Check, check, check.
All right.
Welcome to the Presidio Bitcoin Jam.
We're back, baby.
Yet another week.
It's Friday.
It's noon.
A few minutes after.
We're back in a normal spot.
Yes.
Yeah.
I like the Friday, the sticking to it Friday.
When we do the kind of like one-off things, they're always a little topical and not really
like just us hanging out talking about what we want to talk about.
So yeah.
Well, I like the live audience.
That's great, too.
They're fun.
It's great, too.
It's not this, though.
And also, by missing last week's normal PBJ,
now we have...
A lot of stuff happens every week in Bitcoin.
This was like the biggest week.
Now we have two weeks.
This was a super slow week.
I can't even remember what happened last week.
Now, two weeks to talk about.
But this week was a big week.
So what happened this week?
Some are calling it one of the biggest,
if not the biggest week in Bitcoin.
Yeah, I would go sign that.
I like it.
So what happened this week?
Well, let's see.
We actually talked twice in the show, I think,
about Square launching Bitcoin acceptance.
Now that's actually gone GA.
It's available broadly to square sellers.
So that went live on Monday.
That means if I'm a square seller and I have the POS,
I can do some configuration stuff and then I can accept Bitcoin.
Yep.
Every POS can do that now.
What kind of configuration?
Is it complicated?
I have learned a lot.
I've also learned a lot this week.
It can be simple.
It can be a few taps.
there's many many a large percentage of square sellers it's a few taps i've also learned there
can be gotchas um there's still a few like uh or like you have to upgrade your software right
there's still a few versions that aren't supported yet but i think you know that's going to be rolling
out um and then for if you're a certain type of business and haven't done some like kyb before
then you have to do that.
So there can be some friction for some sellers.
But I've also learned though,
and we'll get to what Spiral did this week
and some of the stuff we've done.
But through our efforts,
we're trying to help not just Square,
but any POS solution.
We want to help Bitcoin payments for it.
Because there's still,
the lion's share of small businesses
and merchants in the world don't use Square.
In the US, Toast or Clover or other solutions.
and then outside the U.S., Square is not supported yet.
What is a rough market share, just to kind of gauge it?
Do you think Square is somewhere like 10%, 20%?
Of global?
No, of U.S.?
Yes.
I have no idea.
Toast has grown a lot the past, whatever, five plus years.
And I think it's a pretty strong competitor to Square.
I don't know the relative size of the two.
I still think Square is much bigger,
but the growth rate of Toast has been higher.
and we're trying to turn that around and i think clover's a smaller player just put that in context
you know when i think of like the two payment companies i sort of track square and stripe are
the two major ones stripe is obviously more focused online but square does online too is that
true or is it square 100 i'm a brick and mortar there's some online but i mean it's it's not
competitive i think with but both of these companies you know i'm sure everyone's familiar
but like you know to the tune of like tens of billions of dollars by like 50 to 100 billion
in valuation. So these are like major companies
and the fact that Square is doing this is like, it's a
really big deal. Well, I mean, a number we do know
is like 4 million Square markets.
So that's an absolute number. I don't know
what the market, I mean, what's the definition
of small business and
et cetera.
So I don't know what the
I don't know what the market share is. It's a big deal.
It's a big deal.
So let's see,
what are some insights?
I forget the insight I was going to give, but
Another insight is that I do think in-person payments, like honestly, two months ago, I was kind of, and I think I even said it on the show, kind of skeptical of like Americans buying a coffee with Bitcoin.
The classic crypto.
And we can explain, you know, why I skeptical.
And probably a lot of people are skeptical about that.
And then like why my mind's changed a bit.
But one piece of it is that in-person payments, you have that, it's way more of a human connection.
Like with a local merchant.
Like you typically, each person generally has like a few merchants that are their favorites, their regulars.
That business knows who you are, knows your name, values you because they know you're a recurring customer.
And you care about that business hanging around.
Like for DK, I mean, like local bike shops are a thing, right?
And so even though often I could buy a gear bike part even 50% cheaper or whatever online, I'd almost prefer to buy it locally just to keep the bike shop in business because they repair my bike.
And when you have a problem, they're available to have a problem.
We had a problem.
I had a problem on our ride the other day and like right after the thing dropped it off, you know, 10 minutes later and it was fixed in like an hour.
You can't get that if you go for the cheapest online thing.
And I think that's generally true. Everyone has their favorite merchants and it varies.
My tea, my tea. I could order online cheaper from Japan.
Customers care about the businesses. Businesses care about the customers. It's just way more intimate than online transactions.
And so I think, number one, there's actual conversations in person.
and I think Bitcoin can be a really interesting conversation
and we'll get into
I think it's a different type of conversation
than Bitcoiners are used to
because Bitcoiners are used to like
down to the state, separation of money
censorship resistance
freedom, etc
I don't think that's the typical conversation here
here it's about
you can save fees
and that's what opens their eyes
and they perk up when they can save fees
and then they ask how
and then it's like just a couple taps and you can, you know,
but then it's like, well, okay, who's going to know they can come in
and make Bitcoin payments and help you save fees?
And why would they, like Bitcoiners will do that,
but what about the rest of the people?
What's going to motivate them?
And we've talked about, you know, on previous episodes,
like Pink Owl is going to give a 21% discount,
which is super extreme, but, you know,
giving incentives and discounts is one.
We've seen some merchants show the plushie.
They literally, you know, put it right by the cash register
Really? I didn't know that.
Oh, you didn't?
No, that's cool.
Pink Owl does that.
And both, so Bob, who works out of Presidio Bitcoin, he...
Bitcoin Bob, you mean?
Bitcoin Bob.
I've renamed him with the B as the Bitcoin symbol.
Bob's great.
And he went to seven merchants in Larkspur in Marin, where he lives.
And all seven, or none of the seven knew anything about Bitcoin.
So they were not like pink owl folks are like hardcore Bitcoiners.
These seven merchants didn't know anything about Bitcoin.
He's already converted two of them to accept Bitcoin and they now show up on the map.
And both of them are displaying put the plushie by the register.
Really?
It creates awareness.
Wow.
And it's a lighthearted way to strike up conversation too.
Again, it's not hardcore.
It's kind of silly, kind of goofy.
But like it's way more human than a lot of Bitcoin content.
What did he say down with the state?
What his face says is that he's grumpy about 3% fees, right?
Which is in the one-pager that leave behind the victory.
Before we get into the fees, which is, that's the money shot to me.
But if the plushie is so successful, and I know we're still owed a performance from DK in this plushie suit,
does that mean perhaps Pink Out Coffee needs someone to come and perhaps dance around a billboard?
He's actually signing their own.
One Saturday, I'm just saying,
there is a suit available.
There is a man who's supposed to wear the suit.
All right, all right.
Dress me up.
We might have to do that.
I need makeup and wardrobe.
But, you know,
why could Bitcoin payments actually take off this time?
I think multiple reasons.
One, again, like,
comparing Square versus Stripe,
Stripe is way, it's impersonal.
Like, it's amazing.
Like, I'm online, I'm on some e-commerce site,
I need to make a purchase,
I click a button.
It's super simple.
But there's no human connection.
There is no conversation to be had.
Would I care about using Bitcoin there?
Maybe.
If privacy matters for that purchase,
then I would care.
If I'm giving some kind of money back
or incentive beyond what I'm already getting
with credit cards,
then that could be useful.
Or if you're in India or a country,
you can't use Stripe.
That's the other big example.
So definitely there's still reasons to do it for e-commerce, but I guess I'm just more bullish on the in-person stuff for the reasons we just mentioned.
So that's one reason.
I think leading with save fees is definitely, that's been my experience talking to merchants and everyone else's experience.
And most of these local merchants, you might hear 3% and think that sounds small, right?
But most of these local merchants are probably operating on something 9% or 10% margin.
So it's double digit, it would be a double digit percentage increase in their profit margin.
That's a huge win.
You have money to take home.
Right.
I mean, if you have a 6% profit margin, then it's half of your profit margin.
I think we should pause here because we have not made this explicit.
I think this is a big point worth stopping and focusing on.
So to be clear, this is my understanding, any merchant that opts into Bitcoin payments today is paying exactly 0% fees right now.
Historically, they're paying whatever it is, 2.9% with Visa plus some like a quarter or whatever the full charges.
Visa, MasterCard, each other and things.
but to go from paying 3% to 0%,
and to be clear,
the fact that Square,
and I understand they're doing this
through all of 2026 as a promo
and then charging 1%,
so eventually they will have to pay something,
but it's still much lower.
Like, that's crazy to me.
That is such a huge deal,
and it's also just like a shout out to you guys
for actually, I mean,
I'm shocked, like everyone was on board with this,
but it's wild,
and like, it's almost,
I was saying this to Bob last night,
the only issue I see with it
is it almost sounds too good to be true.
Like, if you go to a merchant and you say,
hey guys, would you like to,
just not pay any fees at all?
Who would say no?
Well, okay, multiple things.
One, we're already seeing evidence
that they're saying yes.
Just in Bob's anecdote,
he went to seven merchants.
None of them knew anything about Bitcoin.
Already two of them are accepting Bitcoin.
So people who are passionate about Bitcoin
and want to see this happen,
get out there and do this.
We'll get to Spiral's created
a marketing kit for you as well.
We'll talk about that in a little bit.
So yeah, I think there's reason to believe that they will do it.
Now, what are still some of the challenges though, right?
Even if they turn it on, well, you know, how many of their customers are going to pay in Bitcoin?
Sure.
So one, they have to create awareness.
Right.
Well, one of the awesome things that was also announced this week is that Square and Cash App integrated BTC Map.
So for people not familiar with BGC Map, it's been an open source project for at least three years with the goal of collecting merchant data that accepts Bitcoin and then storing it in OpenStreetMap along with their license, which is a permissive license.
like anyone can use it.
Anyone can use it,
but it's similar to AGPL
in that if you do incorporate it,
you have to make your data available.
So that's a side issue.
Both the software and the data of BTCMap are...
The software is AGPL,
and I forget the name of the...
It's whatever the open business data license is
or something like that from OpenStreetMap.
But the data is stored in OpenStreetMap
and with that license.
an interesting topic to discuss.
Probably not, we won't have time today, but
I don't see how Google Maps and Apple Maps
can use it. So do they have to recreate all this data
from scratch? Because of the AGPL?
Well, the
data license.
The data license equivalent
of AGPL. But let's talk about that
another time.
How do you get on the BTC map? Is that when you flip
on the POS, on the Square POS?
You have to opt in.
We did it here.
So Presidio Bitcoin has, you know, Square went to sale and we had to opt in.
It's important to, you know, so then, so a lot of Bitcoiners are like, why not enable all this by default?
Why not opt in to the map by default?
Well, a lot of business owners, it's like their home address.
So doing that opt in without their permission, like, you know, as I joked, as I joked with folks, like, who doesn't want a bunch of rabid Bitcoiners showing up at your home?
The book of Satoshi, ready to go.
Um, so, uh, but I, you know, I, I think we're seeing evidence, uh, it's public information,
like the absolute number of, um, merchants coming onto BC map.
And it's been quite, I mean, so it's over, it's over a thousand, uh, as of like Wednesday
or something.
So I'm sure it's like a couple thousand hours.
So, and I think it's a reasonably high percentage of merchants are opting into that.
