Latest / Simply Bitcoin / Jameson Lopp | Making Bitcoin Self-Custody Mainstream | Simply Bitcoin IRL

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Jameson Lopp | Making Bitcoin Self-Custody Mainstream | Simply Bitcoin IRL · Simply Bitcoin

0:01
Hello everybody, Welcome to another episode of Simply
0:03
Bitcoin, IRL. Today we have a very special
0:06
guest, Jameson Lop. Jameson Lop is the Co Founder
0:10
and Chief Security Officer over at Casa.
0:14
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0:17
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0:20
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0:21
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0:43
Let's bring up Jameson up on stage.
0:46
Jameson, I'm so happy that you're joining us today.
0:49
I've I've been trying to get you on on the show for for a very
0:52
long time. So I'm very hyped that that you
0:54
agreed and it's it's truly an honor.
0:58
You bet. Is this sufficiently IRLI?
1:02
Feel like I'm still in cyberspace?
1:04
Yeah, I mean it's it is 'cause you know what, compared to our
1:10
our, our live show which is a little bit more scripted and
1:14
this is more kind of conversational, maybe it's semi
1:17
IRL to to be safe I guess. Fair enough.
1:22
Yeah. I mean, I like to do it live.
1:25
Yeah, absolutely. Live.
1:26
Live makes it a little bit more spontaneous, right?
1:30
So anyways, so Jameson, the reason I reached out to you is
1:33
you came out with this article recently, March 24th, 2024, and
1:39
the headline of the article is Congress is unconstitutionally
1:42
criminalizing privacy. And this is actually something
1:45
that we've been covering personally on on Simply Bitcoin
1:49
Live for quite a while now. And it seems like the 4th
1:53
Amendment has completely been thrown out the window.
1:56
You know, the recent FIN CEN proposal that, you know,
1:59
Elizabeth Warren took advantage of the, you know, the the
2:02
tragedy that's going on in in in Gaza and Palestine and Israel
2:06
and to, you know, try to make certain moves that her her bill
2:10
in in Congress, which has 20 senators signed up to it,
2:13
including two Republicans, which would be, to use Pierre
2:16
Rashard's own words, a de facto ban on Bitcoin mining in the US.
2:21
The pressure that was put on the FIN CEN with that crazy
2:24
proposal, basically every single address had to be reported it,
2:28
you know, basically it would, it would affect lightning as well.
2:31
And then, you know, the, the congressional testimony by Tom
2:35
Emmer where he got the head of the FIN CEN to admit that
2:39
terrorists prefer using the traditional financial system.
2:42
But of course, none of these proposals, none of these laws
2:45
are ever walked back, right? So clearly this is something
2:48
that you've been on top of as well.
2:50
So I just wanted to get your thoughts on it.
2:53
Well, kind of. I mean, really like you were
2:56
speaking to. These attacks are coming from
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many different sides. And unless you're a lawyer who
3:06
specializes in cover, none of us really even have enough time to
3:11
stay on top of all these things, especially if you're talking
3:15
about trying to stay on top of all of the laws and changes.
3:19
And so this one in particular, this corporate transparency act
3:23
that I just wrote about a few weeks ago, it had been in the
3:26
works for many years. I mean I think it was originally
3:28
proposed back in 2019 if not earlier and it just took them a
3:34
number of years before the proposed change got rammed
3:38
through. And in this particular case it
3:41
got rammed through with the National Defense Authorization
3:44
Act which is basically one of those 1500 page you have to pass
3:51
it or else everything shuts down type of bills.
3:53
So when people have something that they want to get past, they
3:57
try to shove it all into this omnibus bill and then hope that
4:01
nobody reads the multi thousand page bill.
4:03
And so I don't think I even heard about the Corporate
4:08
Transparency Act until maybe late last year where it had
4:13
already been passed several years ago, but it wasn't you
4:16
know going into effect until January 1st of this year.
4:20
And so I really started hearing about it this year because I
4:24
have at least ten different corporations that I operate for
4:29
a variety of different purposes, investments, asset ownership,
4:34
especially privacy around asset holdings, real estate, vehicles,
4:39
stuff like that. And so basically I started
4:41
getting hit up by all my different attorneys and other
4:45
legal entities that are managing my various companies and and
4:52
assets because they're basically telling me, hey, we need you to
4:55
go fill out all of this paperwork by the end of the year
4:59
for all of your corporations. Otherwise I think at least in
5:04
some of the cases they were threatening to drop me as a
5:06
client, you know, if I was not in compliance.
5:09
So you know, it started to affect me personally and I
5:13
started looking into this. And then when we saw this
5:17
judgement come out recently, that it was unconstitutional and
5:21
I was like, Hooray, I won't have to do any of this bullshit.
5:24
But then I read that, no, I still have to do it anyways
5:27
because Fencenn is saying that they're going to enforce the
5:31
unconstitutional law. So that's what really threw me
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for a loop and got me to, you know, write about this.
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And I mean we've seen many different outrageous and
5:42
sometimes hypocritical things, you know, coming out of the
5:46
authoritarian land. But you know, when it gets this
5:50
far, and I'm actually facing having to jump through a bunch
5:55
of hoops in order to comply with a law that has already been
6:00
deemed unconstitutional, you know, the the level of
6:03
ridiculousness just goes through the roof to the point of, like,
6:09
I'm going to shout about. It it seems like you you cut off
6:20
there for a SEC but so and I I kind of wanted to read some of
6:25
this what what some of the consequences are of of the sort
6:29
UN quote non compliance. So it says civil penalties of up
6:33
to $500 per day, criminal fines of up to $10,000 and
6:39
imprisonment, imprisonment for up to two years.
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So I mean like this is pretty you mentioned it right.
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It's unconstitutional. What's the 4th amendment right?
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No unreasonable search and seizure, I think.
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I think this is unreasonable to to say the least.
6:58
But if it was already deemed unconstitutional op, how do they
7:02
keep getting away with this anyways?
7:05
Well, the legal system was really complicated, right?
7:09
I'm not a lawyer. I've only dabbled in trying to
7:12
follow some of the legal cases in this space over recent years,
7:16
and especially on the civil side of things like following a lot
7:21
of the Craig Wright shenanigans. I've certainly lost a lot more
7:26
faith in our legal system than even the modicum of faith that I
7:32
had in that to start with justice, say like 5 real was not
7:48
fun, was not something that I recommend going through.
