What's going on, everyone? Welcome back. This is Ryan Selkis at 2-Bit Idiot, another episode
of Misari's Unqualified Opinions. I am ecstatic to talk to my guest today, Jameson Lopp, who's
one of the most personally impactful folks in the industry as I started following Bitcoin in 2013,
and just given the wealth of information that Jameson has voluntarily put out for free regarding
Bitcoin over the years. He embodies the ethos of the early community especially. I'd like to say
the community still, but obviously it's gotten a bit more commercial and mainstream since then.
We're going to talk about personal privacy, personal security, and ultimately that's going
to dovetail nicely into talking more about Caso, which is a self-custody platform focused on Bitcoin,
but that I believe is branched out into other assets as well that Jameson can speak a little
bit more about. As the CTO and co-founder, are you now the CEO and president as well?
I'm sticking to the technical side of things. We have had a CEO transition recently. We basically
brought up our long-time product manager to step into that role, but I'm happy to stay away from
the business side as much as possible. Excellent. Well, I understand that and certainly on brand
anyway. Jameson, why don't we start just with your origin story? I'm going to caveat that for
anyone that's watching that isn't already familiar with you by saying, I think the expectation is
that there is little to no personal identifying information that you will contribute in terms of
your early days and where you're based and maybe even prior work history. As much as you can tell
her in the way that you want to share what got you into Bitcoin and how you came down the rabbit
hole and got to be in the position that you are now where you've more or less been in the thick
of things for nine years now with respect to Bitcoin development in particular. Yeah. I've
been full-time Bitcoin for about five years. I was an enthusiast for a few years before that,
but really I got interested both from the libertarian philosophical side and the technical
side. I'll never really remember the first time I heard about Bitcoin because like many of us,
I dismissed it several times before I actually started looking into it. But once I actually did
and read the white paper, I realized from a computer science standpoint that this was solving
a very interesting problem that I had never thought about before. And then also as I stepped
back a bit and just thought of money and how that operates, the idea of money being this abstract
concept that should really not be owned by anyone or any group, it made sense to me that that should
also be an open source collaborative project. So I felt like trying to create the optimal form of
money as an open project seemed like it had a pretty good chance of succeeding, even despite
all of the technical underpinnings of what was happening at the protocol level.
You know what's interesting? I mean, people talk about Bitcoin and cryptocurrencies more generally
being anti-fragile systems, right? Some are obviously more fragile than others, but there's
certainly this, it's the Lindy effect, right? The longer it doesn't die, the harder it becomes to
kill, right? And what I have noticed, and I'm sure this is consistent with what you've experienced
as well, every single problem that has emerged with Bitcoin and to a lesser extent with Ethereum
as well, it ultimately seems to get addressed because the community is strong enough, the
cohort of true believers and missionaries is strong enough where folks just emerge to solve
problems around the periphery, whether it's infrastructure on the trading side, whether
it's custody, whether it's even marketing, whether it's refining the cultural ethos of the project
in a decentralized fashion, which we saw play out over the course of 2016, 2017 with SegWit2X and
you know, what was at the time and maybe for the foreseeable future, the most contentious protocol
change that we've seen in the industry. How have things changed or what has your experience been
in watching some of these problem areas ultimately just fade away? And how do you think about the
magnitude of today's challenges versus the challenges five years ago that were solved or
generally speaking, like rank order, where we've been and where we're going in terms of threats
to Bitcoin and whether this is now an inevitability and we've gotten, you know, so anti-fragile as a
community or as a system or it'd be very, very difficult to shut this down because you are,
I would say, in one of the cohorts of true believers that says, well, you can never stop
running the software, which is true, but I'm wondering more about the practical elements,
right? You know, what emerging threats would we still have to overcome or what issues would we
have to de-risk and how does that compare to previous challenges?
Well, that's a lot to unpack. But really, I think the main thing is over the past few years,
we've continued to improve our understanding of what the system actually is. That's kind of
my thesis that I wrote a few years ago with the CoinDesk piece that was entitled that nobody
understands Bitcoin. And that was mainly a point I was trying to make of, you know, even a few
understand everything technical about the protocol or even if you're a renowned economist or even if
you're a businessman who's building companies that are worth billions of dollars, there is no one.
And I would say even Satoshi, if they're still around, no one can fully comprehend like all the
different aspects of this system has just grown to be so large and have such a diverse group of
people with different incentives that are all playing off of each other. And also, we're still
figuring out the game theory of how the system moves forward. And it's these stressor events,
I would say, in reference to the anti-fragility that you were talking about, that that's where
we learn the most is when things start going wrong. And when people are suddenly incentivized
to come together to try to fix a perceived problem, it may not even be a problem that
everyone agrees is a problem. But it's these stressors that kind of force us to try to
collaborate with each other. Sometimes that results in more fighting and even now forking
off and splitting. And it's just been fascinating to see that evolution over the years. And it's
hard to even think through all of the possible future stress events that may happen. I mean,
we can definitely rattle a few off the top of our head, like scaling is an ongoing thing.
