TFTC: A Bitcoin Podcast - #361: Tether, Holepunch, and Keet with Paolo Ardoino

Episode Date: September 28, 2022

Join Marty as he sits down with Paolo Ardoino to discuss the history of Tether and Bitfinex. They also discuss Tether's role in hyperbitcoinization, Holepunch and Keet, and how private key authentication can help the internet become far more P2P. Follow Paolo on Twitter Check out Keet.io Shoutout to our sponsors: Unchained Capital Braiins HodlHodl Upstream Data TFTC Merch is Available: Shop Now Join the TFTC Movement: Main YT Channel Clips YT Channel Website Twitter Instagram Follow Marty Bent: Twitter Newsletter Podcast

what's up freaks it's your boy marty here to introduce this incredible rip of tftc i sat down with paulo adreno from bitfinex tether hole punch keat incredible conversation i'm very happy that paulo and the bitfinex and tether and hole punch team is beginning to um speak more publicly about what they're building because they're pretty cypherpunk they're pretty badass. We dive in to everything in regards to Tether, the FUD around it, how the treasury is managed, how Tether's created, what it's done for people in the emerging world, how they've integrated Lightning, what their plans are with Hole Punch. Hardcore cypherpunks. This report was brought to you by our good friends at Unchained Capital. I'm right down the hall, pointing to

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bitcoin's multi-sig properties as well what you do is you put your bitcoin up in a two or three multi-sig escrow account you hold one key your counterparty in the loan holds one key and then hodl hodl holds the third key and so your bitcoin's locked up as collateral in that escrow multi-sig wallet you can't move the bitcoin obviously since you only have one key in that two or three quorum however since you have one key you have visibility into the escrow account so that you know your sats aren't being rehypothecated and if you're paying back your your loan your stable coin loan you're going to get your sats back at the end of the day put sats up in collateral get stable coins in return pay back the loan get your sets back simple as that on the other end if you

want to lend out stable coins that you have sitting around you put them up in the marketplace lend them out to somebody using bitcoin as collateral they pay you back what you gave them plus interest it's a beautiful thing lend.hodlhodl.com no kyc no aml peer-to-peer leverages multi-sig uh and lower rates lend that huddle huddle.com enjoy this episode with paolo it's a good one okay you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to

devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be hello thank you for joining us while you're in the middle of a conference thank you march for having me well i'm very excited i mean on tftc on this show on rabbit recap that i did with matt odell we've talked for many years about bitfinex tether and more recently we started talking about keith uh you are the cto of bitfinex and tether and the chief strategy officer of keith yeah that's correct yeah and uh i didn't know you were at a conference You're at a regulatory conference.

It's got to be exciting for you. Look, I think that is definitely, you know, we are hearing about, you know, these Mika license developments. So it's clear that the world is going towards a more regulated area for both exchanges and stablecoins. So that's where we stand at, right? So we need to be part of the, let's say, discussions because Tether represents the biggest stablecoin and we have been asked many questions. So they want to hear directly from us.

They want to understand how Tether is being used. And I think that is quite interesting to me. You know, the thing that I'm more excited to talk about in these type of conferences is like, you know, sometimes living in Europe and maybe also you might share the feeling also living in the US, but we hear a lot of people tending to think about the use, how much a technology or tool or product is useful based on their personal experience. And that's it, right? But they don't understand that there is an entire world out there that might see things in different ways. The same thing applies to Bitcoin, but with Tether and Bitcoin, I've been advocating a lot in Europe because I see a lot of close minds here and I hear a lot of close minds here that don't understand that if you look at Turkey, if you look at Argentina, Venezuela, El Salvador and Vietnam and so many places in Africa, so many places are actually in desperate need of these technologies and this new type of money. And, you know, they are not used to have perfect banking rails, if you could call them, although, you know, perfect and banking should not be in the same sentence anyway. But, you know, it's my role is trying to, you know, be the spokesperson for the industry, at least with hopefully I'm representing the good part of the ethos of the industry, trying to make lockmakers understanding where we are coming from and why what we are doing is so important.

Yeah, and if things keep going the way they have been going last week, the people of England might need Bitcoin and Tether for banking purposes as well. But I think for the context of this conversation, for anybody who's new to the show, I mean, Bitfinex, you guys and Tether have been around for quite some time uh and like i mentioned you guys have drawn the ire of regulators around the world particularly from here in the u.s and in new york state the ny um

what is it the nysfd whatever it is um has come at you guys what why don't we talk a little bit about the history of bitfinex and tether and how you guys are set up from a regulatory framework and how many customers you guys serve around the world yeah so well bitfinex started in 2012 and tether started in 2014 uh well when both companies started um there was not much uh low around cryptocurrencies and stable coins even source stable coins right stable coins were actually created with tether that was the first one on omni and that's correct so um omni was first called uh master coin um was the um let's say uh the the base layer for for tether and that allowed it to grow uh pretty quickly until then ethereum was not dead as support with him was

other end of 2017 but uh you know with the big um ico boom uh we had in 2016 poloniex heavily starting to rely on uh on tether because and and then created massive arbitrage opportunity between tethered enabled um exchanges because then in order to move fiat from one exchange to another you would take 35 days you know the arbitrage opportunity was completely gone was extremely capital intensive but tether completely streamlined that process allowing um usdt so dollars moving at the same pace on chain as bitcoin right especially using bitcoin blockchain so now exchanges usually credit bitcoin um within you know one block or three uh three blocks and um and they could do the same thing with tether so for the first time basically in history

dollars could move a really high, fast pace rather than waiting for international wires to settle. So that moment drew a lot of attention to Tether, especially at the end of 2017, beginning of 2018, Tether became the first big stablecoin to bypass one billion dollar in market cap and grew pretty quickly over 2018 to reach around four billion um at that time uh really openly we we discussed that a few times we had some issues with banking banking was with the iso boom banks became really really well aware of crypto they were They're extremely scared of crypto. And so they started shutting down accounts, bank accounts all over the place, especially

for exchanges and stable coins issues where there were basically only us that were that big. So that was a challenging moment. But as we are used to in both Bitfinex and Tether, we keep our head down. We keep working. Again, openly, we really should have done a much better job in PR, in making our community, the general Bitcoin community, crypto community at large, to understand what the hell was going on.

