1 00:00:00,000 --> 00:00:05,180 All right. Welcome to the next episode of Presidio Bitcoin Jam. How are you guys doing? 2 00:00:05,880 --> 00:00:06,960 Good. How are you, DK? 3 00:00:07,640 --> 00:00:12,580 Good. Good. I am away still this week, but I will be back next week. So I'm looking forward 4 00:00:12,580 --> 00:00:13,140 to seeing you guys. 5 00:00:13,160 --> 00:00:13,600 All right. 6 00:00:14,200 --> 00:00:15,300 Actually, we're back. 7 00:00:15,400 --> 00:00:18,860 We're supposed to be back like early in the week. So I'll probably see you guys early in 8 00:00:18,860 --> 00:00:21,080 the week, but definitely in studio for Friday. 9 00:00:21,800 --> 00:00:25,980 Very nice. Very nice. We'll have to get some biking on tap. 10 00:00:26,640 --> 00:00:28,560 Indeed. Indeed. I'm bringing my bike too. 11 00:00:28,560 --> 00:00:38,960 And I think finally, DK, now that you're back, it's beyond time that the three of us do a little swim in the cold water, which I actually did this morning because I have stuff later this afternoon. 12 00:00:39,040 --> 00:00:40,180 So I'm feeling particularly relaxed. 13 00:00:40,940 --> 00:00:44,080 By the way, cold water is the greatest elixir of life. 14 00:00:44,600 --> 00:00:46,060 Then we hit the sauna afterwards. 15 00:00:46,380 --> 00:00:52,860 And who knows, maybe if we're feeling spicy, we bring some of those little portable mics and just hot air, PBJ hot air edition. 16 00:00:52,960 --> 00:00:55,100 I'm just saying, we've been talking about it for a year. 17 00:00:55,220 --> 00:00:55,900 It's time, gents. 18 00:00:55,900 --> 00:00:59,800 But you're doing the cold water swimming with no wetsuit, right? 19 00:00:59,860 --> 00:01:02,980 Because you're a legit Dolphin Club member? 20 00:01:03,260 --> 00:01:03,740 Yeah, obviously. 21 00:01:04,120 --> 00:01:05,540 Steve and I are wetsuit guys. 22 00:01:05,840 --> 00:01:06,800 Who would wear a wet? 23 00:01:06,940 --> 00:01:07,760 Oh, no. 24 00:01:07,960 --> 00:01:08,340 For real? 25 00:01:08,980 --> 00:01:09,580 I'm just playing. 26 00:01:09,820 --> 00:01:14,460 I will say, compared to a lot of people that do this stuff, I'm barely a swimmer. 27 00:01:14,520 --> 00:01:16,380 I mean, I do swim a little bit, but let's be real. 28 00:01:16,460 --> 00:01:21,260 I love the cold shock, and I swim a little bit out there, but I'm a sauna maximalist. 29 00:01:21,580 --> 00:01:24,140 When it comes to the sauna, my sauna game is very, very strong. 30 00:01:24,220 --> 00:01:25,180 I can stay in there as long as you want. 31 00:01:25,180 --> 00:01:28,620 I need the wetsuit for buoyancy more than warm. 32 00:01:29,060 --> 00:01:30,880 It helps by swimming. 33 00:01:31,520 --> 00:01:36,080 But you'll get tired and feathered if you carry a wetsuit into the Dolphin Club. 34 00:01:36,420 --> 00:01:38,300 They will not be happy to see that. 35 00:01:38,420 --> 00:01:40,480 That would be a little embarrassing. 36 00:01:42,000 --> 00:01:43,740 I'm definitely wearing a wetsuit then. 37 00:01:43,900 --> 00:01:45,920 Then I don't have to do the sauna with you guys. 38 00:01:45,920 --> 00:01:49,320 Yeah, well, that's like wearing an Ethereum hat at BitDev's. 39 00:01:50,180 --> 00:01:51,780 It is kind of that same amount. 40 00:01:51,780 --> 00:01:52,700 Your mileage may vary. 41 00:01:52,700 --> 00:01:58,620 actually tickle DK. 42 00:01:58,860 --> 00:01:59,500 All right. 43 00:01:59,620 --> 00:01:59,820 Yeah. 44 00:02:00,440 --> 00:02:01,320 But by the way, 45 00:02:01,340 --> 00:02:02,920 one other thing I just wanted to mention from last week, 46 00:02:02,960 --> 00:02:04,060 I know we have a lot to chat about, 47 00:02:04,460 --> 00:02:05,660 but a shout out to my dad. 48 00:02:05,660 --> 00:02:07,560 Who's a regular listener of PBJ. 49 00:02:07,600 --> 00:02:08,180 It's kind of crazy. 50 00:02:08,320 --> 00:02:08,620 Cause really, 51 00:02:08,880 --> 00:02:09,020 Oh, 52 00:02:09,080 --> 00:02:09,980 he listens to every episode. 53 00:02:10,320 --> 00:02:11,480 So if you're listening right now, 54 00:02:11,500 --> 00:02:12,660 I think he listens after on YouTube. 55 00:02:12,860 --> 00:02:13,240 Hey dad. 56 00:02:13,420 --> 00:02:13,620 Yeah. 57 00:02:13,660 --> 00:02:14,080 What's up? 58 00:02:14,160 --> 00:02:14,720 What's up dad? 59 00:02:15,040 --> 00:02:15,180 Yeah. 60 00:02:15,900 --> 00:02:16,300 Cleb. 61 00:02:16,620 --> 00:02:17,060 Anyways, 62 00:02:17,240 --> 00:02:21,040 he was making some particular comments and it's also crazy. 63 00:02:21,040 --> 00:02:21,520 Cause he's, 64 00:02:21,580 --> 00:02:21,720 you know, 65 00:02:21,720 --> 00:02:26,880 he's interested in technology, but he's not, he would not be going deep down Bitcoin if it weren't 66 00:02:26,880 --> 00:02:30,160 for me doing this. However, he's gotten super into it. He's probably one of the most knowledgeable 67 00:02:30,160 --> 00:02:33,920 people about Bitcoin in the world at this point. I mean, if he's listening to every one of our 68 00:02:33,920 --> 00:02:37,760 podcasts, I can't imagine anything more informative. Well, you need to get him commenting on the 69 00:02:37,760 --> 00:02:43,540 stream. Like you can live, live comment. I don't think he's live. I think he does it after, 70 00:02:43,640 --> 00:02:46,280 but I'll tell him about that. We'll see if we can get him set up for next week. 71 00:02:46,280 --> 00:02:55,000 But one of his biggest comments last week, the thing that he loved the most was, and I didn't see this the first time, so I had to go rewatch and it truly was amazing. 72 00:02:55,500 --> 00:02:56,700 DK's Muppet faces. 73 00:02:57,660 --> 00:02:57,900 Oh, yeah. 74 00:02:58,060 --> 00:02:58,220 Yeah. 75 00:02:58,300 --> 00:03:01,920 I was revisiting my Muppet faces in my mind. 76 00:03:01,980 --> 00:03:03,000 I was like, did I do that? 77 00:03:03,300 --> 00:03:03,880 Yeah, you did. 78 00:03:04,260 --> 00:03:05,180 And they were fabulous. 79 00:03:05,440 --> 00:03:10,820 Like, as we were describing the scam that is the monetary system, central banking, stable coins. 80 00:03:10,880 --> 00:03:12,580 We'll talk all about those scams more today. 81 00:03:12,580 --> 00:03:16,820 but uh you know i suggested there's that little muppet meme with the guy that's like hey man you're 82 00:03:16,820 --> 00:03:21,760 not just making shit out about it then there and exactly there it is that's it that's the money 83 00:03:21,760 --> 00:03:28,360 shot dk knows exactly excellent so that was that's his go-to move now exactly from now i'm just gonna 84 00:03:28,360 --> 00:03:36,840 watch dk muppet it's good so uh so do you guys have anything besides the agenda can i get into it 85 00:03:36,840 --> 00:03:43,700 let's roll go for it okay so there is i think in the last hour it's like breaking news right is 86 00:03:43,700 --> 00:03:50,680 spark announced stable coins on bitcoin and you know i gotta be honest i think we've talked about 87 00:03:50,680 --> 00:03:55,040 l2s in different flavors and spark in different flavors and stable coins in different flavors 88 00:03:55,040 --> 00:03:59,880 and i still don't have like a clear mind map of how they all hang together and what are the 89 00:03:59,880 --> 00:04:05,840 trade-offs and all that and i think steve you've done a lot of research and talking to people about 90 00:04:05,840 --> 00:04:13,080 this so and i think did you make or share that um the spreadsheet that outlines various l2s 91 00:04:13,080 --> 00:04:17,400 yeah there's like a table that compares but we didn't start we didn't start with the spark 92 00:04:17,400 --> 00:04:22,180 and just speak to spark and then maybe we'll show that table in a little bit to compare 93 00:04:22,180 --> 00:04:28,580 because spark has several different businesses i think there's like kind of the there's like a a 94 00:04:28,580 --> 00:04:33,900 bank kind of networking thing kind of like effectively like a swift for banking for 95 00:04:33,900 --> 00:04:37,360 kind of traditional banks and there's like a developer api and there's uma and then a new 96 00:04:37,360 --> 00:04:43,520 naming service so i kind of i don't feel like i have a clear way to understand or explain 97 00:04:43,520 --> 00:04:50,120 what what the focus is so maybe you can help i think even light spark the company has different 98 00:04:50,120 --> 00:04:56,140 yeah so yeah so light sparks company they have several different products different businesses 99 00:04:56,140 --> 00:05:03,060 and spark is a open source technology which we'll we'll get into um but their announcement today 100 00:05:03,060 --> 00:05:13,240 I think everyone already knew that is following along with LightSpark and Spark technology that it supports tokens, its token platform, and will support stablecoins. 101 00:05:13,720 --> 00:05:14,680 So that's not news. 102 00:05:14,980 --> 00:05:24,800 But the news that was announced this morning is that there's a specific stablecoin issuer that is live on Spark now, which is the USDB. 103 00:05:24,800 --> 00:05:28,060 it's the stablecoin from 104 00:05:28,060 --> 00:05:31,580 Kraken, Robinhood, Anchorage 105 00:05:31,580 --> 00:05:34,260 and a few others I think 106 00:05:34,260 --> 00:05:38,260 so do they have like a consortium that is launching that or issuing that 107 00:05:38,260 --> 00:05:39,300 as part of this? 108 00:05:39,300 --> 00:05:40,940 or is that already existed before? 109 00:05:41,320 --> 00:05:42,740 that already existed 110 00:05:42,740 --> 00:05:47,540 yeah a number of companies not named 111 00:05:47,540 --> 00:05:49,320 Tether, Circle and Coinbase 112 00:05:49,320 --> 00:05:51,860 didn't really like 113 00:05:51,860 --> 00:05:54,040 I'm speculating but I don't think like 114 00:05:54,040 --> 00:05:58,180 the power dynamics of Tether and USDC. 115 00:05:58,660 --> 00:06:02,600 So they issued a new stablecoin. 116 00:06:03,300 --> 00:06:05,260 PayPal also issued their own stablecoin, 117 00:06:05,440 --> 00:06:07,800 but this one, I think it's USDB. 118 00:06:09,400 --> 00:06:10,560 Yeah, USDB. 119 00:06:11,320 --> 00:06:13,340 It's Robinhood, Kraken, Anchorage, 120 00:06:13,480 --> 00:06:14,640 and there's a few others. 121 00:06:14,800 --> 00:06:15,860 Well, I forget if it goes in there, 122 00:06:15,980 --> 00:06:17,140 but in any case, 123 00:06:17,360 --> 00:06:19,000 they announced that like a year ago. 124 00:06:20,060 --> 00:06:22,320 They meaning this consortium. 125 00:06:22,320 --> 00:06:25,340 but the announcement today is that specific 126 00:06:25,340 --> 00:06:27,480 stablecoin on Spark 127 00:06:27,480 --> 00:06:28,100 is live 128 00:06:28,100 --> 00:06:31,080 so we should 129 00:06:31,080 --> 00:06:33,560 test it out after the show or this weekend 130 00:06:33,560 --> 00:06:35,520 I think they're even giving away dollars 131 00:06:35,520 --> 00:06:36,760 so if you want some free money 132 00:06:36,760 --> 00:06:39,080 won't say no to that 133 00:06:39,080 --> 00:06:39,380 but 134 00:06:39,380 --> 00:06:43,320 so that's a little more 135 00:06:43,320 --> 00:06:45,260 progress on the Spark 136 00:06:45,260 --> 00:06:46,680 Spark Network 137 00:06:46,680 --> 00:06:48,520 and from LightSpark 138 00:06:48,520 --> 00:06:50,420 and to be clear 139 00:06:50,420 --> 00:06:52,580 because I know we've talked a lot about stable coins 140 00:06:52,580 --> 00:06:54,020 and network effects in the past. 141 00:06:54,300 --> 00:06:55,920 This doesn't obviously preclude LightSpark. 142 00:06:55,960 --> 00:06:58,640 If they wanted to issue Circle or Tether in the future, 143 00:06:58,720 --> 00:06:59,840 this could be just like a dry run. 144 00:07:00,100 --> 00:07:02,180 Because my guess is, even though this is interesting, 145 00:07:02,300 --> 00:07:04,620 they've got Kraken and some of these guys in the mix. 146 00:07:05,360 --> 00:07:06,300 I don't know the numbers, 147 00:07:06,400 --> 00:07:09,700 but I would assume that they have very little volume before this. 148 00:07:09,800 --> 00:07:10,240 But who knows? 149 00:07:10,300 --> 00:07:12,280 Maybe this is like enough of a differentiator 150 00:07:12,280 --> 00:07:14,540 that the stable coin can actually get some traction. 151 00:07:15,240 --> 00:07:17,880 Yeah, I think USDP is a small player right now. 152 00:07:17,880 --> 00:07:22,400 don't really know what their growth prospects are. 153 00:07:22,800 --> 00:07:25,280 I think it would take more than just being on Spark. 154 00:07:25,480 --> 00:07:27,120 I mean, I generally agree with your first comment 155 00:07:27,120 --> 00:07:30,960 that it's good to have something live on Spark. 156 00:07:31,860 --> 00:07:35,720 But no doubt LightSpark wants to get Tether and USDC 157 00:07:35,720 --> 00:07:40,740 and any issuer on Spark, I would guess, is their goal. 158 00:07:42,500 --> 00:07:43,120 But anyway... 159 00:07:43,120 --> 00:07:46,940 Does USDC operate today on Solana and Tron and other places? 160 00:07:46,940 --> 00:07:55,960 Yeah, I should, presumably, I actually don't know offhand every platform they're on, but since it was announced a year ago, I assume they're on something like that. 161 00:07:56,440 --> 00:07:57,580 Probably Solana. 162 00:07:58,280 --> 00:07:59,940 Maybe Bass. 163 00:08:02,020 --> 00:08:05,820 Maybe soon Tempo. 164 00:08:05,880 --> 00:08:06,700 Tempo or Google. 165 00:08:07,440 --> 00:08:08,300 G-Chain. 166 00:08:08,960 --> 00:08:10,580 Google, well, G-Call. 167 00:08:10,660 --> 00:08:11,400 Universal Ledger. 168 00:08:11,400 --> 00:08:11,960 Yeah. 169 00:08:11,960 --> 00:08:15,520 It doesn't do... 170 00:08:15,520 --> 00:08:17,240 You don't need stablecoins. 171 00:08:19,300 --> 00:08:20,540 You don't need a blockchain. 172 00:08:20,680 --> 00:08:22,660 And you don't need to listen to the rest of our episode. 173 00:08:22,840 --> 00:08:24,220 You've already heard the conclusion, right? 174 00:08:24,500 --> 00:08:25,660 We already talked about this last week. 175 00:08:25,660 --> 00:08:26,440 You don't need stablecoins. 176 00:08:26,500 --> 00:08:27,940 You can go listen to the end of last time. 177 00:08:28,020 --> 00:08:30,020 I thought we summarized things nicely. 178 00:08:30,480 --> 00:08:33,000 And I remain a G. Cole 179 00:08:33,000 --> 00:08:36,040 bull out of all these stablecoins. 180 00:08:37,200 --> 00:08:37,600 Maximals? 181 00:08:39,800 --> 00:08:41,080 Well, I think... 182 00:08:41,960 --> 00:08:44,520 players like Stripe and stuff can definitely carve out, 183 00:08:44,680 --> 00:08:48,460 it'll become very fragmented and messy. 184 00:08:49,200 --> 00:08:50,780 And so it's not like, 185 00:08:50,860 --> 00:08:53,660 I don't think it'll be a winner take all. 186 00:08:54,340 --> 00:08:56,000 But it'll be like super messy. 187 00:08:56,260 --> 00:08:58,180 So I think Stripe will carve out their niche 188 00:08:58,180 --> 00:08:59,320 and many others will too. 189 00:08:59,420 --> 00:09:03,780 But I think the database solution by Google 190 00:09:03,780 --> 00:09:05,520 is a winning formula. 191 00:09:05,800 --> 00:09:05,880 Yeah. 192 00:09:06,240 --> 00:09:08,200 One question, and maybe this will be a good, 193 00:09:08,300 --> 00:09:10,580 as you think about setting us up for describing Spark. 194 00:09:11,100 --> 00:09:25,380 The reason I asked that question on if USDB perhaps will get some more traction now because it's on Bitcoin or interoperable with Bitcoin and Lightning is, and I don't know the answer to this question, but if you can do trustless swaps between Bitcoin and this new stablecoin. 195 00:09:25,380 --> 00:09:42,680 I don't know the answer to that, but to me, that's always been one major value proposition is if I'm a Bitcoiner and let's say I'm a major Bitcoiner and I'm outside of the US or I'm even outside the system, whatever way, can I get in and out of dollars without needing to have a centralized market maker between the two different chains? 196 00:09:43,300 --> 00:09:46,240 Yeah, that's a good question. I think the answer is yes. 197 00:09:46,840 --> 00:09:48,200 Because that's a huge deal, I think. 198 00:09:49,900 --> 00:09:51,940 Yeah, that's where the offhand. 199 00:09:51,940 --> 00:09:58,700 And my understanding is that that's a part of what Shazan had to build to make Lava work. 200 00:09:58,700 --> 00:10:11,240 Like being able to sort of take a stable coin that comes from wherever it is and have some sort of interconnectivity awareness of what's happening on Bitcoin and vice versa in order to be able to resolve those DLCs. 201 00:10:11,860 --> 00:10:15,540 So I think there's at least some novel work toward that end. 202 00:10:16,740 --> 00:10:18,140 I've never seen that published. 203 00:10:18,140 --> 00:10:21,180 I find lava very opaque 204 00:10:21,180 --> 00:10:22,840 so I don't really understand it to be honest 205 00:10:22,840 --> 00:10:23,900 no 206 00:10:23,900 --> 00:10:25,260 anyway 207 00:10:25,260 --> 00:10:27,760 should we go through 208 00:10:27,760 --> 00:10:30,260 should we go through Spark? 209 00:10:30,440 --> 00:10:30,920 let's do it 210 00:10:30,920 --> 00:10:34,980 yeah so for those unfamiliar with it 211 00:10:34,980 --> 00:10:36,800 Spark itself is 212 00:10:36,800 --> 00:10:38,860 it's a 213 00:10:38,860 --> 00:10:39,880 it's a protocol 214 00:10:39,880 --> 00:10:41,740 it's an open source technology 215 00:10:41,740 --> 00:10:45,280 it allows for 216 00:10:45,280 --> 00:10:45,940 it's a 217 00:10:45,940 --> 00:10:49,480 I think anyone would consider it 218 00:10:49,480 --> 00:10:52,600 I think most people 219 00:10:52,600 --> 00:10:55,120 when you get into a debate about what is a layer 2 220 00:10:55,120 --> 00:10:59,720 the most strictest definition usually is that it has to have unilateral exit 221 00:10:59,720 --> 00:11:02,660 and Spark does have unilateral exit 222 00:11:02,660 --> 00:11:05,500 so I think most people would consider Spark a layer 2 223 00:11:05,500 --> 00:11:07,580 so in some ways it competes with Lightning 224 00:11:07,580 --> 00:11:10,700 but just like every other layer 225 00:11:10,700 --> 00:11:14,680 more broadly, layer 2, Cashew, Fetiment, ARC 226 00:11:14,680 --> 00:11:16,080 all of them support 227 00:11:16,080 --> 00:11:17,980 lightning. They all interact. 228 00:11:18,560 --> 00:11:20,820 Lightning, it's the glue that connects all these systems 229 00:11:20,820 --> 00:11:22,740 together. Spark does as well. 230 00:11:23,400 --> 00:11:24,720 By unilateral exit, we mean 231 00:11:24,720 --> 00:11:26,840 from the layer 2 to the native 232 00:11:26,840 --> 00:11:28,260 layer 1? Yeah. 233 00:11:29,020 --> 00:11:30,700 So if you hold money 234 00:11:30,700 --> 00:11:32,740 in a wallet that's based on Spark, 235 00:11:33,580 --> 00:11:34,620 that 236 00:11:34,620 --> 00:11:36,400 means you're connected to 237 00:11:36,400 --> 00:11:38,780 one or more servers, like 238 00:11:38,780 --> 00:11:40,860 Spark servers, and if they just disappear, 239 00:11:42,780 --> 00:11:43,340 there's 240 00:11:43,340 --> 00:11:44,480 a mechanism for you to 241 00:11:44,680 --> 00:11:46,800 to get your money back on chain. 