Um, some of the most pivotal moments and things that I think have been impactful are not the
things that happen in the Bitcoin ecosystem or the advancements by its proponents, but rather
the self-owns of the detractors, the haters, the authoritarians. It's, you know, look at,
look at all the countries that banned Bitcoin over the years and how well that worked out for them.
Or, or more recently, you know, the federal reserve being pressed and, and saying, you know,
there is an infinite amount of cash, you know, and essentially creating a meme, the money printer,
go burr, which, you know, hit the mainstream consciousness and has helped, you know, propel
once again, Bitcoin into mainstream thought.
Welcome to the Swan Signal podcast, a production of Swan Bitcoin, the best way to accumulate
Bitcoin with automatic recurring buys at swanbitcoin.com. Swan Signal pairs great
guests for compelling discussions about Bitcoin and economics. And this week we have Jameson Lopp,
co-founder and CTO of Casa and Eric Martindale of Fabric. Pairing up great guests is a unique
format in the Bitcoin content space and, in my opinion, absolutely deserves consideration for
a spot in your rotation. Should you agree, you can subscribe at swansignalpodcast.com
and youtube.com slash swan signal. So glad you found your way here. Enjoy.
All right, Swan fans, welcome back to Swan Signal Live. This is, of course, a production
of Swan Bitcoin. Swan Signal is a weekly show that pairs up great guests for compelling
discussions about Bitcoin and economics. I am your host, Brady Swenson, head of education at
Swan. Before we dive into today's great discussion with two great Bitcoiners, a quick word about the
service we provide here at Swan. We have built the best way to accumulate Bitcoin with automatic
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You can be able to buy on the daily with your Swan accounts. I've had massive demand for daily
since the day we launched. It is coming. Go to swanbitcoin.com slash daily buys and you'll be
among the first daily stackers on the Swan squad. All right, let's get into this one. We have two
Bitcoin legends with us today. Both have been around since the very early years of the project.
Very well respected Bitcoin developers. I'm really excited to get to have the opportunity to talk
with these guys and share it with you all. First, we have Jameson Lopp, co-founder and CTO of Casa.
Thanks for joining us, Lopp. How's it going, man? Great. Happy to be here with my bearded brethren.
I have a little work to do to catch up with you guys.
The other gentleman with us today here is, of course, Eric Martindale. He's currently working
on the Fabric Protocol, an early layer three system for Bitcoin. Thanks for being here, Eric.
Yeah, awesome to be here. Good to see you again, Jameson. I guess apparently the beard comes with
the crypto knowledge. It grows out as you learn more, right? That sounds good. That sounds about
right. At least I have a little bit going on, so I guess I've earned a little bit of knowledge
over these couple of years. All right, so let's dive into this one. As I said, of course, these
guys have been around for a long time. Whenever I get a chance to speak with Bitcoiners who have
been here for most of the life of the project, I think it's really, really valuable to dive into
some history. Us are sort of newer to Bitcoin. I've been around for a few years now, and I know a
lot of you watching are even more recent than that. It's really valuable to learn about some
good perspective from the history of the project. We're going to dive into some history, and it's
going to be a lot of fun, but I think to set the scene in context, I'd really like to take a moment
to consider the present moment that we find ourselves in Bitcoin, because it's a very unique
one, even in the history of this very exciting project that's filled with unique events.
We're living in a time where the case for Bitcoin is really standing stark, even more stark than
ever against a backdrop of Keynesian monetary policy run amok. It's a time where some of the
world's biggest investors and even the biggest companies in the world are investing in Bitcoin
and converting their cash reserves to Bitcoin. It's kind of surreal in this particular year.
I don't think any of us saw all of this sort of mashing together into a six-month period so soon.
Jameson, we'll start with you, then we'll go to Eric. What's it like for you personally,
having been in Bitcoin for so long to experience these events unfold as they are before us?
When I think back on the things that I find most gratifying, it's not the fact that the Bitcoin
price went up so much. It's just that my crazy rants from eight years ago actually turned out
to be pretty accurate and all the folks who said I was crazy have to eat their words now.
You don't want to dwell too much on the like, I told you so stuff because there's always going
to be some element of that. Whenever you're talking about massive fundamental changes and shifts in
society and economics and so on, then obviously, there will be a lot of skeptics. It's, in many
cases, impossible to convince someone of a potential future actually being possible and then
we just see that that's like the one constant is that the world continues to get weirder and now
it seems like even the most implausible theory is about what might happen in the next few years
suddenly seem a lot more possible. Yeah, Eric, how are you feeling, man? I mean,
is this surreal for you to watch all this happening? Yeah, it is super surreal. I definitely
came at this from the libertarian angle initially and then I've evolved into an anarchist over time
but it really has been just an incredible series of events. You used to be the
tinfoil hat conspiracy theorist talking about the inflation from the Fed and how the fiat
currency was going to collapse. Even just a few years ago, it was really hard to say that
anything that's happening right now was ever going to happen. It was all like a very distant
idea in the mind. It was a way of just trying to help teach people about fiat systems and
central banking and so on and try to get them more aware of what's going on in the world
and how they can actually affect change rather than going through the political system.
Where we are now, it's just like a few years ago, we didn't even see this coming.
It's almost like a dream. It's a cypherpunk dream in a way. It's basically everything
that the original cypherpunk talked about back in the day. When Sochi came out with his white
paper, he really hit on all of those points extremely well and all of the talkings and
postings that he shared initially. We're almost 12 years in I think at this point, something like
that. It's gone even further than I think most people even in the very beginning days when there
was a lot of crazy ranty libertarians running around on the forums talking about the collapse
of the fiat system. We're witnessing it before our eyes just with the latest round of inflation,
global pandemic, and the government just printing more and more money basically in an attempt to
address the issue. At this point, as we've discussed many times on this podcast and
elsewhere as Bitcoiners, there's really no other way out at this point. We are in terms of the
Federal Reserve and US governments, meaning citizens of the United States are committed,
whether we like it or not, to this path of Keynesian monetary policy ride or die.