And we actually have been always shy to communicate with public. And, you know, we come from the fact that we are all, you know, simple guys, all like people that love to work and keep their head down. But we realized that, you know, we are big companies and we should. So now we realize, right, so in 2020, 21, we started realizing that, you know, we were actually really, really big companies and we should act more, you know, publicly in the interest of, you know, both our customers and wannabe customers or anyway, the community at large. So, we started improving communication. You might see that changing a lot. So, that has changed a lot in the last two years or so. We hired an important person in the sector to help us to draft correctly our communication and explain that this industry is extremely challenging, right? So I compare it to when the first cars were built and there was no there were no streets and there was no manual on how to drive safely and where no legal framework for operating a car and making sure that you wouldn't start or you wouldn't be a problem for society. right so um it's um the the crypto industry is like that right so we are learning while we go and there were there were no rules uh there are new rules are coming up now kind of um now also

the us and and europe are starting to draft um lows and that's something that is going to heavily change the industry i think in the next few years so uh we need to act that like uh big guys i would say um so when i joined crypto was basically felt like exchanges felt like e-commerces for for bitcoins rather than trading platforms right so you had you could handle 10 orders per second if you were lucky now we are talking about hundreds of thousands of orders per second that are processed through matching engines in a single exchange imagine across all exchanges so the level of complexity of what we are doing the size of companies is they are ballooning and so that requires a pure structure so we have been you know to summarize we have been

all always technologies focusing first on the product and and and safety of our companies and then on the communication but we should have taken communication a bit more let's say as part of our uh full strategy um right in the beginning yeah and like i said you guys have drawn the ire of not only regulators but i i hate the word conspiracy theory because uh i think it's a bastardize phrase but a theorist out there who believe that that tether is just creating the synthetic dollar market out of thin air in the bitcoin and uh cryptocurrency space and really driving prices i mean that's that's one of the big themes out there and in tradfi is uh we're not going to go near bitcoin or quote-unquote crypto because tether exists and it's just

manipulating uh prices i mean i've been following tether for for many years now i'm on i think i understand how these tether are created but i'd like to hear it from your are you guys just spinning up dollars out of the ether putting them on these blockchains and then driving prices what is the mechanism that actually brings tether to the market a tether token well there is well there so much to talk about that of course um there is no way that tethers creates um usdt out of thing in here right so first of all um we have now a really um big auditor that performs our attestation our attestation by way we have been scrutinized heavily scrutinized by two big um regulators in the us and by the way all our operations and documentation is still going to the new york

only general on a quarterly basis right it's not like you know you snap a finger and you create money that's not how um tether works and ever worked so the tether mechanism is pretty pretty simple um a customer wants to acquire 100 000 usdt they send 100 000 dollars um to our bank account the when the dollars are received and are safe in the bank account 100 000 usdt minus fees are created and sent back on chain the process the opposite process is also true someone wants back their money they um send us um to our treasury wallet on chain 100 000 usdt and we send back a wire for the same amount minus fees so then what happened with the money in the bank is that we are investing a portion of that money in what we call safe and liquid assets at the moment uh you know

the history of tether has been extremely interesting around that because uh the reality of what we were doing has been um for from you know the uh the tether truthers has been always twisted and in fact we have heard about evergrande there's so much time right people were or these guys were were suggesting that we were uh tether was investing in in and had 80 percent exposure to evergrande tether never held any evergrande uh commercial paper or starch right so anyone that has good experience with with more traditional financial markets knows that you couldn't even touch the evergrande with a 10-foot pole since a long time right so um and and why why the hell we should have done that right so the good thing about stable coins is that you can take really um

the least risk possible and still earn a yield on a important monetary base right so uh when you have like um 50 billion dollars in a bank account and you have like a return of 20 30 40 basis points it's a lot of money right so it's not something negligible in a lot of money and so if you are able to keep the company operations lean like tether does then you know you don't need you don't need to take risk in order to to generate revenues and it's important that of Of course, stable coins generate revenues because, as you know, we have also our issuance and redemption fees that are 10 basis points so that operating healthy business allows us to maintain a really strong, stable coin. And you can you can see that you can you can see the strength of Tether because Tether did something that not even a bank or no bank in the world has ever done in the last two to three months. right so after the luna terror crash um the 12 13 of may uh if i'm correct with the date

so there was a immense tether fad uh created and uh that was the beginning of the tether shorter starting to pile up and the you know paid trolls um sharing you know all the most catastrophic news around tether but the i think that i'm glad that in a way that happened because we could prove again that we did something that no bank could do so we were able to pay um seven billion dollars in two days right seven billion dollar at that time was around 10 of our serves and there is in the last 30 to 40 years there is only one situation in which the banking industry uh a bank in the banking industry had to uh pay out 10 of their assets was called washington mutual in 2008 and that went bankrupt and tether did that in two days without the blink

of an eye and then over in over one month that was able to process around 20 billion dollars that was around 25 percent of its reserves and we could have done much more than that well the market stopped and now tether started growing again um and our second main competitor started to decrease widely but um you know it's uh it's something that in the end yes we have now the the biggest um auditing firm doing under the station among the other stable coins we have we are providing our information to the aep steel and all that right but there is no one else that has this real world scenario that proves the risk management that we in fact had right we always set we have liquid assets we have the best risk management in the world and i can tell you one

more sorry if i i'm rambling so much but um another interesting factor is uh that it was discovered that the tether is actually one of the few companies that uh takes risk management really seriously right so we have been uh we had a lending program and we were kind of the only company if not one of really really few companies that was over collateralizing its loans right so we had um between 130 to 150 collateral so that even when something hit the fan we could completely unwind in this position but even um in a um having some equity left to return to the um to the borrower so that speaks really highly about the quality of our risk management because you know we didn't wait we handled it i would say perfectly uh always in touch with

