Citadel Dispatch

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TOPICS: security, privacy, bip47, whirlpool, coinswaps, atomic swaps, taproot, lightning, full nodes, threat models, build processes

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[00:00:00] Unknown:

Survey by CNBC,   of equity strategists and portfolio managers, 44%   say it will be below   30,000   and just about flat for the year. Others are more optimistic. 25%   seeing it nearly $40,000,   and an equal amount predicting $50,000.   Now Bitcoin reached a high of nearly $65,000   back in April. And right now, you can take a look at Bitcoin. It's trading under $33,000   at about $32981.   What do you think, Bec? Are you if you were part of that survey, what would you what would you predict? Oh, I have no idea. I mean, it's pretty volatile. Could go any direction.  

[00:00:43] Unknown:

And 30,000?   I don't know. I   I wouldn't bet on this. How about you?  

[00:00:50] Unknown:

I will take by the end of the year,   I will, and maybe I'll be a cynic here. I will take the under, but if you said 10 years from now, I would take the over. Okay. Then I'll take the over just to play the other side.   What's Joe say?  

[00:01:44] Unknown:

Happy Bitcoin Tuesday, freaks.   It's your boy, Matt Odell, here for another Citadel Dispatch. This is episode 29.   Special shout out to our ride or die freaks joining us in the live chat considering   Euro 2020 is going on right now, Spain versus Italy.   So I appreciate you guys choosing us over,   that match.   If you   if if if you feel the need to go watch that, you can always watch our archives after the fact, but dispatch.com.   They're hosted on bitcoin tv.com.   Full downloads, no ads.   You can even torrent if you want, via bitcoin tv.com, which is pretty fucking cool.   If you're joining us on the audio feed,   that was CNBC   speculating on price because they have a survey of of,   I guess, a bunch of rich people who think Bitcoin's going to be under 30 k at the end of the year.  

That formally marks bear hunting season for us.   It's,   it's just pretty interesting watching how quick   people switch,   from bullish to bearish in these cycles.   It's   it doesn't matter how many times you've been in the space, how long you've been in the space. It it catches you off guard every single time.   So it will be cool to watch   them get caught with their pants down.   What else do I have for us? Today,   we will be focusing on privacy and security best practices.   I have 2 return guests here. I have Kito Miner of Noddle   and Craig Raw of Sparrow Wallet.  

I think together, the 3 of us should have a very insightful conversation here about,   you know, probably the most important thing for Bitcoiners today, which is is is getting your privacy and security in order,   before the price goes up,   and you end up securing a lot more money than you are currently holding.   This is Citadel Dispatch, the interactive live show about Bitcoin distributed systems privacy and open source software. As I said earlier,   this is dispatch number 29.   We've been coming to you live for over 6 months now.   And as I said earlier, all of those archives are available at seal dispatch.com.  

I want to thank all the freaks who continue to support the show and help keep it ad free, commercial free with no sponsors.   That is how I want to continue.   I am here with you guys, ride or die. Let's fucking make it happen. So I do appreciate all the freaks supporting the show.   You can do that through citadel dispatch.com.   You can also do that through our lnurl link on the QR code on the bottom left if you're watching the video stream.   And my favorite way of having you guys support the show is through podcasting 2 point o apps,   which you can look up on new podcast apps dot com, which allows you to stream Satch directly to dispatch.  

Every every day, after we record live and I post it up to our RSS feed,   I watch the stats stream in from listeners around the world who are using the podcasting 2 point o apps, my favorite one being Breeze.   We also have a Sphinx tribe, which allows you to not only stream stats, but also we it's a private chat that runs through the lightning network, and you can donate in the in that tribe as well.   So all links for that is also at sail dispatch.com.   Once again, thank you guys for supporting the show. You are what makes dispatch unique and special.   So with all that said,   I want to welcome Keto Miner onto the show again. Keto, what's up? How's it going? Hello, Preaks.  



[00:05:28] Unknown:

Fuck. Yes. And Craig Raw. How's it going, Craig? Yeah. Good, man. Thanks for having me back, man.  

[00:05:35] Unknown:

Yeah. So, I mean,   I love all of our conversations, and,   I'm excited to have you guys both as as return guests. I I think   the more your presence is on dispatch, the better for all for the whole audience and all of us including including myself.   I think this discussion will be kinda wide ranging. We do have a decent amount of freaks joining us live here with the live chat, so I expect them to be throwing questions at us as,   we continue,   this conversation.   I don't know really where we should start at first.   You know, I I think I think maybe,   we should maybe let's just start with a little check-in with Sparrow, Craig, because I feel like when you first came on dispatch,   I don't even know what episode that was. I guess I should have looked that up ahead of time. But I feel like Sparrow,   has come a long way since then.  



[00:06:32] Unknown:

Yeah. It's just been building away.   I don't know, Matt. For for me, it's it's, you know, I I don't really,   think too much about how much it's growing. You know? It's it's not like there's an incentive model there where I get paid more   the more people that you sort   of use it, really.   So for me, it's it's just a case of of trying to   add the features that make sense and squash any bugs that,   might come as fast as I can.   But I'm I'm pretty proud of it. I think it's   it's starting to,   become seen as a decent option, I hope.   So,   yeah, I'm,   I kinda just like,   the fact that the vision that I had is now   kind of a real thing in the world. And,   yeah, it certainly gets me up every day, and,   proud to be part of the whole sort of Bitcoin ethos that we're in.  



[00:07:31] Unknown:

Awesome. I mean, off the top of my head, you know, I guess this is I mean, you said,   you don't you don't really get paid the more users that are using Sparrow, which is true. But, one thing I did think of while you're just speaking there,   is you did re you did add a donation page, I believe, since last time you were on dispatch.  

[00:07:51] Unknown:

Yeah. Yeah. For sure.   So, yeah, you can go to sparrowwallet.com/   donate.   And I'm very grateful for sure of any, you know   you   know, donations   that I get.   But, you know, it's it's not about that for me. You know, I I didn't, you know, begin this whole thing looking for that. For me, it's really just about trying to be trying to provide,   a decent option mainly for people   to realize the store of value that Bitcoin holds. Right? That's the number one use case. It's kind of like the the sort of email   use case that the Internet had in the sort of early days that really brought it to the fore, and that's the number one use use case. I just kinda wanted to nail that and do it in a way that I thought was   best.  

So   that's kinda what drives me. Yeah.  

[00:08:45] Unknown:

And then I guess the other thing that the other big addition that I saw I mean, they   we could talk about the trade offs here a little bit.   You almost kind of I felt like you added it begrudgingly, was that you added   integrated Bitcoin wallet tracker so that you can just run Bitcoin Core on the same machine as Sparrow,   for easier setup without an Electrum personal server. Right?  

[00:09:11] Unknown:

Yeah. I mean, you know, you know, I've obviously got my,   my sort of drawbacks,   to doing it that way, but I think it's a valid approach. And, you know, as I as I I think I have, like, a pinned sort of tweet, which which says, you know, the ideas that I had at the start are not the ideas that I have now. You know, I kind of had this idea that it has to be the best way or, you know, don't even do it. And what I've realized is that you actually need to kind of take people on this journey   where many people, I mean, are not gonna in fact, most people are not gonna start off with their own node and running   servers behind the node, and it's just way too much. But, you know,   job number 1 is to get people to get their coins off in exchange.  

So, you know, if you can just get people to download a noncustodial wallet, and even if they're using a public server, you know, you've done, like, 70, 80% of the job. You know? For me, that's critical. And then   moving to a Bitcoin core wallet. Yeah. Sure. You know, Bitcoin core, the wallet does store all of the addresses in plain text. Not ideal for cold storage.   But, you know, again, now you're at least private. And then moving to the Electrum server,   that's just really getting to the stage where even if your server gets, you know, taken out of your hands or hacked or whatever,   no one can tell what's going on. You know? So long so long as as your wallet is encrypted, you're good. So, yeah, I mean, I I did add that, and I sort of now see it as part of the journey.  

So that's   that's kind of,   that kind of happened in   retrospect,   but I think it's good it's there.  

[00:10:52] Unknown:

Yeah. I mean, I think this is something that a lot of us,   a lot of us that are obsessed with Bitcoin, we tend to get into the weeds,   you know, especially on Bitcoin Twitter and on this show. I mean, this show is a, you know, a more technical focused show,   for more dedicated Bitcoiners,   and maybe them helping their friends and family is kind of like the target market that I've   looked at for the the freaks and the audience here.   And I feel like, you know, sometimes I just   I'm sitting there, like, having a beer, and I'm just like, we get so far into the weeds, and 95%   of people are just   buying Bitcoin on Robinhood, and they can't even withdraw it if they wanted to.  



[00:11:39] Unknown:

Yeah. I mean and and, you know, that's my my big sort of worry. Right? Is that if we don't get enough people to custody their own Bitcoin,   we're gonna get rehypothecated   Bitcoin. Right? That's gonna happen. I mean, if if the risk is   minimal there'll always be some risk, but if the risk is minimal,   then people are gonna do it, and they might get away, away, away with it. And that's that's the big worry to to to me. Right? That's what we have to avoid.   So, you know,   making wallets that are easy to use, that's kind of what that's the the sort of ethos here. Right? That's that's what I'm trying trying to do anyway.  

[00:12:15] Unknown:

Yeah. And kind of trying, like,   trying to get users to slowly improve themselves rather than expecting the world for them instantly. Right?  

[00:12:24] Unknown:

Yeah. I mean, I I think that's,   I think I was listening to rabbit hole re recap, and Mark Mody made made the point, like, just make a small improvement   every day, and I think that that makes a huge amount of sense. Right? So just getting people to download   a wallet to get their coins off the exchange,   great idea. You know, that's that's what I just try and try and do. And if they're using a surf server, which reveals the x x XPub,   You know, I don't worry too much about that because I know that further down down the line, once they're more, you know,   familiar with what's going on,   Hopefully, the soft software has taken them on a   journey to to kind of get to the point where they're thinking, oh, maybe I should go off and buy myself a model. You know?  

That's that's kind of what I think we need need to do. It it can't just be landed on them on day 1.  

[00:13:17] Unknown:

Right. And, I mean, this is something key to mind, or that you've been,   I guess, battling your own demons with over at at Nautl.   I mean, Noddle was originally   I guess when Noddle hit the market,   there really wasn't   many   of these dedicated node projects, and I I feel like Nodl kind of aim to be   a more user friendly option, a a plug and play. You just buy this device, and it just works.  

[00:13:45] Unknown:

Yeah. I I guess at the time we launched,   Casa   just launched,   and,   the only order on the market was, I don't I'm not sure I recall the name correctly, seed box or something. The the one which was, like,   an Intel NOC with just Bitcoin installed   on it, basically. And,   and the company was supposed initially to make the the summary partnership, but they closed shop just before they they did.   Yeah. And when I when I first started doing a full node, it was basically just to   to run Bitcoin Core and go   through Andrea's book and all the all the comments,   because I didn't want to do it on my old computer.  

Back then, the blockchain was probably 60 or 70 gigs,   and and you could run that on a RASP 0.  

[00:14:44] Unknown:

Yeah. So, I mean, I feel like as a Nodl user,   I had   one of the original Nodl's.   Did you   you never really decided   to go   full grandma mode. Do you wanna, like, talk about why that decision was or, like, how you've had to deal with support requests and the different levels of tech levels of your users? I mean, I I think,   you know, if if   most of our audience here listens to pretty much every dispatch, I assume.   At least that's what the download listen numbers look like.   And we had, we recently had this   this node round table,   with   the majority the overwhelming majority of dedicated node projects   on for that show.  

And one thing that becomes very clear   if you start looking at those different projects is they all kind of try and target different demographics.   And on one side, you have, like, the Ronin Dojos and the Raspberry Pi Blitz. That's definitely a more advanced user set.   You know, they,   Raspberry Pi Blitz still doesn't have a GUI.   They have, like, a command line style GUI.   Ronin Dojo just recently added, you know, a a more sexy GUI, but it's definitely a more advanced user product.   And then you have, like, the my nodes and the umbrells and the start nines that are trying to hold your hand as much as possible and be pretty   and as user friendly as possible.  

And I feel like Nautle kind of sits in the middle somewhere.  

[00:16:30] Unknown:

Yeah. Totally. We we we definitely sit in the middle. We we are trying to be more on the user friendly side.   And   at the same time, we are working on the advanced   user mode in which you can just,   use the UI to edit the configuration files and do whatever you want in them.   But, yeah, we we just recently started working with, UX person to to to work on the onboarding process and,   and have something much more user friendly, like, for the first contact.   And, during this this setup process, you will be able, like, to choose if you want to run-in the user friendly mode or in the advanced mode.   Yeah. But but yeah. Today, we are definitely, like, really in the middle. And,   my my goal was not necessarily to be, like, very user friendly, but to,   to follow some best practices, like,   the probably the first lines of code I wrote was the installation script for Bitcoin Core, which verifies the signatures,   and   and gives you a precise error, like,   you failed to download, failed to verify signatures.  

Something weird with PGP happened and so on. So that was, like, the first bricks. And,   yeah. And we we are trying to do that as much as possible for everything.  

[00:18:00] Unknown:

Because I feel like there's,   I've I'm trying to   put a connection here between what you guys have been doing at Nautle and what Craig has been working on with Sparrow.   I feel like you guys   both   are kind of hitting that balance in the middle between   trying to be user friendly and pretty,   while also not trying to sugarcoat the important stuff,   which I feel like is not   a typical   it's it's not it's not a typical result of what you would see in closed source, you know, Silicon Valley software,   which is just constantly trying to be, like, the super polished UX and just hide everything from the user and hide all the trade offs from the user.   So a lot of   experienced   dev teams, I feel like, try and go that Silicon Valley approach,   but maybe   what we really wanna see in Bitcoin land in terms of increasing that sovereign Bitcoiner base, that base that uses their own node, makes every spend a coin join, avoids KYC,   helps their friends and family, tries to broaden the circular economy.  

Trying to increase that base   is is not an easy process.   It takes a lot of education, which is what I've been focused on is on the education side.   But I feel like tools like both of yours, where it kind of bridges the gap, where it allows   it doesn't it doesn't sugarcoat shit, but it's it's still very clean software. Do you know what I mean? Like, the the I feel like is was this an active,   goal by you guys, or did you just stumble into that result? Because that's what I'm witnessing.  

[00:19:52] Unknown:

Happy to have a go at that. Yeah, Matt. I I very much agree.   You know, if you look at what the kind of   Silicon Valley, VC world is trying to do, they're trying to take responsibility   away   from the user,   make them into   consumers   of those those goods, right, which   is, for me, like, very different from what we're trying to do here in   Bitcoin, where we're trying to give people   responsibility   over their own money. Right? The the kind of value that they earn in their life.   And for for me, that's that requires a very different mindset.   So, you know, I look back at a at a career which has been spent mostly, you know, kind of building   products in that   VC kind of world, and   I really feel it's quite different from what I'm doing now.  

So, you know, whether,   you know, I can't say that I had a conscious sort of thought to go and build it this this way, but it certainly   Sparrow is, you know, the design that I kind of wanted to build was to, you know, give somebody who really   took that responsibility   seriously and sort of wanted to   take ownership   of their life, of their money, not kind of put it into the hands of others who can do whatever they want want with it, and give them the tools,   to be able to really know what's going on, to not not hide anything,   but still make it easy enough to use so they don't have to go down to the command line or, you know,   use UIs that are just very obtuse.  

So, yeah, I mean, I I think it's it's absolutely a different thing that we're trying to build build here.  

[00:21:33] Unknown:

Yeah. And and I guess hiding too much stuff can be very fast dangerous. And,   we, as you said, we are talking to people who want to take back the the ownership and the control over their money. And,   they should realize that it's   not easy,   that there are risks, and,   and they have to to do choices in educated ways.   And, yeah, hiding too much stuff can just lead to mistakes and, and overconfidence.  

[00:22:06] Unknown:

Yeah. I tend to agree,   which is why I'm a   big advocate for both of your, projects.   So, I mean, with all that said, I mean, first of all, you know,   classic,   disclaimer.   I don't want   our audience to get overwhelmed when it comes to privacy and security.   It is a it is a constant step improvement. You should just constantly be seeking to improve yourself. The number one thing is to realize   how much information you're really leaking out there. And,   the reality is   is that we are leaking tons and tons of information on a daily basis,   not just in Bitcoin land, but also in Bitcoin land.  

