I'm on a
personal mission to
not let happen to ark
what happened to lightning
specifically that is being oversold
as a solution to everything.
The times
where you can just open a channel
and it will be open forever,
and you have one Bitcoin of inbound
liquidity for free forever.
These times are slowly
but surely coming to an end.
And lightning has turned into this
almost intermediate layer
that really there's
applications on top of it
that use lightning as the mechanism
of facilitating transactions.
If you make an on chain transaction,
that's going to be
a rare thing in the future,
and maybe it's
not even that far from now.
We had to shut down
both services for,
I think,
four days in a row,
because all our working
capital of the capital
that we used for
was locked up in the mempool.
So get out of money, guys.
Everything that is somewhat
critical has to be open
source software.
We sometimes use the servers,
we pay for it,
but we want to be able
to run it ourselves
because we don't know
what will happen to the service.
Open sourcing everything
and just selling the service
is the obvious ethical way
to go about things,
and it's also the way
to get the market signal
if you're doing the
right thing or not.
Kelly and welcome to
the Bitcoin Infinity Show.
Thank you for joining us.
Thank you for having me
I'm excited to be here.
Yes.
Good to finally have you on Killian.
I mean,
I went up to Madrid to visit
you and a bunch of other Bitcoiners,
like, two years ago
now or something.
Yeah, something like that.
It's like time flies.
How are things in Madrid?
Good.
So, actually, since you visited,
I think we were at the stage
where we're building up
the local Bitcoin meetup.
So two steps back.
I arrived in Madrid around 2019
and it was pretty much
nothing regarding Bitcoin.
No meetup, no no people, you know.
And I was like, damn that
that can be the case
for such a big city
to to not have a
regular bitcoin meetup,
let alone even a meetup.
So,
I started it together with a friend
and you have been one of our,
our first, guests to speak.
And, so the concept we
always have is like, we're offline
an expert or a, and the person
that is dedicating his or her life
to a specific thing in Bitcoin
that giving a talk about it
and then afterwards, you know,
casual beers and meetup.
And I think we did that with us.
All right.
So since then
it's it's been growing
and it's been going, going great.
So we have a core of
let's say 40 people
now that show up every single time
we do a meta.
We do it twice a month. Now.
So things like good in Madrid,
it's finally Bitcoin is moving.
Good to here.
So you either have an
expert or someone like me.
Your interpretation.
Well anyway, that's good to hear.
Well,
since this is your first time
on, I think,
a little introduction is due to Mur
and for our listeners.
So don't know who you are,
which I think is,
a handful of them, at least.
So can you give us the Tldr
on, Kilian
and what were your origin story,
how you found Bitcoin
and what you do now and all of that?
Sure.
Okay, so I'm Kilian, I'm with Boltz
and I discovered Bitcoin
back in 2015,
early 16 back in China.
So my my story is maybe a little bit
different than a lot of other
than the story of a lot of others
because I got into Bitcoin
by starting to work in Bitcoin
without having a clue
what it is or how it works.
So, what happened in in
the end was, I,
I was working at the large
German automotive company
in China and, decided that
this big corp thing is not for me.
Switched to a smaller
Chinese supplier,
which decided to go bankrupt
within three months.
And then I was basically
in the streets of Shanghai back
then and was like, okay, well,
what I'm going to
what I'm going to do
and, ended up going to a big fund
meet up back in Shanghai.
And that's where I met stepson
and stepson Sam
ho convinced me
that my to come into office,
the next day,
he was working at PTC
China back then, and
a week later,
I was working for them.
So, that's
basically how it happened.
I studied at PTC China.
Pretty early on.
I've been with the mining pool.
So taking care,
you know, of the mining pool system,
the interface, the website.
Also actually,
flew to Sichuan to visit
a couple of mining firms
that did a Docker, documentation
with, TechCrunch actually
find the link somewhere.
So we're filming,
like the mining scene in China
was pretty wild
and interesting times.
And over the course of 2016,
I started working on
a mobile wallet.
So I've been pretty focused on
on wallets until then.
I think it was sometime late 2017
where I switched,
switch companies to work
on, starting to work on atomic swaps
on a project
that tried
to build a Dex based on lightning.
So remember, this was early 2018.
So pretty ambitious
to say, to say the least.
Surprise that failed.
But the good outcome
of of that story
is that we started bolts
as a sidekick,
of that
lightning Dex, by the way,
it was called Open Dex.
The website might actually
still be around somewhere.
So bolts was a
little bit of a
of a band aid of a,
of a little thing that we did
on the site in order
to help open Dex to manage,
lightning liquidity.
Then it turned out
that this band aid,
this little hobby
that we had on the site,
turned out to be quite the thing.
So, in 2023
is actually only last year.
Michael Call, my co-founders,
and I, we got together,
and it's like, okay, guys,
what are we doing with our lives?
We looked at bolts.
It's, was there running?
We maintained it.
We just basically maintained it all
these years to be up and running.
But it had organic growth.
Even though we didn't launch
any new features,
it was really in pure
maintenance mode.
And, we,
we felt that it deserved more.
So, that's where we
then decided
to start going full time
and see how far we can get.
And wanted to have you years later.
I would say we we're in a
pretty decent position
where bolts is, is doing well
and we saw a lot of integrations.
We launched a couple of new swaps.
If you talk more about it
later, I guess.
But yeah, that's basically my story,
I guess. Yeah, yeah.
We're going to deep dive into what
what bolts is, a little later on.
But like,
I'd like to call back to this,
you say you, you started working for
beta sec in 2015.
Early 2016,
I think it was February 2016.
Yes, yes.
And I think, well,
most people don't know about this
era in Bitcoin is that,
China was super, super dominant,
like it was almost,
a Chinese project, like, they were.
Yes, very much
dominated by China,
especially mining,
but also other things. And I think,
it BTCc
was one of the only Chinese, mining.
It's an ex mining or exchanges.
Right.
An exchange
that also had a mining pool.
Also had a mining pool.
Exactly. Yes.
That that actually could bridge
that gap that had the
that didn't
have the language barrier
because you had some
English speakers, including you.
Yes. Yours truly.
Samson. Right.
Yes.
Well, Samson, Bobby, the CEO,
I mean, he's he's American as well.
So it was really this hybrid
that made BTC or BTC China,
special back then. Yes. Yeah.
And were you a part
of of all of these,
meetings like during the Blocksize
force and everything?
There's,
secretive meetings
between minus and,
Oh, no, these ones. No.
So I've been part
of the meetings within BTC.
See that we're discussing.
Oh, I, I mean, it was
it was wild times back then.
I remember
meeting of BTC management
sitting down
and, Jeff Garcia just released,
his version of,
you know,
SegWit to X,
and there was a series to speed,
the pay debate of
is this Bitcoin?
Are we running this?
Is this the thing that we decide
to be to be bitcoin or not?
And it was highly confusing.
And back then,
I mean, in hindsight,
everything looks so clear
and you know
and so I don't know evident.
But back then it wasn't I,
I was new to Bitcoin.
But even people
that have been in the game for,
for many, many years,
like Samson and Bobby,
they were seriously confused
of what to do, what to do with it.
So high uncertainty if Bitcoin
even survives this,
to say to say the least. Right? So,
I have not been part of any secret
New York agreements,
stuff like that.
I've not been there
and I'm gladly so.
But within BTC,
if I'm an exchange perspective,
it was an incredibly confusing
and frightening time
because, you
you clearly didn't
know what to choose.
Yeah, I'm so curious.
Because you say that you started
working for a Bitcoin company
without knowing what Bitcoin was,
and I think you're you're
you're not alone.
