Latest / What Bitcoin Did / Rebuilding the World’s Financial System with Bitcoin | Obi Nwosu

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Rebuilding the World’s Financial System with Bitcoin | Obi Nwosu · What Bitcoin Did

0:00
If it's three times faster and a third of the cost, that's 10x better than what I have.
0:06
That's the thing that will cause people to switch.
0:08
Uplifting vast swathes of people out of poverty, if we can help towards that, I'm not saying
0:14
we're going to solve that, but if we can help towards that in any tiny way, that's priceless.
0:19
If you give up the ability to transact privately, then effectively Bitcoin goes from being one of the most empowering freedom technologies in the world to being actually a tool for mass surveillance on a level that we have never seen.
0:44
Welcome to Bali, Obi.
0:46
Oh, thank you.
0:46
I mean, you've been here for a while.
0:48
Yeah, I've been finishing off my, this is maybe TMI, but finishing off my honeymoon.
0:57
And then it's merging into a project that we're doing with HRF.
1:02
Yeah, but it was a good end to the honeymoon.
1:05
Yeah, it's hot though.
1:05
This is probably the hottest podcast I've ever done.
1:07
Really?
1:08
Well, outside in Bali, it's pretty hot.
1:10
Well, having spent a big part of the year in Kenya, I would say this.
1:15
Yeah, fair enough.
1:15
Like my wife, it's weird to say that now,
1:19
but my wife is constantly wearing jumpers here.
1:21
Really?
1:22
Yeah, that's not good for me.
1:24
Very different level of heat and temperature acclimatization.
1:28
I mean, I live in Australia. I still never got used to it.
1:30
I've got like three fans pointing at me right now.
1:32
But I think the place to start, Obi,
1:34
you just asked Eric, who's sat in the background,
1:37
what he's excited about and what he's concerned about
1:39
in Bitcoin at the moment.
1:40
I think there's a lot to be excited about.
1:43
The concerns I have are the ones around privacy devs being put in jail.
1:47
I think that's one of the scariest things happening in Bitcoin at the moment.
1:50
But for you, what are you excited about?
1:52
What are you concerned about?
1:54
Excited and concerned.
1:55
I'm actually very excited about the fact how people are perceiving and just how boring things are.
2:08
Bitcoin has an incredible amount of development happening.
2:13
If you went back one or two years ago, you had lots of detractors saying,
2:16
nothing interesting is happening in the development side.
2:19
But now we have a ton of stuff happening, obviously in eCash and in communities,
2:26
not just with Fedi, but with Chorus and so on, but also other technologies.
2:30
Whatever your views are on them, things like BitVM, it's really interesting.
2:34
I agree.
2:35
We're seeing...
2:36
ARK, that's exciting.
2:37
ARK is exciting.
2:39
Spark is really interesting as well.
2:41
Even seeing there's drama.
2:44
There's debates between knots and core.
2:49
And you have the Bitcoin treasury companies and ETFs.
2:54
And with all of this, it's still, relatively speaking,
2:58
there's not that many people in the general public talking about Bitcoin.
3:01
It's become, and I think that's not that we're early or that we're late.
3:05
It's just that we've arrived and we are here.
3:08
We're now part of the woodwork.
3:10
It's part of the norm.
3:12
Going back to a world pre-Bitcoin,
3:15
I don't think it's anybody's mind.
3:16
It's anybody's sort of psyche or perception anymore.
3:19
It's like mobile phones or smartphones.
3:21
They're no longer than you knew.
3:22
They're just part of life.
3:23
Yeah, I totally agree.
3:24
And there's a lot to talk about in the Knots Core debate,
3:26
but this show is not going to go out
3:27
for another six weeks or something.
3:29
So we better not talk about that
3:31
because things will have changed.
3:32
But you brought up kind of the adoption of Bitcoin
3:35
And that's one of the things that I wanted to really talk to you about is,
3:39
is global Bitcoin adoption actually happening yet?
3:41
Because, so I, we were in Africa nearly two years ago.
3:45
We went to Ghana and Malawi and Kenya.
3:48
And I didn't see that much Bitcoin usage.
3:50
Like it was still very niche then, I think.
3:52
I don't know how it's changed since then.
3:55
We're here in Bali.
3:56
I'm pretty excited to see what people are doing with Bitcoin in Indonesia.
3:59
But like wherever I go,
4:01
it still tends to be like a niche group of us nerdy Bitcoiners doing cool Bitcoin things.
4:06
But I don't feel like it's spread out of that yet.
4:09
So first of all, what do you define as adoption?
4:13
I want to see people using Bitcoin, like actually using Bitcoin for things like payments,
4:19
which I know is what you're working on at Fedi.
4:20
But so when we were in those three African countries, I know it's just a small microcosm,
4:26
but I didn't really see people using it.
4:29
And I don't know why that is.
4:33
So I think your perception is and was correct.
4:41
We have spent a long time in multiple countries.
4:47
So in Africa, multiple countries across East, West,
4:51
and South, Southern Africa, all across Latin America,
4:56
all across Southeast Asia, and actually East Asia, South Asia, and so on.
5:05
And in Europe, and to a lesser extent, Europe and the Western world.
5:12
Working on the ground to understand communities,
5:16
understand their perception around Bitcoin.
5:18
And when we started, we had this view that
5:20
If you just make the technology easy enough and powerful enough, people will start using Bitcoin for payments.
5:31
I think what we've found over the last few years is that still Bitcoin is being adopted.
5:40
It's being adopted worldwide, but it is being adopted as a store of value in the greatest extent.
5:50
And that could be a store of value from the point.
5:53
And it could even be before that.
5:55
It could be adopted as a speculative asset to a way to build wealth.
6:00
Because if you're starting from a position of not having that much wealth,
6:03
the first thing you want to do is gain more wealth
6:05
because that gives you more freedom.
6:07
Our objective is to give people financial freedom.
6:09
And part of that is having disposable income
6:11
and then using disposable income to build more wealth,
6:14
which you can then invest for your children, your family, your health, etc.
6:18
So that still is the predominant use case.
6:23
We do see it being used for payments in various circumstances,
6:28
but they tend to be at scenarios when other things just are not able to work.
6:35
So you saw this happen not for payments, but for store of value and wealth for even large institutions.
6:43
famously, you had Michael Saylor as the last resort decide, OK,
6:50
damn this, I'm going to go off and try and buy Bitcoin instead of seeing my money lose value.
6:57
RAOUL PAL, Yeah.
6:58
RAOUL PAL, And over time, then he started to understand and he focused on now micro strategy,
7:03
strategy, and so on. The same thing happens at a micro level in people's minds around the world.
7:12
there are scenarios where you have no other option other than to use a tool like Bitcoin.
7:20
And then you use it.
7:21
And at that point, when you use it, you then start to slowly understand other aspects about the technology and about the money.
7:31
And then you eventually move over more and more to a Bitcoin standard, where more of your wealth is in Bitcoin.
7:37
You initially don't want to spend it.
7:40
But once you run out of all other options, then you have to spend it because beyond the
7:45
acquisition of Bitcoin is the desire for a roof over my head and food in my belly and
7:51
good quality medicine, et cetera, et cetera, et cetera. So it is a progression. We're seeing
7:58
store of value, medium of exchange. And then at that point, people who are big Bitcoiners,
8:05
they start thinking about Bitcoin and how many Bitcoin I own or how many sats I own.
8:09
At that point, you're effectively using it as a unit of account.
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10:27
It's funny because that is the progression that everyone talks about,
10:30
going store of value, medium of exchange, unit of account.
10:32
I think for me, it's gone store of value, and it is my unit of account.
10:36
Like if I'm spending money on something, I do think in Bitcoin terms.
10:40
Medium exchange has been harder because you just don't have the option to pay in Bitcoin in that many places yet.
10:45
Like when you go to a Bitcoin conference, obviously things are easy.
10:49
But outside of that, in just normal day-to-day life, I can very rarely spend Bitcoin.
10:53
So is this just like a chicken and egg problem with making this an actual currency rather than just a store of value?
10:59
Yeah, I think it is.
11:00
It's simply it is that.
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And so that's why there are different.
11:05
We've tried many different experiments
11:07
with different organizations, ranging from human rights
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defenders to humanitarian organizations
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to communities, disempowered communities,
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and actually to quite affluent communities as well, to compare.
11:20
And some, I would say there were 14 different types
11:24
of experiments we had initially.
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Then they whittled down to four.
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And now we have, and those are our biggest focus.
11:34
And I would say that the interesting ones have an element of solving the chicken and the egg.
11:43
And then once you solve the chicken and the egg so that people view Bitcoin as the mechanism for a medium of exchange,
11:51
and they start using it every day as a medium of exchange, you can have a different order where it starts with a medium of exchange.
11:57
I'm using this thing, Bitcoin, or sats, actually, because the numbers that we're talking about
12:01
is sats.
12:02
Using this thing called sats to pay for things and use things.
12:08
But I don't know what it is, but it's giving me something I value.
12:11
And after a while, I start realizing, wait a minute, this thing is going up in value.
12:16
And then I start thinking about it as a store of value.
12:21
So it is possible to go medium of exchange, store of value, and then you know the account
12:26
as well, but you have to solve the chicken and egg. I can give you some examples of that.
12:30
Yeah, please do.
12:31
So this one is actually really exciting. We have created a satellite internet service,
12:47
starting in Kenya. And we're calling it Satenet, S-A-T-E-N-E-T, like satellite internet, Satenet.
12:56
and you pay for it in SATs.
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So satellite internet pay for in SATs.
13:01
Internet penetration, most of the world is actually pretty good.
13:05
Southeast Asia is pretty good and so on.
13:06
The only sore spot is Africa.
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There's still 300, 400 million people
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who don't have access to good quality internet
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or at an affordable price.
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And what is the internet?
13:18
Like when these people do have internet,
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is it like 4G type internet?
13:22
No, 4G, sometimes 5G over your mobile phone.
13:25
But it's really, really expensive.
13:29
And so it may be three, four, five, six, seven times the cost of the cost here, for example,
13:34
in Bali or in the West.
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And the quality is lower at way higher cost with people whose disposable income is less.
13:42
The average middle class, I just saw a study on FT the other day, the average middle class
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family or person in Africa has a monthly income, according to the FT.
13:53
So I haven't verified this, but this was the stat of $200 to $300 a month equivalent.
14:01
That's the average.
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So if you're paying more for your internet, and you think about what you pay for your internet
14:07
bill right now, it's a much, much higher percentage of your salary just to get internet.
14:11
And even then, people still want it because it's so valuable.
14:14
I mean, in US dollars, I think my internet is something like $50 a month.
14:17
Yeah, but I don't want you to say your salary, but as a percentage of its salary,
14:21
It's not the same as someone who says $200 a month.
14:25
It starts becoming 10%, 20%, 30% of your salary to spend on internet.
14:29
But they still do, which proves that it's so valuable, people are willing to spend that.
14:34
And the reason why is that the telecoms companies can charge that.
14:40
They can get away with it.
14:41
It's hard to set up their infrastructure, so they do.
14:44
What we experimented with SatiNet is instead of trying to teach people about Bitcoin directly,
14:50
why don't we solve the chicken and give them something that we know a large percentage of
14:54
people will want um in this case it's it's internet um and um then we will but you can only the point
15:04
is you can only pay for this in e-cash with sats so you can only pay for your satellite internet
15:09
in sats and that's the only way and we set up these starlink um like um services in different
15:17
places. And we've tried in some of the biggest slums in Nairobi and also in rural Africa. And
15:26
we set these up and we've been observing to see how it goes. And that's still very early days.
15:32
But the feedback has been really, really interesting. One, people started using it.
15:38
They didn't explain what sats were. Their assumption probably is just the token for satellite internet.
15:42
How do they get sats?
15:44
So to get the sats, there's multiple mechanisms.
15:48
So for example, there is, within the Fedi app,
15:51
we have these things called mini apps.
15:54
And mini apps are just websites.
15:56
It's got a built-in web browser in the app.
15:58
And there are apps that you can see now
16:01
for almost every service in the Bitcoin ecosystem.
16:04
But they're all over the place.
16:05
You have to have Chrome, you have to find them.
16:07
We have this sort of mini app store,
16:09
which allows you to find the mini app that you want
16:13
and use it for your benefit.
16:16
I can quickly show you on a screen.
16:18
This is a really ignorant question, Ovi.
16:19
But if you see here, I've got the app open.
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If I have an app catalog, this takes you to a page
16:29
where I can see some of the Fedi mini apps
16:33
which are available.
16:34
and many of the popular ones allow you to swap from your local currency to bitcoin so if we go to
16:44
or to spend bitcoin to earn bitcoin etc one of them in kenya there are mini apps that allow you to
16:51
take mpeso which is the mobile money which is incredibly popular in kenya and you can it can
16:58
You can send that to a phone number, and in return,
17:04
get sats and eCash directly into the Fedimod.
17:08
So most of the people would use in these rural areas.
17:11
We also have, there's also local brokers who effectively
17:20
are trusted and so on.
17:21
And we try to vet them and introduce them
17:24
to these communities.
17:25
So people locally can take cash as well.
17:30
But you'll find that very quickly,
17:32
most people, when a service like this exists in your area,
17:35
they will use that because just within the app,
17:37
they click a couple of buttons
17:38
and they've just got stats in their pocket
17:39
and they can send it directly using the tools
17:42
they're already aware of.
17:44
Can you do, I don't know if this is even possible,
17:46
but can you make Fedi work
17:48
even if they don't have like internet minutes who's starting?
17:50
Like because you're providing the internet service
17:52
through this product,
17:53
can you allow them to still use Fedi
17:55
if they don't have any internet?
17:57
Yeah, so when you connect to, and we do,
18:00
when you connect to the service,
18:02
you can use aspects of Feddy.
18:05
It can recognize it,
18:06
and you can use aspects of Feddy for a period of time.
18:08
So if you want to top up,
18:09
you can still get online to top up.
18:11
Yeah, you can still get online.
18:12
And also, eCash, we've demonstrated this
18:14
like a couple of years ago,
18:15
but you can send eCash to it offline.
18:18
So if you already have received,
18:21
you already have a balance,
18:23
even if your data runs out,
18:24
you can still use that balance to top up your internet,
18:28
even without internet connection, and then get more internet.
18:32
And that's one of the powers of eCash.
18:34
So again, within the same app, you can see your balance,
18:39
pay for your internet, you can use certain limited services
18:42
without paying for the internet as well.
18:44
And when you pay for it, you have now full high speed, high quality internet
18:48
that's faster than the internet you get locally at a third of the cost.
18:52
That's amazing.
18:53
So that's compelling.
18:55
That solves the 10x better.
18:57
If it's three times faster and a third of the cost,
18:59
that's 10x better than what I have.
19:01
That's the thing that will cause people to switch.
19:02
And so people take, and we put them in busy areas,
19:06
like the equivalent of the high street,
19:09
the town square, as it were, where communities congregate.
19:12
And people will come there and hang around there
19:14
so that they can access this high-quality internet.
19:17
They're doing gig work from there.
