SAVEOURWALLETS.ORG, MINING POOL CENTRALIZATION, VIBE CODING WALLETS, FILTERS, & MORE| Matt Corallo

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
It's great the Trump administration has walked back some of that.

(00:03):
They're said we're not going to bring these kinds of charges, but whoever is in the White
House next can undo that and probably will.
You know, the pendulum likes to swing both ways.
It will presumably swing the other way soon.
Whether people are happy or not with that, that might mean anti-crypto, anti-Bitcoin.
And this is something they will probably try again.
And if they do, that means we don't get access to the kinds of good wallets we want.

(00:26):
We don't get access to Phoenix.
We're not going to get access to Lightning wallets.
roll-ups are dead, ARK, Spark, all of these things that you might have heard of or might not have
heard of yet that are coming down the pipeline to wallets to improve the UX, make it really,
really usable, make Bitcoin awesome, we can't have as Americans. We can't build an America,
and we can't allow others to service to Americans. So we need to get the law changed so that

(00:50):
developers, so that people running these kinds of wallets are protected so that we can have
access to these things in the US.
The Bitcoin Podcast

(01:28):
Bitcoin.net slash titcoin. On X, YouTube, and Rumble, just search at Walker America.
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and head to bitcoinpodcast.net for everything else. Without further ado, let's get into this

(01:53):
Bitcoin talk.
Matt, glad to have you here.
Hopefully you're also relatively recovered from Vegas,
but I know you've been hitting the circuit of podcasts,
so that can be quite taxing.

(02:13):
Yeah, thanks for having me.
Yeah, I've been on tour, as it were,
trying to get the message out.
It's been, you know, it's fun.
It's fun to hang out and chat Bitcoin with people
for an hour at a time,
but it also means I don't get my normal work done.
Yeah. And just for so you are what what is your your head of something at Spiral, right?

(02:36):
I don't know. I'm an engineer. I guess I'm the most tenured engineer on the Spiral team.
So we work on lightning. We work on making lightning more accessible, better for wallets and hoping to our real goal is to make Bitcoin the best money.
I mean, that's that's the top one of blocks top line goals and to use that within block.

(02:57):
But then our goal is viral is to just just make Bitcoin the best money.
I still remember and I mentioned this to you at in Vegas, one of the Bitcoin conference presentations from all the conferences I've been to that has stuck with me the most.
that I will just always remember was your talk at TabConf in 2022, I think.

(03:19):
It was basically the premise was like lightning screwed, but maybe not.
But it is, but maybe not.
And I don't know, it was just, it was masterful.
And I maybe want to revisit some of your theses from that a little bit later on in this,
just because I thought that was just a banger of a talk.
Also, the keynote that you gave right before,

(03:40):
You were the last speaker before Trump went on stage last year, which was amazing because you gave a really important, like not just some fluffy, you know, NGU talk.
You gave like a, hey, this is a thing we need to pay attention to with mining centralization.
And you gave it to the most packed house you possibly could have.
So I thought that was pretty cool.

(04:01):
The most packed house of people on their phones.
Well, okay, fair enough.
I was paying attention to it for what it's worth.
for sure for sure some others were as well uh but that yeah that's fair um but okay today and like
the reason that you had reached out we chatted at the conference a little bit you had some very uh
some very cool hats which i believe you're wearing now yep okay awesome so i'm just going to

(04:24):
preemptively tell people to go to save our wallets.org uh which i thought initially just
knowing you i was like is this going to be some sort of a deep troll is this like is this matt
playing some sort of a long game no no this is this is very uh very real and a very serious thing
so i want to just kind of get right into that to make sure we we cover it can you tell us like what

(04:45):
is going on what is save our wallets.org and like what are we talking about here why is there why did
you create a website just for uh for this yeah yeah so in the the so most people are familiar
with the samurai and the tornado cash cases uh the doj brought charges against non-custodial
wallet, non-custodial platform, saying, oh, you were a money transmitter, which basically

(05:10):
is the class of rules that requires KYC, AML, all the stuff that you'd have to do with a bank,
all the stuff that you have to do with a custodial institution. And they said, no, no,
no, even though you were non-custodial, you had to comply with all these laws.
It was not possible for them to comply with these laws. The people they were supposed to register
with would not have accepted their registration because they didn't think they needed to register.

(05:33):
But nonetheless, the DOJ brought these charges and, you know, maybe they'll win in court.
The DOJ has now dropped some of those charges.
But importantly, it had a chilling effect, right?
We saw Phoenix, this great lightning wallet, decide to pull out of the U.S. market.
And a lot of developers were asking questions.
So, yeah, it's great.

(05:53):
The Trump administration has walked back some of that.
They said we're not going to bring these kinds of charges, but whoever is in the White House next can undo that and probably will.
You know, the pendulum likes to swing both ways.
It will presumably swing the other way soon.
Whether people are happy or not with that, that might mean anti-crypto, anti-Bitcoin.
And this is something they will probably try again.

(06:17):
And if they do, that means we don't get access to the kinds of good wallets we want.
We don't get access to Phoenix.
We're not going to get access to Lightning wallets.
Roll-ups are dead.
ARK, Spark, all of these things that you might have heard of or might not have heard of yet
that are coming down the pipeline to wallets to improve the ux make it really really usable make
bitcoin awesome we can't have as americans we can't build an america and we can't allow others

(06:44):
to service to americans which is which is kind of insane because purportedly we're the freest
country in the world supposedly and by many metrics yes like you know i forget who it was
that described it this way it may have been may have been greg foss a canadian who you know is
looking for down from our american attic at america but saying basically you know america's

(07:06):
the prettiest horse at the glue factory like yeah it's it's still a horse at the glue factory but
it's the best looking one there right but this is kind of insane though and just to uh to loop back
on one thing you mentioned because i think this is actually really important for people to realize
why the pendulum swinging back and forth actually makes such a difference and you need like you need
actual protections like that are codified into law the uh fincen basically said no this uh this

(07:34):
they're not violating anything like the this doesn't apply money transmitter doesn't apply
from our perspective like no it's it's all good the prosecutors went ahead with it anyway
knowing that and i think uh sam shpira at the bdc policy institute has done like a lot to kind of
uncover that and showcase i know a lot of people have this is just what i've seen
But this is kind of like why there is actually some some really dire need to make this stuff happen at a regulatory level, because if it's just prosecutors from an administration being left up to it, they'll just do whatever they want.

(08:05):
Like, it doesn't matter what a particular agency says. Right.
Totally. Yeah. And, you know, there are a lot of prosecutors in the United States.
They can make decisions, you know, the obviously their boss can tell them no, but whether they're paying close enough attention.
But yeah, more importantly, the next administration, who knows what they're going to do.
And so we really need to get the law changed.
We need to make it clear that, look, if you're not a custodial platform, you know, you still

(08:31):
have to enforce sanctions.
You still can't like open a channel with someone in Iran, whatever.
But you don't have to do KYC, AML, these things that you can't actually do, right?
We're not talking about stuff where it's like, oh, well, these wallets just don't want to
do.
It's like, no, they can't.
You cannot do AML at that level on Lightning, on any of these platforms.
You know, you can't run a Lightning wallet and submit to yearly examinations about whether

(08:55):
or not your AML system is up to par.
Like, this isn't, it's not practical.
It's not feasible.
It's just not a thing.
And so we need to get the law changed so that developers, so that people running these kinds
of wallets are protected so that we can have access to these things in the US.
and i mean does this is this something that potentially has ramifications further than just
like if an individual is listening to this and they're thinking well okay maybe some companies

