BITCOIN REALISM: SCALING, GOVERNMENT CAPTURE, & THE LIGHTNING NETWORK | John Carvalho (THE Bitcoin Podcast) - THE Bitcoin Podcast

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
I think white market Bitcoin is untenable.

(00:02):
I think this is all just a temporary state that any amount of kind of
appeal or evangelism or intentional involvement of getting Bitcoin,
getting government involved in Bitcoin will be regrettable.
I have much more dire serious view about involving government in Bitcoin
because while a lot of the things you said are perfectly reasonable,

(00:22):
I think that what people need to realize is that Bitcoin's biggest enemy is the government.
And so inviting them in is giving them power.
And so we want them to be as ignorant and as blunt and primitive about how they
deal with Bitcoin as possible.
Even if it hurts sometimes banning Bitcoin and things like this,
those are the things that are actually good for Bitcoin.

(00:43):
And then, you know, this is good for Bitcoin in a mean sense,
not the strategic Bitcoin reserve because basically what we don't want is
Bitcoin captured and it can be captured.
Greetings and salutations, my fellow plebs.
My name is Walker and this is the Bitcoin podcast.

(01:05):
The Bitcoin time chain is 884388 and the value of one Bitcoin is still one Bitcoin.
Today, my guest is John Carvalho, CEO at Synonym.
I've known John for a few years now and I always appreciate the fact that he is a
hardcore Bitcoiner who has worked in Bitcoin for years and has built a Bitcoin

(01:28):
company but is also extremely realistic and honest about his critiques of Bitcoin.
This was a great conversation with John, with a lot of playing devil's advocate
on both sides.
And I encourage you to check your preconceived notions at the door,
put your emotions aside, and use this as an opportunity to learn and think.

(01:50):
Before we dive into me a favor and subscribe to the Bitcoin podcast,
wherever you're listening, and make sure to subscribe on YouTube and Rumble as well.
Just search at Walker America.
And if you find this show valuable, consider giving value back by giving it a zap on
Noster or a boost on Fountain.
You can find me on Noster at primal.net slash Walker and this podcast at primal.net

(02:14):
slash Bitcoin.
Without further ado, let's get into this Bitcoin talk with John Carvalho.
I've had multiple people come up and say, I want to share your stuff with my friends
and family, but I'm trying to teach them about how serious Bitcoin is.

(02:36):
And then they see Bitcoin and I'm worried it might put them off.
And it's like, you know what?
I view that as a filtering mechanism.
If you can't take a nice tit-joke, then I just, I don't know, maybe Bitcoin's not for
you or maybe it is and I'm being just a bit immature, but only time will tell.
But we were talking a little bit about live streaming a minute ago and you were talking

(02:57):
about how there were some hiccups with setting it up.
And I wanted to mention that like that was one of the first kind of projects I did in
Bitcoin was deal with video and live streaming.
And that was what brought me to Romania as well.
Oh.
My business partner was Romanian.
And so we were doing a live video chat website that we were, you could only tip in Bitcoin.

(03:18):
And that was called Exotica.
And that was one of my first Bitcoin projects.
If I had to guess with a name like Exotica, like is my assumption about what sort of video
chatting that was?
Well, you've got Exotica, you've got Romania.
So you guys were in the game before the Tate brothers then.

(03:41):
Oh yeah, definitely.
I'd left by the time they arrived.
That's maybe for the best.
I think they were trying to muscle in on that territory.
And we weren't so much trying to manage the models so much as inform the studios that
they could use this, which is a little bit different, but still interesting.

(04:03):
It's pretty sweet.
I mean, so you've done a lot in the Bitcoin space.
Like I actually, I was thinking today, I was like, I don't know if I kind of know your
full journey through this space because you've done a lot.
You're working on Synonym now and a bunch of stuff within that, which I definitely want
to get into.
But can we start out like at the beginning?

(04:26):
When did you actually get into Bitcoin?
What first attracted you to this and has now clearly infected you with this mind virus
where this is all you want to focus on?
I'll attempt a summary.
I'm sure I'll miss things and I'm sure it will also be a little too long.
But I started in late 2012 basically because I heard about Silk Road and I was like, people

(04:51):
are buying drugs online with Bitcoin.
What's going on?
How is this possible?
So I bought my first bitcoins for about $10 each, sent them immediately to Silk Road
and bought some weed.
At the time where I was living, it wasn't very easy to get anything really as far as
drugs go.

(05:13):
Legalization was not quite where it is today either.
And I thought I'd try it.
And after a couple of times, I got really paranoid and stopped doing it.
And then a month later, I got shut down.
So my timing was pretty lucky in that regard as far as discovering Silk Road pretty early
in Bitcoin and then not getting wrecked when it got shut down and this kind of thing.

(05:38):
In the first few years of Bitcoin, I actually operated under a different identity, two different
identities, one and then another.
I haven't really revealed either of those publicly.
I was very active in the Bitcoin world in that time and maybe someday I'll tell that
story but not today.
And at some point, I realized that it was impossible for me to be how I am and not get

(06:04):
some attention.
In other words, the reason why I burned my first handle was because I felt like too many
people knew I existed.
And back then, it was a little more scary.
We thought maybe the government was going to pull Bitcoiners on a list and go after
us and it was a little more uncertain than today, a little less accepted than today.
And so I became paranoid and I burnt that handle and started another one.

(06:28):
And then I got even more well known with that one and I was like, shit, I have to stop doing
this.
You know what I mean?
And then I also felt bad from burning the first one because it was a waste of time because
I still became relatively known again and I thought, okay, well, I'm just going to burn
both of these and just use my real name.

(06:49):
And around then was when, as I mentioned to you earlier, was when Bitcoin Uncensored was
a really popular podcast and they were basically kind of like Howard Stern for Bitcoin, like
shock jocks and interviewing like gay prostitutes that accepted Bitcoin and things like this,
people that sold drugs and all kinds of crazy people.

(07:10):
Crazy.
Back then, they liked making fun of the early shit coiners because they were just really
dumb and ridiculous.
Was that much change to now though with the dumb and ridiculousness of shit?
I can't stress enough that I think if you ask around, you can get your hands on a torrent
file of most of the old Bitcoin Uncensored episodes and everybody should watch it, should

(07:32):
be required watching, honestly.
You don't really have an understanding of Bitcoin culture if you missed that.
It did get a little bit crazy towards the end.
One of the hosts split off and did his own podcast, became a B-cashier and kind of got
a little crazy, but now he's not doing anything in crypto at all.
It's a story of the past, but I definitely recommend it.

(07:55):
During that, they started streaming as a joke.
They started live streaming their show on a porn chat website, a video chat website.
I was like, what the hell?
It was just hilarious.
You know what I mean?
For them, it was perfect and they did it for a while.
At the time, I was going through a divorce and I was like, I want to do a Bitcoin project.

(08:18):
I was already doing Bitcoin full time since the very beginning in one way or another.
Eventually, I had a business.
I closed and wound that down, marketing and design and branding.
I was doing pretty well and all I cared about was Bitcoin.
Then I decided to take on the guy who was making that website that they were streaming

(08:38):
on.
I became business partners with him.
After I got divorced, I didn't like where I was living.
That was one of the reasons I was unhappy.
I just decided to travel for a few months.
I went and visited the business partner in Romania and ended up staying there for four
or five years.
During that time, we tried to run Exotica.

(09:00):
I ended up pretty much getting scammed by the business partner.
I was funding it myself and I ran out of money and decided to get a job or at least a joke.
I made a tweet with the little butterfly meme and it had a picture of the Twitter link,
the Twitter icon and it said, is this a job?
Sergey from BitRefill asked me if I was serious or if I was joking and I said, well, it depends.

(09:25):
Are you serious?
We had a conversation and I joined BitRefill as their chief communications officer.
I was getting their marketing off the ground, getting their paid advertising.
Passing off the ground and doing a lot of Bitcoin related business development.
We ended up convincing Bitfinex to be the first major exchange to run a Lightning node.

(09:51):
They ended up, I think they still are the biggest set of Lightning nodes on the network.
Eventually my ideas started getting more ambitious.
I tried to fit those ideas into BitRefill and BitRefill said no, which was totally reasonable
because it would have been changing BitRefill to a notable amount.

(10:13):
But the reason why I bring up Bitfinex is because through that business development
relationship specifically, I ended up getting to know Apollo a little bit better and I essentially
asked him, I said, hey, if Sergey doesn't want to do this, will you fund it?
And I put together a more formal deck explaining the initial vision of the company and he said,

(10:33):
yes.
So we ended up coming to a deal to where we didn't, I didn't want it to be a normal startup.
I didn't want to have to fundraise every couple of years and this kind of thing.
I don't like VCs for the most part.
And so we made an arrangement to become a subsidiary of Tether.
So we're kind of like their Bitcoin and peer-to-peer web research company.

(10:55):
But we also make products.
Sorry, I've been talking for a while now, but I'm sure I missed some things.
There's a bunch of things I missed in there.
But yeah, that's kind of leads us close to where we are now.
Been doing Synonym for roughly almost five years now.
First two years, we're totally in stealth.
We didn't tell anybody anything we were doing.

(11:15):
And this year is probably finally the year where I think we're going to finally have
one full loop of an example of everything that we're trying to build.
First of all, there is no need to ever apologize for going too long on this show.
It does not exist.
I think that because everybody thinks I'm arrogant.
So I have to like disclaim everything I do.
You know, John, I know you.

(11:36):
So there are no disclaimers necessary on this show.
Just let it flow.
But I appreciate the background.
And honestly, I'm still just kind of, I'm working through the idea that shit coiners
in the early days were like even more shit-coiny than they are today.
Just because the amount of like, like the sheer number of these scams, of these shit

(12:01):
coins that are proliferating now is like mind boggling.
Like this new like pump dot fun thing.
If you see like, it's really a better way to put it was less sophisticated.
We kind of went through a cycle.
Like it was like less sophisticated, more naive and just more ignorant to highly skilled
and highly divisive and toxic methods.

(12:22):
And now we've kind of come back down, you know, the curve again to things like pump
dot fun was just explicitly like turbo Ponzi's, you know,
Okay.
That's, I think that's a fair characterization because that's, that's the wild thing now
is I feel like it also, it was talking with.
We had those back then too, by the way, they were called gems.
Oh, okay.