7:53
But I think the the short version is that there's so much
7:56
complexity within the legal system that it's almost never
8:01
over as long as someone who is fighting a battle within the
8:05
legal system is willing to continue devoting resources to
8:08
fighting. Yeah, absolutely.
8:11
And also you know there's something that me and me and my
8:15
Co host were kind of theorizing about just essentially a a a a
8:21
lot of these regulations, it's it's almost as if they're
8:25
structured in a way where they're specifically being
8:29
hostile towards not only the industry but the technology
8:33
itself. And that was kind of a theory
8:36
that we had for you know, a couple months, right.
8:38
I mentioned the Elizabeth Warren proposal earlier in your
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specific case in in this piece, right.
8:44
It's another of course proposal or or recommendation from from
8:48
the FIN CEN. But what was interesting to me
8:51
is yesterday during the Bitcoin Policy Institute summit, we had
8:58
AUS senator that basically said the choir part out loud.
9:01
I actually have the clip. It's about a minute long, a
9:03
minute or two long. So I'm gonna play it and then
9:05
we'll talk about it. Sure.
9:10
So the state of play on Capitol Hill is, I think best explained
9:17
by what I see is the overarching motivations.
9:21
And in this administration, there are a number of a
9:28
high-ranking policy positions that are held by people who are
9:35
threatened by Bitcoin because they know they can't control it.
9:40
They know it's decentralized, they know its potential.
9:46
And these are people that are so wedded to the government being
9:51
in control of the money, how it's spent, how it's used, that
9:59
they find it threatening that something exists that they can't
10:04
control. And so with that policy
10:08
overarching motivation, we're seeing things like a proposed
10:12
30% tax on Bitcoin mining. We're seeing things like that
10:18
truly odd regulatory overreach by the energy EIA, Energy
10:29
Information Administration over at Energy to send out
10:33
questionnaires about mining consumption of energy.
10:40
That was just egregious. And so these are the policy
10:47
headwinds that the Bitcoin world is facing right now.
10:55
And it's really, I think, entirely based on this
11:00
administration's fear of things they can't control.
11:05
Philip what's your what's your take on that I mean this is
11:08
something at least I'll speak for myself and and and my Co
11:12
host Opti we we were we basically like we didn't find a
11:16
smoking gun but for me it just seemed like how do I put this in
11:21
a nice way it it just seemed like their their intention I
11:24
questioned their intent their intentions and their motives So
11:28
you know someone who has been in the space for quite a long time
11:32
I would say is is successful in his own right.
11:35
Lop, what's your take on this? I mean it, it's a center saying
11:39
this, so obviously it it holds a little bit of weight.
11:43
What's your take? Yeah.
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I mean, this is nothing new. Government is by design, an
11:54
authoritarian entity, and it seeks to have as much control as
11:59
possible over everything within its domain.
12:03
Of course, when we talk about the United States, you know,
12:07
basically the United States considers the entire world to be
12:10
its domain. So things get even trickier
12:12
there. You know, as the United States
12:15
tries to exert it's a control and influence in a variety of
12:19
different ways. You know, regardless of what
12:22
jurisdiction you're in, especially by claiming in many
12:27
cases that you know, if you even interact with United States
12:30
citizens, that you're going to fall under their sphere of
12:33
influence in a variety of different regulatory ways.
12:37
So, you know, it's not, it's not anything I think against Bitcoin
12:43
in particular, the government is is afraid of any technology that
12:50
threatens its ability to observe, to surveil and
12:56
therefore to control the actions of the the people within its
13:02
sphere of influence. So, you know, we're seeing
13:06
similar types of ridiculous proposals to strip people's
13:10
privacy away, for example, even proposals to basically KYC at
13:16
your very Internet connection just to make sure that you know
13:20
anyone who goes to an adult website is actually an adult,
13:24
for example. And, you know, so this, this
13:26
type of cat and mouse game is going to continue, I think in
13:32
perpetuity that, you know, we continue to invent technology
13:36
that help us evade, you know, government and other
13:41
authoritarian surveillance regimes.
13:43
And then they react and this, this type of battle I think is
13:48
never really going to end. And so anyone who really cares
13:51
about it, I think should be paying some amount of attention
13:56
to it and be willing to put some big advocate of things, you
14:11
know, actually in powerful and make it more difficult for the
14:16
authorities to exert control over you.
14:19
But here we are just talking about it in general is is one
14:24
way that we're contributing to this, you know, getting
14:26
awareness out there. So and and it's interesting the
14:31
the way that you approach it which is basically the the kind
14:34
of like an arms race in a way, right.
14:36
You know you're you're you're just trying to like constantly
14:39
trying to stay ahead of the curve.
14:41
But I, I, I, and maybe I'm naive to think this, but I, I, I've
14:45
come to this kind of this realization that current US
14:48
sanction policy and current like how the government views the
14:53
relationship with money in a way is kind of incompatible with how
14:58
Bitcoin works. In the sense that you know, if
15:01
enough of the populace adopts Bitcoin and they're using it
15:04
for, you know, transacting, their ways of controlling the
15:09
money flows are going to be severely diminished.
15:12
If not, you know, like they're not going to be able to assert
15:16
as much control as as they they once have have had in the past.
15:20
So I mean won't there reach like kind of like a breaking point in
15:25
in a sense where, you know, it either goes one way or goes the
15:29
other way? Like are are we gonna go the
15:31
route of of of, you know, communist China?
15:34
Are we gonna go the route of what this country was originally
15:38
founded on which we've completely gone away from.
15:42
So is there like an inflection point, so to speak?
15:47
I mean, I generally like to remain optimistic, but you know,
15:51
I'll say, you know, in this particular example here, we're
15:55
talking about a flagrant violation of the Constitution.
16:02
I do believe that any government, at least
16:09
historically, regardless of how a government is formed, power
16:14
tends to consolidate power. And you know, of course power
16:19
corrupts and so on and so forth. But I think what power corrupts
16:21
really means is that any sort of entity, whether it's a single
16:26
person or an organization or whatever, that has power over a
16:30
long enough period of time, they want more power.
16:33
Like you never have enough power.
16:36
And so the incentive is to use your power to create more power,
16:39
gain more resources, so on and so forth.