So fortunately, we have this escape patch, this plan B. I'd like to know, Jameson,
how do you see Bitcoin transition? Let me put it this way, how does the recent events affect
the way you envision a transition to Bitcoin playing out? Do you think it's going to pull
that future forward a bit? I think it was a combination of people being locked inside for
a long time and all of the macro events giving them more of an opportunity to investigate some
of these issues that people generally go most of their lives not thinking about that has resulted
in a resurgence of new, inbound interests. Now, obviously, there have been the more public,
like well-known investors and other public figures who have come forward to state their own bullish
case for Bitcoin. But at Casa, we're just onboarding a lot of normal new coiners, white-collar
professionals, people who they have enough wealth that they are thinking about, maybe I need to
diversify, maybe I need to hedge against some risks that I never really considered risks before.
So these things, they are incentivizing people to actually give a look at Bitcoin. Whereas before,
Bitcoin was a really hard sell to people in first world countries that had good access to
financial infrastructure. It was a much easier sell to people who were in third world countries
that were hyper-inflating or didn't have good access to banking networks. Now, those of us
who were deemed the crazy Austrian and libertarian folks in the first world suddenly seem a lot less
crazier. And I think it's just another one of the big use cases for this technology that
the value has always been there. And now it's just becoming more obvious because of the friction
that people are feeling. Yeah, just expand on that a little bit. Even in the early days,
it was sort of imagined that it wouldn't be the first world countries that would adopt Bitcoin
quickly. So it wouldn't be the United States. Certainly, the US would be the last to the table.
And you can kind of draw a parallel for reasons for that, like in the energy industry, for example.
So the United States has something like a 150-year-old electrical grid, right? So this
is all infrastructure that's already in place. It's already widely used. The lights stay on.
The water continues getting pumped. So there's really not that much room or not much more really
incentive for new infrastructure to be put in place, new technology to be put in place.
Whereas, say, in the developing world, for example, all sorts of places where they don't have
access to robust financial services, we always sort of anticipated that that would really be
where Bitcoin started to take off first. And you can see that sort of develop, at least initially
in the remittance market, for example. Bitcoin is a censorship-resistant money. And it allows you to
and it allows you to top borders, basically ignore national borders in terms of your ability to move
capital. So we really saw, for example, the Philippines, people sending money back to the
Philippines and using it to really just bypass these sort of legacy regulations that are in place.
So I do think it's sort of a rising swell. Obviously, we didn't really expect the banks,
per se, to kind of move into the Bitcoin industry as quickly as they have, say, seven or eight years
ago. It was sort of like, oh, one day, 20 or 30 years down the line. And now we have the national
bank of a number of different countries at this point, starting to talk about Bitcoin really
releasing reports on Bitcoin. You got the Goldman Sachs report on Bitcoin that came out. You've got
all these major financial institutions that here we are 12 years later starting to pay attention to
it because it has worked in places like Venezuela, in places like the Philippines, in all of these
places where there is either onerous regulation, these draconian systems which restrict how we
freely move money, or just there's an inflation problem, for example. And you see people being
able to lift up their families and support and build a dream where they wouldn't have been able
to otherwise because they saw this thing on the internet four or five years ago, and it happens
to have a deflationary design rather than an inflationary design. And as their nation's
currency collapsed, they were able to lift their family up and out of that situation and move them
somewhere else in a lot of cases. So I'm hearing a lot of stories like that. And that's really
what energizes me about Bitcoin is there is an actual tangible social benefit in the real world
for this stuff. And then obviously, we could go down the rabbit hole in terms of things that you
can actually do with it as a programmable money, for example. But just seeing that it's actually
solving a real problem in the real world, startups have to face that problem every day. So what's the
problem that you're solving for your customer? And Bitcoin's use case is definitely maybe a bit
esoteric for some, especially here in the developed world. But at the end of the day, this is a long
process, right? So that tidal wave, you can start to see is really swelling. And that's reflected
in the market prices, not that anybody cares what the price of Bitcoin is in fiat currency,
because it's going to get inflated all to hell. But no, I do think it's a huge groundswell. And
we're still at the very tip of that iceberg. Is that what originally inspired you about Bitcoin?
Did you see it as a way for people living in regimes with already failing currencies and
more autocratic governments as a way to kind of opt out of the power structure there?
Yeah, definitely on the broader sense. I look at Bitcoin as the tip of the spear
in the sort of slaying of this legacy idea that we need some sort of centralized institution
to run society. So I mean, frankly, government at large, this idea that some one man or one group
of people can write laws which govern over somebody else. I think Bitcoin basically demonetizes
the systems, it defunds them. So it's a way of basically forcing them to compete in the market
for the services that they're providing, liberating the market to compete on services.
So Bitcoin being seizureship proof, basically, it allows you to basically opt out and
participate in the businesses that you're interested in rather than having to comply with
whatever onerous regulation. In the US, we really don't even have it that bad. We have a central
bank, which was created in 1913. And personally, I view the fact that we have a central bank that
has the authority to hold a monopoly over the monetary system. Anytime you have a monopoly,
it obviously kills out all the competition, but you end up with much lower quality of services
at a much higher cost. But it allows us to dump dollars on the rest of the world.