242 00:11:47,380 --> 00:11:48,320 We'll get into that, 243 00:11:48,400 --> 00:11:51,160 because it comes with an asterisk next to it. 244 00:11:52,440 --> 00:11:54,480 But that mechanism does exist, 245 00:11:54,700 --> 00:11:57,500 and most other systems don't have that. 246 00:11:57,680 --> 00:11:59,080 Like, the VM stuff does not, 247 00:11:59,540 --> 00:12:00,260 cashew does not, 248 00:12:00,400 --> 00:12:01,120 sediment does not, 249 00:12:03,200 --> 00:12:05,080 and liquid does not. 250 00:12:07,000 --> 00:12:08,240 Lightning, of course, does. 251 00:12:09,660 --> 00:12:10,880 Anyway, so... 252 00:12:10,880 --> 00:12:11,840 Lightning and Spark are the only ones 253 00:12:11,840 --> 00:12:13,100 that have unilateral exit? 254 00:12:13,100 --> 00:12:16,160 ARK as well, which is still 255 00:12:16,160 --> 00:12:19,120 in R&D mode, but making progress as well. 256 00:12:22,080 --> 00:12:24,120 And so Spark can 257 00:12:24,120 --> 00:12:28,080 scale Bitcoin payments, but also you can issue 258 00:12:28,080 --> 00:12:32,080 tokens on it. And we just talked about a stablecoin, 259 00:12:32,240 --> 00:12:34,740 so you can issue stablecoins on Spark as well. 260 00:12:36,120 --> 00:12:39,100 And then they're on Bitcoin. 261 00:12:40,000 --> 00:12:42,040 You don't need another blockchain 262 00:12:42,040 --> 00:12:49,220 to build a wallet that supports both Bitcoin and stablecoins, 263 00:12:49,340 --> 00:12:50,860 you could just use Spark. 264 00:12:52,960 --> 00:12:55,000 So I mentioned servers, right? 265 00:12:55,040 --> 00:12:56,780 So you might have a wallet on your phone, 266 00:12:56,900 --> 00:12:58,740 but then it connects to one or more servers. 267 00:12:58,940 --> 00:13:00,780 So let's talk a little bit about that, 268 00:13:01,540 --> 00:13:03,140 the world in the servers. 269 00:13:03,140 --> 00:13:06,840 There's three different names we're going to go through here, 270 00:13:07,360 --> 00:13:08,580 vocabulary lesson. 271 00:13:08,740 --> 00:13:09,740 One is Spark Entity. 272 00:13:10,220 --> 00:13:11,660 Two is Spark Operator. 273 00:13:11,660 --> 00:13:14,020 and three is Spark service provider. 274 00:13:14,840 --> 00:13:17,340 S-E-S-O-S-S-P. 275 00:13:17,860 --> 00:13:20,100 So the S-E, Spark entity, 276 00:13:20,640 --> 00:13:21,740 you can think of that as like 277 00:13:21,740 --> 00:13:26,560 the company or organization 278 00:13:26,560 --> 00:13:31,080 in charge of one of these Spark systems. 279 00:13:31,860 --> 00:13:33,300 There can be, just like with Cashew, 280 00:13:34,340 --> 00:13:35,360 Fediment, Arc, 281 00:13:35,620 --> 00:13:39,360 there can be many instances of this. 282 00:13:40,040 --> 00:13:45,400 So one instance, the Spark entity would be responsible for it and sort of dictate the 283 00:13:45,400 --> 00:13:47,020 governance of how it's set up. 284 00:13:47,240 --> 00:13:52,500 It could also determine how many Spark operators there are, because there can be one or more 285 00:13:52,500 --> 00:13:54,940 Spark operators within a Spark entity. 286 00:13:55,720 --> 00:13:58,880 So the Spark entity can decide there's only going to be one Spark operator. 287 00:13:59,520 --> 00:14:04,340 And if there is only one, presumably it's the same company as the Spark entity. 288 00:14:04,720 --> 00:14:06,880 But there can also be multiple. 289 00:14:06,880 --> 00:14:13,160 So is the Spark entity, is that a legal differentiation that owns the different Spark operators? 290 00:14:13,660 --> 00:14:14,680 It's just a different role. 291 00:14:15,020 --> 00:14:16,420 I mean, let's go through a concrete example. 292 00:14:16,680 --> 00:14:20,340 So LightSpark is the first Spark entity. 293 00:14:21,100 --> 00:14:26,240 They have announced, at least so far, two Spark operators. 294 00:14:27,000 --> 00:14:28,460 LightSpark is one of the Spark operators. 295 00:14:29,160 --> 00:14:33,020 And then it's Ethan Marcus' startup that's the second one. 296 00:14:33,020 --> 00:14:38,360 I mean, I've jokingly referred to as David and son, but they probably don't like me saying that. 297 00:14:38,940 --> 00:14:40,280 But it's literally true. 298 00:14:40,660 --> 00:14:41,880 But his son has a startup. 299 00:14:42,040 --> 00:14:43,700 I think it's FlashNet. 300 00:14:43,960 --> 00:14:44,620 Yeah, FlashNet. 301 00:14:44,680 --> 00:14:44,940 Is that right? 302 00:14:45,580 --> 00:14:53,100 So two different companies, FlashNet and LightSpark, are Spark operators within one Spark entity. 303 00:14:53,420 --> 00:14:56,660 But what is the actual Spark entity? 304 00:14:57,040 --> 00:14:59,480 Because each of the operators is running a server. 305 00:14:59,680 --> 00:15:00,400 Is that correct? 306 00:15:00,400 --> 00:15:06,700 Yeah, but the Spark entity's role is, it's in charge. 307 00:15:07,120 --> 00:15:09,580 I mean, it determines the rules. 308 00:15:09,880 --> 00:15:13,400 Like, for example, who determines how many operators there are? 309 00:15:13,620 --> 00:15:13,860 Got it. 310 00:15:13,860 --> 00:15:15,980 Who determines the onboarding process? 311 00:15:16,400 --> 00:15:17,400 It's a permission system. 312 00:15:17,560 --> 00:15:19,620 I mean, that part of it is a permission system. 313 00:15:19,900 --> 00:15:20,520 Got it. 314 00:15:20,520 --> 00:15:23,220 So, like, what if I want to be a Spark operator on that? 315 00:15:24,020 --> 00:15:26,720 Like, I can't just, like, permissionlessly join. 316 00:15:26,900 --> 00:15:27,280 I understand. 317 00:15:27,280 --> 00:15:30,140 The Spark entity says, okay, here's your application. 318 00:15:30,400 --> 00:15:33,360 fill it out, let's sign a partnership, and then you can join. 319 00:15:33,900 --> 00:15:42,720 To create a new Spark operator, you have to go be a part of a Spark entity. 320 00:15:43,220 --> 00:15:48,400 But to create a new Spark entity, is that permissionless, or do you need to go to LightSpark to create that? 321 00:15:48,760 --> 00:15:50,600 That is permissionless. 322 00:15:50,880 --> 00:15:54,260 It's permissionless with some caveats right now. 323 00:15:55,260 --> 00:15:58,880 So Spark is MIT-licensed open-source software. 324 00:15:58,880 --> 00:16:00,280 the client side 325 00:16:00,280 --> 00:16:02,420 and the server 326 00:16:02,420 --> 00:16:05,020 although the SSP which we haven't talked about yet 327 00:16:05,020 --> 00:16:06,240 that is currently 328 00:16:06,240 --> 00:16:09,160 closed source and there's no publish 329 00:16:09,160 --> 00:16:10,120 specification 330 00:16:10,120 --> 00:16:11,380 for 331 00:16:11,380 --> 00:16:14,060 what that should look like 332 00:16:14,060 --> 00:16:15,600 so if you were to build your own SSP 333 00:16:15,600 --> 00:16:18,360 you'd have to like reverse engineer 334 00:16:18,360 --> 00:16:19,820 what that API looks like 335 00:16:19,820 --> 00:16:21,880 so you could plug it in to the Spark 336 00:16:21,880 --> 00:16:23,980 so the Spark operator server software 337 00:16:23,980 --> 00:16:24,940 is open source 338 00:16:24,940 --> 00:16:26,840 the SSP is not 339 00:16:26,840 --> 00:16:28,520 and there's no published spec. 340 00:16:28,720 --> 00:16:30,100 So there'd be a bit of reverse engineering, 341 00:16:30,220 --> 00:16:31,380 but there'd be nothing stopping. 342 00:16:31,860 --> 00:16:34,800 The three of us could create a Spark entity right now. 343 00:16:36,000 --> 00:16:37,720 Each of us could have our own companies 344 00:16:37,720 --> 00:16:38,460 and Spark operators. 345 00:16:38,600 --> 00:16:39,240 We could have three operators. 346 00:16:39,400 --> 00:16:42,060 We could stand it up, create a business. 347 00:16:42,340 --> 00:16:43,260 Wallets could be built on it. 348 00:16:43,660 --> 00:16:45,160 Stable coins could run through it. 349 00:16:45,260 --> 00:16:46,040 We could charge money 350 00:16:46,040 --> 00:16:48,360 and it would literally be completely independent 351 00:16:48,360 --> 00:16:51,860 of LightSpark and they'd have nothing to say about it. 352 00:16:52,620 --> 00:16:53,300 That's possible. 353 00:16:53,540 --> 00:16:54,680 This could be one of our offerings 354 00:16:54,680 --> 00:16:55,560 for our treasury company. 355 00:16:56,840 --> 00:17:00,600 But practically speaking, one, we'd have to reverse engineer. 356 00:17:00,720 --> 00:17:03,160 I mean, there'd be a lot of engineering work for us to get that up and running. 357 00:17:04,340 --> 00:17:08,520 And, you know, obviously, LightSpark built the system so that their engineers understand 358 00:17:08,520 --> 00:17:12,360 the system well, and we'd have to learn. 359 00:17:12,700 --> 00:17:12,820 Right. 360 00:17:13,080 --> 00:17:16,460 So before we jump in the Spark operator, I just want to make sure I understand the distinction 361 00:17:16,460 --> 00:17:19,760 between the service provider, the operator, and the entity. 362 00:17:19,760 --> 00:17:29,540 so the nct defines the rules how like how um sort of flexible is the like all the parameters you can 363 00:17:29,540 --> 00:17:34,160 change in there as an example you know and maybe a uh an analogy would be something like the 364 00:17:34,160 --> 00:17:38,800 universes and taproot assets is this the kind of thing where you could say on our spark chain 365 00:17:38,800 --> 00:17:45,280 you can only move dollars you can only move this specific uh stable coin is that one of the 366 00:17:45,280 --> 00:17:49,420 potential parameters you consider what are the i think so some of the so one parameter is how 367 00:17:49,420 --> 00:17:51,280 many operators are there? And some 368 00:17:51,280 --> 00:17:53,220 considerations, well, actually, 369 00:17:53,780 --> 00:17:55,320 I'll, let's 370 00:17:55,320 --> 00:17:57,320 go deeper in a second. So one is number 371 00:17:57,320 --> 00:17:58,580 of operators. Two is 372 00:17:58,580 --> 00:18:01,420 what if any fees 373 00:18:01,420 --> 00:18:02,660 are charged by the operators. 374 00:18:03,280 --> 00:18:05,580 Three is how many 375 00:18:05,580 --> 00:18:07,520 SSPs 376 00:18:07,520 --> 00:18:08,520 are there. 377 00:18:09,920 --> 00:18:11,300 Four is like, what are the rules 378 00:18:11,300 --> 00:18:13,040 around all this? Like, who can be an SSP? 379 00:18:13,200 --> 00:18:14,840 Who can be, not only how many, but like 380 00:18:14,840 --> 00:18:17,180 who is allowed to be an 381 00:18:17,180 --> 00:18:18,420 SSP and an SO? 382 00:18:19,420 --> 00:18:28,080 And then, yeah, probably like what assets are supported on that entity. 383 00:18:28,540 --> 00:18:32,640 And can the entity, after it's up and running, retroactively make changes? 384 00:18:32,740 --> 00:18:36,640 Or once it's set, that instance is set? 385 00:18:36,840 --> 00:18:39,480 I think it could be changed at any point in time. 386 00:18:39,760 --> 00:18:42,660 And for the audience, so, you know, I don't work for LightSpark. 387 00:18:42,780 --> 00:18:44,100 I have studied it quite a bit. 388 00:18:44,340 --> 00:18:47,840 My team has looked at a lot of the code, so we understand it fairly well. 389 00:18:48,220 --> 00:18:49,380 We still have a lot of questions. 390 00:18:49,420 --> 00:18:52,200 but like everything I'm saying is like pretty confident, 391 00:18:52,480 --> 00:18:54,820 but I don't speak for the company or the technology. 392 00:18:55,780 --> 00:18:58,340 I'm still trying to get a little bit of a mental model 393 00:18:58,340 --> 00:18:59,400 of how to think about, 394 00:18:59,520 --> 00:19:02,500 like presumably the company created entities, 395 00:19:02,900 --> 00:19:03,880 operators and SSPs 396 00:19:03,880 --> 00:19:08,520 because they envision a certain structure or future 397 00:19:08,520 --> 00:19:09,340 and how that would work. 398 00:19:09,560 --> 00:19:10,960 Like, so, you know, 399 00:19:11,040 --> 00:19:12,560 like you gave the example of 400 00:19:12,560 --> 00:19:14,060 what if the three of us were to make an entity 401 00:19:14,060 --> 00:19:15,840 and each become operators within that entity? 402 00:19:15,940 --> 00:19:18,160 It's like, why would we choose 403 00:19:18,160 --> 00:19:20,240 to each be operators in a single entity 404 00:19:20,240 --> 00:19:21,600 versus each create our own entity. 405 00:19:21,740 --> 00:19:23,400 I feel like there's like levels of abstraction 406 00:19:23,400 --> 00:19:26,160 that there's somebody at LightSpark 407 00:19:26,160 --> 00:19:28,280 who's imagining a certain structure 408 00:19:28,280 --> 00:19:29,180 or certain use cases. 409 00:19:29,360 --> 00:19:30,520 Those aren't in my mind yet. 410 00:19:30,940 --> 00:19:32,380 So another thing that's not been, 411 00:19:32,520 --> 00:19:34,680 an important part of how does Spark work, 412 00:19:34,960 --> 00:19:38,100 how does it get the scaling impact that it has? 413 00:19:38,440 --> 00:19:41,380 It is based on a technology called State Chains, 414 00:19:41,380 --> 00:19:46,700 which Ruben Sampson invented in 2018 or 2019. 415 00:19:46,700 --> 00:19:50,660 on a Medium post. 416 00:19:50,800 --> 00:19:52,260 And I remember when he posted it, I read it, 417 00:19:52,320 --> 00:19:53,800 and I liked State Chains a lot 418 00:19:53,800 --> 00:19:56,540 back when Medium was actually used. 419 00:19:56,540 --> 00:19:58,960 I read a lot of your Medium posts too back then. 420 00:19:59,040 --> 00:20:00,600 But anyway, State Chains, 421 00:20:00,720 --> 00:20:03,280 I always felt it was a really good building block. 422 00:20:03,680 --> 00:20:06,460 It had a nice set of properties 423 00:20:06,460 --> 00:20:11,940 where it is trusted, 424 00:20:12,680 --> 00:20:16,400 but you get a lot better off-chain scaling 425 00:20:16,400 --> 00:20:17,820 than Lightning. 426 00:20:18,160 --> 00:20:22,480 You can basically lock up Bitcoin 427 00:20:22,480 --> 00:20:24,700 in a Bitcoin transaction 428 00:20:24,700 --> 00:20:28,620 and then you can send that Bitcoin 429 00:20:28,620 --> 00:20:30,480 from like I can send it to Max, 430 00:20:30,580 --> 00:20:33,460 Max can send it to DK off chain. 431 00:20:35,800 --> 00:20:42,860 And without a lot of the drawbacks to Lightning. 432 00:20:43,360 --> 00:20:46,380 But the big drawback to state chain 433 00:20:46,380 --> 00:20:47,540 is a level of trust. 434 00:20:47,820 --> 00:20:48,620 You need a server, 435 00:20:49,440 --> 00:20:50,220 a state chain, 436 00:20:50,820 --> 00:20:52,500 like entity or operator, 437 00:20:53,580 --> 00:20:57,640 basically what the Spark operator is. 438 00:20:58,280 --> 00:21:03,600 And then if I send money to Max, 439 00:21:08,100 --> 00:21:10,080 so there's a unilateral exit. 440 00:21:10,460 --> 00:21:11,680 So Max would have a transaction 441 00:21:11,680 --> 00:21:13,020 that if the server goes away, 442 00:21:13,160 --> 00:21:14,740 he can still get his money back. 443 00:21:14,740 --> 00:21:17,260 but Max is trusting 444 00:21:17,260 --> 00:21:18,880 there is one 445 00:21:18,880 --> 00:21:20,940 way to steal Max's money 446 00:21:20,940 --> 00:21:23,080 if I the previous owner 447 00:21:23,080 --> 00:21:25,300 collude with the server we have 448 00:21:25,300 --> 00:21:27,200 key material that can be combined 449 00:21:27,200 --> 00:21:29,280 and we can unilaterally 450 00:21:29,280 --> 00:21:31,220 exit the previous owner of what 451 00:21:31,220 --> 00:21:32,240 of the Bitcoin 452 00:21:32,240 --> 00:21:35,580 so if I have money and I pay you 453 00:21:35,580 --> 00:21:37,480 if I then 454 00:21:37,480 --> 00:21:38,600 collude with the operator 455 00:21:38,600 --> 00:21:41,620 I can steal what you believe is your money 456 00:21:41,620 --> 00:21:42,280 you can double spend 457 00:21:42,280 --> 00:21:49,120 Now, if my keys are deleted or the operator's keys are deleted, then it's not possible to steal your money. 458 00:21:49,500 --> 00:21:49,700 Got it. 459 00:21:50,220 --> 00:21:52,600 So you are trusting. 460 00:21:53,060 --> 00:21:57,860 So the operator can say, hey, I've written the code to delete the keys. 461 00:21:58,020 --> 00:22:03,560 Upon transfer, those keys that were associated with me are deleted. 462 00:22:03,960 --> 00:22:08,780 So the operator can write that code, run that code, make that public statement. 463 00:22:08,780 --> 00:22:11,800 But you're trusting that they're actually doing that. 464 00:22:11,800 --> 00:22:14,640 And there's not another nefarious backdoor. 465 00:22:14,740 --> 00:22:16,400 For example, maybe in the future, 466 00:22:16,580 --> 00:22:19,040 I have a camera or even in my contact lens 467 00:22:19,040 --> 00:22:20,180 and take a photo of the key, 468 00:22:20,480 --> 00:22:21,700 so it's not even on the computer. 469 00:22:22,300 --> 00:22:25,560 Who's, you mean you as a rogue employee of that operator? 470 00:22:25,740 --> 00:22:47,515 Sure or the operator themselves a rogue employee One you trusting the operator that they don lie cheat steal Two you trusting that no rogue employee does that Three you trusting that some external hacker like North Korea or something isn getting into that system changing the code to not delete the keys and then be able to steal all the money that flows to that system after that point 471 00:22:47,996 --> 00:22:49,496 So that's what you're trusting. 472 00:22:49,496 --> 00:22:54,535 but you get really nice scaling properties 473 00:22:54,535 --> 00:22:56,736 for that trade off 474 00:22:56,736 --> 00:22:58,515 so that's state change technology 475 00:22:58,515 --> 00:22:59,976 that's how Spark works 476 00:22:59,976 --> 00:23:02,996 now that's a preface to what you asked David 477 00:23:02,996 --> 00:23:04,916 which is like why have all this complexity 478 00:23:04,916 --> 00:23:05,956 about multiple operators 479 00:23:05,956 --> 00:23:10,555 why isn't an entity and operator the same thing 480 00:23:10,555 --> 00:23:11,535 and only have one operator 481 00:23:11,535 --> 00:23:14,055 so a benefit to multiple operators 482 00:23:14,055 --> 00:23:14,736 is that 483 00:23:14,736 --> 00:23:19,096 if you have like two operators 484 00:23:19,096 --> 00:23:21,316 you would have to 485 00:23:21,316 --> 00:23:23,055 both would have to cheat 486 00:23:23,055 --> 00:23:25,096 like both would have to change their code 487 00:23:25,096 --> 00:23:27,055 to not delete the keys 488 00:23:27,055 --> 00:23:28,496 in order to 489 00:23:28,496 --> 00:23:31,336 steal funds and collude with the previous 490 00:23:31,336 --> 00:23:32,936 owner. So then it's like a federation 491 00:23:32,936 --> 00:23:34,555 it's federation or 492 00:23:34,555 --> 00:23:37,196 a fediment or some of these things. Yep and so 493 00:23:37,196 --> 00:23:39,275 you can do like I believe their current 494 00:23:39,275 --> 00:23:41,156 one is a two of two. Right. 495 00:23:41,396 --> 00:23:43,216 If you wanted to do a 496 00:23:43,216 --> 00:23:45,176 threshold where 497 00:23:45,176 --> 00:23:46,956 let's say you have four operators 498 00:23:46,956 --> 00:23:48,876 then you would need 499 00:23:48,876 --> 00:23:49,496 the trust 500 00:23:49,496 --> 00:23:51,896 two. 501 00:23:54,555 --> 00:23:56,336 But then 502 00:23:56,336 --> 00:23:58,696 the nice thing then is one of the operators 503 00:23:58,696 --> 00:24:00,756 doesn't have to sign each transaction 504 00:24:00,756 --> 00:24:02,535 if they have downtime or something. 505 00:24:03,196 --> 00:24:04,795 So you get the resilience of threshold 506 00:24:04,795 --> 00:24:06,596 but you do 507 00:24:06,596 --> 00:24:08,775 your trust goes from one to two 508 00:24:08,775 --> 00:24:10,775 you have to trust two. If it's two of two 509 00:24:10,775 --> 00:24:12,396 or three of three you only have to trust 510 00:24:12,396 --> 00:24:14,736 that at least one operator is honest. 