19:19
They're starting to study for more qualifications,
19:25
because they have these ambitions to be able to receive
19:31
qualifications that will allow them to earn more money
19:33
and more value.
19:34
Most people want to best of their life.
19:36
And because of that, they're willing to go through,
19:38
because it is, go through the hoops needed to, because why,
19:42
I mean, why not just pay with Impessa directly
19:45
for this internet?
19:46
Yeah.
19:46
Because, well, no, because that's
19:49
the price you have to pay you have to pay in sats for satellite internet sats for satellite internet
19:54
because okay um and then they start paying but then what happens is just like you're now in bali
20:00
your unit of account beyond bitcoin is um the aussie dollar yes but you have i guess you have
20:08
a few bali balinese indonesian rupiah yep with you why because it doesn't make sense every time
20:14
you want to buy a cup of coffee to go to a bureau of exchange and withdraw exactly what you need for
20:19
that cup of coffee of course you start forming you start holding another balance in that currency
20:23
it's just convenient because and and the same thing happens here you start holding a balance
20:28
but then you start holding a balance in sets and you'll say well internet costs you this much
20:33
kenyan shillings which is this many sets the price stays the same in kenyan shillings
20:37
but the but the amount of sats for it changes as bitcoin's price starts to move you start to notice
20:43
over time that, wait a minute, I need less sats each time to start buying this internet.
20:48
Why did I put more money in sats?
20:50
So then you start thinking, this sats thing, if I hold it for a period of time and hold
20:55
a balance, I'm able to buy more sats than I expected to be able to buy.
20:59
And that's when you start thinking, maybe, well, this was the hypothesis.
21:03
And this was the hope that people start thinking, maybe I put more money in, as you said, to
21:09
use it to save in it.
21:10
And that's what we're seeing.
21:14
We just, again, very early numbers, very early stages.
21:18
But we've seen two things.
21:19
One, large demand for more of these spots to set up.
21:22
So people want to see it in more regions and more,
21:25
which is a good point.
21:27
And two, based on the latest numbers,
21:30
we're expecting it to take a lot longer.
21:33
25% of the people who are using it
21:37
are now depositing money for the purposes of holding the SATs.
21:43
RAOUL PAL, Oh, that's cool.
21:43
RAOUL PAL, And saving.
21:44
So but they didn't start with that.
21:45
We didn't suggest it.
21:46
We didn't educate about that.
21:47
We educated about using it for internet.
21:50
And they're still using it for internet as well,
21:51
but they're holding a little bit extra.
21:52
That's 25%.
21:53
And that's after only a few weeks.
21:55
So I'm really excited to see that because we're seeing there's a different path.
21:59
Because the store of value followed by medium exchange,
22:01
followed by unit of account is only possible for people who have disposable income.
22:05
If you start with store of value, that must mean that you have value to store.
22:10
Yeah, that was going to be one of my questions.
22:11
And so therefore, the majority of people in the world who have no disposable income cannot take that path.
22:17
Yeah, that was going to be one of my questions.
22:19
Because back to the idea of Bitcoin at the moment is really just a store of value.
22:23
There's tools being worked on that are amazing, and we are moving in the right direction.
22:27
But for most of the world, people just see this as a store of value.
22:30
And like in the US, in Europe, in the UK and Australia,
22:34
like that use case is really clear and really prevalent.
22:36
But is there like a capital issue in the rest of the world
22:39
that make that a hard leap?
22:41
Because like you were saying just before we started recording,
22:43
you've got an employee in every continent now.
22:47
Like how are these other places?
22:49
Other than the Antarctic.
22:50
You did the clever thing.
22:52
I'm sorry.
22:53
You made me admit that I don't have one continent, yeah.
22:55
But like, is there a capital problem
22:57
that stops these people adopting Bitcoin as a store of value
22:59
because they don't have value to store.
23:00
You mean our employees or?
23:02
No I mean the people in the Global South who just don like some of these won have enough money to even think about or store about If you have no value to store then you can store value Yeah You can If you need a month to live and have a roof over your head and not die
23:17
Yeah.
23:18
And you earn $10 a month, you can't spend $1 into Bitcoin because then you will die.
23:23
So yes.
23:25
And that's the majority of people.
23:26
They have no idea.
23:27
They live hand to mouth.
23:28
So but if we can provide them a service that saves them money.
23:32
so so they're now their monthly expenditure goes from 10 to 9 and it's providing them a better
23:38
quality service so they start using that service because otherwise the people are living busy
23:43
lives they've not got time to understand the thing that you wanted to understand yeah so even if
23:47
something betters their life if it requires time to understand a lot of people are just surviving
23:51
um so but if you just tell them you know i know you need um internet i know you need electricity
23:58
you know you need that i don't have to explain why that's useful and i'm giving you electricity
24:02
that's cheaper than you had before i'm giving you internet that's better than you had before
24:06
oh and by the way it's powered by and i'm not even explaining how it's powered to begin with
24:11
you start they will switch because it's better it's significantly better but because it the
24:17
kicker is because it requires or it involves bitcoin in some way that permeates across the
24:23
psyche of the group.
24:25
We're only a stone's throw away from Gridless.
24:28
One of the communities is in the same community that Gridless works.
24:34
And what prompted this was actually a tweet I did.
24:36
I don't tweet much these days because it's just generally a minefield to tweet.
24:40
And I prefer proof of work over proof of talk.
24:43
But one of the last tweets I did a couple of years ago was about this idea of a Bitcoin
24:49
frontier town.
24:50
And this was a picture.
24:52
It was me, Eric Hirschman, and the guys from Block, Jack, and Miles, and others.
24:59
And it was one of the first Bitcoin mining huts, literally a hut, in Kenya, in the outback
25:07
of Kenya, effectively, that was helping make the renewable energy production there affordable.
25:15
Is this the one on the lake?
25:17
It was on the lake, yes.
25:18
Yeah, I've been there.
25:18
A year before we went there, I'd been and there was this vision.
25:24
And I said, welcome to the first Bitcoin frontier town.
25:26
And this is like the frontier towns in the US of old.
25:30
But instead of powered by age-old technology, it's powered by Bitcoin.
25:35
So instead of having coal and mining and oil mining and oil production,
25:44
you're having renewables, hydro and solar.
25:47
instead of gold mining, you have Bitcoin mining.
25:52
Instead of having these local outback banks,
25:59
the local village banks, you have Fedimance and Fedi.
26:03
And instead of roads and railways connecting
26:07
these different communities to cover,
26:08
you use the internet to connect with the other.
26:11
And that was the idea.
26:12
And that's stuck with me ever since.
26:14
I love that.
26:15
Now, on the energy and mining side,
26:20
you've got Gridless working away with that,
26:22
and they're doing great stuff on mining,
26:24
and they're also now expanding into energy production as well
26:26
because they work really well.
26:28
But what we're seeing is this really strong tie
26:31
between the banking and internet.
26:35
And that's what we're providing with SatayNet.
26:37
It's effectively the other side.
26:38
So we provide internet,
26:41
which is you get connecting you to the rest of the world.
26:43
And we're seeing this where people are talking about
26:44
are now studying on these with remote universities because of the internet screen. It wasn't
26:50
affordable with the old internet. Now it's affordable. We've improved the infrastructure
26:54
for transportation because we've just dematerialized it effectively and brought it at a lower cost.
27:00
But we've also, the key thing is we can do this at cost because we don't need to make money from
27:07
that. We just use that as a mechanism for people to start spending in sats with e-cash. And if
27:13
they start spending in Satsafi cash, we earn transaction fees on that as well. We also earn
27:17
when people custody as well. So we earn custody fees, we earn transaction fees. And as time goes
27:24
by, they start building wealth. And as they start building wealth, they start storing that in Bitcoin.
27:30
And the more they store over time, the more we earn from custody fees and transaction fees.
27:35
So we don't have to, and unlike a telecoms company who has to make money directly from the internet,
27:41
We don't.
27:42
We just have to use that as the chicken to move them over to Bitcoin.
27:45
Because as they gain wealth, we gain wealth.
27:47
And that allows us to be always disruptively cheaper than an internet company
27:52
because we don't need to make profit from that.
27:54
So why?
27:55
I know you're not solely focused on Africa at Fedi.
27:58
You're focused all over the world.
28:00
But personally, you obviously have a focus on Africa.
28:03
I know you have family from Nigeria.
28:06
And now from Kenya.
28:07
And now from Kenya.
28:08
So why have you chosen to focus there?
28:10
Do you think there's an opportunity for,
28:11
like I know Charlene Federipo, who's amazing,
28:14
has written a book about like the leap that Africa can take here.
28:17
Like, do you think there's a massive opportunity
28:19
for people in Africa to benefit from Bitcoin
28:21
in a way that the rest of the world maybe doesn't have?
28:24
So just to be clear, your first statement was correct.
28:29
FedE as a company is global.
28:30
And I talked about one initiative,
28:34
and that's really exciting.
28:36
But there's a second one that's actually the bigger one,
28:39
which is a global initiative that we will talk about in a bit.
28:42
But what makes Africa interesting,
28:45
and I think there's three groups that I'm particularly interested in.
28:50
One are the humanitarian groups.
28:54
And we've worked with organizations that save the children,
28:57
RefUnite, and they are global organizations.
29:02
And they help people who need humanitarian assistance.
29:06
Another big thing, which is the reason why we set up Fedi in the first place, and the
29:12
reason why we're here on this trek is human rights defenders.
29:15
And we have worked with human rights defenders around the world, some in very challenging
29:21
scenarios.
29:22
Many of those, we can't always talk about so publicly.
29:26
But behind the scenes, we're helping them, where it's important for them to have tools
29:31
that are very easy to use, but provide them privacy on the ground.
29:35
And that's again, literally, Fedi was set up after an event in Norway, in fact, where
29:45
we met some incredible human rights defenders.
29:49
And the idea came about that we can provide them tools.
29:52
They have the need for privacy and a real valid need for privacy, because if their privacy
29:59
is lost, they can be arrested, tortured, and killed, or their family and friends can be.
30:04
So they have the need and they are very, very strong communities with very high trust.
30:09
So it was a perfect fit.
30:12
And then finally, there are disempowered communities around the world and a large percentage of those happen to be in Africa.
30:20
And then combine that with my historical, you know, my family was from Nigeria or is from Nigeria.
30:27
My wife now is from Kenya.
30:29
you see that the number of disempowered communities there is, they're all over the world,
30:36
but it's larger than many other parts. And so therefore, the opportunity to uplift them
30:41
by giving them the superpower of having disposable income, having savings. Having some savings is
30:48
the beginning of everything. You can't have a house without savings. You can't have a car.
30:53
And then with the car, you can then go off and earn more money and so on and so forth.
30:56
You can't even think about the future. You just have to think about today.
30:58
And that requires you to do that en masse.
31:03
I think Bitcoin is the most asymmetric opportunity to en masse give people who are currently living
31:10
hand-to-mouth the opportunity to have savings.
31:13
And once you give them opportunity, even though in terms of revenue, the other projects that
31:19
are much more globally focused that benefit people around the world will generate more
31:25
money.
31:26
but in terms of impact and value to the world,
31:30
I think uplifting vast swathes of people out of poverty,
31:36
if we can help towards that,
31:38
I'm not saying we're going to solve that,
31:39
but we can help towards that in any tiny way,
31:42
that's priceless.
31:44
The other thing that is really interesting,
31:46
and this is maybe not so obvious,
31:51
but this is for all three of those groups,
31:53
is that even though they don't necessarily make the most money,
31:58
they are by far the most challenging to help and service.
32:03
Why is that?
32:04
Because they have real privacy needs.
32:07
It's not just, I want privacy philosophically.
32:09
I want privacy or I die or I get tortured.
32:12
Or I have mobile phones that are not the latest and greatest $2,000 iPhone,
32:19
but they're like really, you know, $50,
32:25
just about called smartphones,
32:26
which are way slower than what you expect.
32:29
I have one of those,
32:31
even now that's actually quite a medium range-ish phone.
32:33
And it's just super frustrating to use.
32:36
You have that just to test that the software actually works.
32:37
Just to test that it works and have the experience.
32:39
And that's a big thing I want more people
32:43
to start thinking about going from aware.
32:46
Well, first of all, there's a lack of awareness
32:49
of how outside of people's personal bubbles.
32:53
The next phase is to have awareness.
32:55
And I think there are a lot of you and others
33:00
are working to get awareness.
33:02
But the real phase, and this is something
33:04
I have to work on every day,
33:07
is to get experience understanding it.
33:10
Not just going somewhere, but living that life
33:12
for a period of time.
33:14
And trust me, if you tried to live it for a week,
33:16
you'd probably run away screaming.
33:18
It will feel like being in the worst sort of gulag prison compared to the life of the
33:24
average Westerner.
33:26
So that's one of the reasons why I have that mobile phone.
33:28
But for us at FEDE, because we're dealing with these communities, people who are under
33:33
the Okoforotan regimes, people who have been ravaged by environmental disaster, or people
33:40
who are at the end of the socioeconomic scale.
33:47
You have to deal with spotty bad internet.
33:52
You have to deal with really underpowered devices.
33:56
You have to deal with real security concerns.
33:59
And you have to deal with,
34:01
sometimes literacy levels are lower in these countries.
34:06
Issues with eyesight.
34:07
all these things because you know cataracts and so on and undiagnosed um um short um i
34:15
eyesight issues and all of the sort of stuff that's that other people don't have to think about
34:21
and as a result the app that you end up building is like this sort of battle it's this honey badger
34:28
type app effectively because honey badgers are formed in the furnace of challenge um and what
34:35
What often you can see if you don't have that is you have lots of apps that are interesting
34:40
and they show interesting ideas, but they're not really commercially or operationally viable.
34:47
They're always sort of science projects.
34:51
And what we've got here is, and it's still, again, we've got years of just like taking
34:56
the iPhone or Android or iOS.
34:59
It's years development to get it to be what we want and you'll probably never achieve it.
35:02
They've been working that for two decades.
35:04
But it is, and there's still a long list of things we're going to do, but it's just this
35:09
battle-hardened device.
35:10
So then when you take it to a larger audience, it's going to be way more polished and way
35:18
more able to handle scenarios that other apps can't.
35:21
Perfect example is WhatsApp.
35:23
WhatsApp is an incredibly popular app, and it just works almost everywhere.
35:28
Why?
35:28
Because they put a lot of effort getting it to work in the global self.
35:31
so spotty internet it just works because a big part of the market had that but if you if you
35:37
just build in the west where everybody has almost always on internet you wouldn't have built all
35:41
these features that actually benefit everybody so that's that's that's those are the those are
35:46
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today. That is anchorwatch.com. It's funny because I've never really thought about that challenge in
37:50
app development. So the thing that came to mind is my probably favorite Lightning wallet, the one
37:55
that I use all the time is Phoenix, but that's useless to people in the global South who don't
37:59
have enough money. Because the first thing you have to do is lock money up for liquidity.
