your setup. And so it kind of gets
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complicated. But I think
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where we're going longer term with things like taproot and with things like someday channel factories and various techniques
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that
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will,
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you know, once once they've been developed and popularized and commercialized and put into wallets and software that we use,
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it'll be it'll be better then. You know, Lightning is very new,
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like a secondary effect that has happened. So like there's been privacy advocates who have just kind of played around with it to try and use it as a privacy tool. So I hope more development goes into it, more privacy focus goes into it. But one of the really cool aspects of Lightning, and to be honest, you call me a lightning bear,
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One of the cool aspects of Lightning is
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Bitcoin doesn't change. Bitcoin is very difficult to change on the protocol level. And that's part of the value prop because
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being easy to
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change is an attack vector because you can you can change it in ways that make it worse money.
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So we have Bitcoin, which has very conservative development, and then we have layer 2 networks on top, like Lightning being the most
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most used one and most famous one, that have very rapid change. And they're able to change very quickly, develop very quickly.
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So hopefully, we see development there
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keep improving and and keep making it more private and just a better experience.
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But at the same time, if lightning fails, we'll have other layer 2 networks, it won't be the end of the world.
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And to me that's the most bullish part about lightning. The most bullish part about lightning is
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it could disappear tomorrow, and it wouldn't it wouldn't be the end of the end of Bitcoin. And I should have probably prefaced it by saying you cycle through bearishness,
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I basically got fee FOMO and I was like, the fees are just gonna keep going up. And then they just went all the way down. You can, like, send a transaction now for like a 120 sets. It's like what is it? Like, 20¢ or something? 10¢?
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Catan was right, unfortunately. Yeah. Our our buddy
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2035. So if the fee market and block space market rather doesn't happen by then, well, maybe the security element maybe might be a little bit more in question, but honestly, You
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know,
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you're
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using
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especially
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if
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you're
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using
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a KYC, You know, you're using if
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especially if you're using a KYC custodian,
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like, they're holding your keys. They can see all of your transactions. They know your balances. They can seize all your money. And I think part of the reason why we've seen the fee market,
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not really developed yet is because so many people just buy Bitcoin and they just hold it in the custodial wallet. They never actually withdraw it. And if they do withdraw it, they just do one transaction out. They don't take any privacy precautions.
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So so the amount of transactions that are actually getting settled on the Bitcoin network are significantly lower because of these custodial platforms.
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So that on the margin, that was a lot of transactions because a lot of people are using blockchain dot info. So I think that was part of it. I think lightning's taken a little bit off. I think more people using stable coins,
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and maybe there's less and less of a
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transactional culture in Bitcoin. It's it's sort of became more and more of a saving. Do not use blockchain dot info.
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Yeah. That goes without saying.
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one thing, and I lost my train of thought, but I'll ask one more question and then maybe we open it up for the audience to have some questions as well. You know, one thing I was thinking about that New York story, you know, someone's probably in the audience like, well, why don't you just pay them, you know, the $20 in Bitcoin and use Lightning? I mean, back 3 years ago, Lightning wallets
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didn't really exist. I mean, we had to go to a terminal and, like, you know, hard code a transaction basically.
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And then if I sent you a transaction on chain, $20, it would have been, like, $7 worth of fees. So that $20 worth of cash was, was a okay.
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I guess I'll close with, you know, can the Bitcoin
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protocol, so layer 1 privacy, you mentioned Taproot, you mentioned a couple of these other things, Can we get more private by default?
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is
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there's a few. So Taproot will help in small ways.
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It will make certain transactions look the same.
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There is a hope of this idea of cross input signature aggregation, although that's like a very far off, and we don't know if we'll ever get that.
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There's also another kind of more far off idea of confidential transactions,
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which would help in terms of some of the privacy heuristics.
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But currently, the trade offs associated to get confidential transactions
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just make it untenable in terms of getting the users and the developers over the line in terms of getting them to agree with that. But, I did a recent episode with Adam Backupset 300 talking about some those trade offs if you're interested about that.
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is seeing Sparrow wallet integrate Whirlpool.
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Now I think this is really cool for a number of reasons because,
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you know, you guys might have seen that meme video of the first follower, right? Like this guy, there's the first guy dancing crazy and whatever. Maybe in that analogy, it's like samurai wallet of the crazy ones and Sparrow wallet was the first follower, and maybe some of the other wallets will actually
372
00:34:26.694 --> 00:34:35.100
integrate Whirlpool as well. And so then we'd have all these different wallets all mixing through the same protocol and becoming part of the same anonymity set and liquidity
373
00:34:35.480 --> 00:34:47.125
set, if you will. So that could be a positive development, and we might see more and more people using bitcoin more privately in that way, and it's got some interesting features that previously were not easy. So for example, mixing to your cold storage.
374
00:34:47.579 --> 00:34:58.204
That was something that was very difficult to do if you're just on your Samura wallet on your mobile, but now with Sparrow, you can do that. Oh, actually previously, you could have done something similar with join market, but, again, join market is not as accessible.
375
00:34:58.825 --> 00:35:02.765
So I'm hopeful there that with some of the application level
376
00:35:03.145 --> 00:35:05.404
technology and software and hardware potentially,
377
00:35:05.750 --> 00:35:07.830
that will get more privacy that way,
378
00:35:08.230 --> 00:35:12.810
but it's it's kind of up in the air right now. Joy Market was one of the first CoinJoin,
379
00:35:13.190 --> 00:35:13.690
380
00:35:15.145 --> 00:35:18.845
They're working to make it more accessible. I've actually been working with Human Rights Foundation.
381
00:35:19.145 --> 00:35:24.710
We set up a bounty so that it's easy to set up on your own node. All these node packages, whether it's raspiblitz
382
00:35:25.330 --> 00:35:26.150
or Umbrel,
383
00:35:27.010 --> 00:35:29.830
or myNode, you'll be able to easily use join market.
384
00:35:30.930 --> 00:35:38.015
I I I just I like to privacy projects in the space. I am very, very excited about Sparrow. That's Sparrow wallet dot com.
385
00:35:39.035 --> 00:35:47.589
Craig Raw from South Africa developed it. He basically made a wallet that he wanted to use. It has very few dependencies. It's very reliable. It it's just very efficient.