(12:43):
Yeah.
We had these websites that basically where you deposited the Bitcoin and now you owned
the gem.
It was just a picture of a gem and you tried to sell the Bitcoin to the next person and
you just had, you just kept passing it to see like a hot potato.
How high the price would go until somebody kept the gem.
Well, I mean, like that's the mind blowing thing though is that I feel like right now

(13:05):
especially because like in the early days, like you said, you needed to, you needed to
use Bitcoin to basically enter in to this, to this market right now.
There's a lot of different, you know, you don't need to sell Bitcoin in order to get
access to these shitcoin scams.
You can go in, you know, there's all sorts of like fiat conversion on ramps that you
can use now.
But I feel like that means that like the capital is no longer rotating out of Bitcoin and into

(13:31):
these shitcoin scams.
It's just kind of one big, just like, I don't know, vortex of, you know, well, it's a shit
vortex essentially where all of this money is just circulating.
Everybody's looking for the next big thing, but it feels like, I don't know about the
vibe that you're sensing.
It feels like there's sort of a growing realization, like shockingly finally, I haven't been around

(13:54):
as long as you, but even in my few short years here, it feels like now there's this realization
that like, okay, yeah, this stuff is just all a scam.
We're just admitting it's all a scam.
Yes, Bitcoin is like, if you actually want to be able to preserve any wealth, Bitcoin
is there, but we're just going to call all of this stuff.
We're just going to be honest about it.
Like Dave Portnoy basically being like, Hey, you know, I'm going to, I'm tweeting about

(14:16):
this shitcoin.
I'm going to rug this shitcoin in like a few hours, but hey, you might be able to make
some money in the meantime, but I warned you.
So it's okay.
And like, I mean, you've got Javier Malay like retweeting, fucking that Libra shitcoin.
Like it's just, it's also in your face now.
Like there's no, there's no shame.
There's no like hiding it.
I think to some degree, Malay was probably scammed too.

(14:38):
Probably.
There's a lot of ignorance.
Like it's mostly ignorance in the whole industry.
On some level, on one way or another, there are people speaking about what they don't
know what they're talking about, almost everybody.
So like I, I'm not saying he should be forgiven so much as this is a very predatory behavior.
This is a very exploitative behavior.

(15:00):
And that's what you're identifying.
It wasn't all, and maybe that's another way to look at the past is they weren't, the
whole like mega exploitative aspect of shitcoinery didn't really enter until like people like
a 16 Z entered people.
Like what was the, the coin desk company coin, people like coin shares, which actually

(15:20):
was invested in by Jack as well.
You know, we started having serious people trying to create coins for selling as products.
That was when the exploitation really began.
But in the earlier days, it was kind of like, oh, I made another Bitcoin, but this one has
a shorter block time.
Oh, cool.
You know, it was like just innocent experimentation.

(15:42):
And then once people saw how much you could make off of this, we started having some real
schemes go on.
They were like some real pump and dumps going on back in the day, but it was more like Bitcoin
stocks.
Like we had these like fake stock markets with like fake shares of fake mining companies
where they were quote unquote real, sort of like a mix between Kickstarter and the, in

(16:03):
Wall Street, you know what I mean?
But just all, you know, informal.
And then eventually the SEC shot all that down too.
So yeah.
Yeah.
I guess it turns out Gary Gensler was in fact standing in front of just a tidal wave
of shit trying, maybe he was well intentioned.
Yeah.
I never made a verdict on him.

(16:25):
Sometimes he just seemed like, like when you really look at his face, when he's saying
things like he just, he just has this look on his face like, all right guys, I get it,
leave me alone, but I got to say this, you know, like I got to do this is my job.
Like he just seems so like unconcerned when you look at his face.
You know?
Yeah.
I think he had a lot of pressure too.
Like I'm not trying to absolve him of any potential sins, but I'm also realizing that

(16:49):
there was certainly a lot of external pressure from within, you know, forces within the,
you know, last administration.
If we're talking about like Operation Chokepoint 2.0, like there, there were a lot of external
factors and I don't really think that Gary was very much in control.
I mean, I'm not totally sold in that narrative, by the way, the Chokepoint thing.

(17:10):
Okay.
I think that maybe there was some of that there, but that probably most of it was just
natural hesitation and natural, you know, being timid about the situation and unsure.
And that the other half of it was actually just really exploitative, shit-coiny people
trying to do things that normally they shouldn't be able to get away with.

(17:31):
And sometimes they did.
And then when they were, when walls were put up, they called it Chokepoint 2.0.
Now I know that there are probably some legitimate efforts that also got choked.
I just don't think it was necessarily a huge, you know, conspiracy to, you know, to chill
the industry or such.
I think that there were a lot of people in the industry trying to legitimize illegitimate

(17:52):
things and the industry was a little bit immune to it.
I think that there, like, it would be impossible to deny that there was a shitload of just
Tom Fulery and Shenanigans going on.
Look at the people complaining.
It's like all, you know, look at the people that have spearheaded the idea of Chokepoint.
It's not people that are like doing freedom technology for Bitcoin and Cypherpunks.

(18:16):
It's people that have like these investment companies and VCs and people like, I don't
know, Eric Wall and these kinds of guys, like these really toxic people.
And there's also like, there's very obvious things like the treatment of Silvergate versus
Silicon Valley Bank.
Like there's certain things where like, okay, there are some pretty obvious cases where
there were different rules applied.

(18:38):
But I would also very much concede that like, yeah, there's just a lot of shit trying to
pass themselves off.
Some of those people are taking really abnormal risks.
Yeah.
I know that, like, for example, like, Biffenecks didn't get taken down by any of this as an
example.
In other words, when FTX collapsed and Terra Luna collapsed and all these things, it was

(19:00):
all those people that were complaining about Chokepoint that got taken down by those collapses
and ended up being insolvent.
And so I think there's just more to the story and I would never really be all that sympathetic
to people that are doing exploitative things.
It really blows my mind that there are Bitcoiners out there who are not yet on Noster.

(19:20):
Seriously, what are you doing?
Just like you shouldn't need to ask permission to use your money.
You shouldn't need to ask permission to speak freely.
But that is exactly what you are doing.
If you are still stuck only using centralized social media platforms on Noster, you're
you can't be censored.
You can't be banned.

(19:40):
And you can't be deboosted for saying words that Elon Musk or Mark Zuckerberg don't like.
Noster also has Bitcoin payments built in.
So when you post a meme, a spicy hot take or just a photo of a really nice steak, people
can zap you Bitcoin to show you they like what you posted and find it valuable.
So if you want to stop larking, you can find me on Noster by going to primal.net slash Walker.

(20:06):
You can find this podcast on Noster by going to primal.net slash TIT coin.
Primal has a built in Bitcoin wallet so you can literally get zapped by people for your
posts.
Then use those sats to buy a coffee or do whatever you want all from the same app.
Search for primal in the app store.
Go to primal.net or check out any of the hundreds of other Noster apps that are out there because

(20:32):
you can freely switch between them anytime you want.
So come join the largest circular Bitcoin community in the world and start zapping sats
on Noster.
Shitcoining is bad for you.
And you know what else is bad for you?
Trusting a centralized exchange to keep your Bitcoin safe.
So go to bitbox.swiss slash Walker and use the promo code Walker for 5% off the easy to

(20:59):
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Nation states are buying and unless you have your head stuck in the sand, you realize that

(21:19):
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in fiat value because we all know one Bitcoin equals one Bitcoin, right?
So now is the perfect time to make sure you have your security locked down tight with Bitbox.
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(21:39):
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(22:01):
Not only do you get 5% off a great piece of Bitcoin only open source hardware, but you
also help support this podcast.
So thank you.
Yeah, I'm much more sympathetic to open source devs.
Yeah, I was just gonna say I'm much more sympathetic to open source devs who are taken out and punished

(22:22):
for writing code than I am for people trying to run obvious schemes and pass themselves
off as legitimate and dump on retail.
But yeah, well okay, shit coins aside.
We've given them too much air already, but they are fun to talk about.
Let's talk about Bitcoin because John, I always appreciate your perspective on things.

(22:45):
Because and I think oftentimes you may rub people the wrong way because you come off
as like very direct and oftentimes do not buy into usual Hopium type NGU narratives and
are sometimes a cool refreshing breeze to chill people out a little bit.
But a lot of people don't like that and they view it as naysaying and whatever else.

(23:07):
Personally I do because I think that if we don't stay grounded in fact and reality then
like what the fuck are we doing?
We're just kind of blowing smoke up each other's asses and that doesn't get us anywhere meaningful.
And so one of the kind of big themes I wanted to talk to you about today is generally misconceptions
about what Bitcoin is, what Bitcoin isn't, what Bitcoin can do, what Bitcoin can't do

(23:33):
on kind of a let's say societal level.
Because I know one of the things that you've said that's really sparked the ire of a lot
of folks on on X formerly known as Twitter.
You said something like Bitcoin is not money.
Can we talk about that a little bit as a jumping off point and just aware that reasoning comes
from because a lot of people like myself included would say like well if you use it as money

(23:58):
it's money.
You know if we're talking lowercase b Bitcoin like Bitcoin the network uppercase b is the
network right?
It's the protocol.
Lowercase b is money.
I use it as money.
So where does that kind of reasoning come from on your side?
There's a lot of nuance here which is probably going to make it not as fun for listeners.
But first of all I'll disclaim that like I just hate the topic of what is money.

(24:22):
I think it's just riddled with so much bullshit.
It's hard to find a good conversation in my opinion by normal people especially about
what money is.
I think it's mostly just people like kind of circumnavigating all of the ideas that
they've heard about money and trying to do this associative thing where they can maybe

(24:45):
connect some of the things and they make this really like ugly mental model that is just
rickety and awkward.
And they share it with each other and everybody and then they people hold on to the aspects
that they feel are good narratives for making them rich or making them feel more comfortable
with their investment or speculation this kind of thing.

(25:05):
So my disclaimer is that I'm not going to pretend that I have some sort of magical better
definition than money.
I think the whole topic is bullshit because my deficient of money is simply how you use
the most popular goods.
And so that's my only qualification for money is it's the most popular good in a marketplace

(25:26):
and what it's made out of is not really very important.
It's just how you use it.
And so to call Bitcoin money or for me to say that it's not money is probably more
related to a specific context.
In other words money is something you use to buy things right.
But Bitcoin doesn't scale.
Bitcoin blocks get full and fees go really high.

