And they're saying, oh, if you're creating these permissionless, censorship-resistant protocols
that can be used by people for nefarious purposes, then you, as a software engineer, should be
responsible for anyone who abuses the power that this software gives to them. And that's really
what I find ridiculous, because you can generally use any tool for good or evil. And you're just
because a tool can be used for bad things, does not negate all of the good things that it could be
used for. Okay, we're back. Got an awesome guest today, Jameson Lopp. He's co-founder,
Chief Security Officer at Casa. And he's done a huge amount for Bitcoin education as well
over the years. He's been around since, I think, probably before Bitcoin was even created. No,
just joking. He's one of the good guys in the space, in my opinion, always got great perspectives
around stuff, very outspoken about Bitcoin. Some people might label him as a Bitcoin Maxi, I see him
a lot more kind of like in-depth, kind of more sobering perspective around it, as opposed to
hardcore. Jameson, welcome. It's really good to have you, and I really appreciate you making the
time to be with us. Welcome. Yeah, great to be here. Yeah, I mean, I identify first and foremost as a
cypherpunk as a crypto-anarchist and libertarian-minded person. Bitcoin is a little lower down, because I
think that's one of the tools in our toolbox. But I have a really, really long essay I wrote a few
years ago about Bitcoin maximalism and the moniker and how it's evolved and how I consider myself a
Bitcoin maximalist, but I'm also continually going to remain open to evaluating new tools and
technologies and anything that I believe can further my goals of enhancing individual freedom
and fighting back against the powers that be. So I do certainly piss off a number of what I call
the Bitcoin Puritans. You think that like, I shouldn't be looking at other things. I should only focus
on Bitcoin stuff. So yeah, I mean, I would say I'm a bit more open-minded than most. And sometimes
that gets me in trouble, but I'm not going to apologize for continuing my personal mission.
Yeah. And I think, I mean, one of the other things that I wanted to add into the intro, but obviously
doing intros, you kind of like miss out, but I'll add it is like kind of like a jack of all trades
and also a master of many of those, you know, you kind of like wear many hats. And I'd like to get
into that, you know, like, so just give us however you want, kind of like an intro in terms of like
your journey in crypto and particularly your journey with the business that you run at the
moment. Yeah, let us have it. Let's hear about, you know, your journey and how you've landed up here
today. Yeah. So, you know, I did get into Bitcoin pretty early, 2012. It's been more than a decade
now. And I'm coming up on a decade of working full time in the industry. So it was only a couple
years later that I managed to realize that I was spending all my time on it as a hobby. So I might
as well get paid to do it. And spent the first three years of my Bitcoin journey, full time working
at Bitcoin, building infrastructure there, managing nodes, managing sending queues, fee estimation,
getting a lot deeper into the protocol and understanding a lot of stuff about wallets,
private keys, self custody, cybersecurity in general. And then I just pivoted slightly and I
took a lot of the lessons that we learned, best practices, tools, hardware, software, and use
that to help form the idea that became CASA, which is basically we're trying to provide the most
user friendly, but also high security, high robustness, self custody solution out there.
Because self custody is a very complicated thing. There's really no limit to the number of
decisions and ways that you can architect self custody. And so the result of that, if you kind
of think of it as this like a decision tree of all these different decisions you make,
many of those decisions can take you down a path where you have
vulnerabilities or single points of failure, things that can go wrong and result in catastrophic
loss. So I basically think of the way that we approach architecting CASA is we actually,
we greatly limit your choices and how you can set yourself custody because we're trying to guide
you down, you know, the happy path that will minimize the foot guns and the pitfalls because
really what I think that we're fighting against is human nature. And that is the human nature to
prioritize convenience at the expense of almost all else. And this applies to many different
things in our lives. But the concerning thing that I see it applying towards Bitcoin is that
a lot of people just you buy their coins on an exchange and leave them there forever and thus
expose themselves to a lot of unnecessary risks that Bitcoin was designed to prevent. So people
are throwing out a lot of the great features of Bitcoin from the get go. And we want to give people
the confidence that they can do self custody, that they don't need to trust third parties to do that.