511 00:24:15,096 --> 00:24:16,636 And in theory you could be that operator. 512 00:24:16,956 --> 00:24:19,436 the end user? 513 00:24:19,936 --> 00:24:21,236 Well, yeah, for most end users, 514 00:24:21,476 --> 00:24:23,295 but let's say you were a business and you're like, 515 00:24:23,396 --> 00:24:24,896 I don't want to trust other businesses, 516 00:24:25,256 --> 00:24:27,456 but if you're the business, if I'm, for example, 517 00:24:27,795 --> 00:24:29,396 Google and Stripe, right, and we're talking 518 00:24:29,396 --> 00:24:30,636 about permissionless or 519 00:24:30,636 --> 00:24:33,376 credibly neutral, if you say I'm one 520 00:24:33,376 --> 00:24:35,535 of the operators and therefore I trust 521 00:24:35,535 --> 00:24:37,236 that I'm not going to mess up, then I know that 522 00:24:37,236 --> 00:24:38,976 my system is secure. 523 00:24:39,416 --> 00:24:39,936 That's correct. 524 00:24:41,316 --> 00:24:43,516 And then also, it helps 525 00:24:43,516 --> 00:24:45,356 the regulatory posture as well. 526 00:24:46,956 --> 00:24:54,656 Because LightSpark intends for their Spark entity to be no KYC. 527 00:24:55,555 --> 00:24:58,456 That it's not an MSB. 528 00:24:59,316 --> 00:25:04,936 And I believe the argument is, well, they can't steal customer funds. 529 00:25:04,936 --> 00:25:05,936 Like, here's the code. 530 00:25:06,055 --> 00:25:06,896 We've developed the system. 531 00:25:07,176 --> 00:25:10,535 No one entity can steal the funds. 532 00:25:11,616 --> 00:25:15,876 And LightSpark itself, that company, can't steal the funds unilaterally. 533 00:25:16,956 --> 00:25:22,555 And so they're not an MSB and they don't need KYC. 534 00:25:23,016 --> 00:25:26,956 So I think it's an important part of the regulatory story as well, 535 00:25:27,996 --> 00:25:29,936 as is unilateral exit. 536 00:25:30,216 --> 00:25:32,956 Because another thing is even if we go away, we disappear, 537 00:25:33,236 --> 00:25:35,896 we turn the server off or whatever, we're told to turn the server off, 538 00:25:36,396 --> 00:25:38,636 customers can still get their money. 539 00:25:38,856 --> 00:25:41,436 So I think it's a pretty strong regulatory. 540 00:25:41,676 --> 00:25:43,256 One thing jumped in my head immediately, 541 00:25:43,256 --> 00:25:46,896 and I don't know why I didn't think about this before, 542 00:25:46,956 --> 00:25:48,136 but to your point 543 00:25:48,136 --> 00:25:48,416 I mean 544 00:25:48,416 --> 00:25:49,396 the big weakness 545 00:25:49,396 --> 00:25:50,256 is 546 00:25:50,256 --> 00:25:52,016 trusting that 547 00:25:52,016 --> 00:25:53,916 the key is not getting stolen somehow 548 00:25:53,916 --> 00:25:54,936 what about just running 549 00:25:54,936 --> 00:25:56,216 the signers for the spark 550 00:25:56,216 --> 00:25:57,496 using Lexi 551 00:25:57,496 --> 00:25:58,516 or OpenSecret 552 00:25:58,516 --> 00:25:59,055 in the T 553 00:25:59,055 --> 00:26:00,336 in the enclave 554 00:26:00,336 --> 00:26:01,236 yeah 555 00:26:01,236 --> 00:26:01,816 I think 556 00:26:01,816 --> 00:26:02,295 it solves 557 00:26:02,295 --> 00:26:03,636 or it didn't solve it entirely 558 00:26:03,636 --> 00:26:04,795 but it's a huge jump 559 00:26:04,795 --> 00:26:05,476 yeah 560 00:26:05,476 --> 00:26:06,196 it's 561 00:26:06,196 --> 00:26:07,196 that is a 562 00:26:07,196 --> 00:26:08,516 potential roadmap thing 563 00:26:08,516 --> 00:26:09,496 to improve it further 564 00:26:09,496 --> 00:26:09,936 yeah 565 00:26:09,936 --> 00:26:11,636 there's some technical challenges there 566 00:26:11,636 --> 00:26:12,876 but I'm sure they can be overcome 567 00:26:12,876 --> 00:26:14,696 and then 568 00:26:14,696 --> 00:26:15,336 you 569 00:26:15,336 --> 00:26:16,596 you just improve 570 00:26:16,596 --> 00:26:18,076 the resilience even more. 571 00:26:18,236 --> 00:26:19,336 Because then you get it to a point 572 00:26:19,336 --> 00:26:19,896 where you're, 573 00:26:20,956 --> 00:26:21,516 you know, 574 00:26:21,656 --> 00:26:23,076 like SGX has to be attacked, 575 00:26:23,216 --> 00:26:23,816 which actually, 576 00:26:24,076 --> 00:26:25,516 there are known attacks on SGX. 577 00:26:25,736 --> 00:26:26,376 SGX can't fail. 578 00:26:27,076 --> 00:26:29,116 So these systems can be broken, 579 00:26:29,275 --> 00:26:30,696 but it just raises the bar 580 00:26:30,696 --> 00:26:32,275 for attacking the system. 581 00:26:32,396 --> 00:26:33,096 So I think that's like 582 00:26:33,096 --> 00:26:33,816 a future direction 583 00:26:33,816 --> 00:26:34,696 for this technology. 584 00:26:34,876 --> 00:26:35,535 And you could have, 585 00:26:35,596 --> 00:26:35,996 for example, 586 00:26:36,156 --> 00:26:36,596 I mean, yeah, 587 00:26:36,856 --> 00:26:37,476 nothing's perfect, 588 00:26:37,576 --> 00:26:37,956 but you could have 589 00:26:37,956 --> 00:26:38,656 one of the designers 590 00:26:38,656 --> 00:26:40,076 using Nitro at AWS, 591 00:26:40,376 --> 00:26:41,616 one using SGX from Intel. 592 00:26:41,836 --> 00:26:42,096 Like you could, 593 00:26:43,035 --> 00:26:43,996 that would improve 594 00:26:43,996 --> 00:26:45,035 the resilience even more. 595 00:26:45,035 --> 00:26:45,295 Yeah. 596 00:26:45,295 --> 00:26:51,535 um and just to understand the use case a little more clearly um i understand that light spark may 597 00:26:51,535 --> 00:26:56,996 be running an entity presumably because they're kind of a new startup that's building the thing 598 00:26:56,996 --> 00:27:02,736 and maybe want to have a demo of it but do they or would you imagine that a typical entity would 599 00:27:02,736 --> 00:27:09,896 be like would jp morgan be an entity or would it be like a new community banking type of emergent 600 00:27:09,896 --> 00:27:12,055 kind of community bank thing, 601 00:27:12,116 --> 00:27:13,836 the way we think about things like 602 00:27:13,836 --> 00:27:16,676 cashew mints and infetimints? 603 00:27:17,216 --> 00:27:18,496 Like, is that sort of the use case 604 00:27:18,496 --> 00:27:20,656 or is there some other type of entity 605 00:27:20,656 --> 00:27:22,976 to think about that would be a Spark entity? 606 00:27:26,276 --> 00:27:27,656 I mean, I think, yeah, 607 00:27:27,716 --> 00:27:29,035 any financial institution, 608 00:27:29,236 --> 00:27:32,196 whether you're TradFi or FinTech 609 00:27:32,196 --> 00:27:35,436 or a new crypto Bitcoin company, 610 00:27:35,736 --> 00:27:38,916 this could appeal to you. 611 00:27:38,916 --> 00:27:44,535 anyone that's looking at stable coins or like google stripe anyone that's thinking about getting 612 00:27:44,535 --> 00:27:48,716 in this game could do this or even being a consortium right instead of like they're like 613 00:27:48,716 --> 00:27:52,836 google credibly neutral or tempo with like oh we've got visa again all this you could actually 614 00:27:52,836 --> 00:27:58,656 each of those players could be a signer so would this be like an alternative like the gcul the 615 00:27:58,656 --> 00:28:08,035 google cloud whatever ledger thing is that um sorry i forget the you uh the universal universal 616 00:28:08,035 --> 00:28:12,035 Ledger, yeah. Is that like an alternative approach to a very 617 00:28:12,035 --> 00:28:15,816 similar problem? Or do they work together in some way? 618 00:28:16,416 --> 00:28:19,816 Well, I think, well, again, so Spark, you can use it for 619 00:28:19,816 --> 00:28:23,916 Bitcoin payments or stable coins or 620 00:28:23,916 --> 00:28:27,976 any token. So Google Cloud has no Bitcoin payment 621 00:28:27,976 --> 00:28:31,836 solution. Also, Google Cloud, Universal 622 00:28:31,836 --> 00:28:34,216 Ledger, you know, has a, or at least they 623 00:28:34,216 --> 00:28:38,476 stated that they have a full compliance solution. 624 00:28:38,716 --> 00:28:40,356 So I think they're 625 00:28:40,356 --> 00:28:42,535 going to... 626 00:28:42,535 --> 00:28:43,676 It's more on the KYC side. 627 00:28:43,876 --> 00:28:46,035 It's more on the KYC side. 628 00:28:47,916 --> 00:28:50,236 And LightSpark also has 629 00:28:50,236 --> 00:28:54,096 compliant solutions as well. That's more the UMA and their original 630 00:28:54,096 --> 00:28:58,216 first product they introduced. Whereas Spark technology 631 00:28:58,216 --> 00:28:59,956 is not that. 632 00:28:59,956 --> 00:29:03,356 So I think about two critical differences in my mind. 633 00:29:03,356 --> 00:29:07,476 one, all of the blockchains are just, again, as we've said many times last week, 634 00:29:07,936 --> 00:29:11,636 if you want to hear the rant, go on there or just decentralization theater. 635 00:29:12,035 --> 00:29:15,776 The nice thing here is, in theory, you can actually prove if we have 12 institutions 636 00:29:15,776 --> 00:29:19,476 that are part of a consortium, you can prove if it's a whatever, 8 of 12 637 00:29:19,476 --> 00:29:23,055 SIG or whatever the threshold is, you actually need it. 638 00:29:23,055 --> 00:29:26,596 Those 12 institutions design it to move it. So that's one really nice thing is you can get real 639 00:29:26,596 --> 00:29:30,816 decentralization, not just the theater. And the second piece 640 00:29:30,816 --> 00:29:32,276 is it interconnects with, 641 00:29:32,516 --> 00:29:32,676 you know, 642 00:29:32,696 --> 00:29:33,216 this is what we're talking about, 643 00:29:33,256 --> 00:29:33,976 like network of Bitcoin, 644 00:29:34,096 --> 00:29:35,016 the internet of value 645 00:29:35,016 --> 00:29:35,956 versus each of these 646 00:29:35,956 --> 00:29:36,896 being separate intranets 647 00:29:36,896 --> 00:29:38,276 and all of them having to go 648 00:29:38,276 --> 00:29:38,776 and like, okay, 649 00:29:38,776 --> 00:29:39,295 I need a plugin 650 00:29:39,295 --> 00:29:40,196 so that I'm compliant 651 00:29:40,196 --> 00:29:41,136 with Stripe chain, 652 00:29:41,236 --> 00:29:41,636 Google chain. 653 00:29:41,876 --> 00:29:42,516 That's the way I see it. 654 00:29:43,236 --> 00:29:43,976 And let's say, 655 00:29:44,116 --> 00:29:45,116 I'm just going to make up 656 00:29:45,116 --> 00:29:45,736 a hypothetical 657 00:29:45,736 --> 00:29:47,216 to see if it fits. 658 00:29:47,416 --> 00:29:48,055 Let's say that, 659 00:29:48,055 --> 00:29:48,736 you know, 660 00:29:49,076 --> 00:29:50,795 Matt and I have been 661 00:29:50,795 --> 00:29:53,055 vibe coding a lot of things 662 00:29:53,055 --> 00:29:53,576 and I think we've been 663 00:29:53,576 --> 00:29:54,295 drawn to games a lot. 664 00:29:54,376 --> 00:29:55,316 Let's say we were to set up 665 00:29:55,316 --> 00:29:56,776 a Bitcoin arcade. 666 00:29:57,276 --> 00:29:58,356 Would that be 667 00:29:58,356 --> 00:29:59,336 the type of thing 668 00:29:59,336 --> 00:30:00,416 that might be an entity? 669 00:30:00,816 --> 00:30:05,055 Is that like a new startup that uses Bitcoin in a new way? 670 00:30:05,396 --> 00:30:07,055 Is that the entity level? 671 00:30:07,176 --> 00:30:08,756 And then we would also be our own operator 672 00:30:08,756 --> 00:30:11,016 or we would create other operators? 673 00:30:11,356 --> 00:30:13,856 I'm trying to understand how the patterns map. 674 00:30:15,316 --> 00:30:17,376 I think if you're building an application, 675 00:30:17,596 --> 00:30:20,136 you don't create, I mean, I think you just create an app. 676 00:30:21,856 --> 00:30:24,216 You would use other entities. 677 00:30:25,176 --> 00:30:26,876 I think you need to be, I mean, 678 00:30:26,876 --> 00:30:28,756 it would 679 00:30:28,756 --> 00:30:29,816 definitely 680 00:30:29,816 --> 00:30:30,856 it would be bad 681 00:30:30,856 --> 00:30:31,316 for 682 00:30:31,316 --> 00:30:33,016 decentralization 683 00:30:33,016 --> 00:30:33,376 if there 684 00:30:33,376 --> 00:30:33,836 is 685 00:30:33,836 --> 00:30:34,295 if 686 00:30:34,295 --> 00:30:35,216 Spark becomes 687 00:30:35,216 --> 00:30:35,836 very popular 688 00:30:35,836 --> 00:30:36,535 and there's only 689 00:30:36,535 --> 00:30:37,096 one entity 690 00:30:37,096 --> 00:30:37,956 like LightSpark 691 00:30:37,956 --> 00:30:38,696 that would be 692 00:30:38,696 --> 00:30:39,676 that would give 693 00:30:39,676 --> 00:30:40,236 them tremendous 694 00:30:40,236 --> 00:30:40,676 power 695 00:30:40,676 --> 00:30:43,295 and 696 00:30:43,295 --> 00:30:44,555 you know 697 00:30:44,555 --> 00:30:45,156 so the more 698 00:30:45,156 --> 00:30:46,116 the more the better 699 00:30:46,116 --> 00:30:47,076 for decentralization 700 00:30:47,076 --> 00:30:47,976 but just realistically 701 00:30:47,976 --> 00:30:48,436 I think 702 00:30:48,436 --> 00:30:49,736 the more would be 703 00:30:49,736 --> 00:30:50,316 you know 704 00:30:50,316 --> 00:30:51,096 like Tether 705 00:30:51,096 --> 00:30:51,676 and Coinbase 706 00:30:51,676 --> 00:30:52,216 and Block 707 00:30:52,216 --> 00:30:52,576 and 708 00:30:52,576 --> 00:30:54,216 Stripe 709 00:30:54,216 --> 00:30:54,795 and Google 710 00:30:54,795 --> 00:30:55,216 and like 711 00:30:55,216 --> 00:30:56,276 companies like that 712 00:30:56,276 --> 00:30:58,716 banks could become entities. 713 00:30:59,416 --> 00:31:00,876 I don't think you're going to 714 00:31:00,876 --> 00:31:02,996 vibe code an app and become an entity. 715 00:31:03,316 --> 00:31:04,716 It's a big undertaking. 716 00:31:06,516 --> 00:31:08,596 It's similar to the early days 717 00:31:08,596 --> 00:31:10,476 with Lighting Network or even email and servers. 718 00:31:10,636 --> 00:31:11,936 It's a pain in the ass to run a server. 719 00:31:13,396 --> 00:31:13,876 And I assume... 720 00:31:13,876 --> 00:31:16,816 We haven't talked about 721 00:31:16,816 --> 00:31:18,736 SSPs yet, but you either have to provide 722 00:31:18,736 --> 00:31:20,656 liquidity or find partners 723 00:31:20,656 --> 00:31:21,055 that will. 724 00:31:21,996 --> 00:31:24,555 In the LightSpark SE, 725 00:31:24,555 --> 00:31:27,876 They hold the role of the SE. 726 00:31:28,096 --> 00:31:28,696 It's their SE. 727 00:31:29,436 --> 00:31:30,836 They are one of the two operators. 728 00:31:31,616 --> 00:31:33,316 And they're an SSP. 729 00:31:33,816 --> 00:31:35,776 An SSP, Spark Service Provider, 730 00:31:36,276 --> 00:31:40,055 you can think of it as quite similar to LSP, 731 00:31:40,816 --> 00:31:41,956 Lightning Service Provider, 732 00:31:42,176 --> 00:31:44,076 or an ASP, Arc Service Provider, 733 00:31:44,336 --> 00:31:47,596 or both Cashew and Fediment have Lightning Gateways. 734 00:31:47,776 --> 00:31:50,516 All of these servers, 735 00:31:50,836 --> 00:31:52,896 the purpose is connect to the Lightning Network 736 00:31:52,896 --> 00:31:56,036 and then provide, well, in some of those cases, 737 00:31:56,176 --> 00:31:57,676 provide liquidity to wallets. 738 00:31:57,836 --> 00:32:01,076 In the case of ARK, Lightning, and Spark, 739 00:32:01,696 --> 00:32:05,176 there needs to be liquidity for the wallets. 740 00:32:05,316 --> 00:32:09,096 And that's, so within the Spark universe, 741 00:32:09,516 --> 00:32:11,016 there's an SSP. 742 00:32:11,376 --> 00:32:15,636 And one entity can have one or more SSPs. 743 00:32:16,096 --> 00:32:17,336 It's not, you're not locked to one. 744 00:32:17,876 --> 00:32:20,076 You need at least one, but there can be multiple. 745 00:32:20,736 --> 00:32:22,436 And there's a million different combinations. 746 00:32:22,436 --> 00:32:27,536 Like you could literally have, like the entity doesn't have to be an SSP. 747 00:32:27,876 --> 00:32:33,256 So you could be an entity, you could have like four operators, four different companies or whatever. 748 00:32:33,636 --> 00:32:36,496 And then like none of them even needed to be the SSPs. 749 00:32:36,696 --> 00:32:38,016 That could be other SSPs. 750 00:32:38,295 --> 00:32:42,196 And as the entity, you could set up the SSPs, they could be permissionless. 751 00:32:42,416 --> 00:32:48,576 Or you could have an application process where you have to sign a business agreement to be an SSP within the entity. 752 00:32:48,576 --> 00:32:54,176 Those are the types of, getting back to what the rules are for SE, the SE can decide that. 753 00:32:54,516 --> 00:32:56,076 So explain, I don't fully understand. 754 00:32:56,236 --> 00:32:58,216 So what exactly is the SSB doing? 755 00:32:58,396 --> 00:33:03,336 Is their primary goal to connect to the lighting network and manage Bitcoin lighting network liquidity? 756 00:33:03,936 --> 00:33:05,276 It's a couple of things. 757 00:33:05,476 --> 00:33:07,516 One, the way Spark, another part of this. 758 00:33:07,916 --> 00:33:10,036 So I mentioned Spark is based on state chains. 759 00:33:10,816 --> 00:33:16,316 Another building block within Spark are payment trees. 760 00:33:16,716 --> 00:33:16,976 Right. 761 00:33:16,976 --> 00:33:28,196 So one of the challenges with Lightning for individuals is that you need at least one Lightning channel per user. 762 00:33:30,036 --> 00:33:33,536 And that creates a scaling constraint. 763 00:33:34,376 --> 00:33:39,216 With Spark, you do not open up a channel per user. 764 00:33:39,896 --> 00:33:45,036 Instead, they use these state coins from state chains. 765 00:33:45,036 --> 00:33:49,256 and a state coin can be a certain amount of Bitcoin. 766 00:33:50,096 --> 00:33:52,696 And then they divide that amount up 767 00:33:52,696 --> 00:33:55,576 into small denominations 768 00:33:55,576 --> 00:33:59,536 that are reflected as leaves on a tree. 769 00:33:59,976 --> 00:34:01,736 And the tree can be large. 770 00:34:01,736 --> 00:34:04,316 It can be like a 12-level deep tree. 771 00:34:04,476 --> 00:34:07,376 You can have dozens, hundreds, thousands of leaves. 772 00:34:07,676 --> 00:34:10,536 There's trade-offs to what you get with a bigger tree 773 00:34:10,536 --> 00:34:11,476 versus a smaller tree 774 00:34:11,476 --> 00:34:16,115 and all the different configurations of a tree. 775 00:34:16,635 --> 00:34:18,096 But that's a very important building block 776 00:34:18,096 --> 00:34:19,295 to understand with Spark. 777 00:34:21,896 --> 00:34:28,396 So there needs to be a liquidity provider, 778 00:34:28,635 --> 00:34:31,596 at least one, that's responsible for that tree 779 00:34:31,596 --> 00:34:35,216 that can swap leaves with wallets. 780 00:34:35,916 --> 00:34:37,335 So, okay, interesting. 781 00:34:38,016 --> 00:34:39,056 Two questions. 782 00:34:39,056 --> 00:34:43,196 One, is it arbitrary, the denominations of what can fit on the tree? 783 00:34:43,675 --> 00:34:46,315 That's another thing that the Spark entity can determine. 784 00:34:46,635 --> 00:34:46,795 Okay. 785 00:34:47,076 --> 00:34:50,856 And two, maybe you can give us a concrete example. 786 00:34:50,996 --> 00:34:51,576 I don't understand. 787 00:34:51,716 --> 00:34:54,016 What is the liquidity provider doing with this leaf? 788 00:34:54,135 --> 00:34:56,236 So if they're swapping out with a wallet, what does that look like? 789 00:34:56,236 --> 00:34:58,896 The other part is connecting to Lightning. 790 00:34:59,135 --> 00:34:59,376 Exactly. 