Hi, this is Arnab. Welcome to the channel. Today we have Jameson with us. Jameson is
one of the most influential people in the crypto space and he writes great blogs. He
has a very active Twitter page and he is involved in the community for a long time. And today
we are going to talk to him more about how he views the current crypto system and what
are his views on some interesting topics like lightning, fund security and so on and so
forth. So thanks Jameson, first of all, for accepting our invitation to come on the call.
My pleasure. Happy to be here. Awesome. Awesome. So can you start off by like talking about
what are some projects that you're working on currently? And yeah, where are you spending
your most of the time in crypto currently? Well, my full time job is currently at CASA.
Just overseeing the infrastructure and general security model and design of what we're building
with our premium product, which is this non-custodial multisig vault. Then we also have another
product that we announced did a presale for and will start shipping in a week or so, which
is the Bitcoin full node slash lightning node product. That is kind of coming in on the
exact opposite end of the market, really targeting more of the lower end enthusiasts who would
be willing to spend a few hundred dollars to get into that part of the ecosystem. Whereas
our high end product is more for the crypto multimillionaire and basically $10,000 a year
to get an extremely high level of support and a user friendly high security solution
for vaulting their large amount of Bitcoin. Got it. Got it. And like, can you like talk
about how you actually got into crypto and why, like how did you start with CASA as well?
It's been a pretty long journey. Originally got interested in 2012, just from reading
slash dot articles about it and realizing that the system was not falling apart and
failing as I had expected that it would. So I started looking into it, reading the white
paper, looking at some of the code and just trying to sift through Bitcoin talk forum
posts and keep track of what was happening on Reddit and other social media. And within,
I guess it was about a year, a year and a half later, I forked Bitcoin core myself and
created Satoshi where I was basically trying to bring more transparency into the operations
that were happening inside of a Bitcoin node because I wanted to understand it better and
I felt like there was probably some use for other developers to understand it as well.
Then put a nice dashboard on top of that and made Satoshi dot info a public dashboard where
anybody can go in and kind of get a better understanding of what's happening on the network
and what's happening inside of my node. And, you know, it's all open source. So if anyone
wants to, they can basically replicate that themselves and run their own Satoshi node.
And then about a year after I did Satoshi, that's when I guess there was another price
run up. That was like $1,000 run up, you know, in 2014. And I just saw a lot of venture capital
coming into the space and figured that I could probably get a full-time job. And that's when
I joined BitGo in early 2015, basically spent three years there running a lot of their infrastructure,
both the node operations and then various indexing operations to create databases that
the wallet platform could then talk to to figure out, you know, what is the current
state of the blockchain. And then at the beginning of this year, pivoted slightly. And, you know,
I'm still doing infrastructure for multi-sig non-custodial crypto products. But instead
of having an enterprise focus where BitGo was really doing hot wallet stuff and helping
exchanges and transaction processors. Instead, we're really focusing on the individuals at
Casa and we think there was a gap in the market there. So just trying to make it easier for
people who have, you know, they have come into a large amount of wealth that they never
anticipated because they've been in the space for a few years and the value has gone up
so much. And now I think there's a lot of people who are in a position where they're
just like afraid, you know, they don't want to screw up. They don't want to lose all their
money because they know that if you screw up, it's gone and nobody can help you. So
we're just trying to offer a product that can give people a peace of mind.
Makes sense. And since crypto is like super nascent right now and like we people say we
are still in the 1995 of crypto, right? Even individuals like us who are who are techies
and like we try to figure our way out on like how to store our private key and like how
to make our phone secure and stuff like that. How far do you think we are from like a normal
user being able to use crypto? It might be a wallet or like running their own node because
this is still like super early and like only for the geeks.
Oh, yeah. You know, definitely many years. You know, the problem right now is that even
though it's possible to be your own bank and do this all yourself, even the really sophisticated
people, you know, technical people who have been in this space for years, and this is
part of the reason why I joined CASA, even if you have all of the knowledge, which can
take years to gain, it's still a big time, I guess, component of what you have to dedicate
to do it right. And so what I was seeing myself, you know, just like creating a calendar event
where like on an annual basis, I go through all of my cold storage and like refresh it
and you make sure all the private keys are backed up, make sure recovery process works
and like doing all of that to like, quote unquote, do it right, was taking one to two
days, so basically like a whole weekend. And, you know, I don't want to have to basically
throw away an entire weekend every year, you know, just to get a little more peace of mind
and I was figuring, you know, if it takes me that long, then I suspect the vast majority
of people will just look at it and throw up their hands and say, you know, I'm not even
going to bother with all of this. So that's why I think there is a big gap there that
we can fill. And I'm pretty happy with what we've done so far at CASA where you can actually
get set up and onboarded with your multi-sig, multi-device wallet with CASA in like five
or 10 minutes. And it's really what we've done is we've brought in the usability of
what you get with a mobile app. But instead of, you know, keeping all the private keys
on your phone, we're then leveraging the security aspects of what you get with the hardware
key management devices like the treasurers, ledgers, keys, holding cards, what have you.