And that means we have to make them believe that they are capable of taking on the responsibility
that comes with that. I mean, I think that's great. Once again, like it's obviously a positive
force to have in the space. In terms of business itself, is it kind of like a process of education,
like from a business model perspective, where you guys kind of like billing people around the
education that goes with that? Because it's almost like, it's easy to be dismissive, you know, like
as someone who's listening to you, like, I know the complexity, because I've obviously jumped into
what it is that you guys do. But if you hear it for the first time, it's kind of like, well,
why do I need someone to tell me how to write a whole lot of like words on a piece of paper,
you know, like, and then obviously, there's, that isn't the case. But I mean, how do you guys
approach it from a, you know, how do you solve this thing? I think that's the question, you know,
how do you actually sell it and, and drive home the importance of the complexity that you just
described? So we offer a few different tiers and the sort of the entry level like $20 a month tier,
which is this two or three setup, it's, it's so simple that when you, you set up one key on your
phone, we are automatically encrypting and creating an encrypted cloud backup of that. So like, you
don't even have to worry about backing it up. It's pretty much automatic. Because we, we have no
control over how people backup their seed phrases like to their, their hardware devices. We can
tell people to do it, but in our experience, you know, a lot of people won't do it anyways, or
they'll do it and they just will forget about it or lose it and not take care of it. And so like,
in that default setup, two of the three keys are already practically impossible to lose because
one is with CASA and we have multiple redundant backups. The other, that mobile key automatically
has a backup. So even the, your, your other hardware device, whatever it is, you should back it up.
But if you don't, you can still lose it and we can help you recover from that. Now at the higher
level tiers where you have more keys, like a three of five setup, that comes with a higher level of
service. So you're actually, you have a dedicated client advisor, you can get on phone calls with,
we can walk you through the process of setting those up and backing them up. So there is more
hands on high touch process. And in addition to that, we have functionality. We were, as far as
I'm aware, we were the first ones to ever roll out this idea of doing health checks. And so basically
the app will periodically, like every six months, if you haven't signed anything with a given key,
it'll actually say, Hey, we need you to sign something just to show that you still have the
key. You haven't lost it. You haven't had, you know, hardware failure, key rot, whatever. And this
is I think one of the more powerful things of our infrastructure that we've set up is just
these types of reminders, because it needs to be a continual ongoing process. A lot of people,
I think, do enter into it with this idea of, oh, it's a set it and forget it thing. But there are
things that can change over time. So you do need to be regularly monitoring the state of your self
custody. Nice. Okay. So, I mean, obviously, there's an importance around that. We know that, I mean,
I think it's like 4 million Bitcoin have gone missing forever. It is that high, is it? Yeah.
Probably even higher. It's difficult to estimate, but you can just look at how many haven't moved
in five or 10 years. Yeah. So I mean, obviously, it's an important aspect of what it is that you
guys are doing and well done for obviously carving a niche in the space and obviously with your
background insecurity and the rest of it. I mean, it was obviously a given that you're going to land
up doing something like this. I wanted to kind of like veer off to the left and get kind of like a
general overview and your thoughts around, you know, obviously, a lot to talk about around,
obviously the ETFs and the way that, you know, things have played out. I'm not necessarily
that interested around the price aspect of things. I think that's not what I believe Bitcoin to be
about. I think it's more, I'm more interested in like the idea that Bitcoin was about the individual
for individuals and kind of giving us that self sovereignty and the power around money and where
it potentially goes to from here and where there is a risk of us as individuals giving it away
into the hands of those that then get to determine its trajectory, you know, outside of the individual.
Just, I mean, I know that that's a bit of a big one, but it's a topic that I feel very strongly
about and I'm just curious as to, you know, what were your thoughts on and, you know, where do you
see it potentially going from here? So decentralization is the buzzword that people generally
throw around. And there are many different ways to measure centralization or decentralization of
a given system. And one of them, like with regard to ETFs and sort of institutionalization
of Bitcoin, you know, when you've got these big players coming in that actually fall under
regulations where they're actually not allowed to sell custody, they have to use a quote unquote
qualified custodian, which I believe is this ridiculous antiquated traditional financial
concept. That is one of the many dangers that I see looming on the horizon and why I've spoken
up several times about my concerns around the ETFs, mainly because like 90% of the ETFs are all
using the same custodian at Coinbase. I mean, look, I have owned, I owned GBTC for many years.