386
00:35:48.465 --> 00:35:51.925
I actually convinced him on CIDO Dispatch Live to add,
387
00:35:52.705 --> 00:35:54.485
Whirlpool, which is pretty cool.
388
00:35:55.745 --> 00:35:59.140
I do not remember the number even though I've had way less episodes than you,
389
00:35:59.680 --> 00:36:01.620
but you can just check it if you want.
390
00:36:03.120 --> 00:36:03.620
But
391
00:36:04.275 --> 00:36:10.375
I don't think confidential transactions will ever happen. The the idea of confidential transactions is that the amount is blinded,
392
00:36:10.675 --> 00:36:26.085
not the sender receiver, but the amount is blind. And what's nice about that is all CoinJoin implementations up until this point relied on equal amounts. So when you send a CoinJoin transaction a CoinJoin transaction at its core is a collaborative transaction. It's this idea that you send a transaction with multiple people,
393
00:36:26.625 --> 00:36:29.125
and you all get increased privacy because
394
00:36:29.490 --> 00:36:31.830
that probability game, like we were talking about earlier,
395
00:36:32.370 --> 00:36:37.270
it breaks the probability. You don't know which one is which person because you all shared it together.
396
00:36:38.025 --> 00:36:41.805
If you add confidential transactions to the mix and you can't see the amount,
397
00:36:42.424 --> 00:36:50.670
then they don't have to be the equal amounts. Right now, the CoinJoin implementations rely on the fact that you're all coming in at equal amounts because the amounts can be seen.
398
00:36:50.970 --> 00:36:51.950
All that said,
399
00:36:52.330 --> 00:36:55.790
I highly doubt confidential transactions are ever gonna happen on Bitcoin.
400
00:36:56.245 --> 00:37:01.225
So the dream is really on the app level and that's what Stephane was talking about earlier.
401
00:37:02.405 --> 00:37:05.910
Apps like Sparrow Wallet, apps like Samura, apps like JoinMarket
402
00:37:06.530 --> 00:37:12.310
can implement it on the wallet level as more people start using it on the wallet level. Everyone gets increased privacy.
403
00:37:14.694 --> 00:37:19.595
And what I expect is I'm actually really bullish on Bitcoin privacy long term,
404
00:37:19.950 --> 00:37:26.450
because I think regardless of privacy, Bitcoin is gonna take over the world. And that's one of the reasons why there's a lot of,
405
00:37:27.150 --> 00:37:28.930
so called, like, privacy coins
406
00:37:29.445 --> 00:37:35.625
where, like, these coins focus on trying to make private transactions, and I don't focus my time on them because
407
00:37:36.085 --> 00:37:38.345
Bitcoin's gonna win regardless of what happens.
408
00:37:38.800 --> 00:37:42.260
So the goal should be to try and make Bitcoin as private as possible.
409
00:37:42.720 --> 00:37:50.255
And what I think happens is what's gonna happen in all of our everyday lives is that as more of our lives become digital, as more of our lives,
410
00:37:51.035 --> 00:37:55.830
start to use Bitcoin, as more of our lives just and every day you buy a concert ticket, you
411
00:37:57.830 --> 00:38:01.130
buy this, you buy something on Amazon, goes digital, we're gonna get burned. And we're all gonna start to get burned.
412
00:38:01.590 --> 00:38:05.385
The leaks are gonna get worse. We just had Facebook. I think it was, like, 1,800,000,000
413
00:38:06.645 --> 00:38:09.945
people's records got compromised on on Facebook.
414
00:38:11.420 --> 00:38:15.599
As people start to get burned, they're gonna realize the need to increase their privacy.
415
00:38:16.300 --> 00:38:17.119
And I think
416
00:38:17.565 --> 00:38:19.825
Bitcoin as this open permissionless
417
00:38:20.204 --> 00:38:28.280
way of innovation, like you can innovate on top of Bitcoin and no one can stop you, will result in kind of market forces that push people
418
00:38:28.580 --> 00:38:30.520
into these better privacy solutions.
419
00:38:31.140 --> 00:38:35.655
So the way I look at it is Bitcoin will be easy to use privately,
420
00:38:36.355 --> 00:38:36.855
eventually.
421
00:38:37.715 --> 00:38:38.215
And
422
00:38:39.075 --> 00:38:43.460
the difference is it'll either be really messy in the middle and we'll all get burned,
423
00:38:43.840 --> 00:38:46.340
or we avoid that process. But at the end,
424
00:38:46.800 --> 00:38:54.005
425
00:38:54.545 --> 00:38:56.085
Bitcoin's gonna win regardless,
426
00:38:56.545 --> 00:38:57.525
which I agree with.
427
00:38:58.200 --> 00:39:04.380
There is an interesting hypothetical, and I think put this one up a while back. But he said this idea of imagine if every sat was KYC'd.
428
00:39:05.214 --> 00:39:12.994
And would you regard Bitcoin as a as a failure at that point, or would you still see it as a like, would you still see it as a set as a an improvement?
429
00:39:13.860 --> 00:39:15.160
430
00:39:15.940 --> 00:39:24.335
But in that theoretical, then then we've we've we Bitcoin is no longer permissionless. If if you have to ask permission to spend your Bitcoin, it's not your Bitcoin.
431
00:39:25.275 --> 00:39:27.694
And if every transaction is known,
432
00:39:30.380 --> 00:39:30.880
then
433
00:39:31.500 --> 00:39:33.280
people will self censor themselves.
434
00:39:34.620 --> 00:39:38.080
They they can get their like, the thing is, like, Bitcoin's hard to seize,
435
00:39:38.715 --> 00:39:47.535
but it's not hard to throw you in jail for doing a transaction you weren't allowed to do in the first place. Right? So privacy is key to the censorship resistant aspect of Bitcoin.
436
00:39:48.410 --> 00:39:48.910
So
437
00:39:49.530 --> 00:39:52.349
in that straw man theoretical and every
438
00:39:52.730 --> 00:39:55.710
every every UTXO, every status k y seed,
439
00:39:56.895 --> 00:39:59.875
to me, Bitcoin will have failed. The price still might pump,
440
00:40:01.055 --> 00:40:01.555
but,
441
00:40:02.175 --> 00:40:13.205
I I would hope that there'd be pushback before we got to that point. Yeah. Yeah. And look, it is it is an unrealistic hypothetical. I agree. I it's just an interesting thought I think. Would would Bitcoin have failed at that point?