38:03
That instantly, not interesting to the people. And again, when you say the global South,
38:07
we're making a broad. There's a middle class, there's a working class, and there's an upper
38:16
class in all countries. Even in America, it says that it doesn't have a class system.
38:21
Oh, definitely.
38:22
There's still a class system. It becomes college, which college you went to or who you worked for
38:26
and so on, but it's an alternative. But so this is the case. The issue is just the percentages.
38:33
Whereas, and so in some like Africa, the wealthy class would by Western standards be
38:42
be considered incredibly wealthy.
38:45
They have servants, and they have drivers, and multiple cars, and redundant power supplies,
38:50
and a lot of things that the average wealthy person in the West would not have.
38:55
And so when we're talking about this, we're talking about the people in the lower middle
39:04
class to the working class area.
39:08
And it's just a larger percentage.
39:09
But the same problem will exist in the United States as well, but just for a smaller percentage.
39:14
So we're more talking globally, but for the people who are disempowered.
39:18
Yes, totally.
39:20
So when it comes to Bitcoin in this kind of store of value phase,
39:24
if it doesn't manage to get to be a real usable medium exchange,
39:29
do you see that as failure for Bitcoin, as freedom money?
39:32
So I think that, yes, it would be. And it would be failure in the long run. It will seem like
39:46
it's not failure. And it can seem like it's not failure for a long period of time.
39:49
Because people who have Bitcoin are getting rich while it's still not being full of money.
39:53
But they don't realize what they are giving up.
39:54
Yeah.
39:56
If you give up the ability to transact privately,
40:04
then effectively, Bitcoin goes from being
40:10
one of the most empowering freedom technologies in the world
40:14
to being actually a tool for mass surveillance
40:17
on a level that we have never seen.
40:20
Yeah.
40:20
And in fact, it would actually be worse than the current state of affairs.
40:25
Current state of affairs, you still have cash,
40:27
and governments are trying to get rid of cash,
40:29
but you still have cash to some degree.
40:32
You have disjointed systems, et cetera.
40:35
It's not great, but it is the current system.
40:38
Bitcoin has the option for being free to money,
40:41
where you have a scenario where you are able to transact privately.
40:45
You may not want to.
40:46
You may want to hold it, but you have that ability.
40:47
if that goes and every transaction is surveilled and tracked then literally that is uh panopticon
40:56
yeah um and you're just australian almost you will know a bit of history lesson there was um
41:02
in london there's a place called millbank and um it's it's right next to the house of parliament
41:07
um and it's famous because it's got these very yellow these very red bricks sorry those bricks
41:14
were all built from a prison and it was knocked down and the bricks were used to make the Milbank
41:21
estate afterwards, or many of the bricks were, and that's why it's got its unique color.
41:26
But the Milbank estate was actually, I think it was Bentham who made it. It was the world's first
41:33
panopticon. It's a prison where all of the prisoners can be seen from a central point,
41:42
and they could see every single person.
41:45
So if you live in Milbank, you're living in what was proven.
41:47
You're already in the Panopticon.
41:48
The prisoners of Milbank.
41:49
And then off from the River Thames, you have this mooring point for the ships that would
41:57
take people to the New World, to Australia from there.
42:00
So that would be the, wherever you were, you know, you're ne'er-do-well, you know, good
42:04
for nothing, you would, from around, well, that's defined by the state, from around the
42:08
United Kingdom, you would be sent to Milbank as your last port of call. And then the prisons of
42:14
Milgang would be sent to the long multi-week, multi-month journey to Australia. By the time
42:22
they get to Australia, they've got scurvy, they're really depressed, they're whining, complaining.
42:28
And so people see these people arrive and he goes, here come those new whinging prisons of Milbank.
42:35
prisons of Milbanks is POMS. I did not know it was Milbanks. I thought it was Her Majesty. I
42:40
thought it was like Prisoners of Her Majesty. I didn't know it was Prisoners of Milbank.
42:43
There's a history lesson. I did not know that. Well, anyway, it could be Prisoners of
42:47
Majesty, but I think it's Prisoners of Milbank. That was the one I used to live in the Milbank
42:51
estate. Yeah, right. Yeah. So getting back to like the, so you were talking there about this
42:59
like potential Panopticon and like, I understand what you're saying with Bitcoin. The other
43:04
potential Panopticon that we go into is like this CBDC world. And I know they tried that in
43:09
Nigeria. Maybe you can fill me in on what actually happened there. Because I think there was a lot
43:13
of pushback, right? I think there's been, I mean, there was a lot of pushback. There were
43:18
demonstrations. People were, and it was also related to demonstrations around police brutality.
43:24
They were closely aligned things, but it was a tried. Adoption for it has been basically
43:30
non-existent and we've seen it around the world so um but i think the mistake people make is they
43:37
think that um governments will just try once and stop and goes okay well it's a fair cop let's stop
43:43
no they'll just try more subtle words yeah they will go and say well let's um just people are for
43:51
some reason psychologically do not like cbcs but they're comfortable with stable coins so
43:57
So let's just let them use stable coins and make sure that we're regulating the stable
44:03
coins to the same level that we would regulate CBDCs.
44:07
And that works for a period of time.
44:10
That might work for a very long period of time.
44:12
But if that does, then again, you're now living in a panopticon.
44:16
You do not have monetary freedom.
44:18
And we're also doing a similar thing with AI.
44:22
We are giving the level of information that we're sharing with AI.
44:25
This scares me.
44:26
Yeah, but it's the same with what you spend and what you think.
44:31
Both technologies are examples of technologies that can be freedom technologies.
44:35
Because you can have the ability to have everybody to have super intelligence
44:39
in their pockets or on their face with glasses in future,
44:43
leveling everybody up everywhere so that they take the best actions
44:49
for their health, their family, their education.
44:51
It could be an incredibly freeing technology.
44:53
having the ability to freely hold and transact privately money,
44:58
and money that's hard money that doesn't inflate,
45:03
again, is incredibly powerful.
45:06
But if you lose privacy on either of those,
45:10
that's the difference between it being this tool for mass oppression
45:13
and disempowerment or a tool for empowerment.
45:17
And it will be very much like,
45:20
because these organizations think in decades.
45:23
It will be like the boiling of the frog.
45:25
You put the frog in the water,
45:27
and it will be a slow process,
45:28
and it will seem fine until it's too late.
45:31
And this is how people accept regimes
45:34
that end up becoming incredibly oppressive.
45:37
They happen a little bit, a little bit, a little bit,
45:39
and every single small step seems small,
45:43
and it's accepted until you have no choice,
45:46
and you realize that you were part of the problem by not stopping it at every step.
45:55
It's gradual.
45:55
So I think we will eventually, if we, and again, there might be an ability for subgroups of people
46:03
to maintain freedom because they, and it might be that it could be a subset of people around the
46:08
world choose to go this sort of Bitcoin path and use it as a medium of exchange and make sure
46:13
they are able to transact privately and they effectively have this Noah Ark scenario Um and they be living amongst the other people who don have that same level of freedom
46:26
But what I hope is that that group
46:28
is as big as it possibly can be.
46:31
Because you're really literally talking about
46:35
the difference between night and day here
46:36
between freedom and oppression.
46:38
If you had to put, like, a probability
46:40
on which path we actually go down,
46:41
whether it's oppression or freedom,
46:43
Where do you think we're falling at the moment?
46:45
100% of both.
46:46
So it'll just be people who can live their free life
46:49
amongst the oppressed.
46:50
Yeah, because, I mean, now you've got people
46:53
like Balaji giving it names and labels
46:56
like network states and so on.
46:57
But I just think it's common sense that right now
47:01
we have our communities and tribes.
47:03
And more and more because of the internet,
47:07
the tribes are not, the change now from the past
47:11
is not that the tribes stop existing.
47:13
but they've stopped becoming geographic in nature.
47:15
And they're more philosophical in nature.
47:17
So we're both part of the-
47:21
The Bitcoin call?
47:23
Well, we're part of the privileged set of Bitcoin, even with Bitcoin.
47:27
The privileged set of Bitcoin is who are able to travel freely.
47:29
And I've experienced that now.
47:31
My wife's passport is Kenyan, and it's just incredibly difficult
47:34
and expensive now to travel, whereas before it was without a thought.
47:38
But as such, I'm able to experience Bitcoin communities from around the world.
47:42
and cultures are very different,
47:45
but we have this instant connection
47:48
because we have a similar philosophy around,
47:52
and it goes beyond money.
47:54
And so I would say that we're part of the same community.
47:56
Even if I've never met the person before,
47:58
I can immediately find things to talk about and compare.
48:03
I probably have more in common
48:04
with a random Bitcoin in Argentina than I do my neighbor.
48:07
Yeah, and it will be the same for footballers,
48:09
for a billion interested football,
48:10
or people who are into pottery or whatever it may be, or anime.
48:14
I'm a big fan of anime.
48:15
Again, I went to an anime expo.
48:19
I know, of course.
48:20
We did the whole thing.
48:22
The whole cosplay thing.
48:23
It was a lot of fun.
48:24
I love it.
48:24
But in Japan.
48:26
But again, a lot of people couldn't even speak.
48:29
Well, not couldn't even.
48:30
They were in Japan.
48:30
Of course, I shouldn't expect to speak English.
48:32
But they couldn't speak English.
48:33
And I couldn't.
48:34
My Japanese is very rusty, non-existent.
48:38
But we had a lot of connection.
48:40
There was the guy in the taxi driving us over,
48:42
and we were just saying names of anime periodicals
48:47
that we read.
48:48
And that was all he's, he couldn't say much more in English.
48:51
But we still could share good, good, bad, bad,
48:54
and so on and so forth.
48:55
So it's almost like the end of monoculture
48:57
in a lot of ways.
48:58
Yeah, it's this multifaceted set of cultures that are,
49:03
and every time you join a different WhatsApp group
49:07
or Telegram group or Signal group or Feddie,
49:10
community, you're part of a different non-geographically
49:14
bound, but philosophically bound community.
49:17
And some of those communities will have philosophies
49:21
around healthy living, around low time preference,
49:27
around the need to have the importance of privacy.
49:31
And they will exist.
49:33
It's a guarantee.
49:34
The question is, is that are those communities in total 1%
49:40
the population of the planet or 99 of the population of the planet and and that's the
49:45
question and and i think at this point so if you ask that question um i think at the moment the
49:52
majority of the planet will will be um in the disempowered without realizing it um um oppressed
50:02
no privacy um part of the world and and i find myself as well without realizing it and i'm someone
50:08
who's very focused on trying to lead a private life to the extent that I can. And I'm openly
50:16
using things like Gemini and ChatGPT.
50:19
I do the same thing.
50:19
Giving very sensitive information away. And I think, well, but for me, if someone made
50:23
a tool that was in the same order of magnitude as useful, I would switch. What other percentage
50:31
of people would switch for that? That's the question right now. I think maybe 5%, 10% would.
50:36
I'm hoping we can get that to 30, 40, 50, 60%.
50:40
And I think you're right there.
50:41
The tools just need to be as good or close to as good
50:44
as the chat GPTs of the world.
50:46
For the 5% to 10% who understand the importance
50:52
of maintaining privacy
50:55
or having the ability to have a private life.
50:58
I do think that is showing potential of getting better.
51:01
I think the stuff that Open Secrets are doing with Maple AI,
51:04
that's very cool.
51:05
and Proton have just released their private AI.
51:08
I don't know if you've seen that.
51:09
I started playing around with it.
51:10
I only saw it yesterday,
51:11
but hopefully there's signs of improvement there.
51:14
No, yeah, yeah.
51:15
There's improvement.
51:15
But again, as I said,
51:16
it's only going to affect the people who-
51:19
Who care enough.
51:19
Who care enough.
51:20
And caring more comes from culture.
51:25
And culture is passed along through community.
51:29
So again, we saw this in Japan.
51:32
and kids there hardly ever act up, are very polite, very quiet.
51:40
When they finish, they clean up their table after them.
51:43
And then you go next door to China, to Hong Kong,
51:46
and kids are like shouting and screaming and so on.
51:49
And again, these are generalizations, but it's differences in culture.
51:53
And so if there's a culture, and this is where education is actually,
51:58
greater and greater understanding of why the importance ultimately to get that from 10% to
52:04
60, 70% are thousands, hundreds of thousands of educators around the world by their own actions
52:11
demonstrating what happens if you take an attitude of trying to look after your body,
52:17
trying to look after your mind, trying to question information and don't blindly follow it,
52:24
trying to take a low time preference to things
52:27
and not try to rush.
52:28
We have to make a million tomorrow,
52:30
but, and rush out poor quality altcoin-like software,
52:36
but try to maintain the low time preference
52:39
step-by-step approach.
52:41
The more we have maintained that,
52:44
then the people that will see us
52:46
will start to ape that behavior.
52:48
Kids ape the behavior of their parents.
52:50
If their parents are low time preference,
52:52
then their kids are gonna be low time preference.
52:53
and that's a hiding towards disaster.
52:58
That's one of the things I'm very bullish on.
53:00
Bitcoiners love to see other Bitcoiners having kids.
53:03
I think the next generation of Bitcoiners is going to be strong.
53:06
But I agree, we need to lean into and push the Bitcoin culture
53:09
as much as we possibly can.
53:11
We should talk about Feddy because we've barely spoken about it yet.
53:14
It's come up a couple of times, but it's been, I don't know,
53:17
two, three years since you were on the show when we did the demonstration.
53:20
There'll be people who didn't listen to that show
53:22
who have come along since then.
53:23
Do you want to just start by giving an explanation
53:25
of what Feddy and Feddy Mint are?
53:27
Yeah.
53:28
So let's start with Feddy,
53:33
because actually there are two separate things.
53:34
The names are very similar, but they're very separate.
53:37
So Feddy is both a company, a company called Feddy,
53:42
and it's a technology.
53:43
It's an app.
53:44
You should think about this.
53:45
It's like this super wallet.
53:47
So it's chat, money, and more.
53:52
We call them mini apps all in one place.
53:55
So from one app, I can, not directly from the app, but using these mini apps, I can augment
54:01
the capability of the app to be able to accept payments or act like a point of sale or ask
54:08
an AI questions or whatever I may want to do, all powered by Bitcoin and eCash.
54:15
The second thing I can do in the most core is it's a wallet.
54:18
So I can hold money and value with it.
54:22
I can spend.
54:23
I can see my balance.
54:25
And I can hold value both in Bitcoin and I can have Bitcoin back to USD as well.
54:32
So it can be Bitcoin and USD, but it's still behind the scenes.
54:35
It's all Bitcoin.
54:36
How do you do that, by the way?
54:37
Is that like Stable Channels or something that you're doing?
54:39
It's like Stable Channels.
54:41
We built it before Stable Channels.
54:43
has been around for the first version of it was two and a half years ago. And so we had two and
54:49
a half years worth of development of that. But effectively, it does something like stable channels.
54:56
RAOUL PAL, It's just a market maker taking the other side of the trade, essentially.
54:58
ALEX SMYTH, Exactly. We have people who want the value of their Bitcoin stabilized USD,
55:03
called them stability seekers. They want the price to be stable to something that they want,
55:07
something like USD. And then you have stability providers who provide additional Bitcoin
55:12
to effectively cover the scenario where the value of Bitcoin goes down to a certain extent.