16:41
And so I think that, you know, that is generally the impetus
16:45
for what causes declines in civilization.
16:49
And so you know, America has had a great run and we, we did a
16:54
really good job putting a lot of these laws in place at the
17:01
inception of America. And those laws have staved off
17:06
the decline and the rise of various authoritarian regimes
17:11
within the government. But you know, it's been several
17:14
centuries, right? It's it's only going to last for
17:18
so long, I think, before there will be some sort of inflection
17:22
point, breaking point, whatever. And and hopefully it can be
17:28
peaceful rather than violent. But this is one of one of the
17:32
questions that I've been grappling with for a while,
17:35
which is that it seems like we are the frogs in the proverbial
17:41
simmering pot that's, you know, close to boiling.
17:45
And, you know, every time one of these egregious new laws comes
17:52
out, I ask myself, you know, at what point will people say,
18:08
because is obedience complacent, Naive, you know, too busy living
18:15
their lives to pay attention, You know, just trying to survive
18:19
because their purchasing power keeps going down a million
18:24
different variables at play? But is it the case that there
18:28
are so few of us who are even paying attention anymore that
18:32
there's not going to be a sufficient push back?
18:36
My my only, or at least my primary point of optimism of
18:41
push back, at least in the the Bitcoin regulation space, is the
18:45
fact that Bitcoin has become so valuable and there's so many
18:48
people and organizations with so much money and resources on the
18:53
line now that they're going to be more willing to put resources
18:57
into fighting the political apparatus.
19:00
But with regard to all of the other stuff that's infringing on
19:03
our freedoms, I'm not quite as optimistic.
19:07
Yeah and and it's interesting the and the way that you phrase
19:10
that because it it it it's almost of of course you're you
19:15
are on Bitcoin Twitter lop. So of course you've seen this
19:19
meme but basically you know there's this guy cooking a
19:22
barbecue and it's like you know it's Bitcoin or slavery or
19:27
something like that. And then the meme, like says it
19:29
like basically like, that's cool.
19:31
Did you see the game over the weekend?
19:33
And it's just it it's almost as if so many people are still, how
19:40
do I say basically stuck in the Fiat matrix?
19:42
Like they're they're so blind to what's going on.
19:45
They're so distracted by the bread and circuses that it's
19:50
like, yes, there's there's there's definitely a, you know,
19:53
a group of us that are awakened. But we're definitely in a
19:56
minority compared to, you know, the rest of the populace that is
20:01
just kind of like willing willingly, like kind of it's
20:04
it's what you said they're they're they're being, you know,
20:07
metaphorically boiled in this, in this pot.
20:10
And they're like, it's nice and warm in here.
20:11
And you know, I can order Uber Eats and I can watch Netflix
20:14
from here. And it's very nice, you know
20:16
you. Know I think there's there's a
20:19
few things going on right is on one hand I've seen, you know
20:24
plenty of people speak out about the sort of homogeneous nature
20:28
of a lot of us in the space or in a more crass way to to put
20:34
it. A lot of bitcoiners are you know
20:39
young to middle-aged white guys. I would say that it's like a
20:45
Maslow's hierarchy of needs things, and I've seen similar
20:50
stuff sort of in the libertarian space or you some might call it
20:56
the sort of like weaponized autist space as well.
21:00
When you get to some of these fringe groups that are just
21:05
thinking about the sort of the state of existence differently
21:11
and and not agreeing with the status quo, You know, I think
21:16
that you have to be at a certain level of comfort and time and
21:21
resources to even be thinking about that stuff in the 1st
21:24
place. Much less to even have the level
21:27
of optimism that you can do anything about it.
21:29
And then you should even spend any of your time thinking about
21:32
it, talking about it. So we certainly should
21:35
recognize, I think that we are privileged enough to be at the
21:42
the level that we can have these types of more philosophical
21:47
discussions. But the next question is
21:50
obviously OK, talking about it is great, but what action can we
21:56
take? And then that's where the
21:58
questions get much more gnarlier of like do we do we fight the
22:01
system within the rules of the system or do we exit the system
22:07
and try to fight it from outside of the system?
22:10
And obviously with Bitcoin that's it's great because it
22:13
allows us to exit. But you know, we still have a
22:16
lot of ties to the existing system and I think we should
22:21
assume that the powers that be are going to put more and more
22:26
pressure on all of the choke points.
22:29
What are all the choke points? I mean, it's basically all the
22:31
custodians, all of the bridges from traditional finance.
22:35
And, you know, one of my bigger worries lately is the fact that,
22:40
like, over 80% of the Bitcoin and all of the ETFs is held at
22:46
Coinbase. That's a single point of
22:48
failure. It's not great to think about
22:51
the sort of extreme edge cases, attacks of things that could
22:55
happen if far too much of the Bitcoin supply gets into the
23:00
hands of far too few people, but I guess we'll cross that bridge
23:06
when we get to it. Unfortunately, the incentives
23:09
and the way that the system is set up tends to push things
23:13
towards centralization. 100% by the way, there's about 450.
23:17
You got 450 of you guys watching live.
23:20
So if you guys are enjoying the show so far, make sure to smash
23:23
that like button. It's a lot.
23:24
You mentioned the kind of the centralization of the the
23:27
custody of of the Bitcoin ETFs, right?
23:30
All all the Bitcoin that's being custodied with with Coinbase.
23:34
I also heard a rumor that Brian Armstrong keeps it in his night
23:40
stand on a cold card and that's that's where it's that's where
23:44
all the bitcoins at. But maybe it's just a rumor.
23:48
No, but seriously, I I think though like what I'm seeing and
23:51
one of the things that I've run into, you know, being in Bitcoin
23:57
for my 8th year is the specifically for the older
24:02
generation is the difficulty of of self custody.
24:07
It's something that you guys do incredibly at.
24:09
I recommend Casa all the time that you guys make the the multi
24:15
sig aspect of it easy and easy to use where if you were, if you
24:21
were to set it up yourself, it becomes incredibly kind of
24:24
complicated in a way, right you you guys have the two of three
24:26
that you offer. You guys have the three of five
24:30
and not only with the haptic feedback when you know you sign
24:33
in and makes a little nice noise when you do the key check and
24:36
all that stuff. So I guess what I'm trying to
24:38
say is that you you create a a pleasant experience to take self
24:44
custody specifically for the older generation.