442
00:40:13.525 --> 00:40:14.345
443
00:40:14.645 --> 00:40:17.625
the main problem is more about the
444
00:40:18.005 --> 00:40:25.069
government's tentacles getting into a lot of things because the government is what forces AML and sanctions controls onto all these businesses.
445
00:40:25.530 --> 00:40:26.270
I think
446
00:40:28.329 --> 00:40:46.810
it would. Yeah. So like you were saying, it's an unrealistic hypothetical in that not every sat will be k y c'd. But here's the other thing, it might be that there are different countries or jurisdictions or citadels, as we might say, that have different rules and maybe some of them it is kyc, but you just, you're allowed to just spend what you want. And so
447
00:40:47.375 --> 00:40:53.860
it might allow more of a competitive jurisdiction aspect and that in turn might give people more freedom in a way that
448
00:40:54.340 --> 00:40:54.840
maybe
449
00:40:55.300 --> 00:41:01.320
is not implied. It's not the same future that you have implied. Yeah. I think it's a pretty shitty thought experiment, to be honest.
450
00:41:01.765 --> 00:41:03.945
451
00:41:04.485 --> 00:41:08.745
Any questions from the audience? We can do this. Yes. Emily, you enunciate. I'll repeat.
452
00:41:09.180 --> 00:41:09.839
The next frontier
453
00:41:10.460 --> 00:41:11.280
for Bitcoin,
454
00:41:11.660 --> 00:41:15.920
assuming it's taken over the world, where is that next battle? Is that a fair
455
00:41:16.444 --> 00:41:17.585
456
00:41:20.045 --> 00:41:28.740
I think it'll be those countries that really go hard on Bitcoin first. You know, maybe El Salvador will be one of the first places where if they if they stick with this thing,
457
00:41:29.120 --> 00:41:35.605
a lot of people in that country will get a lot richer than people in other countries because they will have been day to day native using Bitcoin.
458
00:41:36.385 --> 00:41:55.350
That's one example. But I think it's also just people who hold a lot of coin right now will will kind of drive that competitive pressure amongst the different states and maybe some of the smallest like so might not, it might not necessarily be like the Australia, US, UK, Canada. It might be some of the smaller nations that are maybe a little bit more nimble and actually offer a bit more freedom. Who knows?
459
00:41:55.830 --> 00:41:58.890
460
00:41:59.190 --> 00:42:07.945
it's the challengers that adopt Bitcoin first and and end up benefiting from it more. So you you tend to see disadvantaged people get it first.
461
00:42:08.645 --> 00:42:18.299
You see tend to see the secondary companies, not the top tier company isn't the first one who adopts it. It's a secondary company. You see countries like El Salvador adopt it before a large GDP nation.
462
00:42:19.960 --> 00:42:21.980
And at some point that will change,
463
00:42:22.605 --> 00:42:26.065
but in the short to medium term, it'll probably continue to be
464
00:42:26.605 --> 00:42:29.265
kind of, you know, countries, companies,
465
00:42:29.740 --> 00:42:33.040
individuals that have something to prove, something to truly fight for,
466
00:42:33.580 --> 00:42:40.745
that will adopt it first. And that's kind of, you know, that's one of the most beautiful aspects of Bitcoin to me, at least in the adoption cycle,
467
00:42:41.685 --> 00:42:43.945
because, you know, Bitcoin doesn't, like, magically
468
00:42:44.325 --> 00:42:45.785
fix income inequality
469
00:42:46.085 --> 00:42:46.585
or,
470
00:42:47.400 --> 00:42:48.619
make the world necessarily,
471
00:42:48.920 --> 00:42:51.180
you know, more financially equal,
472
00:42:51.799 --> 00:42:54.299
but it does guarantee you a fair money,
473
00:42:54.685 --> 00:42:59.745
and it it guarantees you the ability to fight on a fair playing field where the money isn't necessarily,
474
00:43:00.845 --> 00:43:04.790
working against you or being co opted by super powerful forces.
475
00:43:05.730 --> 00:43:06.630
Thank you, Emily.
476
00:43:07.170 --> 00:43:08.710
477
00:43:10.965 --> 00:43:11.785
So with
478
00:43:12.245 --> 00:43:17.785
Chinese miners coming over, especially to Texas, especially with flare gas in West Texas,
479
00:43:18.400 --> 00:43:20.980
seeing the federal versus the state level,
480
00:43:21.280 --> 00:43:23.380
you see, like, a Texas, Wyoming,
481
00:43:23.839 --> 00:43:24.339
Tennessee,
482
00:43:24.640 --> 00:43:25.140
hopefully,
483
00:43:25.465 --> 00:43:28.845
North Dakota, South Dakota kind of saying, hey, we're gonna create our own rules
484
00:43:29.305 --> 00:43:39.640
485
00:43:41.765 --> 00:43:42.265
486
00:43:43.765 --> 00:43:44.265
say
487
00:43:44.725 --> 00:43:45.225
make
488
00:43:45.685 --> 00:43:51.400
some states, I guess, more likely to try and execute that strategy. Right? Would you say that's a fair? And who are the
489
00:43:51.940 --> 00:43:52.440
490
00:43:54.020 --> 00:44:23.265
491
00:44:23.930 --> 00:44:24.330
492
00:44:24.730 --> 00:44:29.630
Yeah. You know, first of all, I think Bitcoin is private Bitcoin usage is protected,
493
00:44:30.410 --> 00:44:32.750
by the constitution of the United States,
494
00:44:33.115 --> 00:44:36.575
the first and fourth amendment, the first being free speech,
495
00:44:37.115 --> 00:44:46.060
and the fourth being unreasonable search and seizure. If you're not using a third party because we have the 3rd party doctrine, which is why it's important to use it with your own node, holding your own keys,
496
00:44:46.440 --> 00:44:49.180
and I would like to see more constitutional fights on that level.
497
00:44:49.655 --> 00:44:53.915
But you also have, I believe it's the 14th amendment, which is states' rights,
498
00:44:54.775 --> 00:44:58.800
and I wanna see it protected on that level as well. So I wanna see more constitutional
499
00:44:59.660 --> 00:45:00.800
law kind of,
500
00:45:01.340 --> 00:45:02.400
plays with Bitcoin.