Privacy, I think, is going to become a bigger and bigger issue in the short to medium term future.
But fundamentally, a lot of this, at least the internal strife within the community,
is around the fundamental question of what is Bitcoin. And that's one thing that all of us who
are deep into this are still trying to wrap our heads around, at least until we get to the point
where the protocol is completely ossified and nobody even wants to try to make any changes
to it anymore. And we're probably still a fair ways away from that. But I think that's
one of the things that could kill Bitcoin. I'm sure that there are. Essentially, you would have to
sufficiently demotivate all of the Bitcoin proponents so that they felt like it wasn't
worth their time to try to fix or improve or maintain the system anymore. And maybe that
happens because something that's orders of magnitude better comes along and it's not worth
working on the old technology. Or maybe it is because of some sort of catastrophic event
that people don't think is recoverable from. But it's kind of like what you said. Either you
believe in it or you don't. And part of it, I think, is almost a self-fulfilling prophecy of
if you have a sufficient degree of incentive and belief that people are going to continue
to build on the system and make it work, then it will continue to work.
My impression is that after SegWit 2x, we're going to cover all that. There's, again, a lot to
unpack there. And I did throw an open-ended question so that hopefully it would elicit
exactly the response that you gave, which I think opens up five or six different
rabbit holes that we want to dive down. But the one that maybe we can start with is the
what is Bitcoin? You said you still grapple with it culturally. And I love Spencer from
Blockchain Capital, his analogy of the platypus. Is it a duck? Is it a beaver? Is it this weird
looking thing that when it was first discovered, the biologists that saw pictures of it from the
folks that were in Australia that discovered it said, well, this is not real. It's clearly
some elaborate hoax. Bitcoin has some elements of that for sure. Is it a currency? Is it digital
gold? Is it a payment system? I would argue that the SegWit 2x resolution, which ultimately led to
the user-activated soft fork, which essentially ensured that only SegWit would get implemented.
There wasn't going to be any consensus level change that would necessarily create a hard fork
in terms of raising the block size, which sounds from an outsider looking in like a technical issue,
but was really an issue about sensor ability of the network and who controlled it over time.
If you look at the resolution, it almost seemed like the decision was made culturally,
if not directly, at least implicitly, that Bitcoin is digital gold and it's a settlement layer.
Right? If you need a high value transactions to clear, this is the nuclear bomb resistant
protocol that will allow you to do that because it's been so hardened and it is so difficult
to co-opt even if you have a bunch of business operators and miners in the same room that are
trying to push one agenda forward, even if it looks like a smart compromise at the time.
I'm curious if you believe that, first of all, that is true or if you're still open-ended about
it because the only counter that I really hear is folks that might say, well, Bitcoin is money,
but those Bitcoin is money folks tend to be the same people that 10 years ago probably would have
said gold is money. Right? So I don't necessarily view there being a distinction. Is that consistent
with what you think or do you not know what's your reaction to that as a mental model?
I stepped back a bit from the actual perspective of what an individual might believe Bitcoin is
because there are many different perspectives and I actually try to understand what is the
governance model instead. And I think this is what tripped up a lot of people over the multi-year
scaling debates because we as humans are used to existing within fairly well-defined models
of governance, whether that is through various levels of government, nations, states, cities,
counties, municipalities, whatnot, or even just governance through corporate structures of our
employers, then we have generally fairly well understood written rules of where the power is
and who can exert the power to make decisions and get things done. But I think that Bitcoin inverts
this model on its head. And instead of being this top-down, hierarchical command and control
governance model, it's the exact opposite where it's a bottom-up, organically flowing from
consensus of all of the individual participants into whatever this abstract thing we call consensus
is. Because as a system, Bitcoin is just a protocol. It's a way for machines to talk to
each other to come to a machine consensus of the state of the system. But that machine consensus
is, at least in theory, supposed to just be automating what the human consensus is from
the system. So what is the human consensus for the system? Well, there's no straightforward way
to measure that. You can't vote on it. It's not a one human, one vote type of model. You can vote
based on how many coins you have type of model. I would even argue that the famous phrase from the
white paper, one CPU, one vote, is actually not how the human consensus for the system works.
Rather that, which is often known as Nakamoto consensus, is only for deciding amongst the
valid possible blocks that are on the network for deciding which set of valid blocks is the most
valid with the most work behind them, whatever. But that itself does not allow you to change
the underlying rules of the network. So how do we measure this? Well, we yell about it a lot.