Yes.
For people that started
working Bitcoin back then.
And to be honest
I don't think anyone really know was
knew what bitcoin was back then
or that you
could make the argument that
still no one knows what it is.
Exactly.
Like we're
we're still trying to figure out
what this thing is,
but in hindsight, it's
this David and Goliath story
with, like,
this thing of a.
Yeah.
For those that don't know,
the Blocksize wars
were on the surface about
should we increase
the block size or not?
But they were really about
control of the network.
And who was in charge
of the network? And,
it wasn't sort of,
common knowledge at the time that
that the users
were really the masters
of the miners
and not the other way around.
So I think a lot of the,
a lot of the people
at the mining companies
thought that they had more power
than they actually did
over the network, which is.
Just to.
An extent,
just to like all the big companies
like the
this New York agreement
that everything
like almost every big company
assigned it, BitPay signed it, and,
Jihan signed it and
everyone signed it.
But it didn't go through
because the users didn't want it.
And the markets
clearly showed that, like,
we don't want this thing.
We want Bitcoin to be decentralized.
Otherwise it doesn't work.
And increasing the log size,
of course, would have set
the precedent for doing so again,
which would have rapidly destroyed
that decentralization
and put the put Bitcoin
in the hands of a few,
powerful players.
So luckily that I mean, to me,
I'm telling this story
because to me, though,
this is the the pivotal event in my,
like how I discovered Bitcoin
because it wasn't
until this unfolded the way it did
that I was convinced that
this is the future, that there's
no way this, this unstoppable,
truly unstoppable.
So. So, yeah.
100% agree.
And, with what made the
this situation
even more special,
not only being in China,
but also being in BTC
was that you had, Samsung in that.
Right.
So Samsung
was one of the vocal applicators,
like the first thing,
one of the first things I got
from was a was
I had no idea what it was.
But then I started, you know, like
informing myself,
what the hell is going on here?
But I was right there.
The source of information
and also
from a corporate standpoint,
the came from the rest
of the management team
that wanted something different.
So there was an internal conflict,
going on as well. So,
highly confusing.
But in the end,
I appreciate
so much appreciated so much
that I had the chance to be there
and actually
have all this information
right at that time.
Whereas I'll,
you know,
I think for, for many others,
they just didn't have access to,
to these kind of things.
No, it's it's fantastic.
You have like first hand information
like you were there and
I witnessed it from the sideline.
I mean, I was witness
it from, from my couch
via whatever I read online,
but the whole,
I mean, even Samsung,
Samsung has told me that his,
his views on what Bitcoin was
has changed a lot during that time.
And even
like even
he wasn't like clearly on one side
until until specific points
and the events that unfolded.
And it's it's so interesting
because you have these developers
which are mostly from the English
speaking world,
and then
the hardware manufacturers
and the the exchanges
and the miners are
mostly from the Chinese
speaking world.
And it's it's pretty hard to,
to like bridge
the gap between the two.
And, yeah,
I finally find it
insanely fascinating.
And, yeah, people
should study it more on and,
the, the story should get out more.
There's a good book about it.
But I believe
there will be more books about it
in the future. Yeah.
Thank you.
Professor. Okay. Very good to know.
All right.
We'll see
anyway, where are we?
Yeah. Volts.
Can you tell us a little more
about volts? What is? Bolts?
And, Yeah.
How has it changed
since you went full time?
Sure.
So bolts started
out, as I said, like a like a band.
So basically
the initial idea
of bolts was to create a service
that would connect
to your lightning note
and take care.
The channels are in balance,
basically.
However, you wanted them to be like,
have this amount of inbound minimum
with this amount
of abutment, minimum.
So that's basically
the idea of bolts.
So it was really this
tightly coupled lightning
rebalancing service.
We quickly,
pretty quickly we,
we opened it
up, to the outer world though with
with a website.
So that's something that makes bolts
very special that you not
only technical people can access it
on, but also
it has a pretty easy
to use, web interface,
which is available
at bolts that exchange.
So it's a simple website with a,
I want to go
from lightning to bitcoin,
and this is how much I want to swap.
And we launched a website
already back in 2019.
So, back
then it was a little bit unthinkable
to do all the crypto magic
that is required for this,
for this service to function
in a, in a web app.
But, it was definitely possible.
So then we spent some time
working around the,
the UX issues and,
yeah, make it make it really,
a decent, a decent enough UX.
That being said,
the first website was horrible.
It was. Utterly. Ugly. Yeah.
Ugly.
Beyond imagination.
I think I still have,
we still in our blog,
still somewhat have,
we have a blog post up,
where we have the three
different versions of three
different iterations of a web app
to look at,
and that it's just funny
if we look back
and how things were
looking back then,
but it was functional.
That was the most important thing
you could got moved between the,
the Bitcoin main
chain, and lightning tools
to keep the channels balanced.
And then
this was basically unchanged
until 2023.
That was the,
the premise to use people
that the product had positioning
and and 2023
when we looked at it
and said, okay, we want
I want to put attention,
we're basically think, okay,
what what's what's the next step?
What else?
What else could bots do
to help to help bitcoiners. And,
then 2023 happened.
You know, ordinals and,
let's just call it mempool.
Congestion happens like, every time.
Go to WTF happened in February 2023.
Very good website.
Okay,
I didn't know about this website,
but yes.
So that is
that was the time
where we saw the window
of a window
of opportunity for, for eclipse.
So it became pretty evident
that even for channel,
especially for channel rebalancing,
because that was
that was the use case
that we were talking about, okay,
this was not functioning anymore.
Right?
So, we
we increasingly noticed
how the Lightning Network
was becoming less reliable,
because the rebalancing mechanism
based on
the mentioned was less reliable.
It was not reliable at all.
It didn't work right,
which basically didn't
work for an entire week.
And you could notice
how lightning payments
were increasingly difficult
to get through
because channels were
only imbalance.
So I said, okay, what's
what's the solution to that?
And then we we looked
at liquid again.
Because I'm saying again,
we had the out of pure
technical interest.
We started,
with a liquid integration
already a year before.
There was just never the motivation.
And, you know, not being full time,
just being a hobby,
that was just never the motivation
to push it across the finish line.
But 95% of the work was done.
So, then we had the motivation say,
okay, that
this is actually
this might be quite the solution
for for letting
channel rebalancing
in, you know, in times
where we have
these sustained
high, high fee, levels.
So we did
and we launched it
maybe like a week
or one of the five weeks after
after the fee increase happened.
So that impact was like,
wow, these guys
implemented all this in a week.
And so it's not exactly true
because we,
you know, had this lying around for
for more than a year.
But this is where we launched
it back.
And I think it was end of May,
May 30th or something like that,
where we launched
liquid swaps and went out with that.
And then things started changing.
We saw a lot of interest,
porting and also criticism
goes, you know, you
you don't do these things right.
If there's not a decent amount
of criticism in the market.
But, since then, I think what
we changed the perception
of, of the liquid network,
we changed the way
people think about it
and how it's being used right now.
Because as of today,
we are not only doing
channel rebalancing,
we've also enabled a new kind of,
wallet
to interact
with lightning using liquid swaps.
So that's something
that has been wildly successful
in the past couple of months.
So these things were developing,
and, and the since we launched
liquid one roughly
one and a half years ago,
another add on that
we're doing right now is,
is the BTC pay plugin.
So that allows you to
accept lightning
without running a lightning node.
So this not running a lightning
node is becoming
increasingly popular.
Not that's you know,
we need to support lightning.
And we will always want to help
lightning with rebalancing.