791 00:34:59,596 --> 00:35:04,815 So if I have a Spark wallet and I want to pay David, but he's using Cash App, 792 00:35:05,196 --> 00:35:06,936 or he's using a Cashew wallet, or whatever, 793 00:35:06,936 --> 00:35:16,196 he's using like how do I pay him well I can scan a lightning invoice and then the you know 794 00:35:16,196 --> 00:35:24,356 one or more leaves of the spark tree which are which I own as part of my wallet would then be 795 00:35:24,356 --> 00:35:30,675 atomically swapped for Bitcoin and lightning to pay David very much like how cashew and 796 00:35:30,675 --> 00:35:35,516 fedement work right like when if you have a cashew wallet and you need to pay someone even 797 00:35:35,516 --> 00:35:40,576 if they're using cashew, but they're on a different mint, it has to be swapped into Bitcoin, sent over 798 00:35:40,576 --> 00:35:46,315 lightning, and then swapped back into IOU tokens. Now, how small can you denominate this? Because 799 00:35:46,315 --> 00:35:52,096 as an example, let's just say I get whatever, $10, whatever the denomination on the tree, 800 00:35:52,096 --> 00:35:57,416 I have a $10 leaf, but I make a one penny payment, a micropayment. How would that, can you do that 801 00:35:57,416 --> 00:36:03,295 first of all? And how would that work? You had a similar trade-off as like eCash, like eCash too. 802 00:36:03,295 --> 00:36:05,155 you have to, eCash is denominated 803 00:36:05,155 --> 00:36:06,675 and you have to make this, 804 00:36:07,295 --> 00:36:09,436 you have to determine like how small the denominations 805 00:36:09,436 --> 00:36:11,536 are. And it's a privacy 806 00:36:11,536 --> 00:36:13,396 versus data size trade-off 807 00:36:13,396 --> 00:36:15,716 with eCash. Like with eCash, 808 00:36:15,835 --> 00:36:17,496 from a privacy standpoint, ideally 809 00:36:17,496 --> 00:36:19,536 the denomination size 810 00:36:19,536 --> 00:36:20,556 is one sat. 811 00:36:21,776 --> 00:36:23,356 Well, I think we're going to go much smaller than that. 812 00:36:23,476 --> 00:36:25,216 I think actually that's one of the things I like about eCash. 813 00:36:25,216 --> 00:36:27,356 But that's not practical, though. Like if I send you a payment, it might be 814 00:36:27,356 --> 00:36:28,876 like terabytes in size. 815 00:36:29,016 --> 00:36:31,416 Totally. But I mean, one of the things I love about eCash 816 00:36:31,416 --> 00:36:33,196 and maybe this can work as well is if we're doing 817 00:36:33,196 --> 00:36:34,216 for the agents, right? 818 00:36:34,256 --> 00:36:34,976 I think one sat, 819 00:36:35,536 --> 00:36:35,776 if you're, 820 00:36:35,856 --> 00:36:36,696 I actually had this conversation 821 00:36:36,696 --> 00:36:39,036 with our new AI member 822 00:36:39,036 --> 00:36:40,536 who I want to sell docs, but. 823 00:36:40,916 --> 00:36:41,976 Oh, sorry. 824 00:36:43,476 --> 00:36:45,835 You can have like a one sat 825 00:36:45,835 --> 00:36:46,996 or even sub, 826 00:36:47,155 --> 00:36:49,276 but for perfect privacy, 827 00:36:49,416 --> 00:36:49,976 I meant like, 828 00:36:50,716 --> 00:36:52,096 that's the only denomination 829 00:36:52,096 --> 00:36:53,696 you have for perfect privacy. 830 00:36:54,056 --> 00:36:54,396 Oh. 831 00:36:54,536 --> 00:36:56,815 So if I sent you like a million sats, 832 00:36:56,976 --> 00:36:58,675 it would be a million tokens. 833 00:36:59,216 --> 00:37:00,736 That's why it doesn't scale well. 834 00:37:01,356 --> 00:37:01,756 Interesting. 835 00:37:01,756 --> 00:37:02,856 So, but you get, 836 00:37:02,856 --> 00:37:04,516 that's the best for privacy. 837 00:37:04,835 --> 00:37:05,835 But you got to be real. 838 00:37:05,916 --> 00:37:07,295 So usually you do like, 839 00:37:07,315 --> 00:37:07,696 you know, 840 00:37:07,756 --> 00:37:09,876 powers of two. 841 00:37:10,536 --> 00:37:11,976 So your denominations would be 842 00:37:11,976 --> 00:37:12,356 one, 843 00:37:12,456 --> 00:37:12,556 two, 844 00:37:12,655 --> 00:37:12,835 four, 845 00:37:12,916 --> 00:37:13,115 eight, 846 00:37:13,256 --> 00:37:13,675 16. 847 00:37:13,996 --> 00:37:14,276 Okay. 848 00:37:14,795 --> 00:37:16,615 So if I send you 20, 849 00:37:16,916 --> 00:37:19,756 then that would be a 16 token 850 00:37:19,756 --> 00:37:20,576 and a four token. 851 00:37:21,256 --> 00:37:21,276 So, 852 00:37:21,675 --> 00:37:23,396 and that applies to both 853 00:37:23,396 --> 00:37:25,036 e-cash systems 854 00:37:25,036 --> 00:37:25,916 and to 855 00:37:25,916 --> 00:37:27,756 tree-based systems. 856 00:37:27,756 --> 00:37:28,815 So again, 857 00:37:28,956 --> 00:37:30,655 just to use a very concrete example, 858 00:37:30,876 --> 00:37:31,996 I have a $10 leaf. 859 00:37:31,996 --> 00:37:32,916 I want to send a penny. 860 00:37:33,196 --> 00:37:34,175 How would that work? 861 00:37:34,376 --> 00:37:36,016 If the denominations are much larger. 862 00:37:36,155 --> 00:37:42,615 Well, your $10, you know, it might, let's get back to Spark. 863 00:37:42,936 --> 00:37:44,155 So a tree within Spark. 864 00:37:44,576 --> 00:37:51,036 You might have a leaf that is of value worth $10 of Bitcoin. 865 00:37:51,256 --> 00:37:52,436 So then you just have one leaf. 866 00:37:52,756 --> 00:38:01,795 Or maybe it's comprised of multiple leaves, like an $8, $8, and they're literally UTXS. 867 00:38:01,795 --> 00:38:02,196 Yeah, okay. 868 00:38:02,416 --> 00:38:03,295 They're literally Bitcoin. 869 00:38:03,536 --> 00:38:06,376 Each leaf in a spark tree is a Bitcoin transaction. 870 00:38:06,456 --> 00:38:07,256 Okay, that makes sense. 871 00:38:07,376 --> 00:38:09,756 So like you could have an $8 one and a $2 one. 872 00:38:10,356 --> 00:38:10,756 Got it. 873 00:38:10,776 --> 00:38:10,896 Right. 874 00:38:11,236 --> 00:38:16,396 So then you can start understanding unilateral exit a little bit better. 875 00:38:16,556 --> 00:38:16,815 Yeah. 876 00:38:16,815 --> 00:38:22,115 If I have, in this hypothetical example, I have a $10 balance and I have an $8 and a $2 leaf. 877 00:38:22,776 --> 00:38:25,456 Each of those is a Bitcoin transaction in this tree. 878 00:38:25,835 --> 00:38:25,996 Got it. 879 00:38:26,256 --> 00:38:29,876 And if I want a unilateral exit, I have to broadcast both. 880 00:38:29,876 --> 00:38:33,716 and not only do I have to broadcast each of those 881 00:38:33,716 --> 00:38:35,815 I have to broadcast every transaction 882 00:38:35,815 --> 00:38:40,696 on my portion of the tree 883 00:38:40,696 --> 00:38:42,256 all the way to the root of the tree 884 00:38:42,256 --> 00:38:43,996 so just to be clear on this 885 00:38:43,996 --> 00:38:46,756 I understand it much better with UTXOs 886 00:38:46,756 --> 00:38:49,835 so if I have one UTXO, I make a payment 887 00:38:49,835 --> 00:38:53,736 I get now whatever, my change address 888 00:38:53,736 --> 00:38:56,476 is my new UTXO that I'm now cussing 889 00:38:56,476 --> 00:38:57,576 is that the way this would work too? 890 00:38:57,675 --> 00:38:59,236 so in that $10 one penny example 891 00:38:59,236 --> 00:39:00,276 that's an extreme example 892 00:39:00,276 --> 00:39:01,896 but would I then end up 893 00:39:01,896 --> 00:39:03,476 with two new leaves 894 00:39:03,476 --> 00:39:04,135 or not 895 00:39:04,135 --> 00:39:05,276 only one of the leaves 896 00:39:05,276 --> 00:39:05,655 is mine 897 00:39:05,655 --> 00:39:06,396 but does it create 898 00:39:06,396 --> 00:39:07,436 well if you brought 899 00:39:07,436 --> 00:39:08,835 if you unilaterally exit 900 00:39:08,835 --> 00:39:09,236 you're 901 00:39:09,236 --> 00:39:10,916 you're exiting 902 00:39:10,916 --> 00:39:12,115 the spark system 903 00:39:12,115 --> 00:39:12,556 right 904 00:39:12,556 --> 00:39:13,655 then you'd just have 905 00:39:13,655 --> 00:39:14,876 bitcoin on chain 906 00:39:14,876 --> 00:39:15,376 and what I 907 00:39:15,376 --> 00:39:16,396 but I would only have to 908 00:39:16,396 --> 00:39:16,736 so 909 00:39:16,736 --> 00:39:18,256 but what happens between 910 00:39:18,256 --> 00:39:18,815 you know 911 00:39:18,815 --> 00:39:19,476 A and Z 912 00:39:19,476 --> 00:39:20,696 before I want to exit the chain 913 00:39:20,696 --> 00:39:22,216 if I do a whole bunch of payments 914 00:39:22,216 --> 00:39:22,655 between them 915 00:39:22,655 --> 00:39:23,376 do I have to save 916 00:39:23,376 --> 00:39:24,356 each of those UTXOs 917 00:39:24,356 --> 00:39:25,056 as leaves and publish 918 00:39:25,056 --> 00:39:26,056 certainly not 919 00:39:26,056 --> 00:39:27,135 like there's probably one 920 00:39:27,135 --> 00:39:27,996 well also they're not really 921 00:39:27,996 --> 00:39:28,835 because there's 922 00:39:28,835 --> 00:39:32,036 There's one UTXO for the entire state coin. 923 00:39:32,356 --> 00:39:35,516 A state coin is then split up into many leaves in a tree. 924 00:39:35,736 --> 00:39:38,556 Think of a big tree with hundreds of leaves. 925 00:39:39,856 --> 00:39:40,536 Is it similar to Merkle? 926 00:39:40,536 --> 00:39:42,896 All of that represents one UTXO. 927 00:39:42,996 --> 00:39:44,116 Similar to a Merkle tree? 928 00:39:44,576 --> 00:39:44,896 Yes. 929 00:39:45,036 --> 00:39:45,216 Okay. 930 00:39:45,556 --> 00:39:45,716 Yep. 931 00:39:46,315 --> 00:39:51,335 So all of that is just this representation off-chain 932 00:39:51,335 --> 00:39:53,096 that Bitcoin doesn't know anything about 933 00:39:53,096 --> 00:39:57,576 that is representing a distribution of value 934 00:39:57,576 --> 00:39:59,496 across that one UTXO. 935 00:39:59,675 --> 00:40:01,376 That's where you're getting the scaling factor. 936 00:40:02,236 --> 00:40:02,976 So you can do like, 937 00:40:03,716 --> 00:40:06,196 I mean, it depends on the depth and size of the tree, 938 00:40:06,275 --> 00:40:08,315 but you can do like thousands of payments 939 00:40:08,315 --> 00:40:12,016 before that tree expires 940 00:40:12,016 --> 00:40:15,196 and is no longer can be used. 941 00:40:15,576 --> 00:40:17,236 We can get into that as well if we want, 942 00:40:18,175 --> 00:40:18,916 why that is. 943 00:40:18,916 --> 00:40:22,756 But it's tied to the unilateral exit part. 944 00:40:24,196 --> 00:40:26,556 But yeah, that's where you're getting 945 00:40:26,556 --> 00:40:29,216 nice scaling properties by sharing that UTXO 946 00:40:29,216 --> 00:40:30,016 across all these payments. 947 00:40:30,155 --> 00:40:31,655 Okay, so two questions on that. 948 00:40:31,996 --> 00:40:35,155 So let's say before I unilaterally exit, 949 00:40:35,216 --> 00:40:37,775 I'm doing whatever, a thousand payments. 950 00:40:38,996 --> 00:40:41,076 How is that updated in the tree? 951 00:40:41,476 --> 00:40:43,756 Or how, I guess there's two questions. 952 00:40:43,876 --> 00:40:45,636 One, whenever I do want to unilaterally exit, 953 00:40:45,636 --> 00:40:51,096 if the operator or the entity is the one that has the UTXO, 954 00:40:51,756 --> 00:40:54,835 how do I, as an individual user, get unilateral exit? 955 00:40:54,835 --> 00:40:57,036 does the entire tree have to close out 956 00:40:57,036 --> 00:40:58,576 and go back to the chain? 957 00:40:58,655 --> 00:41:00,696 Or is there a way for me individually? 958 00:41:01,136 --> 00:41:02,476 For the unilateral exit? 959 00:41:02,636 --> 00:41:02,815 Yeah. 960 00:41:03,616 --> 00:41:04,936 Like, does that close it for everyone? 961 00:41:05,295 --> 00:41:08,016 Let's say you keep this relatively simple. 962 00:41:08,295 --> 00:41:11,016 Only one leaf you want to exit with. 963 00:41:11,696 --> 00:41:14,876 You sort of follow that up the tree to the root 964 00:41:14,876 --> 00:41:17,036 and all of those branches, 965 00:41:17,275 --> 00:41:18,256 that branch basically, 966 00:41:18,396 --> 00:41:20,556 and all the associated transactions, 967 00:41:20,556 --> 00:41:22,076 those all need to be broadcast. 968 00:41:23,556 --> 00:41:24,076 Got it. 969 00:41:24,076 --> 00:41:26,576 So it's just a portion. 970 00:41:26,576 --> 00:41:27,556 It's a portion of the, 971 00:41:27,616 --> 00:41:28,835 it's only a portion of the tree. 972 00:41:29,175 --> 00:41:29,275 Right. 973 00:41:29,356 --> 00:41:31,076 But let's say I am now intermingled 974 00:41:31,076 --> 00:41:32,815 with a whole bunch of other users in the tree. 975 00:41:34,155 --> 00:41:35,155 Who's paying for that? 976 00:41:35,295 --> 00:41:35,335 Like, 977 00:41:35,356 --> 00:41:36,596 and do they, 978 00:41:36,696 --> 00:41:39,216 do they get exited from their leaves as well 979 00:41:39,216 --> 00:41:40,616 that were mixed up with my leaves 980 00:41:40,616 --> 00:41:41,315 or how does that work? 981 00:41:41,356 --> 00:41:41,835 They would. 982 00:41:41,916 --> 00:41:42,416 And I, 983 00:41:42,416 --> 00:41:44,756 I don't know the answer to like, 984 00:41:44,976 --> 00:41:46,856 I'm guessing the SSP 985 00:41:46,856 --> 00:41:47,996 will, 986 00:41:48,116 --> 00:41:49,576 would swap leaves for them. 987 00:41:49,655 --> 00:41:50,795 I actually don't know the answer to that. 988 00:41:51,036 --> 00:41:51,396 God. 989 00:41:51,496 --> 00:41:51,716 Sorry, 990 00:41:51,956 --> 00:41:52,175 David, 991 00:41:52,236 --> 00:41:52,896 what did you ask? 992 00:41:53,295 --> 00:41:53,736 I was just, 993 00:41:53,736 --> 00:42:01,116 I'm just still trying to understand, do I have like a private key that lets me sign transactions? 994 00:42:01,795 --> 00:42:06,576 Like if I want to broadcast all of these things, I guess it kind of overlaps with what Max was just asking. 995 00:42:06,696 --> 00:42:13,496 But if I, I would guess that this tree has some mix of my stuff and other people's stuff if I've used it effectively for payments. 996 00:42:14,056 --> 00:42:19,136 And so I'm just wondering how do I broadcast all of that and how does that affect other people? 997 00:42:19,136 --> 00:42:24,655 Well, maybe we, since it's pretty complicated, why don't we stick to the happy path versus the unilateral? 998 00:42:24,896 --> 00:42:26,516 Unilateral exit's very complicated. 999 00:42:26,815 --> 00:42:28,476 They don't even fully have it solved yet. 1000 00:42:29,675 --> 00:42:31,016 So let's, let's. 1001 00:42:31,136 --> 00:42:32,335 Wait a second, that sounds like a red flag. 1002 00:42:33,396 --> 00:42:36,136 Well, I mean, we can, yeah, I wouldn't say it's red. 1003 00:42:36,256 --> 00:42:37,436 I mean, software's complicated. 1004 00:42:37,835 --> 00:42:38,536 They are. 1005 00:42:38,736 --> 00:42:39,416 I'm mostly kidding, yeah. 1006 00:42:39,456 --> 00:42:40,636 Making progress towards that. 1007 00:42:40,815 --> 00:42:40,856 Right. 1008 00:42:43,136 --> 00:42:48,396 But also, yeah, we also should, unilateral exit is not practical for the majority of users. 1009 00:42:48,396 --> 00:42:53,476 It's more, in my opinion, it's more of a regulatory position than a user benefit. 1010 00:42:53,956 --> 00:42:56,216 But we can talk about that later if you want. 1011 00:42:56,315 --> 00:42:58,596 But let's talk about how does it work in the happy path case. 1012 00:42:59,056 --> 00:43:03,096 So like, yeah, there might be a tree with a bunch of leaves. 1013 00:43:04,076 --> 00:43:08,136 And each of the three of us have our own wallets. 1014 00:43:09,175 --> 00:43:13,196 And some of our coins could be in tree one. 1015 00:43:13,356 --> 00:43:14,815 Some of our coins are in tree two. 1016 00:43:14,916 --> 00:43:16,436 They're all sort of mingled together. 1017 00:43:16,436 --> 00:43:18,775 let's say I make a payment to someone 1018 00:43:18,775 --> 00:43:20,036 and 1019 00:43:20,036 --> 00:43:22,295 you know of value 1020 00:43:22,295 --> 00:43:23,896 13 so 1021 00:43:23,896 --> 00:43:26,636 let's say it's like powers of 2 1022 00:43:26,636 --> 00:43:28,795 so I need a coin of 8, 4 1023 00:43:28,795 --> 00:43:30,275 and 1 and let's say I have 1024 00:43:30,275 --> 00:43:32,775 that in my wallet if I don't then 1025 00:43:32,775 --> 00:43:34,396 you can do a swap with the 1026 00:43:34,396 --> 00:43:35,956 server 1027 00:43:35,956 --> 00:43:38,476 to get the appropriate change 1028 00:43:38,476 --> 00:43:40,576 but let's say I have 8, 4 and 1 1029 00:43:40,576 --> 00:43:42,596 great that's what I need for my payment so 1030 00:43:42,596 --> 00:43:43,956 we take those three leaves 1031 00:43:43,956 --> 00:43:46,795 and then I make my payment. 1032 00:43:47,335 --> 00:43:49,016 If it's going to someone else 1033 00:43:49,016 --> 00:43:53,236 that has a wallet on the same Spark entity, 1034 00:43:54,716 --> 00:43:55,916 then I think, 1035 00:43:56,416 --> 00:43:59,196 you know, 1036 00:43:59,436 --> 00:44:00,856 then they would just be assigned 1037 00:44:00,856 --> 00:44:03,536 one or more leaves to receive that value. 1038 00:44:03,815 --> 00:44:06,256 Again, so the server needs to manage that. 1039 00:44:08,416 --> 00:44:11,916 Whether the SSP does that by itself 1040 00:44:11,916 --> 00:44:14,155 or does it in conjunction with Spark operators 1041 00:44:14,155 --> 00:44:16,356 is an unknown to me still. 1042 00:44:17,216 --> 00:44:19,476 But definitely the SSP would have to be involved 1043 00:44:19,476 --> 00:44:22,076 and maybe they can do it all by themselves. 1044 00:44:23,216 --> 00:44:25,155 And then if you are making a payment 1045 00:44:25,155 --> 00:44:26,736 outside of that Spark entity, 1046 00:44:26,876 --> 00:44:28,155 but to some other Spark entity 1047 00:44:28,155 --> 00:44:30,335 or to any other system, 1048 00:44:30,775 --> 00:44:32,716 then it does what I said earlier, 1049 00:44:32,716 --> 00:44:34,936 which is, you know, swaps it to Lightning 1050 00:44:34,936 --> 00:44:36,696 and then makes the payment that way. 1051 00:44:37,716 --> 00:44:40,076 So it sounds like, just to be clear, 1052 00:44:40,076 --> 00:44:42,416 We have to go a little bit more in the details on this, 1053 00:44:42,416 --> 00:44:45,536 but the liquidity provider, 1054 00:44:45,536 --> 00:44:48,136 a lot of what they're doing is kind of like 1055 00:44:48,136 --> 00:44:52,775 mashing together different pre-denominated notes 1056 00:44:52,775 --> 00:44:55,016 so that everyone can get paid. 1057 00:44:55,016 --> 00:44:57,275 Yeah, it's very much, that's how eCash works too. 1058 00:44:57,275 --> 00:45:08,171 So it I mean eCash doesn use a tree but eCash has all the denominations as well and has to manage that It is easier in eCash because 1059 00:45:08,171 --> 00:45:10,231 it's not managing these complicated trees. 1060 00:45:10,351 --> 00:45:10,451 Right. 1061 00:45:12,591 --> 00:45:14,191 You know, but of course 1062 00:45:14,191 --> 00:45:16,031 trade-offs. Trade-offs. 1063 00:45:16,851 --> 00:45:18,231 eCash, like all the 1064 00:45:18,231 --> 00:45:20,171 money can be stolen at any point in time by 1065 00:45:20,171 --> 00:45:21,171 the Mint, right? 1066 00:45:22,331 --> 00:45:22,851 So, 1067 00:45:23,091 --> 00:45:24,511 yeah. 1068 00:45:25,791 --> 00:45:26,891 There's a question. 1069 00:45:26,891 --> 00:45:31,711 I just want to raise from Austin and this is kind of reflects something I was asking I think 1070 00:45:31,711 --> 00:45:37,751 Austin was around but he's asking what's the motivation to become an entity I still think 1071 00:45:37,751 --> 00:45:43,691 having more grounding in what what an entity looks like and why people choose to run entities 1072 00:45:43,691 --> 00:45:47,831 could help because then it also helps understand why people choose to be operators on an entity 1073 00:45:47,831 --> 00:45:54,911 versus create a new entity and how do SSPs fit into that is there is it basically kind of like a 1074 00:45:54,911 --> 00:45:56,911 new type of banking institution. 1075 00:45:57,631 --> 00:45:59,331 And so they would hope to collect fees. 1076 00:45:59,491 --> 00:46:00,351 You want to make money. 