In Bitcoin, it's extra dangerous   because real money is on the line,   and the Bitcoin blockchain is presumably forever if we are correct.   This chain will last   longer than any of us will last,   and it will have a record of all the transactions there. So mistakes you make today   can be used against you in the future, and we should assume they will be used against you in the future.   And if you mix that with   the growing surveillance state both on   the government side and the corporate surveillance side, and the mix together of those two entities, those two   forces of surveillance   together,   you combine that with Bitcoin information, and all of a sudden,   our financial transactions are an open book. So it's really important that Bitcoiners today start realizing how important this is and start taking steps to improve their processes.  

So with all that said, I mean, let's just dump jump into the weeds. I mean, I I have a list here of of things that that Craig mentioned that I would love to talk about.   And then, you know, there's a bunch of different things we can talk about. But, before we get started,   we had   this we had this recent scare with Specter Wallet, another,   another   project that aims to interface with your node and use it with hardware wallets.   So similar target market as Sparrow.   What's really cool about the 2 of them is you can you can use them interchangeably,   because they operate on the same standards. So if you're, for instance, running a nodal and you have it connected   relatively painlessly.  

It also lets you,   verify what each is showing you if you're running 2 separate machines, 1 with Sparrow   plus,   a node, whether that's Bitcoin Core or Electrum Server,   and one with Spectre plus a node.   So with Spectre, very popular project.   My main go to guide in terms of getting started with self sovereign storage is using a cold card plus Spectre.   Their Windows binary, they had a scare with. So during the build process of building that Windows install file, that Windows application file,   the dotexe,   they were afraid that they did it on an infected machine, and it carried a Trojan.   So we've talked about on the show in the past   about how   users should verify PGP signatures to make sure that, for instance, Craig actually built the Sparrow binary that you're installing.  

But in this case, if the Spectre vulnerability was true, which it turned out to be a false alarm, it wasn't,   verifying the PGP signatures alone wouldn't have done anything for you. It wouldn't have protected you because,   the the Spectre developer actually did   build that that binary,   and signed it with his actual PGP key.   It just had a a they they just thought that maybe a Trojan had slipped into that build process, so it wouldn't have protected you from the on the PGP side.   So I'm curious, you know, both of you guys shipped software. I I guess we'll start with Craig.   How do you feel like, did this   wake you up at all to your build processes? Is this is this something that you're actively considering before it happened?  

How do you view, like, your relationship with your users in turn I mean, obviously, they could build from source,   but the overwhelming majority of users are probably not building from source and probably will never build from source. So how do you view that as   a when you threat model that out for you and your users?  

[00:26:47] Unknown:

Yeah. I mean, you know, look, I I think, first of all, I just wanna say, I think   spec Spectra guys handled it very, very well. You know, they were fully upfront with it and kind of pulled, you know,   pulled that particular   binary down until they found that it was the   actually, sort of a false positive from some antivirus, I think.   You know,   I think what you need to do is is to really just make sure that the build environment that you're using is is sort of clean. You know? I think that that's   really clear. And and, you know, that's some something which, you know, I think I'm doing pretty well, but I can always be better.   So just making sure that,   you know, the the kind of machines that that final binary is built on just have absolutely zero,   chance of well, as as little chance as you can get of some kind of infection trying to creep in. You know, I think from a,   in the particular world   of Java that I work in,   it's gonna be pretty hard because the Java builds,   are   just   extremely,   I I don't know how how to say it, but they're just very,   sort of,   bay bay basically put 2 together get get get get get that in a way that it's really hard for anything alien to be able to come in there.  

That's not to say that it couldn't happen, and I'm certainly trying to dream up ways in which it could.   But I think, you know,   largely, it's just really about trying to make sure that the build process that you have   is good. The second point is really trying to make sure that whatever dependencies   you are,   you sort of need to bring in in order to do the work that you're doing,   that you have a very clear idea of what they are. So, you know, when   I build you know, look at something that I'm I need it need need to add some kind of a a   new   software,   you know, loop to add   to be able to get a new   feature in, what I do is I see, well, what else is that thing trying to bring in? And if it's too much, then I just won't use it.  

And it's really just about it's not only about trying to get the size of the binary down, but it's also just about trying to make sure that you understand that when that binary is built,   you know what size it should be. And you can look through it and just kind of eyeball it and say, okay. Yes. This makes sense. All of those files are correct.   So those kind of things is also things that you can do.   You   know? Yeah. I I think,   ultimately,   you know, the more people that look look at it, the more people that build,   ultimately getting deterministic   builds is a great step step forward as well.  

We're all trying to work towards that, but companies like Apple make it very hard.   So, yeah, those those, I guess, are my my sort of headline thoughts, Matt.  

[00:29:49] Unknown:

So, I mean   yeah. I I guess there's well, first of all, Kito, you have anything to add there?  

[00:29:55] Unknown:

Yeah. I would just I would like to go back a little to what actually happened. Like,   when when I've seen this alert,   my first thought were like,   it's pretty unlikely it's not a false positive, actually,   because the two ways it could have happened is all the build machine itself being infected. And if you check the signature of this,   of what matched,   in this antivirus, which I remember correctly, it's around somewhere. So you usually notice,   that on your computer.   And second possibility   would be someone   else uploading,   malicious binary   to the repository   with   correct signature, which is even less likely.  

And it's not like we don't have a history of open source projects, especially crypto and privacy related that trigger,   antiviruses.   So   yeah.   Of course,   from outside, it was impossible to to judge 100%,   but it was pretty,   the probability was pretty high that it was a false positive for especially coming from 1 or 2 antiviruses   out of 20 different ones.  

[00:31:12] Unknown:

So   so Greg mentioned,  

[00:31:16] Unknown:

deterministic builds, reproducible builds. So that was my second point. Like,   we so we have not that we don't don't deliver   almost any binaries. It's all interpreted code, so you can read the code that is actually executed anyway.   But if   we were to deliver any binaries,   deterministic   builds are definitely the way to go because you can, like in your build chain, you could have   2 totally   separate environments, 2 different computers,   building the binary and compare it at the end. If it matches,   then you can assume your computers are fine and the binary is fine. If one of them is different,   you can assume that one of these 2 computers are doing something strange.  

Also, like, try to avoid using any   stuff pulled from external repositories, not only dependencies. But for example, if you're using,   like, a a base OS,   docker image in your build,   this image can very well be very,   can be compromised.   I don't recall exactly, but I think there were some occurrences when   some   some, images on the Docker Hub, like official images, were were compromised with something already that that's already happened.   So, yeah, like, really control your your strip   your build environment to the bare minimum.   For example, when I'm building even for tests, like BTCPay server on my local development machine,   I run the build itself in a virtual machine, which is, like, the base OS with nothing in it,   on the on the dot net and the source code, and and I build it there.  

Yeah. Like, it had just have full control. And and as Craig said, like, on Windows and Mac, obviously, it's more complicated than on on Linux.   I mean, most people if you want to have signed binaries.  

[00:33:21] Unknown:

Most people should start   at least playing around with the cheap Linux machine.   You know, get a cheap Dell or ThinkPad or something install.   I like Pop!OS as a as a learner,   Linux distro,   and we start trying to get comfortable with it. You know, maybe   with the ideal goal long term to make that your dedicated Bitcoin machine.   I think we're doing it again, and we're gonna do it many times   in this, discussion where we jump into the weeds very hard, and I want to be able to pull us back every time we do that   to go to to to talk about something that's actionable   for the average user to protect themselves.  

You know, the multisig approach that both Spectre and,   Sparrow have focused on   do seem to mitigate this concern a bit.   Obviously,   if there was a Trojan,   you would still have a privacy risk,   which Craig talks about a lot of times, specifically with the the default setup that a lot of people use on Spectre, which I'm guilty of recommending as well, where you run core directly on the same machine, so you do have,   all your all your transaction   information is on that machine, so you do have a privacy risk there. But if you're using multisig,   with hardware wallets, the different hardware wallets,   and you're verifying   the   transaction information on on your actual devices   before you sign them,   it would mitigate this risk. Right?  



[00:35:00] Unknown:

Yeah. As long as you can do that. I I I think I'm not sure all hardware wallets allow you to do that yet.   Maybe Craig can can help me on that, but I I think some of them just don't show anything meaningful when you do not play sig.  

[00:35:16] Unknown:

Yeah. They look. They're gradually   getting there, and I think they're getting there pretty fast. I've just had a a sort of a new batch of the   the sort of newer ones   arrive at my my desk, and and definitely   is becoming a must have. So   those that don't do do it well, I think, will need to,   up their game pretty fast,   in order to stay   in the game.  

[00:35:42] Unknown:

But at a high level, what what we're trying to do there,   as a broader community   is is reduce single points of failure. Right? So even if,   Spectre or Sparrow is compromised,   you would you would basically need   a combination of that and a plurality of your hardware devices   and user error   in order to lose funds in that kind of situation. Right?  

[00:36:08] Unknown:

That's right, Matt. Yeah. Yeah. For sure.   So, yeah, that that's that's the sort of that's the sort of goal, that we all try to work, you know,   towards,   and we don't have to get there on   day 1 as we say,   but   so long as   people are kind of learning all the time about the different factors that go into that,   it's definitely something that can can be done. I mean, I'm I like to say that if you if you are using single sig with a gold card, you basically understand   70, you know,   percent of what you need to to know to move to a multisync.   It's not that much hot harder. And I'm not trying to push people there. I think that people need   to kind of get there in their own own time, but, it's often made out to be like this giant leap   beyond a single sig set of setup. And I I don't think it really is anymore. It was for sure, but it's not so much anymore.  

It can definitely be reached.  

[00:37:12] Unknown:

I mean, if anything, the more difficult aspect is   then going and securing all those individual backups. Right? It's just more things mentally that you're you're you're dealing with,   But at the same time, that's kind of a a feature, not a bug. Right? I mean, if,   if any of those individual backups get compromised,   it's better, obviously, than if you have a single sig backup get compromised.  

[00:37:38] Unknown:

Yeah. So the way I I like to think about it is, you know, if you have a mental load anyway because you're going to bed and you're kind of worried that the single seg setup is sitting there with all the cash on it,   and you are concerned,   and you're kind of keeping you up a little bit at night, you know, you whenever you think about it, you're like, I got a bit of a worry there. Price has gone   up. Then you're really carrying that kind of mental load, and multisync just takes that away. Right? Now you're thinking to yourself, there's like zero chance. You know? I've got these backups. They're in different locations.   You know? I've the you know, somebody could come here right now and demand it all, and I can just say, sorry. You know? It it can't happen. You know? So for me, it's it's really about trying to balance the mental load, and and you'll know when you are carrying that that sort of load and when you need to seek out the peace of mind that multisig can bring.  



[00:38:33] Unknown:

Right. And and just to be clear here, I mean, in terms of accessibility,   the fact that I have both of you on is,   fantastic because,   I mean, if   if if you're a new user and you buy a Nodl and you plug it in,   and you update it, and then you connect it to, ideally, a dedicated   laptop   or desktop   with Sparrow Wallet running,   that's a relatively   easy accessible setup process, and all of a sudden,   you have a more secure,   a more secure way of using Bitcoin than the 99%   of people out there. And and the fact that that exists, that capability exists,   in a relatively accessible way   is absolutely understated. I I think people don't realize how far we've come. You know, 2 years ago,   that kind of setup would have been way, way, way less accessible   So I have a bunch of   I have, like, 6 different people who privately messaged me telling me,   that I shouldn't,   schedule   SIL dispatches during Euro 2020.  

As far as I'm concerned, freaks,   Euro 2020 using Bitcoin Tuesdays to to do games,   is a state attack. So,   that tournament will be over soon.   Uh-huh. Like I said,   the archives are always available. You you are missed if you're not in the live chat right now.   The live chat is what makes this great.   But,   there's really nothing we could do about that, and I'm   just glad that we're still having these great conversations about Bitcoin.   The   so let's let's jump into this. So so so we have BIP 47 on the list to discuss.   BIP 47,   is this reusable payment code,   that allows   individuals   to accept,   the main the main use case to me,   and the samurai guys will disagree with me, is   for,   easily accepting donations. And I had Gladstein, Alex Gladstein from, chief strategy officer of HRF last week, and it's a lot of it's it's work that I've been doing with him on the sidelines in terms of getting activists   to be able to easily accept Bitcoin without running,   you know, without running, quite frankly, without running BTC pay server on some, you know, server somewhere,   which a lot of times requires KYC, has overhead costs, has its own privacy concerns that you have to deal with in terms of trying to obtain a server   without KYC ing yourself. I know,   Keter miner has a side project that allows you to do that,   using Bitcoin,   but that's not really my point here. The cool thing about bit 47 is that you have this,   you just have this text string that you can post in a Twitter bio or something like that, and people can donate to you   without reusing the same address.  

Now, unfortunately, the biggest   trade off that we have to deal with with BIP 47 right now is is the only ones who have implemented it.   And if you don't have wide   wallet support, specifically,   is only Android.   As far as I'm concerned, people should if they're an iPhone user, they can should consider switching from iPhone. But if they don't wanna switch from iPhone, they should buy a cheap Pixel and use it as their dedicated Samuari device.   But as   a project at Civil Dispatch that's trying to   really adopt the ethos of free open source software,   and not have advertisements,   we're heavily donation based, and   we're constantly seeking out alternatives to how we can accept donations.  

And one of the issues to me with BIP 47   is that if I post this payment code,   there's only one wallet where people can donate from. And I I'm   so instead, I've opted for lnurl. I've adopted, you know, these podcasting 2 point o apps,   but they have similar issues. You know? There's not all lightning wallet support it.   So what we really wanna see is we wanna see broad adoption of all these standards, but let's. We're focusing on bit 47 here, which is on chain,   allows you to do,   you know, many donations,   many payments   to a known text string without reusing addresses.  

I know, Craig, you've been pretty   decently outspoken about considering   integrating it into   Sparrow Wallet. I'm curious on what your thoughts are there around it and and whether or not you think it's a good fit for Sparrow.  

[00:43:13] Unknown:

Yeah. So, I mean, let me take a step back, Matt, and and first of all, just kinda talk about,   what I actually wanted to do,   here was just,   help the freaks understand,   you know, why I think we're only seeing it in one wallet to date. Right?   You know, because there's been a lot of kind of rumors   and ideas going on around, you know, why have so few wallets,   built this thing thing in.   So, you know, here's the perspective of a dev who's been trying to do it, trying to look look into it. And I've just kind of wanted to without,   you know,   without trying to say it's good or bad or anything, actually, just trying to try to say, like, here's the challenges that are,   incurred when you try and and build against this particular spec.  

In order to do this, I'm gonna have to dive into a few technical details, but hopefully,   it will be not too bad, and I won't go too deep into it. Let's go deep. I'm down.  

[00:44:15] Unknown:

Alrighty.  

[00:44:16] Unknown:

So with bit 47,   you've got what are now four versions of this particular spec.   We're gonna go through the different versions because I think it's useful,   and I think it's valid. You you kind of have to understand   where this thing has come come from in order to understand where it's going.   So version 1,   which was released back in 2015,   so it's been around a while.   So we we have these as Matt described, we have these payment codes.   Everyone   who has a BIP 47   capable wallet can get a payment   code. And with that payment code, somebody who wants to pay you   can send a special transaction with a certain kind of output called an op return up output. And if they do that, then basically what happens is that there's this private wallet, which is your wallet as the owner of the BIFF 47 wallet. It's like your own kind of a new wallet that you would create.  

But it's only   visible, or at least the addresses are only visible to the person who's trying to pay you, to the person who created this output, which is called a notification   output.   Right? So that's what that's basically how   the 47 works.   Now,   the first thing to be aware of is that when you create this output,   that that sets this whole thing thing up, you are probably going to have some change from from it because this particular output has no real value attached to it. It's just kind of got a very minimal   amount to it. So that change amount that gets sent back   has a certain privacy risk attached to it. Okay? So if if you are now,   using that change output and you use it to pay someone else, they can then look back at that change output,   link it back to the payment code that you sent this   notification output to, and then they can tell that you want to create that link. So there is a bit of privacy leakage there. And what the spec advisers   or suggests at least is that that change output should be coin joined. Now that imply I mean, they they don't say it must must be, but you can see that's why they would advise it. Now that implies that a wallet needs to have access to a coin joint, you know,   kind of,   sort of   piece of collaborative transaction tool Yeah. The the wallet. That's it. That's it. So, you know, so that's one thing that, you know,   write kind of off off the bat. As as you begin, you kind of realize, okay. Well, that's something that we'll have to think about how we're gonna build.  