501
00:45:03.180 --> 00:45:13.325
I expect states to start doing it. I expect, once again, to go back to the previous question, the challenger states to kinda step up first, who have less to lose, who have been, you know, completely,
502
00:45:14.025 --> 00:45:16.285
destroyed economically in a lot of ways.
503
00:45:18.010 --> 00:45:19.069
But with Texas,
504
00:45:19.530 --> 00:45:22.670
you know, it's a very interesting beast because they are a powerhouse.
505
00:45:23.450 --> 00:45:23.950
And
506
00:45:24.835 --> 00:45:26.295
while it's nice to see
507
00:45:26.595 --> 00:45:31.095
the mining industry grow down there, and I I very much support the use of,
508
00:45:32.250 --> 00:45:35.230
we didn't repeat that part of the question, but waste natural gas,
509
00:45:35.690 --> 00:45:43.685
that's just being put out into the atmosphere and it's horrible for the environment. There's actually an incentive now to to be better for the environment, a direct financial incentive
510
00:45:43.985 --> 00:45:47.205
by capturing that that waste gas and turning it into Bitcoin.
511
00:45:48.960 --> 00:45:50.579
We are the land of KYC.
512
00:45:51.119 --> 00:45:53.220
And when you look at international exchanges,
513
00:45:54.000 --> 00:45:58.339
a lot of times it's not their own governments that force them into complying with,
514
00:45:58.945 --> 00:46:05.525
KYC laws and lists of Bitcoiners. It's the American government that does it. We had a major exchange called BitMEX. Right?
515
00:46:05.850 --> 00:46:09.950
BitMEX didn't wanna implement KYC AML. They were based in the Seychelles.
516
00:46:11.130 --> 00:46:14.750
They were forced to implement it because the US government said to them,
517
00:46:15.065 --> 00:46:15.965
if you don't implement
518
00:46:16.265 --> 00:46:31.770
KYC, Americans might use it. So you have to KYC every single one of your customers to make sure the Americans don't use it. And then we used, you know, our 8 aircraft carriers or whatever to make sure that that policy was enforced. Right? They threw 2 of the founders in jail.
519
00:46:32.265 --> 00:46:37.244
The 3rd founder ultimately bent the knee and settled with them, and now they're fully KYC'd AML'd.
520
00:46:37.545 --> 00:46:41.085
So the more miners we have in America, that becomes more of a risk to me.
521
00:46:41.910 --> 00:46:47.530
And, you know, as much as I love this country, I think it's important for us as Americans to, like, keep our guard up
522
00:46:47.830 --> 00:46:48.150
and,
523
00:46:48.630 --> 00:46:50.970
at least at the very least, you know,
524
00:46:51.655 --> 00:46:52.555
try and
525
00:46:53.494 --> 00:46:54.955
support, you know, mining
526
00:46:55.415 --> 00:46:58.075
firms that are pushing back against
527
00:46:58.770 --> 00:46:59.270
unwarranted,
528
00:47:01.250 --> 00:47:08.915
regulation against them that is that is ultimately worse for Americans and worse for people around the world. Yeah. I'll just add there as well. Even with the,
529
00:47:09.635 --> 00:47:28.755
530
00:47:29.055 --> 00:47:30.275
KYC, AML,
531
00:47:30.660 --> 00:47:37.560
you're a Europe. You're on the blacklist, and we're gonna try to stop you in terms of banking. And so then that country now faces pressure,
532
00:47:38.195 --> 00:47:51.800
either the legislators or the regulators of that country have pressure on them. We need to push KOC onto our banks, financial services, and to Bitcoin companies. And so that's a bit of that pressure game that goes on there. But
533
00:47:52.420 --> 00:47:54.599
maybe an interesting example though is,
534
00:47:55.115 --> 00:47:59.855
Bekele with El Salvador sort of almost giving him the middle finger to the IMF.
535
00:48:00.395 --> 00:48:05.329
Maybe there is a scenario where maybe some country governor or state governor
536
00:48:06.190 --> 00:48:07.890
starts giving the middle finger to FATF.
537
00:48:08.510 --> 00:48:09.410
We don't know.
538
00:48:10.430 --> 00:48:10.930
539
00:48:11.230 --> 00:48:11.890
Go ahead.
540
00:48:15.015 --> 00:48:16.474
541
00:48:17.335 --> 00:48:18.395
countries, authoritarian
542
00:48:18.775 --> 00:48:21.835
countries like, the Democratic Republic of Congo,
543
00:48:23.730 --> 00:48:29.349
just shut down internet, shut down text messages. They go the full 9 yards to to try and
544
00:48:30.065 --> 00:48:35.845
quash any kind of, opposition to them. And how can Bitcoin be more robust against that?
545
00:48:36.145 --> 00:48:45.010
I would say that, you know, when people see a need, a true need, and this is one of the things I, you know, I really took away from the Oslo Freedom Forum by the HRF,
546
00:48:46.185 --> 00:48:48.765
is they they will find a way. Right? And
547
00:48:49.145 --> 00:48:50.045
I I think,
548
00:48:50.345 --> 00:49:02.610
you know, for people in those types of situations, you don't have to explain the need for Bitcoin. You can skip that whole first step. You just have to explain to them and help them how how can they access it, how can they use it.
549
00:49:03.150 --> 00:49:03.650
And
550
00:49:03.984 --> 00:49:09.605
I think the important part is, you know, at least on our side, me and Stefan's side, like,
551
00:49:10.065 --> 00:49:11.685
you wanna support the tools,
552
00:49:12.380 --> 00:49:13.119
you wanna
553
00:49:13.420 --> 00:49:19.040
make the education, you wanna have it there for people. So when they realize that need, they can come
554
00:49:19.744 --> 00:49:28.964
and and and learn for themselves and take their own journey and try and make it happen. But I think, ultimately, like, every attack against Bitcoin makes the network more more robust.
555
00:49:30.240 --> 00:49:34.580
And, frankly, to be honest, you know, between the competition between countries,
556
00:49:35.920 --> 00:49:36.420
between,
557
00:49:37.455 --> 00:49:40.835
like, the the way that the Bitcoin network is now, I think it's
558
00:49:41.455 --> 00:49:45.395
extremely robust. Like, I think we're we're we're very well situated
559
00:49:45.695 --> 00:49:46.755
in terms of
560
00:49:47.519 --> 00:49:48.420
state resistance,
561
00:49:49.519 --> 00:49:54.980
on the network level. My my bigger concern is on the actual individual user level.