the customer the customer in this situation was celsius and um instead we have here been we we heard many companies that were considered heroes right were considered mighty perfect without any issues all part of this group of holy heroes of the industry and they were all doing uncollateralized loans so it's interesting to me that while doing you know the second half of may all these uh all these uh uh journals newspapers were all looking at tether right and they were all waiting for tether to do something you know wrong or stupid right they were actually tether was they were so focalized on tether that they couldn't see that probably the actual issue of the industry of the crypto industries was under their eyes also in some

companies that were even public companies right so we are seeing some public companies that went bankrupt and filed Chapter 11 because they were doing uncollateralized loans. So the interesting fact in the aftermath is that Tether probably was not the bad pie all along and we should have focused somewhere else our attention. Yeah. It was a massive stress test for the whole industry. And like you said, the fact that you guys were able to move $7 billion in two days is is extremely impressive. And I mean, that gets to another question too.

I mean, well, first, like the risk management, like you just described, in the industry was proven to be extremely subpar, particularly when it comes to the collateralization of the loans that were going out from many of these businesses. Many blowups happened. But another sort of theme and topic around that time,

which I'm very interested to get your thoughts on, is the difference between a fully reserved dollar-to-dollar or equivalent paper instrument-to-dollar stablecoin like Tether versus these programmatic stablecoins like MakerDAO or Terraluna, which was one of those. What are your thoughts on the differences between the two models of stablecoin and the risk involved with both? So I was in Paris again, actually, in April and at the Blockchain Week in Paris, and I was talking to that was the moment when Terra and Luna were at their peak and Terra was considered this new beautiful instrument by the community, the many people, influential people in the crypto community.

And I was I was asked by journalists what I was what were my thoughts on on on Terra. And I said, look, to me is a disaster waiting to happen because the way so you cannot have a stable coin that is collateralized by by another thing that the same guy created, basically. Right. So Luna was collateralizing Terra because, yes, there were some Bitcoin, but the majority was actually linked to Terra. and the anchor protocol and so on so to me when i said that i was you know um many people were upset and said well you are just jealous because tara is going to eat your your lunch at tether and i said well you know it's easy to be a stable coin until you are small because you can you know you can grow in worst case scenario if you have to handle liquidation in the market the market can sustain a $2 billion, $3 billion liquidation is still possible in a market with good liquidity.

But if you are an $18 billion that was Terra at its peak before everything started to crumble, then it's too much because you might need to liquidate half of your position that is $10 billion, right? So there is too much for $10 billion in an already stressed market, is too much right so that was easy the more you grow the more you have to make sure that you are you all your backing are extremely solid and liquid right so and their backing was luna and was was bitcoin so it was kind of easy for people to borrow luna short luna sub in order to start trigger liquidations and force the terra foundation to have to sell again luna to stable coins in order to try to protect protect their peg and you enter in this vortex in this cascading loop

that will make you know the more people sell luna the terra foundation had to sell luna and then you know you you it's a race to zero so of course was terra was um in the aftermath was evident to now everyone that was extremely subject to attacks if you think about it it's exactly what uh short sellers try to do with tether right they started selling tether subpar and they tried to cause a potential background right they said okay what happens if you think about the uh financial aspects of um of in the operativity right so if you sell tether let's say 50 basis points below the dollar. What happens is that market makers will buy these cheap tethers on exchanges, will send these cheap tethers to our platform, and will redeem for one dollar.

They take one dollar, they send the dollar to the exchange again, they buy cheap tethers, and so on and so forth. And this is how the 7 billion and then eventually 20 billion in redemptions happen right so there is this enormous pressure and they you you are as a stable coin you are forced to do your job right that is giving back the money but in a really short amount of time and so the hope of short sellers were was that in fact we didn't have all the research that we said that we had we didn't have the security the liquidity that we said we had right So, well, they got their proof now, but that if, in fact, we weren't so solid, you know, a stable coin that doesn't have liquid assets would have the same issue of Terra. So, again, I'm glad that we were able to prove that, not just with some paper that says that, in fact, we are solid, but with actual facts.

Yeah, with actual market activity. Yeah, and it's interesting. I've had people on this podcast, again, who are trad-fi and are Bitcoin curious, but they stay out of the market because they're worried about tether manipulation. And it's always befuddled me, and I've always fallen short of being able to convince them,

like, hey, it seems like it's fully reserved. They've proven via audits that it's reserved, and they had this massive stress test over the summer. I don't know what else to tell these people. What would you tell these people that are staying out of Bitcoin because they think tether manipulation is running the market? I mean, I think that the sad part is that thinking that Bitcoin has only value because tether is extremely sad to me, right? So Bitcoin is this instrument that is providing freedom to many, has, you know, a lot of real-world use cases. It's a new technology started 10 years ago, well, a bit more now, but is 14 years ago.

And it is actually changing the world for many populations that need a lifeline because, you know, well, yes, GDP is going down the bean. But if you think about Turkish Lira, they lost 70% of the, well, more than 70% of the value in 12 months, right? Approaching to 80% now. And the same thing happened to the Argentinian pesos and Venezuela, their own currency has the same fate and so on. So thinking that the only reason for Bitcoin to be to to have a value is because some magic thing that's happening in behind the scenes is quite sad. And we, in fact, proved that all the Tether's USDT tokens and the other tokens are in fact backed. We have we again are providing this information to the AG. We have now BDO, that is a top five auditing firm, that is performing our testations.