24:47
Now my question to you is do you see a world where people are are
24:51
taking self custody because it it almost seems like if they had
24:55
a choice between the convenience aspect of it, it's like yeah I
24:59
got Bitcoin, I have the BlackRock ETF, this is great,
25:02
right? And then as Bitcoiners are like
25:04
fighting this uphill battle where as in, in in specifically
25:07
in my family I'm like the Uncle Jim, like everyone has their
25:10
Bitcoin coin in cold storage where they don't know how to
25:13
access it. They have to call me every time.
25:15
So you know, is that a solvable problem?
25:19
Is that something that you know is that something that perhaps
25:23
us bitcoiners don't really. We haven't come to terms with
25:26
the fact that human nature is human nature and people are just
25:30
gonna sometimes just like convenience is convenience,
25:34
right? Yeah, yeah.
25:37
You know, this is one of the difficult things when it comes
25:42
to having discussions, especially around Casa and our
25:44
design decisions and trade-offs. And a lot of the more and some
25:56
of these correct that, you know, if you want the strongest
26:00
possible security model, if you want to actually benefit from
26:04
all of the things that Bitcoin has to offer, then you have to
26:07
be your own bank. You have to take custody and you
26:10
have to take some modicum of responsibility when you do that.
26:15
And this is certainly the biggest thing that we're
26:18
fighting against. And as you noted, you know, Casa
26:21
has a lot of really cute little design quirks and aspects and
26:26
things that are meant to help engage the person and make the
26:28
app as easy as possible. And that's by design.
26:31
Like Weed are not designed like a lot of other wallets out
26:37
there. We try to keep it as simple as
26:40
possible and do it in many cases it's and actually has you know,
26:52
potential foot guns and pitfalls in there for novice users and we
26:57
want to have them avoid that. So you know, we go for ease of
27:02
use, safety and simplicity over pretty much everything else.
27:06
And you know, in a perfect world, yeah, I would love for
27:10
everyone to be doing self custody, doing it on their own
27:16
themselves without having to get help from anybody.
27:19
But once again, I think it comes back to the the sort of issue of
27:24
time and resources and you know, what are people willing to to
27:28
spend their time learning and doing?
27:32
So we basically try to bring down the the amount of effort
27:39
that is required to get yourself into a self custody set up and
27:42
we, you know, kind of put in guard rails to make it hard for
27:48
people to shoot themselves in the foot.
27:50
You know, it's always going to be possible to shoot yourself in
27:52
the foot if you have custody of your keys, but we just try to
27:57
make it so that you you basically have to shoot yourself
27:59
multiple times before you enter into a catastrophic loss.
28:04
But this is I would say our greatest enemy.
28:10
You know from time to time there, I'm sure you've seen on
28:15
Bitcoin Twitter that there will be beefs and stuff between
28:20
various hardware and and software companies and self
28:25
custody and stuff. And it's it's always interesting
28:28
to see the sort of different perspectives there.
28:30
But it should be very clear that our competitors, our enemies are
28:37
not other self custody companies.
28:40
It's the custodians. The self custody companies
28:43
should really be directing all of their fire at the custodians.
28:46
And how do you do that? Well, unfortunately, we're
28:49
competing against convenience and you know, convenience, and
28:54
this is one of my more, I guess, black pill perspectives on this,
28:59
is that over the past decade, it seems to me that humans tend to
29:06
prefer and prioritize convenience over everything
29:11
else. Obviously there's some edge
29:12
cases and I am, you know, edge case.
29:15
I don't fall into this. A lot of the people watching
29:17
don't fall into this, but by and large, humans tend to take the
29:22
path of least resistance to meet whatever their objective is.
29:26
And so if the vast majority of people you know coming into
29:30
Bitcoin are mainly looking at it as an investment, then they're
29:33
going to say, you know, what's the easiest, fastest, quickest
29:36
way for me to have financial exposure to Bitcoin as an
29:40
investment? And they're probably not going
29:43
to go deeper into the rabbit hole and think about security
29:48
models and hedging against 61O2 attacks and all the other things
29:53
that us super paranoid Bitcoin folks have been talking about.
29:56
So that's why it's, I think tantamount for any sort of self
30:04
custody, service manufacturer, provider, whatever, to put an
30:08
extremely high amount of effort into their design and their user
30:13
experience to make it as dead simple as possible.
30:18
Because otherwise, what you end up with is a story that I've
30:21
heard quite frequently is even amongst a lot of people who get
30:25
to the stage where they buy a hardware device.
30:29
In many cases that hardware device just sits in their
30:32
drawer, unopened, and they don't actually take it out, set it up,
30:37
and much less move any funds to it.
30:39
Because it's just, it feels like too much work, too much friction
30:43
and it's too scary, you know, to take on that responsibility for
30:48
a lot of people. Yeah.
30:50
Yeah. And and and that's something
30:51
that you know I, I've, I've unfortunately I've you know
30:54
'cause we all come from it, from the from and I'm sure Jameson
30:59
you fall into this category right where you just you come to
31:02
it from like the utopian vision. It's like oh we have the tools
31:06
now, right. We have self custody and then it
31:10
slowly starts to hit you, right when you know you meet with your
31:14
family or Thanksgiving and then you know you're the Bitcoin.
31:18
I I'm not just saying in my case it's like I'm the Bitcoin IT guy
31:22
and then you know it's just like OK, how you doing sister.
31:25
She's like, I have my, I have, I have, I have the Ledger.
31:29
But I I, I I forgot the password and I'm like, OK, no problem.
31:33
Do you have the words? She's like what do you mean what
31:35
words? And I'm like, oh right.
31:37
And and it's just it's it's happened so many and then it
31:40
doesn't matter how many times you explain it to them.
31:44
And then that kind of leads me back to what you guys offer
31:48
specifically with the three of two, the two of three and the
31:51
three of five where in a way I I don't, I don't want to you guys
31:55
make it idiot proof essentially right.
31:57
You guys make it extremely difficult for what you said for
32:01
someone to shoot themselves in the foot if you know they at
32:06
least right, you know secure some of their words, right.
32:10
So already 2 two of the two of the keys are are relatively easy
32:14
to recover the the you know, the cost of recovery key and then
32:17
the the mobile key and then you know all you really need is just
32:21
one hopefully one of those 24 words right so.