And kind of by like having a product that uses all of these different features and functionality,
we can actually guide the user through the best practices. So, you know, instead of like
throwing a security book at them or, you know, IT data management handbook at them, we actually
build the product in a way such that in order to use the product, you have to be following
best practices. And I think that that is going to be the key for mainstream adoption is that
instead of relying upon users to educate themselves, which only nerds are going to educate themselves
about how to do stuff right, you have to build the product in a way that does the education
as they're using the product.
Right. Unlike companies like Google who try to like get access to all of your data and
like not sort of make sense.
Yeah. And that's a hard thing to do. Where, you know, even this is something we talk about
a lot at CASA. We didn't talk about as much at BitGo, but even when you're creating a
like non-custodial service where, you know, we've already got a really solid foundation
because we don't have private keys that can be stolen from us. So we're already like pushing
the security out to the edges of our users. It still becomes a privacy issue of, you know,
whenever you're interacting with a third party, you are giving them some data and then that
data could potentially be leaked and used against you. So we try to do as much as we
can to minimize like even the amount of personally identifiable information and then logging
and other stuff that we do in our own system. And that makes it more difficult for us because
when you're developing web applications, one thing that not many people think about is
that a lot of the developer tools and debugging stuff and analytics and whatnot that are very
useful for software developers, it's actually surveillance software. You're surveilling
your users in order to better understand like when a crash happens or they hit an edge case
and something goes wrong. And we don't want to surveil our users, but we do want to be
able to help them and, you know, debug stuff. So it's a really, it's a whole other issue
that we try to find this delicate balance around.
Right. Makes sense. And so this is just like one of the techniques of storing your funds
in multisig. But what do you foresee, like in the future, what other methods or what
other strategies can an individual use to keep their funds safe?
Yeah. So, you know, one standard thing that a lot of people have talked about of course
is just various types of metal backup, like seed storage stuff. I actually did a stress
test a few months ago where I bought a lot of the common metal seed phrase storage devices
and put them through the ringer. You know, I think that a lot of them work very well
and they will work very well for the vast majority of scenarios, like even a house fire
or whatever. I just put, I put them through an extreme stress test just to figure out
what the limits were. I think there, we will hopefully see new ways of kind of distributing
the trust for this sensitive material. So even if you're not using multisig itself,
like within one of these protocols, because actually a lot of them don't support multisig,
then we may see kind of something that's similar to multisig, which is like a Shemir secret
sharing, basically ways that you can split up the single sig or, you know, single key
data in a way that you're distributing it around, you know, a set of friends and family
that you are highly confident are not going to collude against you to steal all of your
money. And, you know, this becomes important, not just for redundancy of like natural disasters,
you know, fires, floods, what have you, but also for inheritance planning. And that's
another big aspect of what we're doing at CASA is that we think that while it is important
to have really good security, both historically through various analyses that some analytics
companies have done, and even anecdotally from what I've seen over the past four years
working in space, it seems like you're far more likely to screw up and lose access to
your keys than you are to have an attacker actually take control and steal your money.
Right. We need to help them and keep them from shooting themselves in the foot basically.
Yeah, and I just like to put it out there that we had bought like one of your CASA lightning
nodes and like we personally follow CASA quite closely. And what I would like to like ask
you is that, like so all the current custody solutions, most of them are focusing on the
enterprise and the institutions and even like CASA is focusing on like high net worth individuals.
Like how, which sort of solution do you see? Like say Shamir secret is one, do you see
that Shamir secret or these sort of solutions would be used by say a normal person who has
say $10,000 or $100,000 worth of crypto and that their wallet, their hot wallet could
be protected by such a recovery mechanism. And yeah, and like that system might be able
to compete with the current say banking system.
Yeah. So once again, it's going to come down to how the user interface is designed. So
you know, when we talk about like Shamir secret sharing, unfortunately right now, if you want
to do Shamir secret sharing, you're probably going to have to go find a command line tool
or even some of the tools with UIs behind them that I've tried out. They're actually,
they're not even compatible with each other. It's like they're generally not implementing
it perfectly in a way that you know, you can then use another tool later and be reasonably
sure that you're going to be able to reconstitute the data. So we have Shamir secret sharing,
which is this fundamental building block that I think we can build other stuff on top of.