Yeah, exactly. I mean, it puts us in a de facto tyrannical position, even if the Keynesians are
well-intentioned, right? Even if the Keynesians think that tweaking these dials and tuning these
levers is actually going to help people improve their quality of lives, however deluded that they
are, the damage is real. And people say taxation is theft, right? Well, inflation is an even greater
theft. I definitely agree that taxation is theft, but inflation is the more insidious one, because
it steals from everybody at the same time, and there's absolutely nothing you can do about it,
at least to address it directly. I was saying since 1913, ever since there has been a private
bank that has had the authority to issue the money, and the lawmakers are directly tied to it by way
of the 16th Amendment, at least here in the United States, which grants them the right to levy an
apportioned tax for the first time in history, 1913, the creation of the income tax. I basically
view every legal decision, every law written since that point in time, from my perspective,
is illegitimate, right? Because now that you have this height coupling, this marriage of
money and state, how can you possibly hope to have a legitimate political system at all? So Bitcoin
represents the separation of money and state. It's the opt-out. You have the voice-in-exit strategy.
It gives you the personal sovereignty, the individual autonomy. It allows you to express
your personal beliefs and decisions. I do think that absolutely, it starts in the areas of most
need. Because the US is certainly at the top of the ladder, they're really going to be the last
to the table. So pretty much everybody who's even aware of what Bitcoin is, at least in terms of
what Bitcoin is, at least just beyond the service level, is way ahead of the curve at this point,
even now, right? Yeah. All right. So Jameson, Bitcoin itself is a large orange pill to swallow,
like to relearn what money is. And I think for a lot of Bitcoiners, Bitcoin has done that.
If you were not a gold bug before, from the libertarian kind of monetary perspective, you
have been taught what money really is by Bitcoin. And that is a disorienting sort of shift in
worldview. And then you start to follow the rabbit hole down all of the consequences,
potential outcomes from that sort of change in the worldview. And Eric is making some,
like kind of walking down that rabbit hole. So as Bitcoin starts to really exert its force
globally, as it already is, I think we're seeing it happen now in real time, how does this
transition happen? I mean, we're not going to move directly from democracy is pretty lindy at this
point. Our current form of democracy, whatever you want to call it, you can debate the semantics and
all that. But the current form of government in the United States is going to resist change,
obviously. So is the monetary policy. So there's a lot to unpack there. How do you see Bitcoin
affecting the way we govern our society, the way we live? And how can that transition happen
in any remotely peaceful way, do you think? Oh, yeah. Well, that's the real question,
right? And this is where the stuff, talking about anarcho-capitalism,
potential voluntary society, it's somewhat easy to talk about living in a society that's already
fully in that type of frame of reference. But how do you get from point A to point B without a lot
of people killing each other? Because nobody willingly gives up their power voluntarily.
That's the major problem is that how do you take power away without a lot of bloodshed and violence
and whatnot? And that is going to be, I think, a very interesting transition to watch. Because
if you follow through the theory, some of these theories being that ultimately taking the power
of controlling money away from the state will disempower it in terms of things like taxation
or basically self-funding in a variety of different ways, both through inflation and taxation,
that that is going to make nation states very upset. They are going to probably do some things
that are violent. And the real question, I think, will be, what will the timing be like on that?
Will the nation states be too sluggish? Will they act too late, past the point of no return,
where the system has already become so decentralized and widespread that even
the power of nation states, which are very powerful when they can concentrate at a single target,
it's still very difficult for nation states to undergo something where they are having to fight
the entire citizenry. And this is something that I've argued with people about libertarian style
arguments, your second amendment arguments, like my entire life, is that there are a lot of people
who just don't seem to understand what the real power balance is. They don't seem, well, frankly,
the most nation states have done a very good job putting forward their monopoly on violence
and instilling fear in the populace, so that I would say a decent proportion of people are
fearful enough of their states that they think that, you know, if they do anything against the
state's wishes, you know, hellfire will rain down upon them. But they don't seem to understand that,
you know, even nation states are only comprised basically of, you know, a small percentage of the
actual population, and that they don't have the ability to force their will against a populace
that ultimately opposes them. I mean, we see this all the time, even with like dictatorships and
popular uprisings, it's like once you get a decent portion of the population to rise up, in many
cases, it doesn't even matter if they're armed or not, because they will find ways to arm themselves.
They will ultimately take the power that they need to, you know, fight back against whatever is
upsetting them. So, you know, will there be violence? I mean, I'm sure there will. It's not
going to be a completely peaceful transition. How long is it going to take? You know, years,
decades, generations, hard to say. But in general, like Eric was saying, like, the technology seems
to continue to impress everyone in the pace at which it is adopted and spread. And so, sooner
rather than later seems to be the answer for almost everything in this space. You know, there's still
so much work to be done, though, to make the technology more user-friendly, more secure,
more scalable, et cetera, et cetera. We don't have the perfect money yet, but I have believed
all along that the framework under which Bitcoin was originally created, money as an open-source
collaborative project, you know, a voluntary project where anyone who cares can contribute,
is the most sound foundation that you can have. Beautiful. Yeah, I think, like, there's a pretty
serious, I mean, a pretty serious issue with even, like, for example, even like 100 years ago here
in the United States, we had a very different kind of culture, right? People were more aware
of their individual autonomy at the time. So, we've had a long series of, especially here in
the United States, of events which have kind of led us to rely more and more on the government.
And I think that's put the population in a very vulnerable position, right? I view these sort of
centralized systems as, you know, vectors of attack, you know, just like Nick Szabo's famous
trusted third parties are security holes. You know, when you have a centralized government,
to your point about open source, you know, it's a security threat. It's an attack vector that can be
exploited. And just like we're even seeing out in the world today, you know, it's pretty dangerous
times when your population gets unhappy and turns to violence to attempt to affect their political
goals. But, you know, the open source model, you know, anytime power is changing hands, you know,
you have that sort of danger, right? But just to hit on Jameson's point there, like, the open
source model, like, rather than looking to take over the existing system, the existing structure,
and change it to suit your win, the better option is to build an alternative, right? And that's
exactly what Satoshi did, right? That's exactly what Bitcoin represents. That's exactly why Bitcoin
is an open source project that very strictly and firmly does not have a governance
component, right? It's not, there's no central committee, there's no company,
there's no authority that can tell you what software you can run, at least in terms of your
full node, right? It's very difficult to convince a lot of people of that, though.