32:26
Well, yeah, I mean that's the nice thing about that two of
32:28
three set up is even if they if for some reason they don't store
32:32
the seed phrase for the hardware device or they lose it or
32:34
whatever, then it's almost impossible to lose your mobile
32:38
key, 'cause we do an encrypted cloud backup of it.
32:41
And then of course the Casa key has multiple redundant backups,
32:45
so it's not going anywhere. And so that's that's what it
32:50
kind of comes down to is assuming the user is going to
32:54
make a lot of stupid mistakes and actually trying to design
32:58
the product around the understanding that people are
33:00
human and people make mistakes. This is where you know a lot of
33:06
the, the wallets and and products that are out there I
33:09
think are built by nerds for nerds and they aren't really,
33:17
they aren't putting person off the street interact with all the
33:23
different ways that they can screw it up.
33:26
You know that's that's one of our very important design
33:30
philosophies when we're building stuff is actually you know put
33:34
non nerdy people in the driver's seat of the beta product and
33:38
just watch them fumble around with it.
33:41
This is kind of the level of convenience that you need to
33:43
have in order for technology to get adopted.
33:46
So let's you travel back a few decades to the 90s and we're,
33:53
let's say we're cypherpunks and we're really excited because
33:56
this PGP thing is pretty good. Privacy has been put out there
34:02
and it allows anybody with a computer to engage in encrypted
34:08
communications with with other parties and knowing that they
34:12
can't be intercepted even by nation States and you know,
34:15
military level hardware that can try to crack that encryption.
34:21
This is, this is great, right? There's a crypto anarchy is
34:24
right around the corner because the state has has been
34:27
effectively neutered and can no longer surveil all of our
34:32
communications. Well, you know, that didn't
34:37
then. And it's because PGP never had a
34:40
good PGP probably never even got a fraction of a percent of
34:46
adoption across the world. Now obviously I use it
34:50
regularly, but it's incredibly difficult and I it's I I don't
34:56
even recommend it to anyone else.
34:58
I I figure, you know, you basically have to be an Uber
35:01
privacy nerd to be interested in sort of that level of
35:06
communications. And if you care that much, then
35:09
you'll probably be willing to, you know, jump through all of
35:12
the hoops to actually get it working.
35:14
But thankfully, you know, over the past few years we've had
35:17
much better secure communications technology and
35:22
apps coming out and they seem to be coming out faster and faster.
35:26
You know I'm a big fan of Keats, for example the hole punch
35:30
protocol like getting some real peer-to-peer encrypted
35:34
communications going on. It's still got a fair amount of
35:41
work to to see it is that and with the usability of you know
35:53
any regular chat app you know. If you can use Telegram you can
35:56
use KEAT. Yeah, 100 a 100%.
36:01
I think you hit the nail on the head because if the level of
36:06
convenience is not close to or it it's it's you know it's it's
36:15
the the human experience it's the convenience aspect.
36:18
And then you kind of see this with the, you know with the, I'm
36:20
a huge fan of of kind of like the rise of of sovereign
36:23
computing that we're seeing right, which is so cool, right.
36:27
You know it started with the Bitcoin node and now you're
36:30
seeing all these other applications that are starting
36:32
to build be built on top of it and essentially it's kind of the
36:35
same thing. But if the convenience aspect is
36:38
not there, right, people are always get to pick the cloud
36:43
option because the cloud option is the convenient option, right.
36:47
It's the the less friction option.
36:49
So yeah it's it's it's it's interesting.
36:51
So I would, I would ask, I would ask this to you lot.
36:54
Do you do you ever see a world where Bitcoin self custody I
36:58
wouldn't say goes completely mainstream.
37:00
I think there's a portion of the population that are always just
37:03
gonna, you know, they're just they're just never gonna go down
37:08
that route. But do you think that we'll ever
37:10
get to a point where you know 1020, thirty 40% of the
37:15
population are are actually, you know, holding their own keys.
37:19
And the reason I'm throwing those numbers out there is
37:21
because I think that's when things really start to change.
37:24
I think you know if you have you know ten 2030% of the population
37:29
as as like truly sovereign individuals where the state
37:31
can't just you know confiscate their wealth at at the flick of
37:35
a switch. I I I think things will change.
37:38
I I I think you know and perhaps this is like the you know
37:42
Bitcoin utopian idea perhaps this is like kind of the
37:45
sovereign individual thesis that we all want to see play out.
37:48
But you know, do you think that we'll ever get to that point?
37:52
And then, you know, of course your company is playing a major
37:55
kind of role in this to make self custody convenient, right?
38:00
Make self make self custody accessible.
38:02
I think is a is a good word as well.
38:07
That's tough. I think that we should be
38:14
looking of better incentive technology.
38:33
There's also just the scalability question, right?
38:36
So it seems to me like a more likely scenario, both from a
38:44
technical scaling perspective and from a sort of user
38:48
responsibility perspective is that, you know, something like
38:53
the Fetty model. Seems to me like it's a more
38:56
feasible path forward where you know, the vast majority of
39:02
people aren't directly only controlling their keys, but they
39:06
are outsourcing it to a sort of semi trusted group of other
39:11
people. You know that that is an
39:14
improvement upon having a just a single point of failure bank
39:19
that can basically rug pull you and do everything.
39:23
But I think there's still a lot of work to be done.
39:29
Like, like we said that it's a complicated question to answer
39:33
because it's a big world and different people have different
39:37
incentives and accessibility to systems that are more
39:43
convenient. So, you know, people who are in
39:45
first world countries who have decent access to financial
39:51
infrastructure, I think are going to be the laggards to
39:54
adopt this technology just because the incentives aren't
39:57
there. So, you know, watch Africa, you
40:00
know, watch some of these other nations where I think we're
40:04
going to see Bitcoin adoption accelerate faster than in the
40:08
first world or at least. The adoption that's happening in
40:11
the first world is all financialized adoption, you
40:14
know, through traditional financial investment vehicles,
40:18
which is not particularly interesting from a sovereignty
40:21
or a cypherpunk perspective. Yeah, yeah.