Now once this link has been created,   what happens is   that   the that you, as the receiver   of the payments,   basically have this new wallet. And this new wallet, you have to then have a set of addresses, which which you create up to the gap limit, which is usually, you know, sort   of 20.   And that allows you to receive,   you know, the then the the the   payee, the person who's trying to send you the donation,   can then create   an address, which you will then receive the man money for. And nobody else in the world will be able to know that they then   sent, you know, that,   sort of Bitcoin   transaction to you.  

Now,   every time that you receive a new notification output that someone creates this link, you get a new   wallet with a new set of addresses attached to it.   Now   there's some interesting things to think think about when you're trying to build against against this. Right? So so all HD wallets, all kind of BIP 32 wallets,   you currently have to support 2 lists of addresses. You have to support the receive addresses and the change add addresses. Right? And these are lists that grow in length over time.   So adding one of these BIP 47 wallets, whenever you create this link is basically a new list.   And   this has this kind of list of addresses that have all the UTXOs that hang off off them is   the major,   kind of data store and   server kind of load that you have to place on any wallet. So it's it's quite a big thing that you're now taking   a number which is bound in a 2, and you're making it into a longer kind of list. Right? So that's some something that a wallet dev needs to think about.  

For example, right now, if you are using the current Eletris build and you open,   you know, 3 or 4 decent sized wallets,   it's gonna really start to battle.   Now the new version, which is coming out, is gonna make that better, but it's still   something to think about because   what makes it struggle is the number of subscribed addresses that you have.   Every subscribed address, whenever there's a new transaction that comes in on the mem mem mempool,   it needs to be matched against that particular wallet. And you're trying to see, well, does this apply to my wallet or not?   And the more of those addresses that you add   is the more load that that server has to bear. So it is something that you need to think think about.  

And you also, as the owner of the BIP 47 wallet, have no   control, obviously, over the number of times somebody opens  

[00:49:46] Unknown:

one of these these these kind of links. Right? So you can almost assume it's infinite. Right? Because you're gonna if I publicly post if I publicly post my payment code, you know, with Samurai, like, just called PayNIM,   like, an attacker can just come in and   create a bunch of different relationships. Right?  

[00:50:06] Unknown:

Correct. Correct. So, you know, I'm not trying to say it's bad or good. In fact, I can't see any other way way to do it, but I'm just trying to say these are the things that one has to think about   when trying to build against against against against it. But, you know, the the last thing I want is that somebody fires up,   you know,   Sparrow wallet, and the thing just doesn't doesn't work. Right? That's that's,   not a situation which I can have. So I I do need to consider,   as I build this, how do I deal with that?   Then getting back to the fact we're still on version 1 here, we're still looking at the old legacy paid to pubkey hash outputs,   which means that if you are using a nice native Seg Segwit wallet,   you will have to receive on these old style addresses. That means that your Sparo wallet now has to either understand different script types, or you just need to actually, when you set up your wallet, have an old   script script script type and incur the higher fees that comes with that.  

So those are a few thoughts around version version 1.   Now version 2, we can skip past because it uses bloom full full filters, which we don't really have in Bitcoin anymore, so,   we can move on to version 3.   The nice thing about version 3 is that it takes away this,   this kind of op return output, which was a big part of why   I think people didn't,   go for bit 47 at the start. And what it replaces it with is a bare multisig 1 of 3 output. And what that means is that you have basically a transaction output that you can slide into any other transaction that you have. So you don't have to create a specific,   you know, kind of very   easy to identify,   you know,   link, you know, instead, you can just add it to any other   kind of   Bitcoin   transact act action   that you're making,   and it can appear   fairly I mean, these outputs are not common, but at least it's not something completely unique.  

However, there is an issue with this. Right? And I didn't actually realize this until I kind of read the spec about 3 three times.   But one of the issues here is that you actually need to listen   for a key within the output script. You can't kind of listen to the output script as a whole. You have to listen to just a part of it.   Now server product protocols are just not generally designed for this. So Bitcoin Core can't do this today. Electrum Servers can't do this today.   What the author, Justice,   has   basically,   you know, his kind of approach to this is to use BIP   157, which is the BIP for complex   block filter filters, the successor to bloom.  

And he's basically   created a enhanced   blue an   enhanced filter,   which allows you to then look inside   the script. So it's almost like saying, here's the middle part of the address, and we we just wanna match on   characters, you know, 10 to 20. Right? We don't want to care about the other ones on either side.   And,   that's quite a challenge. Now as far as I know, and I might be wrong,   this particular filter has not been added to Bitcoin Core. So if you wanted   to go and   do this today,   I'm not sure that you could.   Again, this is, you know, just me trying to figure it out. So,   this is one of the issues trying to   overcome with version 3.  

Assuming that we can do this with version 3, you then have   these lists of addresses, which you then need to listen for again. But in version 3, you need to listen to 3 different script script types. You need to listen to pay to pubkey.   You need to listen to pay you need to listen to the the kind of native seg seg segwit version that we all hopefully use today,   and you need to listen to pay to pub pubkey hash, which is the old version 1. So you now have not only   an unbounded list of these,   lists of   of of sort of   addresses that you need to listen to, but you multiply that by 3 as well. So that does increase the load. Now I was a bit concerned about this, so   Justice and I had a chat,   and it resulted in version 4 of this spec of the bit 40 47   spec, which is now has a different different name, but it's the same thing.  

And that is basically   where one only has to listen to a native   Seg   Segwit list. So now we're just down to, basically, the kind of 1   the the kind of unbounded list, but there's only 1 script script type rather than 3. And that's kind of where I am,   trying to figure this entire thing thing out. I hope, you know, I kind of hope that that's help helpful for people to understand that these things are not   necessarily   easy to do. It's been one of the more challenging   areas that I've been trying to work work on to try and figure it out. So, yeah, I hope that made some sense.  

[00:55:25] Unknown:

No. I mean, that was extremely insightful.   I appreciate you going through your thought process in terms of integrating it with Sparrow.   I mean,   from my understanding,   a group of core developers,   in the BIP 47vone   said that they they don't think it should be implemented,   and that the main two arguments that I've heard or my understanding of them, my basic understanding of them is is the the first main argument is   is that that notification   transaction is an inefficient use of block space.   We are streaming mempool pool dot space right now, a live view of mempool,   of of mempools,   at least their specific mempool, but I know my mempool also matches what they're showing right now.  

And, you know,   we're sitting at Bitcoin at   over $30,000.   Adoption is supposedly higher than it's ever been, and,   mempools are completely empty right now. So I don't think that block space is a very good argument   against using it. And if anything,   if bit 47 helps create a a fee market, then in the future, you know, you can have more efficient versions of it. And then the second thing was,   you could have a I think they called it   mystery shopper attack where someone sends,   Bitcoin UTXOs   to your,   payment code   and then tries to track those payments,   which to me is just inherently an issue with accepting any Bitcoin payments publicly. I mean, if I on BTC pay server, that's the number one way that you would try and deanonymize   someone's BTC pay server if we're gonna go from   a a framing of an activist or something in an authoritarian country,   accepting Bitcoin donations through a public BTC pay server,   I would expect their government to send   Bitcoin donations,   fake Bitcoin well, real Bitcoin, but but, you know, Bitcoin donations into that into that BTC pay server and then try and track   you spending those and maybe   watch for a user making mistake in terms of   combining UTXOs after the fact and using the common in input ownership heuristic to to tell that if if if there's 2 inputs, 3 inputs in a transaction, they're probably all owned by the same person,   which kinda goes hand in hand with what you said earlier, which is almost like,   if you wanna implement this in a safe way, you need to have a full suite of tools. You need to have   coin control with labeling where people can actually choose which UTXOs they spend and and keep track of them, and then collaborative transaction tools, whether that's   uncoordinated 2 person coin joins, pay joins,   or   or or or coordinated coin joins, something like Whirlpool.  

So you you kinda need to have   all the different basis, but even if you don't,   do we agree that that, you know, receiving payments through a BIP 47 payment code is strictly better than   than the status quo, which is probably just posting an address and reusing that address over and over again.  

[00:58:53] Unknown:

Yeah. Of course, Matt. There's no   no doubt. Yeah. Look. I mean, I've I've seen, you know, people, you know, quote what the, you know, some people said way way back back when. I I I don't think it's really all that material.   I I would hope that   wallet devs today are not depending on the opinions of you know, that were said many years ago and are have probably been somewhat, you know, miss   misquoted   anyway.   I think we should all just think for ourselves. And,   I guess, my point of view is is just coming from,   you know, let's actually try and build this thing and see what's   you know, how how close we can get to actually doing doing so.  

So,   yeah, I I I I I just kinda feel that Bitcoin Core gets quite a lot of flack for it, but it's really immaterial. It's you know, we should all just look at the spec, and if you wanna build it, build it.  

[00:59:54] Unknown:

Well, I mean, I think,  

[00:59:55] Unknown:

you know, in in in reality, there's there's always shades of gray,   but there but there's definitely   there's there's definitely validity in an argument   that there is a small group of developers,   that most people follow that other developers follow in terms of of what they should be prioritizing and what they should be working on. And and we we do as Bitcoiners fall into victim of of group think in that regard, like,   almost level of appeal to authority.   And   and for better or worse, like, I think one of the most valuable aspects of Bitcoin is the culture around core development in terms of being ultraconservative.   But,   when we're looking at, you know I I I went on a a bit of a tirade on Twitter today. Like, when you're when you're looking at the reality   of   of Bitcoin   right now,   the overwhelming majority of people are using it in the least private way possible,   which is custodial exchanges. And then the few that are actually removing themselves from custodial exchanges are constantly reusing addresses. They're not using their own node.  

So there's a lot of low hanging fruit that can be improved   just by   offering, you know, better, more user friendly tools to to users. Right? You   know,   my tirade specifically today was, like, the glass node charts that show, like, a they call it accumulation addresses,   which are addresses that are constantly receiving Bitcoin and they're they're stacking. Right? And they the I've had people tag me and they're like, oh, Matt. Like, this is a chart showing everyone stacking sats.   And it's like, no. This is a chart of people that don't listen to the show for the last 3 years and are still reusing addresses.   And   and to me, it's a bearish chart when we see,   you know,   600,000 addresses all reusing constantly.  

I'm curious what, I I wanna get to Quito, but before I get to Quito, Craig, like, how does Taproot addresses native Taproot addresses fall into your thought process here with BIP 47?  

[01:02:06] Unknown:

That's actually really interesting, Matt. I I don't have a great answer   for you, but I'm I'm hoping that, the signature algorithms   in there will make it easier   to get this,   this kind of key exchange done.   And I I'm not deep enough into Taproot yet to be sure that that is the case, so I don't wanna say that it is.   But,   I believe that there might be some scope,   in terms of the way the signing is done and the way the sig signatures   are tweaked that, we might be able to   get   some some kind of easier   and more hidden kind of   methods there to be able able to do it. But, yeah, it's it's kind of one of those things that I still need to get my head more into.  



[01:02:56] Unknown:

But in the short in the short term, I mean, that would be   just another set of addresses that you're gonna have to track. Right? That the wallet's gonna have to track, and the node's gonna have to track.  

[01:03:05] Unknown:

Correct. Correct. I mean, that's the way, but what if 47   7 works?   You know, I I think that the servers   that we run are getting more powerful with time,   and I'm sure Kito will have some ideas on this. He has to deal with this stuff all the time.   But, you know,   yeah,   I I I guess we just kind of have to find a way to do it that,   doesn't   put too much load, for example, on the   public service service service service that are being being run. We don't want those to fall   over. We don't want people to   kind of just have this,   unbounded   kind of list that just grows and grows, and eventually, their kind of home node will fall over.  

I don't think that that's,   you know, gonna happen off the bat. I think it would take quite a while for that to actually   occur, but it is still a concern that you have to at least think about it, the offset.  

[01:04:05] Unknown:

If anything, it's a bigger concern for the public nodes. No? Because, I mean, like,   maybe if you're uncle Biming and you're you know, I got   I mean, it'd be the most I mean, to me, it'd be the most bullish thing ever if I had, like, a 100 close friends and family using my note. Like, we're not even close to that, but,   I mean, if if I'm running Electris on a Nodle I mean, key to mind, let's get you in here. Like, if I'm running Eletris on,   on a model and I'm using it with I'm using it, and I have, like, 5 or 10 family members, and they're all using it with BIP 47.   Like, we're not even clear close to that,   that overhead being a bottleneck for us. Right?  



[01:04:46] Unknown:

Well, I I I'm not sure. You know, sometimes   only running,   a pretty heavy   Electrum wallet,   against Electrum server   and running lightning at the same time,   doesn't work when the when the mempool is heavy or stuff like that.   So, yeah, I think I think anything track requiring   constant tracking of transactions   is   is, is becoming a a bigger and bigger issue as time   goes.   There there are some solutions that   seem to do it in a   smoother way, like the MB Explorer library used by BTC pay server.   That's a pretty good tracker. It's actually very lightweight, and,   it it was built from the beginning to track thousands of addresses.  

So maybe   the answer is something somewhere in between, like, some mid tracking middleware   that wouldn't be a full electron server, but   but would be interfaced with, with Bitcoin code only for tracking,   transactions. I don't know.  

[01:05:59] Unknown:

Okay. So, I mean, that's just something that we're just gonna constantly be up against then. Right? Is is that is is trying to reduce that overhead in terms of both server usage, but also, you   know, both on the efficiency side of the of whatever you're running on your server, plus the efficiency side of of whatever is hitting the server. Right? Yep.  

[01:06:22] Unknown:

To me At the end of the day, you always need to track these these addresses or or transactions or whatever you are looking for. So   the the best thing you can do is to do it in the most efficient way. And, yeah, I I guess, like, from a purely   server overhead,   point of view,   having a BTC pay server for donations is probably lighter than running your own bit 47   server.  

[01:06:51] Unknown:

Yeah. But, I mean, you wouldn't   so so with Samurais implementation,   they have a,   they have a shorter code. They have so you have your payment code,   and then your payment code is just reliant on your own node, and then they have a shorter code that's like a username lookup, a randomly generated username, which is the pay name.   And they manage that server,   but that's just a lookup for your payment code. Right?  

[01:07:21] Unknown:

That's right. Yeah.  

[01:07:24] Unknown:

So so you're really   when you're using BIP 47   with SAMURAI with your own dojo,   you're running your own BIP 47 server. You're running your own payment code server.  

[01:07:37] Unknown:

As far as I know, Matt, you know, I beyond. I'm not precisely sure how they do it, but they've obviously made made it work so it can be done. And,   you know, we all just kind of need to,   understand understand that it's it's not a hill that can't be climbed. You know? It's it's just, we need to kind of try and figure out the ways to do it. I'd be really interested to know how   they are implementing version 3.   Hopefully, I can ask them a little bit more more about that because that's kind of the biggest barrier to me right now is, you know, how do we get past this need to   to not only,   scan for lots of add addresses, but to actually scan within that particular output script and to find a particular key within an up output script. Because as I say, Bitcoin Core, you can't do that today.  

Electrum server, you basically create a script hash, which is you basically just hash the output script. So, you know, you can't do that with just part of it.   So, you know, how they're doing that,   I presume it's using   the the sort of compact block filters. But   if those haven't been built into core,   you know, I'm I'm not super familiar with,   how many people have turned compact dot filters on when they install their node.   Is that a default set of setting? I don't think it is.   And if so, this particular enhancement   that the author of BIP 47 has put forward, like, is that supported?  

Though, that's kind of where I am, I guess, with my   so, you know, I'm sure I'm gonna make it very soon.  

[01:09:18] Unknown:

I'm curious, Kito. Like, do you have any insight here? My understanding is that Dojo is,   you started   it with Noddle   before they implemented it, but Dojo now,   they they're not using   filters at all. They're not using block filters at all. It's it's Elektris. They're running Elektris if you run Dojo.  

[01:09:38] Unknown:

Yeah. Yeah. Yeah. They use, they use Electrolux inside the the Dojo stack. Yeah.   Okay. Yeah. And just to to answer, Craig, yeah, so compact filters are not enabled by default indeed, and they are pretty recent in the mainstream core. They were in not   in, Luke's fork, and,   I think they were   merged finally in, in the mainstream core in 0 21.  