Well, I was going to say, I mean, it's worth noting again, like, I think the point I would
drive home is like, and I know we're going to get to the, the, the payments and how Bitcoin can be
done even in the background. But like, again, imagine you're a merchant. If someone comes to
you and says, I'm going to save you all fees. Oh, and by the way, I'm going to put you in a map,
which is going to bring some crazy customers that are probably like pretty well off to spend a bunch
of money with you. Like I just, it, again, the only challenges, like, I think that the more I
watch all this unfold, the more I'm just like, of course this is going to work. Like, and I'm shocked.
I was just skeptical. I mean, I agree. I, another reason, because like we've been here before,
2013-2014 hype wave
it was like the first Silicon Valley hype wave
and it was a ton of payments
Square turned on Bitcoin payments back then
and I think they had like
one transaction a day
or a month
and it was like abysmal
but think about Bitcoin today versus
10 plus years ago
everything's changed
the number of people who own Bitcoin
the number of people who are aware of Bitcoin
the number of people who
the technology
Look at the application. There's dozens of apps I can install on my phone, which have anywhere from a decent to good and some even pretty great user experience for making payments. If I use Phoenix or Cash App, Primal, all of those make the payment in one second or less. It is truly lightning fast.
So, um, and by the way, I think, I think that's worth stopping on.
Cause I thought about this.
We had not to side rail us too much, but a sort of, uh, Bitcoin startup night, Silicon
Valley night here last night.
And DKA kind of was trying to get out of us the question of like, what changed?
Why did Silicon Valley get it so wrong to their credit?
And not just where, if I recall Stripe in that era also enabled Bitcoin payments.
Right.
And so I think, you know, a lot of people in Silicon Valley before they went full shit
coin, you know, they're used to seeing businesses and businesses grow pretty fast.
either get an option or you don't, and then either works or it doesn't.
You're not used to looking at protocols like the internet, like Bitcoin.
And so a lot of people in that first era, you had companies like Stripe and Square,
you had BitPay, all these companies that said, oh, Bitcoin's going to be the next big thing.
This is value for the internet.
What's good people are going to use value for?
Payments.
And then they integrated it.
But then, you know, before Lightning Network, which allows for, you know,
peer-to-peer instant final settlement, instant being the key word there,
you know, if you're sitting there and you're waiting 10, 20, 30 minutes for confirmations
and no one has Bitcoin and all these other things,
of course it's not going to work.
So just to kind of loop back to our conversation last night,
I think it's worth noting Silicon Valley did get Bitcoin early on.
The tech wasn't ready.
They weren't used to protocols.
Now the protocol is finally ready.
And at least one company stuck around.
Yep.
So, yeah, I think comparing it 10 years ago,
things are dramatically different.
That's another big change.
And the general awareness from TradFi,
You know, love it or hate it, but it's a force for awareness in the world.
And national politics, love it or hate it, but it's a force for awareness in the world.
So, but there's still barriers.
So let's talk about some of that.
Because you're saying like it's a no-brainer for a merchant to enable it.
I mean, I agree with that because it's like it's simple, or at least for square merchants, it's simple to turn up.
Oh, I know what I was going to say earlier.
Let me add that really quick.
This has forced me to better understand the other existing Bitcoin point of sale solution.
because with this file project,
we created a website for merchants
and we didn't want it to be Square exclusive
because even though we work for Block,
our mission is all of Bitcoin.
And so number one,
we want to be neutral and fair and credible.
And number two, like I said earlier,
there's a ton of merchants around the world
who can't use Square or don't use Square.
So what do they do?
So on our website, we promote other point-of-sale solutions too, but it's very different than Square.
Well, obviously. I mean, these are like startups.
Well, not just that, but just like Square is sort of your back-end system too, just as Toast and Clover are.
So if you're using Toast and you want to accept Bitcoin payments, yes, you can use Wallet-Totoshi or Mana or IdexPay or BTCPay, these various solutions.
but it doesn't integrate with your backend system.
So then you have two separate records of transactions
and then it likely complicates your accounting
and taxes and everything.
So it's just a way bigger barrier.
So I fear that for those merchants,
it's still, you got to be a hardcore Bitcoiner to do that.
I mean, to use a non-square POS to accept Bitcoin.
But if you use a non-square,
Well, if you don't use Square and you need to use a non-Square Bitcoin POS, it's way more friction.
So you have to be a hardcore Bitcoiner.
But with Square, you don't have to be a hardcore Bitcoiner.
And we're already seeing evidence of that playoff.
I would say one potential exception on that.
And I don't know how you want to address this.
And by the way, excellent URL.
Steve got bitcoin4merchants.org.
Is that right?
We have one and a half.
What does that mean?
we purchased
spiral purchase
bitcoinmerchants.org
a premium domain
but we thought it was a good value
and then we learned that
so
the broker we were working with
didn't own it, someone else owns it
and we learned that it can take
weeks to actually get control
of the domain
so we did not get it in time
we didn't get it in time
for the launch
so we also acquired
Bitcoinmerchantcommunity.org
which is a great name.
It's a mouthful.
It's a long domain name
but that's what's live today.
But Bitcoinmerchants.org is coming.
If we can work on it.
It's kind of like sending a wire
versus Bitcoin.
Fair enough.
I don't know if we'll get that.
Anyway, that's a whole other issue.
I think there's almost three categories
of merchants in my mind.
I don't know how you want to handle this.
Obviously, if you're square,
To me, it's like, I mean, I don't see any reason why you wouldn't do it.
Okay, great.
Then there's if you have another backend system and you like Bitcoin, but it's complicated,
you know, as people get more aware, increasingly more people will be interested in do it for
things like Ibex and, you know, whatever, whoever's doing that.
Great.
Then I think there's the third category of merchants, which is people that are just pure
cash in it.
And then I think for them, maybe BTC pay server or something like that.
Like I could see a world where, and this is not small numbers, like just Mexico where
I used to live 50% of the economy, pure cash.
And so I could see that other use case
where if they get the tools,
like as awareness grows,
like, okay, yeah,
I'll put in a little extra work up front
if I can make Bitcoin work like cash.
Yep, great point.
Blink is another example of a point in a sale solution.
So that third category, I agree,
it's huge, it's really important,
and especially outside the US.
And I think that's where solutions
like Blink and others could be great solutions for that.
with respect to like Square merchants, I agree
it truly is a no-brainer for them to turn it on.
It's very little time for them.
It's only beneficial to them.
Do they have to commit to holding the Bitcoin or they can receive it as USD?
No, they can receive it as USD. That's why literally there's no drawback.
So they don't face any new tax situation.
If they don't know about or care about Bitcoin or don't even believe in Bitcoin
they don't have to touch or hold Bitcoin at all.
They just received SD.
It just expands their payment options for their customers
and also creates a marketing moment
for like new customers to come in.
So I don't want to steal your thunder,
but to me, all those announcements are great.
And by the way, I just have to say shout out to you.
Shout out to Jack.
Shout out to Miles.
Like the Square team,
I don't know what the hell is going on over there,
but all of a sudden it feels like Elon is running this thing.
There have been so many damn launches this week.
I've been shocked.
The one that got me though,
it's like, okay, Bitcoin accepted.
That's cool.
uh btc map that's cool we're gonna talk about some other stuff from cash app you know no fee
stack and that's cool the thing that got me was you can now as a merchant i say hey you want to
pay with bitcoin go into cash app okay and choose do i pay with my bitcoin balance or my dollar
balance that to me was the single i was shocked shocked and you don't even need a bitcoin balance
tell us about that uh i i will oh sorry but i want to hold on we're still on the i want to
We're getting there.
It's very methodical.
It's friction.
I want to like, let's talk about friction
and then we'll get that.
Because that's a big deal.
That's where it comes.
But the friction.
So I agree.
It's a no brainer for Square Merchant
to turn on Bitcoin payments.
But that still doesn't mean success.
Yeah.
Meaning we could still live in a world
where, yeah, for a few weeks,
there's some Bitcoiners that go to these stores
and paying Bitcoin.
Yeah, yeah.
You know, and then like by January,
no one's doing it anymore.
Kind of like 10 years ago.
Maybe like 10x the scale of the hype cycle,
but it disappears.
That absolutely could be the outcome.
I don't think it's going to be the outcome.
I'm optimistic, but that could be the outcome.
So what are the barriers?
Well, number one is customer awareness to even,
I mean, so there's,
let's split the customers in two segments.
One is Bitcoiners.
Bitcoiners are aware of this, I think,
especially with the amazing masterclass
of communications and marketing this week.
But normal people, the rest of the people,
aren't aware of it.
So how do they become aware of it?
Number two, there is friction for a normal person, even a normal person who owns Bitcoin, because they typically own an ETF or have some in Coinbase or Cash App.
So they might have a spending wallet on their phone, but many, many don't.
So that's friction.
So how do you create awareness and how do you motivate consumers to spend time to get a spending wallet on their phone?
even though the UX of those apps are, like I said earlier, are good now,
but still you have to install it.
You have to somehow get Bitcoin into it.
So there's still all that friction.
And then third, what's the motivation for them to spend Bitcoin?
Especially a lot of Americans, they get 1%, 2% cash back with their credit card.
Why go through all this hassle?
And then why spend Bitcoin? I don't get any money back.
And then the fourth reason is that because merchant adoption is so low,
it just super awkward It kind of like if you have a Discover credit card but even way worse If you go into America do you accept Discover And you told no
most of the time.
You just feel beaten down. It's a waste of time.
It's awkward. You feel like an idiot.
Like, oh, I should have Visa.
I should just use Visa.
How does Discover even help?
I had a Discover card.
Why? How?
Everyone accepts it. What do you do with this Discover thing?
I mean, when I was like, wait, wait,
like a different era.
But I used Discover in Iowa.
Hey, just throwing this out there,
quick random idea.
Since Discover is so backwards
and like small or whatever,
but somehow it's survived.
Is that like an acquisition target
for Square or somebody?
Just like if you're in a viral network,
turn it like whatever,
convert them all to Bitcoin.
Throwing it out.
Yeah, I don't know.
Yeah, so anyway,
I think those are the remaining.
Oh, and then taxes as well.
But honestly, I bring taxes lowest on that list.
I think it's the psychology of like,
a very low percentage of
the speed at which Steve ships
the ideas you guys come up with on the show
is epic.
We got some interesting comments.
Thanks, Matthew.
Yeah.
Yeah, because we actually,
yeah, the Spiral stuff did stem from the show.
So,
but I,
my,
one of the developers who is a former Spiral grantee,
we were chatting about like,
what are the remaining barriers?
And here's my ranked list.
I still think number,
I still think number one is like,
lack of reason for consumers to spend Bitcoin.
Why?
Now, we said in the show a few episodes ago,
if Pink Owl offers 21% discount,
that's going to get normal people
installing wallets, getting Bitcoin on it
to save 21%.
That's steep.
Eventually, even like a small kickback
could be valuable,
which actually another news item from this week
is Visa MasterCard settlement.
Apparently, there's been a 20-year legal battle,
and there's a settlement.
Are you guys not aware of this?
I'm not aware of that.
I think it has huge ramifications,
because today, any merchant that accepts Visa
has to accept any card.
It's in their agreement.
So that's why if you get these rewards cards,
they have amazing rewards.
The merchant actually has to spend more on fees
when consumers have used cards that have higher rewards.
What do you mean any card?
So they have to accept Discover?
Is this like some Visa entity?
The Monopoly thing?
No, Visa issued.
They have to accept any Visa card.
Like if you're a merchant,
even if,
so if I come in,
let's say I have two Visa cards.
One has a way better
consumer reward for me.
But you have to pay more in fees.
You have to accept it.