562
00:49:55.455 --> 00:49:57.395
And, you know, if you're a developed country,
563
00:49:58.095 --> 00:49:58.595
like,
564
00:49:59.055 --> 00:50:04.835
you know, that that's a weapon of mass destruction shutting off the Internet for your whole for for for everything. Right?
565
00:50:05.440 --> 00:50:08.660
So so the really the low hanging fruit is you attack users,
566
00:50:09.119 --> 00:50:11.060
and specifically what you do is,
567
00:50:11.680 --> 00:50:23.285
and hopefully this is not prescient, you attack the the users that are outspoken about these causes like me and Stefan, and then you make an example out of us, and then everyone else kinda just falls in line and complies.
568
00:50:23.850 --> 00:50:25.950
Right? Because that's, you know, unfortunately,
569
00:50:26.410 --> 00:50:44.390
especially over the last 2 years, that's the unfortunate reality. The unfortunate reality is if you if you scare people enough, you make examples out of a few people, the majority of people will will fall in line, and you don't have to go through those drastic measures in the first place. Yeah. So just to add to that, I think it's about building a social movement that there's enough,
570
00:50:44.769 --> 00:51:00.480
571
00:51:01.020 --> 00:51:02.560
And talking to some of my cousins,
572
00:51:03.260 --> 00:51:13.915
it it's bleak when your income is really low. You just can't save. Right? So with the average, you know, a person in Sri Lanka might be earning. If I were to US dollarize that income, it might be 5 or $6,000
573
00:51:14.295 --> 00:51:14.955
a year
574
00:51:15.280 --> 00:51:33.575
or maybe a little bit more. Right? But it's imagine living on $6,000 a year. Like, you just it's very hard for you to save when your income is just simply that low. And it's even it might even be difficult for you to use Bitcoin non custodially when your income is that low. And so that's why in El Salvador, we're seeing things like Bitcoin Beach, by Galloy,
575
00:51:34.280 --> 00:51:46.235
doing this idea of like a community lightning bank and things like that because you just can't afford it otherwise. And so that's one of the difficulties there. But I think education and over time and especially
576
00:51:46.615 --> 00:51:53.560
this might be like my friend Hasma Cook with his DCA army message of, you know, if enough people start stacking sats hard,
577
00:51:53.940 --> 00:52:00.280
you monetize Bitcoin globally, and then that's actually how you can save people in the developed in the, developing countries. Because
578
00:52:01.055 --> 00:52:02.994
quite frankly, there's a wealth and income
579
00:52:03.615 --> 00:52:05.075
disparity that is just so
580
00:52:05.455 --> 00:52:05.955
immense.
581
00:52:06.575 --> 00:52:12.710
He also called privacy dev spooks though. Yeah. So, look, I don't agree with his views there, but I agree on his DCA army.
582
00:52:13.089 --> 00:52:13.589
583
00:52:14.450 --> 00:52:22.315
584
00:52:23.175 --> 00:52:25.220
for this basically to be a viable thing.
585
00:52:25.619 --> 00:52:26.119
586
00:52:26.820 --> 00:52:29.720
set being, like, this idea in privacy that
587
00:52:30.020 --> 00:52:34.920
you're only as private as the crowd that you're among. If only, like, 10 people are seeking privacy,
588
00:52:35.285 --> 00:52:36.745
it's very easy to just
589
00:52:37.045 --> 00:52:50.090
realize those 10 people are using, you know, the privacy methods. That's not just a Bitcoin thing. That's just a a a normal you know, it's a it's a it's a privacy meme almost, but it's a it's a real it's a real aspect to privacy in general.
590
00:52:51.030 --> 00:52:51.770
And then
591
00:52:52.630 --> 00:52:54.265
he c k asked,
592
00:52:54.964 --> 00:52:58.025
like, when can we see larger Bitcoin anonymity set,
593
00:52:59.204 --> 00:53:00.424
specifically with CoinJoin?
594
00:53:00.724 --> 00:53:05.280
I think it's gonna be a while, you know. I've spent, you know, 2 years not shutting up about it
595
00:53:05.980 --> 00:53:06.480
and,
596
00:53:07.020 --> 00:53:10.815
it's grown quite a bit. I mean, Whirlpool right now It's at 34,000
597
00:53:11.115 --> 00:53:13.055
Bitcoin? No. It's at like 43100
598
00:53:13.835 --> 00:53:14.635
Bitcoin and,
599
00:53:15.435 --> 00:53:21.569
I see some, you know, people wearing their their Apple Watches. I know some of you had the Bitcoin price on there.
600
00:53:23.069 --> 00:53:28.875
Bitcoin price is up right now, so I think it's at a all time high both in dollar terms and Bitcoin terms. It's probably like a
601
00:53:29.994 --> 00:53:31.355
what is that? What is,
602
00:53:32.154 --> 00:53:38.280
I I am horrible at live, Matt. Alright. Let's do it. So 40, mate, how do you call it? 200 Bitcoin at 55 k a 1000.
603
00:53:38.740 --> 00:53:39.720
55 k.
604
00:53:41.460 --> 00:53:43.000
Is I think a quarter of a1000000?
605
00:53:43.915 --> 00:53:46.815
Yeah. It's a quarter of a1000000. It was great math.
606
00:53:48.714 --> 00:54:15.430
A quarter of a1000000000. Yeah. That was Mass that's pretty big. That's pretty big. That's pretty big. But, we need to see that number go up. And I think ultimately, and it just goes back to the previous the previous question, ultimately, like, people just need to get burned really before they start to realize the need. I think the tools have improved, so it is easier to use now. And we were talking about Sparrow Wallet. It's extremely easy to use. You install the wallet. You connect it to your own node. You can just use it with Bitcoin Core if you want.
607
00:54:15.970 --> 00:54:17.510
Super easy to use now,
608
00:54:18.275 --> 00:54:19.415
relatively cheap,
609
00:54:20.115 --> 00:54:20.615
and
610
00:54:21.395 --> 00:54:27.650
that should help it increase. But ultimately, people need to get burned, I think, before before that number really goes up significantly.
611
00:54:27.950 --> 00:54:28.930
612
00:54:29.950 --> 00:54:34.130
613
00:54:34.555 --> 00:54:37.695
then step 1, acquire the coins non non KYC.