[01:10:06] Unknown:

They, like, they Luke specifically put it in knots,   for Wasabi, and then Wasabi implemented knots as built in package,   for Wasabi,  

[01:10:16] Unknown:

so that they could get the block actually running notes until until Bitcoin calls 0 21 for for our lightning back ends,   because we are we are running the tree now with our own private servers.  

[01:10:30] Unknown:

That's interesting.   So,   yeah. So, I mean, look, everything has trade offs.   You know,   just to go back, like, one of the things I mentioned is is one of the   the most valuable aspects of Bitcoin to me is this culture at   among core development to be as conservative as possible.   But we don't have that same culture with Lightning, and I I think   that's probably for the better.   It's a it's a a quicker development process, with different trade offs set up, but the result is   that a lot of the negatives   that people have mentioned about these on chain aspects,   a perfect example is, that   that that change during the BIP 47,   notification   process that you say Craig needs to be coin joined, which it should be,   are trade offs that are made every day by every Lightning user. I mean, I I just saw   nifty nay,   c lightning developer with Blockstream,   on the mailing list saying that every UTXO   that you connect to a Lightning node should be coin joined first.  

So these are trade offs that they're actively making.   So to me, to have on chain tools that are making similar trade offs isn't the end of the world. There it's better to have those in our tool set.   We have IFH   in, the live chat asking what is the easiest way for someone to accept lightning donations in a static way,   and you basically have 2 options right now. You you either can use lnbits   to create an ln URL,   with your own node,   or you can use ln transaction bot. We had Fiat Jeff on the show   a couple weeks ago,   maybe over a month ago,   who's the maintainer of that. That is custodial. Right? And that's another trade off you're making. You're trusting him with your privacy and your funds. But if you're   rather than focusing on perfect,   when it comes to user focused tools,   not the protocol. The protocol, I understand that we should be as conservative as possible. But when it comes to actually user tools, it's good to have many different options with different trade offs. I I think,   people will use those, and it's it's super helpful. But ifh, to be clear, that static l n URL is what I have in the bottom left hand corner,   that QR code. So if you scan that QR code with supporting wallets, unfortunately, not all lightning wallets support it,   but if you scan that with a supporting wallet, it'll allow you to pay whatever you wanna pay, and you can also include a memo, which is really cool. I have people donate to the show,   and they give me feedback in their donation. So,   I I take your feedback more seriously if your donation's higher. I'm   just   but,   yeah. So that's cool.  

Okay. So BIP 47,   Sparrow's gonna implement it soon. He's just, Craig's just working on the specifics. Right, Craig? Absolutely,  

[01:13:44] Unknown:

Matt.  

[01:13:46] Unknown:

Awesome. Looking forward to that. So let's jump into Whirlpool   because,   you can't implement BIP 47 unless you have,   some kind of collaborative transaction tools.   What is what what do you wanna focus on with Whirlpool here? I mean, you put it on the docket to discuss.  

[01:14:05] Unknown:

Yeah. So I mean, I you know, I guess, actually, I have, you know, really some questions is,   do people kind of view it as   as winning the CoinJoin implementation?   Is is   that an idea that makes any sense? Because, you know, one of the things that I really like about it is the fact that you can see the amount of unspent   capacity.   Now before the show, I was trying to find the same kind of figure for joint market,   and for Wasabi,   and I I couldn't.   I don't know if they if it's just that my skills weren't enough to figure that thing out.   But, you know, over 3,000   Bitcoin in an   in in in sort of un unspent   capacity is pretty good.  

And it it just it just kind of seems to me that they have figured out the incentive model,   behind this in a way that the other implementations   haven't necessarily,   you know, done.   What do you guys think?  

[01:15:13] Unknown:

So, I mean,   obviously, this is a topic that I've been pretty focused on.   I mean, you you can look up stats for the other CoinJoin implementations.   If you go to if you go to whirlpoolstats.com,   it redirects   to attyperboles,   tracking website,   and he tracks Whirlpool volume,   joint market volume, and Wasabi volume.   There it's really apples and oranges. You can't really compare Whirlpool on spent capacity to these other volume numbers,   and the reason is   is because   the way Samurais set up their CoinJoin implementation   is they've set it up so that you have this structured liquidity pool, and that's what this unspent capacity pool is.  

And the cool part about that is it it feels like a tangible goal that we can work towards   increasing that liquidity pool.   And   and the the difference is is is when you when you use something like Whirlpool,   when you use Whirlpool,   the   the way their Sybil mechanism works   is you pay less fees the more money you send in at a given time, and that's that transaction 0. When you send in the transaction 0,   your fees are flat based on which pool you decide to join.   And then those   those transactions,   if if, let's say, you're going let's say, you're going into the million sat pool in Whirlpool,   and you go in with 5,000,000 sats or a little bit over 5,000,000 sats, because you have to pay the Whirlpool fee. So   you go in with a little bit over than 5,000,000 SaaS, you're gonna have   7 UTXOs are gonna get created. You're gonna have   5,000,000,   you're gonna you're gonna have   5, 1,000,000 SAT UTXOs going into Whirlpool.  

You're gonna have 1 UTXO   that is paying your Whirlpool fee to the samurai developers, and then you're gonna have 1 UTXO, which is your change output, which is underneath.   It's it's it's whatever is left over that couldn't fit into that 1,000,000 sat denomination.   And then those 5 UTXO's are going into 5 different rounds of CoinJoin.   They're not in the same round. None of them are allowed to be in the same round, and that's that Sybil mechanism involved.   Then once you've entered this coin joint pool,   it sits in there, and as long as you're running,   Whirlpool,   which you can run 247 very easily with Noddle or Ronin Dojo or Umbrel,   they will constantly provide remix. They'll constantly be remixing in that pool to any new users who join that pool,   And the idea is to try and interconnect all those mixes. Every single round   has   can be traced on the blockchain all the way back to the 1st Whirlpool mix that ever happened,   and they should be able to go forward from that point as long as at least one person,   one participant out of those 5 UTXOs that are in each round   goes on to another round. So even if you don't,   ideally, you should be actively keeping Whirlpool on, but even if you don't, as long as other participants in your round are constantly   in Whirlpool and constantly providing liquidity,   the the probability of which UTXO is yours   grows with the set. Right? Like, you're you're intermixed into the set. And it's this idea of creating this, like, structured liquidity   pool that is   provides as much privacy as possible for a new user who just comes in and maybe only does one round. Like, they should really be doing more rounds, but if they just do one round, like, they should have, you know,   a a lower, like, a a harder chance, a harder probability, a lower probability of guessing which UTX dose is theirs when they come out because it's connected to the previous mixes and the future mixes.  

So it feels like a tangible goal of something we can work towards, and it and and the result there is as more users are entering the system,   over time,   your anonymity set shouldn't degrade. This idea of you're one of a 1000 people or one of 2 1000 people or 1 of 4000 people   in these other implementations,   specifically Wasabi, your an anonymity set tends to degrade over time. So   if you do, like, a round and and you're in Wasabi and you do around 70 people,   and 65 of those people end up sending to a KYC exchange or combining their outputs afterwards and then sending to a KYC exchange or whatever, doxing their their coins in some way, your anonymity set is being ruined over time, and you don't even realize.   So this idea of the unspent capacity is a very cool metric to me. It's also a metric that can't be easily gained,   because   every UTXO in that unspent capacity   calculation is something that's sitting there in post Whirlpool. You can't then recycle   you can't recycle it back through and get counted twice. But if you're going at just,   if you're going at just naive volume numbers,   you can recycle UTXOs   and just   keep sending them back in. And that that will cost you money,   but if you are   the the coordinated coin joints like, if if you're the one running the coordinated coin joints, in this case, Wasabi,   Wasabi doesn't have to pay that coin joint fee. So so I'm not accusing them of doing it, but I'm just saying that you you basically,   with without that unspent capacity metric,   if you're looking at just pure wasabi volumes, you're trusting that they're not   constantly recycling volume through   their coin joints. Right? Because the unspent capacity is literally   transactions that are sitting there   in   in post Whirlpool UTXO. So so so, yes,   the samurai devs could be inflating that number with their own UTXOs, but they can only do it once. They can't constantly recycle it to increase   can increase that number.  

So to me, the unspent capacity is a very tangible number. It's a harder to gain number, and it's something that we've been very focused on at the on on rabbit hole recap. We talk about it every the beginning of every episode.   On top of that,   what's cool about Whirlpool is it was made from the get go.   It was built from the get go to share that   liquidity pool with other   wallet developers, and and the reason for that is because   we don't have many people using CoinJoin period right now. Like, I   one of the biggest promoters of CoinJoin,   there's no way for me to tell exactly how many people are using CoinJoin, but across the three implementations,   I I can safely say that's less than 10,000 people.  

Right? It's not that many people are using CoinJoin,   and it's further split between those three implementations. Some people are using join market. Some people are using Wasabi.   Some people are using,   Whirlpool,   And so that small anonymity set that we already have of 10,000 people,   or less than 10,000 people,   is further split. So the individual privacy you get of any of the individual tools is is reduced.   So what we wanna see is we want to see CoinJoin   get added to every wallet,   and we want to see them sharing liquidity pools would be the ideal. And just to be clear   to listeners who are watching the livestream, the reason the live chat   just got erased was because there was some scammer who posted something. So I I deleted the live chat, blocked him, and then re popped it up just to let you know. The so where I'm getting at here is   they set up Whirlpool in a way that if you integrate it into Sparrow Wallet,   they will give you a cut of all fees that come in   through Sparrow,   so you can monetize your wallet in a ethical way without adding fiat, onramps, or what other elements that Bitcoin wallets or ads that Bitcoin or or tracking that Bitcoin wallets add to try and monetize.  

So you can monetize your wallet while providing your users   better privacy,   and the main negative that people have against   Whirlpool is that   you can use it without your own node, and in that case,   samurai knows your XPUBs.   They don't know your IP address because it defaults to Tor, but they know your XPUBs.   And if there's a subset   if there's a majority of people   that are using it without their own node, then samurai can reverse construct   and and remove that anonymity set that you think you have that you don't because   they know   all the different,   addresses of the non node users.  

But if   Sparrow Wallet adds it   and Blue Wallet adds it, and Ledger adds it, and all these different wallets add it,   Maybe not all users will use their own node, but because there'll be different nodes that are being used by the light users,   it splits up that threshold of the amount of people that are using it. So it it makes   not only does it increase the overall usage and anonymity set of all Whirlpool users, it also removes,   it mitigates that main concern that a lot of people have that you have these light client users that are are trusting samurai with their   with their address history. Does does any of this make sense that I've   been talking for a while?  



[01:25:19] Unknown:

Well, that was great, Matt. Thank you. Yeah.   Certainly got got a lot from the front from that,   I'm definitely looking at Whirlpool.   You know,   it's, I think, becoming   clear to me at least that   it's it's, you know, it's certainly the most recommended   CoinJoin that I'm seeing,   you know, just kind of out there.   And I I think there's a lot to be said for,   you know, the highest   the highest kind of, you know, the the credit credit credit credibility pool providing them the the the largest anonymity   sets.   So that that kind of makes a lot of sense. But as I was saying earlier,   what I really like about it is the fact that the incentives have been chosen. You know, just for example,   having a flat fee to enter a pool obviously incentivizes   you to increase   the amount of Bitcoin that you're gonna mix because, you know, you're always looking at the ratio between the fee that you spend to the amount that you mix. And if the the fee is flat,   then you obviously say, well, great. I'm just going to, you know, mix as much as I can. So that that those kind of clever   choices,   make a lot of sense to me. I think,   and I I kind of wanna get in into this, as we get further into the chat, but, really,   privacy only works   when it has, I think, additional,   you know, kind of incentives   or it's built in a clever way so that you feel like you're winning when you do it.  

There's there's some something about that.   You know, as much as we would like to believe   that everyone wants to be private for its own sake,   I think that it only really works when it kind of almost becomes part of a bigger package.   And I just think   100%.   Yep.  

[01:27:13] Unknown:

Incentives   are everything. And and just to be clear on the   in terms of providing liquidity,   join market,   you know, nailed the incentive structure for the makers,   in in terms of of the people who are providing liquidity,   because you can actually get paid to run join market 247.   With with Samurai, you get basically paid in privacy because your your privacy increases the more your liquidity is sitting in there.   I would argue   that the incentive on the taker side is almost more important because,   with join market, what we saw is we we do have a dedicated, you know, sub thousand group of makers   that are constantly providing liquidity because both idealistic reasons   and because they can make some money off of it.  

But if we wanna if we wanna get that total coin joined user number,   you know, above 10,000, if we wanna get it to 50,000 to a 100,000 people,   you have to make it as accessible as possible   for   the average user who's who's not gonna be a maker. He's a guy who comes in as a as a taker and and just wants to, you know,   pay a little bit of Bitcoin and and get better privacy as a result.   So the incentives are very important, but also how you   who those incentives are focused on are are extra important, and I I I think   yeah. I   it's it's it's definitely it's definitely a in a very nuanced topic.  

I wouldn't I wouldn't go as far as saying   that,   the liquidity pool of of Samurai is is the largest.   Naive raw numbers would would say that   wasabi is larger, but like I said,   the the the liquidity pool   is not   is not structured well. It's not a strong foundation that Wasabi is built on top of.   There's all these different little aspects of the way their implementation works   that doesn't incentivize remixing. You have to pay a fee constantly if you're if you're remixing. You you you get to choose which rounds you participate in, which makes it cheaper for a civil attacker. A civil attacker pays the same fees that are that a, quote, unquote, good user or   a benevolent actor pays.  

So it's not as civil resistant.   And then on top of that, with both of these coordinated   CoinJoin implementations, you don't have civil resistance,   from the actual coordinator because the main civil resistance, especially in this today's fee market, which we're looking at mempool dot space right now, which is just   one sat per byte, you get into the next block.   The main civil resistance is the actual coin joint fee, which is paid to the coordinator themselves. So in Samurai's case, it's paid to Samurai, and Wasabi's case is paid to   Wasabi.  

And both of those coordinators could could, you know, flood rounds at minimal cost to themselves,   except for the minor fees. And if   if if I'm correct in that the fee market will increase, then   then that becomes less of an issue because you have the civil resistance of the actual transaction fees. We just haven't gone in there and, you know,   whatever. I've been eating crow about the people give me shit about   the 200 k price call, but the big one for me is the mem pool. Like, I mem   pools. Like, I just I did not expect that we were gonna get 1 sat per byte right now in this   in 2021,   especially amid a minor alleged minor crackdown in China where hash rates down a shit ton, and you can just get confirmed to 1 separate byte. But I I I think I think what Samura is building in terms of the Whirlpool implementation   is just a really, really strong foundation   that we can work off of, that is really, really good on chain properties when you look at how it looks on chain,   and the defaults that they have set.  

And I   I feel good   trying to increase that liquidity. And I think the next step is we need more wallets   to basically integrate Whirlpool. And that's what I've been trying to,   facilitate behind the scenes,   and I hope that we'll see some more wallets do it specifically. I mean, Sparrow would be absolutely fantastic, you know, one of the best in class   desktop wallets, but I would love to see an iPhone wallet added as well because I I think that's a,   you know, I mean, there's just a lot of pick corners that use iPhones. So   for better or worse.  



[01:32:03] Unknown:

So so so, Matt, let me ask you this. If I was to play devil's advocate here,   and let's assume that all these wallets integrate against against it,   are we not   server endpoint.   Does that make any sense?  

[01:32:26] Unknown:

So the so there's 2 servers.   There's the samurai wallet   tracking server, which is for samurai wallet users that are not using their own node,   which is, like, what whatever their modified version of Electris is or whatever they're running.   And then there's a separate Whirlpool server.   We   if if we have more wallets using Whirlpool,   then we are creating a central point of failure on the Whirlpool server in terms of uptime,   but that Whirlpool server is blinded,   so the Whirlpool server doesn't have any   there's no there's no privacy risk with that Whirlpool server.   Every time you connect to it, you connect to it with a new Tor identity.  

You're not giving it x pubs. You're serving it individual addresses.   So   so it doesn't add a centralized risk in terms of privacy.   It does add a, basically, denial of service risk in terms of   you're gonna have, you know, one Whirlpool server, maybe a backup Whirlpool server,   that is coordinating all of these coin join rounds.   But,   you know, theoretically,   in a worst case scenario, let's say we have Sparrow Wallet and 5 other wallets,   6 other wallets all using the same Whirlpool liquidity pool,   and,   you know, AMLD   10 comes out or whatever. Like, I think we're on 6 right now, and they're, like, super aggressive against CoinJoin, and they go after the samurai team, and they they shut down the Whirlpool servers.  