But running a lightning
node is simply it's
not for everyone.
And that's something we realized.
And that's why
we're increasing our product
offering for
for these kind of things.
And it's also being accepted
really well by the market,
even though it's, better.
So yeah, these are the, the,
the things that we are
that we're building out
and the long term vision,
that's probably
how it should terminate
with all of this.
The long term vision
of boards is to be
the connecting
the the place
that connects the different
Bitcoin layers.
Saying between layers.
Picture layer two
is that's a different discussion
we can have later.
The different layers of Bitcoin.
Yeah.
So if you want to move your bitcoin
from lightning
to liquid to the main main chain
and as of recently also to the roots
looks like chain,
bolts is the place to go.
The very special thing
or the thing
that makes bolts specialty
is that all this is non-custodial.
So we are
retaining the control of your funds
throughout the swap process.
Cool.
So
like, yeah, this is so fascinating
because it's
in a way
it's a response to to an attack.
Like if you view
the ordinals thing
as an attack
on, on, on the on maintain
that or an attack
on lightning, really.
Because it reduces the functionality
of like lightning.
So it's an inner
it's sort of a response
to an attack in the from.
That's a
do you view, do you view
the ordinals thing as an attack.
I'm not pro ordinals obviously.
But I don't think I
you few of them really as an attack.
I don't think they were
really intended as an attack.
The result was right.
So the result was large
interruptions across the board.
By the way,
we had to shut down both services
for four days in a row
because all our working capital,
the capital that we used for us
was, was locked up in the method.
So get out of money, guys.
We you know, that that's, you know,
replenish and replenish.
It was okay. Like, there's a limit.
We can't do that anymore.
We have to shut off.
So yeah, that was.
And that we were not the only one.
A lot of other services had the
same issue in May 2023.
That being said, I don't
think it was
it was meant to be
this intentional attack.
And I maybe I'm naive,
but I believe in people
just doing
the cutting around to doing things.
But it resulted to be one.
And
but instead of complaining about it,
we chose to
work on something that might help.
Yeah.
Which was the response
to the actual attack back in 2017
when when, Roger
was promoting
Bitcoin Cash and, like,
clogging up the chain with like,
this is before fee estimations
and all of that.
So, so you paid like $20
per transactions
per transaction back in 2017, which,
which a very,
very obviously was an attack.
This this is not as obvious.
It might, might just be,
a consequence of,
of decisions like,
SegWit interpret this.
This might be an unintended
consequence of that,
that the chain is now
being used this way.
And whether it's a deliberate attack
or just a coincidence.
What what is it called like?
Occam's razor is one thing, but,
the easiest explanation.
But this,
someone else's razor,
which is like,
never,
never attribute to to malice that
which can be explained by stupidity
or stupidity is, they are stupid.
I believe in that.
Everyone agrees that they're stupid.
Like, it's it's just,
But but
I find the similarities here,
very fascinating that it's
it it acts as, as a de facto attack,
even though
it might not have been an
intended attack.
But the immune system response
from the network,
you being the white
blood cells there is,
or you being the immune system
of the network, you and others, like
it is similar to what it was back
then where like,
just build around this. The stuff.
The the net.
It's a net positive.
Definitely.
So, I, I,
I appreciate these kind of,
events to happen
because even though
you lose a couple of nights of sleep
and everything
looks like doomsday
for, for for some time,
Bitcoin always comes out top right,
and it forces us to,
to to think out of the box
and work on solutions
that will mitigate this in future.
So and mitigate
a potentially even more drastic,
consequences.
Yeah. So, so,
this takes us into this,
question,
about centralization.
Like, how is bolts, helping
decentralization
rather than being centralized itself
like it's
bolts are so liquid,
as you can argue,
how centralized that is.
But like,
what's the arguments there
and how much do you think
about decentralization
was what,
issues when you make decisions
in the company?
Sure.
First I want to say
we are for profit company.
Right.
So, bolts.
Bolts is not a, project anymore.
It is, serious for profit venture.
And even with a legal entity,
we're headquartered in El Salvador.
We pay taxes there.
So the this is
this is a serious business venture
since since one and a half years.
So we have an interest and
and making a profit and,
and in my opinion, that much that
that really should be okay.
And it's,
it's making us independent.
More independent
than if we were purely,
based, you know,
funding, funding ourselves
by a grants or something with that.
So you see that,
a profitable,
a profitable business model
that develops software,
actually has.
Yeah, has,
has a brighter future
than someone that is depending
on the mercy
end of the grant of
of of someone else.
That being said,
even though we are,
for profit company,
we still decided
or we especially decided
to open source our code.
And that
is part
of our decentralization, strategy.
It actually the topic came up,
when we were talking with breeze
or when I was talking to Roy
from Breece,
to integrate bolts into their new,
liquid SDK.
So the the topic came up
basically saying, hey, Killian,
bolts are super cool.
It's a nice service,
but what if it goes down?
Or what if you decide to
to raise your fees? Tanks.
Like what
what what am I going to do?
I'm locked in.
And after a couple of back
and forth,
it was clear that
that we had to open source
all our code, including the backend,
so that if push comes to shove
and we have to shut down,
or if our service
quality degrades and,
you know, we're doing a shitty job
in the end,
breeze has to have the option
to spin up,
bolts backend by themselves
and, continue to service.
They have a pretty well
connected lightning not already.
So for them, for,
for for companies
and professionals
like like breeze, it's, it's
they can do that
and they have the resources
to do that.
I was also convinced
actually by ourselves
because we ourselves
do not use
any think fosters
for mission critical stuff.
Nothing. Right.
So everything that is somewhat
critical has to be open
source software.
We sometimes use the service,
we pay for it,
but we want to be able
to run it ourselves
because we don't know
what will happen to the service.
So it was really a
no brainer in the end.
So open sourcing was was step one
and making, and, and ensuring
that integrations that integrate,
bolts via its API, can,
can run the service by themselves,
should they have to.
The idea is, though,
that they don't
necessarily want to do that
because it's not core to their
their business.
They're actually focusing
on their business model.
They want to be good
in their business
and use yours as bolts
and basically have
just the option as a, as a backup.
Nevertheless, that, it inspired,
a couple of other technical
folks out there
to spin up their own backends.
So right now, as of today,
we have at least
a handful more bolts
backends running out there.
And the great thing about,
about this is,
they're all maintained
the same API key.
So basically
what you can do is just, you know,
switch the domain to someone else
and, you can continue operating.
Should bolts
not be to your liking anymore
or should you go down
so that that is possible
as of today.
And I'm very happy glad
that this happened.
Because now
I have a
good response to these
these kind of kind of questions.
So yes, Wild Bolts
itself is centralized, right?
It's a centralized server.
It's,
it's a user interacting with bolts
as a service.
It's,
an API call
going to a central, central server.
And that
piece itself is centralized.
And that's centralized for a reason,
because there is no good way to,
to centralize that.
As of today,
with the lightning and Bitcoin
just being, you know,
like how they are and,
and technically it's
just not really possible.
That's how it is.
But what we can do is
we can decentralize,
the control of the code,
which we open sourced and then,
you know,
have DevOps, a little bit
of an ecosystem
of, of bolts around pools.
Now, I absolutely love that.
And I actually prefer, companies
to be
for profit
than to be
like funded by charities,
because that, in my opinion,
that is, has a higher risk of being
like, hijacked,
because you don't want to
bite the hand that feeds you
because you're afraid of not getting
the grants, which.
Happens like we have seen it.
We have swift seen it. So, yes.