I switched my GBTCs to FBTC. That's Fidelity's because it's just an ideological thing because
Fidelity is the only ETF that actually custodies their own coins. And, you know, I own these
things because I have IRAs and 401ks, you know, these tax-advantaged accounts. And that's kind
of limited my choices as to what I can do with those funds if I don't want to take a big tax hit
of taking them out before retirement age. So the ETFs are one of those vehicles that
fall into this category of, you know, extreme convenience. It's very good from the perspective
of it has really opened up the markets, the ability for new classes of investors to easily
get exposure to Bitcoin as a financial asset. But of course, it prevents and limits them from
getting exposure to Bitcoin as a sovereign asset. And, you know, I think there's room for all of it.
And I can't give like a specific amount of Bitcoin that would be catastrophic to be held in those.
It's just the sort of balancing act of, I mean, we don't want to get to the point where
the majority of Bitcoin is held in like 10 parties' hands because I think that
it starts to bump up against potential governance issues and, you know, regulatory and nation-state
capture. Yeah, I think that's quite a healthy perspective to have because I think the only
way that we're going to get kind of like fast forwarding the adoption of Bitcoin and the idea
of Bitcoin and whatever that might be for whoever's actually looking at it, that the only way that
we're going to fast-track that or get to a point where we can circumvent what fiat currencies have
kind of like imposed upon us is to get that wider adoption through institutions. I think
that role is important. I think I have a great fear for, like you said, you know, that's kind of
like too much, too many Bitcoin in the hands of too few is not a positive. And I don't think
that that's the essence of what Bitcoin was created to do. I'm curious what the thoughts
are from your side of things and, you know, in terms of your belief system around kind of like
the political like massinations that have played out over the last couple of months and,
you know, a lot of people talk about it being a bipartisan issue, but now it's become kind of like
almost like a favored Republican narrative in many ways, if, you know, kind of like crypto
Twitter is anything to go by. But let's assume that it is. I mean, what does the political
landscape for Bitcoin look like? And do we ever arrive at a point where it is truly bipartisan?
I think it's about incentives. And so in one of the many side projects that I have is Bitcoin
politicians.org where I'm tracking the United States members of Congress and which ones actually
own Bitcoin, because a number of them speak favorably about it. But even amongst that subset,
a lot of them don't actually own it. So you do have to wonder whether they're pandering or they
actually believe what they're saying. So point being my belief is that like we need to get more
politicians actually owning Bitcoin skin in the game. And, you know, that is going to be a stronger
incentive for them to follow through and, and hopefully, you know, follow this line of thinking
of well, I'm a bit coiner and I don't want, you know, authoritarian regimes telling me what to do
with my own assets. But it's, it's tricky. I mean, it's, it's weird to me because the Democratic
Party 15 years ago was actually more of the like anti big bank, you know, occupy Wall Street folks.
And now they've kind of flipped the script on that they seem to be more captured by the big
banks. They seem to want more control and to keep the traditional financial system more entrenched
and just continually beat on everyone who is trying to build crypto projects that are, you know,
not under the purview of regulators and various law enforcement in this ecosystem. So
unfortunately, it does seem like the Republicans are a bit of a softer touch on that. And what I've
said for a while is, you know, we we're not asking for any help from government authorities. We just
want you to leave us alone. Let us build stuff. You know, if we're not directly harming people, then
why do you need to continually threaten us with, you know, basically regulation by enforcement? And
and while this hasn't really directly affected our business, because we're pretty simple in what we
offer with with self custody and not doing any of the more cutting edge defy stuff that seems to
be more under the crosshairs of SEC and other authorities, it's a it's still it's a looming
threat where we see verbiage being proposed that would even go to the extent of regulating self
custody and requiring things like AML, KYC, or onerous reporting around self custody, which
it doesn't match up with requirements for ownership of other like non crypto assets. So it
you know, it seems like the
the people who are more heavy handed, they actually want the higher level of control
over the crypto stuff than they've even really asked for with some of the traditional financial
stuff. Yeah, it seems well, there's that saying, you know, don't listen to what they say, watch
what they do. And it's, you know, you have, you know, once again, coming back to, you know, the
political side of it is that, you know, like we want to support crypto and we want regulations,
this is what obviously we've heard from the democrat side of things. And then two days later,
you know, the SEC is obviously issuing some kind of a, you know, some kind of a warrant for lack of
a better word, you know, and it's, we saw it with Uniswap yesterday and, you know, you've been doing
this and you must pay this fine. And there's no real clear, there doesn't seem to be a clear
almost like directive, you know, the directive is that we want things to be this way. It's more
like these kind of like pockets of like, you must do this. And if you don't do this, then that will
happen as opposed to, well, here's the regulatory landscape. And I'm just curious, yeah, like from
an American perspective, like you as someone who I assume lives in America and is, you know,
like an American citizen assuming that you are, I mean, how do you navigate that if you
are someone who believes in crypto and you have supported the democratic party for, you know,
like your whole life, how do you actually navigate that going forward? You know, it's like,
so different countries operate differently, just with regard to how their legal systems work.