And something that I've actually just started thinking about recently, and this is the problem
of proving a negative, is that, you know, I've written so many, like, FUD debunking articles of,
like, does Bitcoin Core control Bitcoin? Does the Chinese miner consortium control Bitcoin?
You know, it's, you can't prove that something doesn't happen, right? And that's kind of where
there's almost a leap of faith required for you to have, like, been in the space so long and looked
at the system from so many different angles. Yeah, that's definitely true. I mean, and it's
definitely, you know, coming from an engineering perspective, you know, knowing that, you know,
pretty much, you know, for my entire life, I have almost exclusively relied on open source software.
You know, I ran Gen 2 Linux for a long time, where every single program that ran on my computer,
with the exception of the BIOS at the time, but even now you can replace that with open source
alternatives as well, was doubt the source code was downloaded, compiled, and then built on my own
machine. So it's different coming from maybe our perspective, or my perspective, at least.
And it's much easier to see how you do have that autonomy. But from an outsider, I agree completely,
that's a very difficult hurdle to get over. And, you know, you can say that, you know, Bitcoin core
developers are maintainers of one of the implementations of Bitcoin, right? But that's
not very satisfying for someone for a market that, like, really, there aren't that many other
alternatives, you know, there's Bitcoin, there's a couple of other smaller implementations,
but they just don't have a presence. And if somebody wanted to make a change for themselves,
like, they don't even have the toolbox, let alone the tools in that toolbox, to start making those
changes. So you made a point earlier about how far we are, how much further we have to go in terms of
user experience. I think that's the biggest remaining hurdle, or, you know, boundary to cross,
is how do we give people easier access to tools, and easier access, like, for example, the power
that Bitcoin provides? You know, you guys do multi-sig, and, you know, there's all sorts of
custodianship stuff that's interesting. But, you know, how do we make these things easier to use,
and more readily ready as drop-in replacements for the existing centralized systems that they
already use? Yeah, it's just like, you know, we would probably agree, it would be great if,
you know, every American family had an AR-15 or two and a few thousand rounds of ammo. And we
think that that would, you know, make the country more resilient against things like, you know,
a tyrannical government attack. But you still, you wouldn't just print up a bunch of AR-15s,
and go dropping them off on people's doorsteps without some, you know, training and other
instruction, and, you know, trying to make these things not have literal foot guns in them.
Yeah, the education thing is also something that definitely needs to be improved and worked on.
And I think we see that kind of play out with some of the other, you know, copycats that have
cropped up since Bitcoin was released, is some of them even attacked, like, for example, Ethereum,
you know, really, really tried to make the developer process easier to try to build out
that ecosystem. But, you know, Bitcoin has some really, really important core principles, right,
that do make it somewhat difficult to convey those ideas to people or make them accessible,
at least, right? But at the end of the day, it becomes a more powerful system. It's a marathon,
not a sprint, right? You know, this is a 100-year plus societal change. So we can't just rush into
this and then not expect people to lose their money in, you know, bugged contracts and broken
engineering solutions. So I definitely think the education aspect of it, not only from that
engineering philosophy, that precision-oriented engineering perspective, but just from the
technology aspect itself, getting into the nitty-gritty of how Bitcoin, how smart contracts,
as Bitcoin is a form of smart contract, how these systems work and why you might want certain
properties versus others. And then the level above that is educating people about the utility of
these things and making it accessible for them to interface with them, right? And the more of those
systems that we have, obviously, and it's sort of like a funnel, right? You got to improve the
education, make people aware that these things even exist. You got to teach them how to build
things with them, how to use them. And then you got to make the tools not clunky and slow and
awkward to use. And then you got to get the market momentum. So it's just like this huge funnel of
all these individual pieces that we got to get through. But at the end of the day, I think it
does start with education and just continuing to share, basically, to share the
overall ethos and logos, for example, of what Bitcoin represents as a system.
That's what we're here for, right? I mean, a lot of us are working on, and I think we see the
importance of education just because this is such a massive change. It's kind of the polar opposite
of the way we've been running the show for a century. So I wonder though, I mean, I hear you
and kind of laying out the path, the funnel for adoption, but I can't help but think that we don't
like that. That's not going to be up to us, right? The developers and designers aren't necessarily
going to be able to be like, all right, we need to get this, this and this place. Now you guys can
come in. It seems like, I mean, that's happening now, right? I guess the demand is rising because
of events that are happening and people are waking up to Bitcoin being a better savings
technology. And in the capacity, in that capacity, as Bitcoin being a better savings technology,
it seems like we're in pretty good shape at this point. I think in other use cases down the road,
I agree, obviously, we have a lot of work to do, and I know both of you guys are working on this.
So let's, I want to get into Fabric and I want to get into CASA, but I did want to do a little bit
of history stuff first. So let's hit that and then we'll finish up with what you guys are working
on right now. So a question I had for you was, you know, what, like what, for you, what was the most
pivotal, pivotal event in Bitcoin's history and why, and can you share us, you know, give us some
context and color about your experiences you went through it. And you both can't pick the, the, the
four cores, S2X, you have to pick one. So who wants to go first and take the low hanging fruit?