614
00:54:38.395 --> 00:54:39.275
Step 2 is,
615
00:54:39.915 --> 00:54:43.270
run your own bitcoin node. And step 3 is, like, use CoinJoin,
616
00:54:43.970 --> 00:54:46.290
wallets like Samura Wallet and Sparrow Wallet,
617
00:54:46.690 --> 00:54:48.790
would probably be my kind of easy
618
00:54:49.145 --> 00:54:52.525
619
00:54:53.065 --> 00:54:55.485
Hold your own keys. Use your own known.
620
00:54:56.220 --> 00:54:57.600
Learn privacy best practices.
621
00:54:57.900 --> 00:55:00.000
Cell phones are horrible for privacy.
622
00:55:01.420 --> 00:55:03.600
We're literally just walking around with surveillance,
623
00:55:04.300 --> 00:55:10.005
trackers on us. I mentioned the Apple Watch. It's just a modern day cattle tag that you guys all have on you.
624
00:55:11.505 --> 00:55:17.670
There are certain techniques you can use with your cell phones to improve your privacy situation. I have covered them on SITO Dispatch.
625
00:55:18.130 --> 00:55:20.950
I really like Kallix OS, which is an open source,
626
00:55:21.730 --> 00:55:28.205
fork of Android with Google removed from it. It's still a surveillance device, but at least it reduces it somewhat.
627
00:55:29.545 --> 00:55:32.845
And it's just all about that privacy versus convenience trade off.
628
00:55:33.690 --> 00:55:35.470
The the the true privacy advocates
629
00:55:35.930 --> 00:55:37.230
don't have a phone, period.
630
00:55:38.330 --> 00:55:46.725
I run Kallix, you know, I got my face on here, you know. The privacy advocate that talks publicly about privacy. He's also the co founder of Bitcoin TV.
631
00:55:47.105 --> 00:55:53.260
The The question is, what do we think of ransomware and governments going after Bitcoin and our privacy to fight ransomware
632
00:55:53.720 --> 00:55:57.825
and how that should how how we expect that to play out? Yeah. So
633
00:55:59.005 --> 00:56:08.869
634
00:56:09.250 --> 00:56:21.045
see how bad bitcoin is. It's being used by the hackers and so on. So there will be a bit of a narrative battle about that and I think people who are advocating and from a human rights point of view and from
635
00:56:21.789 --> 00:56:25.010
an anti inflation or anti fiat money point of view, we'll have to,
636
00:56:25.470 --> 00:56:26.190
make that case.
637
00:56:27.789 --> 00:56:37.855
I think there will be a lot of resources put into chain surveillance. So, you know, Coinbase are putting money into that. The chain analysis of the world are getting government contracts
638
00:56:38.220 --> 00:56:48.035
to do spying on people and to have that sort of exchange relationship. So these are all yeah. They're a bit concerning and, what you'll see is actually really interesting on this sort of stuff as well is,
639
00:56:48.915 --> 00:57:00.540
Ergo BTC from the samurai camp. He's a part of OXT research. He often does some research reports on some of these hacks and he'll trace it through. And funnily enough, he ends up tracing it through some exchanges and being like,
640
00:57:00.920 --> 00:57:02.300
this money went to Binance.
641
00:57:02.680 --> 00:57:04.620
So someone knows who this person is.
642
00:57:04.945 --> 00:57:07.525
So, certainly very interesting guy to follow,
643
00:57:08.385 --> 00:57:15.880
in terms of his ability to trace things on chain. He's like a white hat on chain analyst, so he's an interesting perspective there.
644
00:57:16.980 --> 00:57:17.480
Yeah.
645
00:57:17.940 --> 00:57:23.655
646
00:57:23.955 --> 00:57:26.775
Advocates and people who attempt to use Bitcoin privately,
647
00:57:27.395 --> 00:57:29.575
will be a u used as an excuse to
648
00:57:29.900 --> 00:57:34.079
enforce greater KYC laws and make them even more burdensome and more dangerous.
649
00:57:35.099 --> 00:57:36.880
Ransomware is not Bitcoin's fault.
650
00:57:37.345 --> 00:57:43.205
We've entered the era of digital money. There's no going back now. These companies need to secure their data better.
651
00:57:43.505 --> 00:57:45.365
They shouldn't get hacked in the first place.
652
00:57:45.690 --> 00:57:52.590
The rent no one blames cash when, someone gets kidnapped and you you have a double bag of cash to pay the kidnapper.
653
00:57:53.285 --> 00:57:58.345
If anything, bitcoin makes the ransom more safe because you don't have to actually have that physical transaction.
654
00:57:59.444 --> 00:58:01.545
And then the ultimate irony of ransomware
655
00:58:02.300 --> 00:58:02.800
is,
656
00:58:04.220 --> 00:58:09.119
the really dangerous ransomware is So the basic ransomware is a hacker
657
00:58:09.420 --> 00:58:11.280
gets access to corporate systems,
658
00:58:11.595 --> 00:58:19.855
they encrypt all of your data. So they don't actually steal your data, they just encrypt it and then they have the key. So to get the key back, you have to pay them.
659
00:58:20.500 --> 00:58:24.839
And once you pay them, they actually most of the time they'll give you the key because
660
00:58:25.300 --> 00:58:38.470
they just they just wanna get the easy payment and they want people to know that if you keep paying them, if they do it at scale, that you can pay them and you can reliably get the key back. The new breed of ransomware actually a lot of times takes the data hostage as well.
661
00:58:39.090 --> 00:58:39.590
And
662
00:58:40.130 --> 00:58:41.990
the unfortunate reality is
663
00:58:42.530 --> 00:58:46.550
ransomware is gonna be used as a reason to collect more information on people,
664
00:58:47.045 --> 00:58:50.825
And then that information is gonna get stolen by the ransomware hackers
665
00:58:51.285 --> 00:58:56.470
and make ransomware even more profitable for them because then they can go and sell that data. So so
666
00:58:57.250 --> 00:59:01.190
the the strategy that's gonna be used, unfortunately, to try and fight ransomware
667
00:59:01.569 --> 00:59:07.095
is actually gonna be making ransomware more dangerous and and increase the incentive for it in the first place.