I couldn't tell you, I think like Russia and China, for example, operate under regimes where
at a very high level, the only things that are legal for a citizen to do are the things
that are explicitly codified as legal to do. So like the default is, if something's never
been done before, it's actually illegal, because the government has to tell you that it's legal.
Now, the nice thing about America and hopefully a number of other Western countries is that it's
more permissive in the sense that if something is not expressively, expressively codified as
illegal, then it should be legal by default. So, you know, that's where we are in America. However,
the bureaucratic regime and the regulatory monster that has evolved over the past several decades
within America is such that while there's a lot of stuff that is not expressively illegal,
it's not legal either. And this is weird gray area where the regulators have an immense amount
of power to arbitrarily decide what is legal or illegal kind of on a whim. And I think that's
one of the biggest things that we see pushback on is this regulation via enforcement action,
rather than via actually codifying laws that people can follow is like there are a lot of
entities in the space have been asking for clarity just so that they can know what is safe for them
to do. But the regulators fairly craftily have refused to do that because they want to have
the flexibility to make these arbitrary decisions. So, I do think while I'm generally not a fan of
government in general, it would be nice if we could just get some more laws on the books that
would expressively codify things like self-custody as a right that cannot be compromised or have
additional requirements handed down upon us just so that we can continue operating without having
this sort of dark cloud of uncertainty hanging over us. For example, I think we have seen some
European countries that have started clamping down and you're requiring more reporting and
NYC even on a self-custody wallet. So, we would like to prevent that from happening in America.
Actually, I saw a pretty neat talk recently by Jonathan Mohan who was talking about the
FIT 21 legislation, which I think is past one of the houses of Congress. And that would more
expressively codify some of the rights of what we're allowed to do. And my main point being there is
we need to have some sort of higher level of legal authority that effectively
quashes the ability of these regulators to have arbitrary and capricious rulings that are coming
out on a regular basis. Yeah, there was actually a really interesting tweet that was put out this
morning where X wins block of California anti-hate speech law. The government cannot force individuals
organizations to express certain viewpoints or adopt specific speech. So, I think even though
there is this uncertainty, kudos to America and the fact that freedom of speech is something that
you guys as Americans hold really dear and really close and really strongly. And I think that says
a lot and hopefully that will serve in this quest to actually find answers and actually form a basis
with which America can actually proceed in the way that you've obviously demonstrated. So, I'm
hoping and I'm being bullish because there hasn't been much bullishness lately in the markets and in
general. Kind of like Europe, like you said, has been I think around code and there's someone who
does code and someone who is in the space from a technological perspective. What are your feelings
around the fact that the free speech has effectively been taken out of code?
Yeah, I mean obviously that's a big topic. Would love to hear what you think about that.