(25:47):
Layer twos become unreliable when blocks are full and the security models totally fall
apart.
And so calling Bitcoin money while most of the Bitcoin community is more interested in
Bitcoin ETFs Bitcoin strategic Bitcoin the strategic Bitcoin reserves you know getting
rich off of the speculation of Bitcoin the Ponzi aspect of Bitcoin for lack of a better

(26:11):
term because there is no term that is something that is like a Ponzi but not having a leader.
You know there is this aspect to it.
And so I think that calling Bitcoin money if you want to be sincere means that you have
a philosophy about trying to get as many people to use Bitcoin as possible for commerce.

(26:32):
I don't think there's a very big constituency of that right now in Bitcoin.
There used to be a little bit of a movement especially back when I was at BitRefill it
felt like it was really going places.
But right now I would say that maybe you know people that use BitRefill are the only ones
some of the few ones actually trying to live on Bitcoin and using it as money and the use

(26:53):
case of actual active users that are using Bitcoin as money or even Lightning Network
at all is pretty insignificant in the grand scheme of things.
And so to call Bitcoin not money I would say I probably was mentioning it in a context
but just also all of these other things I don't like about the topic of money because
there's all these weird little like arguments and nuances you get into that benefit no one.

(27:18):
Like I could tell you that I think you know from reading Eric Voskill's work his book
Crypto Economics that he has a pretty good theory for just calling Bitcoin market issued
a fiat and there's a whole kind of way of looking at Bitcoin from an economic standpoint
that way that it's all fiat when it's meant to be purely money and it's just a matter
of who issues it right.

(27:40):
And so there's a lot of different ways to look at it.
None of them are terribly useful in your life.
And so from your perspective like it's not even worth the debate of okay well you know
money can also fulfill the role as a store of value even if people are using it as a
store of value that you know you're just okay you're just trying to classify this thing

(28:01):
but these classifications are ultimately irrelevant is kind of a larger point.
They make a checklist of things that Bitcoin meets as requirements and then they reverse
engineer that being the requirements for money and they say oh it must be the artist money
it must be the most portable blah blah blah blah no it only needs to be the most popular
good in a specific marketplace that's my definition of it.

(28:24):
It doesn't really matter what it's made out of whether it's fiat or credit or cryptocurrency
it's just not that important unless you're using the specific facets of that thing.
For example Bitcoin is specifically going to be best at censorship resistance for the
most part.
Again this context to this as well.
So like if what you care about is censorship resistance if what you care about is you know

(28:47):
having free markets then you care about using Bitcoin itself as money not using putting
Bitcoin in account like a strike account and then paying in a custodial way over lightning
that's not real it's all a lark right like we don't need lightning if we're going to
trust businesses to run it for us only businesses need it and so there's I don't know I could

(29:10):
go on and on sorry.
No no I appreciate that perspective because I think it's one of those things that it like
it is important to talk about what you think the purpose of Bitcoin is.
I mean you in the general sense here like you know all of you people like what is the
purpose of Bitcoin because I think there's kind of an ongoing debate like and I'm sure

(29:33):
it has been for since much longer than I've been around obviously about the whole okay
store of value versus medium of exchange does Bitcoin need to be actually used as you know
as a medium of exchange in order to be successful to continue you know doing what it does or
is it enough that we have protection against monetary debasement by governments and central

(29:56):
banks it works as a store of value okay maybe it doesn't need to be the medium of exchange
we thought it did but I mean you know to your point about you know okay Bitcoin base layer
doesn't scale like yes you know that's that's that's fair right it is what it is the blocks
are well they're they're capped hopefully will remain capped but do you see.

(30:19):
I think we should be raised by the way but I would well that's what I was gonna that's
what I was gonna ask because you you were also you I mean you go back to that interview
with our debate you had with Roger Vair you guys were basically you know debating this
I haven't watched the full thing I've watched a good amount of it but I'm curious what what
is your reasoning for saying that the base layer block size that that needs to be raised

(30:42):
well it doesn't need to be so much as if you're going to establish what your goals are or what
you define Bitcoin as there are for many definitions that people claim to have for it there are
these requirements where you would need to have people using Bitcoin to make payments
you need to be using Bitcoin in the base layer and not trusting sorry where were we I'm thinking

(31:07):
well yeah just no no no yeah just wondering like okay so so you're saying it doesn't necessarily
need to be raised the block size but you're you're saying there's a conditional if there
as an if you want Bitcoin to be something at the base layer then you need to have a block
size increase right Bitcoin literally does not scale this is an objective statement this

(31:29):
is not like me being an asshole it's just the design of it it literally just as a definition
as you as you explain it to other people or other engineers or such it does not scale
but the only thing close we have to scaling it is to require each node to allocate more
resources to it every node which would be increasing the block size or you know increasing

(31:51):
the size of the chain in general the disk space required etc and so when people talk
about scaling Bitcoin what I say is well you only have a few options you can either you
know try to somehow soft fork in more block space you know in a kind of incremental safe
way in other words only do it when it's clear that it's needed like blocks have been full

(32:11):
for six months or a year or years whatever threshold people want to agree on but one
that's very you know obvious once we find a safe way to do that because it's not a lot
of research in the area anymore or you could invest in like making disk space cheaper making
networks faster this is how you have any hope of scaling Bitcoin but you're always going

(32:34):
to hit ultimately the limit of the speed of light that's going to be your ultimate limit
and so you have distance or you know across the earth of trying to send Bitcoin and once
you have once you hit a size where people can't stay in sync and you start having more orphans
and fragmentation of the network then that's it you reach the limit you know I mean this
there's nothing more and you know unless we discover something faster than the speed of

(32:56):
light and we have quantum Bitcoin and whatever then but for our current understanding that's
it and even then we're not going to fit everybody and so this idea that we can fit everybody
that Bitcoin is for everybody is just you know factually untrue and so you know if how
you think about Bitcoin depends on what your philosophy is for what you want it to be and

(33:18):
how you use it and so a lot of people don't think that much about it because they just
think it's something that they want to get rich from but if you actually want like a
censorship free society and you know open free markets where people have you know this freedom
of association and freedom to you know organize however they want you need a lot more tools

(33:39):
and you need a lot more open-mindedness about scaling Bitcoin because I don't think that
things like UTXO sharing or basically how we how we make the lightning network layer
have proven to be scale well themselves even lightning itself is trending towards being
very centralized over time and less and less people using it self custodially that could

(34:01):
change but in the end there's all these limits in place and all these kind of trade-offs
so you have to be more realistic and more down to earth when you're talking about these
things that's what I find the most difficult is just getting someone to just accept what
I'm saying you know at a literal value instead of attaching all their emotions to it and

(34:21):
reacting. I agree with that and sympathize with the sentiment greatly one thing that
I would ask in the interest of realism though is that is it at all realistic for and I'm
not saying possible like let's assume technical feasibility of Bitcoin base layer scaling
through whatever mechanism maybe through a block size increase scaling to be able to

(34:45):
encompass all the you know eight plus billion people of the world or however many ten billion
that'll be at that point is it realistic to assume that everybody in the world needs to
use Bitcoin at the base layer or wants to use Bitcoin at the base layer.
No I mean I think that those are all reasonable questions. This is again you have to choose
your goal when you're discussing the design like a lot of times people are discussing

(35:09):
with Bitcoin is about its design and altering its design and this is like something that's
for engineers to discuss for architects to discuss this is not like something to just
toy around with and people take it very unseriously but yeah it really depends on what you're
going for do I think what I'm what I would recommend going for is basically that let's

(35:29):
figure out where the sweet spot is and see if we're happy with it. Let's figure out how
much we could actually reasonably scale Bitcoin safely by increasing block sizes through layers
through whatever else and see how many people even care to use Bitcoin this way because
it might be that most people for the next hundred years only care about having Bitcoin

(35:52):
in a ETF you know and then there's 20% of people that care about the rest and if that's
true Bitcoin only needs to scale that much. Now you're always going to wonder if it could
take more scale if more people would use it that way because ultimately all the fees
are exclusive right so the higher the more it costs to run a node the less people are

(36:13):
going to run nodes at some you know some function the more it costs is end of Bitcoin transaction
the less people will buy Bitcoin the less people will spend Bitcoin. It's exclusive
in every way when fees go up and it doesn't matter where the fees go up it just starts
excluding people once they go up. Yeah I mean that it's it's definitely true but also

(36:34):
isn't that competition what adds another layer of you know another layer of security to Bitcoin
itself knowing that there is some finite you know not only is the total supply capped but
that the you know ability to transact on chain is not just a you know it's not free or near

(36:55):
free there is a real world material cost to it which you know prevents people from just
using it for whatever they want or for not having very much economic incentive to actually
pay the fees that will then support the miners who are you know hashing the blocks.
I'd say I generally agree but there's nuance there like for example if the culture of the

(37:19):
engineer designing it and the culture of the people using it is such that we say we give
up on commerce we give up on small transactions we give up on you know point of sale Bitcoin
purchases because it's just not going to scale it's just too expensive and there's just too
many people that want Bitcoin and the fees and the speed are just never going to meet
it well then that changes the whole culture of what people work on what people expect

(37:43):
from Bitcoin and so now you don't design for that anymore and you lose what you had of it
because it's no longer supported I'll give you an example like I've always been very
much into the idea of using Bitcoin as money to spend it for freedom etc but this one one
thing that we learned at Bittery Fill is that a concept of zero confirmation transactions

(38:08):
was something that a business could actually limit their exposure to in other words we
know that they aren't safe until they're confirmed and back then even till they have more than
one confirmation but we also know that we can exactly limit our exposure and basically
provides their confirmation transactions as a service to customers so basically if the

(38:30):
customer could either establish a reputation with Bittery Fill somehow or Bittery Fill
could allocate a certain amount of money they're willing to lose to double spends per time
period per day per week per year whatever then they could always just shut it off when
that limit was hit and they could say okay well we'll resume again the next time and
they could just we could spend our time mitigating these problems but because the culture is

(38:55):
just so far from that they actually killed zero confirmation transactions intentionally
and made them literally impossible to do safely whereas before we could do them safely now
the culture made that impossible so now you lose a whole use case within using Bitcoin
as money that previously was there and that businesses could rely on then now they no