I wouldn't mention
a specific company, but,
I know of,
you know, block explorers
and stuff that have
suffered this fate lately.
Anyway,
so, so, the,
Or maybe I shouldn't
throw too many stones here.
But the thing is that
this is the way to go
from a, like,
an anarcho
capitalist ethics perspective.
Open sourcing everything
and just selling
the service
is the obvious ethical way
to go about things.
And it's also the
the way to get the market signal
if you're doing the right thing
or not,
because of course, information
should be free.
But the information,
the code is not the service
you're selling.
You're selling like the.
But we had to realize that,
you know,
so that that was actually
part of our journey was
and in the discussion
with Roy,
I had to realize
that we're not selling a service.
Oh, sorry,
not selling a software,
but we are selling a service.
We are selling
we're and our USP is the operations
that we manage our liquidity
well, that we have good uptime.
You know that things are reliable
and stable, rock solid.
That's basically what,
what what we are selling.
And not just a software itself. No.
And this is
this is what I love
about the free market mechanism,
because in the end it leads.
It leads intelligent people
to make ethical decisions
because it wins out,
especially now
that we have a Bitcoin
then that's sort of turbocharged.
And no, I just love it.
Luke,
I think this is the point
where you come in.
Yeah, yeah.
And like a lot of this stuff
is building
from from kind of my, my perspective
as a, as a user of bots in, in,
a couple of ways,
I guess just kind of digging into
some of the,
the experience of, of bots
from a user's perspective.
I, I have a starter question
because because one of the,
one of the ways
that that I use bots
personally is, is, yeah,
this this swap in and out of,
of lightning and that, one,
one practical question
I have is
what direction,
does, does everything
usually flow into.
Is it,
does it does
it change over time or is it,
is it the, going from lightning out?
What do you see the,
the most of in volts.
So that changed over time.
Not super significantly just yet.
But, the,
all the time where
we've been mainly focused on
lightning channel rebalancing, like,
you know, as a service
for lightning
providers,
we had,
the vast majority of,
of, of the swaps
were,
were going from lightning
to the chain,
meaning we were,
receiving lightning
and it was paying out, by the chain.
So from a from, lightning,
no perspective is
the typical get inbound liquidity,
use case.
That was the majority of the volume.
Now that we have more use cases,
going on that that's that's
lightning,
slightly changing,
for example, with a wallet
with a wallet
integration specifically,
if you look at one
wallet integration,
it's pretty balanced, actually.
So in and out is
in and out of balance.
So namely you have the Aqua Wallet,
which is a
pretty popular wallet by now.
So users are just
makes a lot of sense
if you think about it.
They sent in the way amount that,
that would
they deposit the same amount
that they're taking out.
So, that's also the
the reason why we,
expanding our integrations to more
use cases
in order to balance,
balance up the, the flow
a little bit because,
in balance flows always bad.
Lightning.
So you want to do a lot to,
to balance up.
Yeah.
I totally
I totally understand this point.
And I mean,
I mean,
this shouldn't come as a surprise,
but our specific use cases,
this isn't like
mining secret or anything.
We have a
we have a web shop
and we accept Bitcoin and we
we need lots of inbound liquidity.
And so
and so I mean, the the process
for that
that that I found really easy
was just make a channel to bolts
and then
basically swap
everything everything out.
Now I mean I
get that, that, that sort of from,
from your side
that leaves
a bunch of kind of liquidity,
kind of stuck there.
Right?
Because if you, if,
if someone opens a channel to you
and then sends all the funds to you,
it's not like you can leave it there
indefinitely.
You've you've got SATs locked up.
So have you closed that channel
to get get rid of that.
Then there goes
the inbound liquidity.
So how does that work from,
from a practical perspective,
if someone is is using this,
is, is this even a recommendable
way to, to get inbound liquidity?
Yeah, that's a good question.
So that is also evolving.
So all these years it was the,
the way to go.
And a lot of people did that.
The downside was that
we were sitting on a lot of capital,
potentially unused or especially the
the unused capital
that was sitting
on our side of the channel,
meaning our capital not moving.
That's always bad.
What do you want in the end?
Does this velocity. Right.
So we want the capital
to be used as efficiently
as, as as it gets.
We didn't really meant it.
So this might be coming
as a surprising fact,
we didn't really manage
much of the liquidity of our
of our lightning notes, in the past,
but we started doing so,
maybe since 3 or 4 months.
We are really actively, filtering.
We also built internal
tooling for that
to detect that, you know, like,
get alerts
and then also close channels where,
we have significant capital
on our side of the channel
that is not being used. Okay.
So as long as,
as long as you and that's,
that's just a hard
fact on lightning.
As the network is transitioning
and then my well, in my opinion
about full swing
already,
transitioning
to a more professional network,
we have to live with the fact
that unused channels, unused capital
channels gets closed.
And and that's just how it is,
the times
where you can just
open a channel and,
you know, it will be open forever.
And you have one Bitcoin of inbound
liquidity for free forever.
These these times are slowly
but surely coming to an end.
So right now I would not
recommend bulls
as a way to open a channel,
then swap yourself inbound
and then,
you know, hope
that it just stays there forever.
There are actually lsps,
so we're not an LSP.
LSP that sell this as a service.
So basically you pay the money
for the capital cost
to have that inbound
liquidity open to you.
So that is the way
I would go in the future to
to have that as reliable.
Hey there, dear listener,
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Yes. Brush your teeth.
All right. Back to the show.
Yeah.
It's interesting
like lightning
in the sort of original sense of, of
open a channel and then,
and then you can
and then you
can split back and forth,
you know, batching transactions
and all
this, this,
this really hasn't
been what it's,
it's turned into in practice
over the course of of time,
lightning is, has turned into this
almost intermediate
layer that, that,
really there's
applications on top of it
that, that use lightning
as the, the mechanism of,
facilitating transactions.
But, but
not very many people have their own
lightning node
and, yeah, it's,
it's it's interesting that,
when you talk about
the professionalization
of lightning, it's,
it's it's
kind of that
if you even have a lightning node,
this is going to be such a rarity.
It's, it's
just the same kind of thing is,
if you make an on chain transaction,
that's going to be
a rare thing in the future.
And and maybe it's
not even that that far from now.
How do you see the,
the evolution of lightning
and what it's going to look like
in five years, ten years?
Yeah.
Let me get my crystal ball.
So no, I have
I have pretty strong opinions
about that actually.
So I, I acknowledge the transition
of lightning
to, more professional network.
I acknowledge the transition to,
of highly
connected, world
connected, professional nodes,
that spend significant resources
and time
and software
intelligence software
managing managing the nodes with us
being one of them.
By the way,
we operate
one of the oldest lightning nodes of
on the network,
like I think our oldest
channels, almost six years old.
We opened it in 2019.
So we we have significant experience
in operating a lightning node,
and I think it will be in the end.
It will be these kind of players
which will either be
wireless by themselves,
that will be exchanges
or other platforms that,
you know,
I'll professional a need
a professional lightning apprentice
operation in-house,
but the rest of the of of
users and retail and users,
I don't think that will
be touching lightning
directly in a sense.
So I'll take this
with a grain of salt,
because I'm obviously biased here,
but I think using lightning
in a noncustodial way in the future,
the only way to do
that is by a swaps.
And it probably won't be swaps
from liquid for forever,
but swaps from other layers, right?
So we we have a lot of other
interesting new layers coming up.
Ark being one of them.
So I really see this, this vision
of lightning
playing out in a way where it is
the transactional layer,
where it is the connective tissue.
That's how Roy always puts it
between the different bitcoin,
layers.