People write lengthy blog posts and tweet storms. And that sometimes weighs people's opinions.
But ultimately, we run our nodes. And the nodes are essentially supposed to be the extension of
ourselves when it comes to consensus for this. So I run a variety of nodes for a variety of reasons,
both personal use, various side projects that I do, and of course, for enterprise use at CASA.
And by me deciding which nodes I'm running, what software they're using, what rules they're
enforcing, I am having my own impact upon the broader consensus of the system, just saying,
I will only accept transactions or my business will only accept transactions that conform to
these rules. Now, what happens when not everyone agrees on that? That's when things get really
interesting. And ultimately, we have either some sort of standoff or we have exit in forking.
But that has been one of the most fascinating things, I think, to watch over the past few years.
And I expect that it's not going to be over anytime soon. I expect that as long as there
are incentives for people to try to find ways to inject control over parts of the system,
they're going to do that. And I think we're seeing some interesting things happen in various other
networks of people trying to create new types of governance that are different from Bitcoin and
perhaps concentrate power in different sets of actors on the network. And of course, that has
pros and cons, depending on what you're trying to do. It's interesting that you bring that up
because you have been almost exclusively focused on Bitcoin for the amount of time you've been in
the industry. But you hear very different opinions from quote unquote Bitcoin maximalists. And I
won't necessarily label you as a maximalist, because you've already, I think, hinted at something
that is by definition more open minded than folks that are exclusively religiously Bitcoin only.
And that is some of these other protocols, even if you're not working on them, it sounds like you
support their right to exist and support experimentation across a variety of different
feature optimizations, consensus algorithms, what have you. Because the concept of exit
is so deeply ingrained in people that were into Bitcoin from the early days. And I've heard Eric
Voorhees pretty eloquently lay this argument out as well. I think Balaji in his introduction to
Nakamoto, his new project wrote something along the same lines that one element of decentralization
is decentralization amongst coins. And let's see where the greatest ecosystems emerge and what the
greatest feature sets and applications are without prejudging that this necessarily has to come
from Bitcoin. How do you reconcile your overwhelming interest in Bitcoin with this
open mindedness about everything else? Is it just, hey, I'm taking a look at all these other
science experiments and maybe I'll start dabbling in more of them if they hit certain milestones?
Or is it I'm only one person, I only have finite attention, so I'm going to focus on this thing
that I have conviction in and I know is going to be around for a while?
Well, I mean, there's a million different reasons why you can make claims that Bitcoin
is the best positions to remain in a top position. I think that, you know, due to network effects,
that is likely to continue at least for the short term. It's funny regarding some of the
more philosophical things and the tribalism and purity tests, especially with maximalism.
I for quite a while considered myself a Bitcoin maximalist, you know, going back to the origins
of the term, you know, Vitalik Buterin actually coining the term as a sort of derogatory thing.
And then many Bitcoiners taking that and adopting it and calling themselves maximalists. I kind of
I take it to the absurd extreme now because, you know, there are certain parts, you know, sub,
I guess, sections of maximalism that I feel almost go to more extreme. So sometimes I even
jokingly refer to like Bitcoin extremists or Bitcoin terrorists, you know, because of the
level of purity tests that are happening. And, you know, I at least once or twice a year, I get
attacked myself by self-described Bitcoin maximalist for one reason or another. Usually
it's because I have mentioned some other project and due to the nature of Twitter,
things are taken out of context. I would say that in monetary terms, I am a Bitcoin maximalist in
that I think that it's only natural that the vast majority of wealth will end up in one, you know,
currency system. It just it makes more sense because you get more utility when you're all
using the same thing. Also, from a technical standpoint, I have a lot of experience running
infrastructure on these other networks while I was at Bitgo. And they made my life an operational
nightmare. I had so many problems with nodes on other networks. And that's part of the reason why
I still continually run nodes as experiments myself for these other networks just to see,
you know, does it look like they're improving? Does it look like they're degrading? Are they
making new types of trade-offs in order to make their performance look better than it actually is?