Right, so I think the ability to write and publish code is a right and that the big
point of contention around this and it's very interesting to me because it goes all the way
back to my time in university where I was one of the first classes that I took as a freshman
computer science major was actually this philosophy of ethics in computer science. And
ethics in computer science goes all the way back to the early days and like the 70s and 80s when
we first started creating machines that had algorithms running in them and like one of the
good examples around that was like some of the early x-ray machines actually had code in them
that was buggy and irradiated people and you know caused harm and even killed some people
as a result of their buggy code and in your that rose up issues of responsibility of like well
if you write code that literally kills someone are you a murderer now and I think you know
that's an extreme example but that is the exact point that a lot of the anti-code as unfettered
free speech people are are trying to make and you know they're saying oh if you're you're creating
these permissionless censorship resistant protocols that can be used by people for nefarious purposes
then you as a software engineer should be responsible for anyone who abuses the power
that this software gives to them and you know that's really what I find ridiculous because
you can generally use any tool for good or evil and you're just because a tool can be used for
bad things does not negate all of the good things that it that it could be used for and if you
require the the builders of tools to police all of the uses of those tools you're going to greatly
hobble and hamper the capabilities of the tools for good not just for evil and you know in general
your criminals are always going to be a bit ahead of the curve when it comes to technology this is
constant cat and mouse game where criminals are constantly trying to stay ahead of law enforcement
by adopting technologies that law enforcement doesn't understand yet for fear of kind of
like repeating what we've already spoken about I really enjoyed a tweet that you put out on
september the second and it's the way that it's been laid out and obviously the words they want
to control what we say to control what we hear to control what we think and obviously that's a
part of this discussion but what what inspired you to actually put that tweet out there is
the something that you think about all the time but more importantly what does this actually mean to
you right you know I I just see a lot of these things as systems of control and you know as I
said I'm a anarcho-capitalist crypto anarchist I believe in free markets as the best way to
advance human civilization even though it is messier and it is harder to control I think that's a
better way of kind of pathfinding our way forward into economies and means of interacting with each
other more efficiently more effectively you're continuing to improve kind of our economic power
and leverage and if we're going to continue to hobble them out of fear of safety it's it's similar
to a lot of other freedom issues like in America for example with firearms it's that same type of
problem of well are you willing to empower the people at the individual level with the knowledge
that that also comes with some risk of abuse that some people are going to abuse that power
you have to look at the flip side of it of uh how are we protecting your human civilization
in general against the abuse of power of a small number of people so the short version is like I
look at all of these things as balances of power and I generally try to push back against any
centralization of power into a few small hands because regardless of how well intentioned those
few authorities are that is ultimately going to create systemic risk and the potential for that
power to be abused I think at a much greater level to cause greater aggregate harm than
having you know the few random individuals and criminals and malicious people who are going
around abusing the the power at a small level yeah I mean now I have to ask you about you know
defy and kind of like the essence of defy and and I know that in general like a bitcoin maxi's
perspective is that like it's kind of like we can't look at anything outside of bitcoin yet
defy is traditionally known as something that's obviously started out as an ethereum based from
my understanding of it anyways I stand to be corrected but it's just kind of like like EVM
and decentralization and I know that that funny enough you did a talk on defy in 2019
as we spoke about before we started recording and you recently actually retweeted that that talk
that you did a younger version of yourself but obviously the essence of who you were back then
is who you are now and I wanted to just tap into you know your general thoughts around defy EVM
and then obviously more importantly around how decentralization and the way that you see the
value of decentralization within bitcoin how does that potentially transfer into the way that we
now understand defy is it valid is it is it's kind of like something that we need to protect
and grow where where is your mind at and where do you think we go in the current kind of paradigm
that is defy defy is kind of a trigger word because I think a lot of people use it to automatically
presume you know decentralization and censorship resistance and part of
the consequence of having permissionless systems and the ability for people to deploy
almost anything that they can dream up and build within these protocols means that you can build
stuff on top of the protocols that looks decentralized but actually has various aspects
of centralization in them so as I think I spoke about in that talk one of the big problems with
a lot of defy projects is that they do tend to make some tradeoffs and they often actually have
administrators or capability for once again a small number of people to have a lot of control
over a specific project so unfortunately you have to do your due diligence and you have to do a lot
of research into each individual project to actually understand what are the guarantees
that that project is offering to you so you know if you are if you're using a smart contract