(39:16):
longer do that they can't provide that convenience for users so these little decisions in culture
are these things affect things in ways that people don't really think about.
I think it was not this past time just in January when we saw each other in El Salvador
but the prior time back in 2022 we had a long conversation about full RBF and zero confirmation

(39:40):
transactions.
That was exactly when the war was happening with them.
I remember it well well I'm curious too so on the because I do want to get into kind
of the layered approach as well because I think that relates directly to a lot of the
stuff that you are building with Synonym and BitKit but I do want to ask as far as one
of the other debates that's ever present it seems again from my short experience here

(40:05):
is the you know to ossify or not to ossify which I think the debate also gets a little
bit clouded because a lot of people who talk about it have never worked in any sort of
software business whatsoever and don't necessarily even understand that like regular maintenance
and upgrades need to be done and that those don't constitute soft forks or hard forks

(40:27):
or you know definitely not hard forks but maybe they don't constitute soft forks either
but regular maintenance needs to be done to keep software in line with the environment
in the real world in which it is being used because things are upgraded constantly a lot
of people confuse that and think no you can just like if everybody just took their hands
off Bitcoin right now it would be fine it's not the case they conflate that with changing

(40:50):
Bitcoin meaning okay we want to bring about fundamental changes we want to you know change
the consensus rules whatever whatever it may be and so I'm curious where you stand on that
you know that there's the other thesis that okay ossification is not like a decision you
make it's a natural process and I'm just kind of curious what your thoughts are on it you

(41:12):
know obviously you think full RPF shouldn't have gone into effect but in a grander sense
where do you stand on this how do you look at it how do you think through the question
of ossifying or is that even the right question to ask that last question is a good question
I think ossification is a meme I think that both sides use concepts related to it to be

(41:36):
manipulative and disingenuous the engineers and you know non-engineers um ossification
I think is when people stop using Bitcoin um so like if it's ossified it's dead I don't
think that Bitcoin ever truly ossifies in the extremist definition of that in other words
the definition that engineers want to use they want to make normal people seem crazy

(42:02):
for suggesting that they should stop changing Bitcoin because it's all because software always
needs maintenance these are they're not having the same conversation they're conflating each
other's conversations on purpose and that's what's shitty about the whole exchange and
that so engineers say these things but then they behave in ways that the normal people

(42:22):
are worried about they say I do want to change Bitcoin I do want to add features and complexity
and softworks I do want to speculate on the design and take risks on the design of this
you know multi-billion trillion dollar network that's live and affecting millions of people
um and they definitely downplay and pretty much have blinders on about the consequence

(42:46):
and the the gravity of their desire to change Bitcoin and willingness to do so even willingness
to change even smaller things like Bitcoin core governance is very oppressive to normal
users because they basically are their own consensus mechanism and the changes to Bitcoin
core because it's a default implementation that everybody uses and it must be compatible

(43:10):
with what people use eventually you are forced to take whatever changes Bitcoin core makes
because they deprecate old versions and so if you if they find some sort of vulnerability
in old version they're not going to patch it in the old version they're going to patch
it in the new version and the new version has all the new softworks so there's not really

(43:30):
a good claim of sort of autonomy or user you know some sort of stability of the code in
the sense that the user is asking for when they discuss ossification yes of course you
get like Twitter assholes that just take things to extremes and speak wildly ignorantly and
they just call they just call for ossification and freeze the code now it's over get rid

(43:54):
of these people but the opposite is true as well where they say the people you know whenever
anybody is telling us to be careful they're just telling us to office ossify which is
ridiculous it's all nonsense and everybody is nobody's being very reasonable in all
these things because the reasonable take is just to be extremely conservative to say we
need to discover and agree on what is extremely high much higher threshold than ever that

(44:18):
we've seen before threshold for determining that a change to Bitcoin has overwhelming
support for its users and its engineers mostly all we get is like this Covenant's proposal
has been around for three years and nobody has any major issues with it and the world
has had enough time to review it we have consensus no no consensus is what we already have on

(44:43):
chain you're out of consensus and you want to change Bitcoin yeah so no I don't believe
in justification as a concept I think that it's like trying to predict the future right
like how do you know if Bitcoin is going to change I don't know you know even if I do
everything in my power to stop it it still could change so how do you know it's gonna
you know I don't know and I think that's a fair way of looking at it and you're absolutely

(45:09):
right that's so much so much so much of these debates is like people there's a lot of let's
say dishonest creative interpretation of what the other side is saying and a lot of you
know well yeah there's a lot of talking down involved to especially when it's like well
clearly you don't understand why this change is so necessary and then the other people

(45:32):
are like well you literally haven't proven that you that it's necessary for anyone right
now so why are we even talking about this and then around and around in circles we go
I'm curious to those so I mean you earlier as we were speaking about scaling Bitcoin
at the base layer you know you mentioned some of the shortcomings with lightning I'm curious

(45:52):
because you guys are also at synonym here so you're building out or have already built
out bitkit it is obviously using lightning what are your thoughts on kind of the current
state of lightning does lightning itself need to be done in a quote sovereign way in a non
custodial way in order for it to be successful or are there some tradeoffs there that are

(46:16):
acceptable for convenience and also how do you approach that at synonym so first I'll
explain you know our involvement in lightning and why despite my you know trying to bring
expectations down to earth that we still included in our products on one hand I'll just say

(46:37):
it's the best option we have despite it having flaws I don't think there's a better you know
speculative thing to be working on on Bitcoin you know without changing Bitcoin of course
in other words stuff that non protocol devs can work on other than lightning arc is okay
but I don't I just feel like it's lightning rearranged to some degree and there's other

(47:01):
things that people bring up liquid I think is just a shit coin I don't think it's a layer
at all and so we include lightning in our products because my original you know one
of my motivations going all the way back to very Phil was using Bitcoin as payments and
lightning was you know there to save us and I was you know definitely you know all gung

(47:23):
ho and supportive of that and trying to do my best to accelerate everything to do with
lightning but now that we've been in the weeds with it and got our hands dirty and seen it
for you know six or seven years now I think it's time to reassess and be realistic about
what we've accomplished and what we have not accomplished I think that lightning is extremely

(47:45):
fragile extremely complex and the culture seems to want to make it more fragile and
complex by adding things like stable coins on lightning for example with with taproot
assets by layering it with things like liquid and trying to use lightning as rails these
are all my opinion very naive ventures and this kind of thing and so we're just sticking

(48:10):
we think that lightning is enough risk for the moment and speculative enough I think
to answer the rest of your question it was sorry it was oh so as far as whether it would
be a success using it self custodially as a user we're pretty close to having refuted

(48:31):
that as a possibility most companies other than ours and a few others have kind of given
up on self custodial lightning in any pure sense some have kind of pivoted a bit to like
server based you know lightning keys on the phone kind of thing some of them have pivoted

(48:51):
to mostly using liquid and just having liquid make lightning payments for you and do swaps
over over that which is another trusted kind of a sensorable solution probably likely
illegal as far as money transmission transmission regulations go as well so I think that what
we've learned is that lightning will definitely always be useful to people who frequently

(49:16):
transact if you need to send many transactions in Bitcoin to a specific peer you'll always
have the utility of opening a channel directly to that peer and not having to have every single
transaction on chain that's and and there is a relatively good assurance that you could
defend your channel on chain if your counterparty were to you know behave poorly or try to steal

(49:41):
from you granted that totally changes if blocks remain full and you can't afford a transaction
but assuming you're a business and this kind of thing you should be able to see that coming
and or afford that transaction and thus be much less risky than your average person but
as far as the individual I think hobbyists people that you know really feel some sort

(50:02):
of need for either the privacy tradeoffs or censorship resistant tradeoffs of lightning
in Bitcoin may still do it and they'll always be able to do it but I think they're going
to be less and less supported over time and they're just going to be harder and harder
to do it for yourself and more of a enterprise sort of business thing.
The kit is still there to try to make it as easy as possible and we don't plan on getting

(50:25):
rid of lightning or anything like that at least not anytime soon but if people stop
using it we will and so right now BitKitt's kind of core purpose in our own roadmap in
our own vision and plan is not simply to be a great mobile Bitcoin and lightning wallet
it's to be a demonstration of what a Bitcoin wallet or a wallet that supports multiple

(50:49):
payment types in our case on chain Bitcoin and off chain with lightning what that looks
like integrated with the rest of our system so in other words in order to demonstrate
the atomic economy which we'll probably talk about more I need to have a wallet that works
within that ecosystem and a wallet that supports Bitcoin and lightning those are the best two

(51:12):
examples of more than one payment method to demonstrate what we want to do with ability
to do payment method matching and the ability to do peer-to-peer e-commerce which is also
something we want to deliver.
I want to get into the atomic economy because I think that's just super fast and I loved
your keynote at Plan B in El Salvador before we do that I do want to ask you said liquids

(51:36):
are shit Quinn and I do want to ask about that.
Literally.
Okay now it's a trade-off right like and I'm going to play devil's advocate here too
because I have personally used liquid like quite a lot I do I would say far more than
average numbers of transactions on lightning and on liquid a little bit on e-cash now far

(52:03):
less just more experimenting because a lot of this is still very new on the well it's
old but it's new again on the e-cash side but what is the big are the trade-offs for
you for liquid not worth it just because there's the federation.
It's a classification thing and if you want to think clearly and discuss clearly designs

(52:23):
of Bitcoin and how blockchains fit into the world and this kind of thing you have to properly
identify things and so whether or not you want to also attribute that using a shit coin
makes you a bad person or whatever that's your own problem I don't care about that.
In my opinion there's no harm in getting utility out of a shit coin I don't do it I don't need

(52:47):
to do it but people that do it I'm not going to deny that they got utility out of it they
did use it for a reason that people using shit coins to scam people and gamble and whatever
I don't really care about but that doesn't mean there's zero utility there so you know
this is nuance and so as far as classifying liquid as a shit coin it's just an objective
literal classification in other words it is a separate blockchain than Bitcoin it uses

(53:12):
a separate consensus mechanism from Bitcoin it has no actual relationship with the Bitcoin
network the transactions of liquid are not made out of Bitcoin transactions like say
the Lightning Network is it's made out of liquid transactions for the liquid blockchain the
liquid blockchain has its own base unit the liquid coins and the only thing that makes