These are all fascinating things for me to follow as experiments. But from a monetary standpoint,
you know, I'm not investing significant fractions of my own money in them. I'm just continuing to
see what the progress of those other projects are in relation to Bitcoin. And of course, I'm also
watching a number of the other Bitcoin forks more from a governance interest standpoint
than a tech interest standpoint. So suffice to say, I am a maximalist from the perspective
of people who are generally in favor and focus on other projects other than Bitcoin. But to
many maximalists, I am not maximalist enough. No true Scotsman, right? Your experience both
at CASA and then previously at Bitco in studying these systems, and particularly the node infrastructure
and general network size and health and functionality. What has improved? And what has
more or less stayed the same or gotten more unwieldy? Bitcoin has its own issues, which
you know, maybe we can go into at a 30,000 foot view. But the one thing that we do know about the
Bitcoin network is the size of the blockchain is relatively constrained because of this,
quote unquote, artificial constraint of the block size per block. Ethereum is a totally
different story. And it can be a bit more unwieldy. I know this from our own infrastructures
team, and their research and work spinning up, you know, Ethereum node infrastructure. A lot of
companies rely on Infura, which is a consensus project, because it takes such a massive resource
expenditure to properly maintain Ethereum nodes. That seems to be a good starting point, just to
talk about the differences between the two. But then I'd love to go beyond that and think which
in the long tail of assets are projects that are maybe solving this correctly versus ones that just
right out of the gates are going to be a complete nightmare to run as a decentralized network
versus, you know, maybe one where there's an oligopoly of node providers that are essentially,
you know, running this cartel. Yeah. So I think the fundamental issue,
it's the same issue that rose up during the Bitcoin scaling debate, but you can see it in
many other networks, or at least the networks that are actually used. And that is this trade off
between the things that you can optimize for. You know, it's not possible to optimize for
everything simultaneously, you have to make some trade-offs. And the biggest one really is
the cost of transacting on a network versus the cost of being able to fully validate the entire
history of the network. That is kind of what I distilled the scaling bait down to after several
years of arguing that one trade-off. And, you know, we've even seen that trade-off be so
contentious that, you know, Bitcoin split into Bitcoin Cash and then Bitcoin Cash split into
SV. And we're kind of like going spiraling down this rabbit hole of people who are willing to go
like more and more to one of those extremes. On the Ethereum side is also interesting because
if I recall correctly, that particular trade-off is actually decided by miners. And there's
essentially a miner vote with like how much gas is allowed to be spent on the Bitcoin side.
How much is allowed to be spent in every block, which is essentially results in, you know,
how much data is allowed to be put in every block. And then I've also had some fun running
Ripple nodes back in the day. And, you know, the transactions on Ripple are practically free.
And if I recall correctly, the like the total amount of disk space to run a fully validating
node, I think is over 10 terabytes at this point, maybe even higher.
Just to put that into context, so cost to maintain Ripple versus Bitcoin and then
the rate at which that node is increasing. What does that ultimately look like?
You know, in terms of just computing power in space, you can run a Bitcoin node on a Raspberry
Pi 4 and sync it in a day or two. A full archival node, not a prune node, which is to have the
latest unspent transaction outputs, which is basically the latest state of the network.
Yeah. So you would need, you know, a hard drive, preferably solid state drive for any of these
on Bitcoin. That's like at least 300 gigabytes. On the Ethereum side,
if you are pruning, then I think the disk space ends up being around 300 gigabytes,
but due to the complexity of the protocol, you end up having to do
tens of terabytes of disk reads and writes. And that's what really slows down the syncing
process to the point that if you have a spinning hard drive, you're never going to be able to sync.
It just doesn't have enough IO throughput to ever catch up with the chain tip. But on my
benchmark machine, which has about $2,000 worth of hardware and has one of those fancy,
basically RAM-based NVMe hard drives that can do hundreds of megabytes in IO per second,
last time I did a sync a few weeks ago, it took between one to two weeks to sync the full Ethereum
history. I would like to do a ripple node sync at some time, but I literally just don't have the
hardware to do it. Like I would have, I would probably need at least like a $5,000 to $10,000
worth of hardware, you know, build a huge rate array essentially to have enough space to do that.
And it's interesting to look at some of the other projects, you know, like the Bitcoin forks
and try to estimate, you know, how far down the path they would go. You know, the thing about
all of the other Bitcoin forks is they actually are not used enough to actually push any of the
software set thresholds. So we haven't, to my chagrin, been able to actually see what happens,
you know, when those networks get pushed to capacity, like we have seen with Ethereum and
Ripple and maybe some of that.
Has any other blockchain come close to that? I mean, I know, you know, people talk about EOS
and Tron in particular as running a lot of transactions. You don't know how much actual
economic activity is going on. You don't know what's going on. You don't know what's going on.
Actual economic activity is going on and, you know, each have been, you know, criticized for
different reasons. EOS and Delegated Proof of Stake because it's, you know, led to some cartel
like Dynamics, which, you know, is a form of censorship. And then Tron because it's a little
bit more technically unwieldy. But have you looked at any of those other chains? Those would seem to
be the couple of next in line, but maybe, I don't know how far down the list you've gone.
I haven't looked at Tron. I wanted to look at EOS recently, you know, just a month or so ago.
