BTC Sessions - Lightning Labs Raises $10M, Bitpay Ditches Bip70, Central Banks Slow To Digitize EP015

Episode Date: February 6, 2020

SHOW TOPICS: Lightning Labs secures $10M funding seed round and announces Loop https://medium.com/@lightning_labs/entering-the-decade-of-lightning-8c4a4d31167f https://lightning.engineering/loop/ Bitpay Dumps Bip70, basically admitting defeat. You should probably use BTCPay or OpenNode instead anyways. https://cryptobriefing.com/bitpay-art-underwhelming-upgrades/ “The Missing Crypto Queen” BBC podcast series documenting the OncCoin Ponzi scheme is being turned into a TV drama https://decrypt.co/18488/onecoin-scandal-to-become-tv-drama Former ECB Vice President says central bank digital currencies are still a decade out https://bitcoinist.com/central-bank-crypto-10-years-away/ SUPPORT THE SHOW: Visit LEDN to check out getting a bitcoin-backed loan https://platform.ledn.io/join/0a00cca3dd61dea5909c95cd41f41685 Get Wasabi wallet and enjoy your privacy https://wasabiwallet.io/ Wasabi Tutorial https://www.youtube.com/watch?v=ECQHAzSckK0 Check out Rise Wallet – the easiest way to onboard your pre-coiner friends to Bitcoin! https://www.risewallet.com/ Rise tutorial https://www.youtube.com/watch?v=X2VUjj6wPM0 Get NORDVPN to protect your online privacy. 75% off a 3 year https://nordvpn.org/btcsessions Check out my website for private bookings: http://btcsessions.ca/ Looking for an audio-only version of the show? https://anchor.fm/btcsessions Join my Telegram channel! https://t.me/btc_sessions If you value my work and would like to send me a tip, they are always appreciated! LIGHTNING tips: https://tippin.me/@BTCsessions

Wasabi wallet. I'm fairly private. What's up everyone? Ben with the BTC sessions here and this is your daily session. Before we dive into the news, of course, shout out to sponsors of the show. Ledden.com. This is where you can use your Bitcoin for a variety of different services. They've of course got their Bitcoin Savings account where you can earn interest on your Bitcoin paid in Bitcoin. They've got Bitcoin backed loans where you can utilize your Bitcoin as collateral to obtain a U.S. or Canadian dollar loan. So if you're in a pinch, you need to get your hands on dollars, but you don't want to sell your Bitcoin. Maybe you're worried it might go up.

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So if you want to check them out, head over to risewollet.com, click on locations and see where you can pick one up. They are currently only in Canada, but they are looking at expanding. so keep an eye out for them elsewhere. With that, let's dive into the news. So very exciting news out of Lightning Labs. So Elizabeth Stark, the CEO and co-founder of Lightning Labs, announced today that they have secured a $10 million series A funding round to further develop their Lightning Payments technology and scale the developer ecosystem.

So just as a reference, the Lightning Network officially launched into its beta in early 2018. So it's only been running for about two years coming up on two years here. And the pace of innovation has been pretty staggering. I've got to say, when I first booted up a Lightning wallet on my phone a couple years back, it was difficult. you know channel management was not easy figuring out what capacity was there was really none of the difficult parts had yet been abstracted away whereas some of the more recent videos that i've done on lightning wallets like breeze and phoenix um those wallets a lot of the difficulty has been taken away

from the front end so the user doesn't even have to see it and it's just all automated and you can just simply receive and send payments there's rarely issues with routing or capacity. So in general, it's just been an all-around great experience and things have really taken off. So I'm very excited to see these guys securing a funding around. So this blog post here, she goes on to talk about her experience about realizing how promising Bitcoin was, but in her original tweet back in 2014, she said, Bitcoin as a protocol has huge potential. It's like the TCP layer, but no one has built the HTTP layer yet. And she was talking about the internet, how you know, you have the TCP IP base layer, but then you needed to have things like

HTTP on top of it, which was the internet as we know it. So she was talking about Bitcoin being the base layer and then application layers being built atop it and how she's driving to a complication. that. She also took the moment to draw attention to their very first lightning-related product. So it should be clear that Lightning Network itself is open source. Anybody can build and implement clients, but you can also build other applications that work with and around the Lightning network, and those can be proprietary or they can be open source as well. So Loop is a project and a product that they've put together that allows a number of things. So if you go over to their loop page, they do have it up on GitHub, so it is open source.