But that's the problem is no one has really built good interfaces for using it. So, you
know, it's going to end up needing to be another sort of software layer, preferably within
these wallets that says, okay, all you need to do now is go, you know, get your friends
and family members and, you know, say have them like, you know, NFC, you know, touch
their wallet to your wallet and, you know, do something that's just a dead simple, like
impossible to screw up from the user standpoint in order to, you know, shard out that data.
So yeah, that's where really I think all the work is going to come into is how to abstract
away all the complexities of that functionality and just provide the user a very like simple
step-by-step guide for how to secure their own funds.
And I think like even multisig, like isn't that ideal? What's your thought on that? Like
say if you want to do a lot of transactions in a day, multisig isn't ideal for that because
you need to get like signatures from various places.
Yeah, yeah, definitely. I mean, that's what any security model, you have the trade off
between security and convenience. And so actually we already do have a single sig functionality
within the CASA wallet software. And so figure, you know, when you set up a CASA wallet, you
have, there's five keys, CASA has one offline, you keep one set of keys on your phone, and
then you have three other dedicated hardware devices. And we were figuring that most likely
someone is going to, you know, have those three devices geographically separated to
make them secure against both physical attackers and against various disaster loss scenarios.
But it would make sense for the user to carry around one device. And so that device could
be a part of, you know, the three or five set for the vault, but it could also be used
as a single sig wallet for their day-to-day spending. And so, you know, it is about, you
know, supporting a variety of different security models, but doing so in a user-friendly fashion.
So you know, being able to reuse, you know, the same hardware device for multiple different
types of wallet security models, I think helps bring down the complexity while still giving
more convenience to the user.
Okay, makes sense. My next question is, there's like a ton going on in the space. We all know
that 99% of the projects are shitcoins, or like they're barely do anything. They're just
like marketing and like pure money fundraising kind of, you know, schemes going on. But having
said that, there are also some really cool projects, other than Bitcoin. Bitcoin obviously
is the coolest, but there are projects like Monero or Decred who are trying to do some
really cool things like on layer one. And even inside Bitcoin, there are a lot of cool
things going on, right? So there's like coin join implementation that's coming. And then
even like even stable coins, we have projects like Maker who are trying to like build decentralized
kind of, you know, stable coins. So my question is, what are some of the things that you are
really excited about in the space? And what should like a user or a high end user inside
crypto look towards, you know, to keep themselves updated?
So you know, personally, I am most interested in privacy technologies, and also scalability
technologies. I mean, from a really high level of like getting crypto assets adopted, mainstream
adoption, it needs to be attacked from many different fronts. And while scalability is
one big issue, it's like if you don't have the usability, then it doesn't matter how
much you can scale because nobody's going to use it. But if you get awesome usability
and no scalability, then you get, you know, a bunch of adoption, and then you run into
a wall and nobody else adopts it. And then of course, there's also the privacy aspects
as well, where while not everyone values their privacy so much in the long term, we've generally
seen quite a few different instances where if you forego your privacy, you end up regretting
it later. So as a result, you know, I'm interested in stuff like Mimble Wimble, which is a completely
novel take on doing both high security, high privacy and high scalability. Let's see, last
I checked, they are about to launch their final and fourth test network. So that's green
coin, right? Yeah, yeah. That's grand. You know, there's also beam. And you know, beam
has like a different governance model, it seems to be more of a Z cash style governance
model. Whereas grin seems to be more of a Bitcoin philosophy style governance where you know,
you're going to do a fair launch with no pre mine and no funny business. And I think that
it's going to be interesting, because you know, even a lot of the developers and contributors
on there are anonymous, you know, kind of like Satoshi style. And, you know, we'll see
how well that works. You know, the economics behind it are also kind of up in the air because
they're doing this like unlimited emission schedule. But, you know, even if if you're
not that interested in the network itself, I think the technology is very interesting
because, you know, anything that becomes interesting enough has the potential to if not get actually
subsumed by Bitcoin in the main protocol by potentially getting like tacked on as a side
chain, where it would be very easy to see some sort of nimble wimble side chain to Bitcoin,
where if you want the privacy of nimble wimble, then you just, you know, lock up some of your
bitcoins and transfer them through a peg, and then do whatever you want much more anonymously
on that side chain network. So, you know, on a similar vein, lightning network also
promises to have better privacy, though it's a lot more complex to reason about and a lot
of that is still up in the air as to how it will work out. But I think that we're going
to see this like explosion of innovation happen as second layers become more feasible. And
that, you know, through lightning networks and through side chains. And, you know, there's
also the drive chain concept has been slowly progressing along. So, basically, if we can
get to the point where it's easier for people or developers to create these side chains
in a way that seems to be reasonably secure enough that people would then adopt them,
then that just makes the pace of innovation, I think, go a lot faster. Because up until
this point, if you wanted to innovate in this space, do something crazy that's not going
to get, you know, adopted by an existing protocol, then you basically have to start an entire
new network from scratch. And that's a really big challenge. You get into this like chicken
and egg problem, you know, having to convince people to spend their resources to help you
and, you know, get adoption on various exchanges and miners throughout the entire complex ecosystem.