668
00:59:07.395 --> 00:59:08.515
And, you know, I just,
669
00:59:10.515 --> 00:59:17.530
I I I just when when these ultimate these ultimately, it's used as an attack against Bitcoin and just, you know, encryption in general,
670
00:59:17.910 --> 00:59:23.595
I hope that, you know, enough people will start pushing back and and saying that it's unreasonable and puts Americans at risk.
671
00:59:24.055 --> 00:59:25.675
672
00:59:25.975 --> 00:59:35.880
673
00:59:38.365 --> 00:59:40.464
674
00:59:41.484 --> 00:59:48.960
I wanna see I wanna see more privacy development, you know. I I don't think, you know, we need, like, the 28th KYC on ramp.
675
00:59:49.340 --> 00:59:52.160
You know, like, let's I and I'm, you know, maybe
676
00:59:52.620 --> 00:59:59.335
maybe I'm being a little bit of a dick because I'm not coding it, you know. So I so I just get up here and just push for it. But,
677
00:59:59.635 --> 01:00:00.535
you know, I
678
01:00:01.075 --> 01:00:02.454
I I I want to support
679
01:00:02.914 --> 01:00:06.500
developers that are focused on privacy in a free open source way,
680
01:00:08.180 --> 01:00:09.720
And I wanna see less,
681
01:00:10.420 --> 01:00:16.360
you know, money going to these, just the 28th, 29th, 30th KYC on ramp that's regulated.
682
01:00:16.885 --> 01:00:22.425
And then the second thing is it's not even a development thing. I wanna see the existing regulated companies
683
01:00:23.045 --> 01:00:24.185
start putting money
684
01:00:25.119 --> 01:00:33.460
on the side to fight for users' privacy. Like I I I expect them to comply with the laws, but, you know, you know, pay up and fight.
685
01:00:33.895 --> 01:00:43.560
Like, actually try and and push back and try and reduce some of these, you know, oversteps because all we've seen is it get worse and worse and worse and worse. We haven't seen any pullback.
686
01:00:45.160 --> 01:00:45.800
687
01:00:46.760 --> 01:00:50.700
I think yeah. So privacy development maybe an example might be
688
01:00:51.615 --> 01:00:59.660
lightning privacy stuff like opening channels with a coin join. I don't know. People like Lisa and I go to talking about stuff like that, dual funded channels and things. Or maybe like
689
01:01:00.059 --> 01:01:08.559
lightning wallets that also combine coin join. But right now there's no one that sort of you either do one or the other world. There's no one who's sort of doing both. Maybe that's an angle.
690
01:01:09.765 --> 01:01:27.765
691
01:01:28.224 --> 01:01:32.244
692
01:01:33.159 --> 01:01:42.865
I Yeah. I think some of the, like, the lobbying stuff I think is like I I think people get frustrated because they they sort of
693
01:01:43.244 --> 01:01:43.744
sense,
694
01:01:44.925 --> 01:02:05.230
like, there's not much you can do about it, but the like, these people in this government are just putting out this more regulation, more regulation, and they're kind of creeping and creeping. Even, now this new thing of every transaction on the what is that? $600? $600. Yeah. Right? So, like it's not even just a bitcoin thing, it's just a life and just financial services in general. They're just closing the doors, closing and shutting the gates and try to
695
01:02:06.910 --> 01:02:08.210
yeah, push everyone. So
696
01:02:08.830 --> 01:02:15.645
697
01:02:16.105 --> 01:02:16.605
somebody
698
01:02:17.065 --> 01:02:18.445
that owns one of these companies.
699
01:02:18.905 --> 01:02:25.140
Have those conversations. We've invited a number of local politicians, and I hope they are gonna come to these future meetups,
700
01:02:25.760 --> 01:02:27.060
and just have these conversations,
701
01:02:27.520 --> 01:02:34.565
get them to use Bitcoin, get them to understand Bitcoin. Because once you use it I mean, we have senator Lummis that disclosed, I think it was today or yesterday,
702
01:02:34.865 --> 01:02:46.365
703
01:02:47.085 --> 01:02:48.705
I wanna be absolutely clear,
704
01:02:50.765 --> 01:02:52.945
that Bitcoin is a massive step improvement
705
01:02:54.049 --> 01:03:05.775
over the legacy financial system. Like, if you use Venmo, you have no privacy. Like, the majority of my peers are using Venmo and credit cards and Cash App, and they just have no privacy whatsoever. Disclose it. So
706
01:03:06.395 --> 01:03:08.575
well, when I'm talking shit, I don't have to disclose.
707
01:03:09.435 --> 01:03:11.055
Cash App sponsored the podcast.
708
01:03:14.540 --> 01:03:18.320
So bitcoin is a is a step improvement, a massive step improvement,
709
01:03:18.895 --> 01:03:22.515
And, we already have tools that make it easier to use Bitcoin privately.
710
01:03:22.895 --> 01:03:24.275
Those tools will get better.
711
01:03:25.055 --> 01:03:28.860
Improvements will be made. Those will make the tools even better. And,
712
01:03:29.340 --> 01:03:33.920
I'm I'm definitely optimistic long term, and I think Bitcoin is a massive net benefit,
713
01:03:34.220 --> 01:03:47.200
714
01:03:47.900 --> 01:03:57.335
mining, lightning. So our next meetup for this group, you know, whoever wants to sign up, it's gonna be on, November 10th. The topic is gonna be why is custody
715
01:03:57.955 --> 01:03:59.815
your why is custodying Bitcoin yourself
716
01:04:00.115 --> 01:04:01.575
super vital and important?
717
01:04:01.990 --> 01:04:05.290
We're gonna have some folks from Unchained, River potentially, and others
718
01:04:05.590 --> 01:04:06.490
coming in town.
719
01:04:06.790 --> 01:04:13.005
And then on December 8th, it's gonna be At Home Mining. Doctor Fomo and I, gonna work on that. That's you, buddy.
720
01:04:14.105 --> 01:04:15.805
And, and then in,
721
01:04:16.184 --> 01:04:29.170
January 12th, it's gonna be lightning focused. So the reason why I was super excited, and thanks thanks to these guys again for spending time with us, is to really set the base around why Bitcoin privacy is so important
722
01:04:29.595 --> 01:04:31.935
before we accumulate as much
723
01:04:32.555 --> 01:04:37.215
as many stats as humanly possible and live a super awesome life. So,
724
01:04:38.130 --> 01:04:42.310
and one other thing, David Bailey in the back. Yeah, I saw you sneak in.