(09:19):
need to worry about this what's the big deal but like this could conceivably this kind of precedent
could be used to go after just like even individual node runners right who are operating lightning
channels with each other like there there's there's no reason like if they if they have a
bone to pick with you they can use this as an attack vector essentially oh totally yeah especially
lightning nodes, you know, any of these, I like to refer to them as ancillary services to non

(09:42):
custodial wallets. So these, these service providers, these sequencers, these lightning
nodes, you know, sometimes it's decentralized network, sometimes it's an individual company,
they can all be targeted with this kind of reasoning. You know, the DOJ said that a frying
pan transmits heat, and thus anyone involved in transmitting any data for a non custodial

(10:04):
wallet as a money transmitter um did they actually say that that was their argument in the in the
filing is a frying pan transmits heat and an ethernet cable transmits data and thus everyone
is a money transmitter and it's like well if you take that to its logical conclusion your isp is a
money transmitter because they let you use bitcoin on the network right it's it's absurd how broad

(10:24):
they wanted to define money transmission here um and so it needs to be clarified like this is
nonsense i mean that that's i i'm now remembering this because i think there were jokes about like
you know stainless steel versus cast iron pans and you know which was but it's just like it's
it's just so insane like that like that that's like an argument that was made like by very

(10:45):
serious people who can just literally throw you in jail like that's those are people that can come
and take away your freedom and they're making arguments based on like you know fucking heat
transfer i mean it's just it's just that's just nuts it's just you know they can maybe you end up
winning in court. It doesn't matter. You still spent three years sitting in jail, rotting in a
cell, and no developer, no wallet software vendor is going to take that risk. Right. And so, you

(11:11):
know, there's a lot of Bitcoiners like, oh, well, we shouldn't let the government, whatever, we
should take our freedoms, not, you know, ask the government to change the rules. And that's fair,
but no one is going to take that risk for you. Right. So you need, in order to have, in order
to use Bitcoin in a way that has not shitty user experience, right? So on Lightning, on ArcSpark,

(11:31):
whatever, on any of these L2s, you need these ancillary services. Maybe they're a company,
maybe it's a centralized network, but you need them in order for that wallet to function.
And no one is going to take that risk for you because no one wants to sit in a jail cell.
Even if they're confident they're going to win on the law, they're not going to want to sit in
the jail cell. No developer is going to do that, no wallet vendor, and these things just won't be

(11:54):
available to americans and like and i cannot blame them i wouldn't want to sit in a jail cell
like for that and and not even have the you know the like nothing is certain once once your freedom
is stripped away and you were put behind bars i mean like we just saw you know ross olbrick finally
made it out after so many years behind bars like nobody wants to be put in that cage and like the

(12:18):
state does have that ability to exert violence on you and they will do it. Like it's just the
reality. So with that kind of dark, dark preface to all of this, what OK, what's the bright side
here in terms of this this Blockchain Regulatory Certainty Act? Yeah. So we have a shot here to fix

(12:39):
the law. So to Congress people, Representative Emmer, who is the majority whip. So that's the
number two position on the Republican side of the House, for those who aren't familiar with their
US civics. And Rep Torres, who is the Democrat from the Bronx, co-introduced the Blockchain

(12:59):
Regulatory Certainty Act, which fixes the law. I mean, it's a super straightforward two-page bill.
You can go read it. Anyone can read it. It's not complicated. You don't need a legal background
to understand everything in there. It just says if you're not a custodian, you're not a money
transmitter. You're not regulated as such. You're not regulated as any of this nonsense.
And so we need to put pressure on them. We need to call our Congress people. We need to say, look,

(13:25):
we need this to pass. And that means we have to work with our friends or more often enemies
on the crypto side of the house, not the Bitcoin side. And we need to get them pushing it. And they
are. We need to work with our friends in Congress and lobbyists who support us. And they are pushing

(13:46):
on this too. But ultimately, we need the politicians to feel pressure from the voters.
People need to pick up the phone and call their representatives. I know it sounds cliche,
but it does work. It takes five minutes of your time. You just go to saveourwellness.org,
you type in your zip code, it'll pull up all the phone numbers for you. You know,

(14:08):
you've got two senators and a house member, you hit all three of them, you just pick up the phone,
you say, Hi, if you haven't heard of the Blockchain Regulatory Certainty Act, I think it's really
important that fixes some issues in the law where there's regulations that people cannot possibly
comply with, and they shouldn't be subject to jail time in exchange for not complying with

(14:28):
something they can't comply with. And then you hang up the phone, you go about your day.
And they listen. They do feel most senators and representatives don't have good information about what their constituents want. And most of them want to turn their place in Congress into a lifetime career, for better or for worse. They want to stay there forever.

(14:51):
And so if you tell them, look, you vote yes on this or I'm not going to vote for you, they do listen.
If they see, you know, 10, 20, 30, 40 people calling in, they're like, oh, actually, a lot of people care about this.
It doesn't take much because not that many people actually do it.
Not many people pick up the phone and call.
It's very true.

(15:12):
And it's like if they see that there are highly motivated people who are taking that five minutes, even though it's easy, you're right.
most people just don't even take that step because there's honestly not that many things
that most people care about enough to take that step.
And so it's like it can actually move the needle.
They will pay attention because honestly, I feel that with politicians, it's like they

(15:34):
have so many people asking them for so many things all the time.
They need to have a way to filter that.
Usually the way to filter things is, okay, how many people are complaining about this?
Like how big of a problem is this going to be for me down the road?
is this an economically uh important group of people who are also complaining about this
they can probably logically make some assumptions there um so i i would encourage people again just

(15:59):
to go to save our wallets.org and to check this out it's a really uh nice little uh little site
as well here but it breaks it down the bill is linked there it's it's all uh pretty as you said
i mean it's a super short bill i had it up here earlier but it's like literally like two pages
And so can you break down just like for the bill? I mean, how does this actually protect developers?

(16:21):
Like, is this something that if it's if it's passed through, does this actually offer the kind of protections that are needed?
Yeah, I mean, it really it's super clear and pretty comprehensive.
It says very explicitly and it has a legal definition of what non-custodial means.
But it's pretty good. It's pretty reasonable definition.
I think it passes the smell test of what people understand non-custodial to mean.

(16:42):
But it says very explicitly, if you are a service provider or a software developer, and there may be one other category, and you are non-custodial, then you are not subject to money transmission laws.
You are not considered a money transmitter as defined in federal law, and you're not a financial institution.

(17:03):
So you're not regulated as a financial institution, i.e. you don't have to do all the AML, KYC and stuff.
It doesn't protect people from sanctions. There's like one or two other things that are strict, but that you can actually comply with and that, you know, you hope prosecutors will be reasonable about.
But things that you actually could comply with, if you're like an LSP, you could not open channels to people in Iran.

(17:27):
Right. It'd be great if we didn't have that those rules, but we're not fixing that.
But it does fix very specifically the samurai case where they were charged with money transmission.
They were also charged with money laundering, but that charge is harder without the transmission case.

(17:48):
Money laundering is a weird thing. You normally have to charge someone with a crime and then money laundering on top.
Just charging money laundering is harder.
But for the most, you know, unless that's a thing you're doing and like running a mixer, running a mixer might still be challenging.
But non-custodial wallets very specifically, you're not a money transmitter.

(18:11):
You're not a financial institution.
And that's really the thing that people are worried about.
That's why Phoenix left the United States after the samurai charges.
And that's why LSPs aren't as plentiful as they should be.
We'd have a lot more competition for non-custodial Lightning wallets if we had this kind of protection.