I mean, we are providing so much information out there that I don't even know what to tell these guys anymore. Because I felt like we passed from a situation where people were saying, well, guys, you are not giving us anything. And now we're giving so much information. And also even the commercial papers, I didn't mention, but, you know, the commercial papers were these things that we published in 2021, right, with the first attestation we did. We published the fact that we have commercial papers. And so our portfolio was composed around $30 billion in commercial papers back in June 2021. And the first thing that I can say is that commercial papers that we had where the vast majority was rated A1 and A2 from Standard & Poor's, right?

So extremely decreed, extremely safe, right? So then yet people were, many people didn't know what commercial papers were, right? So they were scared that they were something like, you know, some numbers written on the back of an envelope of a focaccia or a pizza, right? That is not actually what our commercial papers are. But yet, anyway, we took the decision publicly to unwind our commercial paper position and move that part completely in U.S. treasuries. So what happened in the last 10 to 12 months is that at the end of august we had still at this august we were able to unwind 30 billion of commercial papers and we had left only 200 million and by the end of october we'll have zero so

that is also proof that what we said about the liquidity of our commercial paper was in fact correct and so we didn't lose any money we just let them expire we didn't lose any money on the commercial paper actually we made interest on these commercial papers and that is also proven by the fact that our equity at the end of um so shareholder equity at the end of um um of uh june was 190 million dollars and it will be much higher uh at the new attestation of um in um in um in september end of september of course the interest rates are going up and so on but is also in another interesting data point is that tether never shared the dividend right issued a dividend so all the interest all the revenues that tether have always generated are left in the company because we want

to increase packing and at this pace we will have you know we will reach um we will create this big war chest that will help us to further collateralize um the the issued tokens and that is an additional proof of how the fact that you know for us is not all about money is actually creating something that is solid for the ecosystem because we have a lot of long-term plans including hole punch and all this stuff so we want you know we want to create solid products for the industry and i think that um overall we we we prove that you know with with all our uh efforts right we are all after so many years we are see since ceos stepping down right so you know that are being in the space as long as us or even much less and yet they are stepping down while we

are still here fighting and and you know pushing for you know what we believe is the good part of our industry yeah and that's what i mean i think you guys are bitcoiners at heart and that's how how we can wrap up this Tether stablecoin part of the conversation is I've always viewed, so I've admittedly, I've never used Tether. I personally don't have a use case for it. I just stack Bitcoin passively and hold Bitcoin and I'm lucky to make money that can sustain my life and I don't need to send it internationally.

and just my position personally living here in the United States and where I am in my personal life. Can I say something to that? Sure. That is exactly right. You wouldn't need, and most people in Europe even don't need stable coins, right? So you have the perfect US dollar banking rail, right? So Tether business plan was never take over us banking that would be foolish of us or or anyone else trying but you know there is a desperate just there is just a desperate need outside the us right in the emerging markets developing countries of us dollars right they are a lifeline compared to

their national currencies so basically that is that their business model right so we don't pretend everyone using us we just want to help people that don't have access to a bank account so there are two billion people that don't have banking and yes i would prefer personally and everyone in our team would prefer them to to use um bitcoins right so bitcoin is much better than than than tether right tether is no bitcoin i always said that tether is centralized but the reality is that there are many people in the world that still are linked to the us dollar they need the us dollar they want the the U.S. dollar, and they are all in the poorest countries in the world. So that's what Tether is for.

Yeah. And, I mean, it's undeniable there is utility there. I mean, if anybody's done, I mean, Matt Alborg, who's at BitRefill, formerly ran his own research arm called Useful Toolups. he went and did in-depth research with people in venezuela argentina nigeria um asking how they interacted with bitcoin and a lot and he found just via his research of going out and actually asking people is that yeah people love bitcoin as a settlement layer um and in the novel utility it brought them in their lives however they couldn't stomach the the intraday intramonth

century year of price volatility. So a lot of them would move part of their Bitcoin position into stable coins with Tether being one of the largest ones. So again, sitting here in Austin, Texas, being an American citizen who is able to enjoy the stability of the dollar just in my bank account, I don't have a use case for it, but it's undeniable that there are people in these emerging economies like you described that that do have a use case for this which uh you guys are providing um but that's again uh another thing that we've said on this show uh like tether is inherently uh unstable because it's dollar the dollar is unstable at the end of the day in the long run um and so that's how i want to transition this conversation is how do you view tether's place

in a longer-term thinking of Bitcoin. You see it as this transitionary mechanism that eventually people are using it now, but at some point in the future, Bitcoin will be more widely adopted, more liquid, much larger market cap, and you guys see it as sort of the stepping stone getting towards that hyper-Bitcoinized world.

Yeah, I think that, you know, we we think in the long term and we hope in the long term that is part of our work we want bitcoin to be adopted much more widely right so we believe that in the next 10 years uh bitcoin um installed monetary base will grow at least 10 times if not more and that's how bitcoin will be also accepted and people much more by, you know, day-to-day life people, right? So, you know, if you are like, you have a grocery store, if you are like bus driver and so on, you want to have stability in life, right?

There is so much uncertainty and you want to have stability. But of course, you know, the fiat currency stability, well, we are seeing now with the GBP and we are seeing that with all the other currencies, but the dollar is still the reserve currency in the world but stability is actually people think that the dollar or the this this big uh you know stable currencies are stable but the actually there is an intrinsic cost in holding them that is the inflation and so on right so uh people are kind of making fun of uh bitcoin detractors are making fun of bitcoin because

you know bitcoin is still moving like the us stocks or bitcoin is not an inflation hedge but you know i i always you know make the comparison as i did for example for the el salvador uh bitcoin adoption that people like it's unfair to expect that bitcoin would be a replacement for all the currencies within just 14 years from its birth um as is for for el salvador you know it's maybe two through five percent the actual adoption of bitcoin in el salvador probably a little bit more now but um you know it's like pretending that after the first year or even 14 years of the first car was producted by ford everyone in the us would have a car right at that back then in the first years of the first cars being produced you you know you would have bankers