40:25
No, and I I agree with that. I think I, I tweeted this out
40:27
actually a couple couple weeks ago which basically said like
40:32
I'm more bullish on the the adoption of Bitcoin in the
40:35
developing world versus the adoption Bitcoin in the
40:38
developed world. And it just 'cause it not only
40:42
convenience but also the the what better incentive than
40:47
necessity, right. If you know if you live in a
40:50
country with relative relatively stable Fiat currency, again are
40:55
you and and the bread and circuses are strong and you have
40:57
cash app and you have Venmo and you have Pampao and you have
41:00
Zelle, you know what incentive do you have to try an
41:05
alternative, right. And I think you know if you live
41:08
in a country like Venezuela, Argentina, you know Nigeria,
41:11
like Africa, what you said like Africa.
41:14
And I think you have the incentive to try something new,
41:18
to try an alternative, because the current system is so
41:21
fundamentally broken that you don't have a choice but to find
41:25
but to try something new. Yeah, I mean, I spent my first
41:31
couple of years when I was interested in Bitcoin, you know,
41:34
extolling the virtues of this new protocol and, you know,
41:39
trying to convert people. But I gave up after a year or
41:45
two because I realized I was only getting like a a 1%
41:49
conversion rate. I was.
41:51
I was basically preaching to a bunch of people who didn't see
41:56
the need for it because we had a stable system where people's
42:02
money wasn't getting inflated away.
42:04
And my claims that the money was going to get inflated, the way,
42:07
you know, basically came off as like conspiracy theorist.
42:11
Even though there was so much history to show that it happens.
42:14
It was once again the the frogs simmering in the pot of water
42:20
and me yelling at them that it was going to start boiling.
42:22
So, you know, people didn't actually take notice until just
42:27
the past few years when finally caught up with them.
42:30
So yeah, you go where the incentives are.
42:39
That's my time. And you're trying to convince
42:41
people we just need to keep making the products better so
42:46
that when people realize that they do need it, that they don't
42:49
feel overwhelmed when they try to use it.
42:54
Yeah. And and I think, I think that's,
42:56
you know, you hit the nail on the head, right.
42:58
I I'm so, I'm so sick and tired of of trying to And then they
43:02
think you're crazy, right. So it's like, Oh yeah, like this
43:06
is, you know, my crazy, you know, Bitcoin brother, whatever.
43:10
And you know of course they always remember the first time
43:13
you told them about it and the number go up does its thing and
43:15
they're like, wow. OK maybe this was a good idea.
43:17
Right. But yeah.
43:19
I'm. I'm at that point.
43:20
I know my my Co host is as well. He's super jaded.
43:23
He's like you know what? I just.
43:24
I don't care anymore. You know, we cover this.
43:27
We talk about this. But we've reached this point
43:29
where it's like look like you know I can show you the what
43:32
what's the Satoshi quote. The famous Satoshi quote.
43:34
Like, you know if you don't get it you don't understand that
43:37
that I don't have time to explain it to you.
43:39
Something along those lines. I totally butchered the
43:40
paraphrase. But but but but yeah you know
43:45
I've definitely got to that point.
43:47
So, OK, great. So a couple questions for you.
43:51
So we're kind of entering into this new era in Bitcoin's
43:56
history. So I mean, what do I mean by
43:58
that? We have the approval of the
44:00
ETFs, right, this large amount of Bitcoin held by Coinbase,
44:04
which is just one 61O2 order away from the US government.
44:08
You have the kind of the validation or the vindication of
44:13
the using Bitcoin as an alternative to cash on the
44:18
public company level. You have a Bitcoin entering the
44:22
kind of nation state discussion with what Naimbukele is doing it
44:26
what Naimbukele is doing in El Salvador.
44:29
So glad that he made his reserves public by the way he
44:32
posted that address. I think that's a great step in
44:34
the right direction. So, you know, it's almost as if,
44:38
and Lop, you've been here a lot longer than I have, right?
44:40
But it's almost as if, you know, Bitcoin is growing up in a way,
44:44
right? It's, you know, it's almost like
44:45
as if it's it's it's heading into this next phase.
44:50
So you know what, what does this look like from your perspective?
44:54
What? What?
44:55
What do the next five years look like?
44:59
Well, so it's all about the game theory and the incentives,
45:03
right? Is all of the stuff that you
45:06
just mentioned. It's, it's new and yet it's not
45:10
new really. The difference is that the level
45:15
of players who are entering the game is orders of magnitude
45:21
greater in terms of wealth and power.
45:24
But they're doing it for the same reasons that we did it 10
45:28
plus years ago, which was that, you know, we wanted to exit the
45:35
system that was corrupted and that had rules that couldn't be
45:39
relied upon. And and so we basically opted
45:43
out and we did so with whatever money we had available to us.
45:48
And you know it just took a long time for a bunch of relatively
45:54
poor autistic nerds to you know come together and build the
45:59
system up and you'll get more people interested in it and
46:03
understanding like why it could be beneficial to them.
46:08
And and now we're playing in the big leagues and so we're we're
46:12
at the sort of global corporations slash small nation
46:18
state level. And I think this is where things
46:21
get really interesting, right is because the the small nation
46:26
states especially those that don't have their own currency
46:31
and are basically pegged some other nation states currency
46:36
that is a massive point of control.
46:39
And if you're a nation state in that position, then you would
46:43
probably be pretty interested in exiting from that particular
46:46
arrangement as well. So I think that it's only a
46:49
matter of time that basically, you know, what happened with
46:53
with me and a bunch of the other early adopters where, you know,
46:57
we would adopt Bitcoin, learn about it, use it, understand
47:03
it's, you know, pros and cons and sort of hone our narratives
47:09
and our pitches of why other people should be interested in
47:12
it. That same thing is now playing
47:15
out. But you've got Michael Saylor
47:17
going around and pitching it from a sort of business
47:21
perspective to a lot of his billionaire buddies.
47:24
You've got Bouquet going around, you know pitching it to other
47:30
leaders of nation states that are in similar precarious
47:33
positions and basically saying look, we don't have to play by
47:38
the rules of the Bank of International Settlements.
47:41
We don't have to play by the rules of the Federal Reserve.
47:44
We have other options now. So let's explore those options.
47:49
So you know that is why I think there is going to be another
47:53
massive wave of adoption. You know, you could call it
47:56
institutional level of adoption or or whatever, but it's just
48:01
more people entering the game and they're doing so because
48:05
they understand that it's beneficial to them.
48:08
And you know, this could also it goes all the way back to the
48:10
original Satoshi quote of like you know it.