1077 00:46:01,711 --> 00:46:02,691 Via fees. 1078 00:46:02,891 --> 00:46:05,211 You can presumably make money via some sort of 1079 00:46:05,211 --> 00:46:05,971 fees or loans. 1080 00:46:05,971 --> 00:46:07,291 The fee structure. 1081 00:46:07,571 --> 00:46:10,211 So I'll start by stating LightSpark's published 1082 00:46:10,211 --> 00:46:12,071 fee structure, which is 1083 00:46:12,071 --> 00:46:16,251 the fees for the Spark 1084 00:46:16,251 --> 00:46:18,111 operators, like the Spark entity 1085 00:46:18,111 --> 00:46:19,911 itself, is currently free. 1086 00:46:20,451 --> 00:46:22,291 And they say in the future will be a small 1087 00:46:22,291 --> 00:46:24,131 flat fee. That's what they say. 1088 00:46:24,911 --> 00:46:26,251 But it could be anything. 1089 00:46:27,831 --> 00:46:29,031 Meaning it could be a flat fee, 1090 00:46:29,151 --> 00:46:29,731 it could be a percentage, 1091 00:46:29,971 --> 00:46:31,251 it could be whatever model 1092 00:46:31,251 --> 00:46:32,951 the entity wants to do. 1093 00:46:34,251 --> 00:46:35,391 There's a second fee, though, 1094 00:46:35,451 --> 00:46:37,671 which is the Lightning payment. 1095 00:46:38,271 --> 00:46:38,971 Actually, sorry, 1096 00:46:39,051 --> 00:46:39,991 there's three components 1097 00:46:39,991 --> 00:46:40,991 to payments on the system. 1098 00:46:41,191 --> 00:46:43,211 One is Spark itself. 1099 00:46:43,651 --> 00:46:44,831 Then there's the SSP, 1100 00:46:45,771 --> 00:46:47,491 which is doing these swaps 1101 00:46:47,491 --> 00:46:48,891 from the Spark world 1102 00:46:48,891 --> 00:46:49,771 to the Lightning world 1103 00:46:49,771 --> 00:46:50,951 to make a payment. 1104 00:46:51,291 --> 00:46:51,991 And then the third is 1105 00:46:51,991 --> 00:46:53,091 over the Lightning network itself, 1106 00:46:53,191 --> 00:46:54,491 all the nodes in the Lightning network 1107 00:46:54,491 --> 00:46:56,211 along that route charge their fee. 1108 00:46:56,531 --> 00:46:59,011 So there's like three components to the fee. 1109 00:46:59,911 --> 00:47:02,291 So why become an entity? 1110 00:47:02,771 --> 00:47:05,911 It's because you want to have lots, 1111 00:47:06,591 --> 00:47:07,771 you know, a billion users 1112 00:47:07,771 --> 00:47:09,271 using all kinds of wallets 1113 00:47:09,271 --> 00:47:11,591 that are connected to your entity. 1114 00:47:12,071 --> 00:47:13,171 You're in charge. 1115 00:47:13,591 --> 00:47:16,271 So you can choose to just be the only operator 1116 00:47:16,271 --> 00:47:18,551 or you can choose just two operators. 1117 00:47:19,271 --> 00:47:21,051 You can choose 80-20. 1118 00:47:21,331 --> 00:47:22,391 Like let's say it's my entity. 1119 00:47:22,391 --> 00:47:26,351 and then David, you're like, oh, that was a really good idea, Steve. 1120 00:47:27,011 --> 00:47:30,511 And you seem to have a lot of traction and have a lot of business. 1121 00:47:30,811 --> 00:47:32,511 I'd like to be part of that. 1122 00:47:32,951 --> 00:47:34,611 And I'd be like, yeah, I do want a second operator 1123 00:47:34,611 --> 00:47:36,231 because I want a better regulatory position 1124 00:47:36,231 --> 00:47:43,111 and I want all my customers to believe I'm not going to bug them. 1125 00:47:43,631 --> 00:47:47,471 So by having this independent company join as an operator, great, 1126 00:47:47,551 --> 00:47:48,311 I get some benefit. 1127 00:47:48,611 --> 00:47:50,831 But because I already developed a good business here, 1128 00:47:50,831 --> 00:47:52,931 I'll only give you 20% cut. 1129 00:47:53,391 --> 00:47:53,451 Right. 1130 00:47:53,571 --> 00:47:57,931 So, and then we, and then also I get to decide what the fees are. 1131 00:47:58,011 --> 00:47:58,591 I can change them. 1132 00:47:58,691 --> 00:48:00,191 I mean, I can change them whenever I want. 1133 00:48:00,271 --> 00:48:05,391 I can switch from free to small flat fee to large flat fee to percentage or whatever. 1134 00:48:05,891 --> 00:48:07,591 And then give you a 20% cut. 1135 00:48:08,171 --> 00:48:20,591 And the good business here that you're, you know, hypothetically creating is that you have effectively a new type of bank and you have a lot of customers who are using your banking services with a wallet that is 1136 00:48:20,591 --> 00:48:21,891 proprietary to your entity? 1137 00:48:22,971 --> 00:48:23,711 Is that true? 1138 00:48:25,251 --> 00:48:27,051 This would be, like, there could be 1139 00:48:27,051 --> 00:48:28,991 any wallet 1140 00:48:28,991 --> 00:48:29,851 could use this. 1141 00:48:30,811 --> 00:48:32,971 For example, I mean, what we 1142 00:48:32,971 --> 00:48:34,631 know, like, Fax today, like, 1143 00:48:34,791 --> 00:48:36,971 LightSpark's the only entity that I'm aware 1144 00:48:36,971 --> 00:48:38,971 of, and Wallet 1145 00:48:38,971 --> 00:48:40,551 of Satoshi is using it, and 1146 00:48:40,551 --> 00:48:42,671 is it Blitz or 1147 00:48:42,671 --> 00:48:44,531 Blix, and there's so many different 1148 00:48:44,531 --> 00:48:46,931 wallets. There's several different 1149 00:48:46,931 --> 00:48:48,871 wallets that are using this entity, 1150 00:48:49,011 --> 00:48:50,511 so it's not proprietary. I mean, 1151 00:48:50,591 --> 00:48:53,631 Again, it's whatever the entity wants to do. 1152 00:48:53,891 --> 00:48:57,811 An entity could make it so that no one can use their system except their own wallet. 1153 00:48:58,011 --> 00:48:58,631 You could do that. 1154 00:48:58,971 --> 00:49:00,651 But that's not how LightSpark's entity works. 1155 00:49:01,051 --> 00:49:02,211 They're open for business. 1156 00:49:02,351 --> 00:49:06,851 They want as many wallets as possible because they want as many payments as possible because they'll make more money. 1157 00:49:06,851 --> 00:49:17,951 If I had to zoom out at the 10,000-foot view level, my take on all of this is Bitcoin is money, real money for the world. 1158 00:49:17,951 --> 00:49:19,931 and we have some decentralized payment infrastructure, 1159 00:49:20,091 --> 00:49:21,271 but the vast majority of people 1160 00:49:21,271 --> 00:49:23,271 are not going to use that payment infrastructure themselves 1161 00:49:23,271 --> 00:49:25,091 because it's expensive and hard to run servers. 1162 00:49:25,671 --> 00:49:27,251 Therefore, banks are going to exist. 1163 00:49:27,371 --> 00:49:28,271 And this was an early point. 1164 00:49:28,411 --> 00:49:30,251 I forget if it was Satoshi or Al Finney. 1165 00:49:30,631 --> 00:49:31,731 It was just like, there's going to be banks. 1166 00:49:32,231 --> 00:49:34,111 Now, how are those banks going to work? 1167 00:49:34,251 --> 00:49:36,611 Well, there's a whole wide spectrum, right? 1168 00:49:36,671 --> 00:49:38,711 And this is effectively, I mean, to your question, 1169 00:49:38,851 --> 00:49:40,651 like why would you run an entity? 1170 00:49:41,351 --> 00:49:45,751 Depending on your sort of cynical or less cynical view, 1171 00:49:45,751 --> 00:49:49,331 The cynical view would be because you want to rent-seek from customers you already have. 1172 00:49:49,431 --> 00:49:50,531 That's what Stripe is doing with Tempo. 1173 00:49:51,411 --> 00:49:55,151 That's what Google is doing with Gunkle or whatever it is. 1174 00:49:56,131 --> 00:50:00,771 The less cynical view would be because you're competing in a free market and your bank can 1175 00:50:00,771 --> 00:50:06,551 offer better services, whether that's more trust, more transparency, better payment services, 1176 00:50:06,791 --> 00:50:08,811 cheaper costs because you're better connected. 1177 00:50:09,111 --> 00:50:10,051 There's a whole spectrum. 1178 00:50:10,571 --> 00:50:14,551 Now, why would someone run one of these Spark entities 1179 00:50:14,551 --> 00:50:20,791 versus doing a totally centralized blockchain like Google or Stripe 1180 00:50:20,791 --> 00:50:22,711 versus an eCash mint? 1181 00:50:22,851 --> 00:50:23,771 Well, they have different trade-offs. 1182 00:50:23,931 --> 00:50:26,471 And a lot of it, if I put on my cynical hat again, 1183 00:50:26,471 --> 00:50:29,391 is because you want regulatory cover. 1184 00:50:29,871 --> 00:50:32,831 So you have other people assigners in there because that gets you out of it. 1185 00:50:32,931 --> 00:50:34,731 Or if I have my less cynical hat, 1186 00:50:35,151 --> 00:50:37,651 I actually want to be part of a decentralized consortium 1187 00:50:37,651 --> 00:50:38,871 and it's more like Visa 1188 00:50:38,871 --> 00:50:40,351 and we're all actually sharing 1189 00:50:40,351 --> 00:50:41,891 and we're all providing value 1190 00:50:41,891 --> 00:50:42,431 and it's real. 1191 00:50:42,851 --> 00:50:44,131 If I'm more cynical, 1192 00:50:44,851 --> 00:50:47,411 then it's just a slightly 1193 00:50:47,411 --> 00:50:49,411 different version of theater 1194 00:50:49,411 --> 00:50:52,931 with slightly less theatrics. 1195 00:50:54,131 --> 00:50:55,491 And then there's the third option, 1196 00:50:55,651 --> 00:50:56,251 which is, 1197 00:50:56,611 --> 00:50:58,251 and one day when we get the mints, 1198 00:50:58,331 --> 00:50:59,111 if we talk about e-cashments, 1199 00:50:59,211 --> 00:50:59,491 it's like, 1200 00:50:59,551 --> 00:51:00,271 I'm just going to run my own. 1201 00:51:00,351 --> 00:51:01,891 I'm going to provide my own services 1202 00:51:01,891 --> 00:51:02,831 and you can take it or leave it 1203 00:51:02,831 --> 00:51:03,851 and easily transfer. 1204 00:51:04,251 --> 00:51:05,591 But as I see it, 1205 00:51:05,591 --> 00:51:06,971 it's just looking at 1206 00:51:06,971 --> 00:51:08,811 what's the new tech stack for banks. 1207 00:51:09,911 --> 00:51:12,471 We're frying people's brains. 1208 00:51:12,811 --> 00:51:15,451 So Scott, if there's anything we've, 1209 00:51:15,551 --> 00:51:16,991 admittedly it's complicated. 1210 00:51:17,391 --> 00:51:18,331 If there's anything we've said though 1211 00:51:18,331 --> 00:51:19,431 that you need clarification, 1212 00:51:19,711 --> 00:51:22,071 feel free to shout out. 1213 00:51:22,071 --> 00:51:24,251 My brain is a little fried too. 1214 00:51:24,511 --> 00:51:26,671 I don't know that I fully understand. 1215 00:51:27,351 --> 00:51:28,711 I understand like in the example 1216 00:51:28,711 --> 00:51:30,091 that you gave, Steve, 1217 00:51:30,131 --> 00:51:32,111 you said that you are running this business 1218 00:51:32,111 --> 00:51:33,211 and it's a really good business. 1219 00:51:33,951 --> 00:51:35,691 And you sort of offer 1220 00:51:35,691 --> 00:51:38,711 that I could join in and be an operator on your business. 1221 00:51:38,971 --> 00:51:44,151 I'm trying to understand just because I think it'll help clarify what the layers of this 1222 00:51:44,151 --> 00:51:50,271 technology, what the entity, what function it serves, what it optimizes for, is what 1223 00:51:50,271 --> 00:51:51,471 makes that a good business? 1224 00:51:51,551 --> 00:51:52,671 You have a bunch of fees. 1225 00:51:53,071 --> 00:51:55,211 If I join as an operator, am I sharing in those fees? 1226 00:51:55,431 --> 00:51:56,631 What gets you lots of fees? 1227 00:51:56,711 --> 00:52:01,051 I assume it's you have a lot of wallets or value deployed or payments happening. 1228 00:52:01,491 --> 00:52:05,031 So I'm just trying to get a better sense of just what's going on here. 1229 00:52:05,791 --> 00:52:05,931 Yeah. 1230 00:52:06,391 --> 00:52:08,111 I mean, that part's pretty simple to understand. 1231 00:52:08,231 --> 00:52:11,891 I think you, like if there, you want payments to increase. 1232 00:52:11,891 --> 00:52:13,691 So you need wallets and you need users. 1233 00:52:13,691 --> 00:52:16,451 So let's say you have users, wallets and payments happening. 1234 00:52:16,751 --> 00:52:20,851 Those payments flow through one or more entities, right? 1235 00:52:21,231 --> 00:52:25,411 So if you're an entity that has a lot of payments flowing through it, you can, you can make money. 1236 00:52:25,671 --> 00:52:27,591 That, that seems pretty straightforward to me. 1237 00:52:28,651 --> 00:52:29,051 Right. 1238 00:52:29,191 --> 00:52:34,711 And then, and then, but then it begs the question, well, okay, why don't I just want to take all that money, capture all that money? 1239 00:52:34,711 --> 00:52:36,231 why do I want to have multiple operators? 1240 00:52:36,771 --> 00:52:39,251 That gets into the, well, the system, 1241 00:52:40,151 --> 00:52:42,131 well, a big value proposition with Spark, 1242 00:52:42,731 --> 00:52:46,891 intended value proposition is no KYC, right? 1243 00:52:47,111 --> 00:52:48,611 And so if you take that position, 1244 00:52:48,851 --> 00:52:51,931 you need to be able to defend that legally 1245 00:52:51,931 --> 00:52:53,931 in regulatory bodies. 1246 00:52:54,331 --> 00:52:56,331 And it's a stronger position 1247 00:52:56,331 --> 00:52:58,691 if it's a federation versus one entity. 1248 00:52:59,631 --> 00:53:00,871 And so that is, 1249 00:53:01,871 --> 00:53:04,331 and also even with customers too. 1250 00:53:04,711 --> 00:53:12,471 Because if you have two operators, then you can tell customers, hey, I cannot unilaterally cheat you. 1251 00:53:12,891 --> 00:53:18,451 It has to be, there has to be collusion among multiple parties to steal your money, right? 1252 00:53:18,531 --> 00:53:22,471 So it's, it's a, you know, it could be a marketing benefit to your customers. 1253 00:53:22,771 --> 00:53:25,671 It definitely creates a stronger regulatory position. 1254 00:53:25,791 --> 00:53:27,031 That's why you'd have multiple operators. 1255 00:53:27,511 --> 00:53:30,631 And do you get most of that value by bringing in one new operator? 1256 00:53:30,631 --> 00:53:33,971 Or is it much, much better to have a thousand operators? 1257 00:53:34,711 --> 00:53:38,671 That's a question for our Bitcoin economists that we fund. 1258 00:53:38,891 --> 00:53:41,151 Well, more like your lawyers, right? 1259 00:53:41,311 --> 00:53:43,711 I mean, I'm not a lawyer, 1260 00:53:43,971 --> 00:53:46,231 but I think going from one to two 1261 00:53:46,231 --> 00:53:49,331 is the majority of the value regulatory-wise, 1262 00:53:49,571 --> 00:53:51,891 but the more the merrier. 1263 00:53:52,871 --> 00:53:55,231 Also, economics. 1264 00:53:55,671 --> 00:53:57,831 So another reason, Max pointed out another reason 1265 00:53:57,831 --> 00:53:59,311 you'd want to join as an operator. 1266 00:53:59,951 --> 00:54:01,691 Like, let's say you're a big financial, 1267 00:54:01,991 --> 00:54:04,351 let's say you're a financial institution with a wallet. 1268 00:54:04,711 --> 00:54:09,211 Let's just say you have a wallet and you don't want to stand up your own entity. 1269 00:54:10,111 --> 00:54:10,611 It's just too much. 1270 00:54:13,191 --> 00:54:16,371 It's not really where you want your business to be and it's too much overhead. 1271 00:54:16,731 --> 00:54:25,411 So you can join someone else's entity or use someone else's entity, but you might want to join as an operator for the reason Mac said earlier, which is if you're an operator, then you can. 1272 00:54:25,411 --> 00:54:36,931 And as long as you have your shit together and your servers, your infrastructure is not attacked, then you can be assured that the overall system won't be either. 1273 00:54:37,091 --> 00:54:43,631 So it gives you confidence, gives you more control to make sure your customers are safe from theft. 1274 00:54:43,891 --> 00:54:47,951 Of course, you can still be attacked, but at least you're in charge of your own IT department. 1275 00:54:48,491 --> 00:54:50,411 You have no idea that these other companies. 1276 00:54:50,891 --> 00:54:53,151 So that's the reason you want to become an operator. 1277 00:54:53,151 --> 00:54:55,111 and then as far as economics 1278 00:54:55,111 --> 00:54:56,511 like if you had an entity 1279 00:54:56,511 --> 00:54:58,931 I was like a week ago I was thinking that 1280 00:54:58,931 --> 00:55:01,551 as an entity you'd want to minimize the number of operators 1281 00:55:01,551 --> 00:55:03,431 because you don't want to split the fees up as much 1282 00:55:03,431 --> 00:55:05,191 but again you make the rules 1283 00:55:05,191 --> 00:55:06,351 so it could be like 1284 00:55:06,351 --> 00:55:08,811 okay I get 80% 1285 00:55:08,811 --> 00:55:10,831 the second operator comes and gets 1286 00:55:10,831 --> 00:55:13,011 19% and then 1287 00:55:13,011 --> 00:55:14,711 the next 100 that join 1288 00:55:14,711 --> 00:55:16,291 because their value proposition 1289 00:55:16,291 --> 00:55:18,011 they just want to have this trust 1290 00:55:18,011 --> 00:55:20,431 well you get like .01% 1291 00:55:20,431 --> 00:55:22,331 and okay so 1292 00:55:22,331 --> 00:55:29,411 two things there. One, I think that's a really important point because if you zoom out again, 1293 00:55:29,731 --> 00:55:35,591 it's not just the banks. I'll reframe that. The banks and the payment networks are both under 1294 00:55:35,591 --> 00:55:41,171 attack. And what I'm increasingly seeing very clearly now is everyone's coming for Visa. 1295 00:55:42,511 --> 00:55:47,191 And that's what Stripe is trying to do with their consortium. That's what Spark is doing here. 1296 00:55:47,831 --> 00:55:51,311 And there's going to be network effects. There's probably going to be winner take most. 1297 00:55:52,151 --> 00:55:54,511 Maybe that is a little bit less 1298 00:55:54,511 --> 00:55:56,211 and interoperable with Bitcoin Lightning World. 1299 00:55:56,371 --> 00:55:57,511 That's an interesting question. 1300 00:55:58,271 --> 00:55:59,551 But to your point, 1301 00:55:59,731 --> 00:56:01,131 this is, or to your point, 1302 00:56:01,211 --> 00:56:02,051 same to my earlier point, 1303 00:56:02,491 --> 00:56:04,631 that's actually, that's a big differentiator 1304 00:56:04,631 --> 00:56:06,131 that I don't think a lot of these companies understand that. 1305 00:56:06,151 --> 00:56:08,971 Because if you're going and working with Stripe on Tempo, 1306 00:56:09,731 --> 00:56:12,231 you're basically giving Stripe the keys to the kingdom, 1307 00:56:12,471 --> 00:56:13,251 is my understanding, 1308 00:56:13,371 --> 00:56:15,551 if it's a centralized blockchain or database. 1309 00:56:16,231 --> 00:56:17,371 But in this world, 1310 00:56:17,691 --> 00:56:19,091 this gets at what Google is saying 1311 00:56:19,091 --> 00:56:20,411 with Credibly Neutral so much better. 1312 00:56:20,411 --> 00:56:27,991 Like every bank, if you're invited to join the consortium, you should want to do this because now you don't have to have that trust, whether or not the economics are there. 1313 00:56:28,031 --> 00:56:29,111 I think that's a really important point. 1314 00:56:29,651 --> 00:56:36,411 In additional, yeah, I think it's an important point, but let me, another complication with having lots of operators. 1315 00:56:36,411 --> 00:56:50,231 If you want the trust model where you only need one honest operator, then it has to be an N of N federation, meaning every payment that is made on the system. 1316 00:56:50,411 --> 00:56:55,811 by any wallet, every operator has to sign and be part of that. 1317 00:56:56,331 --> 00:57:01,771 So if you had 100 financial institutions as part of one entity, 1318 00:57:02,411 --> 00:57:07,491 all 100 of their servers and operations have 24-7 uptime. 