and lawyers everyone making fun of who was driving on a car saying and they were you know you had all these newspapers with titles like you know the cars will never replace horses horses are much more sustainable and and clean way of moving around much faster and so on right so things take time right so pretending that you know innovation can happen from one day to another is is like even internet took a lot of time to grow behind the scenes to get where we are at right so it's um i think that in the long term just just to to answer your question in the long term i will i'm seeing people pricing their services in bitcoin that's what we need right thinking first in in bitcoin terms rather than in in dollar terms because if you keep doing the

conversion and if your mental based currency is dollar of course tether will will still be needed But if in the future we'll see more and more people actually thinking in Bitcoin terms, then that will be the game changer. So we are not biased. It's not like we are hoping that things stay the same. We think that the utility of Tether is just being a mere servant of Bitcoin, and it's finding these use cases um around around the world um but maybe eventually these use cases will disappear because just people will price everything in bitcoin directly and that would be probably a safer future to live in yeah no i completely agree it's going to take time you know the people who think that you're going to get mass adoption

immediately are completely delusional this is going to take time it has taken time like you mentioned we're almost 14 years in everybody's anchoring to like yeah we're a decade in but we're almost a decade and a half into this now as we move forward through time and that's what's really exciting to see so like you mentioned hole punch and keat so you guys are expanding the offering of products and i really think what you guys are building uh on hole punch like keep being one of those first products is very interesting because you guys are an exchange and a stable coin company and and getting into uh end-to-end encrypted messaging uh many people wouldn't think that would be your next foray into your product suite so very interested to hear

your plans with hole punch and keith specifically and why you guys decided to build those products why was that the next product in your suite so interesting enough hole punch and keith are is in development since four to five years right so myself i'm always been i'm a developer for since all my life and i've been always excited by um peer-to-peer technology right so and and and privacy so my first public project was called kernel socks bouncer was a project that would allow you to create um modify linux and and have and in order to pipe all your connections through SOX5 and proxies so that everything was inherently private for in your Linux ecosystem right completely transparent to your to all your applications and then I you know I've worked

a lot in distributed technologies I've been one of the coolest project I ever contributed to was a research project for the university that was actually paid by a government that wanted to have this massive and super reliable communication system for battlefields. So I worked a lot on that for two to three years before moving to finance. and um so always been excited by modularization microservices peer-to-peer decentralized you know applications and so on and so when when i i started to you know work a lot in bitfinex and tether and see the potential of uh of uh of uh you know bitcoin as a as a technology as a currency and as a technology i think that bitcoin is dual right there is the blockchain and then there is

the currency so um i i started thinking okay but you know this um uh there is much more to you know freedom is is needs you know i come from and sorry if i jump back and forth i come from you know these uh all the movement of of uh stallman you know with the free software foundation i always follow that um you know the um all the books of like the cathedral and bazaar that teach you how to think about software right software like you can think about microsoft and windows as this cathedral that is in a way super complex and till a certain extent beautiful to the external highs but is extremely if you touch anything it will fall down right it's like actually is a cathedral must uh well it's a castle of cards uh but a mask as a cathedral and um on the other side you had

bazaars that are this you know thing that can keep changing shape and is being destroyed and rebuilt over the centuries and that's how you should build software right software should be always built as something that is extremely modular simple does one simple thing and can change shape immediately without having to restructure it heavily that's how we think about microservices and you know the one of the things that i brought to bitfinex was that bitfinex when i joined in 2014 it was a one single project on github one single modular uh piece of sorry one single monolithic point piece of code and then um you know fast forward many years now we have more than 500 to almost 600 projects on github everyone is basically a simple module and microservice that interact

uh with each other on a distributed hash table internal private distributed hash table so now it's you know people are looking at doing the the craziest moment of volatility they're looking at bitfinex as the exchanger that is always up right because it's built with actually we are doing our internal private peer-to-peer network in order to make our platform resistant so a few years ago i i started talking a lot with another open source developer called matthias bus he's a great developer he shared the passion about peer-to-peer technology with me and we started you know chatting and thinking how we could um if we could build and use basically BitTorrent as a base layer for many more things than what we were seeing

BitTorrent used for. BitTorrent is a great technology. It has opened the eyes of many people when it comes to technology because it's the only unstoppable way to share files. Before BitTorrent, I'm not sure if you recall that, but there were many other solutions like like LimeWire, like eDonkey without Cademlia and all these other solutions like Nutella and so on. But they were always shut down. And then BitTorrent came, right? So the actual realization back then was why BitTorrent is great, but it's limited.

It's limited to static files. What if we take that technology, we improve it, but BitTorrent is basically composed by three things. Distributed hash table swarming. So the distributed hash table is the way is basically data structure that is distributed among different peers, different computers up to ten millions and helps to store the information, the indexes

of all the content that is available in BitTorrent among all these peers. So you don't have a centralized index that says, OK, all these computers has all these files, but this information is kept distributed, decentralized across all these peers through the distributed hash table data structure. The second cool thing about BitTorrent was swarming. Swarming means that the more people were downloading or had a file on their computer, the faster it was getting for others to download it. Simple as that. And the third thing was hole punching. So one of the cool things about

bittorrent is that if you remember nutella lime wire you had to in order to speed up the the download you had to go on your and and uploading service files you had to go on your router at home tweak the port open the port publicly and route that to your own computer i mean that is something that normal people that are not techie they cannot do but victorian starting to introduce hole punching that is that thing that allowed two peers to establish a direct connection without a central server and that is that is the actual most important technology that we're using in hole punch that is the name of the company and the main framework because that is actually removing the need of central servers uh for for many use cases and so basically um again um finishing my

thoughts we we decided that okay bittorrent is cool but is for static files what if we could expand the use case to actual you know live streams right everything in in internet is live stream so what we are doing now this post podcast is creating video audio live streams and so on right so browsing is a live stream using applications and everything is live so what if we could reuse the same technology for for everything that is not just static files and that's how hole punch was born and so in order to exp to demonstrate to the world that the potential of this technology we wanted to create a simple use case right so everyone is used to zoom or to google meet what if we could recreate the very same thing without any single central server

That is the most important thing for me because, you know, we live in a world where we could actually get to Mars pretty soon, and yet we have this thing where people think that in order for you and me to communicate, to have a voice or video chat, we need to pass through someone else's server. Why should it be like that, right? So the technology is good enough so that our two computers can communicate directly without have to proxy our data through another person's server. So in general, we are used to use a lot of the scam keyword in our industry, but I think that cloud is the ultimate scam, is a big problem, and the more there is the geopolitical turmoil, we are going to see it as a problem. So we are used to store all our information on someone else's servers.