55:19
The default is 50%. So as long as Bitcoin's price doesn't go down 50% in 10 minutes,
55:24
which is unlikely, then you're covered. RAOUL PAL, But they then take the upside.
55:29
ALEX SMYTHERNINI, But if it goes up, they take the upside. And historically, over the last
55:33
year or so of running it, they've taken upside. But the other people have got what they wanted.
55:37
If I don't have disposable income and I receive some aid from an aid agency and I've received
55:49
$20 worth of Bitcoin, I don't want that $20 to become $16.
55:55
It'd be nice if it's $24, but I'm more concerned about the downside because I need $20 to live.
55:59
So what I would do is I would stabilize it to $20 and I now have $20.
56:02
dollars. Eight times out of 10 over the last year, that meant that the people who've done the other
56:08
side, they're up. But if it's gone down, they lose. And they're more sophisticated on the other
56:13
side. They can hedge that risk and so on. They could do lots of things. But fundamentally, from
56:17
a user's point of view, I see a Bitcoin balance. I see a USD balance. And I can switch between the
56:21
two. But I'm not actually using any stable coin in the background. I'm not actually using any
56:26
any bank I'm still just using is backed by Bitcoin that's held on the Bitcoin network.
56:34
So we do that and it's all in a simple package. And then finally, we have chat as well, because
56:40
we very, very early on discovered that integrating money with communication, it works really,
56:46
really well. So from within chat, you initially, you could have conversations and you could also
56:52
send money. You could send eCash. You could instant message money, effectively. But since then,
56:59
we've added more and more to that. So now, within chat, you have all the features that we have,
57:05
well, not all, but many of the features now you expect from a modern-day chat app. So you can set
57:10
up groups and subgroups. You can do replies to people. You can add attachments and videos and
57:16
documents because people want to be able to do this. But we can also now do two big new things.
57:23
We can set up what we call multi-spend groups. So if in chat, you can just take a group that you've
57:30
set up in chat, but you can convert that into a multi-spend group. So everybody in that chat
57:36
is able to deposit to the money, to the conversation, to the thread. And it's now
57:42
collectively owned by that chat group and then a subset of people let's think of it like almost
57:47
like the administrators we have the concept of a group administrator like in any other instant
57:52
message we also have a concept of a of a group voter and if you're if you're identified as a voter
57:58
then you are able to vote on the the expenditure of any of the money that was sent to that group
58:03
that's cool yeah and so um and it can be up to 21 voters and you can set the ratio it might be one
58:09
of any one of the 21 or 15 of the 21 or three of nine or two or three or whatever.
58:15
Yeah.
58:15
And any, so you set up five, 10 different groups and one could be called
58:19
picnic and budget and, or another group could be college tuition or whatever.
58:27
Lads weekend away.
58:28
Lads weekend away.
58:29
And then people and all the people who are going get added to that group.
58:33
And maybe two or three of the responsible people who don't get drunk from the lads
58:38
become the voters and you make it a two or three.
58:41
And then people just send their money.
58:43
And in the conversation, you could be chatting,
58:45
but you also can be seeing messages,
58:47
system messages saying this person has now added this much in
58:49
and you can vote and expend on that.
58:52
So that's multi-spend, but it's all a chat conversation
58:54
because we're seeing that UX is becoming really intuitive.
58:57
And then the last one as well is,
59:01
and I think this is where it comes on to Fediment,
59:03
into something we call federation setup service.
59:10
And that is a service to make it incredibly easy.
59:13
It's just a chat conversation to set up a full federation.
59:16
Oh, that's cool.
59:17
And that's the big one.
59:18
So we're making it, and you talk to what we call the G-Bot,
59:23
which is the Guardian Bot.
59:25
And it's this AI that you talk to and you just say,
59:28
I want to set up a federation.
59:29
Here are the terms.
59:30
You agree.
59:30
and it will locate that that will have to have a whole conversation because that's a real big
59:37
feature and that's part of what i told the second thing that we're working on which is to make it
59:43
incredibly easy for people to set up and run federations so that we see this future where
59:49
there are thousands of thousands of federations or or each one are our private custodian private
59:56
custody services, effectively.
59:58
Because we don't want five or six or 10.
59:59
We have maybe 50, 60, 100 right now.
1:00:02
But we want there to be 100,000.
1:00:03
And for that to be happening, it has to be something that people can do while they're
1:00:08
just walking to their car.
1:00:11
It should be very, very easy to set up and very robust and work reliably.
1:00:16
And that's something we've worked on.
1:00:17
That's really cool.
1:00:18
That's FEDI.
1:00:18
Because when you were on the show previously, we went through how you set up a federation.
1:00:22
Yeah.
1:00:22
And it was nowhere near as intuitive as that, as just being able to have a chat.
1:00:26
I definitely want to show you how that's coming up.
1:00:28
Should we have a look?
1:00:29
I want to see.
1:00:29
Yeah.
1:00:30
And just quickly before I do that, you asked about Fediment.
1:00:34
Yeah.
1:00:34
Oh, yeah.
1:00:34
Let's do that.
1:00:35
So Fediment, for the money side of things, we use a protocol called Fediment.
1:00:43
It was invented by my co-founder five years ago now.
1:00:48
And it is the most robust e-cash custodial mechanism.
1:00:56
It allows you to hold value, spend and transact. But the key thing is no single person is in charge
1:01:06
of the money held in it. And so it means that this is technically, we say that means it's
1:01:13
federated. You think like multi-sig is if you have a multi-sig custody of Bitcoin,
1:01:18
that's federated as well. But that's what it allows you to do. And then when you all the money
1:01:24
that's added in to the system or sent to the Fediment Federation causes the issuance of eCash,
1:01:33
which is sent back to the person who issued, who provided the Bitcoin. And that eCash can be
1:01:39
transacted in lieu of the Bitcoin. But the transactions with eCash have incredible levels
1:01:46
of privacy. And when you want to withdraw, you don't have to rely on one person to respond.
1:01:52
is a federation of people will respond as well.
1:01:55
So behind the scenes with Fedi,
1:01:57
all of the different federations that are set up
1:02:01
are all running these federated Fedimint services.
1:02:07
But from a user's point of view,
1:02:09
they just look like a wallet.
1:02:11
And you can be a member of one,
1:02:12
you can be a member of two,
1:02:13
you can be a member of 20.
1:02:15
So when, like, obviously,
1:02:16
the other eCash protocol that's gained some traction,
1:02:19
Cashew, did a show with Kali recently.
1:02:21
He's great.
1:02:21
And I think these are both amazing products.
1:02:23
There's trade-offs to each, and they're both going to exist.
1:02:26
But with Cashew, there's obviously just one person in charge of the Mint.
1:02:30
So the risk there is that that person who's running the Mint rugs everyone and takes the Bitcoin.
1:02:34
Yeah, that's the small risk.
1:02:36
I mean, that's the small risk.
1:02:38
Lots of people in Bitcoin focus on that, but that's not the real risk of any one of these services,
1:02:45
ARK or Spark or Cashew or Liquid.
1:02:49
The big risk is that the person messes up and loses their keys
1:02:56
or their machine blows up.
1:02:59
They don't have a proper backup.
1:03:01
If you think about it, how often do people forget their password
1:03:03
versus how often do they get hacked by the North Korean hacker?
1:03:09
It's a thousand times more likely.
1:03:11
And we've even seen it.
1:03:12
And we worked with communities around the world.
1:03:15
And we have guardians who are the most trusted people
1:03:18
community is the most reliable most technically capable and their federations um and still someone
1:03:26
after a few months forgets their password and they can't remember it and they can't remember
1:03:30
where they saw it and that happens for those luckily because it's a federation you can still
1:03:37
us the federation is impaired because it's not fully someone's machine is no longer working
1:03:42
but you can still withdraw but if it was only one you lose your money that is the 99 risk
1:03:48
that you should worry about that.
1:03:50
What is my protection against just mistakes?
1:03:57
Because mistakes are way more common,
1:03:59
which is why, for example,
1:04:01
I think it's another thing that we have to think about
1:04:05
as Bitcoiners, and we should come about this at the end,
1:04:07
is the insistence that we should try
1:04:11
to get everybody to self-custody.
1:04:12
I think we're doing Bitcoin a disservice
1:04:16
by focusing on that.
1:04:17
Oh, that's spicy.
1:04:18
But we're coming around again.
1:04:19
I'm making a note because I definitely want to talk about that.
1:04:21
And that's just come from hard-earned experience for the last, I don't know, 14 years now in
1:04:26
this space.
1:04:27
Anyway, we'll come back to that.
1:04:29
Yeah, I'm definitely going to come back to that.
1:04:31
But you, like, so understand the risk there of cashew is that it's a single mint operator.
1:04:36
With Fetty Mint, there's multiple.
1:04:38
Yes.
1:04:39
So it protects you against the risk of someone being, just making a mistake.
1:04:43
Mistake proof.
1:04:44
But there's still, again, I agree that this is a small risk, but the risk is that there's
1:04:49
collusion between the people running the federation and they run off with the Bitcoin.
1:04:53
Yeah.
1:04:53
And another thing about the service that we are just announcing now effectively, which
1:05:01
is the federation setup service, is that we think of a way to, I don't want to be hyperbolic,
1:05:09
but massively reduce that risk as well.
1:05:12
Okay.
1:05:12
That's interesting.
1:05:13
Can you talk about how you reduce that risk?
1:05:15
Yeah.
1:05:19
So what happens is to set up a federation, historically,
1:05:24
a number of people need to come together.
1:05:26
We call them guardians.
1:05:27
And let's say you find four people.
1:05:31
It could be seven.
1:05:32
It could be 10.
1:05:33
But let's just say it's four people.
1:05:35
They come together, and they decide, OK, we're going to set up a federation.
1:05:41
They then set up the federation.
1:05:42
They all download the Fedimint software.
1:05:45
It's downloaded.
1:05:47
Yeah, I'm just looking.
1:05:49
Sorry, it's about to sting you.
1:05:50
You're getting shoot by flies.
1:05:51
Yeah, it looked like a mosquito, but they all come together.
1:05:56
And they run the Fedimint software.
1:05:59
They enter each other's credentials.
1:06:02
They share them around in a chat conversation.
1:06:04
And it's not me.
1:06:06
And the Fedimint server coordinates, and the federation is set up.
1:06:11
And as long as their machines are running and connected
1:06:14
to the internet, it continues to run.
1:06:16
If one goes offline or the person makes a mistake
1:06:20
or forgets their keys, which is the 99% risk,
1:06:23
just remember that, we're good.
1:06:26
You can still use the system.
1:06:30
But for them to collude, they have to know each other
1:06:32
fundamentally, and they can collude.
1:06:35
So with Fediment, because we have this system
1:06:40
where we have both money and chat all in one place.
1:06:47
We have the ability to allow people within chat,
1:06:51
and actually, and mods.
1:06:52
So you can have a mini app, which
1:06:55
is the FeddMint Setup Service mini app.
1:06:57
You can say, I want to set up FeddMint.
1:07:00
You enter, you confirm that you want to set it up,
1:07:02
And you pass it your Freddie Mint identity,
1:07:11
which is actually a NOSTA NPUB.
1:07:15
We automatically create you a NOSTA identity for your ID.
1:07:20
And in fact, whenever you open a mini app,
1:07:22
we can automatically log you in by a NOSTA again
1:07:25
without you having to do anything.
1:07:26
So it'll know who you are.
1:07:28
And it will be able to start a conversation with you
1:07:31
in chat in the same app with Gbot.
1:07:34
Gbot will contact you saying, OK, we know that you want to set up.
1:07:37
Let's start the conversation.
1:07:39
That conversation is our chat is using Matrix,
1:07:42
which is something that's tested by the German military.
1:07:44
It's security tested and so on.
1:07:47
If a better technology, white noise comes up,
1:07:49
and it becomes bulletproof and reliable enough in X years,
1:07:55
we'll switch.
1:07:55
But right now, Matrix is the best open standard for encrypted chat that we've seen.
1:08:05
So you're now having this chat conversation, which you know is encrypted and private.
1:08:11
And you start answering some questions.
1:08:14
And I can show you on a video, but you start answering some questions.
1:08:19
And it's like explaining that we're going to help you set up a federation.
1:08:23
You're good with that.
1:08:24
We explain, do you want to, it's going to be hosted on some hosting service.
1:08:35
Are you okay with this?
1:08:36
We give you the cost of that.
1:08:38
It's incredibly inexpensive because you're going to have to pay for four different servers,
1:08:44
your server and the other Guardian servers as well.
1:08:47
And even at that, it's like $20 a month or $21 a month, which is really cheap for four servers.
1:08:54
We then ask you other questions.
1:08:56
Do you want to charge fees for your federation?
1:08:59
Because some people charge, many people don't charge,
1:09:01
but we've now enabled people, if they want to,
1:09:04
to charge a small percentage on back-off transactions
1:09:06
to cover the costs of running the infrastructure,
1:09:09
and it becomes a profit center, not a cost center.
1:09:11
And many other questions.
1:09:12
Do you want to recurring pay?
1:09:14
Do you want to so on and so forth?
1:09:15
But it's just a series of yes, no questions,
1:09:18
which take, I don't know, one minute to fill in.
1:09:20
It's like six questions.
1:09:21
Once that done we have separately spent a number of several months actually approaching year now finding a number of very very reliable very trustworthy
1:09:39
big hardcore values aligned Bitcoiners in the Bitcoin space.
1:09:44
We call them other guardians, OGs.
1:09:46
Yeah.
1:09:47
And they are very, very private and honest.
1:09:51
but we know that they are dedicated to trust and they're very values aligned
1:09:57
with providing a service.
1:10:00
It's sort of people, if you knew where they were, you'd be like,
1:10:02
yeah, I really would love them to be a fellow Guardian.
1:10:04
And so they have set up a, they've also got a set up on their own servers
1:10:10
that they're responsible for.
1:10:14
And it's set up in such a way that they can, they have their own Gbots running.
1:10:18
and the GBOX system can then contact others
1:10:25
and automatically choose a subset of those,
1:10:28
three of those randomly,
1:10:30
and show them to the person
1:10:36
who wants to set up this federation.
1:10:37
You call that person the lead guardian,
1:10:38
the person who's activating it.
1:10:40
In future, we're going to have the ability
1:10:45
for you to see different guardians by their pseudonyms.
1:10:48
And you can decide based on how many federations they've set up.
1:10:51
You might want one with less.
1:10:52
You might want one more.
1:10:52
They can also have like a reputation rating.
1:10:53
Yeah.
1:10:54
And we're going to make, we have, we will be put forward a NIT proposal.
1:10:59
So it will be all done through NOSTA.
1:11:00
In the same way you could have Bitcoin mints for rating mints in general.
1:11:03
This is to rate guardians effectively.
1:11:06
So it's a guardian specific one.
1:11:08
Into like looking at things like uptime and-
1:11:10
Yeah.