(18:31):
Frankly, I've looked into running an LSP for people.
Not that I have buckets of Bitcoin, but enough that I could run an LSP at least for developers to test on and whatnot.
And without this, I'm not comfortable doing it.
But with this, I'm very comfortable running an LSP.
and and and like the the tldr on this is basically this line right here that's you're not going to be

(18:55):
uh designated as you know any of these things unless you have control over digital assets to
which a user is entitled under the blockchain service or the software created maintained or
disseminated by the blockchain developer or provider so basically if you're not in control
of user funds you're good that's that's essentially what it boils down to right that's it yeah that's

(19:17):
That's really all it is. It's not a complicated bill, straightforward, and it protects developers and wallet vendors against a very specific and a very real threat that they're worried about.
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yeah i mean and to me this just seems like such a common sense thing like it seems that the the

(22:51):
biden doj was just i mean being very almost just like malicious like this was this seems like one
of those cases where it's like we're gonna make an example of you so you best not do it again
unless you want to end up like these guys totally yeah i mean it's you know there were definitely
a number of groups within the Biden administration who thought that crypto and Bitcoin, which of

(23:14):
course they considered all to be one thing, were bad, should be destroyed, and we should use
anything at our disposal to do so. Gensler at the SEC, obviously that didn't affect Bitcoin as much,
but here in the DOJ, they were really coming after Bitcoin as well. And we don't know what
the next administration is going to bring. It might be that again, right? So we need to
try to front run it a little bit, keep it from happening. And we just need to make clear to

(23:39):
the Senate and to our Congress people that this is a priority. Maybe they would pass if it got a
vote, but it's hard to get a vote. We have to make sure that they know that this is worth their very
limited floor time to debate this, bring it up and bring it to a vote, either individually or as
part of a larger package. But either way, we need to all make sure that they hear us.

(24:01):
i think the difficult thing that people need to understand too is that it's like precedent that is
set now becomes a huge pain in the ass forever like essentially so if if we don't like now is
when it's easier to fight back against these things from a regulatory standpoint because it's
still kind of like people are still figuring it out yeah but one of the ways they figure it out

(24:24):
is by setting precedent and if all of this goes through kind of unchallenged then it's like well
okay, this is just how we treat this stuff now. So, you know, any of you, you like, we're just
going to toss you unlicensed money transmitters into jail. And I mean, I think the frustrating
thing about this is like, as a citizen, like you want there to be as much innovation as possible,
as many companies building cool and, you know, useful products for you to use as possible.

(24:49):
This kind of treatment of open source developers and non-custodial wallet developers, it literally
just all it makes them do is do what phoenix did like okay we're gonna leave then like we're not
gonna go risk jail time and i think that's like that's such a shame like that's not the environment
we should be fostering like nobody nobody nobody wants that environment no one i mean except for
maybe some like people suffering from a totalitarian temptation that they can't quite

(25:13):
explain they're like they're in their elizabeth warren phase and they're just like i need to suck
all the freedom out of the room as fast as possible i don't know i don't understand people
who want to drive all the crypto assets and Bitcoin into custodial platforms so that they
can be controlled that way.
You know, if it limits non-custodial platforms, everyone's going to go to Coinbase.

(25:33):
And to your point earlier about, you know, getting the president right right now, I think
it's important to recognize that a lot of countries tend to follow the U.S. when it
comes to their regulatory approach.
So if the U.S. says, screw this non-custodial thing, we're going to ban this, we're going
to make it really hard to have a good non-custodial wallet, well, a lot of other countries are

(25:54):
going to look at that and say, oh, look, the US did that.
This makes sense.
We're going to do the same.
And so it's not just the US.
Obviously, Europe's already trying that, and they're all way down that road.
But many other countries will follow what the US does here.
And so if we take a stand and say, no, no, no, non-custodial is fine.
Custodial will regulate.

(26:15):
that gets monitored very closely, whatever, but non-custodial is fine, then that will probably
take hold across a decent portion of the globe. Yeah. I mean, I hope that it does because again,
it's so much of this stuff just seems like it should be common sense. It seems like this
shouldn't even be a debate. Like, of course, if you're not controlling any sort of customer funds

(26:38):
or, you know, user funds, of course, you're not, shouldn't be slapped with these ridiculous,
you know uh legal categorizations but apparently it's very non-obvious to people or they pretend
that it's non-obvious either way i i'm i'm curious to say i mean i saw just uh right before we hopped
on here i saw that like all of the different basically uh both bitcoin and crypto kind of

(27:01):
advocacy groups or you know uh policy groups have basically joined together to issue some
some statements around this which is nice to see like that yeah i mean you know granted it's like
okay you know don't shit coin it's bad for you but it's not like ultimately this the fact that
these laws uh or these actions do affect everyone building in this space at least hopefully some of

(27:25):
that you know sweet uh sweet shit coin money uh flows through the lobbying channels and maybe
benefits bitcoin in some way so at least there's that right they spend a lot of money on lobbying
and we we as bitcoiners don't and they spend a lot of money lobbying about the sec and then
securities regs and whatever and we don't care about that that doesn't help us and so it's it is
nice to get a little bit of their money and a little bit of the the air in the room going towards

(27:49):
something that affects all of us including bitcoin yeah it's it's it's uh a nice a nice change of
pace versus just them trying to fund uh bitcoin smear campaigns um so i mean yeah right uh but
hey at least the this i mean it was i did not know if i was you know going to get to see the skull of
satoshi in person but that was that was pretty cool not cool that they did it and like screw them

(28:14):
for it and i will never forgive or forget uh because you just pre-mined all of your tokens
out of thin air then use it to fund disinformation campaigns when you dump on retail but at least we
got that cool piece of art because like shout out to the artist uh incredible piece of art yeah true
true um and fuck you brad garlinghouse uh but anyway uh but that's beside the point uh so okay

(28:37):
Is there anything else on this in terms of like are any kind of like other deadlines people should be aware of?
Is there anything that like actionable stuff?
Just I want to make sure we like we really drain this.
If there's anything else you like want people to know on this.
No, I mean, I think, you know, we want to get this done.
This Congress, obviously, you know, who knows what will happen in the midterms in another year and a half.

(28:58):
So, you know, we want to we want Congress to feel the pressure now.
We wanted to get it done.
But, yeah, I mean, I think it's the most important thing happening in Bitcoin right now.
certainly the most important thing that that everyone in bitcoin can contribute to by again
by picking up the phone and calling their reps um but yeah i i don't uh but i think that's i think

(29:18):
that's about it even though it's it's super important it's just not a complicated issue
right which which is nice like it's easy to wrap your head around okay so so that that's actually
kind of a perfect uh a perfect transition here because you said this is like the most important
thing happening right now. There are obviously a lot of debates going on within the Bitcoin

(29:39):
community right now, if we can call it that. Presumably then, just given your last statement,
you would say that those other debates are not as important as this one. I'm very curious what you
think as far as what is the signal right now versus what is the noise amongst these various
debates that are going on, whether it be around filtering and this, you know, knots versus core,

(30:03):
which I think is somewhat of a false dichotomy. But or if it's about perhaps the most important
thing is sats versus bits versus just, you know, versus Bitcoin. I don't know if to me,
that's not the most important thing. I enjoy sats, but also, you know, call them whatever you want,
label label them in your app however you want what what else are what are people being distracted by

(30:27):
versus what else should they maybe pay attention to a little bit yeah yeah i mean i think on the
yeah you're right on the filtering debate it's a weird dichotomy it's it's a 10 year old debate now
probably more um so i'll admit that i'm a little tired of it um i've i've had it a few times i know

(30:48):
there's a lot of Bitcoiners who this is their first go around. So they're excited by it, but
I'm a little tired. You know, yeah, I don't think I think a lot has been written there. I think
Bitcoin Core has a PR up to put up a blog post that explains, I think, in very clear terms,

(31:10):
the way the mempool works from their point of view. And I think it is super straightforward
and easy to understand.
So when that comes out,
I encourage people strongly to go read that.
Hopefully, hopefully they'll post it
in the next day or two.
And I don't know that I have a lot more
to add on that debate.
But yeah, I mean, I think it's such a distraction.