And not now. So all these big tech companies are harvesting our data. And that is, you know, I think a pretty obvious thing for me to say, but I want to make people reason on the fact that there is a big problem now with also in Europe, if they think about GDPR, that is an interesting law that force governments or that assumes that the government's public administration and private companies in a certain country won't share automatically information of citizens outside of the country boundaries or store that information on other on country on on data centers on in other countries if you think about it makes sense

right so i'm italian and why public administration information should uh data uh that is my data as a citizen should be stored on cloud somewhere else right and then but and that is for public administration but think about all the private information photos how much content every single person in a specific country creates daily and yet all that information is stored on foreign data centers and you know things were okay until the last year but things are starting to turn and what if we are going to and god god forbids but what if we are going towards a much more difficult times in in in in terms of war and such right so we are going to see this data being weaponized not between people and people but between between countries and that is extremely

scary right a country that suddenly has a data center on soil can say okay i will cease that all this information from this big tech company i will use it against someone else right that is i think quite you know i understand that is uh too much or via a rebellion for many but But I don't like to live in an uncertainty when it comes to my data and how this my data will be used, right? Because, you know, these big tech companies are definitely has pushed people to think that cloud was this friendly help, right? Like this, you know, with Windows we had back in time, we had the clipboard like that smiley face in the Google, sorry, in Microsoft Word, right? But it's like computers and so softwares that are cloud softwares are running on our computers are not our friends. They are doing whatever they can.

They look like our friends. They help us to save, to back up our data and so on. But the ultimate goal is to get control over our data. So we have to think twice on what we want to see in the future when it comes to, you know, data storage and our storage. So a long story short, at KIT, we wanted to prove that all this cloud infrastructure is useless. And we wanted to do it providing a software that could provide much better, higher quality video and audio calls to its users. Because if you don't route your traffic, if you don't proxy your traffic through someone else's data center, then you don't have to compress that much your traffic, right? So my traffic, my video can go from my computer to your computer directly, right?

And, you know, the interesting thing is that, you know, these people think about, they tend to think that mobile phones are not powerful enough to do certain things. And so that's why we need cloud. We need to use Zoom needs data centers because, you know, somehow they add this additional magic to connectivity. That is not true. So mobile phones are extremely powerful. They are more powerful probably than my computer. They can do many things.

They can they have a lot of storage and they can interact with the network peers that subsidize what they are missing. Right. So that's the beauty of it, right? that sees so we and the even more important fact is that the entire combination so all the mobile devices computers raspberries desktops combined in the world and also internet connections in the world as are much much much more powerful that all the data centers available in the world right so we don't need data centers because our data center can be internet and i'm not talking

about some magic you know global state internet like file con and stuff right so it's an internet where peers are just talking with the peers that they want to talk to they need to talk to right so it's like complete decentralization as the web one was supposed to be when it was born yeah now going back to your point i myself as somebody who runs a website runs a podcast i've been been told i need to host those files in the cloud on somebody else's server because i myself don't have the the bandwidth in my hardware to do that so are you saying like be a hole punch in these peer-to-peer connections that and just proving that that may not be true Yes. Let me give you your, let me elaborate your exact example, right? So, and that's how and why

hole punch is super powerful. Remember that BitTorrent has this technology called swarming, right? So the more people were downloading a file, the faster was get. So imagine that you are now hosting your live show on your Raspberry Pi and at home you have like a good line, but it's an average line anyway right of course if you have 10 million viewers it's obvious that your computer will never be able to offer the live show to everyone at the same time but what if right but the good thing about live streams if that is that if there is like a little bit of latency right 200 milliseconds 500 milliseconds no one will care right so if if i see your live stream it's not we are on a call right so if i see it as a live stream i can afford even one second latency so

what if we use the the swarming technology and say that you know you start streaming but the more people are the the first people that are subscribed right so the more people are subscribed they are start they download chunk of your the data from you right and they are advertising to the rest of the network look i have to say i have these chunks i have these chunks and so on so suddenly they start with sharing the data themselves so you can do live streams to tens of millions of people in parallel without any center of server with swarming and that is not like some hypothetical technology that was proven by by victorian so we are just taking that improving it and making it available for live streams so we are going to also uh prove that

you know the youtube use case people can do youtube only funds everything that they is available now at home with their own bandwidth this would be massive and like you said the the orwellian state is beginning to encroach more and more i mean i can only imagine the the attacks that are going to be levied after the nordstrom pipeline was bombed yesterday I think it'd be naive not to think that critical Internet infrastructure will will draw the attention of these nation states next. And it seems like that's the position we've been thrust in as a global society is all these nation states are warring against each other. And you have these very hyper centralized critical infrastructure, mainly Internet infrastructure that's sitting out there like a sitting duck. and we're tasked with this goal

of basically creating alternatives to that before it gets completely corrupted by these warring nations. So how do you see hole punch playing out through here? So I know Bitfinex or Tether's backing Synonym, John Carvalho and team, they're leveraging some of this technology as well. That's a first to market.