Whereas, if you can just spool up a side chain that will hopefully be fairly standardized
and easy for various ecosystem players to plug into, then we can start experimenting
and not being as afraid of failing. Because, you know, if a side chain fails, then all
you have to do is, you know, get, you can still peg your bitcoins back. Like nobody's
actually destroying money if it fails. It's not an economic experiment. It's more of just
a technical experiment.
Right. Makes sense. And what do you think about a project, although like I'm not trying
to like have you judge various projects, but I'm personally also like super into like governance
and like what the Decrypt project is trying to do on the base layer. So do you have any
thoughts on whether governance is needed on layer one and like what Decrypt project has
been up to? Do you think that has value in the long run?
That's an interesting thing. You know, some people care about governance and feel like
they want to have a model that is easier to understand. But, you know, what I think any
of these systems are about from a very fundamental standpoint is voluntary interaction. And so
if people want to opt into a certain governance model, then they have the freedom to do that.
The weird thing that I have trouble kind of keeping a mental model around is, you know,
if the governance is about making decisions that may be controversial, then I don't see
how you can ever actually force anyone, you know, to accept a controversial decision that
they don't want to. Because, you know, even in a system that has various governance mechanisms
built into the technical layer, you can't stop people from forking, you know, basically
taking the software and forking off their own new network. So, you know, it may make
sense for like more making like smaller decisions about certain things. I'm not sure whether
or not there is a like technical solution for like major critical consensus decisions
about the direction that any of these protocols are going to go in.
Okay, makes sense.
Okay, yep, yep. That makes sense. And I want to move back to lightning. So, like, like
this year, I think I watched one of your videos and heard you on the Nordic podcast, you talked
about like, you're super excited about lightning. So like, can you share like, how do you have
what you have seen in lightning, what sort of labs or what sort of work you have seen
done by L&D, the C lightning implementation, and so on and so forth?
Yeah, so you know, we've seen a lot of development happening at the actual like lightning node
software layer itself, you know, there have been a lot of bugs. A lot of people have found
performance issues and fix them, you know, as, as people and developers have been writing,
like the first wave of labs, and they've basically been, you know, stress testing the lightning
software itself, and finding issues that need to be worked out, finding edge cases and bugs.
And so, you know, it's kind of funny to see, you know, some people are like, looking at
the labs and saying, oh, these are all really stupid ideas, you know, this isn't changing
the world. But you know, it's really more proof of concept of just putting some transactional
volume onto the lightning network to try to, you know, stress it a bit more. And I think
one of the things that's going to be more interesting about developers that are coming
into these second layer networks is that they're, you know, not necessarily going to need as
much guidance, I guess, as, as writing stuff on the first layer, where, you know, to create
a Bitcoin application actually requires setting up quite a bit of infrastructure. Setting
up the nodes, figuring out how to, you know, manage private keys and all of this stuff.
But as we're building these other layers on top of Bitcoin, I think it's just becoming
a more developer friendly experience. So a good example of that is, I guess, Satoshi's
place, the lightning koala, who is the developer behind that, has said that, you know, he's
just running that on a Raspberry Pi in his closet at home. And, you know, it's this is
supporting, you know, thousands of users a day, you know, at its height, constantly redrawing
this canvas and processing, I don't even know how many like tens of thousands of transactions.
And you know, it wasn't, it wasn't a huge, you know, money making entrepreneurial venture
for him. I think, you know, he probably made a few hundred dollars off of it. But it showed
that, you know, this is a new type of business model that you can can run.
Yep, yep. And like in the sense of say, wallets and exchanges, how what sort of progress have
you seen? And like, even in lightning, say, a normal normal people start using lightning
wallets, and they start doing lightning transactions. How do you see that the nodes, what sort of
companies or will then will will run the nodes? And do you feel that even if say, if we have
1 billion people who we have hyper bitcoinization, and we have 1 billion people using Bitcoin,
and they are transacting to lightning, what sort of infrastructure do you see we'll have
at that time?
Yeah, so it's going even to get to that that level is going to require a lot more optimizations.
And this is where I think we're seeing stuff that's happening like with L2, for example,
of trying to figure out how to do like mass channel management. Because of course, you
know, the lightning network is complicated, you know, it's Bitcoin plus a whole bunch
of other stuff. And no one has ever really done anything like this before. So as we're
stress testing these networks, we're finding various usability issues and economic issues.