(53:32):
those coins somehow have this kind of ooh it's Bitcoin to it is that they the Federation
a cartel of businesses pegs the price of the liquid shit coin to one Bitcoin and so or
the base unit to the base unit of Bitcoin however you want to look at it and so the

(53:54):
only thing that's making this seem like a Bitcoin layer is that this Federation is promising
not to do anything with your Bitcoin while in hold your Bitcoin for you while you convert
it into their shit coin and so as far as any of the judgments about using a shit coin
other than using the word shit which is obviously disparaging you know I don't care about that

(54:17):
just so much as if you want to have an honest conversation about it you have to think about
it this way because there's a bunch of important little distinctions that come when you organize
it this way like for example liquid doesn't scale Bitcoin it competes with Bitcoin right
and so because it's a separate money it's a separate network and any transaction that
happens on liquid will never happen on Bitcoin and so it basically offloads and people think

(54:42):
this is scaling but is is our wrapped Bitcoins on Ethereum scaling Bitcoin are centralized
transactions and Coinbase to Coinbase customers scaling Bitcoin no this is scaling Bitcoin
I mean scaling Coinbase and scaling these individual things so you have to separate these ideas
so you can have an intelligent conversation about what scaling Bitcoin even is because

(55:06):
if you call liquid a layer and don't recognize that it's a totally independent blockchain
with its own currency its own units then you get everything all mixed up and you can even
have a straight conversation and everybody gets emotional because you're telling them
they're wrong all the time.
There are certainly always a lot of emotions involved I want to ask another another thing

(55:28):
that will move on the atomic economy but as it relates to you mentioned USDT tether on
lightning and that so that was just I mean it had been teased at I think a while ago
but now was just announced in El Salvador or you're not a fan of that you said or you
think it's adding too much complexity can you elaborate on that a little bit because

(55:49):
my first reaction when I heard that was oh I mean that's like that's a cool thing suck
some of the liquidity out of you know the trons and the ethereum's with that stable
coin volume and have it be done with these taproot assets what's your reservation about
that as it relates to just the lightning network fragility.
The intentions were good and I have to say this because I want I don't know if saying

(56:13):
I invented the idea is appropriate but I was definitely the only person holding the tokens
on lightning torch for years.
This started at BitRefill where I you know asked some engineers there was like hey do
you think that would be possible to do tokens of lightning and they were like yeah I don't
see why not and we did research ourselves at Synonym for the first few years on we helped

(56:37):
get RGB funded which was a separate project we tried to get lightning labs to collaborate
with the RGB team and support you know as minimally as we would need for LND to be compatible
with it you know ideas around RGB.
Our team fully implemented Omni Bolt which was another lightning token technology based

(57:01):
on the Omni layer which is actually the first well I think first layer on Bitcoin not lightning
and what we the more I learned about these designs the more I came to the realization
that most of these things were not good designs.
Honestly if you were if you want to do tokens on Bitcoin Omni probably had the best the

(57:23):
most sound design already and Omni Bolt by extension but the difference with those designs
is that what they do is they create native channels to that token and so in other words
you would open a tether channel to your counterparty and you would only be able to send tether.
So what that results in is you have like many lightning networks each network having a different

(57:46):
base currency right and then when you start getting into that you start thinking well
then why are we using Bitcoin is there a way to do this without Bitcoin and you just end
up in this like research rabbit hole where when you come out you learn what all was stupid
about all the prior designs and so when we were you know lightning labs was showing us

(58:10):
the designs for what was then called CMYK as a joke as a dig against RGB we were looking
at those designs before they released them publicly to give our feedback and these kinds
of things when I when they made their announcements and I noticed that they had ignored most of
my feedback was when I decided that I was going to give up on supporting Omni Bolt and give

(58:31):
up on supporting Taproot assets or what was then called Taro on the launch and so getting
away from the history and getting a little bit more to the technical aspect of why I
think that Taproot assets specifically doesn't work is that what it does is it requires this
concept of edge nodes because they don't want to do a design where there are native channels

(58:53):
because they don't like the idea of not using Bitcoin and they they want it to be Bitcoin
based they want it to bring volume to Bitcoin they want to use lightning as rails and this
is a more newer a newer narratives problem is that these edge nodes are essentially going
to have to be exchanges or very tightly integrated with exchanges because what they do is they
convert that token into Bitcoin and then send it on the lightning network and then the edge

(59:18):
node at the other end converts it back into the token that's been designated now the problem
you have there is that conversion is an inefficiency just in general as far as any any idea of wanting
to have a circular economy or having something sustainable you've lost you know you've got
to strike against you now because you're you're converting twice in order to do it but the

(59:40):
process of conversion requires agreeing on a price getting a price requires having an
order book and having liquidity and all of that means that you can't do anything except
tether on on taproot assets because it's the only thing that has volume it's the only thing
that has order books it only thing that has readily available exchanges that will take

(01:00:00):
the counter the closest thing you might see on taproot assets could be USDC because they
really want to compete but I would guess that they might not even bother because lightning
is a pain in the ass and they should probably just wait until tether sees success there
before worrying about trying to compete there because there's a chance that it just never

(01:00:21):
really goes nowhere and it's just a novelty within the Bitcoin community worse than that
is that when you have the situation where you're doing conversions at the edges and
you're tightly integrated with exchanges you're providing a money service and this is heavy
regulated in most countries and so this is most likely going to require licensure from

(01:00:44):
such nodes and KYC and and regulatory attention to the lightning network in general and the
issue I have with this is if they pay close enough attention to lightning where it could
they could make some pretty good arguments for not liking how the design of lightning
network works and because lightning is most likely going to be used mostly by businesses

(01:01:07):
and not end users it becomes much more sensorable and because they could just go after those
businesses and say if you want to use lightning you got to have this license and that license
and blah blah blah so a lot of all kinds of things go out the window when you start you
know examining you know the likely outcomes and possible futures here of course I can't

(01:01:28):
predict the future and I could be wrong and everything could be fine but when you when
you compare these challenges to the alternatives using Tron which nobody has tried to regulate
using Ethereum which nobody has tried to regulate is all which nobody has tried to regulate
that these things are very cheap to send tether for the most part I don't follow shit queens

(01:01:50):
that closely so sorry for one of these is really expensive at the moment I don't care
liquid as well for for tether sure right well liquid is like what liquid thing is really
the same concern because you have bolts be old BOL TZ doing these integrations with
aqua and lightning over liquid and this kind of stuff and what they're doing is likely

(01:02:10):
a money service as well or at least a payment processing service and let and also requiring
regulation and the fact that liquid is made up of like almost literally a cartel of businesses
performing as a bank like if regular it is want to start you know coming down on people
it's just going to be so easy for them and that's why we use Bitcoin is because it's

(01:02:32):
hard to censor and that's why I'm being critical of all these things because we're just introducing
more and more likelihood of censorship.
Honestly, John, this is why I appreciate your perspective because I think if I've gotten
to know you a little bit and I'm glad for that because it can be very easy for people
I think to see or hear some of the things you say and think like you're just naysaying

(01:02:54):
but this comes your criticisms your critiques your your worries come from a place of I want
like like I want there to not be censorship I want there to not be regulatory hammers that
come down and we can think we would both probably agree that most of these regulations are bullshit
that doesn't change the fact that they exist and these regulators exist and when regulators

(01:03:17):
exist they will regulate that's literally what they're there to do and I may think that's
complete garbage but it's a reality and it's one that we have to genuinely look at and
I think that's kind of a perfect way for us to transition a little bit into this idea
you have of the atomic economy and I loved your presentation at Plan B and I thought

(01:03:38):
you set up the problem statement there very well I'll link the full your full talk as
well from the conference for anyone who wants to jump in and go on an even deeper dive into
it but can you can you set it up a little bit of what is this excuse me what is this
idea of the atomic economy and then like why is this needed what's the problem sure I'll

(01:04:02):
just claim to anyone that goes and watches that video that I was very sick and I was
not very happy with my performance but I did get all the ideas out there I think and so
I have this problem like I criticize a lot right and I have this problem with people
that either won't you know counter argue you know a criticism they'll just kind of let

(01:04:23):
it stand or make some kind of bullshit statement and leave it alone and I also have a problem
with people who make criticisms without advice in other words it's easy to complain like
you can combine something complain about about pretty much everything but it's harder to
say how things could be different and visualize and be creative and even then ship those things
and so as a transition to the atomic economy concept the atomic economy and all the things

(01:04:48):
we're building and all the things we research are my answer to these problems is the result
of my being discerning about which problems are real problems which narratives are bullshit
because I'm trying to get rid of all the noise so I can see what's left and work with it
I find that knowing where the walls are or you know what the limits are in design is

(01:05:09):
very freeing it's like once I know that where the walls are in the room I know that this
is the room that I can dance in that I can perform in that I can build in but if I don't
know where the walls are then I'm just guessing and eventually I'm going to hit a wall and
that's not what I want and I think a lot of people are going to end up hitting walls in
Bitcoin with their ideas with their designs with their startups because they don't they're

(01:05:32):
too emotional they're too willing to go with you know cultural popularity popular you know
memes and things like this so time economy is basically partially inspired by the idea
of hyperbiclinization which was you know this idea that eventually all of the gravity of
Bitcoin would suck everything in and it would be the only money and all the other monies

(01:05:53):
would be destroyed all the bad governments would be destroyed all of the big tech would
be destroyed we would all all the people would be in control again and Bitcoin would fix
everything that's obviously a bit naive a bit you know trying to predict to the future
a bit impossible to just state that simply and actually believe in it if that's good

(01:06:16):
enough for you great but it's not good enough for me for me I need to be able to say okay
what does that look like what would the world actually be made out of if governments were
smaller if you know tech providers were gone or smaller if banks were gone or less relevant
like what a weird place all of that was and mostly Bitcoin has been this kind of iterative

(01:06:39):
way of moving towards that without actually planning to move towards it everybody thinks
Bitcoin is inevitable and it will happen and just do nothing just hodl I don't believe
that I believe that the success of Bitcoin comes thanks to the work of people I think
that Bitcoin is people and if we want to have any future that's anything like that we should

(01:07:01):
at least be able to explain and describe it and so the atomic economy is my attempt to
describe it through protocols and product software products and say this is the minimum
set of things that we would need to have in place to have to have any sort of chance of
being respected for predicting this future and that was the vision that I proposed to