And it was, I don't know, I spent like an hour trying to figure out how to run an EOS node and
just gave up. I didn't care enough. I mean, maybe if I had, you know, kept at it, I could figure it
out. I think there was like one project that had some Dockerized components that allowed you to do
it. But it seemed to me like it was challenging enough that there probably are not many people
running EOS nodes. Makes sense. Let's switch gears a little bit. You know, I don't know how
relevant it is to our audience to go deep into the scaling debate, but I think the most interesting
Bitcoin scaling proposal since SegWit has been a combination of Schnorr signatures, Taproot,
and ultimately Lightning, which I'm sure many more people are familiar with Lightning. And you
yourselves supported Lightning via an out of the box Lightning node that was sold too much fanfare
via CASA. You've since discontinued that. So I don't know if there's signal there or what
the reasoning was for pulling the plug on that particular side of the business. But as you think
about layer two versus layer one, that was obviously the layer two de facto scaling solution that most
people still talk about as being maybe not a cure all, but one of the primary meta protocols that
could increase the transaction throughput and allow for smaller transactions on Bitcoin, which
right now would be very, very expensive to conduct. How do you map out the scaling solutions today?
And how important are those three different proposed solutions to what you're doing at CASA?
Yeah. So, you know, Lightning is still very cutting edge and moving at a fast pace. And so,
you know, it was a lot of work for our engineers just to keep up with what was happening with the
Lightning protocol. You know, from a product standpoint that we kind of unintentionally created
two disparate products when we were trying to create one more homogenous product. And we
ended up kind of attracting a different sector of people in the Bitcoin space with that.
Our original product, which is really meant to be a super high security, self-custody solution for
people keeping their keys in multi-sig setup that's backed by hardware devices. A number of
business reasons why we felt like it made more sense to devote our resources to the original
thing, which is just simple key custody. That is still a very big problem. And we feel like it's a
more valuable problem at this point in time, simply because people are storing much larger
amounts of their wealth, you know, on chain, as opposed to with on these second layer protocols.
So, you know, a lot more risk, therefore a lot more opportunity for us as a business. And
in terms of the other things like Schnorr are interesting to us, you know, for the Keymaster
product, for the on chain transactions, especially because we are creating fairly large multi-sig
transactions, three of five and three of six, even. That does a couple of things that that ends up
taking up a lot more space on the blockchain. It's also in and of itself a slight privacy and
fingerprinting issue. And if we're able to aggregate all of the signatures, save a lot of space.
We save a lot of fees and transaction costs, and also we improve our privacy signature,
and also we improve our privacy significantly. Though I'm most interested on the privacy front
by what regard to aggregated signatures plus coin join, you know, plus on chain mixing.
I feel like that we're kind of on the brink of another sort of privacy war right now in the
Bitcoin space, as we're starting to see some companies shut down accounts because of mixing
activities. And that is quite simply because the mixers that exist today are not good enough. And
with signature aggregation, I think that we can really take them to the next level.
Can you break this down a little bit more? I agree with you, and I've written about
this maybe being the cause of the next fork. Certainly the cause of quite a bit of friction
between the cypherpunk crowd and then the economic majority, which was, you know, much discussed in
the last user-activated soft fork during the SegWit2x scaling debate. The concept was,
while the economic majority, the nodes, they want Bitcoin to remain as is. They want to ensure that
there is no hard fork and change in consensus, which would split the network. Well, this time
around, I do feel personally that it's much, much different. And the quote, unquote, economic
majority likely wants to be private enough where they're pseudonymous, but doesn't want to be so
private that there are mass delistings or mass account shutdowns at all of the regulated edges
of the network, which is what provides all the liquidity and allows the network to grow in
practice and likely will be true, I think, for the foreseeable future. How do you deconstruct this
privacy battle in terms of both timing, in terms of who the key players will be and ultimately how
you think this resolves? Well, I think one of the nice things about the approach that's being
taken to all of this is that if we get signature aggregation in the way that it looks like we're
pushing towards, then it shouldn't even be possible for third parties like exchanges to
know that you are aggregating a bunch of signatures because on chain, it just looks like a regular
single signature. That I think is one of the more important things about privacy is that
sure, it's nice if you can just encrypt whatever you're doing so that an adversary looks at it and
just sees a bunch of gibberish. However, when you do that, you are still signaling that something
is going on. That's kind of like what's happening right now with the current state of coin mixing
is that an exchange may not be able to track your coins through the mixing process, but they know
that you have mixed them. The real question is, can we get to the point where you can mix your
coins and it's not even obvious to observers on the blockchain that you have done that?
I think that that's a better way of going about it than doing something, for example, like what
we see on Zcash with Z addresses, where it's obvious to someone that you're sending your money
into a Z address and then who knows where it may pop out. I've been kind of surprised on the
regulatory front that more exchanges have been friendly to Zcash, though maybe you would know
better than I of if any of them are even supporting Z addresses.