1319 00:57:08,051 --> 00:57:11,251 If one of 100 goes down, the whole system fails. 1320 00:57:12,151 --> 00:57:12,771 That's a big point. 1321 00:57:13,351 --> 00:57:14,011 It's a big point, right? 1322 00:57:14,011 --> 00:57:17,251 So then you can get into threshold federation. 1323 00:57:17,251 --> 00:57:20,811 but then you no longer have the 1324 00:57:20,811 --> 00:57:24,391 you only need one honest operator 1325 00:57:24,391 --> 00:57:26,311 you'd need more 1326 00:57:26,311 --> 00:57:27,711 it depends on what your threshold is 1327 00:57:27,711 --> 00:57:29,911 I think it's also worth 1328 00:57:29,911 --> 00:57:32,251 just thinking through some of the incentives 1329 00:57:32,251 --> 00:57:32,991 of this so 1330 00:57:32,991 --> 00:57:36,011 if there's one giant spark that ends up winning 1331 00:57:36,011 --> 00:57:37,251 or is like whatever 1332 00:57:37,251 --> 00:57:38,431 as a pre-distribution 1333 00:57:38,431 --> 00:57:41,051 I mean you definitely want to be 1334 00:57:41,051 --> 00:57:42,411 one of those signers 1335 00:57:42,411 --> 00:57:43,711 and get some of that sweet economics 1336 00:57:43,711 --> 00:57:45,311 so it's going to be very interesting to see 1337 00:57:45,311 --> 00:57:47,111 LightSpark is obviously very well positioned for that 1338 00:57:47,111 --> 00:57:47,691 which is great. 1339 00:57:48,471 --> 00:57:49,371 I'm an investor in LightSpark. 1340 00:57:49,731 --> 00:57:50,011 Exciting. 1341 00:57:50,551 --> 00:57:50,871 But, 1342 00:57:51,111 --> 00:57:51,511 well, 1343 00:57:51,511 --> 00:57:51,931 it's going to be interesting 1344 00:57:51,931 --> 00:57:52,571 to see on two fronts. 1345 00:57:52,651 --> 00:57:52,811 One, 1346 00:57:52,931 --> 00:57:54,471 them competing with Stripe. 1347 00:57:55,031 --> 00:57:56,291 As Stripe is going for their 1348 00:57:56,291 --> 00:57:57,791 much more permissioned, 1349 00:57:57,971 --> 00:57:59,271 I'll be very curious to see, 1350 00:57:59,591 --> 00:57:59,851 you know, 1351 00:57:59,931 --> 00:58:02,351 like if the old world institutions 1352 00:58:02,351 --> 00:58:03,511 end up going more this route 1353 00:58:03,511 --> 00:58:05,991 where they get better security 1354 00:58:05,991 --> 00:58:08,371 and better economics 1355 00:58:08,371 --> 00:58:09,871 or if Stripe can whatever 1356 00:58:09,871 --> 00:58:11,351 kind of get them there first. 1357 00:58:11,591 --> 00:58:11,731 Well, 1358 00:58:11,771 --> 00:58:12,831 so when we analyze this 1359 00:58:12,831 --> 00:58:13,431 and discuss it, 1360 00:58:13,431 --> 00:58:14,771 we got to, 1361 00:58:14,871 --> 00:58:15,131 I think, 1362 00:58:15,511 --> 00:58:16,431 largely separate stablecoins 1363 00:58:16,431 --> 00:58:17,951 stablecoins or Bitcoin payments, right? 1364 00:58:18,131 --> 00:58:19,291 Yeah, I'm thinking stablecoins. 1365 00:58:19,491 --> 00:58:19,851 Right. 1366 00:58:20,211 --> 00:58:21,391 I just wanted to point that out. 1367 00:58:21,671 --> 00:58:24,951 But one other critically important question, though, because as I think about where this 1368 00:58:24,951 --> 00:58:27,411 could go, all of these are very permission with the entity. 1369 00:58:28,151 --> 00:58:35,071 A question I have is, could you do an entity where the rules, like the entity itself is 1370 00:58:35,071 --> 00:58:36,731 a federation and the rules are set in stone? 1371 00:58:37,411 --> 00:58:41,291 So what I mean by that is, in this world, my understanding is, you know, FlightSpark or 1372 00:58:41,291 --> 00:58:45,331 Stripe or whoever starts the entity and there's the rules there of like, I don't know, I guess 1373 00:58:45,331 --> 00:58:47,311 the signature threshold can't be changed 1374 00:58:47,311 --> 00:58:48,451 or maybe that rule can't be changed. 1375 00:58:48,531 --> 00:58:48,871 I don't know. 1376 00:58:49,211 --> 00:58:50,571 But is there a way that you could have, 1377 00:58:50,611 --> 00:58:51,131 for example, 1378 00:58:51,751 --> 00:58:53,771 five anonymous or pseudonymous actors 1379 00:58:53,771 --> 00:58:54,771 on the internet come together 1380 00:58:54,771 --> 00:58:55,071 and say, 1381 00:58:55,171 --> 00:58:58,251 we're going to operate an entity together 1382 00:58:58,251 --> 00:58:59,271 where each can be operators 1383 00:58:59,271 --> 00:59:04,291 and you can't retroactively change. 1384 00:59:04,371 --> 00:59:06,031 You need three of us, five to sign. 1385 00:59:06,291 --> 00:59:07,271 That's the rule forever. 1386 00:59:09,891 --> 00:59:13,551 I don't see how you can guarantee 1387 00:59:13,551 --> 00:59:14,631 that it's not going to change. 1388 00:59:15,331 --> 00:59:17,811 interesting 1389 00:59:17,811 --> 00:59:18,811 anything more about that 1390 00:59:18,811 --> 00:59:19,831 I mean 1391 00:59:19,831 --> 00:59:21,131 can we just update 1392 00:59:21,131 --> 00:59:22,231 software on a server 1393 00:59:22,231 --> 00:59:22,671 well 1394 00:59:22,671 --> 00:59:23,431 to be clear 1395 00:59:23,431 --> 00:59:24,011 with the Fediment 1396 00:59:24,011 --> 00:59:25,151 you could guarantee that right 1397 00:59:25,151 --> 00:59:27,751 I don't see how 1398 00:59:27,751 --> 00:59:31,291 the only 1399 00:59:31,291 --> 00:59:31,751 like 1400 00:59:31,751 --> 00:59:32,671 the only 1401 00:59:32,671 --> 00:59:33,471 the only 1402 00:59:33,471 --> 00:59:35,471 I don't see how you can possibly 1403 00:59:35,471 --> 00:59:36,271 guarantee that 1404 00:59:36,271 --> 00:59:37,511 it won't change 1405 00:59:37,511 --> 00:59:38,991 you could maybe 1406 00:59:38,991 --> 00:59:40,771 make it so that the 1407 00:59:40,771 --> 00:59:42,811 wallets know that there's a change 1408 00:59:42,811 --> 00:59:44,871 like if you had verifiable computing 1409 00:59:44,871 --> 00:59:47,291 so if you do make a server change 1410 00:59:47,291 --> 00:59:48,251 then the client 1411 00:59:48,251 --> 00:59:50,611 could say like oh that 1412 00:59:50,611 --> 00:59:53,271 I guess what I'm saying is like if you have 1413 00:59:53,271 --> 00:59:54,931 a threshold right where you say 1414 00:59:54,931 --> 00:59:57,311 and maybe 1415 00:59:57,311 --> 00:59:59,131 I'm just misunderstanding this like I need 1416 00:59:59,131 --> 01:00:00,231 in order to 1417 01:00:00,231 --> 01:00:03,351 well yeah I guess you already have the unilateral 1418 01:00:03,351 --> 01:00:05,491 because I was going to say like if you wanted to say 1419 01:00:05,491 --> 01:00:07,371 guaranteed the rules in the 1420 01:00:07,371 --> 01:00:08,431 future won't change 1421 01:00:08,431 --> 01:00:11,451 I mean I guess no one would be able to take 1422 01:00:11,451 --> 01:00:13,391 the Bitcoin out of the system and run 1423 01:00:13,391 --> 01:00:16,211 without the threshold signature that was set. 1424 01:00:16,371 --> 01:00:17,591 That's true for all of these scenarios. 1425 01:00:17,611 --> 01:00:18,611 Yeah, so I think there'd be, 1426 01:00:18,791 --> 01:00:20,451 like for all the coins that, 1427 01:00:21,251 --> 01:00:23,131 like when you, if you do a policy change, 1428 01:00:23,191 --> 01:00:24,611 maybe all the existing coins 1429 01:00:24,611 --> 01:00:26,971 are committed to the old policy. 1430 01:00:27,131 --> 01:00:27,571 Got it. 1431 01:00:27,571 --> 01:00:29,331 But once swapped to new coins, 1432 01:00:29,451 --> 01:00:30,471 it would be the new policy. 1433 01:00:30,571 --> 01:00:30,991 That makes sense. 1434 01:00:31,111 --> 01:00:31,231 Yeah. 1435 01:00:31,591 --> 01:00:31,691 Cool. 1436 01:00:32,391 --> 01:00:35,131 And I think you gave a specific example 1437 01:00:35,131 --> 01:00:36,131 that Wallet of Satoshi 1438 01:00:36,131 --> 01:00:38,531 is working with LightSpark. 1439 01:00:38,531 --> 01:00:41,751 Is their capacity as an operator 1440 01:00:41,751 --> 01:00:43,351 on LightSpark's entity? 1441 01:00:44,731 --> 01:00:46,171 I think they're just using it. 1442 01:00:46,791 --> 01:00:47,611 No, they're a wallet 1443 01:00:47,611 --> 01:00:50,551 that uses Spark 1444 01:00:50,551 --> 01:00:51,931 and LightSpark's entity. 1445 01:00:53,131 --> 01:00:53,551 Again, 1446 01:00:54,231 --> 01:00:56,471 the only operators 1447 01:00:56,471 --> 01:00:58,451 I'm aware of is FlashNet 1448 01:00:58,451 --> 01:00:59,291 and LightSpark. 1449 01:01:00,331 --> 01:01:01,851 I'm only aware of one entity 1450 01:01:01,851 --> 01:01:04,051 and two operators in that entity. 1451 01:01:04,551 --> 01:01:05,811 So the way an entity gets 1452 01:01:05,811 --> 01:01:08,011 kind of positioned, market positioned 1453 01:01:08,011 --> 01:01:10,271 in this ecosystem is by having 1454 01:01:10,271 --> 01:01:11,651 a lot of payments flow through them. 1455 01:01:11,751 --> 01:01:12,311 Right? 1456 01:01:13,411 --> 01:01:16,071 Yeah. I feel like I'm not communicating well. 1457 01:01:16,591 --> 01:01:19,611 I mean, to me, the entity part's very straightforward. 1458 01:01:20,591 --> 01:01:22,251 You're a business that wants to make money. 1459 01:01:22,891 --> 01:01:23,871 You're a payments business. 1460 01:01:24,051 --> 01:01:25,371 You're a bank, yeah, or a payments business. 1461 01:01:25,991 --> 01:01:30,091 And then you run the Spark software as an operator. 1462 01:01:30,091 --> 01:01:32,771 You bring on at least one other operator 1463 01:01:32,771 --> 01:01:35,991 so you have a better regulatory position. 1464 01:01:36,911 --> 01:01:38,671 And that's why you do it. 1465 01:01:38,671 --> 01:01:44,251 And then you want lots of wallets, lots of users, lots of payments. 1466 01:01:45,351 --> 01:01:46,811 And to be clear, that's your job. 1467 01:01:47,151 --> 01:01:48,311 I get that people like to make money. 1468 01:01:48,431 --> 01:01:49,671 That's not the open question. 1469 01:01:50,071 --> 01:01:51,111 The open question is how? 1470 01:01:51,831 --> 01:01:58,291 Do you develop and nurture an ecosystem of wallets that depend on you or that root through you somehow? 1471 01:01:58,951 --> 01:01:59,171 Yes. 1472 01:01:59,291 --> 01:02:02,151 You want as many wallets to use you as possible. 1473 01:02:02,351 --> 01:02:05,671 You want as many users as possible, as many payments as possible, and then you charge a fee. 1474 01:02:05,671 --> 01:02:07,751 And to be clear, you could charge a fee. 1475 01:02:07,871 --> 01:02:08,971 I'd see it at least two places. 1476 01:02:09,071 --> 01:02:09,651 Maybe there's more. 1477 01:02:10,011 --> 01:02:10,771 One is when you're... 1478 01:02:10,771 --> 01:02:11,411 There's three, right? 1479 01:02:11,731 --> 01:02:13,311 I mean, I already mentioned three. 1480 01:02:13,471 --> 01:02:15,271 So each of the three players could charge a fee. 1481 01:02:15,491 --> 01:02:15,651 Yeah. 1482 01:02:15,931 --> 01:02:20,251 So to be clear, because I was thinking you make money off of market making with the lighting 1483 01:02:20,251 --> 01:02:20,671 network. 1484 01:02:20,811 --> 01:02:24,371 You make money on being the liquidity provider and swapping these tree leaves around. 1485 01:02:24,791 --> 01:02:29,431 But you could, in theory, also just like, again, kind of rent seek and just say, hey, 1486 01:02:29,471 --> 01:02:31,731 I'm just going to make 20% of everything because it's my customers. 1487 01:02:32,171 --> 01:02:33,231 And I create the entity. 1488 01:02:33,491 --> 01:02:34,551 Is that fair? 1489 01:02:34,551 --> 01:02:34,851 Yeah. 1490 01:02:35,671 --> 01:02:43,931 Well, yeah, I mean, I think if you're the entity, you would want more than 20%. 1491 01:02:43,931 --> 01:02:46,651 Well, yes, okay. 1492 01:02:47,651 --> 01:02:57,871 But again, so let's say there's one entity, two operators, and then I think, you know, 1493 01:02:57,991 --> 01:03:03,231 in the entity, the operator that is the entity would take an 80% cut, the other operator gets 1494 01:03:03,231 --> 01:03:03,911 20%. 1495 01:03:03,911 --> 01:03:05,531 That's for the spark fee. 1496 01:03:05,671 --> 01:03:08,171 then there's SSPs as well. 1497 01:03:08,551 --> 01:03:08,931 And so if you're, 1498 01:03:09,131 --> 01:03:11,011 and we can give a concrete case. 1499 01:03:11,151 --> 01:03:12,231 LightSpark is both, 1500 01:03:12,871 --> 01:03:14,251 they're all three, 1501 01:03:14,431 --> 01:03:16,071 the SE, the SO, and the SSP. 1502 01:03:16,251 --> 01:03:16,451 Right. 1503 01:03:16,671 --> 01:03:17,711 So they can also make money, 1504 01:03:17,751 --> 01:03:19,031 and they publish their figures. 1505 01:03:19,411 --> 01:03:20,351 For their SSP, 1506 01:03:20,831 --> 01:03:23,071 they charge 15 basis points 1507 01:03:23,071 --> 01:03:26,431 on any amount coming into the system 1508 01:03:26,431 --> 01:03:27,591 and 25 basis points 1509 01:03:27,591 --> 01:03:29,191 for any amount going out of the system. 1510 01:03:29,271 --> 01:03:29,971 Cool, that makes sense. 1511 01:03:30,051 --> 01:03:32,111 They also run lightning nodes. 1512 01:03:32,371 --> 01:03:33,331 So they make money on that too. 1513 01:03:33,331 --> 01:03:35,191 Yeah, so they will make money 1514 01:03:35,191 --> 01:03:36,371 in all three components. 1515 01:03:36,791 --> 01:03:38,771 So to be clear, what I'm getting at though, 1516 01:03:38,831 --> 01:03:40,251 in both of those cases, 1517 01:03:41,111 --> 01:03:42,991 and again, this is a little bit of my cynical app 1518 01:03:42,991 --> 01:03:43,591 for anyone doing this, 1519 01:03:43,691 --> 01:03:45,891 but that's a service fee. 1520 01:03:46,411 --> 01:03:47,191 I provide a service. 1521 01:03:47,271 --> 01:03:48,771 My service is I'm providing liquidity 1522 01:03:48,771 --> 01:03:50,591 or I'm providing the gateway 1523 01:03:50,591 --> 01:03:51,991 to the broader internet, right? 1524 01:03:52,151 --> 01:03:53,511 So I'm providing a service 1525 01:03:53,511 --> 01:03:54,611 and you're paying me for that service 1526 01:03:54,611 --> 01:03:55,831 and there's a free market competing 1527 01:03:55,831 --> 01:03:57,251 and that drives the cost down. 1528 01:03:57,811 --> 01:03:59,171 If I'm the entity owner, 1529 01:03:59,251 --> 01:04:00,611 when I said the 20%, I was thinking, 1530 01:04:00,831 --> 01:04:02,571 and whatever, but maybe it's going to be more egregious, 1531 01:04:02,571 --> 01:04:04,771 80%, what I'm saying there is, 1532 01:04:04,771 --> 01:04:06,191 I'm rent-seeking. 1533 01:04:06,571 --> 01:04:07,231 I'm literally just saying, 1534 01:04:07,371 --> 01:04:08,511 I'm not going to provide any service 1535 01:04:08,511 --> 01:04:09,891 besides bringing my customers 1536 01:04:09,891 --> 01:04:11,451 and just brand. 1537 01:04:13,711 --> 01:04:14,451 Well, I guess that's a sign. 1538 01:04:14,451 --> 01:04:14,911 I don't understand. 1539 01:04:15,191 --> 01:04:17,171 20% or 80% is egregious. 1540 01:04:19,671 --> 01:04:21,531 That's 20% or 80% of what. 1541 01:04:22,171 --> 01:04:22,891 The what is what. 1542 01:04:23,071 --> 01:04:24,651 But it's clearly rent-seeking. 1543 01:04:25,451 --> 01:04:26,571 But this is my point. 1544 01:04:26,671 --> 01:04:28,031 Eventually, you could out-compete that. 1545 01:04:28,551 --> 01:04:30,131 Again, this is the whole beauty 1546 01:04:30,131 --> 01:04:31,411 of open-source software 1547 01:04:31,411 --> 01:04:32,391 where I see things trending. 1548 01:04:32,531 --> 01:04:33,571 In the early days, yes, 1549 01:04:33,571 --> 01:04:37,811 the stripes or whatever of the world will quote unquote rent sink by just like, 1550 01:04:37,931 --> 01:04:39,371 hey, I already have my customers plug into me. 1551 01:04:39,831 --> 01:04:41,291 What I'm saying is you could in the future, 1552 01:04:41,431 --> 01:04:44,211 you could have a pseudonymous group of banker, 1553 01:04:44,411 --> 01:04:48,391 like people that come together and it's like our fees are radically lower 1554 01:04:48,391 --> 01:04:52,751 because the only place we're taking a fee is on the liquidity services, 1555 01:04:52,891 --> 01:04:54,711 which is like that's a service. 1556 01:04:55,611 --> 01:04:58,691 But being pseudonymous seems orthogonal to that. 1557 01:04:58,691 --> 01:05:03,391 Like you could have Coinbase and River and Block create an entity 1558 01:05:03,391 --> 01:05:05,311 to compete and they 1559 01:05:05,311 --> 01:05:06,931 charge no fees. 1560 01:05:07,051 --> 01:05:09,151 Yes. Other than the liquidity 1561 01:05:09,151 --> 01:05:10,071 fees that are necessary. 1562 01:05:10,791 --> 01:05:12,731 So yeah, I think 1563 01:05:12,731 --> 01:05:13,711 this 1564 01:05:13,711 --> 01:05:16,791 it's 1565 01:05:16,791 --> 01:05:19,211 an unfortunate outcome 1566 01:05:19,211 --> 01:05:20,571 if there's only one 1567 01:05:20,571 --> 01:05:21,731 Spark entity. 1568 01:05:22,591 --> 01:05:24,691 Spark becomes a really popular technology, 1569 01:05:24,911 --> 01:05:27,091 lots of wallets use it, lots of payments, lots of users 1570 01:05:27,091 --> 01:05:28,551 and there's only one entity 1571 01:05:28,551 --> 01:05:30,791 that's not a healthy outcome for 1572 01:05:30,791 --> 01:05:32,651 at least from the Bitcoin side. 1573 01:05:32,651 --> 01:05:37,571 That's why I think my own opinion on this might vary with stablecoins versus Bitcoin. 1574 01:05:38,031 --> 01:05:53,651 My view on this, stablecoins-wise, I'd love to see Spark, and specifically LightSpark, do really well here versus Tempo and Arc and Base and all these other, yeah, for sure, Tron and stuff like that. 1575 01:05:54,631 --> 01:05:57,151 Just like Taproot Assets as well from Lightning Labs. 1576 01:05:57,611 --> 01:05:59,411 It would be nice to see them succeed. 1577 01:05:59,411 --> 01:06:01,771 from a Bitcoin standpoint 1578 01:06:01,771 --> 01:06:04,351 I'm very excited about what 1579 01:06:04,351 --> 01:06:05,551 Spark can 1580 01:06:05,551 --> 01:06:08,491 how it 1581 01:06:08,491 --> 01:06:10,431 improves the user experience 1582 01:06:10,431 --> 01:06:12,391 and so hopefully 1583 01:06:12,391 --> 01:06:14,291 it helps usher in more wallets 1584 01:06:14,291 --> 01:06:16,511 and we should talk a little bit 1585 01:06:16,511 --> 01:06:18,171 about that user experience part as well 1586 01:06:18,171 --> 01:06:20,411 so I'm excited about 1587 01:06:20,411 --> 01:06:22,431 the potential that Spark can have on the user 1588 01:06:22,431 --> 01:06:23,591 experience for Bitcoin wallets 1589 01:06:23,591 --> 01:06:26,611 I would be very scared though 1590 01:06:26,611 --> 01:06:28,631 of a world where there's only one entity 1591 01:06:28,631 --> 01:06:33,871 then like light spark becomes the visa bitcoin payments and that that's a very unhealthy outcome 1592 01:06:33,871 --> 01:06:40,731 for for bitcoin so it'd be it's far healthier if we have many spark entities and also um other 1593 01:06:40,731 --> 01:06:47,791 technologies like lightning arc cashew fediment some subset of them succeeding as well they each 1594 01:06:47,791 --> 01:06:54,351 of these systems has trade-offs um we're gonna maybe maybe show a table today to show the trade-offs 1595 01:06:54,351 --> 01:06:55,811 maybe we'll have to do that in a new episode 1596 01:06:55,811 --> 01:06:58,351 or a future episode because we only talked about 1597 01:06:58,351 --> 01:07:00,491 Spark today. But each of these systems 1598 01:07:00,491 --> 01:07:02,311 has trade-offs. There's no silver bullet. 1599 01:07:02,491 --> 01:07:03,471 Spark is not perfect. 1600 01:07:04,651 --> 01:07:06,211 Like I said, there's trust 1601 01:07:06,211 --> 01:07:08,171 and also the unilateral exit is 1602 01:07:08,171 --> 01:07:09,631 extremely expensive. 