(31:32):
There's no amount of screaming about that
is going to change anything.
It's just, it is what it is,
whether you like it or not.
No amount of screaming is going to change it.
And no amount of Bitcoin core changes
is going to change reality there either.
It just kind of is what it is. So I find that to be quite a distraction.
On BitSats and Bitcoin, I don't know, man.

(32:02):
I think the ship has sailed, but people are going to push it anyway.
Certainly, I have always held the view that more experimentation in user experiences built around Bitcoin is good.
that is part of the way we look to achieve our mission at Spiral.
We want to provide software that enables people to build a great non-custodial wallet,

(32:27):
and that enables more experimentation of different user experiences
to see what resonates with people and what gets people really using Bitcoin.
And, you know, I mean, our goal is that hopefully by the end of the year,
if not the middle of next year, you will be able to go on Replit,
ask it to build you a Bitcoin wallet, and it's going to build you a super slick, non-custodial Bitcoin wallet that works, has instant payments, low fees, and is super reliable.

(32:52):
And you can build whatever user experience you want, and then we can see what actually works in the marketplace.
That's our top line goal right now.
So I'm excited for that.
But yeah, I mean, sheesh, on bits and sats and whatever, I don't know, man.
I'm not a user experience person.
And it does seem like the fragmenting the user experience is only worse.

(33:15):
But hey, what do I know?
Yeah.
And what about are there any other topics?
I mean, that you think are, again, are worthy of consideration right now when it comes to
like these internal debates that Bitcoiners have?
I mean, there's a lot going on in Bitcoin.

(33:36):
I think that the debates are very often not the point.
Like, you know, there's always a lot of debates going on in Bitcoin about this or that or whatever.
In general, I find them to almost always be distractions like that.
You know, certainly the block size wars was not a distraction.
That was that was really about how to define Bitcoin.

(33:57):
And there was a lot of as painful as it was, there was a lot of value in having that debate and pushing through those wars.
But for the most part, I think most debates in Bitcoin tend to be a distraction.
but there is a lot going on in bitcoin there's all there's more developers building bitcoin
applications than there ever have been there continues to be a very slow but non-trivial

(34:19):
growth in available resources for developers and funding for developers tons of new protocols and
things coming out whether it's roll-ups and l2s whatever you think of some of those going in the
shit coining on bitcoin direction some of them going in the in the providing better privacy
direction though uh which is cool or arc and other new l2s that aren't roll-up based plus i think

(34:44):
lightning is finally getting good this year i mentioned earlier but i i really think the
non-custodial lightning wallets that are going to ship in the middle of next year based on the work
we do on ldk at spiral are going to be really really good i mean i know a lot of people wrote
off lightning for a lot of very good reasons uh non-custodial lightning has sucked but it's it's

(35:06):
It's getting there and we finally do have a lot of the pieces in place and will have the pieces in place over the next few months to really make it awesome.
So there's a lot of really great work being done.
It's just that a lot of the plebs, either people who are developers or maybe more importantly, just don't have a ton of time.

(35:29):
This isn't their full time job.
They don't have a ton of time to contribute to Bitcoin.
Don't really get to help with some of these things.
And so a lot of people want to just have debates because it's very understandable and it's easy and you can feel like you're doing something and not sure that you always are.
Well, let's I'd love to dig into the lightning piece a little bit, because, again, that that talk you gave and I'll link it in the show notes for people.

(35:54):
I'm sure I can find it on YouTube.
But basically, yeah, lightning screwed, but it's not screwed, but it's it's it's screwed.
but it's okay uh can how maybe if you could give the just like the high level premise for that
talk like what led you to give it and then kind of how has your view of lightning either evolved
or shifted or changed since then yeah um i think when i gave that talk oh you said 2022 is probably

(36:22):
something around then uh i think so probably uh i think lightning was a little overhyped
there was a lot of like lightning is perfect lightning is super secure you're on a node you
don't have to worry about it whatever whatever um and i think there were a lot of very big open
hairy questions about lightning including in the security model including the trust model
um i think many times in that talk i told people like you probably should never open a channel with

(36:47):
someone you don't trust um at least kind of trust you know you don't have to like think they're the
the best person in the world but they're at least not going to go to a lot of effort to take your
money um and i think since then the communities come around the other way and now lightning sucks
lightning is broken lightning will never grow it's just a way for custodial platforms to settle

(37:08):
money and then maybe it's a a way for other l2s that people actually use to settle um you know
whether it's you're using e-cash or spark or arc or whatever you're gonna pay people over lightning
I'm gonna you know pull a little bit of a cliche and and pretend that my view hasn't shifted I've

(37:29):
been rock solid and the community was here and the other community is here and I'm still chilling
in the middle but I think you know a lot of the stuff that that was in that talk to you was
here's a big problem it's really hairy we think we have a solution kind of right here
and we have to figure it out and we have to go build it and it's a lot of work to build it

(37:50):
And now for many of them, not everything, but for many of those big hairy problems, we do have solutions and we have them built or almost built.
You know, the biggest one really being these pinning attacks.
So Lightning has this like really weird OG Lightning has this really weird trust model where, you know, we're creating all these transactions, but we're not broadcasting them right away.

(38:15):
That's like classic Lightning. We're creating these transactions. We're updating them all the time.
and then eventually we'll broadcast it later.
The problem is we've got to put a fee on that transaction.
You know, we're building these transactions every minute or whatever.
We're assigning a fee and that fee needs to be sufficient to get into a block
at some point in the future that we don't yet know.
And obviously, if you follow Bitcoin fee estimates or you go to Mempool,

(38:39):
Mempool.netspace every now and again, you notice that the fee does fluctuate.
And sometimes the fee fluctuates a lot.
Sometimes the fees spike up, you know, hundreds, 100x over one day because somebody is doing something crazy and they put a lot of transactions on the chain. So creating transactions that have a fixed fee rate now for inclusion in the chain some point later where we don't know what the fee rate is going to be, then is not a solvable problem. It's not just a hard problem. It's like we can't solve it.

(39:06):
And over the course of the last four or five years, Lightning has done some work at changing the protocol, but also Bitcoin Core has rethought how they deal with transactions in the mempool to address this problem for Lightning.
And it also fixes problems for other related problems for other L2s.

(39:28):
And so Bitcoin Core now, as of, I think the latest release, maybe the one before it, when you take a transaction, when nodes send transactions to each other, you know, that you're sending a transaction, they're like, okay, I got this transaction, I'm going to see if I want to put it in my mempool, and then relay it onwards.
Now, nodes are able to look at multiple transactions at once.

(39:49):
So a node is able to say hey Walker you know your peer can say hey Walker hey I got some transactions for you Instead of sending one it sends two And now your node can look at those two transactions and can say okay I going to look at the overall fee rate of both of the transactions together and not just one at a time

(40:09):
And that lets us play fun games like assigning zero fee on these transactions in Lightning that we update all the time and then hanging another transaction off of them that pays for them.
And so this second transaction can have a high fee.
It pays for that transaction.
But nodes have to relay them together so that nodes can say, OK, these two transactions together make sense, even if the first one didn't.