But not,
like I said, not people
running their own lightning nodes
and managing everything
by themselves.
So that's how I see
lightning evolving.
Yes, it's the rail between layers.
Yes, it's it's
the way to do payments
because lightning
lighting is awesome.
It has awesome properties.
You know, I'm like, for you
as a merchant,
you have instant
transaction finality.
That's just unbeatable, right?
So, folks pay you,
you can be 100% sure, be sure that
this is actually paid
and there's no
plaque reorg or something going on.
Right.
So you can release a good and
and and be fine with it.
So those are properties
that make that make lightning really
irreplaceable.
And that's why
I will always have its place.
But the way we use it
probably from from,
you know, swapping in
and swapping out as, as we need it.
Yeah.
This, this grain
of, of salt
you're talking about
to take this with.
I take it with a grain of salt
from from chef co-owner tears
because they are salty
about the whole,
like, the situation.
And this is one of the
main criticisms,
about lightning and,
Bitcoin's scaling in general,
I hear from chef corners is that,
lightning is totally centralized
and it's totally like not
self custodial.
And it's so tiresome
because then they go on to
talk about sharding or something.
And, and the,
the thing they're missing is that,
yeah, sure.
You can theoretically
do fractional reserve,
custodial lightning at some point,
but it's still way,
way, way better than banking.
Like you can't do it
to the same extent
as you can in the fiat system.
It's still a like,
even if the worst case scenario,
if volatile
Satoshi decides to give out paper
bitcoin to 10% of the users
or something, they can't do it.
It doesn't scale the way fiat does
where
where you can create like 99.9%
of all the currency
and circulation is just conjured up
the same there.
Like you can't do that.
So like it's still
it's still such an upgrade
for humanity.
So they're like missing
the point in my opinion. And
Yeah.
What what are your thoughts?
I think there are viable ways
how with a good UX,
a really good UX,
how we can use
lightning in the future,
being non-custodial. Right.
So that's the situation
right now, today.
And I
also don't see it that critical.
But I, I'm very hopeful
and very positive
about the future of the,
of the non
custodial future of lightning.
And the main underlying primitives
being what.
Yeah.
I had
I bought some,
inbound liquidity yesterday,
for my newly set up I'll be hub,
running.
So I run
bitcoin knots and L and D and
I'll be hub on my start nine here.
And like, I'm
not very it tech savvy,
but I'm, I'm fiddling around with it
and like seeing what I
can do and I enjoy it.
And I'll be is one of those,
like things services
that are sort of forcing people
to become more technical with it.
Yeah. And I love that.
Like they're steering you
in the right direction.
Yes.
So the
that they are discontinuing
completely discontinuing
the custodial product
is, is,
is it's the right thing
to do from a company's perspective
because they just don't
want to have custody.
I certainly wouldn't want that
right now.
That's that's also part by the way.
So it's not only bitcoin
ethos and our personal ethics
that, that we are
putting so much focus on
both being non-custodial,
but also from a legal standpoint,
as we have learned and learned
in the past couple of years.
It's probably a good idea to,
to not have custody over of a user.
So and I think that's also part of
the motivation of algorithm.
Absolutely.
Because
it's only when you do that
you are really
a financial company, isn't it?
Or a bank or something
like if you don't ever touch
people's funds then
then again,
I mean, attacks can come in
either way, like
The Pirate Bay was a link provider,
nothing else.
And they
they got in legal trouble for that.
So I guess that the risks are always
there as long as the motivation
for the assholes are.
But but still.
Yeah, I understand that
motivation perfectly well.
Yeah.
And I also believe
in, in our world,
transitioning towards a world,
unfortunately,
probably a two tiered world.
A world
where you have places
where you can be sure you're a safe,
offering a service
that is doing nothing illegally
and not having control over
for customer funds
is the defining factor.
And then there will be another world
where all just does matter.
And if they want to, you know,
basically
legislation through
there, through enforcement.
But that's just really not the world
I want to live in.
Now.
And I mean, the
I think,
I think the thing is here is
that is that,
lightning like anything on Bitcoin
is, is,
like a matter of, of degrees.
But I think like what I said
earlier is that, is
that it's all better
than, than the fiat system
just getting some kind of exposure
to Bitcoin somehow.
And, and of course,
if you use a third party
or have a custodian
or have some intermediary,
there's there's
some kind of risk there.
But at the end of the day,
having some amount of satoshis
somewhere
is better than having
no satoshis anywhere.
And, and and so, I mean,
I like this I like this trend.
And I mean, I think
all all, some of all advocates for,
for, for bitcoin
generally can can do
is, is encourage people
to get as deep into that
stack as possible.
But eventually
it is
just going to get to the
to the point
where the, the amounts of satoshis
that people can acquire
aren't going
to, for example, enable,
sending the on chain transaction
to open a lightning channel
to make payments in the the South,
and the, the self-sovereign way.
And so
then it's going to start
to get into other things,
other solutions
to, to enable people to do this,
whether it's,
yeah, sending, sending Bitcoin to,
to some kind of,
lightning provider or whatever,
whatever that, that looks like,
or it's using,
things like liquid,
these other layer twos
that you've mentioned.
But, but liquid is kind of the,
the interesting what I'm,
I really started to use
bolts, actually, when, when,
when the liquid support came in and.
Yeah, I remember the three of us
were, were in Riga.
We had a,
we had a conversation
two years ago in Riga,
and it was shortly
after or
after the liquid swaps
had had really started to come in.
And, this is all
the kind of the peak of all this.
And it was really interesting,
to me.
But let's use liquid
as this this way around the, the,
the spam issue, basically.
And what are your thoughts
on, on the use of liquid
generally in terms of,
in terms
of basically
this, this layer to, to off load
the on chain dynamics,
and, and kind of get rid of that,
not so much risk, but,
but that externality and, and just
keep transacting with, with Bitcoin,
using it with lightning,
using it with like
what do you think of that?
I think that's the way to go.
So, maintain
blocked blog
space is just one of the
you made these scarcest resource
next to the kind of stuff
that we have on the planet,
so we should treat it as such.
So even though right now
some of us might be forgetting
about this
because fees are relatively low,
I think it's crucially important
that we keep in mind, that building,
anything that relies on Bitcoin
mentioned block
space is prone to fail.
Right?
So, that's, that's
that's what you should have in mind.
So using the main chain
for something like
lightning channel
rebalancing thing is just
not the way to go.
And I might even go
further than that
by using the Bitcoin main chain
might not even be the preferred way
to anchor lightning channel itself.
Right?
So, if you're looking
at a couple of years down the road,
we might also want to
have most of the usage.
So don't get me wrong,
the maintained Lightning
network will not
disappear, will stay there.
It has its place.
But, it might be a good idea
to actually anchor
lightning itself on to another layer
to specifically Ark.
I'm very hopeful on
and very positive
about anchoring lightning.
Like I gave a
I gave a talk about this in
the future
was actually pretty, pretty cool.
In adopting bitcoin,
to two weeks ago,
one and half weeks ago.
So those are all ways
how we can make ourselves
more independent,
from, from the Bitcoin mentioned.
And that's an absolute necessity.
So the Bitcoin mania
or the bitcoin
on the bitcoin mentioned
really have to fulfill
this, this, this one purpose
of being the source of truth. Right.
So I have this
trip to graphically verified
1 to 1 relationship
between whatever layer
and even the layer three
or whatever is built on top.
So let's say lightning on August,
layer three is an arc.
All has to trickle down
to the same amount of Bitcoin,
so we can make sure there's
not more than 21 million,
that that is
that is the main purpose
but not every transaction
on the main channel
that can be avoided
should be avoided.