48:15
It might be worth getting a little bit just in case it
48:17
catches on. I mean, absolutely drop mic
48:22
moment there. Does it?
48:23
Does it surprise you? Does it surprise you that
48:26
Bitcoin has come this far? Did you know from initially that
48:31
it was, you know, of course the incentive structure is there,
48:35
right? Bitcoin just has superior
48:38
incentives. I truly believe that's why it's
48:40
winning the way it is. And I think that, you know,
48:42
government money, Fiat money, relies A tremendous amount on
48:46
coercion. If I were to make a bet on, you
48:49
know, who's going to win that race, Incentives versus
48:52
coercion. I'm going to put my money on
48:53
incentives every single time, right?
48:57
Usually when you have to kind of build a wall to keep people in,
49:00
it usually tends not to work out for you.
49:03
So did you know? Did you know that it was, it was
49:07
gonna, you know, did did you know that?
49:09
Did you have some type of like intuition, some type of gut
49:12
feeling that you know Bitcoin had the potential to reach the
49:15
heights that it has reached in in a in a considerably short
49:18
amount of time as well? No, I definitely did not expect
49:24
the acceleration. I remember you know when I I
49:29
first got on the Mount Gox back in the day and I was like I
49:33
should get me some of these bitcoins that I saw it as a like
49:39
30 to 40 year type of investment of like.
49:43
I don't know that this thing is necessarily going to become much
49:46
more valuable. But I do have confidence that
49:50
the rules and the incentives of the system will make it not
49:54
become as less valuable as the you know, Fiat currencies.
50:00
As you know just looking at that like 100 year time scale value
50:04
of the dollar chart, I was relatively certain that that was
50:08
not going to happen with Bitcoin, but I certainly didn't
50:10
expect the the heights that we've gotten to already so
50:16
quickly. And so you know from from that
50:19
perspective in some ways it feels like Bitcoin might have
50:24
kind of gone over its skis a bit in the sense that I don't think
50:32
that we have improved the the protocol, you know, the
50:36
scalability, the privacy so on and so forth.
50:38
I don't, I don't think that we've quite got the protocol to
50:42
the level that we can have the mass adoption that we would all
50:46
like to see. And and I think that's going to
50:50
become a particularly interesting contentious issue in
50:53
coming years. Like you're already seeing
50:55
discussion happen around it and and some people are like trying
50:59
to turn it into like another scaling debates of small blocks
51:02
versus big blocks versus layered development and so on.
51:07
And it's going to be a really complicated road to to travel
51:12
down I think because we are going to have to ask ourselves a
51:16
lot of questions around what trade-offs we believe are
51:21
important because you know if we if we continue down the path
51:28
going right now out, you know their take here on the
51:41
technological progression scale. And my main thing is, I want us
51:48
to explore as many paths as possible, you know, trying to
51:52
sort of optimize for the potential outcomes of what can
51:57
happen with Bitcoin. Because you know how funny I
52:02
think theorized very early on that Bitcoin would basically
52:06
turn into another type of gold where it was all held by a small
52:10
number of banks. And that basically, you know,
52:13
those banks would issue Ious and stuff.
52:16
And you know, that's one potential dystopian future if we
52:19
don't continue to improve the scalability and really what
52:23
people can do with self custody. But you know, I think we're also
52:28
going to see a lot of hybrid and new types of models, especially
52:35
on second layer networks where it might be a lot more difficult
52:39
to reason about, you know, what is your level of sovereignty on
52:42
these networks. That's kind of where we are
52:44
right now. I think with a lot of debate
52:46
happening around like what is a real layer two network or you
52:50
know, what should be considered safe enough to to store your
52:54
funds on a layer two or is there any layer 2 that's safe enough
52:58
for a long term store of value? A lot of open questions and a
53:02
lot of work remaining to be done.
53:04
Yeah a 100% and I agree and you know the the and and again I'm I
53:10
I'm gonna I'm gonna use this word.
53:12
I'm approaching it from a convenience standpoint at the
53:15
the not the self custody aspect but from the my just my
53:21
lightning wallet right. And I remember the I don't wanna
53:25
say it was a rug pull but just wallet of Satoshi deciding that
53:29
they're gonna leave the US. And you know I had a couple $100
53:33
on wall of Satoshi and I was using that as like my Daisy
53:35
daily driver for for lighting custodial wallet.
53:39
Right. You know there's an element of
53:40
trust there. Then they rug pulled in the US.
53:43
I'm like, oh, I called a a good friend of mine Ben Perrin.
53:46
I'm like, hey, man. Like what do what do what do I
53:49
use you know like what What he's like you have to use Phoenix but
53:53
however you you have to send a large amount first.
53:56
You can't just send a a small transaction.
53:59
I use I use Mun wallet for a while had a terrible had a
54:03
terrible experience in a certain situation with with with moon or
54:06
mun. I don't know how to pronounce
54:07
it. And then I finally kind of ended
54:10
up with using the Primal and then the Get Albie and then you
54:16
connect the Get Albie wallet with with the blue wallet and
54:21
then that kind of creates a good experience then strike.
54:24
Yeah, but almost nobody's gonna do that, yeah.
54:26
No one's gonna do that and it's like highly complicated, right.
54:29
Like it's not an easy like kind of step so and then of course
54:34
like I think it's like semi it's, it's, it's, it's it's self
54:38
custodial. I think they make you write down
54:40
12 words but you don't really know what's going on in the back
54:43
end. So I guess what I'm trying to
54:45
say is that like you know the current state of lightning, the
54:49
current state of second layer solutions after Wall of Satoshi
54:53
left the US is not in a good place right now.
54:56
Like it is not in a good place. I think strike you can make the
55:01
argument that they have a, you know, relatively good Lightning
55:05
experience, but it's like, OK, so now my Lightning wallet is an
55:09
on ramp like that's pretty crazy.
55:11
So yeah, I want to get your like, so I want to get your take
55:15
on that. And then I hear that you
55:16
mentioned Fetamine and Ben was actually showing me or or we
55:20
were talking about Fetamine and kind of like the things that are
55:23
moving forward in that. And I, I, I kind of want to join
55:26
a mint like I got invited to 1. So that seems really cool.
55:29
And like, no one really knows each other's identities.
55:32
And I think that's super cool. So what is the current status in
55:36
your opinion on second layer Bitcoin?