Someone else can launch their own coordinator   through,   Tor, make it an Onion only service, and maybe have some kind of web of trust, you know, ideally a NIM or something that already has a reputation can launch it. But, otherwise, it'll take some time to get new reputation there.   But but you can run you can run the Whirlpool server   just completely through onion and not, you know, have it tied to your identity.   But the the key aspect there is is who's ever running that Whirlpool server is not they're not a privacy risk. They're they're purely a,   uptime or,   you know, they they they they purely just need to be there to coordinate, but they're they're blind to what's actually happening.  



[01:34:52] Unknown:

Okay. Yeah. No. That that I think makes some some some sense. I think the main thing is, you know, even if,   the Whirlpool server does somehow get impacted, the fact that, you know, we can start it up as a sort of a third party effort,   that makes some some sense. I could see how that could could could work should that unfortunate day ever happen.  

[01:35:15] Unknown:

Okay. Good. But I think I think that's, like,   that's, like, the most bullish start model ever for me because, like, that means, like, it's heavily being used,   and gets taken down in in that situation. Like, if if that situation happens,   to me, we're sitting in a way more bullish scenario than I expect otherwise,   because it just does not seem like we have that momentum to get it added to more wallets. But I would like to see it adds more wallets, and I think the number one incentive   for it to get added to more wallets   is in privacy, and we're talking about incentives here. Right? It's it's that these these wallet developers and you know this firsthand, Craig.  

Like, if you're running   a a a free open source wallet,   it is very hard to monetize. And,   you know,   donation where only gets you so far. And if if if these wallet developers have   a way to monetize their wallet in an ethical way   that provides them a steady stream of the best money that humans have ever had in Bitcoin,   without venture capitalists or any kind of VC funding,   that's gonna create   a positive feedback loop for any wallet developers that that ultimately decide to integrate it.   That that aligns them with their users,   and ideally ends up in, you know, better maintained,   fully fleshed out wallets because they have, like, the steady source of funding that they can rely on. Right?  



[01:36:46] Unknown:

Yeah. Agreed. Agreed. I I think it makes a lot of   sense sense. And that's the kind of why I wanted to raise it, just just to   discuss,   you know because it's it seems right right now that we're sort of starting to emerge from a period   where a lot of these implementations   have been sparring off against each other. And,   you know, as I say, for me,   just sitting at looking at it from the outside, I can see and measure how Whirlpool is growing,   which I can't until you send me this link. But even now it's still quite difficult. It's quite a struggle to see how the others are growing.   And, also, I just really like incentive models   that,   kind of work to the benefit of the user who's actually trying to use the product. That that that,   makes a lot of sense to me, and that that's kind of what translates into   success,   in my world at least.  



[01:37:42] Unknown:

Yeah. I mean, so, like, so join market, which is I mean, I just think, like, no one really should be using Wasabi right now, to be honest.   I mean, I there I you can go back people can go back and listen to my episode with no power, but they're working on Wasabi 2 point o,   which is a complete rewrite and a complete change in implementation, and   I I'll reserve judgment on that when that gets released. It hasn't been released yet.   But join market is still very effective software. It's hard to use,   but they've made very different trade off designs   and incentive designs,   and the 2 being is that, first of all, there isn't really a liquidity pool. You're you're basically individually   going through these makers, and each maker is its own liquidity pool almost.  

You're not really mixed in with everyone else.   So you don't have this, like, solid   liquidity base to work off of.   You know, the the UX is getting easier to use, especially with we had open arms on the show with join in box, which is integrated with raspiblitz that makes it way easier to use join market. But the number one incentive difference   is what we just highlighted, which is   individual wallet developers have no reason to implement join market besides possibly   incentivize you know, hoping that more users will use theirs their wallet because it has join market built in.   There's no financial incentive for them to add it, but there's a financial incentive for Whirlpool to be added to these wallets because   you're literally making a portion of the fees.  

It's you know, between Wasabi and Samurais, the first time really that you saw these open source Bitcoin projects   that had a steady income from their users   that also is is not easily,   you know, forkable.   You you, like, you can you can fork it and run your own coordinator, but then you're just in a completely different   liquidity pool. I mean, you don't have that liquidity pool to work off of. So you're incentivized to to really, you know, work together there and and and build that single   large liquidity pool, which I really think we we need,   because there's just not that many users seeking privacy. So we need to amplify as much as possible the users that are.  



[01:39:59] Unknown:

Yep. For sure. Yet. Not yet. We have to yeah. I mean, look,  

[01:40:03] Unknown:

We have we have, you know,   nearly 3,000 Bitcoin.   So so just to be clear on these unspent capacity numbers,   Clark Moody has a higher number than Hyperbole does,   because,   Clark Moody counts,   he he counts,   Whirlpool transactions that are waiting to go into Whirlpool that haven't gone in yet. So they're just sitting in the transaction 0, but they haven't actually   gone into Whirlpool yet. By hyperbole, waits till after they go in.   But,   so the the range is, I think, hyperbole has it at, like, 24100 Bitcoin,   and Clark has it at, like, 32100. So that's, like, there's, like, 800 Bitcoin   getting ready to go into Whirlpool that haven't quite gone in yet.  

So probably the 25100   number is, like, the more accurate number, but regardless, that's a negligible difference in the big scheme of things.   I mean, you're talking about someone you're talking about someone like Michael Sailor or whatever who, like, personally, between his company and his own holdings,   holds over a 150,000   Bitcoin. Right? And we're talking about 25 100 Bitcoin, 3,000 Bitcoin.   So we   so we   it's a it's a big hill for us to climb, and we need to get those numbers up   sooner rather than later because it it provides a   and we talked about this when you first came on about multisig. It provides almost a,   it's like a warning shot to people who want to attack. So when you talk about multi sig, it was this idea that if everyone if every attacker assumes that you have multi they're not gonna come into your house   and, break your knees to try and get, your Bitcoin because they'll just assume that it's in sig, and it's gonna be a long arduous process, and they're gonna have to go to multiple locations.  

I think when it comes to state actors, when it comes to authoritarian governments that are trying to attack private Bitcoin users, if they see that number go up, if they see this privacy liquidity pool increase,   they might be   motivated to not try and attack the privacy of Bitcoin users because they know that there's a way out for them.   So I want to get that number up as soon as possible because I think it reduces the likelihood   of large scale state attack   on the on the privacy side.  

[01:42:26] Unknown:

Yeah. I think that that that thinking makes a lot of   sense, Matt, for sure. Yeah.  

[01:42:33] Unknown:

So right now, by the way, Farik's,   Kito is is dealing with a fire at his Fiat job. So right now, it's just, the Odell and Craig show,   but he'll he'll be back when he can be back. And,   Kito, if you're listening, just chime in when you're when you're talkable again.   So that was an interesting Whirlpool conversation.   What are your I have a bunch of things. Like, are are you   what are your thoughts on adding so so   so Samura has 2 things. Right? So Samura has Whirlpool, which is this coordinated coin joint. Right? Oh, so that was the other thing that join market   before I get distracted even more,   the trade off the join market made was they didn't want   that issue that I said with the Whirlpool coordinator. Right? Like, the Whirlpool coordinator could get shut down,   which is not a privacy risk, but it's a denial of service attack. Right?  

So   the   as far as the join market devs concerned, and I had the 2 lead ones on, I had Belcher and Waxwing on, that's not a trade off they're willing to make. Right? So they wanted join market to be as censorship resistant as possible,   and that's why there's no centralized coordinator. Every round is coordinated by the maker themselves,   the person providing the liquidity.   No. It's actually coordinated by the taker,   so the maker doesn't know how it's coordinated.   So it's coordinated by each individual taker, and the taker will coordinate   maybe,   like, a a waterfall of 10 coin joints between 10 different makers.  

And that way,   the individual makers like, as long as there's 1 or 2 individual makers in there that aren't malicious,   that they can't track the transaction through the the waterfall.   And the taker's coordinating also, the taker knows that I'm coordinating it so that the there's no malicious coordinator. I don't have to rely on a coordinator.   But in the reality of the world right now is   running a coin join coordinator,   is completely   allowed.   So if we can get away with that,   if we can get away with having a centralized coordinator   to make it an easier UX and a and a better liquidity profile,   then we should absolutely do that. And if we can't in the future, then, sure, by all means, we'll go to a more censorship resistant model,   where you don't have a centralized coordinator. But, in the meantime, if we can get away with it,   I think that's absolutely   a benefit.  

And and this is like a it's a similar trade off, but even less so than you're talking about with, like,   these larger,   Electrum servers public Electrum servers that are run, because those public Electrum servers have a privacy risk attached to them. With this, it's all blinded.   So there's no privacy risk. It's just completely a   denial of service vector.   So, yeah, I mean, I so so so Samurai has the coordinated coin joints,   and then they also have collaborative transactions that are uncoordinated.   So they have   they have a fake coin join that they do, which is called Stonewall, which is what   all their transactions default to on the wallet, and that's just me with my own UTXOs.  

When I do transaction, it looks on chain. It looks like it's a coin join, a 2 person coin join. Then they have Stonewall times 2, which is a actual 2 person coin join without a coordinator involved. It's just between the 2 parties.   And then they have the pay join, which they call stowaway,   which is a,   it it looks like an ordinary payment, but one of the inputs is provided by the receiver of the payment   to further throw off, chain analysis.   So they have a mix of these collaborative transactions.   Do you   foresee adding any of these non coordinated  

[01:46:40] Unknown:

collateral transactions in? I kinda think you have to,   because, you know, your post post mix, you can't just,   you know, treat it as you would any you know, it's you you need to think a bit about about that, and I think Semaurei actually advised you   kind of to keep your coins within your your sort of wallet to take advantage of those different   techniques that they have. So, yeah, I I mean, I I definitely see it as part of the overall thing. You know, you kind of have to build one feature at a time, but,   for sure, you know, those kind of you know? And that's that's kind of what I wanted to get onto is just being able to take advantage of   steganographic   techniques,   which is the things that you've just, you know, described.  

I think that that's really important. So,   Sparrow does currently support,   the pay to endpoint   pay join.   And I I mean, I just think it's really cool. I just also think that it's,   it's got an incentive model, which doesn't   necessarily seem to work all that well. So I'm not   super hopeful that,   you know, BIP 78, I think is what it is, is gonna get widespread support. I really hope I'm wrong. But,   you know, I think we need to be building these additional methods in,   because, otherwise,   you know, all of that that sort of mixing that you've done   just becomes,   easily   you know, you you can kind of see what's going on unless you,   spend those post mix outputs in the right way.  



[01:48:21] Unknown:

Yeah. I mean,   so there's, like, an interesting piece of nuance here in terms of Sparrow, because I I imagine the majority of Sparrow users   are   keeping their keys cold on hardware wallets, whether that's single sig or multi sig.   And   the main trade off   with these coordinated coin joint protocols   or just   yeah. I guess the the main trade off with the 247 coordinated coin join protocol like Whirlpool is that the keys need to be hot,   if you wanna be participating. Right?   Obviously,   if you're gonna be a part of a multiparty transaction,   those keys need to be available to sign the transaction,   so they need to be hot.  

With the uncoordinated   collaborative transactions,   whether that's   coin swaps, pay join,   or these 2 person coin joins,   or maybe even 3 person coin joins,   they only need to be hot when you're actually coordinating that when you're actually, you know, doing that transaction. Right?   So, presumably,   you can do that from a hardware wallet, from even a multisig setup relatively   easily if the UX,   facilitates it properly.   So, like, it's   in a in a lot of ways, in terms of UX flow,   it is probably   an easier thing to implement. I mean, you just you just talked about page 1p2ep.   Right? I I assume in Sparrow, the way it's implemented is, like, basically   well, one side is just always on. Right? It's like you're paying a BTC pay server, so they're already   hot. And then the side that has, you know,   hardware wallet set up, whether that's multisig or single sig, is basically deciding at will. I'm gonna do this transaction. So they're able to bring their keys hot just for that, or they're able to sign that transaction   at the time of of that transaction. Right?  



[01:50:27] Unknown:

Yeah. Yeah. So, yeah, that that that is the way it works. You know, one one kind of idea that I thought would be really cool, and I I this is kind of a long way way off, but, I mean, just imagine if we could use cold card c k bunker   feature to keep keep the the the sort of the keys cold while we participated in a whirl whirlpool. I mean, that would be,   you know, I think quite a big win. But, as I say, it's a long long kind of way off, to get to that point. But, you know, these are the kind of ideas that,   I think would make it much easier. Because, you know, if you're looking at it today and you're kind of looking at your cold storage stash and you're trying to decide, should I bring that out of cold storage, mix it, and then send it back in, you know, there's always the worry of bringing it into a hot wallet. Even if you do it a small part at a time, you know, it's it's it's just a reason. It's kind of a friction point that might make people,   not do it.  

So,   you know, if we can remove that friction to some extent, we can we can make it  

[01:51:31] Unknown:

just easier to make make that call. Yeah. I mean, this goes back to what I was discussing earlier about trade offs.   And I I mean, if you talk have you talked to, like, the samurai, ride or die? Like, privacy is all that matters. Privacy is your number one priority.   They would   advise you to   keep all your funds hot in Whirlpool constantly until it's time to spend,   because that'll give you the best privacy guarantees.   And then if you're talking to someone about security guarantees, they'll say you should keep it in a multisig,   multi jurisdictional.  

Like, even if you wanna spend it, it's gonna take yourself a couple months and traveling around the world to to spend your funds.   And   and the realistic   scenario   for a lot of people, the practical scenario in the in the middle ground is   you keep a a decent amount of funds in Whirlpool that are constantly mixing, and you try and reduce that risk   by also having a cold storage   stack.   And when it comes time to spend, then you'll send from cold storage back into Whirlpool. Let it sit there for a while before you actually come to spend.   And then what you mentioned was, like, the CK bunker idea,   where that wouldn't actually be cold, but it'd be, like, cold ish, where you have, like, a plurality of your keys or c k bunker, which is this cold card, basically HSM mode, this hardware signing mode,   and you have it with a set number of rules. So, like, the rules are set in a way   that'll authorize a Whirlpool transaction, but it won't authorize draining the wallet,   which is, like, a very interesting middle ground to me. I think it's a   it could be very useful to people, and it it it would it would probably unlock more liquidity. People would be more comfortable   putting more funds in. Now   the reality of the situation, though, to go even farther back in this conversation,   is that   these are once again,   these are the same trade offs made on Lightning.  

Like, with Lightning, your wallet is completely hot,   and a lot of times, you're actually even broadcasting your IP address, and and most people I don't know if anyone really using   a multisig setup with, like, signing policies   for their lightning wallet. So it's almost always single sig,   and there's a decent amount of funds there. There's whole businesses built in built on basically having these massive lightning hot wallets.   So I feel like there's more nuance there and room   for different trade off balances than   people give it credit for.  

I don't think having   a,   you know, a subset of your funds hot, so you you're using Whirlpool,   is the biggest risk in the world. It is definitely an additional risk,   but it's just something that users need to keep in mind, basically.  

[01:54:35] Unknown:

Yeah. Agreed. Agreed. I think that all of that's very accurate in the way I would see it. So, you know,   have your cold storage stash. Make sure it is cold. Don't   load up your cold storage wallet when you don't need those those funds. You know? By all means, like, do your key key checks. You know? Make sure you can spend from the wallet from time to time to time. That's important to do. But your cold storage wallet, the the whole idea is that it should be be sort of cold. And then you keep a certain amount of funds, which you can then send send through will Whirlpool and spend from there,   and they're 2 separate   mounts.  

I think that that's   the best in class at this moment in time. Yeah.  

[01:55:18] Unknown:

Okay. I mean,   these are my favorite topics, but, damn, they're fucking deep.   Yep.   Yeah. I mean, page 1, I think you kinda hit the nail on the head, man. I like, I people like to hand wave, like, page 1 will be,   you know, this great stenographic   tool for us. But I I just   I don't know if, like, the incentives there are just  

[01:55:43] Unknown:

Yeah. They don't they they just don't seem to,   I I don't know. They it it you know, what you have to have is a merchant who wants to take part, and, you know, they have no particular incentive to do that unless they just care about the privacy   of   the customers who are paying them, which is not a zero thing, but it's it's it's not   a financial thing.   And then, you know, you you kind of have to obviously, as   the consumer paying the merchant, you have to spend a little bit more in fees because you're including an extra input.   Right. So, you know, so it's it's just, you know, neither of those two things are are major, and I I I would definitely   consider it,   a a net positive to use it if I could. But,   whether everyone else will see it that that way, it's it's it's harder to see that being the outcome   or at least becoming the default.  