Yeah, but it has a Visa on it.
Visa says you have to accept it.
You have to accept it.
You can't discriminate and say,
we'll accept some things for the Visa,
but other things for the Visa.
The settlement, though.
Yeah, but who's enforcing that?
I mean, can't the merchants be like,
nah.
No, Visa will be like,
bye-bye.
Yeah.
Interesting.
Visa is an enforcer, right?
Which is what else we should talk about.
But with the settlement, that is going away.
So I think this is massively disruptive.
So merchants can all of a sudden say, no, we only accept the Visa cards that have lower fees.
Oh, yeah.
That's going to create tons of consumer confusion and frustration because all of a sudden, like, I've, you know, there's a whole segment of people who optimize their cards to get the most money back.
Oh, yeah.
If all of a sudden it gets, if it introduces this problem of like, oh, all of a sudden most of the merchants like you don't accept this.
And now it's kind of like a 50-50 chance.
Yeah.
Or it keeps declining.
Then it's like, I don't, it feels more like Discover.
And so it just opens up.
I think that is going to open up a huge opportunity.
It just happened.
I have no idea how it happens to coincide.
It literally announced this week.
No coincidence.
It happens to coincide with this.
No coincidence.
So huge.
But yeah, I think number one issue is like lack of reason for a consumer to spend.
But if they get discounts and incentives, and again, if it's in person with your local favorite merchant, just the emotional.
I'm helping my small business that I love and care about.
Those are reasons to spend in Bitcoin because it helps them out.
Well, and by the way, if you were at the plushie there, your friends, they ask you that.
Like, I think that, yes, a little kickback is probably like the final thing you need.
But also, I wouldn't underestimate, most people are at least somewhat curious.
People have innate curiosity.
And most people are going to be like, what is Bitcoin?
And if you have the little thing left behind there, and they're going to be like, oh, cool, I've heard about this.
I've never played with it.
Almost every person I've talked with, unless they're completely anachronistic, which maybe they're right in the long run.
But I think people think it's cool, too.
As long as they don't already hate it, it's like, why not try this new thing?
Right. So I think that's the number one reason, but I do see it being addressed. I think the number two reason is the percentage of merchants, just like if it's hit or miss. Well, one way to address that is with a map, right? And again, BTC map has existed, but it's been pretty sparse. And if you look at it now, it's still sparse, but it's growing quickly. And you can imagine it becoming not sparse. And so having tools like that, and also the integration of BTC map, it's already in like, Waldo Satoshi and Zeus and a bunch of other, well, I think Zeus, I don't know.
A bunch of Okwa, Albi.
But now it's in Cash App.
So it's just more and more integrated in wallets
and accessible to people.
That will help with that issue.
I think those are the two primary issues
and they're being addressed.
Now, others will cite,
oh, people don't want to spend their Bitcoin.
We've talked about this in the show.
I actually think it's BS.
I mean, I agree that is a common refrain,
but I don't agree that that's actually
going to hold people back from spending.
If I'm offered 21% discount, I'm going to have my savings account with Bitcoin.
I don't touch that.
And then my spending wallet, which I'll keep spend and replenish to get my 21% discount.
But to be clear, I will say this.
I mean, look, I would do a little bit of that just for the love of the cause.
But it would only be for the love of the cause.
Now with this feature, I will tell you, I will not be spending any Bitcoin from Cash App.
I will be 100% on every transaction, dollars, $2 using Bitcoin in the background.
That's the killer app.
100% of the time.
We'll get to that.
I agree with that, but we'll get to that too.
But even for getting that feature dollars, I still think if you have an incentive to spend Bitcoin, you'll spend Bitcoin.
Because you're in one of two camps.
Either you hold dollars as well, and if you do, then you can spend and replenish.
if you don't hold
if you're 100% Bitcoin
you have to spend Bitcoin
so there's no situation
where you wouldn't spend
I do think it's important
I think honestly
this like blitzkrieg
that's happening right now
is going to solve this problem
like I would 100% do that
if I didn't have any tax concerns
honestly
I just don't want to deal with that
so then yeah
that's the next thing in the list
is tax concerns
and I think there
you're going to have
some segment of people
who would just be
civil disobedience
they'll be like
this is
shout out to Darth Quinn
this will be BS
I'm going to spend money
and like if enough of us do it,
the law will change.
And that's happening.
Then there'll be a segment of people
who are ignorant,
meaning they don't know.
They don't know that it's taxed
and they'll just spend
because they're getting 21% off.
And I think that'll be a much larger group
than proactive, knowledgeable civil disobedience.
And if the two groups combined are big enough,
the law will change.
I mean, look at the Uber playbook.
It became so popular in cities that even though cities resisted and whether or not laws were being broken or taxi broke, you know, whatever, tokens or whatever, like it's ubiquitous now, right?
Because there's so much value to consumers.
So imagine a world where there's like tens of thousands, hundreds of thousands of small businesses in America who are benefiting from this.
Yeah.
That's strong voting power and political power.
They're not going to like shut that down.
So I think that will address that issue.
But also, I'll leak a little alpha on the show.
Ooh, here we go.
You heard it here first.
Let's just say the announcements from Block are not done yet.
So stay tuned for Monday.
That's all I'll say.
But anyway.
Sick.
Yeah, so I think there's plausible answers to breaking down all the barriers to spending.
And then we can get this sustainable.
and not just like a one-hit wonder
and then it goes away like sustainable.
Now you want to talk about the,
not only spending Bitcoin,
but yes, an enormous announcement
from Cash App this week
is that you can,
from your dollar balance in Cash App,
which there's what,
60, 70, 80 million Cash App customers,
some like,
huge, huge, huge, real deal,
that have cash or have dollar balances.
They can now pay lightning,
like Bolt 11 lightning invoices
with their balance.
Whether it be Square or any Lightning balance.
So, yes.
I feel very Gen Z now.
Well, actually, sorry.
I learned that was not Gen Z, but Gen Alpha.
Yeah.
Gen Alpha?
DK has moved on from Gen Z.
We're getting Alpha from the Alpha.
So, obviously, it's huge.
Because a ton of people don't have Bitcoin yet,
don't have spending Bitcoin yet,
or they have a psychology,
even though I disagree with them,
but they have a psychology.
do i don't want to spend bitcoin whatever the case is it's a huge segment of people yeah who can now
um pay this lightning invoice and and like why why do they care well the merchant cares because they
saved the fees right so the merchant cares so um you still get a problem how does the consumer know
to do that and what's motivating them to that well all of a sudden the motivate they don't have to
be nearly as motivated because they don't have to install a bitcoin wallet they don't have to
acquire and hold Bitcoin. I guess another friction is like some people are worried about the
volatility, right? I mean, check the Bitcoin price. It's gone down recently, right? We all,
anyone in Bitcoin is accustomed to that and it's like, whatever. But if you're newer to Bitcoin or
you're not yet into Bitcoin, that can be scary. So yeah, for all the people who hold it, the
friction to doing this is much lower. The only friction is you have to be aware and you have to,
when you go to a merchant,
you have to say,
I want to pay in Bitcoin,
even though you don't have Bitcoin.
Meaning like the,
you have to,
because the merchant has to
like use the UI
to switch it to a Bitcoin QR code.
So that actually is still friction.
And I know the team is thinking
like in discussions
about how to make it
so that the default screen
shown to a consumer
can handle anything and everything.
Yes.
If we can,
I mean,
and it's challenging.
But if that can be pulled off,
that would be killer.
I love it.
Because otherwise,
it does create a little bit
of an awkward situation,
especially for people
who don't hold Bitcoin.
If you hold Bitcoin
and you're into Bitcoin,
then you're almost enthusiastic
to be like,
oh, I want to spend in Bitcoin.
Can I spend in Bitcoin?
Or, you know,
here's how you do it, Mr. Merchant.
Here's what you want.
Whereas if you just have to hold dollars,
it's weird and awkward to say that.
Yeah.
Okay, so a bunch of thoughts there.
And I know you guys are already
sort of ahead of the curve.
But to me, a couple of things here.
So number one, let's say there's 70 million Cash App users and 4 million merchants that use Square. So Square is in a very beautiful position compared to anyone else in the world because they own both sides of the transaction. That's a really, really big deal. And so I think one of the first things that's going to happen here, and I think this would actually be dope for Cash App to do, Miles, if you're listening, I'm sure you all thought of something similar, but imagine for a minute, because you guys remember even a couple of years ago, there was a Cash App Pay, even pre-Bitcoin.
And with Cash App Pay, it's like, I'm paying with Bitcoin.
Or sorry, I'm paying on an internal ledger between Square and Cash App.
Great.
So they already saved fees for the company.
That made a lot of sense.
Miles tweeted, they deprecated all of the old internal ledger.
And now it's all Lightning, which is awesome.
So they're clearly moving that way.
That's a big deal.
But I would always, like, look, I always try and support the Square ecosystem as much as
I can because I know what's coming.
So I pay for things like Tidal.
Shout out to Max.
I know we're going to get Bitcoin payments there.
I used to use Cash App Pay because I know we're going to get Bitcoin and we already got that
there.
But imagine for a minute,
the merchant's like,
even if they don't want to explain Bitcoin,
the merchant is so incentivized to save money now,
all they have to do is say,
hey, listen, you download Cash App right now.
I think they already get a $5 referral.
Maybe you could sweeten the deal,
doubling that by saying
with your first Bitcoin transaction,
you get whatever, double that right now on the spot.
I'm going to give you 10 bucks.
Just download Cash App.
You've heard the rappers talk about it.
Kendrick, I'm sure, mentioned or something.
It's cool.
You save.
You help me out.
like, dude, the cash app could just explode.
Like, think about that for a second.
Like, every single person,
and eventually I know the next thing to figure out
is like once you have one QR code,
and then even beyond that,
the real killer app is once you can do with NFC
or some way to pay,
just like tap your phone, like Apple Pay there.
Once you do that and you make Bitcoin the default,
like, I mean, my big question is like,
you know, the old payment networks just got disrupted.
So I will say,
so the Square team is working on NFC support as well.
Yeah, I feel comfortable sharing that.
Miles has been very comfortable sharing the roadmaps.
I'll feel comfortable too.
Yeah, Miles is being real right now.
He's showing everything.
But doesn't iOS protect their property there or no?
Yeah, so we worked with a lot of different,
we, like Spiral Teams,
worked with a lot of different wallets on NSC support.
It's a bit complicated,
but I'll try to explain it simply.
If any device can be a sender and do an NSC payment,
but only an Android device can receive,
unless you sign a partnership with Apple
and then an iOS device can receive.
So that's the situation.
It's a permissioned API from Apple.
Hopefully that changes.
Are there examples of the kinds of things
that they do enable that for?
I don't know.
But I would think,
so it's maybe difficult
if you're like a small startup
in El Salvador
or you're like an open source project.
But if you block,
I would hope and think
the block could sign a partnership with Apple.
So hopefully that's explored.
And then not only would Android devices from, I mean, Square has both Android and iOS devices, right?
So what Square could do already is support receiving on all the Android-based Square devices.
And then any consumer using a wallet that supports NSC, and there's already several that do, like Phoenix supports NSC, Zeus does, Wallace Satoshi, I think, does.
Like, it's quite easy to enable.
then NSC could be used.
Wait, so are there Square terminals?
Are those Android based or not?
Some are.
Like the new handheld one is Android.
Which by the way,
I hadn't played that until last night.
That's nice.
It's basically a phone.
It's dope.
Block basically created a phone.