(01:07:25):
Paulo and tether you know back when we first started the company and I did my best to articulate
it back then and I've been doing my best to evolve that explanation and this idea of atomic
economy I would say still under construction as a way to explain it because it is sort
of like a mental model for the future almost like a theory of everything in kind of a way

(01:07:48):
and this is obviously a rabbit hole and something that can be meaningless if you aren't careful
but the way that we use the atomic economy to define our products is simply we want the
user in control we want people to always have this kind of self sovereignty digital autonomy
or however you want to look at it and we want to be able to have marketplaces that can self

(01:08:11):
assemble and have this concept of mutual consensus where there's more than one consensus more
than one rule set for different things and people meet where they agree and separate
where they disagree sort of like a voluntarious you know ideal network and digital economy
and what we've decided that requires is some sort of decentralized money some sort of wallet

(01:08:39):
it took in place to hold and keep your keys safe and some sort of new web protocol to
be able to interface with all of this in a censorship resistant way that actually meets
the needs of users and so we have bitkit as the wallet we have block tank as the server
providing lightning services our LSP and we have pub key which is made out of pub key

(01:09:03):
core and pub key app and various other components within those to kind of by the end of the
year fully demonstrate what it would be like to live in this atomic economy and use it
and so this spring we'll be releasing the pub key app beta so people can see the interface

(01:09:23):
and how we propose people interact to do things like create their own algorithms together
with people that with the people they care about instead of finding some kind of feed
or something like this that an algorithm that you can trust and we'll also plan to demonstrate
a massively interoperable peer to peer e-commerce solution and then finally I also believe that

(01:09:46):
what you need for such a future is some form of credit and so we have a research project
we'll be beginning this year called Adamicity which is our way of saying this is how we
think you should do trust and money right now we have kind of these hybrid kind of research
projects like Fedamint and Cashew and things like this that all kind of very Bitcoin oriented

(01:10:09):
we try to have a more agnostic approach to saying there will always be many payment
protocols whether they're Bitcoin payment protocols, shitcoin payment protocols, credit
cards, there's always going to be many that people will use and we need to have some way
of interfacing peer to peer to match those payment methods just like we would match people
in a dating website or match people with data in a search engine and trying to put all these

(01:10:32):
powers ultimately in the individual's hands. Not my best explanation but hopefully a good
sound. No, no, no, it's good and you had a line in the speech that was to the effect
of I don't think that scaling Bitcoin through any trusted method or hybrid method is appropriate
for Bitcoin because the purpose of Bitcoin is not need to not need to trust and so this

(01:10:58):
is kind of your answer for that as well right how do we get this technology into as many
people's hands as possible without having to sacrifice what is at the core of Bitcoin
which is trustlessness. Well, I guess what I'm trying to say is I think that Bitcoin
is optimizing for trustlessness and that when you start trying to bring trust back into

(01:11:22):
the picture, you should optimize for trust. You shouldn't go in between because when you
use Bitcoin in a trusted way, you're fucking up. When you use trust and try to pretend that
it's trustless, you're going to get fucked. These things are not supposed to be mixed,
that's why they were made separately and so Adamicity is an idea of okay, how can we actually

(01:11:43):
digitize trust? How can we say okay, when I want to trust what matters? Matters the
most is who I trust? With what do I trust them and to what degree do I trust them? And
so we're trying to give people ways to use those parameters within their social graph
to route credit payments through their social graph just like you might route payments through

(01:12:06):
the Lightning network through a channel graph, you would route it more through trust channels.
So for example, say instead of me saying, oh, I promise that I have this wrapped token
that's backed by Bitcoin, I say, I owe you one Bitcoin. You trust me or not? You know
what I mean? If you trust me, you accept that credit as Bitcoin. If people trust you, they

(01:12:30):
may accept you to pay on their behalf using that credit. And so you can have this kind
of low level of payments, which might be all we need because it keeps looking like in order
to have low level payments, we have to keep using trust, right? So why don't we just go
all in and just take all of those transactions out of any sort of centralized system and
just make them peer to peer and say I owe you X dollars and seven bananas and why Bitcoin

(01:12:55):
and you owe, you know, Bob some three other or 10 other different types of currencies
and things, but these are just entries in a ledger. And the advantage you get here is
you don't have to do actual conversion. You just have to do conversion of the math. You
don't actually have to provide anything until there is an ultimate settlement request. And
so we want to separate requests for settlement from requests for payment and allow credit

(01:13:19):
to be used as a form of payment and appear to peer away. This is all stuff that doesn't
exist yet. But if anybody wants to read about it, they can go to get help.org slash pubkey
slash Adam. And all of this is is open source, right? You guys are building fully in the
open. Everything. Well, we're not always building in the open, but by the time we have any

(01:13:41):
you're shipping in the open, yeah, anything we have that has users is open source. Okay.
The only thing that we have right now that's not open source is pub key app itself, because
it's not done yet. We don't want to release something that is broken or pretend that people
should try to be running it yet. We're trying to get to the point where we can complete
an internal private beta with like 50 people or so run that for a couple of weeks. If everything's

(01:14:05):
fine, you know, make some small adjustments and go live with a public beta. We're not
at that stage yet. We're very close. The way that you're talking about trust to I think
is really interesting. And it's also it's also so important because like the great thing
about Bitcoin is that you don't need to trust Bitcoin. You will always need to trust other

(01:14:25):
humans in your life. I mean, unless you are a hermit who literally never sees another
person for the rest of your life, like, right? Like you have to have trust. You trust your
family, a close circle of friends. It doesn't mean that circle has to extend out far, but
trust is what community is. That's what family is, right? You know, it's what society is.
Exactly. You have to have that. And I think it's really interesting. I'm curious what

(01:14:50):
you're kind of, how do you see this evolving in the future? I think I see these trends
towards mega centralization, whether that be governments or, you know, extremely large
corporations that are mining the shit out of your data, controlling what you see and
what you read and what you can say. I see these trends towards centralization. I see

(01:15:11):
other trends in these parallel silos or I should not say not in silos outside parallel
fields, open fields where people like yourself or people on Nostra people building on Bitcoin
are building out alternative systems that are not centralized, that are decidedly the
opposite of that. They are decentralized. Do you see a trend like in the long term of

(01:15:35):
like, do these centralized systems ever change from within? Or is the only way that you sort
of quote, beat these centralized systems to is to introduce something in parallel outside
of that system that then forces it to change or it dies? Like, like, or, or do some of

(01:15:57):
these centralized systems have so much critical mass that like, they're just going to keep
going. How do you see that? Do you a trend more towards centralization or like that's
the pessimistic side is obviously you're building stuff because you believe that there should
be a more decentralized, less centralized future. But how do you think that we actually

(01:16:18):
get there? And is there so much inertia in the current system that sometimes for some
people that just becomes unreasonable to assume that they'll ever opt out into these other
systems?
Well, a bit in the abstract, what I'll say is I think centralization is cyclical in
that we see the from from empires to ashes, you know, masses to empires. So on some scale

(01:16:43):
on some time scale on some size, that everything gets as big as it can get and then starts
getting smaller. We grow as humans and we start dying and this kind of thing. Everything
has this cyclical aspect to it and nothing is immune from chaos eating away at it. And
so centralization is order and the universe tends to chaos. Life is order and life tends

(01:17:08):
to death. And so thus, you know, centralization is not something that you should be trying
to eliminate. It's something that you should try to be trying to figure out where it belongs
and how to use it. There is utility to centralization. That's why it keeps happening. It is efficient,
the market demands it. It happens for a reason. It's not because people are stupid. It's because

(01:17:29):
it's natural and organic and easy for it to happen. And so with pubkey, what we've done
is we've set it up so it doesn't matter whether or not you want to trust and rely on a centralized
provider or host it yourself because the way you use keys at pubkey is to sign DNS records

(01:17:51):
inside of a very large DHT network. And so I apologize if any of your users are not familiar
with DNS records or this kind of thing. But basically when you buy a website, a website
domain, you know, like you buy joman.com or whatever and you're thrilled because one day
that's going to be a really cool project and you're going to get rich off of it. And then

(01:18:12):
you end up never doing anything with it, like most people who buy domains. But when you buy
these domains, you're buying them from an authority, which you're actually paying for is is you
being listed as the owner to an entry on a list owned by a company. And what they do with that
entry is they say, we're going to let john decide where to point this domain, which which servers

(01:18:35):
are john's website going to live on. And so when you buy a domain name, the first thing you have
to do is either buy hosting from that domain company and then point the domain name to that
hosting so people can see your web pages, or provide it from some third party. And then you
still have to update what's called DNS records, the domain name system, records to point to that

(01:18:59):
other server. So all these things do is they, they ask an authority where to look for data. Well,
what we did is we took mainline DHT, which is the largest decentralized network on the planet,
as far as I know, the largest and oldest decentralized network on the planet, aside from
the internet itself, I guess you could say. But the internet itself isn't a cohesive thing,

(01:19:21):
right? It's a protocol and it has fragmentation, etc. Well, the mainline DHT is what powers torrents,
you know, when you when you download illegal movies and things like this. That's the network
that organizes and helps people with discovery. So what we do is we use a key, and we sign a message
that has DNS records in it, and we put it in that network. And because it's the most decentralized,

(01:19:44):
most censorship resistant network that we have, more than Bitcoin, more than Noster, more than,
more than anything, it makes it the best candidate for doing this. And so what happens is, if you
point that DNS record to synonyms servers, our home server, as we would call it in pubkey,
and we decide to censor you or delete you or ban you or whatever, all you have to do is update

(01:20:10):
your DNS record and the DHT and say, Okay, don't go to john server anymore to look for my data,
go to Joe's server or Harry's server, or your own server. So you could self host it if you wanted to.
And so when people load information in pubkey app, what they're doing is they're compiling
information from whatever home server and whatever indexer they want to. And so thus,

(01:20:34):
if we were to misbehave, while you were trying to take advantage of our centralization,
you could now say, Okay, this centralization isn't longer worth it to me because it comes at the
price of censorship. So I'm going to go elsewhere. And you elsewhere, whether you need to, you would,
if you are a very popular person, you're going to need a scaled real solution, you need another

(01:20:54):
server, another cloud, whatever. But if you're, you know, somebody that can do that yourself,
or somebody who is West data and less people you need to serve, you can also state yourself. In
the end, it's what we call a credible exit. And Nostra does not offer this because when you have to
put your key, your hot key into every application. And if you lose your key or key is stolen or