You know, there was actually a good talk about the logic behind channel rebalancing recently
at scaling Bitcoin, we had a number of talks about how to manage your channel opening and
closing at a large scale. And I think that in general, what you're going to see is people
writing software that is better able to manage multiple users of single channels basically.
So I think that will be very critical for any of the large providers, whether it's exchanges
or payment processes or what have you, rather than having to manage tens of thousands or
hundreds of thousands of channels, being able to consolidate a lot of those users down into
a smaller number of more manageable channels, which hopefully will then also be easier to
manage like from a liquidity and economic standpoint. But you know, there's a lot of new things
that people are playing around with, like the various like channel splicing stuff and
the multi and what is the atomic multipath payment stuff, where essentially what this
is all coming down to is figuring out kind of like a new economic model that we're having
to deal with. It's a bit more complicated than just like on chain Bitcoin transactions.
Okay, makes sense. So what do you feel about like possible flaws or any foreseeable events
in the future that might try to bring the Bitcoin network down? It might be like a state
level DDoS or I don't know, there was like a bug recently, 17144. In your mind, what
do you see, like some of the challenges are in front of us, you know, for the entire Bitcoin
ecosystem to prevent it from a collateral damage kind of scenario?
Yeah, so well, there's also the question around like, is there any one thing or event that
could sufficiently damage Bitcoin? And I think it's not so much like, what could be done
to screw up the network from a technical standpoint, but more of what type of attack or failure
could cause such a loss of confidence that it makes people stop wanting to invest in
it, stop wanting to participate, stop wanting to, you know, dedicate their time and resources
into making a better network. And so that's why my general answer to like, what is Bitcoin's
greatest weakness or greatest threat is apathy, is that, you know, if people stop caring,
and they stop trying to make it better, and stop being willing to basically, you know,
be at least for some of the developers, you know, be like operational on call, if there's
an emergency, you need to be ready to drop whatever is going on and fix the problem.
Because the longer that some sort of critical issue is out there and affecting people, the
greater the confidence loss is going to happen. So, you know, you can worry about various
nation state level attacks, you can worry about various technical failures. I actually
wrote extensively, nearly three years ago, about a number of adversarial conditions that
might happen on lightning network and, you know, different types of attacks. It would
be more like economic attacks. It was like a wealth trying to push a lot of funds through
the network in one direction to like try to, you know, imbalance many, many lightning channels
to the point that they're like forced to close and then, you know, creating a lot of on chain
congestion as a result of that, which could then, you know, create kind of a vicious cycle
due to the game theory and, you know, timeouts that are involved in channel closure. So,
it's I try to think less about like these specific things that might happen and more
about the general awareness of, well, you know, we just need to have a mindset within
the community that this is an adversarial system and we need to be willing to accept
that it is not, you know, it's not perfectly robust that it can withstand any attack on
its own, but rather it's anti-fragile because there are many of us out there who are remaining
vigilant and are willing to step in and fix problems, you know, as they arise. So, it's
just I think it's more of a mindset than anything else. I don't think that there's going to
be any magic bullet that will make these systems like perfectly robust against all types of
attacks.
Okay. Well, then what do you think about mining centralization and like one company like Bitmain
taking control of all the mining hash bar? Although, I mean, all they can do is just
double spend, right? Even if they do a 51%. But I'm like hopeful about the fact that like
I'm sure in the future there are going to be more companies that are already companies
like Oblisk and others who are developing ASIC miners. But do you see this monopoly
breaking up in the future and not posing any threat?
Yeah. So, you know, it seems like, you know, Bitmain in particular has been running into
a number of walls. You know, it sounds like they haven't really been able to innovate
that much on the hardware level. And, you know, I think that they've basically run into
the threshold of what like our silicon processing technology can allow you to do. So, I'm hopeful
that from that perspective, it will be easier for other entrants to come into the market
and compete with them. And, you know, mining centralization is definitely one of the bigger
questions and threats to worry about. You know, from a game theory perspective, like
I'm not worried about any of the large pools or Bitmain or whatever basically doing something
to try to kill Bitcoin because they basically be shooting themselves in the foot. But I
would be more worried about, you know, what happens when another attacker like a nation
state comes in and basically seizes a bunch of pools and equipment and then uses it to
run attacks at very, very low cost because they have, you know, they can use their monopoly
on violence basically to take over and run those attacks. But, you know, even in that
scenario, it once again comes down to how resilient is the entire ecosystem to such
an attack. And, you know, even if that type of almost doomsday scenario happened, it would
be noticed within a few hours at the most. And then what we would see is a lot of people
would be scrambling and coming together on various communications channels and saying,
okay, you know, this is an existential threat. We need to do something about it. And the
ultimate response to anything like that is some sort of code change that, you know, changes
the rules because people I think in a situation like that, we would be able to agree that
if we don't change the rules to, you know, get this bad actor off of the network, then
the network is doomed. So I think there's always, there's always an answer, you know,
to every problem in this space. It's just a question of like, how do you come to consensus
about actually moving forward?