Yeah.
But yeah, some are iOS,
some are Android.
And then of course on regular phones,
Square is supported as well.
Both on iPhone and Android.
And to be clear,
you could also do this with a card, no?
Because everyone's got,
I even had this from back in the day, like the Cash App card.
You can just have that be like a tap in FC2.
Yeah.
So I think that'll come.
That'll improve the user experience.
And hopefully iOS-based core devices will get supported as well.
So that's one thing.
I forget what else you were talking about.
There's some other.
Yeah.
Anyway, I think that'll really improve the user experience as well.
This is a big deal.
You guys just opened up.
Oh, I know.
I want to talk the other dollars and lightning.
Yeah.
So huge thing for,
for cash up.
I mean,
basically anyone using a Bitcoin wallet that supports lightning address can
now pay a cash tag and then vice versa.
Really?
Yeah.
And there's a commitment.
I,
I've been trying to persuade miles for years to support it at three 53,
which we don't have to get in the weeds what that is,
but he now committed to that publicly.
so that will come
so I imagine
a better version of Lightning address
I've told you
I've told you guys this for years
Is this Bolt 12 again?
It's Bolt 12 again
We'll dedicate an episode to that in the future
but have you heard of Bolt 13?
Yes
Spiral funded a grantee working on Bolt 13
Are you serious?
It's for watchtowers
Halloween or something
But we'll get into that.
Let's just call it human Bitcoin address.
Like whatever the technology is underneath,
human Bitcoin addresses.
So I think in a year,
what I'd like to see is Robinhood, Venmo, Cash App,
all supporting this.
And then you have interoperability
between all these products.
Plus all the other Bitcoin wallets in the world,
not just big companies like that,
but like big companies like that
who each have their own ecosystem today
will become interoperable
along with everyone's startup,
everyone's open source project?
Do you think they're generally open to that?
I wouldn't.
I'm going to put enter.
Yeah, well, I can think of reasons why they wouldn't.
Why did AOL not survive?
Anyway, because they're dumb.
They should have plugged in the internet.
Right.
Yeah.
Well, okay, so.
But Spiral is going to be like selling that.
One question on that.
So I want to just pause here.
So are you telling me right now
I can go into my Albi account,
my Albi wallet,
and I can send a payment from Albi
to my cash tag right now.
Bruh!
Where's my phone?
So in...
I'm going to see this thing.
Yeah.
So I mean,
dollars on lightning
is now in Cash App, right?
I gotta see what my tag is.
So...
Does dollars on lightning mean
you're taking,
you're sending as if it's dollars
and it's converting to lightning?
Strike did this like three years ago.
So it's the same concept.
Like my personal story,
I was in Ghana maybe, yeah, like three years ago, I think, for the Bitcoin conference there.
And went out to eat at a restaurant.
And actually, it was with block employees.
Jack was there.
And you would expect the CEO to pay for the bill.
But he makes me pay because I was the senior person.
Smart man.
Referring to my age, not my position at the company.
You're older than Jack?
Yeah.
For real?
Yeah.
Oh, man.
I feel you.
I don't want Jack to hear this segment because you're like...
I didn't mean it that way.
You're saying I look really young.
Okay, thanks.
Wait, so what's my...
Is it Max A. Webster?
I shouldn't be like Doxman.
Whatever.
I don't know.
Play with that later.
Yeah, okay.
But anyway, I paid the bill at this restaurant using my Strike app on my phone, which is connected to a U.S. bank.
I had a US dollar balance in Strike
and I just typed in
the local phone number
of this restaurant
I didn't have to know anything about the local currency
or the mobile payment
technology or mechanism or anything
I just typed in the phone number and it actually made the payment
and it went from
strike to the
lightning network
so there was a
bitcoin to dollar exchange
that Strike had
kind of real time. Yep. I mean, Strike made all this happen and now
Blockhead as well. So there's a dollar to Bitcoin exchange.
It goes out over the Lightning Network to another exchange,
which then converts it back to a local currency,
which is then paid, in this case, paid over the mobile payment network in Ghana.
And was the Ghana merchant, they had a POS or a phone or they were
using Strike or how did they? No, they don't.
They don't need to know anything about Stripe.
They don't need to know anything about dollars.
They don't need to know anything about Bitcoin.
They don't need to know anything about the Lightning Network.
They don't need to know anything about the partners involved in all this.
They just receive mobile payments on their phone,
which is common in Ghana to use a mobile payment.
All right, I'm just going to give a quick shout out.
Or Matthew's saying he'll test it.
Let's fuck it.
Let's do it live.
Max A. Webster.
I want to see if this works.
And if, tell me, oh, damn, my bro's on it.
I'm curious to hear which wallet you sent that from too.
I'll tell you if I get it.
Well, I'm guessing he sent it from Cash App.
No, but Cash App to Cash App, that would be lame.
It needs to be an external wallet to prove a point.
Okay.
I'll let you know.
So while we're waiting for this,
there's somebody in Ghana who has to be able to receive
the Lightning payment and convert it to local currency?
Who does that?
I figured out this Bitnob or just a company I can exchange.
But it's somebody that the...
Strike partner.
So, the merchant knows that they've engaged with this?
No, the merchant doesn't need to know.
The merchant literally just receives money on the mobile payment mechanism that's local to that country.
Okay.
They don't have to know anything about Lightning Network.
Great.
I guess, what's confusing about that?
All right.
Yo, I got it.
That worked.
Matthew, what did you send that from?
I was from Canada.
Oh, Phoenix in Canada.
Yeah.
Motherfucker, dude, that's crazy.
yeah bro wait i gotta know though um i got 94 cents 0.0000001 btc with zero fees is that
correct that's what you said there was no fee paid whatsoever he sent 500 bitcoin oh bro shit
i'm gonna start giving all my cash all right yeah let's go we're gonna make this is how this show
value for value we need a big sign back here with um a bitcoin address and i'm also just gonna throw
out, remember, a reminder, Alex
and Ashi, we should chat about this later,
you know, people are still trying to stream
us money on Fountain and Officer. We gotta get that
stuff set up. And now, now that I'm starting
to get it coming in while we're on the show, I see the power
of value for value. We gotta follow up
on that. Bye. Yeah, so this is
amazing and powerful, right?
Oh, good enough. Let's go.
Alright. I like it.
Okay. A one cent fee.
Pretty awesome. Yeah. So,
should we
keep diving into how that works
or not? I mean, it sounds like it's
trivial. It goes from strikes
in this specific
case, I had strike on my phone.
I had a US dollar balance because I
connected strike to a US
bank. And then
I typed in
the amount I wanted to pay
in the local
currency. And so
I had to pick the local currency and I typed in
the mobile phone number for that restaurant.
That's all I had to type in. Hit return.
Hit the button. Oh, shit.
They then, Strike, took dollars from my account, used an exchange partner of theirs to convert it to Bitcoin, sent it over the Lightning Network to an exchange in Ghana, who they had partnered with.
They had partnered with.
Okay.
Yep.
Who then converted it into local Ghana currency and sent it to this mobile phone number using their network and technology.
And that's why the restaurant didn't even know anything about it.
By the time it gets from strike to the local partner,
that's that conversion then happens at local partner and everything else
works as it.
Yeah.
So that,
that existed three years ago.
As I don't,
we don't need to read the last comment.
Thank y'all.
I got,
I got a lot of y'all coming in now.
This is,
this is guys.
We should be doing this forever.
And by the way,
I agree with Matthew.
We got to get zap streams set up too.
Like this is,
there's a real potential here.
We could fund the Presidio Bitcoin one day from value for value.
That's my goal.
Yes.
all right miles is literally calling me right now so i hope i didn't say something that
that i shouldn have don do that um oh shit okay so um okay so that on lightning Yeah it you And a lot of people are Been there for A lot of them are having
a similar observation.
A lot of people on social media
are having a similar observation
as Max, which is like,
this might have been
the biggest announcement of all.
Ever, ever.
I know Lalu thought it was,
you know, he actually called it
the biggest announcement
in Bitcoin's history,
just that specific thing.
I agree.
And it gets...
This week.
Yeah.
Because actually, Matthew just demonstrated it, right?
He's in Canada.
Because we just disrupted every payment network on the planet, bro.
He used Phoenix, and he sent a small amount of money.
And not just Matthew, bro.
I've been getting it from Rom, Matthew.
So that's Vinny, everybody.
That's Bitcoin, but you can also do dollars as well.
Instant final settlement, not credit-based.
I mean, not with Phoenix, but like Cash App can send dollars.
So you can have a dollar balance, send it to someone else with a Bitcoin wallet,
and they receive Bitcoin.
I mean, my big question is, I mean, I wouldn't want to be,
I mean, not to go too deep in all this, but like, you know,
let's use Western Union.
Like, what the hell are the Western Union's in the world going to do?
Are they going to embrace this or fight it or whatever?
I mean, that to me is, that's the real story.
What did Eastman Kodak do when Instagram came about?
It just died.
You can't necessarily always embrace it.
you kind of sometimes have to play a new game.
Also announced by Cash App is stablecoin support.
Yeah, now what's going on with all this?
So I don't think it's available.
I think they said it'll be available maybe in January
or like coming soon.
On Solana.
Yeah, so we can talk.
Okay, we'll talk a little bit.
There's still so much more to talk about like Bitcoin,
but we'll touch on this.
Let's see.
Well, on Solana, like, okay.
It's got adoption.
I get it.
Yeah.
I mean, which people use it?
Which one would you pick?
Right.
I mean, I can't criticize any answer you have.
No, I get it.
I'm not saying it's the wrong move.
It's probably the right.
Ethereum or base or Tron or Solana or Taproot assets or Spark.
I mean, there's all these options.
But not Spark.
There's no, that it's some, we didn't even get it right when we announced it on the show.
Like it's using some dollar token that we weren't unaware of.
I thought it was like the third or fourth ranked one,
but it's one that no one's ever heard of.
I hear you, and I get you're the user.
I'm the user also on Solana.
It's just for dollars.
I'm not criticizing, but I do think that should be a challenge.
If Lalu is listening or the homies at Spark,
let's get that off Solana.
Well, I have no doubt David Marcus is working his ass off.
I know he is.
To get Tether, USDC, etc.
But even when they do,
I'm more and more convinced Bitcoin's going to win.
It's a payment game over stable coins.
because, and we've talked about this show,
but the fragmentation is going to be horrible.
And with Bitcoin, you get this amazing...
Internet of money, intranets.
You've picked with a solution.
All day.
So I talked to a friend who was an exec at Visa
and now spends a lot of time on stable coins.
And I happened to be on the phone with him yesterday.
And he's just like, oh, he's like, yeah,
the details of like Sol or Base or whatever.
It's like, that doesn't work.
That's going away.
Bridge and all these other, like, that's going to be solved.
So don't waste any time on it.
So I think there's a little bit of criticism
over choosing Solana.
I think that's ridiculous.
I don't think it's criticism.
I think that's a challenge to us as Bitcoiners
if we want the internet value.
I don't view Solana as the long-term answer
because it's an intranet.
But there's a large segment of Bitcoiners
who don't want stable coins on Bitcoin.
Totally.
And there's valid reasons for that too.
I don't have a strong position on it,
but I can definitely argue either side.
I get it.
But I think in the short term, it makes sense to like, because it's a regulated institution
to be able to market between those.
But like one day I would like to see like there's instant swaps between dollar value.
And maybe that's like, by the way, I was very impressed with Tony's presentation last night
thinking about doing sort of like stable coins.