(40:32):
And that's a huge change.
You know, as you might imagine, there's a lot of parts of Bitcoin Core involved in looking at transactions when they get added to the mempool.
To be able to now look at buckets of transactions instead of singular transactions was a lot of work, a lot of research and development.
a lot of thinking about all kinds of crazy denial of service attacks a lot of thinking about ways

(40:53):
people could break these things and it took two three four years for bitcoin core to finally
conclude some of that work some of it's still ongoing there's more work to be done there
but you know fixing these things was hard and so i think the point of the talk was to point out like
these things are hard we might have solutions for some of them some of them we might not have

(41:15):
solutions for some of them are unsolvable most of them we can fix but there's a lot of work to be
done and i think now we're in a position where we can say okay actually we've done most of the work
we needed to do it's not 100 there but over the next i think six to 12 months it's going to be
mostly there um not in all lightning nodes uh but certainly in ldk and for the folks using ldk

(41:40):
based wallets those features that we needed to make lightning good are finally there
which is which is great uh like the fact that you like to hear your positivity on it is is
fantastic because again like uh what i enjoy about you matt is that you're always very
realistic and balanced about things like no one would accuse you of overly hyping something you

(42:05):
know to put it mildly uh so so that i mean that's fantastic and i do think that it is funny
now that you kind of pointed out like i'm remembering in kind of that 2022 era where
it was a lot more talk about how great lightning was and lightning is like it is ready and it's
good to go and you know it's perfect and and it wasn't and now it's kind of like you hear there's

(42:27):
a lot of like lightning like doomerism now and just people you know trying to dunk on lightning
when it from just a as a casual user of lightning and of a bunch of different lightning wallets in a
lot of different contexts it's pretty incredible now and like from what you're saying like it's
going to get better like it's it's it's it's funny how uh how narratives change i guess but

(42:53):
i'm i'm glad to see it under hyped then i guess currently maybe that's a good thing a little a
little bit less hype uh is is not going to be bad yeah and it'll take a while as wallets start to
adopt the newer technologies i mean i think you know over the next few months uh the good lightning
wallets are going to get really good and the ones that maybe aren't as actively maintained or

(43:15):
made some technical decisions that are harder for them to to pivot are gonna stay okay um but over
the next you know as they all start to catch up it's it's gonna be i think really good i think
the user experience is finally going to be great and and hopefully just like more options because
i mean for a while even like a like wallet of satoshi was such a widely used wallet um and then

(43:39):
they obviously they're a custodial wallet to clarify for anyone who is not familiar and they
left they ceased operating i mean you could you could still access the wallet if you were using a
VPN, like, you know, it was fine. But like, for all intents and purposes, they were not available
to folks in the US, you know, because they were worried, again, about the whole money transmitter
thing. Now they're coming back, they're saying we've got a non custodial option. I don't know

(44:03):
if you have any thoughts on that. But just more broadly, it's like, okay, it's nice for people
to have more than just like one option. Like, we should have a bunch of custodial options and a
bunch of non custodial options. And you should be able to easily choose. And they should be and
they should be nice experiences versus like, well, here's the one custodial option that we can still
use. And, oh, you can get a hold of this non-custodial one if you want, but the developers

(44:26):
fled. So like, who knows? Like, I don't know. It feels like we're in a better place now for that,
at least. But do you have any thoughts on the wallet of Satoshi thing?
Yeah. I mean, the BRCA is needed here. And again, you know, our goal on Spiral is really that we
We want everyone to be able to YOLO a good, secure, non-custodial wallet with an LLM and Replit and just build me my own non-custodial wallet.

(44:50):
And it'll be good. That's our goal. By the middle of next year, that's really our goal is that it'll just work.
It'll be great. And we'll have real competition there.
On wallet of Satoshi specifically, my speculation, and I haven't gotten this confirmed, is that they're using Spark,
which is LightSpark's new not custodial but also not non-custodial Bitcoin L2.

(45:22):
So it's a really interesting product.
I think it's really cool.
And for low balances, I think it makes a lot of sense.
For a balance where you can't really open a non-custodial wallet, it makes a lot of sense.
But it is fully trusted.
So it's this really weird dynamic where you trust their server to delete keys so that, you know, as you transact, they're deleting old keys and you trust them to do that.

(45:48):
And if they don't do that, then they can potentially take your money.
But if they do do that, they're not a custodian.
They don't have an active key on their server that someone could hack into, take the key and then take your money.
right so it's not it has a very different trust model in practice so it isn't practice much safer

(46:09):
but it is still fully trusted you're still trusting their server to do the thing correctly
and uh yeah so it's it's somewhere kind of in the middle yeah i mean it's definitely not custodial
because they don't have a key that has some money that they could get hacked or whatever
But it's not non-custodial either because you don't have the key.

(46:33):
You don't have the only right to your money either.
It's somewhere in the middle.
It's a weird middle ground.
But it's a really cool middle ground.
It's cool that people can build a middle ground.
And then on top of that, I think on the Spiral team, we similarly are looking at using Spark for some things.
and very specifically our goal over the next number of months is to start thinking about what

(46:59):
a wallet looks like when you have both a custodial or at least this trusted thing and a non-custodial
option because you know if your wallet only has a thousand sats if you opened a new wallet you
linked your nostor uh and you received a 21 sat zap you can't there's not no no non-custodial
wallet makes sense. You can't have 21 sats in a non-custodial wallet, even with an LSP. They're

(47:22):
not going to allocate money into that channel. It doesn't make sense. And so you need something
custodial there, or at least trusted. And Spark is a really cool option because it's not really
custodial. And it doesn't have that really bad trust model of like they could get hacked and the
money taken. But it is still fully trusted. So we're not going to call it non-custodial.

(47:42):
um and then if you get a decent balance if you get you know 10 000 sats or whatever the threshold is
for you know the wallet could pick a different threshold um you open a line a channel and you go
to an lsp and you say hey look i've already got this money i don't need you to allocate any liquidity
to me just open a channel to me and i'll put this money in my channel um and so it it really makes

(48:05):
for a nice wallet across different balances.
So you don't have to like pick,
oh, well, I'm going to have low balance.
So I need to pick a custodial wallet
or, oh, I'm going to have, you know,
a whole Bitcoin in there.
So I'm going to, I need a non-custodial wallet
because I don't want it to get stolen.

(48:26):
It lets just one wallet service both roles.
And okay, maybe if you have a thousand Bitcoin
or a hundred Bitcoin,
you're not going to use this kind of wallet.
you hopefully have some kind of offline air gapped, whatever. But for a spending wallet,
or for a wallet that only has some savings, I think it makes a lot of sense. And as Lightning
continues to mature, and we address these issues that where the protocol bleeds into the user

(48:49):
experience, and it leads to a really bad user experience, as we address these issues, then
having this wallet with both sides is just going to be super seamless. You shouldn't have to notice
any of this because lightning is going to be totally reliable on this side spark is going to
be totally reliable on this side and the wallet's going to get you the best trust model that makes

(49:10):
sense given your balance at all times and it's just going to work i feel like i kind of glossed
over uh something that you mentioned earlier where basically you said we're like if i heard this
correctly like six to twelve months away from like basically somebody like me being able to vibe code
my own lightning wallet is that kind of what you were you were getting at basically like

(49:30):
yeah that's really cool that's that's our goal that's definitely our goal and i'm not going to
promise 12 months on that i'm in 12 months i think we're going to be there but i'm gonna i'm
gonna say 18 months just because things slip um you know i think we're gonna have a really good
product in the next 12 months certainly um whether it'll be good enough for you to just vibe code

(49:52):
something and have it be secure and robust maybe certainly in 18 months you know by late summer of
next year or fall of next year yeah yeah you're going to be able to vibe code your bitcoin wallet
it's going to be a good wallet that's wild to think about i mean so do you envision a future
where it's like there are innumerable different you know wallet implementations because everybody's

(50:17):
building kind of a wallet that works or maybe not everybody is but more and more people are
able to build out a wallet that has the functionality and the features that they are
looking for like specifically or or do you think we still do these things sort of like you know is
it like a winner take most where we still kind of trend towards like a couple of big players
i assume there'll be a handful of big players i mean you know at some point there's some social

(50:44):
value in like okay well this is the one that a bunch of people reviewed the code and it's not
going to steal your money and whatever. If we really had a million of them and everyone was
using their own, then half of them would steal everyone's money. And that's not a great outcome
either. But aside from that, you know, I think, yeah, I mean, there's going to be quite a few.