(01:21:18):
whatever, people have to use some sort of out of band method to check what your new key is. And you've
got all other sort of after effects, like now all your old messages were signed with your old key.
And people, how do people know when the cutoff was when it stopped being you? You have always kind
of weird continuity issues. Whereas with pubkey and the way that we do identities, you don't. The

(01:21:41):
URL always remains the same. It's just a question of which host is providing the data at that URL.
I don't know if that fully answers your question or if you have no idea.
No, no, no, it does. And, you know, I know that there are, I'm not technologically gifted enough
to be able to refute the claims about Nostra more so than just saying I know that there are

(01:22:03):
a number of different solutions for being able to essentially sign in two apps without actually
exposing, you know, like Albee, for instance, has a as the extension that you can use. There's
also like NSEC bunker, I think that Pablo F7Z developed as well that give you some other options
for that in terms of not needing to put that hot private key directly, you know, copy pasta into

(01:22:27):
a each new application you use. That said, I think what you're still describing here is at a
at the protocol level having not having that necessity, right, to not even need to put it
into some sort of third party signing signing program, just being able to. Yeah, okay,
you're gonna put your cake cold. You don't even have to have it on a device. Okay. Wow. I mean,

(01:22:51):
it's it's super cool. What you know, what I what I love is that there are, I think there are so
many different approaches to, to giving people options to not be completely subservient to these
massive centralized corporations that are again mistreating people where you are the product,
where you are at the, you know, at the whims of their algorithms and at the whims of their

(01:23:16):
content moderation boards. So I mean, do you I'm just kind of curious, how does this compare to,
you know, you mentioned Noster, but what about something like Blue Sky to these some of these
other decentralized identity protocols that are out there? How does it line up? I would say it's

(01:23:36):
definitely more similar to Blue Sky than to Noster. I guess one caveat or nuance I should mention is
that Noster could use this as well. In other words, we've done what we've done with pubkey is try to
evolve things and move past or solve some of the problems that Noster did not address in its original

(01:23:56):
design. Noster could use this what we call Picard, but public key addressable resource records or
this DNA via PK DNS, however you want to call it. But the issue is that it would be a breaking
change. And they would have to admit that this was a good idea. Neither of those things are very

(01:24:17):
likely. Noster is very prideful. There's a lot of tribalists, you know, kind of culture to it. And
to get them to take on the ideas of an outside or even possibly competitive protocol. It's not
very easy. These ideas were shared with Noster people more than a year ago and rejected. And they

(01:24:39):
remain valid. And they remain great solutions. So when I mentioned that we're more like Blue Sky,
what I mentioned is that Blue Sky does not quite do the same thing we have yet, but they are
considering it. Blue Sky is considering having multiple methods, I think, of discovery. Right
now, they're very centralized in how they implement it, and thus very sensorable. But they are aware

(01:25:03):
of using DHT for these purposes. And I think they're aware of what we're doing. I don't know
that they're going to add this as a method or use it as a default method or anything like that.
I have no idea. But this is also just one aspect of our design. This is how we handle, you know,
key management and actual having actual delegation of keys, which is something that Noster can't

(01:25:27):
provide in its current form. Did you submit a NIP for this? You know, everybody says that to me.
And I say, well, I have to ask, we're pretty thoroughly rejected a year ago. I've been pretty
thoroughly rejected any time I make some sort of suggestion about Noster or how it could be better.
I don't have a lot of incentive to go and play the Noster governance game. And from what I've

(01:25:52):
heard, it's not all that easy anymore anyway, that just random people don't get to change Noster.
So I'll put it like this. If you want my BIP, go to github.com slash pubkey. And everything in
there is my Noster improvement proposal. Okay. Maybe I'll just do a little copy pasting myself

(01:26:15):
and just throw it out there. I know that they've explored a bit using DHT,
but they're going through the same things we went through already. They're considering making
their own new DHT. We tried that. We tried using Hypersworm DHT from the whole punch guys. There
was just nothing that if you want to be rational, there's just absolutely nothing that compares at

(01:26:40):
all to using Mainline and the size and the censorship resistance of Mainline. Just everything
else is just a joke. And if you try to bootstrap one, you're going to be very censorable. It's
going to be larping. And you're going to have to spend years dealing with that until you actually
become bigger than Mainline for some reason, which if that's what you feel like you need to do,

(01:27:02):
go for it, but you could just use Mainlines. There's no special reason not to.
I've got to say every time you say Mainline DHT, I don't know why it just, it sounds like somebody
doing hardcore drugs. I'm going to Mainline this DHT right now. That's an aside.
I don't know where I came from, where the name came from. I wasn't around.
Yeah. No, I, John, I really appreciate your time here. And I want to be conscious of it. I do have

(01:27:27):
a couple of more general questions, but before I do that, and these are shorter questions,
I promise, because I again want to be conscious of your scarce time. There are Bitcoin podcasts
are abundant, but you've shared your scarce time on this one. So I appreciate that. But is there
anything I'm always happy to explain myself? So I appreciate you having me the time.
Absolutely. And I mean, I know we could probably go for hours more on just what you're building

(01:27:51):
at Synonym alone, but I just want to say, was there anything else that you really wanted to
make sure that we got out there and covered as it relates to what you're building at Synonym,
BitKey, PubKey, any of this other stuff that is, you know, that we didn't get a chance to go over yet?
No, I mean, I think, I think we could go ahead and say the weeds more with PubKey and PubKey app.
But no, I think that it's a good introduction for your audience. And if they want to learn more or

(01:28:18):
understand better some of the things I maybe spoke about too quickly, we have a pretty good medium
blog where we cover a lot of articles that are related to these things, including a whole article
called the next web, where we talk about the whole vision of PubKey and the different aspects of it.
We have research about proving how decentralized Mainline DHT is and what, you know, a public key

(01:28:42):
domain is and, you know, these concepts that I've introduced. So I encourage anyone that's
remotely interested, including Nostra people, I don't have any special desire to fight Nostra
or kill Nostra or anything like that. I just, we've been working on this stuff since before
Nostra existed. And we're just trying to do what we think is the best design and the most

(01:29:03):
sustainable that can help most people would love for Nostra people to join in. But yeah,
some of the design, some of our design requirements require breaking changes, but that's not impossible.
Well, luckily with Nostra, there's no, there's no, you know, it's not like Bitcoin consensus,
right? Like, for example, you say Nostra, I say Nostra. Like there's not even consensus about the

(01:29:28):
name. I think I'm in the very small minority there though, I'm finding out. I also say hodl
instead of hodl. I just don't like saying no, you know, like, yeah, change it to yester. Okay.
So my two, two follow up questions are number one, again, you, you may be often regarded as a
pessimist. I don't view you that way. I view you as a realistic ops optimist, but I am curious,

(01:29:52):
if you were to say that the one thing, not just Bitcoin, not any, it can be anything that you are
most pessimistic about, what is that thing? What is the thing you are like really, really blackpilled on?
Everything, man. It's really, it's really, really hard for me because I really sincerely believe

(01:30:16):
that like 80 to 95% of the information coming out of everything, every corner of Bitcoin is garbage.
It's just a lot of, a lot of associative, lazy metaphors and just all this kind of like
noise talk, pumper talk, these kinds of things. So I'm pretty bearish on overall, you know, state

(01:30:41):
of the culture and state of understanding, state of good intentions, like I am pretty pessimistic
if you want to be, you know, broad about things. So it's a narrowed down to one would be really
difficult. Okay. I talk about these things all the time in my Twitter account, or sometimes I

(01:31:02):
missing for a month or two, but when I come back, I'm always happy to point out the misconceptions
and things like this. Pretty bearish on, you know, the state of coding for Bitcoin on chain,
the state of lightning, the state of, you know, VC investment. There's just a lot, a lot, a lot
of naivety, a lot of people just masking their own good, good intentions and hopes with ignorance.

(01:31:30):
Sorry, Adam. I don't have a good hot, spicy single answer for you.
No, no, no, I don't need hot and spicy. I was genuinely just curious because the follow up
question is what makes you optimistic and hopeful? What is your white?
I knew that was coming.
It was the pessimistic shot with the optimistic chaser.

(01:31:51):
I'll start with the obvious and maybe not fun one for people, which is just simply,
I'm very optimistic about our own company and about how Tether has chosen to fund us and fund
this crazy vision. I'm very optimistic about the team that I work with and how dedicated they are
to helping to realize this vision, despite it being very speculative and out there compared

(01:32:15):
to what other people are doing. Yeah, I'm extremely optimistic about how that my pessimism and my
judgmental, whatever you want to call me, that all of that stuff has been worth it to narrow down
the world into something that is actually interesting and useful for us to work on.
I'm still optimistic about Bitcoin in general. I still think there's more price upside. I still

(01:32:39):
think that there's more utility to be gained from it. I am a bit worried about people being
comfortable with inviting the government into our Bitcoin home and things like strategic Bitcoin
reserve and caring about what Trump thinks about Bitcoin. This is not a good path, but anyway,
I'm ranting. John, and here I asked you for the optimism and you still brought it back to a worry.

(01:33:06):
I have to say, this is like what? I just have to perfectly describe something as best I can.
I'm also, as it relates to the strategic Bitcoin reserve, I would say that I'm ambivalent
because I don't think that Bitcoin ultimately cares. It's just a protocol, right?
And from my perspective, do I think it would be good for the US? Yes. Do I think it would be good

(01:33:34):
for Bitcoin? I think that probably, yes. I think that generally this is also something that's,
like, I don't want to use a cliche, but I think that this was inevitable. Like, the Bitcoin
strategic reserve is inevitable in the US and in other countries. Companies adopting it is

(01:33:54):
inevitable for their treasuries if Bitcoin is winning. Like, this is a symptom of Bitcoin winning
and a natural consequence of that process, in my opinion. Whether or not that's good or bad,
I think it's beside the point. Do you think what? I think white market Bitcoin is untenable.
I think this is all just a temporary state that any amount of kind of

(01:34:18):
kind of appeal or evangelism or intentional involvement of getting government involved
in Bitcoin will be regrettable. I have much more dire, serious view about involving government
in Bitcoin because while a lot of the things you said are perfectly reasonable, I think that

(01:34:41):
what people need to realize is that Bitcoin's biggest enemy is the government. And so inviting
them in is giving them power. And so we want them to be as ignorant and as
blunt and primitive about how they deal with Bitcoin as possible, even if it hurts sometimes,
banning Bitcoin, things like this. Those are the things that are actually good for Bitcoin.