I almost call what he was doing was like using lighten channels to create synthetic dollars,
like a contracts for difference platform.
I think that was really cool.
And there's a lot of things we could experiment with here.
but I think anything that is an intranet
one day you have to rely
on a company to be there to market make on that
I would love to see that
move into the internet. But it may help to start with
these proprietary networks as long as they don't
get to be dominant as long as there's a path
where they're not going to be able to
ultimately dominate the system
then great like we needed AOL
or we didn't need but like a lot of
first experiences were CompuServe
Prodigy AOL before you had
AOL yeah I agree
the internet access very accessible to a lot of people.
So I think the interesting question is more like, well, Cash App just announced dollars
in Lightning and also going to support stablecoins.
Like, do those conflict or why do both?
Yeah, why?
So I think it's a good question.
So let's talk about it.
To me, so the dollars in Lightning, that means you can pay any other wallet that supports
Bolt 11 invoices in the future Bolt 12.
But like, you know, Lightning payment protocol.
and so
that's a bunch of wallets
windbolt 69
so
the question is
how many wallets are out there
that support USDC and Solana
that don't support Lightning
that
the size of that
sorry
the size of that market
is why cash app
should support USDC
on Solana. And I don't know
what the Venn diagram... I mean, there's a set
of wallets that support USDC
and Solana. Yeah, it's totally fine.
It's totally fine.
Support all the above.
I mean, it's an interesting discussion.
So, okay.
Imagine a circle of here's
the size of all the users that support
their wallet supports USDC on
Solana. There's another circle,
Lightning. There's other
circles for the
dozens, if not hundreds, of other combinations of
stable coins. So CashApp will
support two of these circles.
They overlap to some
extent, and I don't know how much
they overlap. A lot.
Well, then why support USDC
and Solana if they overlap a lot?
Because it already supports Lightning.
I don't know the answer.
But I actually, I suspect there's
if you look at like Phantom and
Trust Wallet and stuff like that, there's probably a bunch that
do support USDC and Solana that do not support
Lightning yet. So
CashApp can now pay those wallets.
and receive from those wallets.
But there's all these other circles
with other stablecoin pairs
that Cash App won't be interoperable with.
And it's just kind of a disaster
trying to support all of them.
I mean, to your friend's point,
I mean, that's why Bridge and others exist
to try to like abstract that.
It's really hard to do for self-custody wallets.
Easier for custodial though.
So we'll see how that plays out.
But to the degree that Lightning payment protocol
is broadly adopted,
honestly, the stablecoin stuff
can literally just go away.
you can just like you use regular dollars on trad fi you'd like your network to uh transport it
i mean i think the big thing is international too right which block is obviously still in the u.s for
now but eventually if block wants to move internationally we've talked about some of the
potential bitcoin opens up for that maybe that's the reason so i'm going to talk a little bit about
my own team and what spiral did this week uh i think what we did was uh you know small mighty team
Shout out to Haley, Ken, and Matt.
And in some ways what we did is small,
but I think the ROI can be huge.
So let me explain why I think it can have a huge ROI.
So I already talked about a couple of components of it,
but we felt it's very important.
Number one, an asset that Bitcoin has
that stable coins and corporations don't have
is the Bitcoin army.
A rabid group of people
who want to will Bitcoin in the world
including willing Bitcoin payments into the world.
And we're already seeing that at Presidia Bitcoin.
Numerous members here are out, you know, convincing local merchants to accept Bitcoin, spending Bitcoin.
And we're seeing that worldwide.
Look at BTC map, it being populated just this week, right?
So we have the Bitcoin army.
Imagine, imagine like the Stripe Tempo army.
there's not going to be a stripe tempo army unless stripe pays people to do it right so here you can
have bitcoin as a volunteer army i i also think it's just worth pausing here and like this something
i wish i had said at the silicon valley whatever startup unite last night like for all of you guys
who have joined you know the ranks of the stripe tempo army or the whatever blockchain is hot army
I know there's some short-term cash, but let me just tell you, you don't know how good it feels to be part of the mission.
You know what I'm saying?
Doesn't it feel just sweet, like just the juice you get from seeing someone join the revolution, be part of the squad?
No amount of money will ever satisfy that primal desire.
It's not too late to join us.
Yeah.
Well, I mean, anyone in Bitcoin who's gone to a Bitcoin event feels that energy around the people that are at the event.
Here at Presidio Bitcoin, we felt it for a year now.
Like, just our community here continues to grow.
We have, like, more than two dozen members now that come in regularly.
We have tons of visitors that flow through here.
And we're all supportive of each other, even though everyone works for a different organization and has their own, like,
best interest and everything.
But, like, the common bond is converted from shitcoins, too.
It's like you can go the Stripe shitcoin path, which is the path of nihilism, where you can have meaning.
Just trust me.
Come try the meaning.
So we have the Bitcoin army.
One thing that anyone has tried to convert a merchant, as I think we already mentioned, but like if you go into merchants that enable Bitcoin payments on Square, number one, they're often quite busy, right?
They don't have time to talk to you, even if it's something simple like that.
Two, you're often talking to someone who's not the owner or the decision maker or even has the access to the Square UI to turn on Bitcoin payments.
so you're often left in a situation where then you just have to like
you leave and you didn't really make any meaningful progress
towards your goal of having them turn on Bitcoin payments
so we felt it was really important we spiral that there is a high quality
leave behind like a sheet of paper with a clear simple
message that you can leave behind and say hey when you have time please take a look at this
or can you please give this to the owner and have them look at it
So we created that. The message is simple. It focuses on the fees. We already talked about that. But, you know, it doesn't. Bitcoiners might not instinctively realize this, but don't talk about censorship resistance or any of the seven qualities of money in the history of money. Merchants don't care about that.
But have you heard about the creature from Jekyll Island?
They might. They'll eventually go on the Bitcoin.
That happened in 1971.
Yeah, what was that in 1971?
Oh, right. They'll eventually go on that journey.
Andrew Jackson was right.
but what they care about today is fees.
So this one pager focuses on that.
Very simple.
Figure out the audience.
There's two versions of this one pager.
One is like pretty standard.
Anyone can use.
The other has is like plushy
and like itty bitty inspired this character.
So if you're if you like the character,
you think that's a fun, cute way
to strike up a conversation.
You go that path.
If you think it's weird and it's not for you
or you don't think it's going to be for the merchant,
that's cool, too.
We have a more standard version, but we have both of those on pagers freely available to download off the website, BitcoinMerchantCommunity.org, and print out, do-it-yourself print out and use.
We also have printed out on really high-quality paper stock.
And it's orange, which is nice.
in Orange,
although I'll get into
some snafus with launch,
but like Orange
and we're distributing that
to six different hubs
around the US,
like Bitcoin hubs.
Austin, Nashville, Atlanta, Denver,
here at PresidioBitcoin,
and then Kansas City came.
Kansas.
Kansas City came.
People from Kansas City
are like, we want this too.
Where's New York?
New York doesn't support.
Square doesn't support it.
For real?
Probably a bit licensed stuff.
Yeah.
Dude.
Not allowed.
It's not allowed to.
That's wild.
Okay.
So, no, people from Kansas City rose up.
They have a guerrilla army of 10 people ready to hit the street.
So we're going to send them not only the one-pagers, but we're also sending them plushies.
So if I want to proselytize, I can come to Presidio Bitcoin, grab a stack of these things, just go out to Merch and start hand them out and tell them about it?
Yep.
We had an event last night.
a bunch of people came and I handed out
these one-pagers and plushies
to four different people
and I had conversations with them.
They all seemed like they're genuinely
going to go out and
try to convert merchants
and I was happy to.
Do they have to choose I'm getting
the serious one or the party one?
I think
we've only printed out the
plushie one,
the itty-bitty one for the hubs.
Got it.
Yeah.
And so, yeah, so we printed on orange paper,
but then we had this hiccup with the domain,
which we talked about at the beginning of the show.
So don't hand those out yet because the domain doesn't work.
So then we had to print out new ones with the alternative domain,
the one that is live.
This orange paper is not in stock.
It takes days to get it printed because it has to be ordered.
so yeah so to do so so we we had to like atoms man uh haley has spent a lot of time working with
printers this uh this week uh so now the hubs have white paper stock because we can get to them right
away but um on monday they should be receiving the updated orange that has the new url right on so
yeah if you are in any of those six cities i mentioned you can reach out to your local bitcoin
hub.
And I mean, if you're in Kansas
City, I think
he'll be okay with me saying who it is.
But the founder of Mana
Wallet, M-A-N-N-A,
his name's Adam.
I haven't heard of that.
I think he's rallying the troops there, so you can reach out to him.
But yeah, go to your local hub
if you happen to be in the area.
And if you show yourself
as eager and willing to go
get some merchants to accept Bitcoin,
you'll get a plushie, some
one-pagers and some instructions on like how to go about like, you know, guidance or best practices
for how to go about approaching it. Is Miles still slinging 25 bucks?
Yeah, I don't know if he has discontinued that. So that's an interesting thing.
Yeah. So, but well, sticking to what Spiral's doing, that's what Spiral's doing.
We also, we need to, we're already receiving feedback from people doing this, the good,
bad and ugly. And there's like huge successes so far, but there's also a ton of learnings
that we want to share with others. So we are in the midst of trying to figure out creating
a community, some kind of discussion forum so that people can share that feedback and
others can learn from it. And so we're trying to figure out what's that like, which tool
to use? And is there like, is it, is this a centrally controlled, like the spiral create
this? And then there's different channels for different regions, or is it more distributed?
I think you recommended Stacker News maybe.
Yeah, we should definitely go to Stacker News territory.
Yeah, definitely Stacker News or Discord.
I mean, support the homies.
We'll see.
Maybe, I don't know.
Or a master solution.
Yeah, but that's how it'd be built.
So we need to figure that out.
I think that's important because people want to give feedback
and people want to learn from that.
We also created a Facebook group, somewhat to my chagrin,
because I haven't used Facebook for a decade.
But it's actually super smart
because where are small businesses globally?
Facebook and WhatsApp.
They're on Facebook, right?
And WhatsApp.
I know Darth Coyne and Sackner News
thought we're total idiots.
He thought our one-pager was horrible copy.
He thought the Facebook group was stupid.
I don't think he knows what he's talking about.
Well, Darth Coyne is out there for comic relief.
He's not living in the real world.
Yeah, well, I mean, he's living in his real world,
which I give him respect for, but yeah.
But the Facebook group,
I mean, there's already like almost 100 merchants.
But the Facebook group,
the intention is merchant.
it's a merchant community.
So it's not like the Bitcoin army.
It's intended for merchants.
And so we seeded it with like Pink Owl and Compass Coffee
and a bunch of other merchants who already know,
they've already been through this,
already using Bitcoin, they know it,
and they can help answer questions.
And then new merchants can go there
and ask newbie questions and basic questions.
And we also, Joe Wood is a CPA and a Bitcoiner
out of Nashville.
He's actually the CPA for Presidio Bitcoin.
and the Bitcoin Design Kit Foundation.
That's how I know him
because he basically is a hardcore Bitcoin
or he wants to help out other Bitcoin efforts
and he's a CPA.
And he started a practice
and I think he's,
I mean, he has like a firm now basically.
I mean, he has like many people.
I think he's had 10 people.
I don't know.
Like he has,
so he's engaged in this Facebook group
because merchants are going to have tax questions too.
So that's awesome to have him there as a resource
and hopefully other CPAs
who are Bitcoin knowledgeable and savvy
join and can help out as well.