I don't believe that they are. I believe that it's normally T to T. I could be wrong on this,
and maybe it varies from exchange to exchange. What's interesting is you've got this general
dynamic globally where states want to surveil everything, and they want to surveil everything,
particularly in the financial system in the name of combating terrorism and money laundering and
all the scary things that people do with private transactions. But what that's led to is a highly
vulnerable state of personal identity and financial information, where you have to be able to
get financial information where if you have backdoors, if you have the ability to surveil,
then it means anybody does. So it's not just going to the CIA or the FBI or Chinese intelligence or
Russian intelligence. It's ubiquitous. And so Zcash is interesting in the sense that
they've kind of split things cleanly down the middle, where you're either pseudonymous,
basically not anonymous because of coin tracing and analytics techniques and companies like
Elliptic and Chainalysis that do this full time. And then there's the Z addresses, which are
completely private. Now, if you want an enterprise to ultimately adopt cryptocurrency, you need that
private element because if you're JP Morgan, you don't want to be transferring customer funds that
can be de-scrambled. And then now you're in breach of your duties to your customers in terms of
ensuring that those transactions are private. There is no ability to separate sharing or being
able to be just private enough so that you can put this on a public chain, but anyone can still
analyze it if they're looking closely enough. So you really do need instead some version of Z
addresses or some version of Schnorr signatures that do all this automatically if other major
entities are ultimately going to be able to participate in this ecosystem. And if you're
dealing with the regulated edges, they still might have the same requirements to divulge that
information to regulators or the exchanges might have the reporting requirements to say,
we don't know exactly where this went, but we know that JP Morgan customer A sent this money
to what they claim was a personal wallet or what they claim was XYZ service. And you basically
might be able to come up with a two-tiered surveillance network that identifies all the
counterparties without necessarily breaking the fungibility of the network. If I just lost like
half my listeners, I apologize. You're going to be able to like synthesize that much more eloquently
maybe. But I guess the punchline that I was trying to drive at is how can we thread that needle
versus put the exchanges in a position where the regulators say, I didn't realize that Bitcoin core
developers were implementing these privacy changes. It makes it incompatible with our
FATF framework. And now you can't abide by the travel rule. So, you know, sorry, you can't
support Bitcoin any longer because that's the nuclear scenario. It seems implausible, but that
could be where some of the tension is. Well, a lot of times I come back to the question of,
well, how does the existing network work? I mean, by network, I mean, financial system.
You know, the same type of problems are also in play when you're just talking about straight up
cash. I mean, there's tons of small businesses that operate on a mostly cash basis and they're
making cash deposits and cash withdrawals. And I don't believe that any financial institutions
are on the hook for tracing, you know, where the money comes from and where it goes, though,
you know, they are supposed to file suspicious activity reports if certain things happen. And
I would just imagine or hope that, you know, that same type of, you know, sanity continues
to persist and just moves into the digital realm. We've covered a lot of ground so far.
And I think you and I philosophically seem to be more aligned than we're different. And if not,
you know, very tightly aligned in a lot of our thinking, maybe because we've been at this for
a while, maybe we're just kindred spirits or maybe we're just both drinking the same Kool-Aid. I do
want to spend the last little bit talking specifically about CASA, because your full
time efforts are very much focused on self-custody, on empowering people to not be so reliant on some
of these regulated edges to actually take control over their financial condition and, you know,
have a bit of self-sovereignty with respect to, you know, owning Bitcoin and being their own bank,
quote unquote, TM. Where is the focus these days? And what has CASA delivered and really carved out
as its own niche in this Bitcoin hardware and personal key security sector?
Yeah. So there are a ton of different options for people to secure their private keys in this space.
And there's an entire range, of course, from fully custodial, where I think a lot of people
just buy their coins on an exchange and leave them there forever until either they decide to sell them
or the exchange gets hacked and they lose them all. And then, of course, there's the full
do-it-yourself model of download one of the dozens of different wallets that are out there
and transfer the coins into your wallet. And then you're fully responsible for, you know,
keeping the backups of that wallet. And if anything goes wrong, there is no one you can complain to.
So I think that CASA really fits into a kind of middle ground. We are in the business of helping
people help themselves. We are not a full custody provider. At most, we will hold one out of three
or one out of five or six keys, depending upon the user's wallet setup. But what we're trying
to go for is to leverage a lot of the expertise and things that I've learned over the years
and build a piece of software that is incredibly user-friendly, but is also architected in such a
way that it guides people down the path of best practices. And really, what I'm referring to in
that is pushing them into a security model where they're able to leverage a lot of the high
security aspects that are available within this system, but just doing it by following the
instructions in a mobile app, essentially. And so that's what we've really done is we've provided
Android and iOS mobile experience that's quite slick, but is backed by your retail products,
your Trezors, your Ledger, your cold card, basically coming in the next week or so now.