(01:35:06):
This is good for Bitcoin meme sense, not the strategic Bitcoin reserve because basically,
what we don't want is Bitcoin captured and it can be captured. Maybe it could be uncaptured with
some sort of revolution or fork or whatever, but the government is the only thing with the resources
to cause Bitcoin problems. Everything else we've surpassed with hash power, with design,

(01:35:30):
whatever it may be, but not the government. The government with many, many guns and they could
go after all the large miners. They could make laws about requiring Bitcoin to be white market.
They could force it to be two Bitcoin prices, a white market price and a black market price.
They could make all black market usage seem illicit. At that point, there's a lot of risks.

(01:35:56):
They could use money printing for as long as they can to gain hash power, to gain a hoard of Bitcoin.
All centralization of any aspect of Bitcoin is dangerous. Ownership of coins, ownership of hash
power, all of it. I'm not going to disagree with that, but I will say we've already been far down

(01:36:21):
that path before the strategic Bitcoin reserve was even around. You already have OFAC compliance
in certain areas. You already had basically- I'm just saying there will be more. The more we embrace
government, the more rules they're going to put on us. That's all. OFAC compliance, miners censoring.
People think that Bitcoin is perfectly censorship resistant. No. If the government wants to subsidize

(01:36:45):
the censorship of transactions, they have a lot of resources to do that. Mining is not very
decentralized. Their ability to enforce that is pretty strong right now. Right now, people like
Bitcoiners want to make a little stink when they find out somebody complies with OFAC or whatever.
You can't run a business and not comply with OFAC in any country. Even though it's a U.S. thing,

(01:37:12):
if you are a European business, you're going to have your lawyers telling you to comply with OFAC.
You can't get away from it. If they start expanding that, OFAC is pretty not very transparent. The
process for getting on the list, the process for getting off the list, whether that is even possible,
the degree of severity to why you're on the list, none of these things are known. There's no

(01:37:35):
democratic process to it. There's no transparency to it. Lightning nodes already have to do this.
If you're an LSP, you're like Breeze, Phoenix, everybody, you have to be checking whether or
not people are buying channels from you with OFAC addresses, withdrawing to OFAC addresses,
all exchanges have to do this. Any money service has to do this. You shouldn't be getting mad at

(01:38:00):
businesses that comply because they wouldn't be able to provide the service if they didn't.
And so what you should be getting mad at is the government. Don't be happy about the government
getting involved in Bitcoin. Be mad at them. Be mad and say, why are you talking about investing
in Bitcoin and speculating on the Bitcoin price when you should be talking about making everybody

(01:38:23):
have a right to transact in Bitcoin, buying things with Bitcoin tax-free? You want Bitcoin rights,
that's what you fight for. No, not Bitcoin speculation and by the government. This is just
way off base. It's a great reminder that the government also can't give you rights. They can
only take them away, right? Which is the sad part. I'm trying to develop my view on what rights even

(01:38:50):
are. It's not a topic I talk about a lot, but it's something I thought about a fair amount,
which is simply that I don't think that human rights exist. I think it's a nonsense. There's no
way to define it in a sensible way. I said this actually in the 21 realities tweet I made today.
Rights are just something that you can physically defend yourself. You enforce your own rights,

(01:39:15):
and whatever you can enforce is your right. And the difference with the only thing that
rights get into as a group thing is basically governments exist to distribute violence. Society
has decided that we need an organized way to control and limit how what's okay with committing
violence. And the only solution we keep coming up with is government. And so the government's job

(01:39:39):
is to distribute violence. When they're doing anything else, they're going to do a bad job
at it and they shouldn't be doing it. And so in the end, violence is a factor. You have to
consider this. I'm in agreement with your characterization of governments. The only
reason that they exist is to enforce the law. The only reason that the law should exist is to

(01:40:01):
organize for the collective defense of private property, which is the distribution of violence.
So a right is a violence that the government will allow. So you have your own rights, but in other
words, not even the rights that you think are yours are fully yours. In other words, anything you
can defend because you can't defend yourself from the government. Not most of the time you can.

(01:40:23):
So what are your rights exactly? It's what the government allows you to do, what violence
that people agree on. And so when people agree on a method of violence or an example where violence
is justified, then it becomes a right. Like you have the right to, I don't know, say somebody
defamed you. And what that means is if you can prove it, then the governor will enforce violence

(01:40:49):
on your behalf. And thus it becomes a government distributed right. And that's the only rights.
There are things that you can defend without consequences alone. And there are things that
other people will commit violence for for you that are accepted. I think that that's fair. I would
say the additional layer there that I would add is that a right is something that you again,

(01:41:10):
to your point, that you can defend for yourself that you have or that you can do without needing
to rely on the labor of others, the coercion of others or violent coercion of others. And that's
basically where like that is as close as you could get to a human right. Yeah, I think that gets more
into like the libertarian way of looking at it and like healthcare is not like I wouldn't argue

(01:41:30):
healthcare is a human right, you know, like that because that requires labor. Yeah, but like apparently
a lot of people don't even defend that one either. No, no, they're on your behalf if somebody doesn't
give you healthcare. In most cases, in some cases they would, but no, generally, generally not.
Yeah, I just speak of it the way I spoke of it because I need to understand like the dynamics

(01:41:51):
of things and be able to have a model. I don't really care so much about the narratives or like
political templates so much as if I really try to think about the core primitives of what's going
on with rights, it's just a matter of violence. And whether you're committing the violence to
yourself or there's some group that's allowing other people to commit violence on your behalf.
And that's how rights are determined. And yeah, I agree with your philosophy of yeah, you shouldn't

(01:42:17):
expect anything that you can't do for yourself because it means somebody else has to do it.
But there is some nuance in there in that we have this superstructure of a violent government.
We do. And that might has right in the government's distribution of it. So that's not something
we'll probably see change because again, we've seen that trend toward the centralization of

(01:42:41):
power, centralization of violence over and over and over and over again as you pointed out earlier.
It's probably because it's an efficiency and probably the best way to do it.
Really efficiently.
And such like to talk about having mercenaries and things like this. Every time I try to think
that through, I'm just like, this just ends in government. There's just no way to avoid

(01:43:03):
things going from ashes to empires. It's just always happening. I don't see why we should
expect different. It reminds me, just an analogy to that is I always chuckle a little bit when
like Bitcoiners are thinking through stuff and they're like, yeah, we're gonna screw the banks,
we're done with the banks, we've got Bitcoin. And then a little while later, it's like, you know

(01:43:24):
what, it'd be really nice though if we had some credit, if we could have some credit within this
Bitcoin community. And then just, okay, but we shouldn't manage that independently. Maybe we
could just have some group of people that manages how credit is given out and keeps track of it
all. And it's like, well, guys, we just fucking created banks again. Congratulations.
You come back to shit and things.

(01:43:45):
It really frustrated me for a while, maybe roughly a year ago, there was a real rash
of excitement about eCash and and and fediments. And that really frustrated me because I don't
mind the idea of discussing credit systems. I mind the idea of using Bitcoin as a credit system,
because that's the opposite of what we made it for. It's just so frustrating to say, oh, let's scale

(01:44:07):
Bitcoin with banks and I'm like, oh, how do I like refute this? How do I deal with this? And VCs are
loving it. And I'm just like, I don't, it's just so obvious to me. And this is how most of my days
are as I log into Twitter, I see something so obviously wrong, like with any amount of thought
put into it. And I just get like depressed. I think, well, the least I can do is share my insights

(01:44:31):
and hope somebody else benefits from them. You know, John, we're going to have to do this again,
because we could get into a whole conversation about about eCash and fediments, because I
have I have positive views on them now, because I also believe optionality and free choice is key
for anyone and trade offs exist within any system. And yeah, don't fall into the trap of me trying

(01:44:54):
to refute something, meaning I'm trying to stop people from doing it. Oh, no, no, trust me, I don't.
Like I said, I do, we have our own credit system design that we think is optimal and that we do
Nintendo and building. It just has nothing to do with Bitcoin. That's all that's the nuance for me,
is that I don't like people portraying credit as a scaling method. It's just not.

(01:45:18):
That's that's fair. Well, John, I've, you know, I've got to cut it off at some
point, because otherwise, I'm, we'll, we'll just have to keep firing. But I enjoyed the
heck out of this man. Synonym dot dot two, right? For the website. Yeah. Yeah. For the company,
if you want to get an overview, pubkey.app, if you want a little sneak preview of the app,

(01:45:39):
pubkey.org, if you want to learn more about the design of the protocol and code,
block tank dot two, dot to, if you want to buy some channels or learn about our LSP.
But yeah, I really hope people at least research and look into what we're doing a little bit,
because I think it's really cool and a lot of discretion has been has led up to our designs.

(01:46:01):
And this is going to be a big year for us with shipping things. So
big hit is already usable and available if you want to start there, but the pubkey stuff is
just unraveling now. I'm excited to play around with it and excited to see what you guys do.
And we are going to have to do this again, because there's far too many things I want to
want to dive into with you. But John, thank you so much. Appreciate your time, man. And

(01:46:25):
hope to see you in the flesh again soon. Maybe it'll just be El Salvador again. Maybe that'll,
that's our, that seems to be the go to meeting spot. No, you guys do more shows than that. It
will be Lugano, maybe, maybe Prague. We'll see. We'll, we're going to try to make it to Prague,
but we will be in Lugano for sure. So stoked about that. It'll be good to be back. But man,
thanks for your time. Appreciate it. And we'll talk soon. And thank you to everyone who jumped

(01:46:49):
in on the live stream on Noster. And we'll see you guys again soon. Thank you. All right.

(01:47:19):
If you are enjoying the Bitcoin podcast and find it valuable, give it a boost on Fountain,
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(01:47:45):
and the show on Noster and on X. Bitcoin is scarce. There will only ever be 21 million,
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BITCOIN REALISM: SCALING, GOVERNMENT CAPTURE, & THE LIGHTNING NETWORK | John Carvalho (THE Bitcoin Podcast)

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}BITCOIN REALISM: SCALING, GOVERNMENT CAPTURE, & THE LIGHTNING NETWORK | John Carvalho (THE Bitcoin Podcast)