you have to understand all of the features and potentially even flaws and risks of that particular
smart contract this is you know one reason why CASA was very slow to even offer Ethereum support
within our system because we didn't want to write our own smart contracts that's a very dangerous
game to play we were waiting for there to be you know a well vetted multi-signature self-custody
smart contracts that withstood the test of time and had tens of billions of dollars secured and
it you know to give us the confidence that the contract itself was not flawed but you know that
was specifically just the noses safe contract and when you go beyond that into you know any sort
of newer defy projects things get a lot riskier you know the newer something is or the the faster
the protocol or smart contract is changing the the more risk there always is involved so
i guess the short version is defy has a lot of potential but as it stands right now
there's a lot of projects out there that we could call dino's of like decentralized in name only
and they often provide convenience and functionality that you can't get elsewhere
but they do that while hiding some of the risks yeah i think i think there is there is that
kind of the evolution that needs to needs to happen i mean right now we we've seen this this
new narrative that's come on and and i'm i mean i i see i see the the idea around kind of like
bitcoin defy or defy in terms of bitcoin but it's it's kind of like well how do i change the idea
of bitcoin being a savings account into something more than that in terms of the way that evm played
it where you can obviously use it as collateral and and now do you do that within the context of
defy or do you then rely on a third party that captures your your your bitcoin and then lets
you borrow off the back of that i'm not really comfortable around that maybe there are people
out there that would be but that's obviously me giving up my self custody of bitcoin do you
believe that there is a space for that kind of dynamic to exist for bitcoin like just purely
from a bitcoin perspective or do you think there's a hard line that needs to be drawn where if i'm
kind of compromising the custody of my bitcoin then i shouldn't be kind of like putting it at
risk or do you think there is room for risk based on the appetite that someone might kind of potentially
you know see in that well i mean it's quite clear that there's demand for people to use their bitcoin
in more complicated defy protocols yeah and the result of that is that once again we've centralized
a lot of the bitcoin ownership for example in wrapped bitcoin which is at least partially
custody by bitgo which is a former employer of mine and you know i obviously have a high regard
for them and their practices but it's still not a great solution if we really want a censorship
resistant type of ecosystem but you know the reason is because of the limitations of the bitcoin
protocol and we're seeing now a number of other projects where people are working on building
out other quote-unquote you know bitcoin second layers but once again due to the limitations
of the bitcoin protocol we still have not realized what i would say is the permissionless side
shame vision that a lot of us held about 10 years ago so the point being though like if you want to
peg your bitcoin into some other system right now you're most likely going to have to give it up
to a trusted third party in order to have tokens in some other system that you're then able to use
more complex functionality around now this is one reason why i think that we need to keep
talking about improvements to the bitcoin protocol solely from a functionality and scalability
perspective the the potential is there for us to make small upgrades to the bitcoin protocol
that would allow us to build second layers that do not require going through a trusted third party
in order to move your funds back and forth and it's been really slow going process you know a
number of different proposals out there and it's not clear how long it's going to take until we
get there but it's at least it's nice to see progress being made i think just last week a
million dollar fund was established solely to do i think it was zero knowledge roll-up
research or no it was op-cat related research with the goal of course of building things like
roll-up second layers that could help accomplish some of that so so if i used to say we've kind of
we've made like one step forward one step backward in that direction but there is a path forward
and i'm going to keep pushing for us to keep trying to make progress in that direction so that we can
get to a future where people can operate more sovereignly and do some of these more esoteric
functions without trusted third parties yeah i mean you in that talk that you did
the one thing that that i really enjoyed and that stood out for me is that you
you distinguished in not so many words and in so many words the difference between distribution
and decentralization in the current form and obviously the importance of true decentralization
is that almost equal distribution you know within the network which i think in many regards bitcoin
has managed to achieve irrespective of having bigger mining operations from my understanding of
it is it is the most efficient kind of network that humans have ever built and and i think that's
one of the coolest things that bitcoin brings to the table besides the fact that you know we can
obviously send money to one another and the story value that exists but just coming back to to the
discussion around kind of like and you said you hit the nail on the head by the way kind of like
the definition from a third party that i interviewed last week who run a website called
bitcoin layers where they're an independent research company they don't you know they don't
do tokens there's none of that that kind of like ps it's going on it's kind of like well let's look
at a sober an academic view of what is actually going on with these different layers in inverted
commas and the classification right now is that every single layer in inverted commas that has
been built is essentially a sidechain and the and the greatest security risk between that is
that communication or bridge between bitcoin itself and the layer that exists from an EVM