So just another plug for why we should do the, so yes, Facebook for like the normie merchants
makes total sense to me.
Stacker News or something like that, but I don't see anything like it.
So frankly, Stacker News for instead of Discord, like it's so easy.
Like imagine that's where the Bitcoiners are.
And you can just like in real time, let's say Miles wants to do another, or we want
to do, or whoever, whoever wants to come out and do their own bounty.
Maybe there's a whale who says, I'm going to put up a million dollars in cash.
I'm just going to like start slinging it.
They can just zap people directly on there.
So if I come, all I have to do is post a photo or video of me doing it.
Boom.
Zap.
25,000 sats.
Could be Nostra too, though.
Could be.
But like that.
I mean, if someone builds it, we've been asking for someone to build this for three years.
Just use Nostra.
Yeah, that's true.
Yeah.
Okay.
And Nostra or Sackgernism.
And meaning like, you know, we can socialize like a hashtag or something.
Yeah.
Something that ties it together.
Either way is fine with me.
But like, I think something where it's tied to Bitcoin because then you can see the interplay of media and money.
Yeah.
I agree with that.
And because of that audience is the Bitcoin army,
it can be something like Stacker News or Noster.
Yeah, I agree.
So another way to frame what Spiral did,
we created two marketing kits.
There's a marketing kit for the Bitcoin army,
which is the one pager and the plushie leave behind.
And just some guidance on how to go about it.
And we'll keep, this is an open source project.
I don't want this to be Spiral exclusive or Spiral only.
We want other contributors to help out.
And with the Bitcoin Army, whatever form we choose,
we're going to learn from that as well.
I've already learned a ton from D++ and Bob,
who have been going out doing this,
as well as my own firsthand examples.
We're going to keep learning, and we'll keep iterating on that.
If people are not near one of the hubs where the material can be distributed,
is there any way to get involved?
Do you just wait for now?
No, no. This is global availability.
You have to do it yourself.
printer, just print it out. And so I think if you have the resources to print it out on
higher quality paper and a better stock of paper, I think that's what we chose to do for the hubs.
But yeah, that's what you do if you're not near the one of the hubs.
Okay. So a couple of questions. One question is, I only for the first time ever last night,
really got to see how a square terminal works from the back end. Is there a stupid, simple video,
like 30 seconds where I say,
I'm about to,
so I'll give you my example.
I want to convert my tea ladies.
I'm going to do that.
Now, I want to go,
I've never seen Square from the back end.
Is there a video where I can just go and watch
like different examples?
Like you said,
there's different operating systems,
wherever it's just like,
I'm going to walk you like I'm a five-year-old
through what do I need to click?
I know Square has produced at least one video
that does a pretty good job,
but does skip some details.
I would say that's number one.
Like the KYB stuff.
I don't think is in that video.
I think maybe they're creating a new one.
I don't know.
But then there's also different Square.
I learned there's like five different apps
in the App Store from Square.
And apparently there's some meta Square app
that combines them all,
but there's still all the,
you know, there's an appointments one
and this and that.
There's so many options.
It doesn't even come from Square.
Like I would love, Bob,
if you're listening to this right now,
if you could just take a video
while you're converting your merchants
and just show like,
hey guys, we're doing this live in real time.
Maybe somebody can do this on Zapstream
and do the, you know, this app on,
but like, this is the exact button.
If you get this error, click this.
Just like, assume I'm five.
Maybe.
I mean, like when they're typing in beneficiary data,
they might not want that public and stuff.
So, but I agree with the general theme
and then you have to address them like-
Maybe somebody should make the video,
how to save 3% on your payment as a square merchant.
I love that.
One other thing I want to throw out,
because I think this is a really important and good idea.
And I know that many startups that I have funded
are doing, let's say, Bitcoin banking and services
in emerging markets.
So places like Mexico, El Salvador, Brazil, Philippines,
et cetera, Vietnam.
One thing that I would love to see someone do,
eventually Square is going to do this themselves, I'm sure,
but that takes time, is to Steve's point,
and you could even do this in the US, right?
You guys are startups, and that means you have limited resources
compared to a massive public company.
But Square already has, I believe you've said,
a version of their software, which is currently available
for all the backend stuff, the accounting,
and like whatever the bookkeeping you have,
but you can't accept payments.
If I were building right now a startup
and I wanted to do this in an emerging market,
I would be figuring out
how can I take whatever Square is built
and figure out how to plug that into
an easy to use Bitcoin acceptance.
And eventually Square will do this themselves.
But like in the meantime,
how do I make all the accounting
that I need for the Bitcoin pay,
whether it's BTC pay server,
whatever product I'm using,
just like seamlessly integrate
or as seamlessly as possible with Square?
That's what I would do.
And I would love to see some of you guys do that.
for all the for the clovers and toasts of the why why square or why integrate with square uh because
i'm assuming square i mean probably has the best ui ux so i'm just thinking here's the example i'm
thinking i'm a merchant in mexico i can use like the kind of like jank normal whatever they use
clip that's very but it's kind of hood square um but imagine if i'm a startup uh like for example
maybe like yopaki or some of these guys are listening to this and they could say hey i know
they were already thinking about doing like a point of sale solution or ibex they have a point
of sales solution.
Instead of trying to rebuild the wheel
and compete with Square
on like probably software
that's really just much better
than what I can do as a startup,
I would say,
how can I take all of the accounting
and backend stuff
from Square's free version
and try and plug that
as easily as possible?
And on Square's end,
it'd be awesome
if that was open source.
I don't know if they would do that,
but...
Square's backend system stuff
isn't available
to the guy in Mexico.
I thought you said
there was a version of Square.
Well, there's Register World.
Yeah.
So I...
What's it called?
I think it's called Register World.
Okay.
I mean, it was launched
like I had worked at the company for like four years and had never heard of it, but it launched
like 10 years ago or something. It's it. I think people in Mexico do use it, but it,
it doesn't have any of the regulated type track by stuff.
Great But but yeah it it it I think it does have some or all of the backend stuff So that my point is never even heard of Register World Square team maybe it a chance to pump this idea out there
because all the other Bitcoin merchants in their own local communities
can start plugging those together.
And if you open source it, all the better.
Yeah.
I think it's definitely been discussed and thought of.
I mean, there's definitely interest from Square to go international.
Totally.
One approach is to take Register World and like a sidecar approach
where any Bitcoin wallet can be used.
Bring your own Bitcoin wallet.
Exactly.
It avoids all regulatory issues,
at least for block,
and it gives merchants choice.
It also means merchants have to choose
and go to the effort.
But I think that's a very reasonable approach.
But my point is, don't wait for Square.
Square does it, amazing.
But if I'm a startup...
But that's what I...
Right.
I don't know what kind of APIs are available.
You're saying integrate.
I don't know if that's available.
If it's available, then I totally agree.
Startups should go do that.
If the APIs aren't there, then how are you going to do it?
So two thoughts.
One, my request would be, it'd be awesome if Square is able to,
just to open source and or like have their APIs be as open as possible for that.
If for whatever reason they can't do that, then if I'm a startup,
you can still hack things together on the backend, right?
So you could like whatever, scrape the CSV file, merge them together.
I don't know exactly how that would work, but if I'm a startup,
that's kind of my like my niche in that I would do.
Yeah, I think that should be explored for sure.
I agree.
Request for psychopaths.
But just wrapping up the spiral stuff.
So there's a marketing kit for the Bitcoin army.
There also will be a marketing kit for merchants as well.
We can address comments in a minute.
Okay.
So yeah, the marketing kit.
Okay, let's address the comments here.
There's a bunch of stuff going on there.
Well, Matthew, I'm with you.
You said people own printers.
That was kind of like, I'm like.
Dude, I actually thought about buying a printer yesterday.
No, I wanted one.
Because now, no, there's all these different things you want.
God, I hate my printer.
No, there's no printer that's good.
No, no, no.
I want a printer.
I actually, I'm going to take the contrarian opinion on this.
I would love to be able to.
Printers are the future.
Yeah, to print.
Printers are the future, just like LinkedIn is the future.
In the same way, I want to be able to print my own stuff to share or modify.
Like, I actually, so for part of my experiments of phoneless living, which is not going as
well as I would like.
One thing I'm thinking of is I would love to go back.
Imagine the year is 2000 again.
You remember when you used to print a map from Yahoo Maps?
I want to do that.
MapQuest.
That's what I used.
Yeah.
All right.
So the second thing Spiral is doing is the merchant marketing kit.
That's not available yet, but we're going to produce that.
And I think there's less urgency there because most of the merchants,
step one is to get merchants to turn it on.
Most merchants are not Pink Owl yet, right?
But they'll eventually become like Pink Owl where they're savvier about Bitcoin.
They realize they need to promote it and want to promote it.
And they'll want like a playbook, right?
So the merchant marketing kit will be a playbook for like what you can do to be successful with reducing fees, right?
And that's where like display the plushie or just other things to create awareness of spending Bitcoin.
So that's what Spiral did this week.
Great.
Boring week.
Nothing going on.
So this was the biggest week ever in Bitcoin.
Talked about a bunch of the announcements.
We are at 120, so we only have maybe 10-ish minutes left.
We talked about what we wanted to talk about last week, but we didn't have a regular PBJ.
We'll let you kick this one off, DK.
Well, okay.
This is a topic, this topic of lava, right?
There's this category of innovation that we've been, I think, all looking for and excited about for a while,
which is how can you take and build a collateralized lending on Bitcoin?
And we had met Shazan, what was it, I don't know, four or five years ago.
Long time.
And he was like, oh, I think I have a way to do non-custodial collateralized lending on Bitcoin.
That a Freudian slip?
He didn't, no, he said non-custodial.
All right.
With DLCs.
and uh and you know that's something i was excited about i continue to be excited about
uh if there's a can we actually pause for one second before we jump into specifics there's a
question i want to ask you dk i have in my whole time of knowing you only seen you get radically
excited about a few ideas one of these ideas is non-custodial lending you so we talked about last
night what sort of categories of big bitcoin businesses that made money there's no question
the biggest is exchange right coinbase is the biggest winner by far kraken's up there a few
others. You have said repeatedly, someone who executes non-custodial lending correctly at scale
could be at least a Coinbase-sized business. Why do you feel so strongly that this is such a
powerful wedge in business opportunity? Well, I think collateralized lending of Bitcoin is the
Coinbase-scale opportunity I'm talking about. And there's an infinite design space that you could
explore there. So I'm not saying it has to be done in a specific way. I'm saying people own this
asset. This asset has increased in value a lot. And a lot of people don't want to sell an asset
that has increased in value because they have to then pay capital gains on it. And we expect the
network value of Bitcoin to 10x or 100x from here over the next years and decades. So I think it's
natural that as that is happening and in traditional, like people collateralize their
homes and get mortgages and people collateralize stocks and get lines of credit. There's all kinds
of collateralized lending in the world, but there's this huge asset that's going to grow much,
much bigger and people are going to want to do collateralized lending on it. And so the question
is, how is that going to be ushered into the world? Will it be via custodial solutions,
non-custodial solutions? Will it be lines of credit? What will be loan terms? Will it be
something to do with the way it interplays with like a mortgage solution. All of the above.
I think all of the above is the right answer. So I'm not singling out non-custodial is the
only opportunity in this category that's going to be the massive winner and everybody else
going to fail. I think there's lots of different solutions. Do you think the biggest winner in
lending, collateralized lending, however it is, ultimately is a bigger opportunity than
exchange? Like IE, the biggest company that comes out of this space is a bigger company than
is. Yes, I think so.