(51:04):
And I think it's what it's really going to do is it's going to enable a lot of experimentation.
You know, if you are a hardcore bits maxi or a sats maxi or whatever, you can go build a wallet
and say, look, look at this wallet.
Look how great the user experience is.
I can demo it.
It works.
It's super slick.
It's as slick as all the other wallets.
But look how great this feature of the wallet is

(51:26):
where I think I'm really delivering a better user experience.
And then it lets people build more innovative things.
You know, let's allow us for more innovation to say,
well, I think that there should be a Bitcoin wallet
with a built-in chat bot
and you pay for the chat bot with lightning or whatever.
I mean, I know that's a common example now.
I'm not an entrepreneur.
I don't have a million ideas, but we're going to really enable people to experiment with

(51:51):
all kinds of different clever things.
And that's going to really unlock things in Bitcoin, I hope.
Can I ask you, I don't know if I've actually heard the story and if you're cool with telling
it, how did you actually get into developing in Bitcoin in the first place?
Do you mind telling that story?
Totally.
I was in high school.

(52:13):
wild and bitcoin got to the front page of slash dot a few times if you're not old enough to know
what slash dot is slash dot was reddit before dig was reddit and it's dig with two g's um so there's
there's been a few of these kind of link sharing sites throughout history and slash dot was the

(52:34):
cool one at the time it was a little more tech focused bitcoin got to the front page a few times
over the course of late 2010, early 2011.
I ended up hearing about Bitcoin
from a podcast that I watch regularly,
but they heard about it from Slashdot.
There was kind of a flood of technologist people
who got involved in Bitcoin
all at the same time in early 2011 to mid 2011.

(52:57):
And I just found it fascinating.
I mean, I didn't, I knew some things.
I was a high school kid.
I didn't really know how to code.
I didn't really know whatever.
I just,
kind of thought this was really cool we could like build a money and like send each other money
based on purely on the software that we were writing and not have to trust anyone else no

(53:19):
one else was involved in us sending each other money and we were building this this money for
the internet i thought that was really really cool and i wanted to work on it and luckily at the time
a few other folks got involved in bitcoin at the same time who were just brilliant i mean who were
You know, Greg Maxwell, Peter Willa, folks who were senior engineers, you know, had been doing software engineering for many, many years and were more than happy to volunteer their time to teach some random kid like me stuff about software engineering.

(53:53):
And so I learned from super brilliant people.
I got to hang out with super brilliant people on IRC and work on a project I thought was fascinating.
So I kept doing that through college, during Blockstream out of college, did that for a few years during ChainCode. Now it's viral. So I've bounced around basically my whole career between positions doing Bitcoin research lab kind of stuff, just write good software to make Bitcoin better.

(54:17):
i've been very fortunate enough to be paid to do that my entire career
i guess probably more than five more more than a decade now i've been doing it full time
and i've been working on bitcoin for almost 15 years that's that's wild oh happy almost
anniversary uh thanks thanks for sharing that i mean that's just that's just very cool um i mean

(54:41):
So you were not like – you were still a very – you were very green when it came to your developer skills when you first discovered Bitcoin and started trying to learn about it.
Yeah, I have one of the best defenses for I'm not Satoshi.
I didn't know what a pointer was in 2011.
So I clearly did not write any of this code that is totally impossible.

(55:03):
It's good to have plausible deniability these days because it seems the Satoshi accusations really get tossed around a lot.
Yeah, it's it's absurd. Well, thank you again for sharing that because I want to ask another question of you based on another one of your talks, which was, again, this this pre Trump talk that you had, which is essentially around what I if I'm remembering correctly, what you viewed as one of the greatest, if not the greatest risks to Bitcoin, which is minor centralization, specifically mining pool centralization.

(55:34):
Some of this, you know, basically we can get into the template side of that too.
But have you seen any improvement in that since then?
As far as I understand, the situation is still not very great.
Where are you at with that?
Is this still in your mind like one of the or if not the greatest like long term risk to Bitcoin?

(55:57):
Yeah, it definitely is a major risk.
It is definitely one of the biggest risks to Bitcoin, I think.
I will say that we are starting to see little shoots of grass poke through the dirt here.
So on the stratum, so the fundamental issue to set context is that in Bitcoin, the network, the thing that gives Bitcoin value is that there's this censorship resistance property.

(56:28):
Like you own your Bitcoin.
No one can take that from you.
No one can stop you from sending your Bitcoin to whoever you want.
And it is your Bitcoin.
You don't have to trust anyone else in order to use it.
And that's great unless there's, let's say, two pools that control more than 51% of the network or three that control something like 70 or 80%, right?

(56:54):
Which is the case today.
If you combine Antpool with all their proxies and then Foundry, it's almost more than 50%, it's close to 50%, sometimes a little more, sometimes a little less.
That's not good, and that can potentially impact this censorship resistance property, which I think is really a major part of where Bitcoin gets its value.

(57:14):
So what does this mean?
So it is not the case that this is fundamental to the design of a pool.
A pool says, okay, we have all these miners.
You're going to mine.
We're only going to find a block every so often.
We're going to split the reward of the block across all the miners proportional to their hash rate.
This is a simple business.
This does not require that they select the transactions that go in the block.

(57:38):
That is a technical shortcut that was done because it's an easier way to implement this business, but that's not required.
And so there have been various proposals throughout Bitcoin's history to remove that requirement to say, OK, we can have a pool where the individual miners are selecting the transactions and the pool still does this reward splitting thing.

(58:02):
We now have a few pools that actually enable this.
So there's Ocean, obviously, very publicly, which is Luke's pool.
They don't have any kind of real material hash rate to speak of.
There's a little bit of hash rate there.
They've invented their own protocol, their own proprietary protocol for this that other pools don't use.
But it does enable this, and that's really good for Bitcoin's decentralization.

(58:25):
There's also Stratum v2, which is a slightly older protocol standard that I wrote with the Brains, which is the former slush pool company.
CEO and CTO were co-authors on that.
they for business reasons don't currently allow miners to select their own transactions sadly

(58:46):
at brains but there's a new pool called demand which is launching kind of in beta right now which
does allow transaction selection and then so these early shoots of small pools enabling this
has created a little bit of noise within the mining community.

(59:06):
And I like to pretend that I also had a part in that
with my main stage talk you talked about in Nashville last year,
where I really tried to hammer this issue home,
as well as some podcasts, you know,
trying to really talk to miners and say,
this is a major issue, you need to fix this.
And so there's Stratton V2,
the software is finally becoming ready.

(59:27):
And I know they're talking to a number of pools
who are hearing from some of their miners that they want this.
And so hopefully that starts to become an option
at some of the larger pools
and some of the moderate-sized pools
over the next number of months.
And then almost entirely flew under the radar,
Bitmain announced in Vegas at a site event

(59:48):
that they were going to start enabling their miners to select the transactions in their block Totally under the radar somehow didn get picked up by almost any media in Bitcoin or podcasts or whatever I haven seen people talking about it
but that is possibly the biggest announcement that was made in Vegas by an order of magnitude.
That's huge for Bitcoin. It's Bitmain. We don't know what protocol they're using. They haven't

(01:00:14):
said anything. They haven't provided any details. Who knows? Maybe it's something they will launch
in five years maybe it's already running we don't have any idea what's going on but they said the
fact that they even committed and said look we think this is important enough that we want to do
this is huge i did not hear about that clearly i was uh like too too busy uh it was that it was at

(01:00:40):
some side event that like i saw one tweet about it and that was it wow well i mean that's like if
If they follow through with that, that's pretty massive, though.
Absolutely massive.
Yeah.
I mean, it would take the largest Bitcoin pool by far and totally decentralize it.
Now, of course, their miners have to switch their software stack and they have to start using it.