1:11:11
And uptime and responsiveness and so on and so forth and rating by other people,
1:11:15
et cetera, et cetera.
1:11:16
how long they've been around these, all these different metrics and so on. But right now,
1:11:19
we just randomly choose and we could out of these. And then once that's done, the different bots
1:11:27
negotiate with each other, and then they do all the backwards and forwards that we demonstrated
1:11:33
a couple of years ago of passing the credentials around and so on. All you see is a little bit of
1:11:38
an hourglass for about five, six seconds where it says negotiating, setting up, finding, locating the
1:11:43
the other guardians, because there's always a challenge for someone when they set up a
1:11:46
federation.
1:11:47
OK, I need to find three other people I can trust.
1:11:49
Well, we've got a set of really, really, really, really trustworthy, reliable people.
1:11:53
And that set will grow over time as well, because it's a profit center.
1:11:57
They earn a few dollars a month for each one that they run.
1:12:00
And so if they're supporting many, that's a revenue earner for them.
1:12:05
And it sets up a federation.
1:12:07
Because of the fact that all the communication is handled automatically by software, none
1:12:12
of the guardians actually know, they know that they're now a guardian for new federation,
1:12:16
but they don't know who any of the other people are. Because each time they set up a new
1:12:21
federation, they always assign themselves a new random name for each one. So-
1:12:26
So it takes out the collusion risk.
1:12:28
You don't know the people, you don't have the, and there's no ability to communicate with the
1:12:32
others, other than through the protocol of just running the software. There's no way to,
1:12:38
You could be in the same group as someone you're a guardian with,
1:12:41
but you won't know.
1:12:43
You won't know.
1:12:44
And so you would have to have some way to find out that you're a guardian.
1:12:49
But the only way to do that would be you have to go to some public forum
1:12:51
somewhere and say, hey, I'm a guardian and so on.
1:12:55
I'd love to rug everyone.
1:12:56
Who else is?
1:12:57
Yeah.
1:12:57
But then you have to out yourself for saying you want to do that to be able to.
1:13:01
There's no other way because you don't know who the other guardians are.
1:13:05
And therefore, there's no ability to collude.
1:13:07
because it's all integrated and coordinated through the G-Bot.
1:13:14
That's very cool.
1:13:15
Is there a potential scenario where you could actually have AI running the Fedamins?
1:13:23
This has come up a number of times.
1:13:25
And yes, it is possible.
1:13:28
The question is who's running.
1:13:31
There's still an element of who's running the AI.
1:13:34
So I was thinking you could give it like a very strict-
1:13:37
Because effectively, we're getting close to that.
1:13:38
Because effectively, the setting up and coordinating of it is all handled by the G-Bots.
1:13:44
Yeah.
1:13:46
Even on voting, the OGs effectively can decide on this type of issue and this type of issue,
1:13:53
just automatically, they can delegate the action to the G-Bot.
1:13:56
They don't actually need to interface with the admin interface if they don't want to.
1:14:01
They can just give it instructions.
1:14:03
In general, if these messages are going out
1:14:08
or this sub or sub going out, you can say yes on my behalf,
1:14:12
for example.
1:14:13
So the G-Bot is not an AI, but it is effectively
1:14:18
your executive assistant for each Guardian as effective as this bot,
1:14:26
which is doing the heavy lifting of the setup running
1:14:29
and maintenance upgrading, all that sort of stuff.
1:14:31
Because essentially, if the risk of collusion is you put it at 1%,
1:14:35
if this takes it down to 0.001%, that's obviously a huge improvement.
1:14:40
But it doesn't remove the risk of losing credentials to access them in.
1:14:44
Is that correct?
1:14:45
No, it doesn't remove that.
1:14:46
But you have to also remember, though, if you lose the credentials,
1:14:53
as long as the machine's still running, you're still fine.
1:14:55
Because if you stop the machine, then the credentials go out of memory.
1:15:00
And then to restart it, you have to add the credentials.
1:15:02
So you'd have to lose your credentials
1:15:03
and the machine will have to crash,
1:15:06
which is why a lot of people use hosting services
1:15:10
because they're more reliable.
1:15:12
They have five lines uptime and so on, et cetera.
1:15:15
So you'd have to lose the credentials
1:15:17
and the machine will have to turn off and on.
1:15:20
And it will have to happen to a number of people,
1:15:24
not just to one.
1:15:25
Yeah.
1:15:25
I just wonder if you somehow gave an AI
1:15:29
a very strict remit of what it can and what it can't do
1:15:32
if you take that risk down to literally zero?
1:15:36
I think getting AIs to run it could be interesting,
1:15:40
but I don't think you ever get things down to zero.
1:15:42
Because the reality is that you're still...
1:15:44
There's still an element of trust.
1:15:47
Yeah, the software is being run by someone
1:15:49
on some computer somewhere.
1:15:51
Yeah.
1:15:53
Unless you had the ability to have a fully AGI,
1:15:57
autonomous AI, which was able to buy and pay for its own internet, move its software from
1:16:05
the original computers that it was launched onto other computers.
1:16:08
Give it three years, we'll be there.
1:16:11
Yeah, maybe give it three months of the rate it's going.
1:16:14
But then in which case, it will be transparent for us.
1:16:18
They will sign up as one or more of the OGs, and they will also sign up as one of the users
1:16:26
and just-
1:16:27
just do things.
1:16:28
And just do things.
1:16:29
And we wouldn't need to do any particular programming
1:16:32
to make that happen because they could use the existing,
1:16:35
as long as they can operate with a computer
1:16:38
and control the screen and keyboard and mouse,
1:16:41
then if a human can do it.
1:16:43
They'll do everything.
1:16:44
If a human can do it, they'll be able to do it.
1:16:45
So I think, but then the question is,
1:16:48
what happens if the AIs collude?
1:16:50
Because your assumption is the AIs are trustworthy
1:16:53
and they won't collude.
1:16:54
And I think that assumption comes from the idea
1:16:56
of this being AI, not AGI.
1:16:59
And if you gave, like, an AI follows rules,
1:17:01
an AGI might not follow rules.
1:17:04
I mean, that may be wrong, but that would be my opinion.
1:17:07
Yeah, yeah.
1:17:07
But we've also seen AIs, they can follow rules,
1:17:11
but if you don't detail the rules correctly,
1:17:16
there's still a risk of unintended consequences.
1:17:20
So the assumption is that it's an AI
1:17:23
and the person who prompted it,
1:17:24
prompted it perfectly without ever putting an unintended error.
1:17:28
Yeah.
1:17:28
Are you still pretty deep in the AI rabbit hole?
1:17:31
I know you were really following it closely.
1:17:32
I follow it closely, but yeah, I'm now just following it and looking with interest and
1:17:44
wonder like everybody else.
1:17:45
But it's one of these things where I've realized that it's like a singularity in the sense that
1:17:54
once we have AGI, it's really hard to intuit what will happen after that point.
1:18:00
100%.
1:18:01
And I'm somebody who normally thinks hundreds of years, dozens of years into the future.
1:18:06
And I find it quite cathartic, quite humbling.
1:18:10
That you can't anymore.
1:18:11
You can't anymore. You can't. So it's better to just focus on what you can do right now.
1:18:16
Yeah. I was talking to Rob.
1:18:18
And hope that it ends up well, but also realizing that it learns from us.
1:18:29
So again, what we can do to instill cultural elements as Bitcoiners into the general cycle
1:18:37
of the world and the data stream that it's learning from could move the needle in what
1:18:43
we end up with.
1:18:43
Do we end up with this thing that being very short time horizon
1:18:46
and very selfish and so on?
1:18:49
You probably don't want your AGI to be like that.
1:18:51
Absolutely not.
1:18:51
But you want it to be more holistic in thinking
1:18:55
and understanding the benefit of having variety
1:18:58
and optionality in the world and thinking in long terms
1:19:02
and win-win scenarios.
1:19:04
And then we've got a really good future ahead of us.
1:19:09
You were saying you were talking to...
1:19:10
I was talking to Rod on the show about this.
1:19:11
And like I would say, I'd be terrified to be a 14-year-old right now.
1:19:14
Because you've gone through the very traditional schooling up until now.
1:19:18
And you're going into a world that who knows what it'll look like in five years time when
1:19:21
you're actually going out into the world and doing things.
1:19:23
It's, I think so much is going to change very quickly.
1:19:27
But let's show me.
1:19:28
I think though, if you're just born now, it's great.
1:19:30
Well, that's exactly what I said to you.
1:19:32
It's like just born, because after 20 years, it's going to be settled.
1:19:36
And it's probably all the sort of the messiness is probably the next 10 years.
1:19:40
Yeah.
1:19:40
And then after that, it's all, well, either it doesn't matter.
1:19:44
We're all dead.
1:19:45
Or it's a nirvana.
1:19:47
Yeah.
1:19:47
Right.
1:19:48
Let's go through these videos.
1:19:49
So which ones do you want to show me?
1:19:51
So, I mean, there's so many things we've done.
1:19:54
But you wanted to talk, let's talk about the thing that we just discussed last, which was
1:20:00
the OG supported federations.
1:20:03
So what you're seeing happening here is you basically said, I wanted to set up a federation.
1:20:10
with a mini app.
1:20:11
You've clicked, you've added your,
1:20:13
and it would have started up a chat with you.
1:20:16
We call it G-Bot.
1:20:18
And you'll just, you'll go into your chat session
1:20:21
and you'll see that you've got a chat session with G-Bot.
1:20:23
And it would say, welcome,
1:20:25
we're going to help you set up a federation.
1:20:27
Here are the terms, you accept, agree.
1:20:30
And then you say, do you want six months or 12 months
1:20:34
in terms of payment?
1:20:36
You select.
1:20:36
and then it will send you a Bitcoin Lightning invoice.
1:20:46
And then you go off.
1:20:51
So this is now being sent.
1:20:53
And in the background,
1:20:54
you go into any Lightning-enabled wallet,
1:20:56
including Fedi,
1:20:57
but it doesn't have to be
1:20:58
because you may not have a Fedi account then.
1:21:00
And the payment is received in the background
1:21:02
and it carries on.
1:21:04
And then it just asks you a couple more questions
1:21:06
it starts creating your it deploys and sets up in the cloud uh uh a federation for you and then
1:21:16
it's now set up um and again now it took a few seconds and now it asks you well what things in
1:21:20
your particular flavor what do you want to what name do you want to give the federation you type
1:21:25
in the name in the chat it's just a chat conversation what um what percentage of commission do you want
1:21:33
to take for transactions for running the federation? 0%, 0.05%, 0.1% are the options at the
1:21:42
moment. And you just select a couple of it. Do you want recurring payments or not? So that,
1:21:48
because it's now a federation, you may just want to have it automatically run.
1:21:51
Yeah. And then once you've done that, it says, okay, I'm setting up the federation in progress.
1:21:58
Now, what's really interesting here is in the background,
1:22:01
this bot is communicating to the bots of all the other OGs
1:22:06
who are just running as well.
1:22:07
And they could be like having a cup of coffee and so on,
1:22:09
their bots running.
1:22:10
And it says, okay, I've randomly selected,
1:22:13
randomly six free.
1:22:15
And do you want to be,
1:22:17
and then they get alerted because it's chats.
1:22:20
They get alerted as a chat notification.
1:22:21
They click in and he goes,
1:22:23
someone wants to sort of a federation
1:22:24
and has asked you to be one of the guardians.
1:22:26
are you okay to be the guardian and you can say yes or no if you say no it'll go and find someone
1:22:30
else until enough but if you say yes it will it will move on to the next one it will say okay i've
1:22:35
got one i found three others and then all of them will separately provision a new fed like we'll set
1:22:44
up a new hosted um fediment federation start it up run it and then they will all coordinate with
1:22:51
each other to set up a for a while you're all having a cup of coffee and you won't have enough
1:22:55
time for a cup of coffee because the whole process takes about 20 seconds.
1:22:58
From the point of you just saying how it fees, it's gone off, found your other guardians
1:23:02
who are all trusted people from the Bitcoin space.
1:23:07
Each one of you has gone off and set up one server each running purposely just for this
1:23:12
federation.
1:23:13
And then they've coordinated each other and they form a federation.
1:23:18
So this whole process here is on.
1:23:22
And I think on the last screen, this is where it's like coordinating, finalizing, and that's it.
1:23:30
It's done.
1:23:31
And what you've ended up with here is the invite code.
1:23:35
You can take that, paste that into your Fedi, and you've got a new federation set up.
1:23:41
Damn.
1:23:41
And then you can share that with everybody.
1:23:43
And from your point, you're seeing updates of what's going on.
1:23:46
But basically, you have to give it a name.
1:23:48
You have to agree to the terms.
1:23:49
And you have to say how much fees you want to charge
1:23:54
and whether you want recurring payments and stuff like that.
1:23:57
In future, also, whether you want to make it public or private.
1:24:00
Because by default, you make it private.
1:24:02
It's just for you and your family and friends.
1:24:04
But you may want it to, some of the federations want to be public
1:24:06
because they want to allow people from around the world,
1:24:09
especially if they're charging fees now.
1:24:10
Then they might want to open it to a larger set of people
1:24:13
because they effectively become a mini private custodian, effectively.
1:24:17
and that's the whole process but it's all running it's all federated in future we will probably add
1:24:25
bits where you can go off and choose who the guardians are also on top of this once it's set
1:24:31
up you can go back to gbot if you want to change the description of your federation or so on you
1:24:38
can go into the admin interface if you want or you can just say to gbot change the description
1:24:42
to this, and it will go off and do that.
1:24:44
Or whatever you want to do, you can do it all by a chat,
1:24:47
because we find that the chat interface is very magical.
1:24:50
It's just, it's the future of UX moving to being just chat.
1:24:56
So that's a huge improvement.
1:24:58
It's a huge improvement.
1:25:00
And we're still going to go a long way further.
1:25:02
But with this, we're going to be aggressively going
1:25:05
and getting multiple people setting up federations.
1:25:11
even with the other thing we've been doing as well within the app is integrating a lot more
1:25:17
of Nostra so we only recently allowed people to start um rating their experience of using a
1:25:25
federation um which uses there's a nip that allows you to see ratings of different mints
1:25:30
um biqua mints and cashew mints and within like a week we became like the number one two and five
1:25:37
are all FerryMints in terms of reviews, because there's a lot of people using these, but we just
1:25:42
haven't spent a lot of time publicizing actual usage. So you can go to BitcoinMints.com and you
1:25:49
can see that the reviews for that are growing and usage is increasing as well. So now that we have
1:25:59
this tool and now we've had two years of battle testing in the hardest environments, the next phase
1:26:04
is really pushing to get as many people setting up federations everywhere.
1:26:12
So anybody who wants to set up a federation in any country can now do it.
1:26:17
And here's the other thing.
1:26:18
Behind the scenes, there's even more to this,
1:26:19
because not only is the federation set up,
1:26:22
you need to connect to the Lightning Network.
1:26:23
And anybody who's tried to connect up to a Lightning Network
1:26:25
and to do it properly,
1:26:27
realize it's really difficult to have a reliable connection to the Internet.