Yes, for me. Yeah, I think so because
if you can do it
in a non-custodial way,
the entire market is
your market from day one. You don't have to mess
with all the regulatory
hurdles that you have to when you actually take
custody of Bitcoin.
Also, I think if we fast forward
10, 20 years, whatever it is, quite a
bit in the future,
Bitcoin will just be ubiquitous
and it'll be the ultimate
collateral in the world better than any other
asset for collateral.
And in terms of
exchanges, like the exchanges
they're profitable because of the casino.
And I'm not saying casinos are going away.
Well, I mean, River is profitable too.
I believe.
Tiny compared to Coinbase though, right?
We love River, we're investors in River
and we love Alex, but it's not
a Coinbase size opportunity
because they're not a casino.
I think River has great
long-term potential as well.
But to date, the money's been
in the casino. I don't think, I'm not
predicting casinos go away. In fact,
casinos are going to exist in 20 years.
Casinos are human nature. They're going to keep existing.
But the size of the opportunity,
like the size of the
casino in 20 years compared to the
whole world adopting Bitcoin, the Bitcoin standard,
Bitcoin's the ultimate collateral in the world,
that market is going to grow
orders of magnitude and be way bigger.
And it's like Alex always says,
you can either build JP Morgan or you can build
Caesar's Palace. Coinbase
built Caesar's Palace. He started to build JP Morgan.
one question on that though i'm curious for both of you guys do you think though if we really get
to the bitcoin standard world so in a world where there's this intermediate step where the state
still exists and all these other reasons for collateralized lending i agree with you and maybe
that's the case the next 10 20 years as you really zoom out and i don't even know it's like it's a
challenge to get timelines here but like does that opportunity still exist in the far future or are we
just one day it's like not like everything's bitcoin there's only bitcoin there's no like
You're saying does the lending opportunity still exist?
Yeah, like imagine that opportunity exists
because of regulatory arbitrage.
I'm saying if we get to a world
that's a lot more sovereign individual
and everyone's just Bitcoin for Bitcoin for everything,
like, sorry, you have a hyper-Bitcoinization.
Like, there is no more fiat.
Yeah, we're fiat.
But obviously there's no more market
to get a dollar loan for Bitcoin.
Exactly.
So obviously that goes away.
But everything else changes too.
Like, what does this state look like?
How does taxation work?
How do other assets work?
That's what I'm saying.
I mean, we've talked a little bit about that.
I think it's an interesting conversation,
but that's long, long term.
And like for the next 20 years,
there's this enormous business opportunity,
which I think this high probability,
my opinion, very high probability this plays out.
The whole hyper-perikinization,
I would define a much lower probability.
At least, I mean, it depends on your timeline.
It depends on your timeline.
Yeah.
And it could be that there's a new type of credit.
I mean, kind of like what Mike Shredge is doing
with digital credit.
There could be a new type of digital credit
that emerges is sort of like auxiliary
to the hyper-Bitcoinization Bitcoin asset
that everybody holds.
And I think it's hard to predict
exactly how it's going to play out.
So it's kind of fascinating to explore,
but that's in a sense like...
And I'll just add there,
I think for people that are thinking
about startup opportunities,
this is a really good direct sort of wedge to get in.
But I'm also very interested in hearing
about what does credit,
when we talked a little bit about this,
but look like in the Bitcoin standard.
I know Tour Demister and some other people
have been talking,
thinking a lot about what Bitcoin and insurance, how those markets are going to be used in the
future. I think there's probably a lot of opportunity. If you believe in hyper-Bitcoinization
future, then you also probably believe that holding that asset should increase as the percent of GDP.
It is growth, right? So if you know that it's going to grow and everybody else knows it's going
to grow, maybe there's a new type of synthetic thing where you're like, I'm not selling it,
but I'm going to capture the gains and you're going to let me spend the liquidity right now.
Well, I think it all changes in nature because people are always like, oh, a deflationary economy will never work.
It's like, well, you bought a phone.
Let me bring this back in, though.
The news of the past week and a half has been lava.
A major crisis, and we're not talking about lava anymore.
We didn't talk about the market.
I mean, the TLDR, four years ago, we all thought this is a big market, convicted on what we just said.
I think we still feel this way.
There'll be many different solutions.
We all agree on that.
We all met Shazan.
I think independently, or I forget how we got connected, but at the same time, we all invested in Lava.
And it felt like a great investment because we had a big opportunity.
And this was also right around the time when BlockFi was blowing up and all these custodial services.
So this self-custody approach was novel and compelling.
Using DLC or discrete log contract technology was quite interesting and compelling.
It had only been partially proven out, like Atomic Finance, and a few startups had used it with mild usage, I believe.
So proved it out to a certain extent, but no one had and still has proven out DLC technology, which for those not familiar with it, just think of it as like advanced smart contracts for Bitcoin.
in which you can do a loan.
You can do loans with DLCs.
And the TLDR without getting too into the weeds
is just imagine you take a bet
or whatever, have some position,
and you say there's an oracle that's going to come.
And the only way that this contract gets settled
or liquidated is if some condition is met
by the external oracle.
There's always been, to be clear,
the issue of who controls the oracle.
That's a point of attack.
But in this case, in a typical case,
the Oracle is saying,
what is the price of Bitcoin in dollars
or something like that.
Or who won the sports match or whatever.
And Lava did some innovation
around how to do blind Oracles.
The Oracle that's reporting
doesn't know which contracts it's resolving.
I'm not aware of that.
Okay.
No, that's just how DLCs work.
Okay.
Tal Trisha invented DLCs
and that's an inherent property
in how DLCs work.
Okay.
Yeah.
And so they got that benefit,
but anyone using DLCs gets that benefit.
So I have been excited about Lava because it's a huge market opportunity, the use of DLC, so the tech nerd in me, and wanting to show or see how more advanced smart contracts could play out in Bitcoin and actually create products that work, scale, are secure.
Because until someone actually does it, you can academically understand it, but let's see it for real.
So I was excited to see that play out.
I was also excited as an investor.
I mean, Shazan, who we met,
obviously has been very successful in selling the vision,
has been very successful at fundraising.
Very few companies in the Bitcoin ecosystem
have been able to break out traditional venture capital.
He raised a Series A from Founders Fund at Kostla.
That was extremely exciting for me to see,
hey, traditional Silicon Valley sees the opportunity in him.
They see the opportunity in collateralized lending.
Looks like we're finally bridging that gap.
So that was the reason I was excited.
Yep.
And we've talked about Lava before.
We talked about other solutions.
we have been Lava supporters and excited for Lava
now
and I've like a year or so ago
I took out some Lava
as an experiment
took out some Lava loans
toy money, nothing real
just to see how it works
gave Shazan some UX feedback, product feedback
but I could see how
like
it was very compelling
like I didn't have to KYC
I was able to get a loan instantly
and then
and keep self-custody of my Bitcoin.
And then I had dollars
and I could literally deposit them
in Wells Fargo Bank.
I could...
You have to KYC to do that, though, right?
I had to KYC to do that.
I also transferred to like...
You could just take...
I transferred to Phantom.
Yep.
And didn't have to KYC.
So if you want to be KYC-free,
you can, you know,
you take out the loan, instant loan.
I mean, you deposit your Bitcoin in Lava.
you get this instant loan
you then transfer the dollars
to phantom
and then do whatever you want
with those dollars
stable coins critically
so to be clear
you have the option of
no KYC
you get stable coins
or KYC
you get stable coins
and then you can choose
to offer up it to bank dollars
so that requires KYC
or you can choose to
choose to offer up it
and I should know
I also did one of these loans
not exactly trivial
I really wanted to like
put my money around my mouth
and see if it worked
it worked
to be clear
there were some issues
with the app
not sending me notifications
not an issue
with the core product.
I've been working through the team with them on that.
I never saw the Lambo.
Not that big of a loan.
Not all of us are filing the 10 million Bitcoin
in our couch.
I had my UX nits,
but the core product I found quite compelling a year ago.
Now, there are still reasons then
that I wouldn't use it for real.
One is that the Oracle,
it was designed to have multiple oracles
but it was only using
just Lava as the oracle
so that really made it
trusted
completely trusting Lava
then but I was just
they're a startup
it's a startup you got to prioritize
and eventually they'd have Coinbase
and Block and River and major institutions
as oracles and then
they all have to agree and then
it's a pretty tight solution I think
A second reason I wouldn't use it for real is that the only way you could custody your Bitcoin is to store it in lava on iPhone.
And Shazan was adamant that that's the most secure way to store Bitcoin.
Well, I agree with a lot of his sentiment on iOS security, but I do not agree that's the most secure way to store Bitcoin.
and independent of whether who's right
about what's the most secure way,
what I do know is everyone has different solutions
they're using.
And we all push super hard for bring your own custody.
Bring your own custody.
All of us agree on that.
DK pushed that the most, but we all pushed for it.
I think that would have been a much superior,
like if you're going to support self-custody,
that's a far superior product.
And it would be beautiful.
Like if I had used cold storage with Ledger
or Trezor or BitKey or whatever,
they could all integrate and support deals.
and then it would just, you literally don't have to,
you don't have to move your Bitcoin out of your BitKey
or your cold card or whatever.
That would be awesome.
That would.
Now, but that's another reason why I wouldn't, you know,
put like $100,000 of Bitcoin or something on my iPhone.
I didn't do that either, to be clear.
So, you know, so there are reasons I wouldn't use it for real.
Yeah.
But then, okay, why is there drama the past week and a half?
lo and behold they completely changed their product from self-custody to custodial none of us were aware of that it took everyone by surprise and so that that's a huge shift so I think things we should talk about what one what do we think about that move and I definitely one thing I want to talk about is like communications because my biggest criticism and concern and I think I would call failure is communications.
So I want to speak to that.
But maybe let's first talk about why do we, because we don't, despite having many private conversations with Shazan, and we also have read what he's written publicly, we still don't really know the reasons for switching.
He's talked about vulnerabilities in DLCs.
He's said that custodial, or that non-custodial is just as trusted, or it's trusted, custodial is trusted.
They're all sort of the same thing.
I want to participate in this conversation. I have to peel it. I'll be right back. Give me two seconds.
I think that's all
anyway
to me, I think one thing we'll talk about is like the customer
base. Who's the customer base? And maybe they don't care.
So if the customer base for this product isn't already self-custodding
and they don't want the burden of self-custodding, then
that could be a very valid reason to switch to custodial.
Because if your customers who want to use the product don't self-custody
and consider it a barrier to start self-custodying,
I think that's a completely rational business and product decision. But then
just communicate that. And I haven't heard those words. Instead,
things like, oh, non-custodial, custodial, they're the same thing. DLCs have
security vulnerabilities. And I still do not understand, despite him
trying to communicate it to me, I still don't know what those problems are.
Yeah, I mean, I think that your advice to Shazan to improve communication is good advice to him.
I will say that, you know, startups are messy and it's challenging when you're building something new.
There's lots of constituents that you have to incorporate their needs into what you're doing and their needs might have conflicts.
so you know when you think about there are there are customers there are investors he's committed
things to there are partners that he has like maybe this new uh credit line that was just uh
announced i think it was a 200 million dollar liquidity line that is going to fund the loans
well i don't i think like a portion of like 15 or so milliliter's equity and they have close but
there's there's i'm just saying there's different constituents who have different expectations of
what you're doing. And in, you know, I don't know the terms of that, but that might not be something
that you can publicly talk about according to the terms of the thing, for example. And maybe they
didn't want to provide the 200 million without a centralized service. So I'm not here to say that
everything he did was right, but I do think it's a complex environment that he's operating in and
he's trying to find the right trade-offs. Let's get into things that I think are unequivocally
could have, should have been done communication-wise. Different categories. So one is in
product. So when I opened Lava app, it basically said it's going to convert me.