team there leveraging this. You guys are building Keat. What has the reception to WholePunch been since people started playing around with it? So far, we had around 100,000 downloads. That for being a two-month product is a lot to me. There is no mobile version yet. I cannot wait for the mobile version because I think it will grow massively. So the, you know, the technology, I think, is exciting many, we are seeing a ton, a ton of people asking when they can get access to, you know, the SDK. The beauty of keyed and hole punch is that will be fully open source, right? So there is a reason why it's not open source yet, is that as many times happen in our industry, you release something, it gets cloned

immediately and an altcoin gets put on top of it as a way to pay for the network and i mean and heavy advocate all the fact that we don't need other tokens right so protocols so in in web3 or d5 there was this narrative that was telling everyone a protocol cannot exist without a token and the one of the main drives are actually what we wanted to do with hole punch was um you know myself matthias we were always pushing for showing that the protocol can be massive without having a token because the we need to go back to the good old times when the product was used because it had utility around and what because you being used because someone was uh was making money out of it right so the the beauty of of um of keaton hole punch is that there will

be all fully open source everyone can will be able to take it right and build whatever so hole punch will have a set of primities for for um you know decentralized storage real data relaying you can build vpns you can build search engines on that you can do build file storage you know one of the applications that are is most exciting for me is like imagine that you're all your digital life right you can store it among peers with some sort of redundancy and you pay like um you know some a fraction some some fraction of bitcoin monthly in order to keep that safer and and backed up right and then you know you you go around you you travel you cross countries and you you are somewhere you you buy a new laptop and you have just remember 24 words that are basically deriving your

hole punch master key. And that will allow you to get back all your data from the peers, right? So your personal digital life can be as stored, as safe, as decentralized, as secured in a decentralized form as your Bitcoins. So the fact that that is super cool, right? And you can, with this technology, you can have a slider that can allow you to go back in history and go forward. And you can still, you can see the changes of your history because this decentralized

data structure is extremely powerful to also have indexes, time-based indexes and so on. So I don't want to bother you with all this stuff, but I'm just getting excited with, for all the things that we can build on top of it and not just us, right? The beauty of this technology is that it's basically JavaScript and HTML, right? So it's React JS, React Native for mobile and JavaScript mainly. So also the way we design it is that JavaScript is the most used programming language when it comes to, you know, most used ever programming language. And you can find, so at this point, any web developer that they are the most easy to find

in the world can build the centralized application because we solve all the complexity of peer-to-peer discovery, peer-to-peer communication and storage and everything for that through the old punch SDK. So suddenly every single developer can forget about the cost of infrastructure. You today would never build Zoom as a competitor because you know that even if you have the best user interface, you still have to pay massively for the backend infrastructure. It would cost hundreds of millions per year, but with HolePunch, all that cost goes away. So you can focus and the entire kit interface has been developed by one single front-end

developer because in six months, everything else is sold by HolePunch. That's why we are so excited because it's like we are creating and even playing field for developers, right? We don't control anything, right? It will be open source, right? So other companies can build similar products, other products, and there is no way for us to control it or anyone to control it because it's just pure talking to each other. It's just code.

Yeah. I mean, and you brought it up too, which I'm really interested to dive into. do not apologize for for getting deep into the weeds i'm extremely fascinated and interested to learn how this works at a technical level and i mean but you mentioned it like you like you can with your bitcoin you can recover your data from your peers using a seed phrase so there's some form of private public key cryptography involved here where does this come out come in and and so It's basically user authentication using keys, correct? Yes. It's basically you use

public keys in order to generate your root key. We are adding now a DID scheme where you can have your root key, you have your key chain so you can derive another subkey that is the key that you could use for chats. Then you can derive from the root key another key that you could use, for example for you know storage and so on and so forth and the cool cool thing is that you can derive sub keys of the chat uh sub key so like in a tree form so you could um you could have multiple identities for the chats if you want to have multiple identities for example all part of

the same root key so of course you can go down but you cannot derive up and so simple cryptography right so it's not we are reinventing the wheel it's like you know simple derivation path cryptography that has been used for a long time in crypto but that is actually cool because then we it allows us to do like multi-device pairing so you have your phone your your your laptop we can allow you to you know um uh sync the two and all in a peer-to-peer fashion right now you get for example you have in for your chat a derivation path you can have two keys and both of them can create an attestation to prove that they are part of the same let's say root key and so that who is in the chat with you can you know unify your contacts under one single

um marty contact so that they they don't see multiple markets in the chat right so but it's it's kind of standard technique um and uh but if we like simple things right so that because the we can we can mold them in into um in in in complex behaviors while remaining extremely simple in in the in the implementation yes and then so this gets to the whole key management ux quote-unquote problem that many people point to a bitcoin people are like oh bitcoin's great but At scale, nobody's going to want to hold their keys. What are your thoughts on individuals and the trend towards the security of an individual's keys becoming more common? Do you think it becomes more common?

Do you think this notion that most people aren't going to control their keys is correct? How do you think this plays out moving forward? I think that it's important to have easy backup schemes. So one of the errors is forcing everyone to be the most sophisticated user ever, right? So for example, you could use a ledger, then you could use a ledger plus a multisig, so a multisig with ledgers and other keys. and you could for for your seed you could use like a metal capsule and or you you could use a paper right so there are so many even with people being able to manage keys there are so many levels of security right so so it's it's an endless battle so i'm you know a lot of security i

use cubes os for as my operating system and of course multi-sig plus plus ledgers but others might be happy just with um you know a ledger with a piece with a paper sheet and and so on right so you need to create if we want to onboard uh people from um you know outside of the crypto industry we need really to force um the creation of user-friendly backup schemes where you know these backup schemes can be and with the peer-to-peer technology is not that difficult right so you can imagine like for example your private keys can be backed up from you know on by 100 different peers there are really a tiny fraction of data right so it's it's super simple right so but you can have a weight with a password uh or a 2fa to request that backup and start from

scratch and get back all your data right so but that the user experience the the user friendliness of that experience is something that we are heavily working on both as sedan i know that john is a maniac on that part and also at with hole punch yeah it'll be very it's very exciting because as we've been saying like this is desperately needed one can make a very strong argument that this iteration of the internet over the last 25 years has been or will be looked back on as an anomaly where maybe we architected the the infrastructure of the applications being built on top of the internet stack as unwise and not well thought out but as we move forward through time and we get smarter and get more comfortable with private public key cryptography um we're