So who wants to go first and take the low hanging fruit? I mean, I'll take the easy low hanging fruit,
right? And that was, that would probably be Mt. Gox. So I mean, in the early days, you know,
right as Bitcoin was happening, right, you know, we had this huge financial collapse, you know,
there was a lot of trust that people just kind of assumed was going to be followed through on. And
we saw the, we saw the 2008 financial crisis, and then pop, here comes Bitcoin, like right at the
most perfect opportune moment. And, you know, it represented a lot, it was fairly cohesive,
at least in the beginning, as to what it represented, right, it was a sort of a
cypherpunky movement. And in the cypherpunk, in the cypherpunk ideology, you know, it's,
we've all we've been talking about this stuff for years, right. And so to see, to see Bitcoin go,
just a couple years later, you know, and there was the Bitcoin Inca hack before that. So that was
another exchange that existed. And there was a couple of other really small ones. But as Bitcoin
had started to gain momentum and speed, you know, the exchange rate was going up, it went from zero,
right, to $2, and then $6, and then 20 something dollars. And, you know, have it have it, I don't
remember exactly what the price was probably something like 200 or something like that,
when Mt. Gox went down. Seeing people sort of forget what the whole thing was about, which is,
you know, decentralizing that, that power, decentralizing the ability to have a stable
sound currency, a sound money, and putting it in the hands of the people so that it couldn't
be inflated away by Keynesian economists sitting off somewhere. And to see like Mt. Gox, in
particular, I think that woke a lot of people up and kind of gave us a course correction.
Because that really is where the not your keys, not your money meme kind of came from is a lot of
people lost a lot of people lost a lot of money during that debacle. And it was it was really
unfortunate. But it was really a demonstration of exactly why you don't trust a centralized
institution with your money. And if not, you treat it like an investment. So I'm really glad that,
you know, the ideology, if you will, speaking broadly, has somewhat unified around this
self sovereignty aspect of what Bitcoin provides. And today, we see that savings narrative kind of
may develop and really be defended well, because of that, but I do split it into like three phases,
right? Like, initially, it's kind of perceived as an investment for the future for the eventual
collapse of fiat currency, right? And then, you know, as we hit the middle of the S curve, right,
you know, there's a debt, that's the savings period, right? Now, now it's still an investment
of sorts, price is still going to the value purchasing power of Bitcoin is still going to
continue to increase. And then as we hit that top of the S curve, as we achieve market penetration,
and more and more people adopt Bitcoin, then we hit that consumer adoption aspect. But I'm just
but I'm just super happy that, you know, we've at least many people who are in the Bitcoin ecosystem
have learned their lesson about centralized systems. Unfortunately, it was an expensive
lesson for some. I think I even lost a couple a couple of Bitcoin there. But, you know,
c'est la vie. So but I'm but I'm glad that that that meme continues, you know, not your keys,
not your money. Yeah, James, and I want to hear, you know, your little story history story for us.
But, you know, Casa was born out of this meme, right? I mean, that was kind of the the genesis
of Casa eight years before the, you know, idea that you've got to get your money off exchanges
as soon as possible. Otherwise, it's not your money. Can you talk about like, I mean, I assume
that that's something that's been motivating you to work on Casa for a long time. And, you know,
just like talk about how you guys have made it way easier to hold your own keys. And it's, you know,
I'm a customer. And, you know, it's a few clicks. And it's really easy to hold your keys within a,
you know, very, like, secure way, much more secure way than holding it on a single device.
Yeah, you know, there are a ton of things that you could talk about point to with,
like, the amazing advancements that the Bitcoin ecosystem has made over the years.
It's, you know, especially been fascinating to watch, you know, second and third layer protocols
being developed at very rapid pace, because, you know, they don't need to get consensus
from the entire ecosystem to do that development. As for myself, you know, I've spent the past
five or six years now doing what I consider to be really, you know, boring, low level work,
which is just private key management, you know, it's a very fundamental problem that still has
not been fully solved. Like, I don't believe I won't consider this to be a solved problem until
we stop hearing about people losing their keys until we stop hearing about, you know, people
getting hacked and having their money stolen, though it's really the self loss that is, I think,
the bigger problem, at least at this point in time. And so that's why I really say it is a lot
about usability and the, I guess, short version of what we try to do at CASA is, you know, we look
out on the entire ecosystem and all of the best practices that we've learned through a lot of very
hard lessons over the years. And then we ask ourselves, well, we know that basically none of
the users are going to read the fucking manual. So how do we build the software to guide them
through the best practices? And that's how we end up with what is a fairly simple and yet elegant
interface in CASA. We actually strip out probably 99% of the possible things that you could do with
the Bitcoin protocol, because most of them are foot guns. And we say, you know, this is how you
get yourself into a nice, robust, manageable, like vault style cold storage setup. And there's still
a lot of work to do there. I mean, there's still, there's more complexity than I would like. I've
got plenty of plans for ways to continue to simplify it. It's fun to look out and see the
advancements that are happening like in the hardware device ecosystem. We're going to start
to see new generations of dedicated hardware key managers come out and continue to evaluate and
look at those. And CASA, we don't want to invent anything novel. With security, novelty is often
a bad thing. We don't want to roll our own crypto. We don't want to create completely novel security
models. So we're going to just keep doing what we do, ingest everything that there is to ingest,
and then try to distill it down to like the most awesome bits of security and usability. But I
kind of like to get back to your question, though, since I can't say four cores or UASF or anything
like that, I would actually say some of the most pivotal moments and things that I think have been
impactful are not the things that happen in the Bitcoin ecosystem or the advancements by its
proponents, but rather the self-owns of the detractors, the haters, the authoritarians.