And by then pushing your private keys onto these dedicated devices, that gives you a level of
robustness against hackers. It also gives you another level of robustness by geographically
separating the devices. That also saves you from physical attackers and any type of natural
disaster. Now, of course, you start going down the path of, well, how many different things you're
trying to protect against. And that's where we really get to what I think the third interesting
value add of CASA is, in addition to the usability and the security, is the service. And this is
something where it's obviously a trade-off. The only way that you can be 100% private and anonymous
within Bitcoin is to never talk to anybody else about what you're doing. Basically, do everything
yourself. The downside there is that you become a potential single point of failure in that if you
miss something, if you don't account for something that might go wrong, you could end up in a
catastrophic situation. And so while our software is designed to be user-friendly for anyone,
it also makes sense for a lot of technical users. And I'm really building the software for myself.
To use something like this, because I have a limited amount of time. And one of the reasons
that I pivoted out of BitGo and into CASA is because despite all of my knowledge and all the
expertise that I've built in this space, I was spending basically a whole weekend every year
working on updating and refreshing my cold storage setup. And I just felt like that was a huge pain.
I didn't want to do it, but I knew I had to do it. It's just like boring IT data backup practice
type stuff that nobody wants to do, even if we know how to do it. So this third level, this third,
I guess, pillar, the service tier is something that you often only really get with like full
custody wallets, your clone base, your exchanges and whatnot. And that's basically set up so that
our premium level of users know that they can call us pretty much any time and get an actual
human on the other end of the line. And that is one of the reasons why our service is more
expensive than most is that we have actual humans who are available to talk to you. And we've put a
lot of time and effort into building the system that we believe offers a lot of value both to
non-technical and technical people. And so there's a lot of ways that we can continue
improving this and then actually inheritance is the next big thing that we've been working on.
You've just noticed that a lot of our users are getting to the point where they're having major
life events, they're getting married, they're having children. These are the things that spur
people to start thinking about what happens if I'm not around anymore, what happens to the people I
care about. And inheritance is one of those things that I think a lot of people in the Bitcoin
space will say, oh, I'm not going to die anytime soon. I'm going to die in the Bitcoin space.
Oh, I'm not going to die anytime soon. I'll just put it off and I'll worry about that later when
I feel like it's a more pressing issue. And that is just another way that things can end up in
disaster. Have you seen any uptick over the course of the last couple of weeks on that premium tier
just due to the coronavirus? Because we mentioned this right before we kind of started the camera
rolling. There seems to be a high correlation of folks within crypto that are preppers or
that are studying the coronavirus in Asia and thinking through the potential exponential growth
and the kind of catastrophic scenarios maybe quite a bit sooner than the general public.
And I'm not sure if that's just because folks are wired differently or where the correlation is, but
at least anecdotally, I can say that's true from some of the conversations that I've had over the
course of the last couple of weeks. I'm not sure if that's translated into new business or new
inquiries.
You know, I don't generally deal with the customer onboarding process. I'm not aware of anyone
mentioning coronavirus. In general, I would say that our interest is fairly strongly correlated
with the price of Bitcoin. You know, as the price goes up a lot, people check their balance and all
of a sudden they're like, oh crap, I just passed this threshold. I should probably actually do
something about it.
Your personal security is infamous in the industry. Can you talk a little bit about the quick tips
that you would give people aside from using CASA to make themselves more robust against physical
attacks? Because, you know, many people think, well, I'm just going to get a ledger and I'm going to
put money there. Or they think, oh, it's okay. Like my stuff is in Coinbase or Zappos or, you
know, I'm working with BitGo as a third party. So there are options available, but it seems like
most people neglect the physical security risks, which today might not be that glaring, but you've
certainly heard of instances, you know, in the US internationally where people have put themselves
physically at risk. And you would imagine that becomes more pervasive if we see another mega
boom like we saw in 2017, particularly as people get bullish around the halving narrative and, you
know, many, many Bitcoin bulls and crypto bulls in general think that we'll see another, you know,
super cycle over the course of the next couple of years.
Yeah. I mean, that is another one of my projects is just trying to keep track of all of those
known physical attacks. And to date, I think there have been fewer than 50 that we know about.
There are definitely plenty of others, you know, that I've heard whispers of that, you know,
people don't want publicized because it attracts more attention and can attract more people that
they don't want to attract. So I actually just published a week or two ago, this really
extensive home defense guide that I had been working on for quite a while, which mostly focuses
on physical security. The short version is that, you know, security is never one thing.