And liquid right now
is just the place to go.
Because it is rock solid,
it is up and operational
without any major hiccups.
Since 2018
it is a Bitcoin core fork.
So running
this is really easy
for anyone that knows
you could do it right.
So,
for, for, for corporate,
for a corporation to run this
and to even integrate it
as a foreign exchange
to integrate it.
It's it's that easy.
That is unsurprising
that the don't do that.
Because,
from a technical perspective,
it's literally zero effort.
It's really just managing the, the,
the liquid, the balances.
So yeah.
So it's, it's, it's, it's it's very
everything is stable and familiar.
And that's why
the moment it is,
it is the place to go.
But, no doubt that there
will be other interesting,
layers and places that
can absorb,
maintain activity in the future.
Yeah.
And, well and liquid
and I, I agree with you.
The, the usability of liquid is
is fantastic.
I mean,
you can do other things with liquid.
And I understand that
this is one of the purposes
that there are other
tokens and stuff.
And of course, there's a,
centralization to it.
But at the end of the day,
it's it's a it's a 1 to 1 peg
with the Bitcoin underneath it.
And, and so as far as I'm concerned
this is actually to,
to your point about,
getting as many transactions
off the base
chain as possible
that I completely agree
with because,
I, I gave a talk a few weeks back
about that basically,
the, the,
the gist of, of what I was saying
was that
everyone has an allotment of
about two transactions
over the course
of their entire lifetime.
If we're talking the number
of transactions
that will be in the blocks
over the course of a human lifetime,
about 70 years
or something like that,
we get about two.
And that's not counting
the human population
changes or something.
Shut up. Community.
Yeah.
But this is with the 8.5
billion people. That's.
What did I just say?
Yeah. Yeah. Sorry.
Don't worry about this.
And the the friendly banter is we
we love it.
Yeah.
I force Luke to edit it out,
so it's fine. Yeah. Basically.
No, no. Okay.
Returning to.
So you get about you
get about two, two transactions and,
Yeah, that
that's just, that's
just not going to, to scale.
Basically it is going to be through
through layers that we scale and,
and also the other side of that,
that that topic was
spam is not good.
And let's try to avoid
that as well, please.
But but in terms of,
in terms of liquid
being this
1 to 1 peg,
you can trust that you've got
the you've got the bitcoin
and you've got the, you've got the
on the other side,
you have that exact same number.
And of course you have to,
to trust a third party.
But then,
but then
the thing is really quite smooth.
It's it's a
transaction, sorry,
a block per minute.
And this, this brings me
to kind of the,
the UX of
of using these these swaps
and these payments.
I think this is really
the only actual downside
with, with using a swap
based system. I use Aqua Wallet.
It's turned
into my, my go to wallet because,
and not for any specific reason,
but it's the,
the main thing is that I can,
I can just
swap for my liquid balance
into my aqua wallet,
and then I can pay for stuff
over the lightning rails,
over the liquid rails.
I can accept the Bitcoin.
It's it's it's great.
The entire thing.
The only downside is
that it's a bit slower
than other Bitcoin wallets.
Sometimes it takes 30s,
sometimes it takes a minute,
sometimes it takes it's
I think it takes
longer than a minute
sometimes for the transaction
to go through.
And so it's not quite
this lightning fast
pun sort of intended
as, as going from a wallet
of Satoshi
to a blank wallet
or something like that,
where it's just a custodial
lightning provider,
one to the other. So, so.
What's what's the
what's the solution.
There?
Is it
is it always going to be
just a little bit of lag compared
to, to these other things
just because,
the swap goes through the, the,
liquid rails
or is there something else
going on there
technically that,
that I don't understand.
Enlighten us please.
Okay.
So, agua in general
has a little bit of lag, and Samson,
is implementation related, so,
the loading times
and all that stuff.
So that also makes agua
sometimes still a little bit slower,
but that's entirely fixable.
And a Samsung Optima,
they know about it.
I actually sent him
a long list of feedback
after adopting Bitcoin
because I use it as a
as my daily driver there as well.
What to fix.
And, I'm confident
things will be faster and snappier
from, from the UX perspective
for the lightning payment, itself.
So what is happening under the hood
when you do a lightning payment is,
you send,
liquid bitcoin into a swap.
So it's being locked up on the on
and the lock up address
on, on the, on the liquid chain
and but technically
it takes up to a minute
depending on the time
that you
the time between two blocks
that you got there,
could take up to 60s
if we, if we were waiting for,
one confirmation.
So actually on liquid
the design
and that's why
we are in close
contact with Blockstream
is to actually keeps
their account safe.
So we know now.
And we learned that,
zero comes on the main chain
as a no go. And, since mempool.
Thanks. Peter Toth.
Is is a thing we
there's just no zero code anymore.
And if you do it,
then it's just a high,
very high risk,
and liquid to design.
And the intention,
of the technical design
is to keep that safe and actually,
quite the contrary, make it safer.
So we're working on certain internal
tooling to actually, make liquid,
silicon transactions
for anyone safe to accept.
And that is the upside
of the centralization
of the 15 functionaries
that produce, the liquid blocks.
And very simple terms.
If all 15 functionaries
tell you
I have two
transactions in my mempool,
I will included in a block,
it's pretty safe
to accept that transaction.
And that's basically
you should leverage
you should embrace
that centralization
of that actually leverage,
leverage for that.
And that's what we're doing. Right.
So, we are accepting zero
transactions still
with an upper limit.
But we definitely can
increase the limit
and make these transactions
maybe total round trip type,
maybe like something
like 2 or 3 seconds
where you should be,
having, your liquid, Bitcoin
being accepted by bolts
and then both start paying
the lightning in was already
so that is
as far
that should be technically
as fast as Phoenix.
In the future.
Right now,
there are certain delays
for security reasons
and each and every step.
So you always end up
you always end up with a
with a slower time,
but it will always be a native
lightning payments.
It will never be as fast
as a wallet of Satoshi
to wallet of Satoshi transaction,
which is just a database
transaction, right?
So that one is always faster.
That's unbeatable.
We have to live with that.
But that's okay.
Now of course.
And well, and actually,
I can say from,
from experience,
using the lightning
side of, of bolts,
swapping in or making a
payment from,
from liquid,
the as soon as the, the
like if I'm making a payment
from a channel, a lightning channel,
bolts receives it.
And the process.
Is it like I don't
I don't even have time to switch
the tab. It's already.
It's already done.
So, yeah, I can I can speak to that.
Things that things appear
to be really quite
tight on the, on the bolts.
And it's just
using the different technologies
in, in concert I guess.
Kind of
makes it complicated,
but nice to know that it's,
nice to know that it's improving.
Yes. And it will be.
It will be faster.
If I was to do a tldr on on
like your back
and forth over the last 20 minutes,
it would be it
20 minutes,
it would have been
liquid is pretty solid, like.
I would say.
So yeah.
I mean,
I learned about
liquid myself on the,
right before we, you know,
when we started integrating it,
I had no idea what liquid was, and
I had to read up stuff.
And I was skeptical for,
for quite some time,
but also was the reason
why we had this integration
there sitting around.
It didn't really finish it.
We didn't have a reason for it
and was like, okay,
I don't know how it will
will be perceived by the market,
you know, like,
but knowing no liquid
and no knowing the,
the people at work on liquid,
I, I am of the opinion
liquid is a pretty solid project.
So because the the amount of effort
and research resources
that Blockstream spent
to make liquid, solid
and reliable is immense,
you don't see any of that
on the outside. Nothing of that.