It's, you know, look at all the countries that banned Bitcoin over the years and how well that
worked out for them. Or more recently, you know, the Federal Reserve being pressed and saying,
you know, there is an infinite amount of cash, you know, and essentially creating a meme,
the Money Printer Go Burr, which, you know, hit the mainstream consciousness and has helped propel
once again Bitcoin into mainstream thought. That's a great point. It's an absolutely great
point. At that point, we had Bitcoin sort of just narrowed down to two memes. It was
Money Printer Go Burr and Bitcoin Fixes This. That's all you need to know about Bitcoin and why
the use case in the elevator pitch. So I want to talk a little bit more about, I mean, by the way,
thank you guys for what you know, what you guys do at CASA. I think we have, you know, still
obviously a massive uphill battle on the not your keys, not your coins front, right. And as we get
more people saving Bitcoin, holding Bitcoin for the long term, as I think that trend is really
picking up with, you know, the massive investors coming into space and the MicroStrategy news that
they're just turning their corporate treasury, 60% of it into Bitcoin. Bitcoin as savings
technology is, you know, out there. It's happening. So it's just going to keep ramping up over the
next couple of years. Now, the OCC, which is a department of the treasury that I don't think
anybody had ever heard of before this announcement, at least to Bitcoiners, I hadn't now say that
banks can custody Bitcoin legally in the United States. So it's obviously going to be the, you
know, path of least resistance for people just to open up a Bitcoin account at their local bank or
at the Bank of America and start saving their putting, you know, buying a Bitcoin and putting
it there still in custody or whatever, or maybe a Bank of America starts selling Bitcoin probably,
right. So, you know, how do we, how do you see us besides just building the products and having
them out there? And obviously education is a piece of it. But do you have hope that we'll be able to
keep most or at least enough Bitcoin off of, out of third party, you know, large central third parties
custodianship? I personally think absolutely. I think just looking at the technology development
and seeing how, certainly in the Bitcoin space, but far less so in the alternative, right. So,
so all of the other altcoins, you know, they're all locking their, their funds up in other people's
multi-sigs, throwing their money in exchanges. It's kind of ridiculous to watch that all happen.
But meanwhile, you know, in Bitcoin space, you know, we have, you know, these, the name is escaping
me right now, but we, it's a desktop trading app. Basically, it's, it doesn't, it doesn't have an
exchange, but we're seeing the development. Bisc. Thank you. Bisc. It used to be Bisc. That's what
I, that's why I was like, I can't remember Bisc. That's right. So, so we have Bisc, you know, I'm
working on a project called Portal Through Fabric, which is, is trying to use Bitcoin's HTLC
component to build these decentralized, or these contracts that don't rely on central depositorship.
And so, so I definitely think the technology is there, but just like we kind of thought covered
in the beginning of the call, you know, it, it, it has to be usable, right? That, that's, that's,
that's the tough part. And quite frankly, I mean, centralized systems, especially exchanges,
and the potential opportunities to make money, which are capital investments rather than savings.
And it's more of a gamble than it is just buy and hold, right? So there's a bit of mentality,
there's a psychology thing that has to go on there as well. But these systems are like,
definitely in their fledgling state, but they exist. And that the fact that we see them so early
in Bitcoin's development is a very, very positive sign, right? So the fact that that meme has stuck
around not your keys, not your coin, the fact that everything other than Bitcoin, the fact that,
you know, centralized systems continue to get hacked, right? These honeypots, these aggregators,
where instead of, you know, where if I can go rob, you know, the bank, rather than having to go
around pickpocketing 200,000 people to get the same amount of money, I'm going to go rob the bank,
right? So it's going to continue happening. You know, in other more poorly thought out systems,
you know, the security bugs are going to continue happening, these, these flaws are going to continue
getting exposed. And I just think that that trend continues. I mean, sure, the overall volume
of, you know, influx into Bitcoin is definitely going to continue to grow. Even the trading
across the altcoin markets is going to continue to grow. Centralized exchanges are going to
continue to grow. But as that continues, as the technology develops out, the proportion
of alternative decentralized systems, or at least trust minimized systems, is also going to grow,
and as a proportion, not as a direct as a linear metric. So I definitely think, yeah,
the savings aspect is a huge component of that. And the fact that, you know, you can put your
Bitcoin onto, you know, onto a steel key, you can stamp it into a sheet of steel, and then,
you know, bury it in your backyard, and then come back to it in 20 years, and then go purchase your
your rocket and fly to Europa, right? So that that that is the sort of time scale that you know,
I think the that's the low time preference that I think, you know, a lot of Bitcoiners at this point
are starting to look at. So I do think that the portion of the market, however fast it continues
to grow, that is on that is relying on trust, is going to continue to demonstrate its previous
pattern of failure. And that portion is going to continue to shrink as as people realize how like
what is actually going on. You know, there were there were even early adopters like Hal Finney,
who opined upon the idea that, you know, maybe Bitcoin does end up mostly being held in vaults
by banks, you know, kind of like gold as a, you know, reserve currency. And even though that would
not be optimal, in terms of, you know, entire anti fragility of the system, we would at least
still have the ability to audit, you know, the total supply, we know that they're not inflating
it, you know, there's no central bank that control it. But I think that this is fundamentally one of
the things that I'm fighting against is that unless we continue to build more and more user
friendly self custody products, that is an inevitable future, because we know what the average
person is, you know, capable and willing to do in terms of, you know, amount of time and effort that
they want to spend thinking about managing their money. So we do need to make self custody
sufficiently robust that people are confident that they can do it themselves is this is a recurring
theme that I hear in the system is, you know, sure, there are a lot of newbies out there who
don't even really know the difference. And so they never withdraw from wherever they buy. But
there's also quite a few people who do know the difference, but they're not confident enough.
And they do believe that, you know, leaving their keys with a trusted entity that has a bunch of
specialists that, you know, worry about the security of those keys is for them possibly
a better risk reward ratio than taking on the onus and the responsibility of self custody.