55:39
Do you see a, do you see a hope for this kind of getting to a
55:43
point where it's convenient and accessible enough for people to
55:47
just, you know, kind of download it and access it?
55:50
There's some regulatory hurdles like we saw with Wall of
55:53
Satoshi, but do you ever get, do you ever see it?
55:55
Do you ever, do you ever see it getting to that point?
56:01
It's certainly possible. So I am somewhat optimistic
56:07
because it seems like there has been an acceleration in
56:11
development of second layer Bitcoin networks, though I think
56:16
a lot of these are also somewhat questionable in nature of you
56:21
know how permissionless they're going to be.
56:26
More along the lines of like the potential impact of better
56:30
second layer networks is that there seems to have been renewed
56:33
interest in discussion and making some you know, OP code
56:38
changes to the Bitcoin base protocol which could potentially
56:42
greatly accelerate the deployment of some of these
56:49
second layer network wallet. That the game.
57:01
I think I also wrote up about a year ago I did a blog post about
57:06
spider chain which is another think of it as like a different
57:12
type of game theory and pegging mechanism to create a second
57:16
layer networks. I don't think that they've
57:19
actually launched on mainnet. Yeah, I think they might have a
57:22
test net, but mostly going back to, you know what I said earlier
57:27
from a development perspective. I just want to see more
57:30
experimentation, like that's the only way that we're going to
57:33
continue to try to optimize amongst the many, many different
57:39
potential paths that this ecosystem can take.
57:43
Or there's paths. And we have to look around and
57:46
then debate the merits and the trade-offs of the the different
57:51
technologies that we could deploy off of Bitcoin and try to
57:57
understand how does this help the network, how might it weaken
58:01
the network? What are we actually introducing
58:07
and what's it worth to U.S. trade off in terms of you know,
58:13
being able to get hopefully more adoption, hopefully more self
58:18
sovereign adoption of you know, people actually interacting with
58:23
these protocols directly rather than through a third party.
58:27
So lightning is a very interesting thing that you can,
58:32
you can easily spend hours talking about the merits of and
58:36
you know I think one of the issues that has come up with
58:39
lightning is just due to its complexity that once again
58:43
people seeking convenience and wanting to get a lot of that
58:47
complexity abstracted away, it leads them once again to
58:51
centralized custodial solutions. I could and I have spoken about
58:58
Lightning at length including from the sort of node operation
59:01
perspective because you know Casa, we actually had one of the
59:05
first plug and play Lightning nodes back in like 2019 or so.
59:09
I had one and we we discontinued it because it was it was quite
59:15
honestly it was a great way to lose money as a business like it
59:19
was. It was such a high support load
59:23
basically for getting for helping people you know manage
59:27
their own networked hardware with it within their home
59:30
environments. When you know within a a network
59:33
that we had no insight into. And then all of the the
59:36
different things that can go wrong lots of lots and lots of
59:40
points of failure within that entire hardware and software
59:43
stack. So I can, I can understand why
59:48
so many people used Wallet of Satoshi because you didn't have
59:52
to deal with channel management and liquidity and all of these
59:55
other things that I was saying from the very beginning.
59:58
Like if if people even need to know what a lightning channel
1:00:01
is, it's never gonna be a mainstream thing.
1:00:03
So one way or another, that type of complexity has to get
1:00:06
abstracted away a. 100 percent, 100%.
1:00:10
Jameson, I do want to be respectful of your time.
1:00:12
It seems like we are getting to the top of the hour.
1:00:14
So I I want to give you this, this opportunity to to our
1:00:18
audience. There's about 805 people
1:00:20
watching live right now at the moment.
1:00:22
If you have any last words for audience, you know in regards to
1:00:26
our conversation regards to the future of Bitcoin, in regards to
1:00:29
Casa, what would those last words be?
1:00:35
Well, you know, I focus on education, and I think that
1:00:38
that's probably the best that we can hope for you.
1:00:43
You don't need to be an evangelist, but I think that you
1:00:47
should at least be able to explain some of the concepts of
1:00:52
these systems fairly simply, and do so in such a way that you
1:00:57
know your audience. If you know if you're talking to
1:01:03
someone who is not particularly nerdy and you're talking about
1:01:07
all the cool technical aspects of Bitcoin, then you're just
1:01:09
going to lose them. There are probably at least a
1:01:13
dozen different ways that people might be interested in Bitcoin.
1:01:17
And I think one of the sort of superpowers of a, you know,
1:01:20
Bitcoin evangelist, if you want to call them that, is the
1:01:23
ability to, you know, ask a few questions, understand what that
1:01:29
person's life is like and what what they care about, what might
1:01:33
trigger them. And then if you can find one of
1:01:35
those things that they care about, you, you know, tie in the
1:01:41
positive aspects of these systems to get them to
1:01:44
understand why they might want to at least put some time into
1:01:48
researching it. Study it.
1:01:50
Yeah. Tell people to to study Bitcoin
1:01:53
rather than buy Bitcoin. And I don't know.
1:01:55
That's one of my favorite things to say.
1:01:57
When when people ask me like should I be buying Bitcoin, I
1:02:00
say, you know, if you have to ask, the answer is no.
1:02:04
That means you need to go back, and you need to study it more
1:02:06
until you're you're convinced that you cannot possibly live
1:02:09
without having some Bitcoin. Amen to that.
1:02:13
Amen to that. Well lop, it's been Jameson.
1:02:16
It's been it's been an honor to to have you on the show for the
1:02:20
first time. Hopefully we'll get you back on
1:02:22
the show in in the future again as well.
1:02:25
Guys, you could follow Lop at Lop on X and go check out
1:02:30
lop.net. I've used so many resources on
1:02:34
on your website that I've used in the past.
1:02:36
My personal favorite are the the stress tests.
1:02:39
The stress tests of the seed plates and stuff like that.
1:02:43
That was really cool though how you did that.
1:02:46
So anyways, Jameson, thank you so much for for joining us on
1:02:49
the show today. Thanks for having me.
1:02:53
Appreciate it. All right guys, that was our
1:02:55
show. If you enjoyed the showing you
1:02:56
what to do, smash the like button, consider subscribing and
1:02:59
we will see you tomorrow for a brand new episode of Simply
1:03:02
Bitcoin Live. Peace out, everybody.