You really want to have multiple layers of defenses. Operational security is really your
first line of defense, which is, you know, don't go around proclaiming to the world that you're
you own a bunch of an asset, especially a digital bearer asset that could potentially be stolen
with a $5 wrench. After that, you may want to decide whether or not you want to go down
the whole path that I did of trying to protect your physical address. That's a privacy rabbit
hole that's difficult to follow unless you're in the United States and willing to spend,
you know, thousands of dollars. Otherwise, we're just talking about layers of traditional
physical security, whether that's fences, doors, dogs, and various means of barricading,
even interior doors, and of course, weapons, you know, more active defenses, you know,
weapons, more active defenses, if you are comfortable with getting to that level, if like
all of your passive defenses get breached, you know, what do you do at that point? You know,
that's a personal choice everyone has to make. And I go into a lot of the details there as well.
Well, if I mean, maybe a good place to end is any not to kind of strike fear in people. But,
you know, I find myself saying this a lot the last couple of weeks is I've kind of gone down
the coronavirus rabbit hole, you know, prepared on panic, right? And that's, I think, the name
of the game when it comes to self custody for a digital bearer instrument like Bitcoin, which is
what you're doing to CASA, certainly some of the recommendations that you have and that we'll link
to in the show notes in terms of physical preparedness, and just general meta awareness
that you're not always trusting somebody else to protect you. Yeah, I mean, this is this ultimately
comes down to making sure that you get rid of any single point of failure so that you don't have a
catastrophe, you know, that's for both the digital realm and the physical realm. I mean, the reason
why I do a lot of things that people consider to be crazy on the physical side is because as I make
the assumption that I only have one life, and I don't want, you know, some weird edge case causing
my life to end any shorter than it might need to be if only I had prepared for that weird edge case.
Well said. Well, Jameson, I think I'm going to try my best to make sure that the cover art for
this interview is you with the massive guns. I'm not talking about your arms, but rather the
post that you shared after the attempted swatting attempts. Maybe since I brought it up, and that's
too juicy to just let slide, can you just give the three minute version of that just to give people
an example of, you know, why this is not just science fiction, but something to take more seriously?
Sure. And this is an extreme edge case. I mean, I think that only around a thousand people in the
United States have been swatted to my understanding. But really what happened was, you know, my rise
in prominence on Twitter got to the point where I had hundreds of me and just sort of a result of
the large numbers is that even though I believe the vast majority of people are good moral people
who don't want to harm others, there is a small number of people out there who have some sort of
mental disorder and they don't mind harming other people. And some of those people are technically
sophisticated enough to find exploits in the existing systems that are out there. And one of
these exploits that got used against me is the fact that we've gotten to the point technically
where you can create anonymous phone calls that can't be traced even by government authorities.
And on the other hand, we have a system of reporting and law enforcement where you can,
if you say the right words, get a large amount of deadly force essentially directed at a specific
target. And so someone made the right call to my local police department and claimed that they were
me and claimed that they had murdered people. And that resulted in my whole neighborhood getting
locked down and having armored cars and dozens of SWAT officers with rifles surrounding my house.
So this is an edge case, but it's the type of thing now that I am trying to be prepared for.
And it's why I've gone down this other privacy rabbit hole to make sure that I'm defended against
that. And the only way that I found to defend against that is to make sure that nobody has my
physical address that they can give to law enforcement to do such a targeted attack.
Well, I feel as if your story should be a wake up call to others that are in the industry full time
because the growth in crypto has this funny way of making previously anonymous people that are
public, that are pitching their own projects and ideas, very, very not private overnight.
And so life comes at you fast, but this is especially something that is probably better
to mentally prepare for versus to do after the fact. For my part, I'm already doomed,
but the good news is anyone that wants to come and kidnap me for ransom, I don't have a whole lot.
So my biggest concern is that people are going to look at the fact that I got in in 2013,
and they're not going to remember all of the times that I've told the story about liquidating
my 401k to buy Bitcoin. They're just going to hear, oh, no, you were in in 2013. So I'm going
to open up the account, try to pay the ransom, and then they're going to say, where are the rest?
And they're going to shoot me.
That's the problem with duress wallets that you never know if what you give them will be
sufficient to make them go away.
I know, I know. But you know, a little bit of gallows humor. But all things considered,
Jameson, I think your general demeanor, everything that you've shared with the industry
and created for the industry so far, makes you one of the more admirable folks and more pleasant
to talk to, for sure. Thank you. Thank you. Thank you very much for coming on the show.
And wish you the best of luck with whatever's next with Casa. I strongly recommend
folks go and check it out. The website and the Twitter handle one more time is?
The website is keys.casa.k-e-y-s dot c-a-a-s-a. And Twitter handle is CasaHodl, exactly like
it sounds like.
And @lopp with the flex as an early as an early Twitter pioneer. So Jameson, thank you
again. We'll catch up real soon. And for everybody that's tuning in, thank you.
Thank you for watching another episode or listening to another episode of Unqualified
Opinions. We'll be back in just a couple of days with another good one. Until then, peace.