1603 01:07:11,551 --> 01:07:12,591 So hopefully 1604 01:07:12,591 --> 01:07:14,631 we see different use cases, 1605 01:07:14,811 --> 01:07:16,611 different user bases use 1606 01:07:16,611 --> 01:07:18,331 these different systems 1607 01:07:18,331 --> 01:07:20,491 and it's more distributed than just 1608 01:07:20,491 --> 01:07:22,191 one entity controlling everything. 1609 01:07:22,191 --> 01:07:41,606 I think it might also help to understand the dynamics of the ecosystem or the imagine you know how this ecosystem might emerge If we were to you mentioned Wallet of Satoshi Does Wallet of Satoshi my understanding the history and you can correct if this is wrong but they were available in u app stores and then they kind of withdrew from u 1610 01:07:41,606 --> 01:07:45,606 app stores because they were concerned about a regulatory issue i think the thing that hit phoenix 1611 01:07:45,606 --> 01:07:49,267 they were worried about kind of a similar thing hitting them and so they withdrew and presumably 1612 01:07:49,267 --> 01:07:55,427 with this spark thing that gives them a little more regulatory cover or clarity that enables them 1613 01:07:55,427 --> 01:07:56,706 to operate more freely. 1614 01:07:57,166 --> 01:07:58,387 So I wonder if we can, 1615 01:07:58,787 --> 01:07:59,646 just to sort of understand 1616 01:07:59,646 --> 01:08:00,307 the ecosystem better, 1617 01:08:00,527 --> 01:08:02,347 why does Wallet of Satoshi 1618 01:08:02,347 --> 01:08:04,407 choose to operate 1619 01:08:04,407 --> 01:08:06,787 with this Spark entity 1620 01:08:06,787 --> 01:08:07,987 or what would cause them 1621 01:08:07,987 --> 01:08:08,747 to choose another one? 1622 01:08:09,126 --> 01:08:09,987 Well, so Wallet of Satoshi 1623 01:08:09,987 --> 01:08:10,767 and Phoenix were like 1624 01:08:10,767 --> 01:08:12,307 very different. 1625 01:08:13,227 --> 01:08:16,307 It's true that events 1626 01:08:16,307 --> 01:08:17,606 at the same time 1627 01:08:17,606 --> 01:08:18,667 led each of them 1628 01:08:18,667 --> 01:08:19,727 to exit the US 1629 01:08:19,727 --> 01:08:21,327 in a similar timeframe. 1630 01:08:21,807 --> 01:08:22,506 But Wallet of Satoshi 1631 01:08:22,506 --> 01:08:24,186 was a custodial lightning wallet. 1632 01:08:24,186 --> 01:08:25,727 They were literally just... 1633 01:08:25,727 --> 01:08:29,227 They held like hundreds of millions or billions of customer money, 1634 01:08:29,486 --> 01:08:32,006 and they weren't a licensed business. 1635 01:08:32,586 --> 01:08:36,827 So that was very, very regulatory risky. 1636 01:08:37,526 --> 01:08:38,747 Phoenix is self-custody. 1637 01:08:39,347 --> 01:08:42,646 So it's just two completely different scenarios. 1638 01:08:42,787 --> 01:08:45,066 But even they were worried about regulatory 1639 01:08:45,066 --> 01:08:47,146 because we just saw people get convicted 1640 01:08:47,146 --> 01:08:50,546 who are running self-custodial services. 1641 01:08:50,627 --> 01:08:52,086 And not that we need to get all down the rabbit hole, 1642 01:08:52,086 --> 01:08:53,787 but even there, there's some gray area, right? 1643 01:08:53,787 --> 01:08:57,227 It's like if they automatically hook up to your LSP for the Phoenix thing. 1644 01:08:57,606 --> 01:09:02,646 There's a lot of nuance, but there's definitely not nuance between custodial and... 1645 01:09:02,646 --> 01:09:02,787 Yeah. 1646 01:09:02,927 --> 01:09:04,767 I mean, Wallace Tudoshi was like out and out. 1647 01:09:05,046 --> 01:09:05,566 Just illegal. 1648 01:09:05,887 --> 01:09:05,967 Right. 1649 01:09:07,066 --> 01:09:07,506 Custodial. 1650 01:09:07,686 --> 01:09:08,327 I was going to say custodial. 1651 01:09:08,327 --> 01:09:09,506 Yeah, custodial, sure. 1652 01:09:09,627 --> 01:09:13,167 So now getting to your question, David. 1653 01:09:13,807 --> 01:09:13,986 Yeah. 1654 01:09:14,167 --> 01:09:16,167 Why are they motivated to switch to Spark? 1655 01:09:16,167 --> 01:09:17,667 Well, two reasons. 1656 01:09:17,847 --> 01:09:22,407 One, it's not clearly custodial. 1657 01:09:22,407 --> 01:09:27,566 there's an online debate about what to call 1658 01:09:27,566 --> 01:09:31,566 the Spark system. Because LightSpark 1659 01:09:31,566 --> 01:09:36,006 and Wallace Toshi market it as fully self-custody 1660 01:09:36,006 --> 01:09:39,546 and that's a big stretch. 1661 01:09:40,586 --> 01:09:43,046 It's definitely a trusted system 1662 01:09:43,046 --> 01:09:47,167 but it's certainly not the same as a custodial system as well. 1663 01:09:47,167 --> 01:09:51,006 It's somewhere in between. Someone coined the term trustodial. 1664 01:09:51,506 --> 01:09:53,506 Yeah, and there's similar debates on all of these things. 1665 01:09:53,506 --> 01:09:55,486 And this is a challenge, right? 1666 01:09:55,546 --> 01:09:58,066 And hopefully this is something you don't really have to explain to end users 1667 01:09:58,066 --> 01:10:01,486 because we're frying people's brains, including our own right here. 1668 01:10:01,827 --> 01:10:02,566 Same thing with Cashew. 1669 01:10:02,667 --> 01:10:06,146 It's like, well, if you have a mint, well, yes, you custody the IOU, 1670 01:10:06,427 --> 01:10:08,387 but it's not really self-custody either. 1671 01:10:08,566 --> 01:10:14,066 But Cashew, one person can steal everyone's money in one moment in time. 1672 01:10:14,327 --> 01:10:15,146 So it's very different. 1673 01:10:15,407 --> 01:10:17,827 Spark is definitely better in that respect. 1674 01:10:18,046 --> 01:10:20,586 It's more like mint than Cashew. 1675 01:10:21,006 --> 01:10:23,006 Yeah, and... 1676 01:10:23,006 --> 01:10:23,827 Potentially even better. 1677 01:10:24,486 --> 01:10:26,727 It's pretty similar to Fediment Trust Model. 1678 01:10:26,927 --> 01:10:27,006 Yeah. 1679 01:10:29,486 --> 01:10:31,006 But the... 1680 01:10:32,006 --> 01:10:34,006 In any case, it's... 1681 01:10:34,686 --> 01:10:37,086 I mean, the number one reason is Wallet of Satoshi 1682 01:10:37,086 --> 01:10:40,467 just outsources their regulatory risk to LightSpark. 1683 01:10:40,927 --> 01:10:41,207 Mm-hmm. 1684 01:10:42,827 --> 01:10:45,066 I mean, that's why, as a wallet developer, 1685 01:10:45,186 --> 01:10:46,586 if you're worried about getting in trouble, 1686 01:10:46,707 --> 01:10:48,467 it's like, oh, great, they're going to take the risk. 1687 01:10:48,467 --> 01:10:57,006 So is that sort of like what we would look at as the emerging ecosystem is going to be people who want to build wallet experiences, but don't want to sort of. 1688 01:10:57,006 --> 01:10:58,546 And that actually helps the answer to you. 1689 01:10:58,646 --> 01:11:04,287 If you vibe code some app, you don't want to become like, you don't want to become an entity because you don't want to go to prison. 1690 01:11:04,506 --> 01:11:04,606 Right. 1691 01:11:04,686 --> 01:11:16,986 If you're worried about going to prison or getting fined or getting in trouble with the government because you're running an MSB or the government claims that you are, even if you don't believe it is, that's why you don't do it. 1692 01:11:16,986 --> 01:11:21,327 So that's why obviously app developers aren't going to just like nonchalantly launch an entity. 1693 01:11:21,467 --> 01:11:23,307 You have to be quite serious. 1694 01:11:23,546 --> 01:11:24,546 It's more like a neobank. 1695 01:11:24,686 --> 01:11:30,427 You're sort of in the business of trying to cultivate, nurture a bunch of liquidity and payments through you. 1696 01:11:30,606 --> 01:11:31,486 It is a bank. 1697 01:11:31,606 --> 01:11:32,486 It's just a different form. 1698 01:11:32,986 --> 01:11:33,086 Yeah. 1699 01:11:34,146 --> 01:11:37,146 So Austin says on the plus side of Spark becomes like Visa. 1700 01:11:37,327 --> 01:11:43,307 They're running open source software that then allows an upstart competitor to compete while also being interoperable. 1701 01:11:43,546 --> 01:11:43,707 Yeah. 1702 01:11:45,887 --> 01:11:46,586 Yes and no. 1703 01:11:46,586 --> 01:11:54,427 So yes, Spark, open source technology, as we said earlier, others can fire up their own entity and compete. 1704 01:11:57,167 --> 01:12:03,887 And it's interoperable, but there's still business network effects here. 1705 01:12:04,947 --> 01:12:11,486 So you can still project a future where one company would dominate. 1706 01:12:11,486 --> 01:12:18,086 But to his point, I mean, it's still, even though that's true, it's still infinitely better than the status quo. 1707 01:12:18,747 --> 01:12:18,887 Yeah. 1708 01:12:18,986 --> 01:12:20,367 Well, at least you're still in our office with Lightning. 1709 01:12:20,486 --> 01:12:21,586 Let's fast forward to that feature. 1710 01:12:21,707 --> 01:12:29,467 So let's say LightSpark dominates and all the wallets use it, all the users, and then they do what any company would do in that position. 1711 01:12:29,667 --> 01:12:31,947 RentSeek can increase their prices and make more money. 1712 01:12:32,006 --> 01:12:32,146 Right. 1713 01:12:33,367 --> 01:12:37,207 And then, you know, it kind of depends on the dynamics of it. 1714 01:12:37,207 --> 01:12:40,627 Like if there's like 50 different wallets globally, 1715 01:12:41,086 --> 01:12:43,106 each with similar size, 1716 01:12:43,467 --> 01:12:45,287 no one, then who has the power? 1717 01:12:45,586 --> 01:12:46,947 Like LightSpark has all the power. 1718 01:12:47,086 --> 01:12:50,686 But if Wallet of Satoshi is like 90% of the payments, 1719 01:12:51,127 --> 01:12:52,646 then they have more power. 1720 01:12:53,106 --> 01:12:57,546 Like Wallet of Satoshi would then just start their own entity, right? 1721 01:12:57,967 --> 01:12:59,066 So that's another thing too. 1722 01:12:59,066 --> 01:13:00,627 Like a wallet might, you know, 1723 01:13:00,686 --> 01:13:02,207 it doesn't really make sense as a wallet 1724 01:13:02,207 --> 01:13:03,847 to become an entity out of the gate. 1725 01:13:04,267 --> 01:13:06,186 Like, but once you become popular and have a big business, 1726 01:13:06,186 --> 01:13:08,807 then you just cut out whoever your entity is 1727 01:13:08,807 --> 01:13:09,586 and just start your own entity. 1728 01:13:09,586 --> 01:13:11,327 Which is what Stripe is doing at Visa right now. 1729 01:13:11,727 --> 01:13:11,827 Yeah. 1730 01:13:12,887 --> 01:13:15,667 So I think a realistic competitor 1731 01:13:15,667 --> 01:13:18,327 would be the popular wallets 1732 01:13:18,327 --> 01:13:19,646 would become their own entity 1733 01:13:19,646 --> 01:13:21,747 or they'd join forces. 1734 01:13:22,207 --> 01:13:23,847 Even though they're competitors, 1735 01:13:24,046 --> 01:13:26,967 they join forces to cut out this other middleman. 1736 01:13:27,267 --> 01:13:29,526 So I think that's what we could expect to see happen there. 1737 01:13:29,686 --> 01:13:32,127 Yeah, Austin has a really insightful comment. 1738 01:13:32,247 --> 01:13:34,267 Motivation to become an entity wants to earn money 1739 01:13:34,267 --> 01:13:35,486 and wants to go to jail. 1740 01:13:35,486 --> 01:13:39,486 noted. Well, I mean, that's why the system 1741 01:13:39,486 --> 01:13:43,586 is designed as it is to avoid being considered 1742 01:13:43,586 --> 01:13:47,667 an MSB. We're still in the transitory 1743 01:13:47,667 --> 01:13:51,526 phase. The sovereign individual or the group sovereign individual has not 1744 01:13:51,526 --> 01:13:55,407 played out yet. In this transition phase for the next couple decades, 1745 01:13:55,646 --> 01:13:58,046 regulatory as a service is important. 1746 01:13:59,727 --> 01:14:03,627 I think we've sort of touched on this can be around Bitcoin payments, 1747 01:14:03,627 --> 01:14:04,986 could be around stablecoin payments. 1748 01:14:05,907 --> 01:14:07,086 I think a lot of our, 1749 01:14:07,227 --> 01:14:09,146 like, well, associate type discussions 1750 01:14:09,146 --> 01:14:11,407 are more around Bitcoin lightning payments. 1751 01:14:12,727 --> 01:14:15,407 How do stablecoins fit in? 1752 01:14:15,506 --> 01:14:17,127 It's an asset that we mentioned, 1753 01:14:17,207 --> 01:14:20,566 USDB can be issued on Spark. 1754 01:14:21,046 --> 01:14:23,387 How does that affect the dynamics? 1755 01:14:23,646 --> 01:14:24,566 Like, I think in the past, 1756 01:14:24,606 --> 01:14:25,787 we've talked about risks 1757 01:14:25,787 --> 01:14:29,127 to having stablecoins that are on Bitcoin 1758 01:14:29,127 --> 01:14:31,086 because then whoever issued the stablecoin 1759 01:14:31,086 --> 01:14:32,646 gets to pick forks 1760 01:14:32,646 --> 01:14:34,967 and might be under regulatory pressure to pick forks. 1761 01:14:34,967 --> 01:14:36,307 Is that the case? 1762 01:14:36,646 --> 01:14:39,606 If we were to have USDB get really large on Spark, 1763 01:14:39,807 --> 01:14:43,086 would USDB be creating similar risk for Bitcoin? 1764 01:14:45,447 --> 01:14:50,967 I think it would also need to develop smart contracts 1765 01:14:51,606 --> 01:14:53,967 and lending and financial services 1766 01:14:54,467 --> 01:14:57,167 that have that stablecoin baked in. 1767 01:14:57,387 --> 01:14:59,046 That's where the risk comes with Ethereum. 1768 01:14:59,447 --> 01:15:01,287 You have all these smart contracts 1769 01:15:01,287 --> 01:15:02,867 So the USDC baked into it. 1770 01:15:03,307 --> 01:15:09,086 So if there's a fork and tons of people have tons of money locked up in these contracts, 1771 01:15:09,307 --> 01:15:12,586 and then Circle says, I support fork A, not fork B, 1772 01:15:13,267 --> 01:15:17,467 like you're going to follow suit on fork A because you want your money to be, 1773 01:15:17,467 --> 01:15:21,486 you want a dollar for every dollar you have, not zero dollars for every dollar you have. 1774 01:15:21,927 --> 01:15:26,867 So you'd need, there'd also need to be like these financial services, smart contracts. 1775 01:15:27,407 --> 01:15:30,086 I have a question, and I'm not sure unless I'm thinking of this in real time, 1776 01:15:30,086 --> 01:15:31,486 of where value is going to accrue. 1777 01:15:31,606 --> 01:15:34,287 Because I think we've talked a lot about stable coins 1778 01:15:34,287 --> 01:15:35,907 over several episodes now. 1779 01:15:36,447 --> 01:15:37,907 And if you want to enter into this business, 1780 01:15:37,986 --> 01:15:39,267 there's two ways you can do this, I see. 1781 01:15:39,407 --> 01:15:41,167 You can either issue your own stable coin. 1782 01:15:41,467 --> 01:15:41,847 There's three. 1783 01:15:42,347 --> 01:15:46,427 You can issue a chain or some payment rail 1784 01:15:46,427 --> 01:15:48,247 for a stable coin, or you could do both. 1785 01:15:49,347 --> 01:15:51,127 And a question that I have is like, 1786 01:15:51,167 --> 01:15:54,387 it seems like so far all the value has accrued 1787 01:15:54,387 --> 01:15:55,947 toward the internal ledger, the issuer. 1788 01:15:56,347 --> 01:15:56,767 Tether, right? 1789 01:15:56,807 --> 01:15:57,967 Because Tether can say, well, fuck it, 1790 01:15:58,006 --> 01:15:59,307 we're going to burn it off of Tron 1791 01:15:59,307 --> 01:16:01,167 and move it over to, you know, 1792 01:16:01,447 --> 01:16:05,467 Solana or Arbitrum or whatever is in vogue. 1793 01:16:06,227 --> 01:16:07,767 And so in that sense, it's almost kind of like, 1794 01:16:07,867 --> 01:16:11,227 well, what value is there on working on the payment rail? 1795 01:16:11,727 --> 01:16:13,407 I don't think this is true, but I'm just... 1796 01:16:13,407 --> 01:16:14,186 There's also bridges. 1797 01:16:14,606 --> 01:16:16,066 And the bridges between them, the market makers. 1798 01:16:16,267 --> 01:16:18,787 And bridges could be where the value accrues. 1799 01:16:19,046 --> 01:16:19,207 Yeah. 1800 01:16:19,207 --> 01:16:25,787 If the bridges can create a seamless user experience, 1801 01:16:26,127 --> 01:16:28,046 get the economics right, 1802 01:16:28,046 --> 01:16:29,887 and get the regulatory picture right, 1803 01:16:30,387 --> 01:16:32,106 then all of a sudden, who cares? 1804 01:16:32,627 --> 01:16:36,606 Then I don't care which, I have dollars, you have dollars. 1805 01:16:37,307 --> 01:16:39,646 The underlying issuer we don't even really care about. 1806 01:16:40,446 --> 01:16:42,247 And if we get to that stage, 1807 01:16:42,606 --> 01:16:44,026 then you're not going to have winner take all 1808 01:16:44,026 --> 01:16:45,407 and tether won't be king. 1809 01:16:45,566 --> 01:16:46,566 The exchange makes all the money. 1810 01:16:47,247 --> 01:16:49,767 And the bridge, exchange, whatever, 1811 01:16:49,967 --> 01:16:51,627 that's where the money will be made. 1812 01:16:52,327 --> 01:16:54,546 What do you guys think of those three options? 1813 01:16:54,546 --> 01:16:56,287 So the issuer is the banking model 1814 01:16:56,287 --> 01:16:57,927 where you're basically making money off the treasuries. 1815 01:16:58,046 --> 01:17:02,066 The bridge is the exchange in a multi-coin world. 1816 01:17:02,667 --> 01:17:04,707 And then there's the owning the payment rail itself. 1817 01:17:05,227 --> 01:17:08,186 What is your intuition on where the value accrues? 1818 01:17:09,986 --> 01:17:12,927 I don't have strong views on it. 1819 01:17:13,606 --> 01:17:16,106 But I think, I mean, we talked before in the show, 1820 01:17:16,467 --> 01:17:21,407 I'm skeptical of winner-take-all by the issuer. 1821 01:17:23,007 --> 01:17:24,707 But I'm also not really, 1822 01:17:24,707 --> 01:17:27,887 we talked last show about it being kind of 1823 01:17:27,887 --> 01:17:28,207 a 1824 01:17:28,207 --> 01:17:31,347 total mess like all these 1825 01:17:31,347 --> 01:17:33,907 like strife will probably be 1826 01:17:33,907 --> 01:17:35,747 successful with their stuff but like still 1827 01:17:35,747 --> 01:17:37,787 kind of a tiny portion 1828 01:17:37,787 --> 01:17:38,546 of the overall 1829 01:17:38,546 --> 01:17:41,526 it just seems like there's going to be dozens 1830 01:17:41,526 --> 01:17:43,946 of very strong players entering 1831 01:17:43,946 --> 01:17:46,007 and each will have 1832 01:17:46,007 --> 01:17:47,566 some level of success 1833 01:17:47,566 --> 01:17:49,526 but none of them are interoperable 1834 01:17:49,526 --> 01:17:51,927 yeah there's no way audience is going to use 1835 01:17:51,927 --> 01:17:53,986 the bridges will like kind of 1836 01:17:53,986 --> 01:17:59,046 make it better but not fully yeah it's just not bridge has to agree to both and like audio may be 1837 01:17:59,046 --> 01:18:03,507 like i'm not gonna play in even with this bridge or whatever so i think it's just gonna be a mess 1838 01:18:03,507 --> 01:18:08,186 over the next five to ten years and of course our our tldr takeaway is it all comes back to bitcoin 1839 01:18:08,186 --> 01:18:14,086 but what's your intuition dk where do you think the the opportunity is yeah i think my brain's a 1840 01:18:14,086 --> 01:18:18,207 little fried on this so i don't know that i'm sure i thought you're gonna give us the all the pieces 1841 01:18:18,207 --> 01:18:24,106 super clearly but uh i mean something at the point of bridging between one another kind of 1842 01:18:24,106 --> 01:18:29,327 commoditizing these things that are like everything's basically a commodity here it's like kind of a usd 1843 01:18:29,327 --> 01:18:35,787 type equivalent thing in digital so like are people going to have huge differentiated networks 1844 01:18:35,787 --> 01:18:41,046 i think the answer is no and so it's more just like the more that you have bridges exist 1845 01:18:41,046 --> 01:18:46,247 almost everything is encouraged to flow through there to try to get more market share for themselves 1846 01:18:46,247 --> 01:18:48,967 but ultimately the bridges are kind of the 1847 01:18:48,967 --> 01:18:50,927 pinch point so despite my 1848 01:18:50,927 --> 01:18:52,927 brain being fried I think if I had to commit 1849 01:18:52,927 --> 01:18:54,946 to an answer right now I'd say 1850 01:18:54,946 --> 01:18:57,227 whoever aggregates and commoditizes 1851 01:18:57,227 --> 01:18:58,526 stablecoins feels like 1852 01:18:58,526 --> 01:19:01,106 a place that would naturally 1853 01:19:01,106 --> 01:19:01,887 accrue value 1854 01:19:01,887 --> 01:19:04,986 which is the bridge 1855 01:19:04,986 --> 01:19:06,967 just to push back on that 1856 01:19:06,967 --> 01:19:09,247 because I know we've had debates over 1857 01:19:09,247 --> 01:19:11,207 network effects and like if it's going to be 1858 01:19:11,207 --> 01:19:12,287 win or take all or win or take most 1859 01:19:12,287 --> 01:19:15,247 but one thing I actually disagree with though is this idea 1860 01:19:15,247 --> 01:19:15,907 that it's a commodity. 