Yeah, that makes sense. And I'm just curious, like, what's your thought on proof of stake?
And do you, do you see like, what are the advantages and disadvantages and should like
someone in the Bitcoin community also think about working on proof of stake?
Yeah, so well, even, you know, proof of stake is tricky because there are a ton of different
variations on proof of stake. But if we're, we're just talking about, okay, you own a
certain number of tokens in a system and then you can basically use those tokens to be like
an authority that, you know, puts them up at risk. And as a result, you are saying,
you know, these transactions and blocks on the network are valid. And if everyone disagrees
with you, then you lose your coins. You know, first of all, that's a very different security
model than proof of work, because you're using value inside of the system to secure itself.
Whereas proof of work uses resources and value that are external to the system to secure
the system. You can then, it starts to become almost more philosophical then about, you
know, does that mean that it is more fair or more competitive when it's external resources?
Because that means that anyone theoretically can go and, you know, get electricity and
build hardware that they then add to a proof of work system to compete with the existing
proof of work participants. Whereas if you want to compete in a proof of stake system,
you actually have to go and buy out the existing token holders. So it kind of creates a model
where the people that are already in the system have a lot more power. It's harder, you know,
it's harder to compete with them because you actually basically have to buy them out. You
have to, you know, put more money into the system itself to get more of those tokens
in order to compete. So even Vitalik Buterin has referenced the quote unquote nobility
problem within proof of stake systems. And I'm not so sure that there's really like a
solution for that. But some people may not consider it to be a huge problem.
Yeah, Gordon, Gordon. And like, so we are talking about proof of stake and you talked
about Vitalik. And so how do you see other altcoins and other projects as well? Do you
see that, say we have Monero and Zcash, Decred, they are working on some specific problems.
We have Ethereum, which is building like a smart computer or world computer, which you
can run smart contracts. And we have done off other ERC20 projects. So how do you view
the space and do you feel that in the long run that these projects will add actual value
to the crypto ecosystem? In general, I think the projects that have
a more narrow focus are probably more likely to achieve their goals. You know, one of the
things with like Ethereum being this general purpose computer is that I don't think that
it's going to be able to do everything for everyone. I don't think, you know, anything
can be everything to everyone. And so, you know, as a result, it's kind of finding its
own identity. You know, over the past year or so, Ethereum basically became an ICO generator.
You know, what will it become next? I don't know. It's, you know, I think what any of
these systems are going to be, they are going to facilitate whatever actions are of the
greatest economic value to the people using the system. So, you know, I think there's
a reason why ICOs became so popular. It's because they brought a ton of money into the
system. You know, while stuff like CryptoKitties was popular for a little while, it's not something
that's ongoing because, you know, this is a resource-contrained system. And if CryptoKitties
are fighting for block space resources and CPU and gas resources against ICOs that are
pulling in tens of millions, if not hundreds of millions of dollars, then obviously the
people that are generating many, many, many millions of dollars are going to be willing
to pay more for the resources on the system, and they are essentially going to price out
the less economically valuable interactions on the system. So, yeah, I mean, I think that
a number of these projects will continue to be successful. Like I said, I'm most interested
in the privacy projects. Those are also very narrowly focused, so it's a lot easier to
judge, you know, whether or not they have been successful at achieving their goals.
But then these more general projects that are trying to do all kinds of stuff, it's
a lot harder to judge, I guess, how well they're able to achieve the goal of being a generic
world computer. So with regard to Ethereum in general, my kind of thesis is that value
has been shown that it's valuable to have this Ethereum virtual machine, this developer-friendly
scripting smart contract-esque language. What is less clear is whether or not Ethereum will
succeed more as a general protocol and scripting language or as a main network itself. And
what I mean by that is that the EVM has been adopted by a number of other projects, Hyperledger,
RSK, and I think a few other private blockchains, for example, because it's valuable. And I
can see that continuing to happen. But just due to the scalability issues in general,
it may be that the protocol itself becomes more widely adopted because you can then have
a thousand different networks out there that are running Ethereum compatible stuff, whereas
the main network may or may not be able to eventually scale up to process everything
that everyone wants it to do.
Got it. Got it. And when you work with CASA, you deal with a lot of institutional clients
and high net worth individuals. How do they see these coins? Because what I've observed
is people who got into crypto in 2017 or 2018, they actually are believers of ERC-20 tokens
and Ethereum. And it's very hard to tell everyone about Bitcoin maximalism and why Bitcoin
will succeed in the long term. So do you feel that like what sort of response are you getting
from high net worth individuals? And do you see that like say hedge funds or institutional
people who are wanting to create this sort of portfolio, they would buy into these shit
coins?