[01:56:39] Unknown:

So It's especially since it's competing with   it's competing with Lightning transactions.   And on Lightning, our big issue is   receiver privacy.   But if if if you're a diligent   Bitcoin user and you want sender privacy on on Bitcoin,   with lightning, you know, you you either spin up a you spin up your own node really quick. Open Arms talks about this a lot. You, like, spin up your own node. You fund it with a a coin join UTXO,   and you you make payments with that for a couple months, and then you shut it down. And and that's gonna give you a way less fee burden than if you use PayJoin, and that's gonna constantly   that incentive   between Lightning and PayJoin will will constantly be there.  

If if you I all of these assumptions rely on a high fee environment, though, so   I'm literally watching   why we're we're   watching the mempool dot space, and it's just completely empty right now. So who knows?  

[01:57:43] Unknown:

Yeah. That's true. What are your thoughts about Coinswap, Matt? So, I mean, you know, I I I kind of really like the idea. I think it it looks   super interesting.   Again, I wore I I sort of wonder about the incentives   behind it. But the thing that I, you know, I've seen talked about is,   you know, what is the market like for people who who want to exchange   their coin history? You know? Is that some something that,   is attractive to people? Because you don't know what coin history you're gonna gonna get. Right? Yeah. And then what are you gonna do?  

[01:58:20] Unknown:

You're gonna chain analysis your fucking   new coin that you got?  

[01:58:25] Unknown:

Yeah. I mean, it's that's the one question that I haven't fully figured out in my own own mind mind yet. I'm just not sure about that one. So I'm trying to check my biases here, so hopefully, you can help me.  

[01:58:38] Unknown:

But   to me,   when we talk about all these things, when we talk about Lightning, when we talk about PayJoint,   when we talk about coin swaps,   when we talk about atomic swaps,   to me, these are all post mix tools.   So I think I think you do coin joints first,   and CoinJoins,   it's interesting. Right? Because   the main negative,   the perceived main negative of CoinJoin, besides the cost, because it is definitely cost you more if you use CoinJoin,   The main perceived negative is that it's really visible on chain.   But with when you talk about the negatives of something like Coinswap,   the the main negative is actually probably the exact opposite.  

Where if I do, like, a Coinswap with you, and let's just say, like, in the most   yeah. I I don't know. Like, it's connected to a sanctioned address or something. Right? But let's say, like, the most is connected to, like, a known ransomware gang,   and then I spend that somewhere.   And then   on chain, it looks like that was just my UTXO the whole fucking time,   so then I can get in trouble for that. But with with coin joint   with these equal output coin joints   on on chain, it's very obvious you did a coin joint, and that's perceived as a negative. But to me,   that's kind of   it's it's it's kind of   parallel to   encryption   with when when I when I send an encrypted message,   an observer doesn't know what   if the encryption sound, the observer doesn't know what's in the message.  

Right? But they know that I sent an encrypted message.   You know, if you if you use a VPN,   your ISP and your government know that you're encrypting your Internet   traffic. If they don't collude with the VPN provider who's actually encrypting your traffic, who's your counterparty there, they don't know what your actual traffic is, but they know it's encrypted.   So to me, CoinJoin are actually   this this it's brilliant that it's on chain and it's it's visible on chain that that   it's a privacy seeking collaborative transaction where it breaks   the history and the the forward the the forward tracking and the and the history of it.  

So to me,   CoinJoin should be   the de facto standard in all of these wallets,   and then all these other tools, whether that's opening up a Lightning channel, doing a pay join, doing a coin swap, are something that happens after this,   equal output coin join.  

[02:01:22] Unknown:

Okay. Sure, Matt. But why would you coin swap after your coin coin joined? What would be the incentive behind that? Because I know Chris Belcher, the author of coins Coinswap says that Coinswap is a replacement for CoinJoin.  

[02:01:34] Unknown:

Right.  

[02:01:35] Unknown:

So,   you know, what would be   would it would it be sort of some way after   the the CoinJoin has taken place that you would find the need to Coinswap? Or Well, so, like, the Belcher's dream,  

[02:01:48] Unknown:

I and I I fucking love Chris.   Big supporter of his work. I'm I   I I financially contribute to his work. I advocate for his work. I loved having him on the show. Love having conversations with him.   The dream for Chris with Coinswaps is that if we have, like,   40%   of Bitcoiners using coin swaps without CoinJoin, just coin swaps,   the chain analysis companies and the governments that they serve,   and the corporate surveillance companies that they serve will just hand in the towel, and they'll be like, there's no way for us to   reasonably   assume   that this transaction is owned by this person because so many people are using coin swaps.  

Now the problem there is that pain point from 0 to 40% or whatever the threshold you wanna say is the threshold where we have enough Bitcoin transactions that are using coin swaps   that it completely throws all your assumptions out the window.   That that bootstrap period,   is super dangerous to users in my mind,   because, like we said earlier, you're gonna get,   you know, you're gonna get other people's coins, and you're not gonna really know what the history is of those coins,   And we're gonna have naive chain analysis companies and the governments they serve just assuming that it's yours. And even if you end up defending yourself in court or something,   it's gonna cost a lot of money. It's gonna be a huge fucking headache, and maybe you'll have accounts closed and all this other shit that you have to fucking deal with.  

So that that   middle ground to me is   is almost untenable. Like, I we have a hard enough time   trying to get CoinJoin usage up. If you have that additional   concern that   that you don't really know, you know, who you're swapping with   and that you might face   punishment based on what you get,   it it's obviously gonna hinder adoption. Now why would someone use it as a post mix tool?   The reason someone use it as a post mix tool is because it it will literally it literally breaks the link on chain. Right? So on CoinJoin,   when they use these equal output Coin Joins,   you're   you're muddying the probability waters. Right? Like, the   tracking Bitcoin's a probability game. So   every every every time someone tracks Bitcoin, they're they're they're making assumptions   and they're assigning probability,   you know, with with these new chain analysis surveillance softwares or whatever. They do it behind the scenes, and they have a pretty UX. Right? But but, basically, what's happening is   they're assigning probabilities to every transaction to whether or not ownership has changed.  

Right? And   in particular instances, it's very fucking obvious. Right? Like, if you if you make a transaction and one one output has   one output is to a wrap SegWit address, a 3 address, and the other output is back to a a native Segwit, a b c one address, and you sent from a b c one address,   the b c one output is obviously your change.   You paid you paid a you paid a wrap Segwit address, and your your change is the native SegWit. So that's obvious.   If you if you pay people like paying in round numbers. So, Craig, if I donate to you and I donate a 1000000 sats and then the change is, like,   432,000   sats,   956   or something, Like, that is obviously my change, and my donation was the round number.  

So there there's certain heuristics that are, like, pretty obvious probability wise, and then there's ones that are   that that they're making bigger guesses. And with CoinJoin,   they're make their their probability gets completely thrown out the window. If you use a a Whirlpool CoinJoin,   you have 5 UTXs go in, and there's no deterministic links. There's, like, 10,000 different combinations that could be   that transaction of the way it happened,   and you could be any of those 5 leaving the pool. And then all of a sudden, if if that if 2 of those people go into another round, then it makes it it makes it even more cloudy of a situation.   With coin swaps, you literally just break the chain.  

You're not even,   you're not fucking with the probabilities.   You're taking someone else's UTXO,   that is completely not connected to you on chain. So it's it's more similar to, like, one of these custodial mixers where, like, you send them Bitcoin, they send you someone else's Bitcoin.   So if you need   the best privacy,   your your your best solution will would probably be,   you know,   equal output coin join, and then go into Coinswaps.   Now why would the average user use coin swaps? Maybe they wouldn't, and that's fine. But if there's a subset of users, then all of a sudden this whole coin swaps idea   of   of, you know,   steganographic,   privacy, this idea that it looks like a normal transaction, but it's really a coin swap.  

If there's some people leaving the pool and going into coin swaps, then you have to basically basically operate under the assumption that anyone leaving the pool could be a coin swap.   So it it it improves the privacy of all participants of   equal output coin joins if you're in the same liquidity pool if a subset of those users are using coin swaps,   I think.  

[02:07:13] Unknown:

Yeah. That that makes some some sense. So we could actually see how, you know, the way that the coin swap is coordinators is with these message boards or at least that's what's been put forward   now. So you could maybe even see   how, you know, somebody could say, listen. I only want a coin swap as with, the output from a coin coin join. I don't wanna coin swap with anything else.  

[02:07:35] Unknown:

Well, you only need so so Chris is operating under his joint market model where he doesn't want any centralized server.   Right? Because because that's obviously less censorship resistant. That server could get shut down. But you could have a blinded centralized Coinswap server   that only allows post Whirlpool UTXOs to be in the Coinswap.   Exactly. And and then you don't even have to coordinate amounts,   because all the amounts are already equal.  

[02:08:02] Unknown:

Yeah. Yeah. And and and, you know, then then you you basically don't have to worry about the coin history thing nearly as much. You know? I think I think   that that world   could could just make it a bit easier,   for the Coinswap   to   be a   more attractive option.  

[02:08:23] Unknown:

Kito, you're back?  

[02:08:24] Unknown:

Yeah. I I'm back. Is isn't that pretty close actually to what Stonewall 2 x is doing?  

[02:08:31] Unknown:

So Stonewall 2 x is a is a coin join. It's a 2 person coin join.   Yeah.   Right.   Yeah. I mean, it's it's it's a similar concept. Right? Where if the majority of people using just regular Stonewall, which is a one person coin joint that looks like a 2 person coin joint, and then some people are using the 2 person coin joint,   then you kinda have to operate under the assumption that every time you see one of those, it could be a 2 person coin joined even though the majority of them are probably 1 person coin joins.   But, yes, it's a it's a similar concept, and and that's why I think it's just good to have all these different post mix tools.  

But I I mean, I also think I'm   part of the minority that thinks Lightning's a post mix tool,   unless you get onboarded directly to Lightning, which might be a thing in, you know, a high fee,   high sustained fee market.   I don't know.   Once again, I don't know how when that's gonna happen because I was completely caught off guard by the current one we're in.   But but if you're coming from unchained, you should always it should be coin joined into lightning every time, period. Back to the that coin swap and inheriting someone else's  

[02:09:40] Unknown:

coin history,   I I think I personally   prefer   to go straight from,   mixing to spending,   because at least I know that,   these coins the only history visible history of my coins is the mixing.   So yeah. Unless the coins what happens with someone who with also some coins straight from the mixer, I probably not use that. Yeah. I mean, what what I'm envisioning here, and it's what the Samura guys have talked about,  

[02:10:11] Unknown:

is that all participants   would be post mixed. Yep.   So it just it just furthers   the privacy guarantees that you would get   rather than if you were just plain,   if you were just just purely using CoinJoin. Right? Is that really different  

[02:10:32] Unknown:

from just one more round?  

[02:10:39] Unknown:

I mean, that's all numbers. Right? I I don't know.  

[02:10:44] Unknown:

Good good question.  

[02:10:46] Unknown:

Yeah.   That is a good question.   Yeah. I maybe maybe not. Maybe not if they're the same liquidity pool and you're swapping with your own liquidity pool and except that I think it makes the liquidity pool denser.   Right? Like, you're just adding another link between 2 rounds within that wider liquidity pool that didn't exist previously.   And maybe maybe you have time as a constraint.   Right? We both know that remixing   and the the way Whirlpool's implemented   takes a while.   But if you have a time constraint,   and let's say you're a mobile user and you just do one Whirlpool round and then you go into a coin swap,   you're getting probably significantly more privacy,   than you would otherwise. Right?  



[02:11:39] Unknown:

Yeah. Probably.  

[02:11:41] Unknown:

Yeah.   I don't know. We're on the bleeding edge of all this shit.   No one really wants to talk about it.   And and so I I I think it's the same situation for atomic swaps.   Right? So coin swaps are atomic swaps that happen on Bitcoin only,   and then atomic swaps is more generally   alluded to as going into an alt chain and then switching back.   Yeah.   The most common one being cited is is Monero because it has confidential transactions already built in   and ring signatures.   So, basically, every Monero transaction is a coin join.   And it's the same thing, because you hear the Monero   stands, they they'll they'll say that they don't wanna swap with a Bitcoin user because they don't want that Bitcoin history.  



[02:12:34] Unknown:

Interesting.  

[02:12:35] Unknown:

So making it a post mix tool solves that, and   and this is one of the the interesting back and forths I have with the Monero group is that,   you know, they say that coin join is not something that should be worked on. Like, you should just switch to Monero, but at the same time, in the same breath, they'll say they won't swap they won't trade their Monero for Bitcoin because the majority of Bitcoin that's being traded for Monero has bad history attached to it.   Okay. So,   anything that you swap with Monero should automatically be coin joined. It should all be post mix.  

[02:13:11] Unknown:

Yeah.  

[02:13:12] Unknown:

I literally think that   we should make as many transactions as possible coin join. Literally, everything we talk about should be a post mix tool, basically, after coin join. Like, the the default on chain should be   coin join. Even if it's even if it's a fake coin join like a stone wall, and it just looks like a coin join, it should at least be a decoy coin join.   Now the the major issue there is block space and fees. Right? Because if you're faking a coin join every transaction, you're gonna pay significantly more in fees.   But I, you know, I think privacy is worth it. I I don't know. I,   it it's it's definitely not an easy solution.  

There's no there's no easy solution.   No. There's nothing. Yeah. I mean, people can use wallets that don't do that. I just think that we should be pushing at least the   the free open source wallets that the community really the hardcore community likes should should all have, you know, some kind of collaborative transaction tools built in automatically.  

[02:14:23] Unknown:

Yeah. And I think, you know, the the sort of challenge here is to build them in an easy to use use way. You know, that's not to say that the tools built today are super hard hard to use, but   I like to believe that things can always be easier and make more more sense, and the sort of UI can help help with that. So,   yeah, I think that that's   definitely something that we can work on.   You know, now that we've got the kind of basic,   we we're sort of starting to figure out what works and what doesn't, not only from an implementation, but also from an incentive   point of view, I think we can start tweak the sort of UI, which is which always comes later on. You know? You kind of you have to,   just get the thing to work first, and then   you can kind of iterate over the UI and kind of make it easy for people to use. Because,   you know, I mean, I I've I've sort of been through Will Whirlpool, and it's it's great, but it's it certainly wasn't obvious   to me at all times exactly what was going going on. I kind of had to read and go back back to the docs and stuff. So,   I'm sure that I'm not alone in that.  

And, you know, that's what good UX does is it kind of just makes it makes it easier.   You kind of you feel   secure and in control as you're doing it.  

[02:15:39] Unknown:

To be clear here, I don't pretend   to   know all the answers. Right?   I just I just I think the status quo right now   is so poor for privacy   that these discussions need to be had.   These discussions need to be had, and we need to push the ecosystem forward because,   if we stay at the status quo, the end result is 99% of Bitcoin users' full financial transaction history is being tracked constantly relatively easily.   And the discussion, it just isn't   happening really. And I I I the one of the reasons I started dispatch in the first place was because I think these topics need, you know, open discussion on a constant basis.  

[02:16:29] Unknown:

Yeah. And I, you know, that's right. But I I think as I'm saying saying, it's it's sort of you know, if you look at how far we've come with multisync, you know, I mean, just a few years years years ago, it was really hard. I mean, like, almost to the point where you would have to write your own code in order to get a multisig wallet up. Like, there there was almost no other way to do it. And, you know, if you wanted to use hard hardware wallets as well, you know,   you were basically you know,   It was just gonna gonna be super, super, super hard. So now it's it's just a few years down down the line, and it's become much easier.   So it's really about trying to get the incentive   right and then get the sort of UX right,   in order to make these these things   become part of people's lives. So it's just become some something that you do because   you you realize that it's the best idea. And,   if you don't do it, you're likely to   worry about it, or it's gonna become the sort of mental load that I was   talk talking about earlier. You know, you're kind of thinking, oh, well,   I haven't done that right. So now people are gonna know about my transactions. They may gonna gonna know how much I'm being paid. They're gonna know where I spend.  