(01:01:02):
But it makes that an option.
It makes it possible to totally decentralize.
OK.
90 percent decentralize one of the largest pools in Bitcoin or the largest pool in Bitcoin.
That's huge.
Do you think they're coming at that from an altruistic perspective of we want Bitcoin or we want what's best for Bitcoin?

(01:01:24):
Is there another potential ulterior motive?
I mean, or is it just that, hey, look, if Bitcoin pools are too centralized and you don't have this optionality here, well, ultimately, that's not good for Bitcoin, which is not good for our bottom line down the road.
So, hey, like, you know, the game theory of Bitcoin just works out that way.
Yeah, I mean, I don't know.

(01:01:45):
I'm asking you to speculate here.
So, you know, obviously Bitmain has a long history of making decisions that look to be very bad for Bitcoin, but good for Bitmain's bottom line.
So I'm not going to give them undue credit for suddenly having had a change of heart and just wanting to do what's best for Bitcoin.

(01:02:06):
uh i think there is now at least some non-zero demand from miners to enable this um they might
be feeling a little bit of heat from the competition of ocean again ocean is almost no hash rate so i
don't know how much they care um but you know maybe they have some miners saying like hey look

(01:02:28):
here's this feature i care about this i want to use it why are you not uh offering this service
um i could also take credit and say like well look i got up on the main stage in nashville last year
and and put up a multi-headed monster and pointed to it and said this is bitmain and they're the evil
monster pulling the strings and maybe they said oh this is bad for a business if if everyone thinks

(01:02:53):
we're the evil flying spaghetti monster or whatever or i guess the flying spaghetti monster
is good i don't know whatever um so you know i'm gonna take credit for it i don't know
but it totally was my all my doing um but yeah we'll we'll see what happens we'll see whether
their miners adopt it we'll see whether they ship it whether they ship stratum b2 or some
proprietary protocol who knows but yeah i mean potentially huge it's that's massive and and

(01:03:20):
can you if you don't mind just for folks that may be hearing this and say like well okay what's the
big deal anyway why does it matter that miners can can choose what transactions go in the block
Like why can't the pool just do it?
What is the actual reason why that makes a difference?
Yeah, so I think we were talking about this censorship resistance property.

(01:03:42):
The way Bitcoin intends to get or intended to always get censorship resistance, intended to always have this property that you don't have to trust anyone else in order to be able to transact your Bitcoin, was that cash rate and mining was supposed to be decentralized.
It was supposed to be that there are a lot of miners all around the world, and anytime you want to get your transaction included, you just have to find one that wants to mine your transaction.

(01:04:07):
Hopefully many do, but you really just have to find one with enough hash rate to regularly mine blocks, and that there are enough miners who have enough hash rate to regularly mine blocks.
That is not hard. That is not the case when the miners, the things who have to pick the transactions that go on the block, who you would have to go to to get your transaction mined are the pools, not the miners.

(01:04:32):
Mining, ASIC ownership, these farms filled with ASICs are actually fairly decentralized.
There are a lot of them owned by a lot of different countries, companies in a lot of different countries around the world.
you know for in for many practical purposes mining is actually decentralized a lot of people

(01:04:52):
maybe don't recognize this or think that well there's these four big public companies in the
u.s well if you add up all the big public companies public miners in the u.s they don't
actually have that much hash rate as a percentage of total hash rate uh around the world there's you
know there's a lot in russia and kazakhstan and china and like it's it's in it's all over the
place, right? That's really good. It's really great for Bitcoin. But the thing that needs to

(01:05:20):
be decentralized is this transaction selection is the like, who do you have to go to to get your
transaction mind? And today, those are pools and pools are super centralized. So we want to take
that, that power and give it to the decentralized group of people rather than having it be in the
centralized group where there's only three or four actual companies who are materially competitive.
you are totally muted right now and you're going to get so much shit for this later

(01:05:49):
this is so embarrassing oh my gosh uh what i was going to say is it's uh it is great honestly to
see whatever bitmain's actual motivation behind it it's incredible to see them make that move
like because again that's a it's a huge huge deal um which is just kind of wild that this wasn't

(01:06:10):
wasn't covered more i blame fellow podcast podcast bros like myself we need to do better
i think it was i think they like announced it thursday afternoon on the last day of the
conference when everyone was worn out and like i'm just gonna go watch ross's speech and then
i'm gonna go home and sleep off the hangover like they announced it the worst possible time

(01:06:31):
at a side event not even the main event and yeah it was like the worst announcement possible but
also one of the biggest that's that is that is wild um so on this is a slightly different note
but i'm curious where you stand on just like the the ossification side of things because i think

(01:06:53):
this is something that gets like the word ossification gets thrown around a lot um as
though it's like this decision that is made versus something that's just like this natural
progression that happens. And I'm curious where you think we are at in this progression. Maybe
you disagree that this is like a natural progression, but like, where do you think we
were at in this? A lot of people have made the points like, well, Bitcoin's basically,

(01:07:16):
you know, already effectively ossified. Like you don't get a choice and it just,
it just happens. And maybe it already kind of happened. Where do you sit on this? Where do you
think we're at in that uh is bitcoin still going to change in a material way does bitcoin still
need to change in a material way yeah yeah i mean i do think there is definitely an element of as

(01:07:39):
bitcoin grows uh it will continue to it'll be harder to change changes will be less frequent
types of changes will be less major i think that's the case um i don't think we're there
yet uh you know bitcoin development is still very small there's still a small group of people who

(01:07:59):
who work on bitcoin full-time and contribute materially to bitcoin development it's an ever
growing group of people but it's still fairly small um and i think that the community of people
who pay a lot of attention to bitcoin who really know a lot about bitcoin who are deeply
interested in everything that's happening in Bitcoin, who are going to pay attention to the

(01:08:26):
next software can share an opinion and not just say like, ah, the developers figure it out.
It's still a small group of people. It feels like a lot of people because there's a lot of people
screaming on social media and they're very loud on social media, but it's still not a big group
of people. And so I don't think we're very far down the ossified direction. I know there's a lot

(01:08:48):
of people who think we are a ways down that direction because it feels to them like, well,
there's no changes happening in Bitcoin and the changes that are getting proposed aren't getting
adopted and yada yada. I think that's just a consequence of developers being busy with other

(01:09:09):
stuff. I talked about Mempool and these big changes happening in Bitcoin Core. It's like,
okay well developers are busy with lots of other things going on and in part as a consequence
they're not working on a lot of soft works they're they're kind of look at various soft
works proposals and like yeah okay that that might move the needle on some stuff but not

(01:09:29):
a huge deal it's not like fundamentally re-architecting bitcoin or fundamentally
enabling new things as much as some proponents claim they're generally not um and so people are
like, oh, OK, we'll get to that. And so I think it's easy to read too much into the fact that
there aren't many changes, haven't been many changes to Bitcoin lately. And I don't think

(01:09:53):
people should read that much into that. I think, you know, we'll we'll see what happens. But I don't
think we need to read too much into that. And yeah, I mean, I think we'll get to a
ossification point. I hope we're not there yet. I don't think we're even really all that close to
there yet um but yeah do you in terms of like how you view bitcoin development more broadly

(01:10:18):
as it encompasses layer two three whatever development is it what's your view on that
in terms of where kind of like where does the quote uh to use a just buzzword innovation
happen in terms of the user experience like it would seem that that happens on these you know
on the layer twos, on the lightnings, or going whatever layer you think this is,

(01:10:40):
like on the e-cash side of things.
Is that where you think a lot of this stuff happens?
And maybe that's why there's not so much of an urgency
behind a lot of these current proposed changes to base layer?
Yeah, in part.
Certainly the various layer twos, layer two and a halves,
custodial with more privacy, whatever you want to call these various systems,

(01:11:03):
move a lot faster.
They can.
There's no, they don't have a whole group of different people who have different stakeholders who all have to agree to any change. And so they move a lot faster. They still move slower than we'd like. Lightning still is taking a long time to get to a point where we're happy with it. But they move fast. And so that is a lot of the focus.