perspective and the smart contract perspective and it's really cool to actually hear you speak
about it because the last thing i expected was kind of like a more bitcoin maximus perspective to be
obviously sober and cognizant of the fact so well done sir respect once again for actually
like being aware of that and it's like i love the fact that you're speaking about well how do we
actually further the space it's not just about absolutes the absolute is the following and
anything over and above that is not an option and and and i think that's what's important here it's
like you say you know like even though it's one step forward one step back there's really an important
point of discovery here like there is an experiment ultimately or various experiments
that are running and it's like we've got to like find better solutions i don't believe that bitcoin
can just be a one or two dimensional you know entity i think it's got so much more potential
and there's so much that i don't think we've even come to realize that the only way we're
going to find out is doing this whole thing what you guys are doing from a custodial perspective
it's not just a piece of paper you know there's something more there and it's like
i think that ownership is the journey and then more importantly the fact that you
are taking ownership not only of your keys but your money and then being able to actually embark
on that journey anyways a little bit of a rant but it's really cool to to be able to speak to
someone about this because generally it's like when i speak to someone it's like it's more hardcore
you know and it's like i respect everyone that's got it that's the way that i see it but i think
it's not really about black and white i think there's a lot of gray areas and i think it's really
important that we actually dive in and figure out you know where do we go from here and what's next
so that's the question what what is next for the space that is bitcoin and and you know the
whole idea of money well i think um
if we don't continue to evolve the protocol and make it more developer friendly for people to
build side chains that are actually permissionless and censorship resistant then you end up with
one of two things but
either people end up using other protocols like more of the ethereum salana whatever stuff which
from a competitive perspective you could argue that you know that means that bitcoin is losing
some market share for some desired set of functionality that the bitcoin protocol itself
does not support or even if people do build more of these so-called bitcoin second layers
but they're all centralized and permissioned either way people end up putting their money
with trusted third parties and they can't you know unilaterally get that money back they're
essentially dealing with io use and so you know that throws out a lot of the security
that bitcoin provides to you so you know really where we're standing right now if you want to
be a sovereign bitcoiner then you're either doing the you know digital gold store of value use case
where you're you're doing what costa provides as functionality which is you know secure cold
storage and you're not really doing very much with it other than holding on to it as a store
value asset or if you want the you know payments rails functionality you know you can operate
lightning nodes and operate on the lightning network in a sovereign fashion though it is
a bit more complicated but i would argue you know lightning is probably the only pure
um right permissionless layer two right now if you want anything beyond that you're giving your
money to someone else or you know not necessarily a single provider maybe a federation but ultimately
you're giving it to some other the control is going into some other entities uh hands and you
have to politely request to get your money back and hope that they honor that request which is
um for some of these things you know it's slightly better than just having all of your money
at an exchange that's regulated and uh could arbitrarily um cancel your account for any number
of reasons and we haven't seen um much censorship of these federated networks but they also have not
received much adoption you know in comparison to defy on non-bitcoin networks
yeah i mean i'm really curious to to hear your thoughts and i haven't actually i don't have
an opinion of this at the moment so it's not a loaded question in the slightest there's
we hear there's there's two there's two very distinct views around the lightning network
there's actually i think i've heard a lot more people say that it's been a failure versus people
who have said that it's been successful what are your thoughts around the lightning network and
you're 100 correct um just having spoken to the guys at bitcoin layers it's it's the only one
that actually features like on all levels like from there's no bridging it's like it's secure on
all accounts it's the most like you said it's the most pure and the most like kick ass out of all
the layers at the moment yet there's some people who think it's been a failure and i'm just curious
as to you know what do you think about it so whenever you are bridging your funds to a second
layer protocol there's a lot of game theory involved so if you're doing it in a sovereign
manner like with lightning um that means you have to be vigilant you know you have to be running a
node and software to constantly ensure that you're not being defrauded and so the you know
level of technical sophistication that's required for that goes up significantly versus just having
you know keys in cold storage on a few devices scattered around so you know that
pretty much immediately pushes a lot of people out of being in that position and once again
drives them towards you know using a trusted third party to manage a lot of that complexity
for them and and we already saw some of the potential downsides to that in america i think
one or two yes several of the
the centralized lightning wallet services out there actually stops accepting american users
once again because of the the sort of regulatory environment and the the gray area and that the
potential that they could get labeled as money transmitters so there's there's a lot of work