1861 01:19:16,026 --> 01:19:17,106 I don't think it's a commodity at all. 1862 01:19:17,927 --> 01:19:20,767 But a USD is not a commodity. 1863 01:19:21,227 --> 01:19:22,207 Yeah, because think about it. 1864 01:19:22,287 --> 01:19:23,807 It's like they may call everything. 1865 01:19:24,046 --> 01:19:25,667 This is why things like Visa exist 1866 01:19:25,667 --> 01:19:26,427 in the first place, right? 1867 01:19:26,486 --> 01:19:27,407 It's like, you know, 1868 01:19:27,566 --> 01:19:28,646 JPMorgan dollar. 1869 01:19:29,467 --> 01:19:30,546 Again, if you go back 1870 01:19:30,546 --> 01:19:32,467 and I'm going to reshill Allen's 1871 01:19:32,467 --> 01:19:34,927 sort of stable comment. 1872 01:19:35,787 --> 01:19:36,467 It's excellent. 1873 01:19:36,887 --> 01:19:37,927 He made this point as well. 1874 01:19:38,046 --> 01:19:39,086 It's like, you know, 1875 01:19:39,566 --> 01:19:41,007 basically, and I think Arturo 1876 01:19:41,007 --> 01:19:42,646 said this with us in an email thread. 1877 01:19:42,727 --> 01:19:43,327 What we're going to watch 1878 01:19:43,327 --> 01:19:44,546 is we're going to watch free banking. 1879 01:19:45,167 --> 01:19:47,847 We haven't seen free bankings for like, I don't know, 150 years. 1880 01:19:48,387 --> 01:19:50,026 And we certainly haven't seen it in the age of the internet. 1881 01:19:50,026 --> 01:19:59,986 And so, you know, part of the socialized risk and insurance that our system has today is like trying to make every dollar the same. 1882 01:20:00,887 --> 01:20:03,347 And so, but that's not the way it works, really. 1883 01:20:03,486 --> 01:20:08,707 JP Morgan may say, you know, I trust Wells Fargo way more than I trust Bank of America. 1884 01:20:08,707 --> 01:20:11,347 because I know over at Bank of America, 1885 01:20:12,066 --> 01:20:13,267 like in the big short, 1886 01:20:13,367 --> 01:20:15,546 they're sitting here giving whatever, 1887 01:20:15,727 --> 01:20:19,747 Miami waitresses five houses or whatever loans. 1888 01:20:19,867 --> 01:20:21,747 I'm like, nah, their dollar's not good. 1889 01:20:22,186 --> 01:20:27,247 But the whole system is sort of like insured 1890 01:20:27,247 --> 01:20:29,787 by the backstop that is the Federal Reserve, 1891 01:20:29,787 --> 01:20:32,387 which eventually is just diluting all the normal people. 1892 01:20:33,606 --> 01:20:35,787 But in this new world, if it's truly free banking 1893 01:20:35,787 --> 01:20:37,946 and it's probably going to end up being Bitcoin backed, 1894 01:20:37,946 --> 01:20:44,526 then like if I believe or tether as an example is able to show now I've got the backing plus surplus 1895 01:20:44,526 --> 01:20:50,907 then I I totally see a world where the tether dollar trades at a different price than like 1896 01:20:50,907 --> 01:20:54,807 muppet muppet dollar or whatever where I'm like well I don't know what their backings are 1897 01:20:54,807 --> 01:20:58,787 and like yes the interoperability via lightning to be able to get in and out of those things 1898 01:20:58,787 --> 01:21:04,086 instantly that matters too a lot and maybe on a long I'm just thinking of this like live a long 1899 01:21:04,086 --> 01:21:09,106 enough time horizon, you're all right. The exchange wins because if you can get in and out of 1900 01:21:09,106 --> 01:21:13,847 something instantly, who cares? But in the meantime, there's going to be probably a long period before 1901 01:21:13,847 --> 01:21:18,467 people just store everything in Bitcoin and they're going to hold dollars. And maybe it's even the 1902 01:21:18,467 --> 01:21:22,686 Bitcoin- People are not going to want to hold Muppet dollars if they don't have any trust in that 1903 01:21:22,686 --> 01:21:26,847 entity. But that's my point. And so where does the value accrue then? Well, it accrues to whatever 1904 01:21:26,847 --> 01:21:32,446 bank they trust. But I'm saying Max Webster dollars. Are they Muppet dollars or are they 1905 01:21:32,446 --> 01:21:34,467 JP Morgan dollars. Nobody has them. 1906 01:21:34,767 --> 01:21:36,767 And how are you going to get people to want to have them? 1907 01:21:37,026 --> 01:21:38,606 Well, if they're all interoperable with 1908 01:21:38,606 --> 01:21:40,606 Lightning, then like, yeah. 1909 01:21:41,026 --> 01:21:42,566 They can exist, but if nobody 1910 01:21:42,566 --> 01:21:43,946 uses it, what does it matter? 1911 01:21:44,387 --> 01:21:46,686 Well, because if I'm paying a Lightning invoice or I'm paying, 1912 01:21:47,046 --> 01:21:48,586 like, as long as they're all connected 1913 01:21:48,586 --> 01:21:50,627 to the internet, I don't think that's going to be a challenge because 1914 01:21:50,627 --> 01:21:52,747 then, well, then you need banks that still 1915 01:21:52,747 --> 01:21:54,347 hook into each of those 1916 01:21:54,347 --> 01:21:56,606 coins to do the swap. Although maybe we 1917 01:21:56,606 --> 01:21:58,627 can find a way to do that trustfully. But I think my broader 1918 01:21:58,627 --> 01:22:00,606 point is like, assume that 1919 01:22:00,606 --> 01:22:11,526 But even for the Bitcoiners, let's say you're a business, you hold some amount of your cash and dollars just because I have to make payroll next month and Bitcoin is going to be volatile for at least the next decade or so while it finishes its monetization process. 1920 01:22:12,967 --> 01:22:26,066 I actually do think that being the bank that issues the coin, if you can get people to trust you the most, that's probably still the best business model in the short term and maybe the exchanges in the long run. 1921 01:22:26,066 --> 01:22:31,207 Hey guys, we're running out of time and I feel remiss that we didn't talk about anything else. 1922 01:22:31,207 --> 01:22:35,207 We didn't know about this, but we didn't properly motivate Spark really. 1923 01:22:36,026 --> 01:22:40,427 In the sense that I said I wanted to talk about user experience. 1924 01:22:40,646 --> 01:22:52,627 So like, if you look at the past 10 years, people's experience with wallets, you typically need to, there's like an onboarding process. 1925 01:22:52,627 --> 01:22:55,586 The typical thing is I'm new to Bitcoin. 1926 01:22:55,946 --> 01:22:58,207 My first touch point is I need to obtain it. 1927 01:22:58,307 --> 01:22:59,086 I need to buy it. 1928 01:22:59,407 --> 01:23:00,646 And then you need to KYC. 1929 01:23:01,767 --> 01:23:03,946 Passports and lots of friction. 1930 01:23:04,127 --> 01:23:04,747 Retinal scan. 1931 01:23:04,787 --> 01:23:09,847 But I want to get into Bitcoin, so I'll go through the friction to get the Bitcoin, and then I'm KYC. 1932 01:23:10,467 --> 01:23:12,287 So that'll continue, I think. 1933 01:23:13,367 --> 01:23:20,307 But I think moving forward, we're going to see new first touch points with people with Bitcoin. 1934 01:23:20,307 --> 01:23:27,486 we have a little taste of that with like stacker news and nostre fountain where you get a fountain 1935 01:23:27,486 --> 01:23:32,867 where you get zapped and you receive a tiny amount of bitcoin so so where there's applications that 1936 01:23:32,867 --> 01:23:38,807 you're using it you don't download you're not like your mindset is not like oh i'm gonna install a 1937 01:23:38,807 --> 01:23:43,566 bitcoin wallet it's like i'm installing an application that has value to me beyond a wallet 1938 01:23:43,566 --> 01:23:49,807 and oh by the way an artifact of this application is that either the application itself i earned 1939 01:23:49,807 --> 01:23:53,827 Bitcoin through it or other users of the system, I earn Bitcoin. 1940 01:23:54,887 --> 01:23:57,807 And in that case, you're typically 1941 01:23:57,807 --> 01:24:01,946 receiving a tiny amount of Bitcoin. And so if you're 1942 01:24:01,946 --> 01:24:06,007 presented with, if your wallet is KYC'd, then that's 1943 01:24:06,007 --> 01:24:09,946 an enormous amount of friction. If you're a 1944 01:24:09,946 --> 01:24:14,167 new user to Bitcoin, your first touchpoint is receiving just a tiny 1945 01:24:14,167 --> 01:24:17,867 amount of Bitcoin, you're not going to go get your passport, 1946 01:24:17,867 --> 01:24:19,867 upload it, type in all this information. 1947 01:24:20,967 --> 01:24:22,127 But instead, one thing that 1948 01:24:22,127 --> 01:24:24,227 the biggest excitement 1949 01:24:24,227 --> 01:24:26,227 I had when I first used Boardwalk 1950 01:24:26,227 --> 01:24:26,767 Cash 1951 01:24:26,767 --> 01:24:29,867 was, which is a 1952 01:24:29,867 --> 01:24:32,146 eCash wallet, was it 1953 01:24:32,146 --> 01:24:34,167 like Max could send me a 1954 01:24:34,167 --> 01:24:36,127 link. I click on 1955 01:24:36,127 --> 01:24:38,127 the link, one step, and 1956 01:24:38,127 --> 01:24:40,086 boom, I'm looking. I have a wallet. 1957 01:24:40,267 --> 01:24:42,146 I have money in my wallet that Max 1958 01:24:42,146 --> 01:24:44,106 sent me, and it can be a tiny amount. 1959 01:24:44,566 --> 01:24:45,586 Beautiful experience. 1960 01:24:45,586 --> 01:24:48,347 and so you can imagine that being integrated 1961 01:24:48,347 --> 01:24:49,727 in all kinds of applications 1962 01:24:49,727 --> 01:24:51,827 and it's like a one-click experience 1963 01:24:51,827 --> 01:24:53,827 and that's your onboarding process. 1964 01:24:54,427 --> 01:24:58,727 So what Spark as well as Lexi, 1965 01:24:58,907 --> 01:25:00,307 which we've talked about in the show before, 1966 01:25:00,467 --> 01:25:01,667 it's a lightning wallet, 1967 01:25:02,227 --> 01:25:03,566 what both of those do is 1968 01:25:03,566 --> 01:25:07,566 it also introduces that one-click onboarding experience 1969 01:25:07,566 --> 01:25:12,946 and whether it's eCache or Lexi or Spark, 1970 01:25:12,946 --> 01:25:15,606 there's no KYC. 1971 01:25:15,946 --> 01:25:19,227 So it's this one-click experience. 1972 01:25:19,787 --> 01:25:21,667 Unlike eCash though, 1973 01:25:22,627 --> 01:25:25,946 LightSpark is a well-funded entity behind it 1974 01:25:25,946 --> 01:25:28,486 and you can be confident 1975 01:25:28,486 --> 01:25:31,207 that they're going to be around in six months, 1976 01:25:31,446 --> 01:25:33,427 in a year, two years, three years. 1977 01:25:33,606 --> 01:25:34,446 They're still going to be there. 1978 01:25:34,586 --> 01:25:35,887 So a wallet that has money in it 1979 01:25:35,887 --> 01:25:37,267 is still going to be around in three years. 1980 01:25:37,986 --> 01:25:40,946 Much higher confidence than a cash you meant today, 1981 01:25:40,946 --> 01:25:44,727 which I have no confidence that any cache email I use today 1982 01:25:44,727 --> 01:25:47,407 is going to be around in three years, let alone three months. 1983 01:25:48,066 --> 01:25:51,606 So that's a growing pain for eCache right now. 1984 01:25:52,227 --> 01:25:57,907 And that's where Lexi and LightSpark have a big edge, I think. 1985 01:25:58,227 --> 01:26:04,946 And so to me, the motivating factor is that you have a reliable system 1986 01:26:04,946 --> 01:26:09,887 that allows this no KYC, beautiful onboarding experience for users for wallets. 1987 01:26:09,887 --> 01:26:21,287 And this ties back into something we've talked about over and over again in the show, which is like vibe coding is going to lead to hundreds of thousands of creators or millions of creators, millions of apps, most of which will suck. 1988 01:26:21,507 --> 01:26:27,287 But like because of the law of large numbers, there'll be lots of compelling applications created. 1989 01:26:27,867 --> 01:26:32,367 Kind of like DK has pointed out before, they don't have to be Bitcoin centric or Bitcoin wallets. 1990 01:26:32,407 --> 01:26:38,146 They can just be like super cool applications that happen to have Bitcoin payments woven into them. 1991 01:26:38,787 --> 01:26:40,347 I think we're going to see that explosion. 1992 01:26:40,686 --> 01:26:42,867 Now we have the technology enabling that, 1993 01:26:43,327 --> 01:26:44,627 and it'll be these new, 1994 01:26:45,086 --> 01:26:48,927 totally new ways to onboard people onto Bitcoin, 1995 01:26:49,367 --> 01:26:51,046 and they don't have to be buying Bitcoin, 1996 01:26:51,146 --> 01:26:53,546 and they don't have to KYC to start using Bitcoin. 1997 01:26:53,986 --> 01:26:56,407 So that, to me, is what's super exciting about this. 1998 01:26:56,667 --> 01:26:58,787 I agree, and I would say even one step further, 1999 01:26:58,986 --> 01:27:00,267 I don't know about this on Spark, 2000 01:27:00,347 --> 01:27:01,046 I need to go deeper, 2001 01:27:01,046 --> 01:27:03,627 but what I was talking about, Dustin, on eCash, 2002 01:27:04,267 --> 01:27:04,907 micropayments too. 2003 01:27:05,646 --> 01:27:07,186 Small payments are what you're talking about. 2004 01:27:07,186 --> 01:27:09,347 like, okay, I got a couple of dollars or whatever I found. 2005 01:27:09,867 --> 01:27:12,007 But imagine agents opening up a wallet 2006 01:27:12,007 --> 01:27:14,367 and it's like, they receive whatever, 2007 01:27:14,627 --> 01:27:15,767 like a fraction of a penny. 2008 01:27:16,046 --> 01:27:16,686 That's also going to be big. 2009 01:27:16,767 --> 01:27:18,467 And AI agents as well. 2010 01:27:18,767 --> 01:27:23,066 Again, AI agents are not going to have their passport. 2011 01:27:23,227 --> 01:27:23,807 They can't. 2012 01:27:23,807 --> 01:27:26,807 And go through banking forms, right? 2013 01:27:27,026 --> 01:27:29,507 So that's another example 2014 01:27:29,507 --> 01:27:31,407 of what will be unlocked with this. 2015 01:27:31,627 --> 01:27:35,646 I was just talking to an AI scientist this past week 2016 01:27:35,646 --> 01:27:37,267 and who's not super deep on Bitcoin, 2017 01:27:37,367 --> 01:27:39,127 but he was asking me a lot of smart questions about it 2018 01:27:39,127 --> 01:27:43,747 and kind of trying to sort of challenge the assumptions 2019 01:27:43,747 --> 01:27:46,066 or get more clarity on where the use cases are. 2020 01:27:46,686 --> 01:27:49,467 And he seemed to find the idea of AI agents 2021 01:27:49,467 --> 01:27:53,566 pretty compelling as an initial use case for Bitcoin. 2022 01:27:54,887 --> 01:27:57,307 But I was explaining to him how I thought 2023 01:27:57,307 --> 01:27:59,267 that the missing piece was that we don't have 2024 01:27:59,267 --> 01:28:03,446 like a kind of a hardware substrate 2025 01:28:03,446 --> 01:28:05,486 that can be paid for in Bitcoin. 2026 01:28:05,646 --> 01:28:07,787 because, you know, 2027 01:28:07,847 --> 01:28:09,046 I think we've talked before 2028 01:28:09,046 --> 01:28:11,946 about how to have an autonomous AI agent 2029 01:28:11,946 --> 01:28:13,407 running its own software business 2030 01:28:13,407 --> 01:28:14,686 that you get paid in Bitcoin. 2031 01:28:14,967 --> 01:28:16,606 It still needs to be able to sort of pay 2032 01:28:16,606 --> 01:28:18,127 for its own infrastructure to exist. 2033 01:28:18,507 --> 01:28:19,486 Any GPUs pay in Bitcoin? 2034 01:28:20,247 --> 01:28:21,146 Yeah, yeah. 2035 01:28:21,367 --> 01:28:22,646 Or even just a CPU. 2036 01:28:22,887 --> 01:28:25,627 It's like an AWS server that can run. 2037 01:28:26,167 --> 01:28:27,247 There's a lot of businesses 2038 01:28:27,247 --> 01:28:29,186 that work really well with no GPUs 2039 01:28:29,186 --> 01:28:31,667 that can generate tens of millions of dollars. 2040 01:28:32,367 --> 01:28:35,446 And an AI agent could build its own business 2041 01:28:35,446 --> 01:28:41,467 like that and it would need bitcoin for that um but i think we've always talked you know both 2042 01:28:41,467 --> 01:28:48,167 offline and on the show i think about sort of who's building that layer and it struck me that 2043 01:28:48,167 --> 01:28:54,127 that doesn't even need to be a hardware layer somebody could build a software layer like a 2044 01:28:54,127 --> 01:28:59,907 virtual machine yeah that maybe like i run a virtual machine and i pay aws i pay amazon with 2045 01:28:59,907 --> 01:29:05,367 my own credit card but i run that and let people launch that and that thing itself can accept bitcoin 2046 01:29:05,367 --> 01:29:11,347 payments and then i end up having the wallet that receives those bitcoin payments to operate that 2047 01:29:11,347 --> 01:29:17,026 virtual machine and then i pay amazon so i think you don't even need i was imagining you kind of 2048 01:29:17,026 --> 01:29:21,207 need to own the hardware and run a data center all that you actually don't need that you can 2049 01:29:21,207 --> 01:29:25,887 through this conversation at least it surfaced to me that you could run a virtualization layer 2050 01:29:25,887 --> 01:29:31,807 and be sort of the bridge to accept the payments and then you can sort of abstract that last bit 2051 01:29:31,807 --> 01:29:33,727 away later. Once you sort of have 2052 01:29:33,727 --> 01:29:35,847 product market fit, you've proven that there are agents 2053 01:29:35,847 --> 01:29:37,847 that people build that run and are useful. 2054 01:29:38,307 --> 01:29:39,986 I love that people should be exploring that right now 2055 01:29:39,986 --> 01:29:41,767 and I think that's kind of what Artur is 2056 01:29:41,767 --> 01:29:43,407 getting at a little bit. So maybe him, 2057 01:29:43,807 --> 01:29:45,667 maybe someone else, but really, really good idea. 2058 01:29:47,167 --> 01:29:47,787 So glad 2059 01:29:47,787 --> 01:29:49,207 we covered Spark in 2060 01:29:49,207 --> 01:29:51,807 depth. Hopefully you guys understand it better. 2061 01:29:52,946 --> 01:29:53,707 Future episode 2062 01:29:53,707 --> 01:29:55,946 though, let's compare it to 2063 01:29:55,946 --> 01:29:57,787 other solutions 2064 01:29:57,787 --> 01:29:59,646 as well for wallets. As I mentioned, 2065 01:29:59,727 --> 01:30:01,347 there's a lot of trade-offs with each of them. 2066 01:30:01,347 --> 01:30:03,486 Yeah. Beautiful. All right. Yeah. All right. 2067 01:30:03,526 --> 01:30:04,467 Until next time. All right. 2068 01:30:05,307 --> 01:30:05,787 Bye-bye.