Absolutely. Yeah. And that I mean, I love hearing I mean, it makes sense. I hadn't thought about it
that way, Eric, that, you know, the central centralization is going to centralization,
they're going to do it does it's going to fail and those it's going to continue. I mean,
mount docs lessons will continue to happen and push people toward the easy, you know, easy solutions
like casa. All right, I want to dive into fabric, I don't know much about fabric. And I think it's
probably, it's probably the same for a lot of people watching today. And really excited to hear
about, you know, this, it's a new layer three, layer three protocol, which is just kind of cutting
edge in and of itself. Because we're sort of, you know, we have some layer two protocols that
Bitcoiners have kind of gotten used to lightning and liquid. I also know that you were involved in
liquid. So if you want to comment on like how you think the state you know how you liquid has evolved
and comments on that, and also tell us about fabric, that'd be awesome. Yeah, sure. So
just to kind of give the overview. So fabric is starts from the origin, the the idea of building
what's called an information market. Right. So this this is a an exchange, if you will, an order book
of information that you can buy and sell. And fabric is a is intending to build a system which
utilizes bitcoins, HTLC and smart contracting capabilities to allow you to participate in the
exchange of information without having to rely on a centralized authority. So perhaps the biggest
application that, you know, that historically would benefit from this model or has been built
that somewhat represented is the World Wide Web. Right. So right now, I mean, and it fundamentally
it radically changed the world much in the same way, although perhaps a little bit less over the
long term than Bitcoin has. But the World Wide Web is this idea that you have these documents,
these these pages that live on a server, and your web browser acts like request, you get a link to
one either from another web page that you've already visited, or from a front or you type it
in or through a search engine these days, or what have you, and you discover this document.
So the simplest case is that rather than sort of your web browser sending a request to the server
to download this document from that implicitly centralized authority, why not broadcast a request
that has some attached amount of Bitcoin, for example, that says, hey, if you can get me this
document that I'm this piece of information that I'm looking for, you can claim this money on the
flip side. Right. So there is a construction known as a zero knowledge contingent payment. And
basically by delivering the document that I requested, you now can spend the funds that I
I bonded into my initial request. Cool. So yeah, I mean, if you're familiar with HTTP, I think it's
HTTP 402, or something like that, payment required, right? It would be an alternative, almost a, it
could be an upgrade to the existing World Wide Web. But unfortunately, the way the World Wide Web
as an application that sits on top of the internet, the World Wide Web is, has so many points of
centralization in it already, right? HTTP is a protocol design is already pretty much, you know,
it's implicitly centralized, right? You're sending a request from a client to a server that's in the
protocol design, all the way down to DNS, right? So there's a centralized authority on DNS. There's
ICANN, which controls internet IP address, the IP addresses, and the domain name system. And all the
way down to BGP and the routing protocol. I mean, BGP is certainly a lot better than as a routing
protocol. That's the fundamental layer at the base of the internet that determines how traffic moves
around the internet, right? So that's probably the single biggest application, but there's a lot of
components. And we're actually, we've actually been working on this project to some extent since 2015.
So even before I joined Blockstream, I had just come out of BitPay, where at the time, BitPay was
actually really interested in things like payment channels and building open source stuff. But there
was a fundamental shift in BitPay's philosophy at around the 2014 timeline. And unfortunately,
they went a different direction. So that summer in 2015, I basically, I wanted to take a lot of the
ideas that we had come up with and build something around them. So just to describe the layer three
thing, you know, Bitcoin is the base layer, we say layer one. In the monetary world, we might even say
AM0, right? So it's the amount amount of physical currency that actually exists, at least in the
case of Bitcoin, it's the base supply. The Bitcoin blockchain is obviously a very expensive distributed
database, right? It's a database that's probably going to last for about for at least 10,000 years,
I think, right? So if you put something into this database, you know that it's going to be there for
an extremely long time, right? So and it has thermodynamic security properties, etc. We all
know all of that stuff. So it makes a lot of sense to use that kind of system as an anchoring point
for a layer two system. And you see this exact taking shape exactly in the form of lightning
and liquid. And you know, lightning is a payment channel network, payment channels have been
talked about, you know, for a long time, all the way back, you know, at least as far as 2012, I
think, certainly, I'm sure there's been posts on the forums before that, I'm pretty sure. And it's
this idea that you have rather than set like, like, putting the transaction into the network
and letting it confirm in a block, right? You simply exchange information with a group of peers,
and update a single transaction or a group of transactions over time. And then if you choose,
you can then settle back out onto the chain if you want to. Or like the lightning approach,
which was a, you know, there was a group of projects around that time that kind of had very
similar ideas. And I think we're very fortunate that lightning has developed as far as it has.
But instead of settling back out on chain, your payment channel, you can use that as input into
another payment channel and build a network of those payment channels. So that's your layer two
network, you know, where Bitcoin has, you know, this 10 minute interval between block times,
right? So it really, it actually doesn't really make that much sense in terms of like internet
payments, right? You know, especially when you when you want to pay an invoice, you know, you
don't want to wait, you know, one confirmation for it, let alone really the three or six or 12
that you really should be waiting to guarantee that you have that money, right? So the this layer,
these layer two systems really give an opportunity to kind of use the Bitcoin base layer properties
and adapt them into something that's a little bit more target specific. And payments is very
specifically one that is obvious, right? lightning does instant payments, and you have instant
understandings and guarantees about about whether or not your funds are good. So fabric sits at
layer three. So if we look at this as a protocol stack, right, we have the settlement layer,
we have a payment layer where there's instantaneous movement of funds. At layer three,
we do what's called computation, right? So this is this is where we build actual machines or
programs which can run inside of these these networks. So if you wanted to implement, for
example, a Turing machine, you would be able to do, you would be able to do that here safely
at layer three, rather than implementing it, for example, at layer one, like Ethereum chose to do
a Turing system, you would be able to pay for each each cycle in the in the in the contra,
basically passing messages around from peer to peer, or we call this, I mean, we don't call this
the academic community calls this secure multi party computation, right? So multiple people
participate in this computation, there's some cryptographic elements that allow you to homomorphically
steal that information. So none of those people can actually read the information. But it but it
but it but it produces meaningful output that you can that the initial requester can actually
interpret and process. Right? So so this that's that's where fabric sits is at that layer three.
And, you know, we, this is definitely a precision oriented problem, which is part of and there's a
lot of different moving parts as to, you know, that have to be built in order for this to exist.