But the fact that it didn't
have a single downtime
since I think
one small incident in November 2018,
there was a 19.
There wasn't a downtime, right?
So that that means quite something.
And there's nothing oxymoronic
about something liquid
being solid at all.
Yes.
He always manages to find this.
He always manages to find his isn't.
Oh, okay.
From one thing to another,
that, jokes aside, like,
there's I've met a couple of,
rootstock advocates
in, in Buenos Aires.
You mentioned rootstock before.
I'm I'm very unfamiliar
with the project.
Still,
they try to explain some stuff, but,
yeah, a lot of that
flew over my head.
So, like,
what's rootstock and is it
solid?
Rootstock
is pretty similar to, to liquid.
So to the solid part,
let's come to it. Maybe in the end.
So, rootstock is a sidechain
just like liquid is
based on the same principles.
There are a couple of
technical differences
or maybe first of similarities.
It is a sidechain.
It has a federation
that is custodian.
That is a big multisig custody
being the one to unpack with
RPC helps called on on rootstock.
So bitcoin versus
mentioned bitcoin same way
liquid bitcoin
versus the mentioned bitcoin.
Yeah.
It's a sidechain is
a blockchain based.
It has block intervals.
It has 30s
block intervals
instead of one minute
like liquid does.
And one major difference
is that in rootstock, the
the federation that guards,
the multisig,
the RPC is separate
from the block producer.
So in liquid it's
the same
15 entities
called functionaries
that do both to do the,
the two card, the LTC pack,
but also produce the blocks
now have the mempool running and
and basically
put transactions on blocks
and attach them to the chain
and rootstock.
It's actually the actual
Bitcoin miners that do that.
The rootstock is being, secured.
And block production
happens on
a, on a
mechanism called merchant mining.
So about I think right now
it's about
60% is is changing
because of new mining
farms coming up and stuff.
But around
between 50
and 60% of the bitcoin miners,
which is pretty decent
hash rate, is securing,
the, rootstock sidechain
at the same time.
And merged mining in simple terms,
is interesting for miners to do that
because they get a
part of the piece,
you know,
the fees that are being spent on the
on the roots of sidechain
as their reward.
So it's an additional
and an additional income.
And that is important part
without extra costs.
Right. So merch mining is for free.
And also they don't
have to put up more power
or more electricity
in order to mine Woodstock, as well.
The technical
underlying concepts of rootstock are
pretty sound, I would say.
The PAC
meta mechanism is,
on a technical level, different
than the one used.
And and liquid,
but is proven it's live
since 2018 as well.
Actually, before liquid
launched, the rootstock launched
I think in January 2018.
So early 20.
18 and liquid launched some, maybe
in November.
So pretty much at the same time.
And fossil
was really a no brainer
to integrate rootstock as well
because it's just the similarities.
Are there.
And additionally,
rootstock has its own
pond ecosystem.
And that is
that's probably a part
of the technical difference
that you won't like. Node.
Is that it's not a utx O
based chain.
It is an account model.
And the idea is to basically
be compatible with the Ethereum EVM
in order
to make it easy
for broader
for projects to move, to move over.
So the, the, the, the picture
fruits like it's basically,
poured over your
DeFi project
from Ethereum
or some other EVM ecosystem
to rootstock
make everything be based on Bitcoin.
It's all RPC back.
There's no, you know, other token,
involved than that.
And that's basically the premise.
And to be very, very secure
because of the high Bitcoin
miner hashrate that is,
you know, securing the network okay.
So you
you have these semi secure
bitcoin securities
like the rootstock Bitcoin
the pegged ones as,
as an anchor to whatever,
stupid shit
coin project
you want to spew out from your crap.
All right.
So but but is,
is there a risk there?
Like what?
Merged mining and everything.
It sounds to me like that
this is
could potentially be messing
with miner incentives.
Somehow,
One way.
Well,
the,
from my perspective, like, the
the more
the more pure
the miner incentives are,
like,
the more their only incentives
are to mine bitcoin
and that for for the rewards,
the subsidy and the fees, the better
it is.
Then again,
I do believe that there's a future
where miners will have to use
their excess heat
and stuff for other stuff
in order to be profitable at all.
So there's
there's bound to be other incentives
going into it.
I just really, really,
really don't like Ethereum
and anything,
connected to it's having like,
messing with Bitcoin,
the incentives.
But maybe that's not a risk.
Like,
Yeah.
Good idea for something here.
Yeah.
Good question.
So I never really
did dig into that too much.
So you are hinting
at something like, you know, maybe,
my restricted value being possible
and mine is being distracted
with Dan sometimes from,
you know, the, the Bitcoin
main chain.
But then it's really it's separate
to this to this ecosystem there.
So yeah
I don't think
it should be messing
with anything happening
on the Bitcoin maintaining at all.
What a good opinion.
What a good analogy.
Be like a gold miner
digging for gold and also
finding some other substance
that they're using
for something else.
Because they might as well dig
for that as it's likely.
So they discovered
some silver as well
to discover some other,
you know, metal that is
that is precious.
And, yeah,
I think that's,
that's a valid analogy.
Yeah.
Even though the silver
might be used for for selling,
some, some crap to people.
Well, well, anyway,
I can't take that analogy
any further
because it doesn't really work
with there's
only one element zero there.
There aren't stable isotopes of it.
So like the. Yeah.
Well and
I think the, the follow on to this
is that this
this is exactly
along with our thread recently
we've been having some discussions
about about this type of thing like,
coins on Bitcoin and,
and basically my, my view, our view
I think is, is pretty much
as long as they fuck off
and they're not doing
what they're doing on
the main chain, like,
if someone has to do
a peg in okay, that's that's fine.
That's you're, you're moving your UT
from one address to another
that's completely compatible with,
with Bitcoin in general.
And then you go off on your side
chain or your side
layer or whatever
you want to call it, and,
and do your thing.
And then eventually
you can peg back in
your bitcoin or not.
And that's your choice.
And I think that model is is fine
because people think.
That's the case for loops. So yes.
So if if the definitely
I mean
if you have an IBM,
you have,
you know,
Turing complete
programmability then things,
people will do things
and you can prevent that.
But that is, that is, that is,
that is okay. Not in my opinion.
Just let let them do it.
And if it's,
if it's, confined to this,
like I said, to this,
space on this layer,
why not let them,
let them, let them fool around.
What what really,
excites me about this, though, and,
I guess I guess probably one of the.
No, I'm not sure how
add how many other layers
we will be looking in the next
year, for example.
But what really excites me
about the programmability
is that it
actually could be useful
for Bitcoin.
Let me give you an example.
I think I highlighted it
even in the,
at the blog post
that where we launched
the lightning to reserve swaps.
And in the past couple of weeks,
this lightning
lightning has a couple of problems
with, doing more advanced things.
One of those, for example,
and I bet you
you can easily
follow the documentation here
is, with prism payments or payments
where you have to split up,
one payment into multiple,
for example,
when you are publishing an article
and there was three authors
that worked together
on this article,
you want to have a way
how you can split up
one lightning payment of,
you know, a paywall or some,
some reader pay
paying it,
it automatically took
to this through.
So right now
there is no good way to do that
in a non-custodial manner right now
usually is, you know,
a lender, you all accept that.
And then I push it out
by a regular annual payment
to these other.
But the nodes in the middle
and the node in the
middle as trusted.
A system like rootstock,
you could use it in order to do that
completely programmatically.
And that's non-custodial.
If you, instead of
staying on in the letting layer,
is okay.
PayPal user pays into,
a rootstock swap on that,
a rootstock swap pays out.