1:26:30
So even if the federation is fine,
1:26:31
And the Lightning, if it's not good, it's still a bad experience.
1:26:35
So whenever you set up a federation, it also immediately provisions you with liquidity for Lightning connectivity as well.
1:26:43
And that's also set up for you as well.
1:26:45
So you have connections to the Lightning network.
1:26:47
And also, if you want to have stable-
1:26:49
Who locks up that liquidity?
1:26:51
So we are locking up the liquidity.
1:26:54
But we effectively become a mini LSP, effectively.
1:26:57
and we can earn lightning routing fees.
1:27:03
You don't have to use us,
1:27:05
but if you want it to just be a click,
1:27:07
then it's with us.
1:27:08
But you can always, after the fact,
1:27:09
change it and add in,
1:27:10
go and see admin and change to it.
1:27:12
Everything can be changed.
1:27:13
You can, you know,
1:27:14
in the future you'll be able to migrate to Guardian
1:27:17
and you can run it separately
1:27:20
on different infrastructure.
1:27:24
You can host it at home.
1:27:25
Fedim has now been updated, so you can operate Fedim mints from Start9, Soon, Umbrella, and
1:27:31
you can replace any of the elements.
1:27:33
But if you just want to be able to click in a chat and have a robust setup with good lightning
1:27:37
connectivity and with stable balance as well, where we provide stable balance so you can
1:27:43
decide, do I want to offer my users not just Bitcoin balance, but a stable balance?
1:27:47
It's just a click.
1:27:48
And then we set it all up and provision into your federation the Bitcoin liquidity needed
1:27:54
to set that all up, all with just say yes or no,
1:27:57
and then it's done.
1:27:58
That is very cool.
1:28:00
So yeah, we're excited about that.
1:28:02
It's just launched.
1:28:04
Well, we've actually been working with communities
1:28:09
for this since the beginning of August.
1:28:17
Just testing?
1:28:18
No, no, real users.
1:28:19
We've been testing for several months,
1:28:22
but we have actual real users paying monthly fees for it
1:28:27
since the beginning of August.
1:28:29
And that's ramping up.
1:28:30
There's a long waiting list of communities
1:28:32
we're working with.
1:28:33
But going into late October, early November,
1:28:38
we want to then just open it up so anybody
1:28:41
will see it in the App Store.
1:28:42
And in the, not the App Store, the mini app catalog,
1:28:47
you'll be able to just select, set up a federation, anybody
1:28:52
anywhere in the world. And one minute later, you can have a federation that's federated by people
1:28:58
who are in multiple jurisdictions in multiple countries, who have been invested to be very
1:29:01
reliable people. They're all anonymous as well. And they all don't know each other. So they have
1:29:05
no ability to collude. And they have no way to contact each other without publicly saying and
1:29:10
outing themselves, at which pace we would know. And they've outed themselves and that would prevent
1:29:15
them. So we're excited about it. That is exciting. Is there anything else in here? We talked about a
1:29:20
of this i think yeah so let's see you should close it here is it a different tub or is it
1:29:32
yeah so the other thing we talked about um um i think one thing one key thing that we've had
1:29:40
but now we've spruced up the interface because it's we think it's going to be really important
1:29:45
coming forward is social backup and recovery and this is a very very quick feature but really
1:29:52
powerful um if you want to um if you want to back up your keys a lot of people talk about self-custody
1:30:03
but then they take their keys and give it to a friend or family in which case it's no longer
1:30:07
self-custody it's federated custody because you and your friend or family have the same have access
1:30:12
to the Bitcoin. And you're now having to trust them. So it's become federated custody.
1:30:18
But people do it in an ad hoc way. What we have here is, and we allow you to do the 12 words and
1:30:25
back up if you want to. But instead, you can take your keys and give it to the federation.
1:30:35
And it's split into parts and backed up and recovered. And so we have the recovery.
1:30:39
very quick process. You click, you save Betty, and you save, and it saves it. And then the backup,
1:30:47
without ever having to save the 12 words, you're able to back up your keys. But what's very
1:30:53
interesting is, though, oh, yeah, what's interesting is then the recovery process is
1:31:03
just so again, you have the ability to, you're returning, you've just bought a new phone after
1:31:11
losing your own in a boating accident, and you can go off and do the whole 12 words, or you can say,
1:31:17
I want to go to social recovery. And you now find that file that was created as part of the
1:31:24
original backup. And then is the key thing, you go to each one of the guardians. So let's say
1:31:31
there's three or four guardians.
1:31:33
One might have said, you know, I don't know you.
1:31:35
I'm going to reject it.
1:31:35
Another one says, yes, as long as you've got the majority to say yes,
1:31:40
then it will immediately recover your keys.
1:31:43
But none of the guardians ever knew your full key.
1:31:46
They only had it encrypted.
1:31:47
Even if they collude with each other, they can't recover your key.
1:31:50
And also remember, they can't collude with each other
1:31:52
because they have no way to communicate with each other.
1:31:54
The V-Bot prevents them from communicating with each other anyway.
1:31:57
So that's, again, a feature that's only possible because you have a community of guardians.
1:32:07
And I've mentioned the stable balance.
1:32:12
And that's probably the last one because there's so many features.
1:32:14
I already discussed multi-spend.
1:32:17
But on the stable balance, you have the ability to see your Bitcoin balance.
1:32:23
But if all federations that are set up with OG can have stable balance,
1:32:28
you can also have a stable balance as well.
1:32:30
And that stable balance behind the scenes
1:32:33
is effectively using an idea similar
1:32:38
to stable channels, where you're entering the amount
1:32:41
that you want to be stabilized.
1:32:44
You confirm, and then it says, you're
1:32:46
depositing this not from the outside world into USD,
1:32:50
but from Bitcoin to USD.
1:32:52
You agree, and once agreed, within 10 minutes,
1:32:57
it's locked in, because contracts happen every 10 minutes.
1:33:00
It's locked into Bitcoin.
1:33:02
So if you go to your balance, you'll
1:33:04
see that it says, still zero, but 10 minutes pending.
1:33:07
And then a few moments later, you have $10 in.
1:33:13
And so it's a way to convert in and out of USD
1:33:15
and have the stability if you want it.
1:33:17
That's very cool.
1:33:19
Damn, there's some big upgrades, Ovi.
1:33:21
There's some big upgrades.
1:33:22
We've been very busy.
1:33:24
All these features, actually, many of them have been around
1:33:26
for well over a year, some of them over two.
1:33:29
But taking something from an idea to being a polished thing
1:33:32
that works in all edge cases on sloppy internet and old devices,
1:33:37
that is 95% of the work.
1:33:40
Showing a demonstration like that in a five-second video is 1% of the work.
1:33:47
99% of the work is actually making it so it works every day, everywhere.
1:33:52
And it doesn't work every day, everywhere,
1:33:53
but it works almost every day, almost everywhere.
1:33:56
And that's now we think we're ready to share this to the world.
1:34:01
So we're going to be a little bit more noisy,
1:34:03
but more in the focus on just allowing people to set this up really easily and be everywhere
1:34:10
and whoever wants to have their own have their own private custody managed privately by communities
1:34:17
for the benefit of communities which and I think that was the point I said we wanted to cover
1:34:23
they can do that because I think private custody is what we as Bitcoiners should be focusing on
1:34:28
not self-custody at the expense of private custody.
1:34:33
I mean, that is the point that I want to finish on.
1:34:36
Because earlier you said you don't think as Bitcoins
1:34:39
we should be pushing people to self-custody.
1:34:41
I want your take on that.
1:34:43
Because Alex Leishman runs River,
1:34:46
unbelievable Bitcoiner, done very, very cool things.
1:34:49
And he would, I think, I've not heard your take yet,
1:34:52
but be in the same camp as you
1:34:53
where he does not think everyone should be self-custodying Bitcoin.
1:34:55
he said this publicly a few times
1:34:59
why do you think
1:35:01
is it the technical hurdles to self-custody
1:35:03
safely or is it to do with this
1:35:05
private custody
1:35:06
so
1:35:08
just
1:35:11
as background I've been trying to get
1:35:13
people to self-custody
1:35:14
for
1:35:16
12 years now
1:35:21
I mean it's been quite a bit longer
1:35:23
than that but running an exchange
1:35:25
Right from the beginning, I've been trying to get people to self-custody.
1:35:29
I self-custody.
1:35:30
And before I lost all my Bitcoin in a boating accident, I self-custody.
1:35:37
And that's part of the problem, that you can lose your Bitcoin in a boating accident.
1:35:39
It's the problem when you come to Bali, isn't it?
1:35:41
You can lose your Bitcoin in a boating accident.
1:35:45
So if you can do it, and I've stated it before, but I think it's important.
1:35:52
There are three key caveats.
1:35:55
You have to be wealthy enough to self-custody because it's more expensive than to do otherwise.
1:36:00
So it just is more expensive.
1:36:02
If I want to store money on what I was at Toshi, it's basically free.
1:36:09
If I want to store money in hardware, if I want to do it correctly, it's expensive.
1:36:15
If I want to do it badly so I lose the money, then it's pretty cheap.
1:36:18
See, this is why they're a sponsor of the show.
1:36:20
So this always sounds like a show when you talk about the sponsor.
1:36:22
But this is why I think BitKey is really interesting.
1:36:24
because like, sure, there's a cost to get a BitKey.
1:36:27
Well, then there's a cost straight away.
1:36:29
For sure.
1:36:29
But I think you can do it relatively cheaply
1:36:31
in a pretty redundant way,
1:36:33
especially if you're technically not super inclined
1:36:35
because it's essentially multi-sig managed for you.
1:36:38
You don't need to worry about seed words.
1:36:40
Yeah, I mean, it is.
1:36:41
My only concern about that, that it's,
1:36:45
so the distinction I, and by the way,
1:36:48
I think BitKey is a great product
1:36:50
for where the world is today.
1:36:51
but um and it's it's better than many of the other options out there but it's still
1:36:57
still the areas that we have to think about so let me if i show you the the philosophy and then
1:37:04
you can see then it'll be sort of clear why there's still some way to go where big key if
1:37:09
from my point of view first of all so there's three things you have to be wealthy enough and
1:37:14
And it might seem it's only 50 quid, but about to see Alex Glastin from HRF, you have to check
1:37:21
your financial privilege.
1:37:22
Because many people, 50 quid is more than two months salary.
1:37:28
So for you, it's nothing.
1:37:29
But for many, many people out there, it is something.
1:37:31
So that's one.
1:37:32
You're excluding all those people.
1:37:34
You might be, well, they're poor enough.
1:37:36
They have fun staying poor.
1:37:38
They don't deserve it.
1:37:39
Because just by virtue of being not poor, not wealthy enough.
1:37:44
The second thing is you have to be technically capable enough.
1:37:46
And because it's only 12 words, it's easy to store.
1:37:49
But again, check your technical acumen privilege.
1:37:53
Because there are many people who will find it very difficult to secure 12 words and find
1:37:58
it just, they just will.
1:38:02
And this took me a while to see.
1:38:03
But after doing it again and again and again with people, and people forgetting 12 words
1:38:07
again and again and again, after being told and after carefully storing it, you realize
1:38:11
actually is not an easy task for many people to do so it doesn't matter how fancy and simple to use
1:38:17
your horror what is the 12 words just by itself is not an easy thing to do i i oversaw um training
1:38:25
sessions in el salvador by ibix micado where and as one of the people who are grading people where
1:38:31
they train these college students i mean um secondary school children and teenagers supposed
1:38:37
be the most tech savvy on how to back up and recover 12 words and we did a final exam and still
1:38:43
after going through the training i'll say 10 to 20 percent got it wrong on the backup and recovery
1:38:48
of 12 words and that's teenagers who are the most technically advanced and were trained
1:38:53
in a literally an academy for this so there's a big percentage of people who just find that
1:38:58
technically complicated and it just is what it is there's no commentary on them it's just
1:39:02
That's not the way they're wired.
1:39:04
So that's the second risk.
1:39:06
And the third is it's just scary.
1:39:09
It's taking risk.
1:39:10
The history of business and commerce is people are willing to buy convenience and sell their risk
1:39:25
or give away risk or reduce their risk for money.
1:39:31
almost all commerce is things that make my life easier and I'm paying for it
1:39:37
or things that reduce my risk and I pay for it.
1:39:41
And we spent hundreds of years inventing concepts like banks
1:39:45
because people want to give away the, they want to.
1:39:49
This is what the consumer wants.
1:39:50
If you actually look at the consumer,
1:39:51
they want to give away the risk of custody to someone else.
1:39:54
And they're willing to pay for it.
1:39:55
They want to give away the risk of,
1:39:57
and the complexity of custody to someone else.
1:39:59
and they're willing to pay for it.
1:40:04
And why?
1:40:05
Because, and this was something
1:40:06
that really hit home for me
1:40:07
when I was running the Bitcoin exchange
1:40:11
I ran in the UK for nearly a decade,
1:40:14
where one of the people
1:40:15
I was trying to get to self-custody
1:40:16
for a long time said,
1:40:17
look, I understand the need to self-custody,
1:40:19
but I trust you more than I trust myself.
1:40:22
And because now,
1:40:23
the other side of the coin though,
1:40:27
no pun intended,
1:40:28
is just on that. That could be their miscalculating risk. Like they, because you were a private
1:40:35
business in the UK, like they don't know the risk profile that you were taking. Like obviously you
1:40:39
ran a good business and maybe there wasn't very much risk there at all, but like they have no way
1:40:44
of actually accurately calculating the risk of leaving Bitcoin with you. It doesn't matter whether
1:40:48
they are able to accurately calculate the risk or not. It's their perception is, and the perception
1:40:55
of most people is that it's safer to hold their money in a bank than to hold their money underneath
1:41:02
their pillow in the house. That's the general perception of most people. And that was a
1:41:07
perception 10 years ago, 50 years ago, 100 years ago. People have that general perception.
1:41:12
Is that accurate or not? We can discuss it as the cows come home, but it doesn't really matter.
1:41:17
What matters is what motivates their action and their action. People are voting. They're holding
1:41:22
their money. They're going the opposite direction. Right now, they're holding not only are they
1:41:28
holding it on a Coinbase or a Cash App or a Strike or so on. They're going further. They're
1:41:35
holding on ETFs and they're going further. They're actually giving up titles to their Bitcoin.
1:41:39
They're not even buying a Bitcoin. They're holding things like strategy, which have some relation
1:41:45
to Bitcoin. So they're going way up the curve. Their actions are telling you what they're doing.