All right. I took a screen. Upgrade. I mean, I took a screenshot so I can look up the actual
word. And then I pressed the button and then it upgraded me. There was no mention of the product
is no longer self-custody. It's now custodial. There's no discussion, no mention of that at all.
I was not informed of that.
So Shazan told me that because my loan for a variety of reasons was not active when the shift happened, that you were told that things were going to be shifted from non-custodial to custodial.
I don't know if that was via email, which I never received emails either.
So maybe you guys got emails, maybe you didn't.
But this was the point I was trying to push Shazan on.
And Shazan, if you're listening, this is an extremely important point.
When you shifted, what did the screen say?
It has a Lava logo.
It says Lava.
Please update your app.
Lava's latest version is here.
Please update it.
Yeah, that's not cool.
And then there's a button that says update app now.
That's literally all it says.
Yeah, that to me is like, that's unacceptable.
It's unacceptable.
Unacceptable.
Horrible communication for their customer base.
It should have been explained.
Did you get an email?
He says emails were sent out.
I did not get an email.
Did you get an email?
I checked my spam folder.
I did not get an email.
I don't think I did.
He says it's because I was an early user.
It could be true.
Could be true.
Maybe we were early users.
were not in the email list
and everyone else was, maybe.
I don't know.
But I did not get an email.
So very bad communication there.
And then when I upgraded,
I tapped the button to upgrade
and then it showed my balances.
They were all zero.
And I had both Bitcoin and dollars in the wallet.
So it said zero.
So then I'm like,
what in the world did I get rugged?
Did my money get stolen?
So I chatted with him
and to his credit,
he took the time.
I mean, he's very busy.
They've all taken the time to help us.
So to Zahn's credit, he took the time to help guide me there.
I still had my seed phrase.
So I took that and imported it into Blue Wallet.
And lo and behold, there was my Bitcoin balance.
And then I transferred it to another wallet and the Bitcoin network worked and it was real and authentic.
So it really was self-custodied Bitcoin.
And I got my Bitcoin back.
But then I still didn't have my Solana dollars or whatever, my USDC dollars.
So I took my seed words and I imported it into Phantom thinking, I don't really know how.
I mean, I know how this stuff, I know how the HD wallet can support other coins.
I've never been to the casino.
But I've never imported a wallet into.
Just for the free drinks.
Yeah, exactly.
Phantom that way.
It's such a buffet.
It did that.
It's such a buffet.
And it did not show me my US dollar balance.
I didn't know if it was or not,
but it didn't surprise me that it didn't.
But I still had the question,
how do I access my dollars?
And then Shazan pointed me to a test flight
with the old version or another version of Lava.
I installed that.
And then it still showed zero,
but then it eventually showed my somehow...
showed my dollar balance, and I have my dollars back.
So the TLDR is, none of my money was taken or stolen.
I had all my money, but it was not a pleasant experience.
It wasn't a good upgrade experience.
But actually, my biggest criticism of the product UI itself
is that it did not explain the self-custody to custodial shift.
And that's not just some detail.
It's not like, maybe some customers don't care about that,
but they're definitely customers who the whole reason they started using lava was the narrative
including all of us including us as investors and users but like the go back and look at all
of lava's communications and shazan's communications for years it's been all about self-custody don't
trust block buy and all these custodians self-custody so that's the narrative it's a super important
one it's totally fine if a business decides to shift you gotta communicate it so the in-product
of communication, horrible, should have been done better,
should be a lesson learned.
And then, two,
the DLCs,
this technology,
he's saying it has critical vulnerabilities,
security vulnerabilities.
He's saying things
that I don't think are true.
I don't know, though. I'd like to understand.
He's saying that the oracles
can equivocate.
The whole point of DLCs is that
oracles cannot equivocate.
What does it mean to equivocate?
so with
the hallmark of DLCs
one is that their
privacy is preserved
and two they can't equivocate
so if you're the Oracle
and you're saying
the price of Bitcoin
is $75,000 or whatever
you publish that
as like a signature
for the world
and every smart contract
that happens to be using
you as the Oracle
then uses that
but you don't know
which smart contracts
are using it
so yeah you can't
like tell mine
that it's $95,000
and his contract
that it's $100,000
you can't equivocate
so you can be wrong
or lie, but it applies to everyone.
But
I don't know. I don't really
understand
the DLC vulnerabilities.
All I'll say is
it wouldn't surprise me
if Lava, the company, has
discovered DLC
drawbacks. Maybe it doesn't work well
with the line of credit product that he
just launched. In fact,
some DLC engineers have told me
separately that it doesn work well for the line of credit product That doesn surprise me I not aware of any of these vulnerabilities but that should be it would be it would first of all just be a kind gesture
to the DLC developer community
saying like,
here's what didn't work.
Here are some vulnerabilities.
And if the vulnerabilities
are putting people's money at risk,
that should be responsibly disclosed.
Right, right.
So whether it's responsibly disclosed
or publicly disclosed,
whatever's appropriate,
that that would be a kind gesture but also help with lava's pr that wasn't done either then there's
communication to just like on social media on x like he's getting blown up lava's getting blown up
lots of hate everyone's hating them it is is bred distrust like no one on social media right now
trusts shazan or lava that's very bad if you're going to i mean for any business but let alone
one that is now going to custody your Bitcoin.
You want to have a trust.
You want to be trusted, right?
And you gain trust by good, proper communications.
Yeah.
And I just want to say, I mean, like I spoke a little bit with Shazan on this stuff.
And I think, you know, I don't understand the DLC stuff too.
I would love to hear from people like Taj or people that actually are deep in DLC world
as well.
There's other engineers.
Perhaps that would be interesting for them all to have a public discussion and talk about
like, what are the drawbacks of DLCs?
Is this something we can fix moving forward?
Because I still want DLCs to work.
I will say, you know, one of Shazan's points, I think is like a fair business point, which is that most people don't care and the big money doesn't care. And I think that's probably right for a lot of, you know, what we've seen. That's why BlockFi got to be a big business. That's why Three Arrows got to be a big business. And all of those companies blew up. So in my mind, he's right. Everything you said, he may or may not be right. But like, regardless, you know, 95% of users don't care. There's at least three users here who did care. There's a lot more people that do care. You can't just like make that shift. Yeah.
One of the comments here, which is a good one, is like probably, you know, what should have happened or made a better decision is like this just winding down the lava, like creating a new brand.
I mean, it could be the same company, but create a new brand, a new product, introduce that, and then just sunset lava.
That would have been a way better approach, I think.
And then also, and then like part of the public communication should be like, here is why we're making this.
I know for the last four years I've been saying self-custody, self-custody, self-custody.
But here's what we learned, right?
We learned that we still believe it a huge market I would like to see this essay still Shazana if you listening write this essay Please We still believe it a huge market Yeah That why we raised a lot of money sort of demonstrating that others believe it a huge market
Two, self-custody.
Our customer base that we've learned about,
they don't care about self-custody
and they don't want to self-custody.
It's limiting us as a business.
I'm just speculating, by the way,
but I can find that to be plausible.
And then three, also, DLC technology,
it didn't work out for these reasons,
line of credit or whatever. He just explained that.
So we're shifting to custodial
because that's where we think the product market
fits going to be. And then
at least it's a plausible, reasonable
business and product story.
And there's still going to be some Bitcoiners
who hate on it
because it's self-custody or the highway.
But at least for everyone else
who's a little more pragmatic, understands
what this is, as opposed to
when you don't communicate,
all that happens is speculation. And a lot of the
speculation is like i mean people are like showing pictures of sam bagman freed and shazan
in a tweet that's horrible that's horrible pr and and in like uh that it's horrible for shazan like
so uh i think the communication should be much much better um but maybe i mean we're way over
but maybe we should try to do our best to speculate why why did this shift occur why is it why is it
still going to be a successful business. I guess one could be that around the custody, like the
customers simply don't want to do it, right? Okay. That could be plausible. And then two, maybe around
raising all this money, maybe they required that it be because the Bitcoin's held with
qualified custodians versus self-custody where people, it's like less tested. People could lose
their Bitcoin because they don't practice good,
you know, have good practices.
DLC is unproven technology.
Maybe there's reasons why that,
the lenders didn't want to lend $200 million.
Yeah.
I think these are all fair speculation.
I don't really think it's our place to speculate.
I think, Shazan, if you're listening,
you should like explain all this in an essay or a video.
If you'd like to read the essay, watch the video,
we'd obviously be happy to.
I mean, I think the reality of the situation,
one thing that we do know is that for better for us,
I think this is true from what I've seen with, you know,
certain like multi-sign companies,
like you know
Unchain
very principled company
but the reality is
as far as I know
maybe things are changing they building a good business for sure but like there a reason that like people would rather just go BlackRock and like whatever have whoever custing for them That just because that what people are used to
Maybe that changes one day.
You know, there's certainly a segment of people in the world
that want self-custody or multi-sig.
That segment also probably does have more
sort of disproportionate amounts of wealth.
They got into Bitcoin early.
So it's not like, it's not a nothing burger.
But like, sadly, you know,
the reason Coinbase is successful is a casino.
The reason three arrows in BlockFi blew up.
and also I just gotta say
it was not a helpful thing
as part of your launch
you'd be like
we brought on world class
investor Anthony Poppliano
like bro
like you can't be tone deaf
like this is the famous
to the moon
like I don't know
I hope for the best
Shazan has a lot
LockFi champion
yeah bro
like what the fuck
like literally this man
was sitting there going
and almost whacks his wife
in the head
as he's like
sitting there talking about
BlockFi the moon
so I would just say
it's tone deaf at best
and you know
it's on you to come out there
and right the wrongs
and like explain this
to people. Maybe you will, maybe you won't. I will personally say I still think there's
opportunity for the business. Clearly, he's shown he's a very savvy fundraiser. Clearly,
they have a good team and I appreciate their team has helped me a lot with some of my issues,
handholding. I got nothing but great service there, so I can't say anything on that.
I'll also tell you, I mean, and you probably know this, but from having spent a lot of time with
him over the last whatever, four or five years, I do believe he is a principal Bitcoiner who
cares about self-custody. I don't think he's just talking a talk. I think he started to achieve
that. And I think there's something along the way that caused him to change his mind about
maybe it's the marketability or the viability of doing that as initially planned today.
I mean, folks can speculate on that as they will. I'm not going to take a stance on that. I don't
know. What I will say is the way I look at it now is like, and Shazan has also said he wants to do
things like I asked about proof of reserves. He doesn't believe in proof of reserves. Fine. Although
I still think proof of reserves would be better. He says he wants to get audits. Great. Let's see
the audits. I would just say, you know, my position is it's still a good business opportunity.
We all invested. I invested with DLCs in mind. I want someone to do something like DLCs. If you're
still thinking about the non-custodial, that's what I personally want. And I would say, look at
it as of right now, it's a business with a lot of money and a smart team, but it's like block five.
And, you know, you can do with that what you will. And most people don't care.
I think that's a good way to wrap it up. All right. I have nothing to add.
yeah sounds good all right till next week okay okay see you guys