Maybe not even all that lightning.
Maybe some way lightning.
Some way, some way.
Via LBC.
But the roots,
the contract does its thing
and it's not stoppable, you know.
So I see potential
and it's just
the first idea that we have.
But I see potential
that this could be useful
for lightning itself.
Yeah.
I mean, I mostly agree, I,
I think that this
the thing is. Yeah, sure.
The ones
that people are going
to use their bitcoins
for different things.
Bitcoin is different things
to different people.
I would prefer
if no
human being ever used their bitcoin
for any illicit activity
or any scams whatsoever.
And Ethereum is a 70% pre mine
super scam.
So like I would prefer
if it had no association
to that at all.
But then again,
as Luke
says, as long as it's just
not affecting
not affecting Bitcoin itself,
then then I'm fine with it.
Which is why, by the way, also,
I, I'm not very fine
with the ordinals.
Good stuff
and the, the spamming
because it is affecting bitcoin,
it is pretending
that other things are as rare
as the satoshis themselves
and the other things
has has
no internal
connection to the network
other than like
they're not connected
to the mechanisms
of the incentive game
theoretical engine
that it's bitcoin.
Other than to,
to like distort the signal
because the Satoshi itself
is the signal within the network.
Right. So, so like my, my,
hope is that Bitcoin
keeps that it is
that Bitcoin's
users are vigilant enough
to, to to care
about keeping that intact
and keeping
that as undiluted as possible.
The, the absolute
rarity of the Satoshi,
how unique
the uniqueness of that property
and how it cannot be replicated.
Maybe, maybe my competition
actually works. Great.
So what if I told you that we,
create incentives
for people that have
this unbearable
need to create
these kind of systems,
to not do it on the maintain,
but do it somewhere else
because it's so much easier there.
They actually have the freedom.
You might even be supported,
you know,
you might even have wallet support.
Yes.
You know,
you don't have to do these crazy
hacks in order to make it happen.
So if we create incentives
to for people to actually move
to other layers to do that
better.
Yeah, I'd prefer they
were completely separated
from the whole thing
because I don't believe that
there's such a thing
as a digital token at all.
Like I don't believe
in intellectual property
to begin with.
So like,
I prefer if they stay
as far away
from Bitcoin as possible.
But if this is the only way,
they're,
Yeah, then okay, I'm fine with it.
This, delicate questions
and maybe I'm putting
too much energy
into thinking about these things.
The problem is,
as always,
there other people think differently
than you.
Yeah.
Period.
Yes, that is the problem.
You're right.
Killian, this is having
a really great, conversation.
Is there
is there anything else that you that
we haven't
had a chance to touch on that
you wanted to bring up? Oh,
I don't know.
Maybe in relation of some technical.
That's not really an anecdote, but,
you know, some even
question taproot.
Yeah.
It's like,
has it been the right thing to do?
Was that really so smart, after all?
And why why did we not catch the,
you know, the things that had
that enabled?
And I just want to give
another perspective on that.
So for us, taproot
has changed things
significantly in a positive way.
And let me tell you how. So
especially for wallets like Iowa,
we had one property
that was basically a
no go,
for for, for these integrations and
that was that you had to wait,
for refunds to arrive in your wallet
when a let new payment failed.
As we all know,
lightning is never 100% reliable,
no matter how hard you try.
And payments can fail.
So when we had an outgoing payment
so people were swapping
from the chain
or from liquid to lightning
and it failed,
they had to wait
between 2 and 4 days
to get their money back.
So on top of a failed payment,
they had to wait.
And you can imagine what the cost,
the frustration and the like.
Even getting this communicated,
which is my job,
was was really, really hard.
So with taproot
and, you know, all the,
key path spend, cooperative signing
magic, that that enabled
so we actually could do away
with that.
And, we can now, in simple terms,
give back refunds immediately
if the user or the users
client like an Aqua wallet and
agreed to cosign this refund,
transaction.
And that's what we do now.
And, the fact was was massive
for us, basically
a drop of support cases
of like 90, 95%.
And, actually,
a wallet,
like I'm not doing all that
automatically under
the hood is basically dot,
dot dot a scan of code.
Oh, payment failed because,
you know,
this node is not reachable,
is offline or,
I don't know,
it doesn't have enough
enough inbound.
A press the back button at
my refund
is already back in my wallet.
So that the taproot really, really
only enabled
us to
build these kind of kind of things
that otherwise
would not be possible.
So I just wanted to
throw that out there.
That taproot, yes,
is being used, yet
it's being
used for very specific,
sometimes called niche use cases.
But in these new niche
use cases, taproot
really, really shines.
So yeah, that's my take on that.
No, I love that
Bitcoin can still improve.
Like and if we
if there's overwhelming consensus
what it really needs it.
Like if you flip that around
that it
sort of means that Bitcoin
can only change for the better
because we're all defined.
We all.
If we all agree, then
that's sort of what
we define better.
As. You know,
if it happened in Bitcoin,
it was like the likelihood
that it was
for the better of
betterment, betterment of mankind.
The are very, very high.
The odds are very high
because everyone in Bitcoin agreed
otherwise
the thing wouldn't have happened.
So that's the other way to see that.
The yeah,
we could go into
the whole ossification of
debate too, but that doesn't.
And yeah,
yeah, yeah that's for another
that's for another, conversation.
But it's good to hear good
to hear that taproot is working
and, that it's, doing some good.
It is.
Awesome. Yeah.
Killian. That.
Thanks again.
And as I said,
this has been a great conversation.
I think we're sort of at a natural,
endpoint.
We've heard
a lot of great stuff about,
bolts and,
everything you're up to is
is there anything you have,
immediately on the the
the time horizon that,
we should know about or any
where you want
to direct our listeners to?
I would encourage your listeners,
especially the more technical ones,
to reach to arc,
you know,
build up an opinion on that.
I think Arc is very, very
interesting for, for Bitcoin
as a whole, for Bitcoin scaling,
as a whole.
I'm on a personal, not a crusade,
but on a personal mission
to not let happen to arc.
What happened to lightning
specifically that being oversold
as a solution to everything.
So I think it's
it would be very important
and maybe there's
some more work needed,
from people
like you and, you know, to, to,
to educate on, on in
simple terms, what, what Argus.
The next couple of months
so that people can form
a concrete opinion.
What I think about arc,
that's based.
Yeah, that's that's on the message.
Maybe I want to get out.
Good.
All right.
And, anywhere
you want to send our listeners,
except for what?
What was it?
Bolts dot some. Exchange.
Both for exchange.
Yeah.
Sponsored exchanges to my website.
You have our we, our is linked.
Our blog,
usually contains
all the features
that we launched in the past.
So if you want to,
you know, read a little bit
through about,
last year what we launched at pulse.
Some technical explainers.
But also like some,
you know, the vision a little bit.
We also have, I think,
the YouTube
playlist collection of, of,
you know, podcasts.
So probably this podcast
will end there as well. Linked.
But yeah. Cool.
Yeah.
I have an errand
to Madrid here in the, like,
somewhere within the time
span of two months from from now.
So I'll,
I'll ping you
when I know when I'm coming,
and we'll go grab a beer or.
Something,
make sure it's a Tuesday,
and then you catch our bit
confused and meet up.
Fantastic.
I'll make sure it's a Tuesday.
Kelly. Right.
Thank you very much
for coming on the Bitcoin
Infinity Show. The,
all the best.
Good luck with everything.
Thanks for having me, Luke.
Yeah, thanks a lot Killian.
It's been the Bitcoin infinity show.
Thank you for listening.