1:41:51
And you see that happening in the global South as well So we don need to debate We can look at this is what users are asking for Why is the question Because they perceive the risk and they want to and risk is
1:42:06
something that people are willing to and want to reduce in their life. And so there's a risk around
1:42:12
custody. And the risk is if I make a mistake, I go from 100% ownership of my money to zero
1:42:18
instantly now there's another risk and bitcoin and the internet and social media have have
1:42:26
increased in the social awareness of the average person and this is the really new new thing
1:42:31
the percept the the risk of slowly having your money debased over time you went back 10 20 years
1:42:37
ago people were no did not did not talk about it didn't understand it 10 years ago a few crazies
1:42:41
understood that five more now and it's even governments didn't understand this really they
1:42:47
thought, well, our money's bad, but the US dollar's good. And now you're seeing, as of a few months
1:42:52
ago, a month ago, gold, the amount of gold being held by nation states has overtaken the amount of
1:42:59
US treasuries being held for the first time since 1996. So that means governments are moving to
1:43:06
their government level hard money. Problem is you need tanks and bank bolts and so on to custody that.
1:43:13
Governments can do that. The average person can't. But the average person is obviously going to go
1:43:17
to Bitcoin. And why? Because we're all understanding the zeitgeist has moved,
1:43:22
the Overton windows moved, and people are all understanding that there is this risk around
1:43:27
inflation, which is the risk, a different risk, the risk of slowly using two, five, 10, 20% of
1:43:33
your money every year. But that's a different risk, which now that people understand for the
1:43:40
first time, they want to reduce that risk as well. But what you're telling them is you've got a
1:43:45
choice. Either take this risk of losing 5%, 10% of your money every year, or you must self-custody,
1:43:55
in which case you must take the other risk of losing 100% overnight from a mistake. And anything
1:44:02
in the middle is not a good option. Therefore, it's the same as taking, and I'm educating it,
1:44:07
it's the same as taking the 10%, 20% risk. Now, let's put it into a different technology. Instead
1:44:13
the technology of moving value, the technology of moving humans, transportation.
1:44:19
Yeah.
1:44:20
Now, there is mass corporate-owned, government-owned transportation, equivalent to mass corporate-owned,
1:44:28
government-owned custody, which is trains and buses.
1:44:33
And then there is true self-determined transportation, which would be not just
1:44:43
the ownership of a car, but it would be the repair, the building and repair and fixing
1:44:49
of the car yourself, not relying on any third party.
1:44:55
So that is true self-ownership of transportation.
1:44:59
Then you can have community ownership where you own the car, but when you need to fix something
1:45:03
or service something, you don't do it yourself.
1:45:05
You use your local mechanic.
1:45:08
If you were to translate the self-conspiracy mindset to Bitcoin, as you'll say,
1:45:13
that form of honing a car is no different to using trains and buses. And if you're not fixing
1:45:20
it yourself and running yourself, it's bullshit. And it's basically, you're relying on a third
1:45:25
party. Therefore, it is basically the same. So you might as well do the other thing. There is no
1:45:29
difference. If you had that mindset, how many people on the road do you think could be driving
1:45:36
right now? Very few. Very few. It will always remain a niche because it's way more expensive.
1:45:41
I will not trust my car to go at 80 miles an hour
1:45:45
if I fix it myself.
1:45:46
The average person won't trust that.
1:45:47
Do you know what?
1:45:47
I do think there's something else in that though.
1:45:49
Like if we did have to do this
1:45:51
and we had to fix our own cars,
1:45:52
you would learn to fix your own car.
1:45:54
And you would know you'd be dead, most likely.
1:45:56
Because you'll be going at 80 miles an hour,
1:45:58
we all come off and you will die.
1:46:00
Because, I mean, maybe it won't.
1:46:03
But your perception is that's, for many people,
1:46:06
the perception is that that will be a big, big risk for me.
1:46:09
I'm not handy.
1:46:10
I don't feel comfortable repairing my own car because if I get it wrong, I die.
1:46:15
So that perception of risk will make me go off and stick to using buses.
1:46:20
If you're telling me that this other one isn't a real option, which is, by the way, the biggest market for transportation,
1:46:26
most people believe that they have private ownership of a car, but they use their community of insurance companies and mechanics to make it viable.
1:46:36
and they've outsourced that,
1:46:38
but they don't conceptually,
1:46:40
and they're not lambasted for saying
1:46:42
that doesn't really count as private ownership of a car.
1:46:44
See, I-
1:46:45
And I think we'll never get to a point
1:46:47
where that niche of people who fix and repair themselves
1:46:49
will ever be anything more than a niche.
1:46:51
It should be allowed to exist,
1:46:53
and it's great that it exists,
1:46:55
but it will not be the norm for most people.
1:46:57
And there will never be a point that it's a norm.
1:47:00
And no one's stopping you from doing it,
1:47:02
but people just don't want it
1:47:03
because it's risky, expensive,
1:47:04
and it's technically complex.
1:47:08
See, I would never lambast anyone
1:47:09
for using something like Fediment
1:47:10
to hold their Bitcoin.
1:47:12
But many people do.
1:47:13
But at the same time,
1:47:15
I would never put all my money
1:47:16
into like a Fediment
1:47:18
because like I don't know
1:47:19
that these tools have been proven out yet
1:47:21
to handle larger amounts of money.
1:47:22
Yeah, but you will.
1:47:23
But people will.
1:47:24
And people do.
1:47:24
Potentially.
1:47:25
No, but this is the difference.
1:47:27
Because we've been building it
1:47:28
over two, three, four years
1:47:29
and we've tested it and battled hard on it,
1:47:31
there are people who are storing
1:47:32
millions of dollars in these things.
1:47:34
That's the difference, because it's not like a project
1:47:36
where people are working on.
1:47:37
It's being worked on in very, very difficult environments.
1:47:42
And this is not just hyperbole.
1:47:44
People are storing millions of dollars on these things right now,
1:47:47
and they're relying on it, and they're holding all of their wealth,
1:47:50
or a big percentage, right now.
1:47:51
Because the alternative will be, for them, not self-custody.
1:47:55
The alternative will be to hold it all with a corporate custody.
1:47:59
And that's also trusting a third party that you don't know.
1:48:02
And look at the history of corporate custody.
1:48:06
Many have lost all...
1:48:07
If you ask corporate custody,
1:48:08
why would you trust Kraken or Coinbase?
1:48:11
When Mt. Gox was just as trustworthy at the time,
1:48:15
Quadriga CX was incredibly trustworthy at the time.
1:48:18
The history of very trustworthy sites at the time
1:48:20
had then lost everything,
1:48:22
but the users thought they were trustworthy
1:48:23
is very, very long.
1:48:25
I don't want to like...
1:48:27
But people put all the largest of their wealth
1:48:29
in those right now.
1:48:30
So a few things.
1:48:31
I don't think that Quadriga or Mt. Gox were as trusted as things like Coinbase and Kraken today.
1:48:37
I still don't think people should trust them.
1:48:39
But I do, like, maybe it's because I'm a Bitcoiner.
1:48:42
Like, I would feel way more uncomfortable having a large amount of my money in a Fediment at this point.
1:48:47
And, like, maybe my perception will change over time.
1:48:49
I don't know.
1:48:50
Than me self-custodying that Bitcoin.
1:48:51
Yeah, no, of course you would.
1:48:52
And if there's, like, three, the three things you went through are, like, cost, technical ability, and risk.
1:49:00
Risk.
1:49:00
Risk being the biggest.
1:49:01
Things are being vastly improved upon.
1:49:03
Like cost, I think you can kind of ignore cost in a lot of ways
1:49:05
because if you do have the money, then cost isn't a prohibitive thing.
1:49:08
So like I understand maybe people who have $50 of Bitcoin,
1:49:13
they're not going to go out and buy a hardware wallet.
1:49:14
But I think for $50 of Bitcoin, you don't really need a hardware wallet.
1:49:16
But if you have like multiple thousands,
1:49:18
like maybe it's worth paying attention to.
1:49:20
And then when it comes down to like, what was the second one?
1:49:24
Technical ability.
1:49:24
I think things like Bitki are doing a really good job.
1:49:26
Like cold cards are amazing and people should use them
1:49:29
and people should learn about them.
1:49:30
and you should continue to learn on this trajectory.
1:49:32
But as an entry point, BitKey takes away so much of that headache
1:49:36
in the sense that it's just a fingerprint.
1:49:38
It's on your app. It's really easy to set up.
1:49:40
You don't need to worry about seed words.
1:49:42
And then on the risk side, if you want to go further out,
1:49:45
and again, you have to have a certain amount of money to do this,
1:49:47
but if you want to use something like AnchorWatch
1:49:49
where you have insured collaborative custody,
1:49:51
that then removes risk because even if you and AnchorWatch
1:49:54
fuck up some magical way or there's a wrench attack
1:49:57
and you need to send Bitcoin to someone,
1:49:59
so you authorize a transaction,
1:50:01
you are then backed by the Lloyds of London Insurance.
1:50:05
So I think these tools are being built out.
1:50:07
And I think Fediman will be one of these tools.
1:50:08
No, no, these tools are being built up.
1:50:10
If you look at those tools,
1:50:12
all those tools are available to people
1:50:15
with a certain amount of wealth.
1:50:17
And as the tools get better,
1:50:18
the wealth levels have to increase.
1:50:20
So yes, they will exist,
1:50:22
but they will not get down to the price
1:50:24
where an anchor watch is available
1:50:25
to a billion people in the global South.
1:50:28
It's just not going to happen.
1:50:29
Totally. And that's why I think- And you also said $50, but $50 excludes
1:50:32
billions of people. I mean, yeah. And Vicky's more expensive than that.
1:50:36
Yeah, but it excludes billions of people, straight out $50.
1:50:38
Totally. So you're saying these things,
1:50:43
but you're talking from a position of being the minority. So for the minority,
1:50:48
and that's what I said, the minority will only always be the minority who's able to self-custody
1:50:53
purely for monetary reasons, technical reasons, and risk reasons. It will always be the minority.
1:50:59
Those things won't get down to the point where 8 billion people will be able to have insurance with Anchor Watch and will be able to afford a hardware wallet.
1:51:09
It just maybe we can get to half a billion And that great And I have no problem with if we get to there But the reality is we will not get to the other billion
1:51:23
Then we'll have to have some sort of collaborative shared custody model.
1:51:27
That shared custody model to share the costs.
1:51:30
And also it shares the technical complexity
1:51:33
because more technical people within that group of people
1:51:36
can take on the technical burden.
1:51:39
Maybe for compensation for capital.
1:51:41
And then finally, it shares the risks because the risks can be shared around as well.
1:51:45
And that is going to be the situation for most people.
1:51:49
Now, we have a choice.
1:51:50
Are those people going to do that using public or governmental public custody, which puts
1:51:58
them at the risk of the other risk that they become aware of, which is inflation, capture,
1:52:04
et cetera?
1:52:05
Or are they going to use private custody?
1:52:07
And that's my point.
1:52:08
And I'm not going, the market for people who want to fix the kit car market for Bitcoin,
1:52:18
that market will always exist.
1:52:20
I used to actually have a kit car before and I liked fixing and tinkering around with cars
1:52:26
back in the day when I had a car addiction.
1:52:31
So that market will always exist and it should be allowed to exist.
1:52:34
But if the kit car market dictated the world market for cars, then we would all be either
1:52:43
using kit cars and probably twice as many be using kit cars.
1:52:46
And then everyone else would be using public transportation.
1:52:49
And it wouldn't be normal cars.
1:52:51
And what I'm saying is, but we don't live in that world.
1:52:54
And so in our world, the kit car market is still healthy and it's still going strong.
1:52:59
but the majority of people are driving cars or motorbikes,
1:53:05
and they are getting them serviced by third parties.
1:53:08
And they still see it as private custody
1:53:10
because it's still owned in a private way
1:53:12
or amongst a private set of people versus corporate custody.
1:53:15
And the risk here is,
1:53:17
and this comes back to your original question,
1:53:19
I don't know, but in a scenario
1:53:21
where the control of money starts being weakened,
1:53:27
money starts being weakened,
1:53:28
And more and more people are talking about the risk that at some point, corporates will
1:53:33
be impelled or compelled to close access to money.
1:53:37
And then the question is, would something like a BitKey still be able to operate in
1:53:42
that environment?
1:53:43
If the device, because they could be asked to add functionality to that device, for example,
1:53:49
they could, the third key is owned by a corporate institution.
1:53:53
So they could be compelled to do something as well.
1:53:55
But they couldn't do anything with your Bitcoin, like with that single key.
1:53:58
But it could stop operating, and that could be very painful for people who have no place to move it to.
1:54:04
If no updates could happen for the software, if the hardware could be remotely bricked, et cetera,
1:54:11
if the service that provides the third key had to be taken offline, then where are you?
1:54:18
Well, the third key doesn't matter.
1:54:19
If they could remotely break the device, I mean, I wholeheartedly believe that that will not be a function.
1:54:25
I mean, well, it needs to have software updates.
1:54:28
They could stop, at the very least.
1:54:30
Why does it need to have software updates?
1:54:32
Because software, because all systems have bugs.
1:54:34
Yeah, but what I'm saying is, like, in this, like, disaster scenario
1:54:37
where they crack down on block and say you have to do something, like, you can-
1:54:41
I don't think you-
1:54:42
It could continue to operate.
1:54:43
And that's what's good about it.
1:54:44
You can get your Bitcoin off it.
1:54:45
Potentially, yes.
1:54:46
You should be able to get your Bitcoin off it if you haven't taken too long.
1:54:49
But as a corporate entity that's public, not private, it can be attacked.
1:54:54
And that's the point. The line should be between public corporate and private. So, for example,
1:55:05
if even these layer two solutions, if those layer two solutions are backed by large public
1:55:11
corporates and they're the ones running infrastructure, that still becomes a risk
1:55:14
because they're public corporates as opposed to private. So the line should be private custody,
1:55:21
held privately with privacy built in,
1:55:24
as opposed to held publicly
1:55:26
without any privacy by public corporates.
1:55:30
Because in that scenario,
1:55:32
it's public corporate, it has to,
1:55:34
it can be, to maintain the ability to have money
1:55:37
that you have self-determination from,
1:55:40
you need two things.
1:55:41
You need it to be decentralized
1:55:42
and you need it to be private.
1:55:46
You need to have privacy.
1:55:47
You need it too.
1:55:48
If I have privacy, but it's not decentralized,
1:55:50
Okay, I don't know what you're doing, but I can just turn you off.
1:55:53
Yeah.
1:55:54
And if I have no privacy, but I have decentralization, I can't turn you off, but I know exactly what you're doing.
1:56:01
So if you do something I don't like, I can still.
1:56:03
So you need the two.
1:56:05
And a public or a corporation cannot offer privacy.
1:56:09
They cannot offer privacy.
1:56:10
No, no.
1:56:10
So therefore, it fails in the initial objective of getting to a medium of exchange.
1:56:15
But the thing that I struggle with is this kind of like pushing the idea of self-custody being in any way a negative thing.
1:56:22
I like the idea of this all being a progression.
1:56:23
I've never said that.
1:56:24
No, you're misunderstanding.
1:56:25
Okay.
1:56:25
Well, I take that back.
1:56:27
But I like the idea of this being a progression where it's a little bit like what Mutiny did,
1:56:32
where if you had a small amount of Bitcoin in the Mutiny wallet, rip, it was Fetty Mint.
1:56:37
And then as it got more, you could sweep that into like a lightning balance.