to be done lightning hasn't failed you could argue that maybe it hasn't grown and been adopted as
fast as we would like but it's also not finished either there are plenty of potential improvements
to lightning that could greatly enhance the the scalability and flexibility for people to operate
lightning nodes and channels in a self-sovereign fashion that would not be as difficult but once
again it would require more changes to the base protocol and so with some of the more
hardcore like pro ossification people who don't want to change the base protocol ever again
that puts us between a rock and a hard place because if we can't improve the bitcoin based
protocol it makes it a lot harder to make improvements at higher layers and and so
that's one of the main things that i'm pushing against lately you know even if you just look
at the history of lightning we wouldn't have lightning if we hadn't made three different
changes to the bitcoin base layer to enable the functionality and game theory that drives it
so my main point you know like without trying to go into the minutiae and get people's eyes
to glaze over is that it is possible for us to make tweaks at lower layers that then have
order of magnitude improvements in functionality of what we can then enable people to do at higher
layers nice just in terms of just before we wrap it up because we almost kind of like at the top
of the hour just in terms of you know another very strong point is like privacy and and you
know all of those those good things what are your thoughts around kind of like the a lot of people
argue that that manero is almost like a version of what bitcoin could have been and i'm just curious
like do you think there's a place for privacy in general outside of bitcoin or do you think that
bitcoin is sufficient for you know maintaining a level of privacy well bitcoin has terrible
privacy so i would certainly love to see more improvements around bitcoin privacy but i do
not think that we're going to see like a manero or zcash level of privacy on the bitcoin base layer
the primary reason for that is a a lot of those really strong privacy protocols require you know
obfuscating the total amount of the the supply so you're often requiring breaking the ability to
audit the total supply of funds and that's that's like a hard no i would say for pretty much everyone
in the bitcoin space i think that if we're going to attain that level of privacy it does need to be
at second layers and you know lightning is much more private from that perspective and we can do
even better with you know other side chains that you know you could you could potentially build
a side chain that has you know manero like properties with ring signatures for example
but once again i wouldn't really i wouldn't push people to use that unless we did it in such a
way that it was permissionless and it was had you know attributes that were more similar to
lightning network where you could unilaterally enter and exit from that protocol so i mean just
from a from the lightning network side of things you've got you've piqued my interest is that you
saying that the way that lightning actually transcends and gets to its full potential is obviously the
growth of of the network itself does that mean that more people running nodes is necessary or
do we need to see kind of like better technological advancement on a code level in terms of improving
it in its current form um i mean some of both you know i think the the privacy characteristics
of lightning today are already pretty good but not if you're using a third party so you know if
if you're not running your own node if someone else is running that node for you then they know
everything that you're doing on lightning and so that comes with the you know potential risk of
for example a nation state or some authority coming in and basically forcing that provider
to reveal all of the private information perhaps we could get to the point where
we could sufficiently obfuscates what was happening on a lightning network to the point where even
the the node provider doesn't have all that information i haven't really seen any proposals
along that line but um another thing is that there are potential improvements like uh i think
sig has no input any prevout uh that could enable this concept of lightning channel factories
which would give us order of magnitude improvements for basically people to share lightning channels
and so like from from the privacy perspective of bitcoin there are a number of proposed
improvements out there once again none of which we have any idea when or if they will get implemented
but the the potential privacy improvements that could happen in bitcoin would mostly be around
more sharing of UTXOs and and and kind of making the current state of bitcoin mixer technology
even stronger i was actually on a panel a couple months ago at bitcoin 2024 we talked about cross
input signature aggregation which is another one of those potential protocol improvements
and to kind of sum all of this all up um i'm generally bearish about privacy
for privacy's sake because in my experience almost nobody cares about privacy until it's too late
but uh one of the reasons that i like several of these privacy proposals is the incentives
that are driving them and essentially they would incentivize people to use them by making it cheaper
to use bitcoin in a pro privacy fashion so i do hope that we can continue to you know iterate on
those and eventually get some of them implemented i mean it's it sounds like a trojan horse and it
sounds like a net positive trojan horse so let's yeah it would be a good thing um privacy is never
going to be a bad thing like you said it's always too late when you realize you need it um okay on
that note um you know top of the hour jameson thank you for your time uh it's been an absolute
pleasure to chat to you and um i know you're busy and it's yeah it's really appreciated thanks for
joining us and yeah look forward to watching kind of the development of casso and what you guys are
doing and you're all the best thanks for having it absolute pleasure thanks everyone um yeah i'll be
sure to like and subscribe uh provided you liked it and you want to come back for more and yeah join
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