(01:11:26):
And that's also a lot of the focus of user experience in Bitcoin.
You know, where is the wallet of the future in six months, eight months, 18 months?
What kind of wallet are people going to be building?
Well, it's not an on-chain wallet.
No one's sitting down and saying, I'm going to build a new on-chain Bitcoin wallet for people to use on their phones.

(01:11:47):
Okay, maybe some people have some high security, whatever, but that's not what's happening.
And so the focus is really on these second-layer systems.
And I think you're right that the – but I think at the same time, that's not to discount how much work has to happen in Bitcoin Core on the on-chain side of things to enable those.

(01:12:09):
There's a lot of people who would argue that we need various changes, software consensus changes to Bitcoin to enable some of these L2s.
I don't think that's necessarily true, but we have needed, for example, mempool policy changes like big overhauls to the mempool and Bitcoin core in order to enable Lightning to have a better security model and in order to enable Lightning to have a better usability story.

(01:12:34):
Those changes also help ARK and other L2s too.
So that's where a lot of the work in Bitcoin core has been focused.
On the software side, there are various proposals that would improve some L2s. I think the improvements to Lightning are moderate, but the improvements to other L2s like Arc are maybe more substantial.

(01:12:57):
there's still usability user experience questions around arc um but uh the wit but most importantly
people are deploying them now without any software changes people can actually sit down and build
these things and this gives you a much better story for okay as bitcoin core finishes up some

(01:13:17):
of its fairly large overhauls to the mempool people are deploying these l2s lightning gets good
Arc starts getting deployed, Spark and whatever else gets deployed, and people start using these things, roll-ups, importantly, start getting deployed.
Then we can see, okay, well, how are these technologies being used?

(01:13:38):
What does the usability look like?
How are they faring in the market?
Are people interested in using them?
Are they really providing value?
And then we can sit down and say, OK, here, you know, I think this specific technology would be 10x better if only we had this software.
And it's just not providing the value that it would to the ecosystem if we because we don't have that.

(01:14:04):
But we only really learn that as we start to deploy things, as we start to actually build things.
And so I think we'll we'll get back to the software game.
we'll get back to it, but we'll come into it with a lot more information than we have now.
And with a lot, ton, ton, ton more information than we had even two years ago, where a lot of
these ideas like Spark, like BitVM didn't exist. So we were kind of flying blind with like, well,

(01:14:30):
we should do this soft fork to get this set of features. Like, okay, well, we don't know how to
use that. Now we have ideas for how to use it. Now we can sit down and say, okay, how do we
actually want it to look because we have ideas for how to use it and we have these systems that
people are actually even building and we're going to see how they're going to work more like
practical uh versus just purely theoretical and saying hey this sounds nice like which is

(01:14:53):
ultimately you're going to get more buy-in from people if that's the case as well like if you're
just throwing out theoretical ideas like nobody wants to hear about your theoretical idea that
sounds cool like but if you have something in practice that's a different story and i think
that was a huge reason why things haven't happened is they just didn't degenerate excitement because
they were theoretical and even even the the practical ideas that people proposed were like

(01:15:18):
still too theoretical um and now there's like there's real practical stuff it's like okay i
can see this i can see how people are building it i can see why people are building it we can see how
people use it and now it's like okay well now we really should do this or that and we should tweak
it slightly because it would help this a little more and whatever i'm gonna be conscious of your

(01:15:43):
of your time here matt and i want to give another uh shout out to people to go to save our wallets
dot org i'm gonna uh do it myself i i need i was gonna try and get the the call made before uh we
hopped on here, but I did not yet. But you have my word that I will make my voice heard to my
elected representatives. And I would encourage people to do this because it's genuinely such a,

(01:16:05):
like, it'll take five minutes of your day. And if you can't spend five minutes to, you know,
to do a little something for Bitcoin, well, like, I don't know what to tell you. Like,
go use the dollar. I mean, you just listen to an hour and a half podcast.
Exactly. You can pick up the phone for five minutes. You clearly have the time.
Exactly. That's, that's the best, that's the best argument. If you're listening to 40 hours
of podcasts per week, you can take five minutes and go, uh, and go call your elected official.

(01:16:31):
And I think this is important too, because people, I think sometimes want to like reject the political
establishment entirely and say, well, we just don't even need to pay attention to them. We
don't need to do it. And that's fine. You can feel that way, but the, you know, it's like,
you may not care about politics, but politics cares about you. And these lawmakers are going
to make laws that you do not like and do not benefit you and do not make you more free because

(01:16:54):
they're laws if you don't stand up and say something. So in this case, where it's a nice,
simple bill that just allows developers to actually develop without the fear of incarceration,
I think that's something that everyone should be able to get behind. So thank you. Anything else
you want to anywhere else you want to send people besides saveourwallets.org? No, that's the big one.

(01:17:15):
Yeah, saveourwallets.org.
You can type your zip code.
You can put in your email.
You're just giving me your email.
We might send you an email.
We might not send you an email.
In fact, if nothing interesting happens, we won't send you an email.
We're not going to use it to spam you.
It's just going in database.
Maybe we'll share it with MailChimp or something.
Yeah.
But hopefully they don't get hacked again.
Hopefully.

(01:17:36):
But just type in your zip code.
We proxy it for you.
We don't log anything.
It's all anonymized.
You're fine.
Just call your reps.
Save our wallets.org. It's not complicated. Spend five minutes. Help Bitcoin.
It's a it's a great pitch. And also the website's very nice. It was designed by the Bitcoin design community. Yeah.

(01:17:58):
Yeah. Yeah. There's a there's a whole community of people whose job is now to just make Bitcoin look better.
They're awesome. One of the people in that community stood up.
I said, like, hey, I think we need to promote this BRCA bill a little better.
and one of them raised their hand and said like,
yeah, I can do that.

(01:18:18):
And so they sat down, designed it.
They had an LLM actually turn it into real code.
It's great what these things can do.
And yeah, now we have a website.
I love it.
Just designing it and then vibe coding it into existence.
It's a beautiful thing.
Well, Matt, thank you so much.
Appreciate your time.
Thanks for all the work that you do.
And looking forward to another banger of a presentation

(01:18:39):
from you at some point.
I'll link a couple of these old ones so people can check them out because they are quite good.
Thanks.

(01:19:11):
and this podcast at primal.net slash titcoin.
On X, YouTube, and Rumble, just search at Walker America
and find this podcast on X and Instagram at titcoinpodcast.
Head to the show notes to grab sponsor links,
head to substack.com slash at Walker America
to get episodes emailed to you
and head to bitcoinpodcast.net for everything else.

(01:19:35):
Bitcoin is scarce, but podcasts are abundant.
So thank you for spending your scarce time listening to The Bitcoin Podcast.
Until next time, stay free.

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