So for the past, you know, couple years since I since I left lockstream, you know, I've been
building out those components and doing protocol protocol work, building out smaller pieces of
pieces of software libraries that are part of the system. And we're, we're pretty close to a, you
know, something that we can actually publish that could could be reviewed, I hope, by the community.
And with a working demonstration and everything. So we're pretty excited about that.
But yeah, that's the overview. That's the 10,000 foot overview without getting into all the crazy
math of homomorphic encryption. Well, so that kind of kind of going back to something I referenced
earlier, you know, with with all the complexity, how do you deal with like trade offs of complexity,
security, usability, like how, how comfortable do you feel building on top of a layer two protocol
that's still evolving? Right. So that that's part that's actually a very big portion of the reason
why it's taken so long to get where we are, is we we love liquid, we love lightning, we've kind of,
I still like liquid, I think it's a halfway solution, right? You know, multi sig, first of all,
is actually vulnerable in Bitcoin land, at least the way it's implemented today until schnorz
signatures get merged, which should be happening soon. And I'm very stoked about that. That path
route. But, you know, I'm a big fan of lightning. But it is indeed actually very, it's still fairly
early, right. So what we ended up doing is we took a much simpler construction for payment channels.
And we built our own peer to peer network. So we ended up having to also implement a layer two
solution that is similar to lightning, but is much much more tightly constrained in its capabilities,
right? Lightning tries to do a lot of different things, actually, right now. And that there's
some really incredible work going on over there between Lalu over at lightning and Christian
Decker at Blockstream. They're both doing incredible work with, you know, multi path payments and,
you know, all sorts of really awesome stuff. But our approach has been to refine everything
down to the simplest, the smallest possible use case, and then refine it into a software library
that's only doing that one thing, right? So do one thing and do it really well. And ultimately,
sometimes we find that a particular problem actually can be divided into three other problems
that then we solve individually on those. So we end up with all of these like, small pieces
that ultimately are composable tools in a toolbox that, you know, you can use to build things down
the line. So, you know, this, this is a, you know, this is the same kind of atomic approach
that the Unix philosophy is, right? It's the same idea that, you know, you don't want your program
to get bigger and bigger and do so many different things, you know, you can, you can build higher
order complexity from small, simple components, if you make them composable, right? And in computer
science, Jameson, I'm sure you know this stuff. But, you know, this, this idea of functional
programming, and lambda calculus at large, is this idea that, that, you know, these, these individual
functions, which only take one input and produce one output, you, that, that is that composability,
you can put those things together and build higher order functions from them. So, yeah, just, just
keeping things limited and, and domain oriented, and not allowing scope creep, which is, which is,
which is tough, right? You know, there's always something that we want to build some, some cool
product or some customer that, you know, we want to, you know, help them build their thing. But
it can, it very quickly can expand and it creates an attack surface, right? So what are, what are
some product, what are some product examples or use cases, specific use cases? Yeah, sure. So, so
the, the biggest one, the biggest customer that we have right now that, that is probably the best
fit is doing medical data processing. So in the US system, I think actually it may be worldwide,
but there's, there's this idea of the HIPAA regulation where any medical service provider
who is collecting patient data, it's kind of a stupid rule, but basically you have to make your
best, you have to make your best effort to, to protect that data from, from being leaked.
Uh, with, with fabric, we actually have the ability, uh, with homomorphic encryption at large,
uh, you have the ability to, uh, put that, encrypt that patient information in a way that only the
patient can decrypt it, right? And still make it so that, uh, medical software and medical providers
can, uh, generate, uh, meaningful information. So for example, uh, you know, dos, dosages of a,
of a certain drug, for example, like if you've taken somebody's lab results, you know, and then,
you know, you process, pass it into this, uh, algorithm, which outputs the appropriate dosage
of whatever, uh, drug that you want to giving them. That information doesn't, I mean, removing
the need for a human, human oversight in some of these systems. Um, the, the simpler ones are,
are very clear cut cases of literally no one should ever be able to see that data except for
the individual patient, right? For, forget this regulation thing of protecting that data, forget
this like idea of using the legal system and, and hoping, trusting that this information is safe,
right? It would be better if it was simply mathematically impossible for that data to leak,
right? Or for that information to be decrypted. So that's, that's one that I'm, I'm super excited
about, but we've, we've got a portal, which is, uh, uh, it's a trust minimized exchange, basically,
uh, that uses the same contract to do what's called dark pool. So, um, uh, encrypted order books,
uh, where you put your order in, you can't actually read the order book, uh, and it either
executes or it doesn't. Um, so that's, that's really exciting and interesting. But yeah,
amazing. Yeah, it's exciting. It's really exciting. Um, and I'm looking forward to seeing what you
guys ended up publishing and the conversation around it. And, uh, it's just, it's really exciting
what's going on in Bitcoin. It's still such early days on all fronts. And, um, it's still
early days on all fronts. And to be here with eyes open, uh, at this point in the project history
is, is, uh, you know, a privilege and an honor and going to be a, just a lot of fun to watch it
fold. So I want to thank you guys, both of you guys for your time today. Keep up the great work.
Thank you to Casa. Thank you to Eric and the work on fabric, really exciting stuff. Um, thank you
guys for tuning in and watching, educating yourself about this very important project. It's very
important movement in, uh, in the world today. Uh, continue to educate yourself, continue to stack
your stats, swanbitcoin.com and, uh, happy third anniversary to the birth of the BTC pay server
project. You can go to swanbitcoin.com slash BTC pay and 25% of all of your fees for every purchase
you make, every automatic purchase you make will go to support the project. So check it out. Thanks
guys. That's a wrap. Thanks. Bye. On behalf of the swan team, I'd like to thank Jameson and Eric
for taking time to join us today. It was a lot of fun. You can find Jameson on Twitter at lopp at
L O P P and Eric is at Martindale at M A R T I N D A L E. We hope you enjoyed this episode of
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