You know, all of these things that we think about that other people are not think thinking about, that I think   needs to become, you know, clearer. And,   I I just have a belief that good   good soft soft software can help make it obvious. You know, if you can, for example,   you know, show somebody in a UI   how   the different UTXOs,   or difference of TXOs as they are spent are connected to each other. You can kinda kind of say, well, did you know that Joe Blogs, who you paid the other day, knows how much you earn because your the salary went straight up to him, and the change then came back. It was a round amount as you were saying saying that. So those kind of things   people don't think think about, but it's mainly just because they're hidden.  

And as   Bitcoin itself and, you know, the way that it works becomes more   well understood,   So, you know, the soft software can can evolve and just show you what's going going on. And that's kind of   the the ethos behind   showing as much detail as I do in   the wallet that I build. It's just, you know, I think it's important because if you don't know the stuff,   then, ultimately,   it's gonna hurt hurt you. You you need to understand   how the protocol works to some degree. Otherwise, you're always going to be you know, there's always gonna be people who unders who understand that kind of use that knowledge against against against you, at least can.  

[02:19:13] Unknown:

Yeah. Sovereignty and personal responsibility is always gonna be more difficult no matter what,   because it requires some responsibility of the user.   So I I don't expect   that we will have a 100% penetration with these types of things,   but I want it to get to a point where someone who realizes the need is able to access them and use them effectively   without too much effort. I I think a perfect example right now   is this,   you know, this El Salvador legal tender law.   Is, like, if we have people right now, you know, buying sandwiches and stuff,   we we don't want the person they pay for the sandwich to know how much money they have or how much money they're making, and we don't want their government to know either. And we don't want the 1,000,000 different corporations that all want to leverage that information for ads and monetization,   to have that information either. And it's it's a very   this is not a, you know, an abstract   goal. This is this is a very   realistic,   pragmatic thing that if we have people spending Bitcoin on a day to day basis   using Bitcoin,   the default should be relatively reasonable in terms of privacy, and they shouldn't they shouldn't   have to go above and beyond to try and protect themselves.  

You know, 1 we're talking about incentives a lot here. And, I mean, one of the things that that we're really up against is this insidious KYC that's just spreading   and regulatory compliance and air quotes that's spreading through the industry.   And no one really wants to talk up against it because it's how they pay their rent.   You know? It's it's how it's these companies,   these regulated companies have the most money.   They're the most profitable businesses,   and,   you know, a lot of   influential Bitcoin people, you know, make make a lot of money off the backs of those companies and their regulatory compliance.   And the fact that we have these large KYC databases being built up on on whose transaction is which   pushes back against basically everything we're fighting for.  

And it's   it's a very dark incentive that people don't really discuss. I I had Belcher and and Waxwing on on the show,   And I said to them, you know, it's   it's you know, when we're designing these incentives when you're designing these incentives about people using transactions more privately,   we're up against the BlockFi's of the world. You know? Michael Saylor posted a tweet that had,   like, 2,000 retweets or something like that,   and it was,   the ideal mobile wallet is a KYC wallet   that automatically gives you a loan   in US dollars   based on   on on your Bitcoin as collateral,   and then you spend that instead of of spending Bitcoin directly. Right? And and   when   when these incentive models are being designed,   a user is gonna consider that as an option over whatever the private alternative is. Right? Like, they're going to,   consider that interest payment that they could get if they   loaned out their Bitcoin with some centralized regulatory compliant non privacy focused service,   versus using, private transactions. Right?  



[02:22:52] Unknown:

Yeah. Yeah. I mean, as I say, that is my biggest cons concern because if that happens too much, then it won't follow too far behind that they'll decide to,   in air quotes, print their own Bitcoin in the back background. You know? And just   because, you know you know,   unless we sort of can withdraw it and they can be left high and high and dry by basically saying that they have,   you know, more than they actually do,   then we really don't have too many weapons against against that. So for me, that is a huge risk and, you know, something that,   I don't think is talked about enough.  



[02:23:32] Unknown:

Kito, what's up over there? I haven't heard from you in a minute.  

[02:23:36] Unknown:

Not much   listening to you guys.   Yeah. I I I guess,   I I I lost my my stream of fault.  

[02:23:50] Unknown:

So I'm curious, before we wrap this up, I'm curious on your your guys' opinions on the fact that mempools are just completely empty right now.   Is it like, am am I right to be,   you   know I I could give you know, maybe maybe   I will admit that I was, you know, a little bit too excited about the price increase. I always am.   You know, between me and the freaks, like, the reason I say stay humble all the time is because I'm never humble in bull markets.   So I'm just constantly trying to remind myself, and I might as well remind the freaks at the same time.   So maybe I got I definitely got a little bit too far ahead of myself, especially when I was in all caps saying 200 k by conference day.  

You know, that kind of half started as a joke because you just get so much engagement whenever you say it.   But I kept saying it. So, anyway, I deserve   to fucking eat crow on that.   But   mempools being completely empty   has completely   thrown me for a loop. Like, this is not,   like, I was way fucking wrong about this. I could give 2 shits about the price. I'm a long term investor in Bitcoin. You know? I I I practice what I preach. You know? I don't sell Bitcoin. I fucking   stay humble, Stack Sats, in that regard. I just constantly I'm just accumulating as much Bitcoin as I can fucking get.   So when the price goes down, it's, to me, it's it's truly stacker's paradise. It's just more time to accumulate.  

I've I've con I'm just fiat mining. I'm making my fiat salary, and I'm just putting into Bitcoin.   The the mempool being completely clear right now,   amid a 50% hash rate reduction,   is   just seems   fucking   like a bad sign. Am   I wrong?  

[02:25:53] Unknown:

So my point of view, Matt, is is that the mempool is completely driven by price, you know,   you know, up and down.   You know, I think if, you know, as you were saying, you know, the number of people in   coin joins and the like is not really material   to drive mempool usage.   In fact, most of the stuff that we talk talk about is not really material to drive. You know, if if if we look at the number of blockchain.comwallets,   we shouldn't be too surprised   that   when the price is not going up or down, when it's kind of just hanging around the same,   then the mempool just stays empty because,   people are you know, they've they've kind of those who are gonna sell have obviously sold.  

Those, who were waiting on the sidelines to buy have obviously still still on the side the sidelines.   And the majority of Bitcoin's usage is driven by people trying to,   you know,   basically,   make or or not lose,   whatever they have put   sort of, into it. So, you know,   it won't stay this way forever, and and the mempool usage will go up again. And maybe it'll clear share again, and perhaps it won't. You know? At some point, it weren't. Right? At some point, the number of users who just kinda use that?   Yeah. Because, you know, at some point, the number of users who will   just be using it, like you and I do,   will get to a point where the block size is just too small. Right? That that day will come. It's obviously not here here today. We obviously don't have the usage in the world today   for that to be true.  

For now, it's still a slow price driven, you know, thing. And and we shouldn't be too surprised about   the 50% drop in hash rate because if mempool's pretty much empty,   it's you know, even if the, you know, the the hash hash rate drops, it's not gonna suddenly   change that all that much. I mean, you know, we we lose a few minutes perhaps, but it's not really a major effect. So Well, my point is my point is  

[02:28:03] Unknown:

in in difficulty adjustment periods where   hash is it where it's trending down, like, right now, where we're projecting a negative difficulty adjustment after the previous one, which was also significant the biggest negative we've ever had,  

[02:28:18] Unknown:

usually, fee pressure is higher in those situations. Right? Because Boston is coming in slower. Yeah. Yeah. Yeah. And I I think if the mempool was full when this happened, if if we were sitting with the serious   backlog when this have have happened, I think we would absolutely be feeling the pressure today.   I think we'd be paying high high fees. But just the fact that it is empty,   you know, and the price hasn't moved moved much, I think,   there's no particular reason why it would suddenly fill that I can think of.  

[02:28:47] Unknown:

So, Keith, what are your thoughts here? Thank you, Craig. Those are very insightful.  

[02:28:52] Unknown:

I think the the manpower pressure is a conspiracy against me. It's always full when I need it to be. I need it to be full. So  

[02:29:00] Unknown:

And 4 months ago, I had fucking fee FOMO. I was like, I'm never gonna be able to pay 23 sats per byte again.  

[02:29:09] Unknown:

Yeah. No. You know, it's it's pretty weird that it's so empty now, and,   maybe it's a vacation   effect. I don't know.  

[02:29:17] Unknown:

So so you wanna hear my the bear Bear O'Dell is coming out at 2 hours and 30 minutes into the show because only the rider dies made it this far.   To me, it's a sign   well, first of all,   clearly,   you know, not enough of the freaks are using CoinJoin. Like, CoinJoin should be a,   you know, buyer of last resort of of block space. It should just be a constant   fee pressure thing.   We we should have so many people using CoinJoin that there's just always a reserve demand   for block space.   So that's unfortunate to see.   And then the second thing is I think   I think it's,   you know, there's there's still a shit ton of traders, Craig, that are that are trading these these price movements even when we're in sideways zone.  

So I don't think the traders have left us.   To me, it's more of a sign   that   that that people are using these custodial   they're using these custodial regulated services rather than actually holding their own keys and using Bitcoin. I mean,   even if   you are   the least   consumer of Block space as a sovereign Bitcoin user, you're still should be making,   you know, a withdrawal a week from whatever your regulated custodian is.   I'm not even saying you put it into CoinJoin, which you should, but, you know, if if you're just making a a transaction   to   your cold storage and you're stacking to cold storage,   you should at least be making 1 transaction a week,   or or one transaction every 2 weeks. How many people are doing that right now? Like, are there are there more than 5,000 of us?  



[02:31:13] Unknown:

Okay. But, Matt, if if people are using custodial wallets   when they buy and sell, then why did the mempool,   go up so much when the price was going up? Because, you know,   in theory, they wouldn't be making on chain, you know,   transactions at that time if it was all just being done with sort of money behind the scenes?  

[02:31:39] Unknown:

So,   I mean, there's there's 2 theories that I'm working with.   The first is,   you know, leverage Bitcoin trading on bucket shops,   where where you have and we even saw, you know, before,   BitMex   cleaned up shop and started adding KYC and and truly blocking Americans.   Like, we saw hedge funds that were acquiring Bitcoin whether through OTC or some other method,   and then they were sending it to   BitMex or or where whatever bucket shop they wanted to use   to do leverage Bitcoin trading, and they didn't really trust that much funds on there, so they were constantly moving back and forth.   And then the other thing is is Shitcoin trading. Like, the Shitcoin market has just completely gotten   destroyed,   because I guess my thought is   is, unfortunately,   if if you're a regulated,   you know, semi wealthy person in America or one of these developed countries, your main incentive   to to leave your regulated custodial exchange   is to go send it to,   Shitcoin bucket shop and try and buy some shitcoins.  



[02:33:04] Unknown:

Well, do do we actually see the same decrease in transactions on other chains?  

[02:33:12] Unknown:

I I don't know. I don't follow any of that shit. I I assume there's only, like, one other chain, which is Ethereum, that has any kind of transaction pressure.   But they just always have, like, shenanigans happening over there, so even who even knows? Like, right now, fees are up because there's some, Uniswap clone that's spamming the chain supposedly.  

[02:33:33] Unknown:

Yeah. That that,   your theory might might be right, mate.   The beauty   of Bitcoin is that we just don't know.   It's  

[02:33:45] Unknown:

My worry, Craig my worry, Craig, is that mempools being this like, it's not even just, like, kind of empty. Like, it's literally 1 separate byte just gets you into the next   gets you into the next block. It's not even, like, kind of empty. It's it's fucking barren,   and and and my concern is   that it shows that we're way earlier than we thought we were,   even I thought we were. And I think I thought we were were earlier than most people think,   which is fine   in the grand scheme of things, except that it means we're more vulnerable.   There's less sovereign Bitcoin holders than people think there are.  



[02:34:27] Unknown:

I agree 100%   with that. 100%.   That is, as I said, that is my biggest concern. I think if we actually knew how many   noncustodial   Bitcoin holders there were, we would be shocked at that figure as being as low as it was. I I I yeah. We have a long way to go.  

[02:34:48] Unknown:

And the mempool being this mempools being this fucking empty is is, to me, is, like, tangible proof of that.  

[02:34:55] Unknown:

Yeah. Yeah. Well, I mean, look. You know, I'm I'm quite sure that if you got every   wallet dev in a room and asked them if they had, you know, 100 of thousands   of users, they're just saying say no. You know, it's not it really isn't the the sort of sort of case. I mean, the fact that we still can't outdo   shittyblockchain.com,   I mean, really,   it just shows we have a long way to way to go.   And, you know, that's that's kind of okay.   I'm not too concerned if you look at the growth of the Internet.   It did take   decades. You know, it feels like it happened very, very fast, but, I mean, it did take quite a bit of time.  

It gets to a certain point where   it becomes a need to know rather than a sort of a nice nice to know,   skill set. We're not there today. We're definitely not.   So when that happens, I I can't say, but, hopefully, you know, in the next 2 to 3 years. And then I think we'll see a bit of a step change   As we kind of saw   around the year, you know, 2,001   to 2,005   or 6, you know, we really saw a big change in the number of people who understood   how to email, how to browse browse the web, how to kind of, you know, just get their shit done online. And   Bitcoin is definitely pre that. It's not in that space yet.  

So,   you know, we need to go through, you know, the sort of bill cycle that we're in now and maybe one one more in order to get to that sort of point.   So, yeah, we're early.  

[02:36:39] Unknown:

Tito, am I being too bearish?  

[02:36:45] Unknown:

Just enough.   Yeah. I I agree 100% with with that. We I I think we are, like,   late seventies, early eighties,   in computing now.   Still still the the   period where people are building cases   out of wood in a garage.  

[02:37:07] Unknown:

And Keter would know.  

[02:37:09] Unknown:

And, yeah, we we we are definitely   overestimating   some numbers. Like,   even things like   how many,   toll nodes are around on the Internet.   Actually, I I learned   the real number quite recently, and it's scaring  

[02:37:27] Unknown:

me. What's the real number?  

[02:37:29] Unknown:

Less than 10,000.  

[02:37:31] Unknown:

Yeah. I would say less than okay. So less than 10,000   sovereign Bitcoin   node users. Right?  

[02:37:38] Unknown:

Well, no. It's,   it doesn't include the the user   troubles. It just,   counts the relays and exit nodes.   But, still, it's it's crazy   it's crazy small, actually.   And,   maybe the numbers we see for Bitcoin nodes and for Lightning nodes are actually accurate, and there isn't that many hiding.  

[02:38:01] Unknown:

So so first of all, we have winsome hacks in,   a good good,   good username in, on Twitch coming into the live chat saying that I've flipped bearish. I've not flipped bearish. I am more bullish than 99% of people on this fucking planet.   Okay? But it's important to be realistic in terms of sovereign Bitcoin users, and that's that's different than price, by the way.   I think it's it's detached from price to a degree   because we do have a lot of people who buy Bitcoin,   and they do increase the price as long as there's not rehypothecation,   which was we're early still on. I don't think there is really.  

So when Michael Sailor, for instance, goes, and I know he's a very controversial figure, goes and buys a bunch of Bitcoin   and then sends it from his custodial broker to his custodial wallet,   that does increase buy pressure.   So I think most people are underestimating   price still.   And I I I I stand by the fact that I think people will be extremely surprised to the upside in terms in terms of price.   I think people are   greatly overestimating the number of sovereign Bitcoin users. So   let's let's just go for through some estimates. I'm just curious before we   wrap this up.  

So how many how many people   got look. Once again, there's no way for us to easily calculate these numbers,   which is why proof of work is so important. Like, the reason we have distributed proof of work is because you have this verifiable,   real work that anyone can verify and know it exists.   But when it comes to user numbers and everything and and node numbers, there's no way to prove one node, one user.   And there's no way to definitively   prove   how many individual users are out there.   Maybe it's a little bit easier because people have such horrible privacy right now, but you're still making a guess. You're making educated guess. And, ideally,   where I want us to be in 5 years is I I don't want Glassnode to have a business model. Like, I want them to look at the chain and just have no fucking idea what the fuck is going on.  

But where we stand right now,   how many how many individuals around the world do we think are holding their own keys?   We'll start with Craig.  

[02:40:28] Unknown:

I was hoping you were not gonna start with me.   Sure.   Probably less than a 100,000 maths.  