Well, yeah, I mean, you can't really categorize everyone into, you know, one single bucket
because there's a diversity of different people in the space. And, you know, at CASA, we are
a Bitcoin first company. We do want to help people just secure their private keys in general
for anything that is valuable. But, you know, we've even had issues with Ethereum and their
multi-SIG functionality or lack thereof, where, you know, we're trying to basically get some
consensus around a standard for multi-SIG on Ethereum so that we can actually integrate
that into our product. But yeah, I mean, when you start talking about people that are more
focused just on the investment aspects and they want to invest in this ecosystem as much
as possible, then yeah, you also run into folks that are more along the like almost
index fund style stuff of like, you know, I want to invest a little bit in everything
and hope that I find that next, the next Bitcoin, you know, ride the bubble basically. But in
my experience, like the folks who are what I would consider to be like extremely experienced
crypto investors tend to come at it from the mindset of, yeah, I'm investing in these other
things, but I'm doing it because I want to end up with more Bitcoins. So it's really
just a psychological thing, right? They're trying to get in before other people get interested
and then they want to get out before the interest wanes.
Right. A lot of these pumps and dumps are essentially that, you know, people are just
trying to steal Bitcoin from folks who have no idea what they're getting into. They just
end up sitting on a bag of a shit coin. Anyway. Okay. So one of my other questions is so like
TCP, right? HTTP is built on TCP, right? And TCP was never built with the privacy in mind,
right? And now 30, 40 years down the line, we are seeing this gigantic internet in front
of us, which has like no layer of privacy in bed. And then there are these corporations
pretty much like data thug corporations who are stealing data from every place that they
can. And they're trying to sell the data, work with the governments, and then try to
make money off of it and like help their spine buddies and whatnot. Right? So do you think
we are at a verge as humanity, we are at a cusp of like building a protocol where we
have like privacy as the number one thing and then everything else is built and over
where you don't need voter IDs, you don't need driver license IDs. You just have a pseudonymous
identity. And like, that's like reviewed wherever you go. And like, based on that, you get all
the services. Do you think we are heading in that direction? Or do you think that's
just like a utopia?
It's certainly more utopistic and very long term view right now. Because you know, the
fundamental problem is that you have to get buy in, you have to have, you know, enough
inertia for those type of systems to gain value, because you're essentially, you're
recreating, you know, these existing networks from scratch. And so, in the vast majority
of cases, we're talking about recreating what is essentially, you know, government
controlled networks. And so how do you do that, you know, without some sort of violent
overthrow of the government? I think that means it's going to have to be a much more
longer natural organic process where these distributed networks build up reputation over
years and decades and generations. And that eventually, it just becomes a no brainer that
governments end up using these, much like how, you know, governments are now providing
a lot of services through online websites, right? It just, it needs to become a mature
technology that people trust due to its history and long standing reputation of being trustworthy.
Right. Okay. So, but you foresee like, let's say a hundred years down the line, they're
definitely going to be like governments that are falling just because they can't print
any more money and their coin is a shit coin in itself. And people like start like trading
their goods and services in Bitcoin or let's say any other coin that becomes number one.
Yeah. Well, I mean, ultimately what I want to see is to create more free markets where,
you know, to take Bitcoin as an example, we're finally creating a free market money where
governments have never really had to compete with regard to money before they just dictated
how the money worked and the citizens had to do it. But just by simply having competition
in the first place, I think we'll force governments to provide better services. And, you know,
whether or not that means that the governments or some of them or all of them will, you know,
collapse and fail, or maybe it just means that they will become better. This is kind
of like the thesis of the sovereign individual, right? Is that by forcing governments to compete
more, they will continue to exist and offer services, but they will have to offer even
better incentives and services to try to get people to want to, you know, be the citizen
of that government.
Right. And so do you think we are like heading towards a regime where everything is a transaction
fee and there are essentially no taxes, right? Because like in India, they're from an entrepreneur
standpoint, there's like a 35% corporate tax, and then you give dividends or you get salaries
to the employees and they pay another 20 to 30% tax. And then there's 18% GST on top of
it. And then you pay tax on any road that you cross and like what not. So you're essentially
paying 50 to 70% of your income in taxes in India, where you're getting a service pretty
much similar to a government in Nigeria. So like, I can't like not pay my taxes, right?
So do you think like, are we like heading in a direction where we are going away from
a tax regime and more of a transaction fee regime?
Well, that's also where I guess privacy would come in, right, is having the deniability.
You know, if the government can't trace all of the transactions, then they can't tax it.