You can take a look at it there. But the long and the short of it, why use loop? Because this is, of course, a paid product for Lightning. You can do a lot of these functions manually on your own, but this is something that, particularly for businesses, could help while also still being non-concernic. custodial. So you can add inbound liquidity to receive payments. You can reduce transaction fees by recycling and reusing lightning channels. You can send funds to and from users or services that aren't yet lightning enabled. You can configure wait times and batching to allow for further

fee savings and you can refill and offload funds from any number of lightning channels in a single on-chain transaction. So with that they, you know, obviously, charge fees because a lot of that is abstracted away by the product that they've built. And so to loop in, you are looking at around 0.05% to half a percent. And to loop in, you're looking at 0.1% up to 1%. And it very much depends on on-chain wait time, on-chain, on-chain fee conditions, so on-and-so-forth. So very interesting to see not only the proliferation of Lightning as a decentralized open source protocol,

but also now products starting to be built on top of it like Loop and like other wallet services and automation services that can abstract things away for users. So congrats to the team at Lightning Labs and Elizabeth Stark for pioneering some new stuff here. Now, moving away from successful and useful innovation to poor crappy products, BitPay, I love the title of this article. So hats off to Paul Haveland over at Crypto Briefing.com. The title of his article is BitPay and the Art of Underwhelming Upgrades. I like that one. So anyways, a while back, BitPay, you know, BitPay was one of the early entrance to the space and it got a lot of investment from early Bitcoin adopters, but has drawn the ire of the Bitcoin community over time as they tended to embrace shitcoins and then purposely impede Bitcoin users by, one, not upgrading to Segwit, to save on fees, to not even looking at Lightning Network.

and three, um, introducing something called BIP 70, which is a payment protocol that essentially doesn't play nice with any major Bitcoin wallets that a regular user would partake in. Um, you would get a merchant that goes to BitPay and says, hey,

I want to accept Bitcoin. And then when people go to pay online at their particular merchant, they would scan it with a Bitcoin wallet that most people would use and it just wouldn't register. The QR code doesn't work. and you have to use some sort of like, you know, a compatibility tool in order to actually utilize it. Well, that is very much over. They have since reversed that and they are rolling out users' ability to pay all BipPay invoices from any cryptocurrency wallet or exchange as of yesterday.

So again, too little too late, I totally agree with the sentiment of this particular article here. They're getting a lot of criticism because while they are just now realizing that, hey, people like to use Bitcoin normally, they've dropped the ball on, like I said, adding Segwit addresses or Beck 32 addresses that can further reduce people's fees. batching, stuff like that. Also, they haven't even begun to look at Lightning Network, which is unbelievable for a payments processor. And with their poor decision-making, when it came to their business, it made way for BTC pay servers. So one of the most important projects in the Bitcoin space right now, being able to trustlessly and non-custodially set up online merchant processing portals so that you can accept payments without having to rely on a third party. And then there are still

third party apps available. One notable one is OpenNote, which has not gone the route of BitPay and has tried to keep up with Bitcoin innovation by ensuring that they have full Segwit support as well as Lightning payments. So yeah, I don't know. BitPay really just dropped the ball, shot themselves in the foot and spent more time embracing every shit coin under the sun than actually focusing on what brings in any real revenue, which most people, when making purchases, by and large, they're going to be doing it using Bitcoin if they're purchasing online using cryptocurrency. So, anyways, good riddance. Whatever.

Let's move on. Very excited to see this. So this is an article from DeCrypt. A while back, there was a BBC podcast series called The Missing Crypto Queen. It was awesome. It is an eight-part series cataloging a lot of the story behind the Ponzi scheme that is One Coin and Dr. Ruzha Ignatova, the founder of One Coin. And so it kind of chronicles how this complete scam was able to milk people out of literally billions of dollars.

And oddly enough, it's still running. It's just they've gone from a lot of the Western markets that figured out what the hell was going on and catered to markets in Africa and Asia where the language barrier of a lot of these English. English-based articles calling out the scam just does not translate. Anyways, it's an incredible series and well worth a listen, so check it out. But they're turning it into a TV drama. So BBC, I'll just read here, BBC Sounds Podcasts, The Missing Crypto Queen, which explores the disappearance of one coin founder, Dr. Ruzha Ignatova, is set to be adapted into a TV drama series according to Entertainment Industry Podcasts.

publication deadline. New Regency Television International secured the screen rights to the adaptation, fending off rival bids from A24 and 20th century TV. New Regency's Ed Rubin and Emma Broughton will produce the series alongside the podcast co-writers Jamie Bartlett and Georgia Cat. So yeah, I'm super excited to see this. I think it's going to be probably some great timing. as well. If they can get this together and drop it sometime next year, it'll probably be right in the midst of some pretty sizable manias in the Bitcoin and cryptocurrency space. And my hope is in seeing stuff and listening to this one coin or watching this one coin TV drama, people will be more in tune with the scams that can happen and they'll make better decisions. So that's my hope. Anyways,

if you haven't heard this podcast yet, check the show number. there's a link to the article in question and they've got links to the actual links to the actual podcast there and just one more story I wanted to touch on here this one out of Bitcoinist the title here is Central Bank Crypto still 10 years away says former ECB vice president so from the top here the former Bank de France governor Christian Neuer suggested that a consumer-focused central bank digital currency or CBDC could be, could still be 10 years away despite current interest from over 50 central banks. However, he did predict that digital payments between commercial banks will happen