[02:40:40] Unknown:

Yeah. Yeah. Okay. I'll cosign that. What do you do you think, Keeda, do you think that's you're you under on less than a 1000000? My my number was 100 about 100,000.   Okay. So so all these numbers when people say, like, there's, like, 30,000,000 Bitcoin users or whatever,   They're just completely off base.  

[02:41:02] Unknown:

Yeah.  

[02:41:03] Unknown:

Or maybe they're they're they're including, like, Robinhood users or whatever, like, self full custodial people. Right?  

[02:41:09] Unknown:

But I mean, Matt, who owned a personal computer in the mid eighties? I mean Okay. That's that's fine. That's I'm not saying that this means Bitcoin's dead. I just want some, you know, realism here in the discussion. Right? No. No. Sure. I I agree. But, you know, I I think an important,   you know, kind of point on the plus side is that, you know, if if if you were around at that time and you were sort of part of that   kind   of journey,   of being into   you know, whether you owned a Commodore 64 or,   some some some Sinclair or you know, that that kind of world was the most   creative time in computing that I've ever known.  

It was really amazing, and   it's it's just fucking cool to be   to be, you know, part of this at that time. You know? I I have no doubt   that   Bitcoin is gonna go the same route of just, you know, becoming   a   default and de facto part of our lives,   that being able to build on it and make changes to it as we are doing. Because believe me, in, you know, 10 to 20 years' time, you're gonna be tinkering on the very edges. You're not gonna be working on on the kind of core stuff as we are today.   You know, that's a great   time to just be in it. No. Look. A 100% correct. Look. Yeah.  



[02:42:38] Unknown:

Look. All of us all of us here, whether it's the 3 of us, me, you, and Kito,   or whether it's the rider die freaks that are in the live chat, or whether it's the rider die freaks that are listening to this as soon as it gets uploaded and you're streaming stats,   Like, we're all in. We're all in, and, you know, there's no place I'd rather be. I have no regrets whatsoever. As far as I'm concerned, I'm one of the luckiest men in the world. You know. I'm super grateful to be here. It's fucking awesome. That being said,   I share this podium with less than a 100 k people that are holding their own keys.  

So okay. So we have that for keys.   How many how many users are using their own node?   Individuals.   I go first. Yeah. You go first this time.  

[02:43:25] Unknown:

I would say between   25 k.  

[02:43:30] Unknown:

Oof. Okay.  

[02:43:32] Unknown:

Yeah. I think that's a part of your part about right. Yeah.  

[02:43:36] Unknown:

Yeah. Okay. So I I agree as well.   I I like that we have consensus here. Yeah. I I was gonna say 5 k. I was gonna say less than 5 k.   Okay. So we have that for using nodes using their own node. So we have a 100000 people holding their own keys,   then we have about 5,000 people less than 5,000 people   using their own node.   How many are holding their own keys, using their own node, and using Lightning?  

[02:44:09] Unknown:

Probably about the same.  

[02:44:12] Unknown:

Yeah. Well,   perhaps half of that, you know, I would guess.  

[02:44:17] Unknown:

Yeah. I think there's a decent amount of people that are using their own node.   I mean, look, even we had   we had that, like, OG who fucking lost a 1,000 Bitcoin in the Electrum phishing scam, and he wasn't using his own node.   Guy had a 1,000 Bitcoin and it was in a hot wallet   on Electrum.  

[02:44:35] Unknown:

Yeah.  

[02:44:37] Unknown:

Okay. So, I mean, yeah, I would say I would say less than 5 I would say significantly less than 5,000. I would say, like, 25100,   3000 people are using their own node in Lightning. Now Lightning does have the benefit that there's probably   a substantial amount of retail using Lightning without their own node, whether they're using, like, a Moon Wallet and with 2 u's,   or if they're using a a a completely custodial option like a BlueWallet or a Wallet of Satoshi, there's probably or like Strike.   There's probably a significant amount that are using lightning without their own node.   But even that is probably less than 15 k or 20 k. Right?  

I'm gonna take your silence as agreement.  

[02:45:21] Unknown:

Yeah.  

[02:45:22] Unknown:

Okay. So we have a 100,000 less than a 100,000   are holding their own keys.   We have less than 5,000 are using their own node.   We have,   less than 3,000 using their own node and lightning.   How many do we think are using CoinJoin?   42.   42?   Less than 2,000. Right?  

[02:45:54] Unknown:

Yeah.   For sure.  

[02:45:57] Unknown:

Right. So so the listenership of this show is a little bit over 20,000.   So   so,   you know, dispatch is, you know, 6 months old, but we've we've basically inherited the majority of of Tales from the clip listeners. But let's say rabbit hole recaps have been going on for 3 years. We got over 20,000 listeners per episode,   and I have not shut up about CoinJoin.   And we have 10% of them are using CoinJoin   or less than 10% of them are using coin join.  

[02:46:32] Unknown:

It's still pretty pretty hard, Matt. I mean, it's it's it's not the easiest thing. Right? You have to have you you don't have to run your own node to to use CoinJoin.  

[02:46:44] Unknown:

Right.   But I think the majority of people that are using CoinJoin   oh, except for maybe Wasabi. The, the overwhelming majority of Wasabi users are   are light users or SPV users.  

[02:47:00] Unknown:

Yeah. That and and some more users as well. I think   way more some more users   using their servers than running their own node.  

[02:47:11] Unknown:

That's interesting.   I guess I guess from from pure user numbers, yes,   rather than volume of Bitcoin. I would say volume of Bitcoin, the majority are probably using their own node.   Because if you're gonna have any kind of substantial amount of Bitcoin in there, I I my guess is is the majority of coinjoin volume across the base   across all implementations   is, like,   you know, a 1000 hardos   that that that have the majority of of the volume,   like, when you measured in Bitcoin terms.   Would you agree on that?  

[02:47:50] Unknown:

Sounds about about right. Yeah. Yeah.  

[02:47:54] Unknown:

So I guess my point is not to, like, completely deflate the room. My point was, you know, that, you know, we have a we have a long road ahead of us, and,   anyone who thinks, like, the fight is over is completely off base. Like, this is this is the start of a of a long war.  

[02:48:13] Unknown:

Yeah. I mean, you know, I guess you could see it see it as a as a as a war. I just see it see it as a curve. Right? Every single time there's a price in in   increase, the number of users go up. Some of those users, obviously, quite a small number,   on a percentage   base base basis just inflates every one of those figures. Right?   And so it will go go on. But what I'm sort of hoping is that,   as I say, once people realize that actually your privacy is is in some ways worse   when you receive   your sal sal salary to salary in Bitcoin, and then you go and spend that UTXO.   They'll start to kind of realize that these tools   are much more important than what they had thought, or they probably wouldn't have even thought thought of thought of them. So, you know, I think it's it's also a question of just getting that education out out there, which you're doing that. You know, it it just takes takes time. You know, the world does not change fast.  



[02:49:12] Unknown:

So we're 2 hours and 50 minutes in.   This is where   the real Bear Adele comes out.   So   once again, not by price. This is just on individual freedoms.   And I think the Bitcoin network can survive even if individuals   are completely fucked.   The majority of individuals are completely fucked.   But,   what I expect to happen is   is yeah. So the best thing we have going for us, I agree, Craig, is that as adoption increases and the circular economy increases, people are going to spend Bitcoin more often because they're gonna be earning Bitcoin. And if if we're right and their fiat is completely worthless, especially in,   you know, weaker economies, But I I think even in America and the and the EU,   we're gonna see those currencies become worse and worse store values as as the years go by. It seems to be amplifying really quickly.  

People are going to be paid in Bitcoin, and they're gonna wanna hold Bitcoin.   This is part of our thesis. Most of our thesis, I think,   is that we expect Bitcoin to be the money that people wanna hold and people wanna spend.   Or or the people that the money that people wanna hold and because they were holding it and the majority of their wealth is in it and they're earning it, they wanna spend it. Right?   And when they come time to spend it, and they realize that they're losing all this privacy that that, you know, they go and buy   buy a sandwich or a car or some shit, and the person they pay knows, you know, how much they make,   or their boss knows what they bought this weekend,   they're going to go and try and seek out better privacy. Right? Like, that's the best argument, I think.  

The the the the number one incentive we have going for us is that as users get burned, they will seek out better alternatives,   to improve their situation.   Now my concern, at least in the short to medium term,   is what's gonna happen is users are gonna realize that because they're not idiots,   and they're gonna go to,   like, custodial privacy solutions. So the perfect example I have of that is   I've had people pay me.   Some people are, you know, relatively well known in the Bitcoin space,   and they know where my tilt is in terms of Bitcoin, and they know I'm going to   look at their transaction when they send it to me.  

And so what they do is they send from Stripe or from Cash App   because I can't tell anything about their transaction from it. I know they sent it from Cash App. It's very obvious. There's 98 inputs coming to, like, all different types of addresses.   Obviously, they didn't construct a transaction with 98 fucking inputs going to different directions.   Or, like, it's, like, 6 inputs with, like, 98 outputs is what I meant to say.   But it gives them privacy from everyone except Cash App or whoever Cash App is giving that information to or if it leaks or whatnot. Right?   So I think we're gonna be up against we're gonna be competing with, like, these   there's gonna be a lot of people that say, like, that's good enough privacy.  

It's like, do you just get the privacy from, like, a regulated   company that gives you the custodial privacy?  

[02:52:35] Unknown:

Yeah. You know, a few years years ago, I really thought that the privacy battle was just lost, you know, just completely lost. But I you know, you are seeing people care about it more these days.   You know, I don't know what the future future holds, but I I'd I'd like to think that that trend becomes more, that people start to chem chem or,   maybe that is overly optimistic. I'm willing to accept   that it might might might be, but, you know,   it's very hard to take   what we currently perceive to be how much people care and then put that forward into the fit pitch picture and then say, well, how much they care today will continue to be how much they they care, you know. We we just don't know. They might actually care less,   but   it probably won't stay the same, you know. Right.  

So Yeah.   Yeah. So, you know, I I think that, you know, there there is some some hope that the trend at least has been   away from,   you know, just give all of my private information to large   company x, and it'll be fine. You know? I I I think that there's been a trend away from that. It's for sure,   it's not   changed the world yet, but,   it does give me some some hope,   that in future, people may care care more.  

[02:53:56] Unknown:

No. I I guess, Snowden helped a lot with that.  

[02:54:00] Unknown:

Every no one remembers it. There's only, like, 10 of us. But if you wanna do the numbers again, there's, like,   there's, like, 2,000 people that remember.   I I think I think the the bullish case is that   is that I think people will go to the custodial privacy options, and then they're gonna get censored   because that's what always happens. Right? You're just gonna have   you're just gonna have, like, the PayPal effect or whatever. Like like, people are gonna have their accounts closed. They're gonna have their money taken. They're gonna have transactions blocked. They're gonna have information leaked about them. There's gonna be massive hacks,   more and more hacks where where user information is taken and leaked,   and people will learn that they have to take their sovereignty back. But I think there's gonna be a middle ground period,   where users acknowledge that they have privacy concerns, but instead   of seeking the sovereign option, which is always gonna be more difficult, they're gonna go for that centralized custodial option, and we're just gonna have to get through that, like, turbulent period.  



[02:55:00] Unknown:

Yeah. I think that that's that's right, Matt. Because, you know, just to take an example from where I live, currently,   you know, South Africa has this stupid law, which is decades old, which basically says you can't export,   any of our local currency overseas. You know, they see that as sort of it's it's, I guess,   not dissimilar to the way China kind of views things.   So what the Reserve Bank here is trying to do is to say, well, you can't if you buy,   Bitcoin on a local exchange here. You can't send it to an international exchange and sell it sell it there because that obviously   goes against this law. Now, obviously, we know that you can withdraw it to your wallet here. You can send it through CoinJoin, and there's not really much that anyone can tell after that that that point. So there's a real incentive there to, you know, to take your money into your own hands versus keeping it in some kind of an online place where all of these rules are are sort of, you know, there. And I think that those rules are gonna get worse, you know, as   the value of Fiat drops over time,   so governments will try whatever adding whatever regulations they can to try and protect it and   trying to protect the flight of capital   as they perceive it dropping against some other place   is one of the key things that they'll they'll they'll do. And and the obvious out is to take   custody of your own funds.  

So, hopefully,   they do do that because I think that that's going to be a way that people start to realize the value of taking, you know, taking it into your own hands.  

[02:56:43] Unknown:

Yeah. No. I agree. I just think it's gonna be,   it's just gonna be longer than most people realize, but I think that, both you and Kito agree with me on that. I'm just reiterating it. Yeah.   Guys, this has been a fantastic conversation. I know I said we're gonna keep it under 2 hours privately, but, here we are.   I appreciate you guys' time. I appreciate all the work you've put into your respective projects and what you've helped. You know, you've helped so many sovereign Bitcoiners. I I'm super grateful for both of you guys.  

[02:57:13] Unknown:

And all of our 10 users.  

[02:57:14] Unknown:

Yeah. All of   our all all of your 500 users.   I,   I think this is a really insightful conversation. I think the freaks really appreciate it. I hope I hope they did.   Do you guys have any final thoughts before we wrap this baby up?  

[02:57:37] Unknown:

No, Matt. It's been it's been great to chat. I I hope you kind of figured out halfway along that part of this was me asking you things and getting the information out of your brain, which has been great. So thank you.  

[02:57:52] Unknown:

Yeah. Thanks, Matt. As usual, it was very interesting. And and thanks, Craig. It was it was very nice talking with you.  

[02:57:58] Unknown:

Yeah. You too.  

[02:58:00] Unknown:

I appreciate you both. I appreciate all the ride or dies who joined us instead of, Euro 2020 today in the live chat.   I appreciate all the freaks who continue to support the show through the podcasting 2 point o apps.   A reminder that is   new podcast apps.com.   My favorite is Breeze. You just open it up. You search Siddle Dispatch, and you could stream stats directly to the show.   You can also donate via sidledispatch.com.   We also have 2 new items on the merch store,   citadel dispatch.com/stack,   brought to you by Ride or Die Freaks that are setting those up for us. We have BTC Pins is providing a SIDL dispatch magnet.   30% of that goes to me, 30% goes to him, and 30% goes to Open Sats   for supporting Bitcoin development. And then we have, a rider die free, Quinn Solo, who is doing sale dispatch flasks.  

Same deal. A third goes to me, a third goes to him, and a third goes to open source development via OpenSats.   We still have the hats available. A lot of you freaks have reached out for the hats. I appreciate all the support   there. Once again, the reminder is that still dispatch.com/stack.   I'm really excited. I don't have   next week's guests lined up yet, but the week after that, July 20th, is gonna be Diverter and e Econo Alchemist,   are gonna both be rejoining the show,   for a special home mining episode. I think all the freaks should be trying to seek out, ASICs right now. I think it's, they're very cheap,   and it's a really good way to stack KYC free while supporting the network.  

So stay tuned for that.   And I appreciate you all. I thank you so much, Kito, and thank you so much, Craig. I look forward to having you guys on the show again soon.  

[02:59:49] Unknown:

Awesome. Thanks, Matt.  

[02:59:51] Unknown:

Thanks, Matt.  

[02:59:59] Unknown:

Reluctantly crouched at the starting line,   engines pumping and thumping in time. The green light flashes, the flags go up, churning and burning. They yearn for the cup. They definitely maneuver and muscle for rank.   Fuel burning fast on an empty tank. Reckless and wild, they pour through the turns. Their prowess is potent and secretly stern. Stern. As they speed through the finish, the flags go down. The fans get up and they get out of town. The arena is empty, except for one man still driving and striving as fast as he can. The sun has gone down and the moon has come up. And long ago, somebody left with the cup. But he's driving and striving, and hugging the turns, and thinking of someone for whom he still burns.   He's going the distance.  

He's going   No trophy, no flowers, no flashbulbs, no line. He's haunted by something he cannot define.   Bowel shaking earthquakes of doubt and remorse. Assail him, impale him with monster truck force. In his mind, he's still driving, still making the grade. She's hoping in time that her memories will fade because he's racing and pacing and hardening the course. He's fighting and fighting and riding on his horse. The sun has gone down and the moon has come up. And long ago, somebody left with the cup, but he's striving and driving and hugging the turns and thanking  

[03:03:03] Unknown:

Love you, freaks. Use your own node. Use coin join. Open some lightning channels. Stay on both stack sets. I'll see you on Thursday for a rapid recap. Cheers.