1:56:40
And I think that kind of thing is nice, where it can go from Fetty Mint to self-custody
1:56:44
to then maybe buy a hardware wallet, maybe upgrade your hardware security and do multi-sig,
1:56:48
and then maybe you want to trust someone like Anchor Watch.
1:56:50
I don't know.
1:56:51
But I don't think it has to be one or the other.
1:56:54
And I agree that having money anywhere that is not a Coinbase-type corporate exchange,
1:57:00
I think that is going to be a step in the right direction.
1:57:02
I just think there's going to be, oh, it's not like a one-size-fits-all.
1:57:05
It's just going to be a thing, almost like a category.
1:57:08
Yeah, and I 100% agree with everything you've said there.
1:57:11
And if anything I've said suggests I think otherwise,
1:57:15
then you need to correct that.
1:57:18
And it's good.
1:57:18
The fact that you have that view suggests that you've got that impression
1:57:22
for what I've said.
1:57:23
And that's not the case.
1:57:25
It's definitely not either.
1:57:26
And as I said, we could have a world with half a billion people using it.
1:57:29
It doesn't sound like it's a bad thing.
1:57:33
And also, I said that just like with cars, I used to tinker with kit cars.
1:57:37
I self-custody myself.
1:57:39
So why would I do that if I think it's a net bad thing?
1:57:42
I don't.
1:57:43
But I'm also just being realistic.
1:57:46
And again, for the people who want to go through the progression
1:57:51
and have built up enough wealth for it to make sense
1:57:54
and are comfortable with the risk of losing their Bitcoin
1:57:59
and that they feel that they are just mentally and emotionally
1:58:05
and just their personality is they are considered and careful people.
1:58:09
Because many people in the world are not careful people.
1:58:12
But if they determine that they are a careful person
1:58:17
who measures twice, cuts once, and that sort of person,
1:58:20
and they also determine that they're technically comfortable enough
1:58:23
to upgrade software and so on,
1:58:26
and if necessary, move over to open source software in the worst case,
1:58:30
and if also it makes monetary sense to them,
1:58:33
They should definitely do it.
1:58:35
I'm just saying that that will always be a minority of people.
1:58:40
Yeah.
1:58:40
Unless wholesale people change to be all very reliable, very considered people.
1:58:47
They all change to be not messy and so on.
1:58:50
They all change to be all aptly enough to be able to spend $50 without thinking about it.
1:58:56
And they all change to be technically competent.
1:58:59
And I just don't think that's a realistic answer.
1:59:00
So there will always be a number of people who will never make it.
1:59:02
the majority to that Nirvana state.
1:59:05
That's fair.
1:59:06
That's the point I'm trying to say.
1:59:07
I agree with,
1:59:08
I actually agree with everything you're saying, I think.
1:59:10
I just think,
1:59:12
I do think it's important to push people to self-custody.
1:59:15
I think doing it in a careful, measured way
1:59:17
is always going to be the right decision.
1:59:19
And maybe that starts with Fettyman,
1:59:20
maybe it moves on.
1:59:22
But one of the things that I do have
1:59:23
a slight skepticism about
1:59:28
is the idea of pushing people to multi-sig too soon.
1:59:31
because I think multi-sig is great.
1:59:34
I use multi-sig,
1:59:35
but like DIY multi-sig is adding complexity
1:59:38
and risk to people that I don't know
1:59:40
if they fully acknowledge
1:59:42
how much additional complexity there is in that.
1:59:44
Like I think single-sig hardware wallets
1:59:46
are still for the vast majority of people,
1:59:48
probably the way to custody Bitcoin.
1:59:51
You're talking about personal custody.
1:59:54
And I mean, very specifically like DIY multi-sig.
1:59:57
Yeah, I think for personal custody, DIY multi-sig can be done wrong because it's technically complex, as I said.
2:00:10
And, but to your point before, I do think that suggesting that it's a good end state if you can do it, which is self-custody, is a great way to go.
2:00:30
But then if you take that logically further you should say then the best end state should be self with multisig That is the best end state
2:00:41
But just like you have an uncomfort,
2:00:42
because you've just hit your,
2:00:44
what you're basically saying is,
2:00:45
I've hit my technical wall,
2:00:48
and therefore now I feel uncomfortable to go further.
2:00:51
This isn't like,
2:00:52
I'm not necessarily talking about me specifically here.
2:00:54
I'm talking about...
2:00:56
But what is the fear?
2:00:57
The fear is that people will make mistakes
2:00:58
and lose their money.
2:00:59
Yeah.
2:00:59
But the same thing will happen in self-custody.
2:01:03
It's the same line.
2:01:05
You've just drawn a line at a different place saying,
2:01:09
this is good enough, but further,
2:01:11
because you can go further again.
2:01:12
It's DIY multi-sig using your own hardware,
2:01:15
where you've taken the parts
2:01:19
and built your own machines yourself
2:01:20
and don't use hardware wallets
2:01:22
because how do I trust them?
2:01:23
That could be another line.
2:01:24
Or it could be, I only use machines
2:01:26
that are older than 15 years old
2:01:28
before Bitcoin was invented
2:01:28
and I build my, you can take it even further.
2:01:31
Yeah.
2:01:31
So, but I'm just thinking.
2:01:33
No, that's what I mean.
2:01:34
I am agreeing with you there that I do think
2:01:36
it's very easy to jump into a very technical setup
2:01:39
that like if push came to shove
2:01:41
and you needed to recover that Bitcoin,
2:01:43
like are you going to be technically competent
2:01:45
enough to do it?
2:01:47
And I think for the majority of you
2:01:48
that that line is not self-custody.
2:01:51
The technical setup is just the beginning of self-custody.
2:01:55
Even a bit key, you're at the point
2:01:57
where it's beyond most people.
2:01:59
That's, I guess, my point.
2:02:01
But yes, you're right.
2:02:02
Multi-sig of the niche,
2:02:05
of the minority of people
2:02:07
who can comfortably self-custody.
2:02:09
And by the way, that's a much smaller set
2:02:11
than the people who are self-custody.
2:02:13
This is the thing.
2:02:14
This is what I mean by pushing too much.
2:02:17
Right now, I would say, from my experience,
2:02:19
from talking to people in CoinFloor
2:02:22
and looking at it more recently,
2:02:24
I would say, again,
2:02:27
I can't know this for sure. My gut thing is that the majority of people who are self-custodying
2:02:31
single SIG with hardware wallets should not be self-custodying because they're not doing it safely
2:02:37
and they are a huge risk of losing their money. We need to do more podcasts.
2:02:41
Because they were pushed too early to self-custody before they were actually ready.
2:02:46
And they just got the thing and they were given a one tutorial. They've now got a hardware wallet
2:02:52
and their private key is their 12 words is they don't test it regularly.
2:03:00
They don't, their private key,
2:03:02
are they checking that the backup has been compromised regularly?
2:03:06
Are they doing any of this stuff?
2:03:09
I can guarantee you the majority of people
2:03:11
aren't doing the things they need to maintain sanity.
2:03:13
With a car, it's like having a car.
2:03:16
I like to put it into things like cars
2:03:18
because people can have an intuitive understanding of this.
2:03:21
Imagine you had a card that you never did an AMOT.
2:03:24
You never checked it yearly.
2:03:26
After 10, 20 years, you then use it.
2:03:30
What do you think is the chance that it's going to break down or have a crash and put you and your family in danger?
2:03:35
Very high.
2:03:36
How many people do you think now with self-custody, how many people do you think are regularly every three months checking their wallets to make sure the transactions still work?
2:03:45
and the SSD card on their hardware wallet hasn't been corrupted
2:03:50
and their backups haven't been waterlogged
2:03:53
because they've kept it under the sink.
2:03:55
How many people are doing that?
2:03:56
Yeah, very few.
2:03:57
So that means they're not yet responsible enough right now to custody.
2:04:02
And by being forced and convinced to do it now,
2:04:06
you've put them at risk.
2:04:07
If you haven't done it properly,
2:04:10
my father used to say,
2:04:11
if it's worth doing a job, it's worth doing it properly.
2:04:13
Just giving people a quick training
2:04:15
and they're not following through and checking on them every day afterwards when it's storing
2:04:19
all of their wealth value is doing them a disservice. So we are not, so most people are
2:04:23
not self-custody properly right now. My camera has overheated in Bali. So we're down to two,
2:04:29
but interestingly, I was talking to Checkmate about this this morning. The number of people-
2:04:34
You were talking to a mate from Czech Republic. He's actually called Checkmate.
2:04:38
I know. It's a terrible joke. Terrible joke. But we were talking about like number of people
2:04:44
that actually hold self-custody Bitcoin.
2:04:46
And he sent me a chart that he puts out,
2:04:49
which is the number is just under 25 million
2:04:51
in individual addresses
2:04:54
that hold more than $100 of Bitcoin.
2:04:57
And obviously, we know that between me and you,
2:05:00
we've probably got 100 addresses.
2:05:03
So the actual number of people self-custody in Bitcoin
2:05:05
might be like less than 2 million, 3 million.
2:05:08
Yeah.
2:05:09
I really don't think that number's very high.
2:05:11
And I would say out of those, probably 80% aren't doing it properly and securely.
2:05:17
So they're putting their value at risk.
2:05:19
We've seen it with people, the number of people.
2:05:22
I just came from Hong Kong, Bitcoin Asia.
2:05:26
And it was actually a surprise for me because last year, it was basically an altcoin casino.
2:05:32
This year, it was actually a Bitcoin conference.
2:05:34
That was very big change.
2:05:36
But still, the vast majority of them are still, the number of people who were just like,
2:05:39
here's my mobile phone with all of my, you know, with like $100,000 worth of Bitcoin on it.
2:05:44
Don't do that.
2:05:45
But this is what, this was the norm.
2:05:47
Yeah.
2:05:47
So this is what most people are doing.
2:05:49
This is what most people are doing because they've been told to self-custody without
2:05:53
being told properly.
2:05:54
It's like teaching people to drive a car without giving them driving lessons.
2:05:58
So you're doing it.
2:06:00
That's what I mean by, yes, we should aim for it.
2:06:03
But aiming for it isn't just throwing as many people, here's a car and getting people in.
2:06:07
That ends in disaster.
2:06:08
It's you have to then do it properly.
2:06:10
If it's worth doing a job, it's worth doing it properly.
2:06:12
And when you realize that what it needs to really train someone to properly do it
2:06:16
and then test them regularly to make sure,
2:06:19
because you're talking about holding all your value,
2:06:21
then you realize it's going to always be a niche.
2:06:23
Yeah.
2:06:23
Public service announcement, don't keep $100,000 on a phone
2:06:26
and go and watch Bitcoin sessions videos.
2:06:28
Yeah, but that doesn't stop people doing it.
2:06:29
Saying that, you now need to go off and train them and check.
2:06:32
And you're going to be committed to do that and run courses
2:06:35
and check back in them for every year?
2:06:36
I mean, personal responsibility at some point, though.
2:06:39
Yeah, and that's not good.
2:06:42
I don't like that.
2:06:43
I've trained you, told you to do something,
2:06:46
and then when you go and crash, you go,
2:06:47
that is personal responsibility.
2:06:48
Yeah, but I mean, it's your money.
2:06:49
You go and look after it properly.
2:06:50
Okay, so you're a kid.
2:06:50
You'll just say, here, just be careful with knives,
2:06:54
and that's it.
2:06:54
But then they cut themselves.
2:06:55
Oh, personal responsibility.
2:06:57
No, it's different, because that's a kid.
2:06:58
Like, we're talking about adults here.
2:06:59
No, no, but that's the difference of you.
2:07:02
I think that everybody's a kid
2:07:05
when it comes to something they don't know.
2:07:06
is if it comes to driving or flying a plane,
2:07:09
and I'm a kid, I don't know it.
2:07:10
I need to be able to fly a plane, I need to be trained.
2:07:13
And if I'm told by the teacher,
2:07:16
and so I go to a pilot school,
2:07:17
and if the pilot school just says,
2:07:18
just get in the plane, it's really important to do,
2:07:21
and then I crash,
2:07:23
then I didn't have the tools to know.
2:07:27
If the experts are telling me
2:07:28
that that's what I should have done, and then I crash,
2:07:30
the experts should take some responsibility then.
2:07:34
Well, yeah, I mean, I-
2:07:35
You would be arrested as a pilot trainer
2:07:36
if that's the way you taught people.
2:07:38
It comes down to messaging, maybe.
2:07:41
It's like people should learn to do this thing.
2:07:42
I'm not saying you should go and set up a hardware wallet,
2:07:45
put all your money on it,
2:07:46
and like as in from scratch today, do that.
2:07:49
But like go learn about it, get comfortable with it,
2:07:52
put some money in, like back up your wallet.
2:07:55
Go through all the steps you need to go through,
2:07:57
know that you can actually do it properly.
2:07:59
And then when you're comfortable,
2:08:00
you should be putting your money on it.
2:08:00
But is that how most people are taught?
2:08:02
Do you think that's how most people learn
2:08:04
how to use a hardware wallet?
2:08:05
Or there's someone who's really busy, they call a friend,
2:08:08
and he goes, use Trezor, use Ledger, use BitQui,
2:08:11
and yeah, yeah, yeah, just go off and do it.
2:08:14
And you should do it.
2:08:15
And that's it.
2:08:16
They're not really taught.
2:08:18
When this is something that you're effectively
2:08:20
becoming your own bank, you're becoming your own Coinbase,
2:08:22
you're becoming your own JP Morgan.
2:08:24
And the education is some friend hurriedly tells you
2:08:28
in a second, oh, yeah, yeah, go off and do it.
2:08:30
And that's putting them at risk.
2:08:33
And it's not intentional.
2:08:34
No, it's not intentional.
2:08:35
But that's the end result.
2:08:36
Most people are not, having been someone who's helped people custody millions of dollars,
2:08:43
over a billion dollars of Bitcoin over the last 12 years, most people have no idea how
2:08:51
to do it really properly.
2:08:53
Yeah.
2:08:53
Well, that's an issue.
2:08:54
Maybe we need to do more podcasts.
2:08:55
More podcasts, more education, and serious education.
2:09:00
I love what people like BTC Sessions are doing,
2:09:04
where they have these universities.
2:09:06
Because if you really want to do it, pay money.
2:09:10
Because to do it properly is not just something you do quickly over a phone.
2:09:14
You have to be trained to do this.
2:09:15
Just like you have to be trained to fly a plane or drive a car.
2:09:20
No, I think the stuff BTC Sessions does is great.
2:09:22
Yeah, and others are doing that.
2:09:23
Of course.
2:09:24
But we've run out of cameras.
2:09:27
It's getting too hot in here.
2:09:28
We'll leave it there for now, Obi.
2:09:29
But I appreciate this.
2:09:30
Pull and reflex oil juice.
2:09:31
I'm going to get in that pool right now.
2:09:32
Then go for a massage.
2:09:33
But I appreciate you, man.
2:09:35
That was a lot of fun.
2:09:35
Thanks very much.
2:09:36
Thank you.
2:09:36
See ya.