725
01:04:42.770 --> 01:04:55.255
He's the CEO, and he was my queue, by the way, to give the Bitcoin Magazine guys a shout out. But, thanks again to them for sponsoring the drinks tonight. They are literally, not to dox them, but it's on Google. So they're right across the street.
726
01:04:55.880 --> 01:05:01.100
And they're a huge, huge Bitcoin company here in Nashville, Tennessee. So thanks again to those guys.
727
01:05:05.465 --> 01:05:06.845
Do you wanna make an announcement?
728
01:05:10.265 --> 01:05:10.765
Okay.
729
01:05:11.590 --> 01:05:15.130
They got something cool in the works. Potentially, it'll be on Twitter tomorrow.
730
01:05:15.590 --> 01:05:18.250
And thanks to Jackalope. Please tip your bartenders.
731
01:05:18.845 --> 01:05:19.744
They are awesome,
732
01:05:20.285 --> 01:05:21.005
to work with,
733
01:05:21.565 --> 01:05:23.424
here as well. So, Matt.
734
01:05:24.045 --> 01:05:25.005
735
01:05:25.325 --> 01:05:28.224
I wanna thank Mills as well, the co host of,
736
01:05:28.830 --> 01:05:32.370
Nashville Bit Corners. I wanna thank Nashville. I love your city. It's a great city.
737
01:05:34.110 --> 01:05:37.010
I just you know, I don't want I don't want people to be discouraged.
738
01:05:39.345 --> 01:05:44.805
I think, you know, take your own journey. Don't get overwhelmed. Small steps, small improvements help.
739
01:05:46.220 --> 01:05:47.359
Every little thing
740
01:05:47.900 --> 01:05:57.145
you can you can cut out of your life that hurts your privacy does help. It does make a difference. You know, unplug your Alexa, unplug your Google Home, take off the smartwatch,
741
01:05:58.405 --> 01:06:00.345
the little things, it's it's important.
742
01:06:00.920 --> 01:06:03.660
I wanna thank Bitcoin Magazine for sponsoring.
743
01:06:04.920 --> 01:06:08.859
I literally spent, like, 7 hours at their office today going over Bitcoin 2022.
744
01:06:09.405 --> 01:06:13.265
It's gonna be absolutely insane. It's gonna be in Miami April 6 through 9th.
745
01:06:14.925 --> 01:06:15.425
55,000
746
01:06:15.725 --> 01:06:23.980
people. They they tell me no, but I think it's gonna be 50 5,000 people, the largest bitcoin only conference in the world. I don't know your track record on price predictions. You can. And,
747
01:06:24.940 --> 01:06:27.280
we're gonna be over 200 k by congress today.
748
01:06:29.445 --> 01:06:31.225
You can buy your ticket at b.tc/conference.
749
01:06:32.885 --> 01:06:34.425
If you use code 1 trillion,
750
01:06:34.910 --> 01:06:44.484
you get 21% off. You pay with Bitcoin, you get a discount. I don't think that price will ever be cheaper than it is today. You will get FOMO in, like, May. No, May's afterwards.
751
01:06:44.785 --> 01:06:51.765
You will get FOMO in, like, February, March, and end up paying way more money to go. So consider buying your ticket now.
752
01:06:52.990 --> 01:07:03.765
My two shows are Citadel Dispatch and Tales from the Crypt. Open up your favorite podcast app, ideally a podcasting 2.0 app so you can stream sats using lightning, just load it up with sats, go to new podcastapps.com.
753
01:07:04.705 --> 01:07:10.130
You can look up the podcasting 2.0 apps. Once again, thank you all. I really do appreciate you.
754
01:07:10.990 --> 01:07:15.730
Bitcoin is going to the fucking moon. We're gonna change the fucking world together. Stay humble, Stack Sats.
755
01:07:16.270 --> 01:07:16.770
Yeah.
756
01:07:19.765 --> 01:07:20.985
757
01:07:22.245 --> 01:07:22.905
there are
758
01:07:23.525 --> 01:07:29.500
different ways you can go about this. Right? You can start by just earning non KYC if that's if that's, important.
759
01:07:29.960 --> 01:07:30.619
You can
760
01:07:30.920 --> 01:07:31.420
use
761
01:07:31.720 --> 01:07:35.500
easy wallets like Sparrow. You can use Samurai Wallet, and you just get started
762
01:07:35.985 --> 01:07:36.645
and then
763
01:07:37.425 --> 01:07:52.455
step up to things like, say, Ronin Dojo running that as your own backing node for your samurai wallet or run your own Electrum server as the backing for your own Sparrow wallet. So these are some steps you can take along the way if you're interested in the non k y c element of this.
764
01:07:53.015 --> 01:07:56.955
And, you know, it doesn't have to be all or nothing. Right? So you can have, like,
765
01:07:57.255 --> 01:08:08.589
not everyone agrees with with me on this, but you can have, like, some k y c coins and some non k y c coins. So I think you can you can sort of have a foot in both worlds there. So that's another idea that you can take from that.
766
01:08:09.665 --> 01:08:26.440
So at the end of the day, I think it comes back to what I was saying before about the overall system that if it's permissionless and censorship resistant, then that's gonna help make bitcoin more successful in the long run. That it's like if the coins are and you can spend it in a way that's actually fungible and not doxing your stack or doxing
767
01:08:26.765 --> 01:08:47.345
your wallet to people when you every time you make a spend or you receive coins. So there's there are a few interesting elements just for you guys to think about. And of course, if you're interested, I've got lots of episodes on my show or, you know, I've interviewed many privacy advocates and privacy developers. People like Matt, people like samurai wallet, people like ergo, various others who are working on this. So you can find me online, stephanlovera.com,
768
01:08:48.365 --> 01:08:50.030
and of course, swanbitcoin.com
769
01:08:50.730 --> 01:08:55.370
as well. I work for Swan, so you can buy with us, and we're bitcoin only. So you can send them to us.
770
01:08:56.475 --> 01:09:04.975
It for me. Thanks. Thanks for having us. Thanks to bitcoin magazine for sponsoring. Thanks to Rod and Mills for hosting us. Thank you guys for showing up. Thank you, everybody. Cheers.