Because, you know, and then ultimately, you know, the ways that your governments operate
is almost entirely through fear. It's not actually through actual enforcement because
governments, they seem really powerful because they concentrate a lot of power, but they
are actually have very little power in comparison to the entire citizenry in general. It's not
possible for a government to throw all of the citizens in jail, for example, if, you
know, if all of the citizens of a country decided that a certain law should no longer
be a law and they just stop obeying that law, then the government can't actually, you know,
punish everyone. You know, from that standpoint, the more like natural organic governance of
whatever the consensus of a population is, I think, is more important. But of course,
you know, the fear and the monopoly on violence is where they are able to coerce a lot of
people into doing whatever they think is best. But the certain is that stuff is going to
change. And, you know, technology continues to evolve and accelerate. And, you know, we
can only make, you know, general guesses at the direction that it seems to be going in.
But, you know, the reason why a lot of us think that governments may be doomed is because
historically, you know, they're so bureaucratic and so slow to react to things that it seems
inevitable that technology is going to outpace the ability for them to just keep up with.
Yeah, I think that's an interesting perspective on like how Bitcoin and governments, how things
can happen. And I'd like to close this talk by talking about stable coins because they
are the current news topic. And so what what what do you see about the current stable coin
space? And do you see that like Bitcoin has been moving in the 6000 6500 ish range? Do
you feel that we like we need stable coins? What sort of purpose do you see they will
serve eventually in the future? And I'd like to particularly ask about die as well, which
is sort of like an open sourced stable coin, which runs on a particular set of code that
people can see. So is die the one on Ethereum? Yep, yep. Maker. MakerDAO. Yeah. I mean, personally,
I don't see a need for stable coins. Like if you're trying to escape the volatility
of Bitcoin, then you can use fiat. I guess it's more like having a fiat that you can
then transfer on your own, you know, have some of the properties of crypto asset that
is like public and permissionless. But I don't know why you would want to, to hold on to
a stable coin for a long period of time, it seems to be make more sense to maybe use as
a transfer value mechanism for short periods of time. So there's also just the fact that,
you know, stable is such a loaded and relative term. You know, nothing is actually stable.
It's all relative to something else. And over the long term, you know, these things are
pegging themselves to the dollar, usually over the long term, the dollar is going to
go down in value. I mean, that's inflation. Like that's one of the fundamental reasons
why this whole ecosystem got started in the first place. So, you know, I think, you know,
it's great that people have the freedom to build their stable coins and offer them as
products, but that, you know, a lot of them are flawed, and they're going to fail for
various reasons. You know, even Dai, I guess, on Ethereum, that seems to be doing reasonably
well from a volatility standpoint. But once again, you're building it on top of Ethereum
and the Ethereum network has been like constantly congested for, I want to say almost an entire
year, if not longer at this point. So, you know, I'm not sure how, like how much great
like adoption it's going to be able to get, because it's on a kind of shaky, you know,
technological platform there.
Got it. Got it. Yeah. And I'd like to close off by just talking about the Bitcoin price.
What do you think will trigger the next bull run for Bitcoin? Or do you see that we'll
have this, like say a bear market for one, two years, and then a bull run, or we see
a steady growth happening? Any thoughts you have in the price?
The only real thoughts I have are that you can't predict it. And if I'm remembering
this correctly, like historically, what tends to happen with price is that it'll be fairly
stable for a while, but that most of the volatility happens within like 10 different days, I want
to say out of the year will be the vast majority of volatility. So like when it shoots up or
it crashes down, these events tend to happen very quickly and you can't predict them. And
so, you know, that's why, yeah, sure, we've been stable for like a week or a few months
now. But at any time it could shoot up or it could crash down and, you know, then sort
of set a new price level for a little while. So, you know, I try not to focus too much
on it, but it definitely feels, you know, I've been through like three or four of these
boom and bust cycles now. And this definitely feels like it's the like slow creeping along
until something big is going to happen. So how long is that going to be? I seriously
doubt it's going to be a two-year bear market simply because we're so much larger than we
were before the last two-year bear market. There's so much more going on behind the scenes.
And I think we're going to continue to see big news coming out to like large players
like Fidelity, for example. There's a number of other large players that have been running
Skunkworks projects for a few years now. I think those are going to start to come out
into production use and that's when we'll see, you know, more mainstream adoption happen.
Yep. Yep. Got it. Yep. Yep. Yeah. Jameson, it was great talking to you. I and Vishal,
we learned a lot. And yeah, I hope that you like keep posting and keep contributing to
the community with the passion you have and you maintain that passion for a long time.
And thanks for taking the time. Really appreciate it.
Yep. Yep. My pleasure. Thanks for having me. Okay. Bye-bye.
Thank you. Take care. Bye. Bye.