fairly soon, according to an article on Ft.com. A couple notable quotes before I give you my thoughts here, he said, whether they will enact the projects in the next 10 years remains to be seen. I don't think we are close to the departure lounge, but the fact that they want to study it means a lot of work will continue this year. He also goes on to say that there needs to be a central bank-backed currency somewhere. It's an important part of the credibility of money that the general public can access. And as you can hear from my light chuckling throughout that, there's a lot here that needs to be unpacked. I won't spend too long on this, but okay, number one, 10 years, wow, 10 years before central bank digital currency could make its way into the hands of regular

day-to-day consumers. What they're talking about as far as bank to bank is there could be something sooner that would serve as a base currency that gets lent out from the central bank to commercial. commercial banks, but eventually there could be a central bank digital currency that regular consumers could use. So what does this look like in comparison to the current system that we have? Well, right now you have central bank digital currencies that are obviously printed in the form of banknotes and coins and also lent to actual consumer, or rather, into actual, consumer-facing banks or retail banks. So in that instance, regular consumers can access the central bank digital currency by just having

the bills and the coins. That's pretty much it, right? You can't be issued any other central bank digital currency in a digital means. Most people, however, interact with banks, which are holding the real currency and then lending out fractional reserve currency on top of that. So like a secondary layer to the base currency. What they're saying here is odds are what they're going to start with is a central bank digital currency that is mostly for interbank settlement, but will not be in the hands of regular retail consumers. And the worry that they talk about here is if they just go straight to consumers,

then the central bank is all of the anti-money laundering and know-your-customer laws will fall on them. And so if they do so and consumers get used to having kind of a direct line to the central bank, then it gets rid of the function of regular consumer banks. And that could have a bad impact on the economy as a whole. And so odds are they're probably not going to go. that route. What they'll do is they will make it possible for regular consumers to hold central bank digital currency at some point, but most consumers will hold a secondary fractional reserve currency that is still issued by these consumer banks. The funny thing about this is,

is that one, how slow these guys are going, but two, how it doesn't even solve anything that makes them or keeps them competitive. Bitcoin was created as a direct response to terrible central bank policy. And so until the central banks actually compete in the realm of monetary policy, digitizing doesn't mean shit. People are still going to flee central bank digital currencies just as much as they flee regular as central bank currencies in the face of better alternatives, it doesn't matter that it's digital. The other interesting thing in this article that I notice is they cite Facebook's Libra project, Facebook's digital currency that they were trying to get off the ground as a major reason

for the quickness and quickness in quotations because 10 years, Jesus. But anyways, they cite Facebook Libra as a reason for pursuing this. But the elephant in the room is that when Facebook tried to go and launch its corporate coin that would compete with central banks, they got hauled into the Senate, grilled with tons of questioning, and banned from multiple countries. Whereas Bitcoin is sitting there, again, a direct competitor with better monetary policy, that is just, you can't do anything about it. It's just sitting there. It's decentralized. It exists. It continues. It continues. to function and even if you wanted to shut it down, there's nobody to haul into the Senate.

There's no one to question. Sure, you could ban it in certain countries, but if people want to flee their local currency in the face of bad monetary policy and go to something better and more sound, they will do it. And you can look no further than places like Venezuela and Argentina as proof. So I'm going to wrap that up there. Let me know what you think about a 10-year roadmap to get a central bank digital currency into the hands of consumers. I find it super hilarious if you haven't noticed. And I mean, not to mention that, if it did take them 10 years, we've got another decade of Bitcoin growth and infrastructure completed.

They'll be so far behind the ball. It will be unbelievable. Anyways, let's wrap it there. Thank you guys so much for watching and or listening. If you are on YouTube, be sure to hit like, subscribe, and share. And if you're listening to this via podcast, please do share this out via your social media. It will be great to get more people watching and listening across both platforms. If you want to help the show in another way, you can hit up the sponsors down below. There is

Ledden and Rise Wallet, links in the show as well as Wasabi Wallet, which can help you with your Bitcoin privacy. So be sure to check out that link as well. And finally, you can help out the show by checking out NordVPN. This is an app that I use on both my phone and my computer regularly. What it does is it hides your IP address. It encrypts your browsing data and it has other added benefits like unlocking geoblog content. So if you want to access something that you can't see in your country, just change your country of origin from within the app and it should be unlocked for you, no problem.

So if you want to check them out, there's a link in the show notes, or conversely, you could go to NordvPN.com and use the code BTN. Sessions, all one word. That will get you 70% off as well as one month free. It ends up being about $3.49 a month. So pretty damn good. And with that, I am signing off. Thank you guys very much.

And I will see you next time for your daily session.