devising schemes that that make the internet more robust for the individual user and hole punch definitely seems to be um a solution uh moving us towards that direction so it's incredibly encouraging to see this because again it's desperately needed i completely cannot agree more yeah and going back to like you don't you're spinning up hole punch as this protocol and a lot of people historically or last decade when you spin up a protocol everybody wants to throw a token on it um and put it on the blockchain i mean i think that's one thing we should make clear hole punch is not a a blockchain it's just a different data structure um with states that you can um tap into and then um but you don't need to add a token

that's inherent to the protocol but you can add sats to it you can inject bitcoin via the lightning network into this right because i saw uh keit i believe it teased it out yesterday you had a keit send a tweet out where somebody was sending sats um to to another individual uh via the messaging app um so how how do you view bitcoin playing into to the whole punch infrastructure and how does that uh integrate with with the system yes so payment systems are extremely important right so it is so we we see the integration with lightning as complementary right so people companies can build services on top of hole punch and they might want to be paid for it and that's completely fine right so i'm not saying that you know when i i talk about the

tokens shouldn't be part of the protocols is because protocol should exist without tokens unless it's you know bitcoin and that is money but everything else so all the communication protocols all these uh interaction protocols should exist without the tokens then people should create use cases for for these protocols and then at that point you can create payment system payment layers so for example you can integrate hole punch and let's say that you provide trading signals right so you can sell credit signals through hole punch and then you you can say i want to be paid you know some satoshis every minute or every you know 10 minutes uh for for my service and then you you you just generate an invoice constantly and then people

can pay for you they can pay for that and if people stop paying you you stop servicing the data to them so easy as that right so it's important for for hole punch to have payment primitives that are you know something that already exists is robust like like network and and then can be integrated by software developers so i'm i'm really excited about that because we prove that the blockchain is not a solution for everything right so i don't like the all these uh three to five years we have been hearing all these blockchains saying well i can scale to gazillion transactions per second i'm going to serve all the needs of humanity do you think that i i so first of all blockchains cannot scale to that right so full stop so the

only way to scale to the human needs is being like bitcoin 10 minutes block time so that you know worst case scenario even in war zones there is enough time to download at one block and everything health should be a layer two that is not sharing a global state so what i don't like is layer ones that are they're trying to be as fast as they can to to you know to to solve all the humanity needs and one thing that people forget and tend to forget in our industry is that yes crypto is cool but there are other industries that are growing fast there is artificial intelligence there is robotics and there is internet of things so if you unify the three things that i just said you have robots sentient robots in the next 10 to 15 years and then you have you have already fridges that

are that are you know um buying groceries for you if if you are missing the milk for example we have light bulbs that are um that are you know paying for their own electricity at least prototypes you have cars that are silver driving and so on imagine how many robots will be in our life in 10 to 20 years and so all these robots will do machine to machine payments we'll do we'll do all the crazy things that we are doing maybe and so the amount of transactions we need we will need are much higher than any possible layer one solution will ever be able to to to offer and there is there is no solution to that with global state right because global state is uh is uh um you know it is it's problematic because it requires to rely on a speed of light because

with the speed of if you have a global consensus with a global state means that the majority of nodes has to be informed about the change if you have 400 500 milliseconds block time that is almost impossible especially if you enter in a war zone then connectivity might not be great then you'll start seeing all these blockchains falling apart because they cannot the state cannot be reliably shared across you know all the places in all the points of the earth so that's why i think that is important to use blockchains only as a settlement layer for really important transactions and you know lightning network you know you have channels people send money through channels and then eventually you know from time to time this channel will be settled on chain and so that's

what yeah that's something that i like to bring also in hole punch as a an entire concept yeah i And I went up there to my bookshelf and I grabbed my 21 computer, which Balaji Srinvansan launched, I believe it was in 2015, 2016. But this was, I mean, the whole goal around this project was enabling the machine payable web, the machine to machine payable web. And it's funny to think back, like, yes, maybe Balaji and the team at 21Co had the right idea, but they were just a bit too early. You need something like Lightning that allows you to move these sats at light speed and have final settlement. This was doing it on-chain. This is the weakest mining computer in the world. But that idea has been around for a while.

Would you argue it wasn't until Lightning came to the Bitcoin stack that it could actually be enabled? Exactly right. so the of course innovation takes time again uh we go back to the fact that you know we cannot expect pretend that that uh you know bitcoin is a complete technology and can fulfill all the needs of humanity in just few years right so things will be all built on top of bitcoin and the thing for most important thing is lightning so to me is you know it's obvious if you when i try to speak to not non-technical persons like that i meet in my day-to-day life why i'm excited about bitcoin is like um i try to point them to the fact that i'm not interested of what their fridge is going to

buy for them or what of what they are paying for if they are paying for a salad or for a steak or whatever right so if you have a global share state on layer one you will see all that information that i shouldn't care about but with lighting is just channels right it's the same thing of hole punch you are actually opening a channel that is a socket that is a connection only with the person that you need to deal with in that specific moment in time right so so you can send one trillion transactions between you we can and to each other trillions of transactions without affecting our neighbor because that our neighbor should never know about those transactions but we shouldn't know about what our neighbor is doing as well because that will be just clog

our network our computing power our you know our life in general right so it's it's the simplest of the concepts of course lighting took a little bit of time to be uh created there are some of course security aspects that were needed that was a need to be figured out but the underlying concept is is obvious you need channels you need to to segregate information just within the people the peers that need that information in that specific moment in time yeah and correct me if i'm wrong but bitfinex was the first exchange to integrate lightning correct we were the first big exchange to integrate lighting and now we are still the biggest node we are we crossed i think one thousand bitcoin on lightning on our lightning node now so we are actually one fifth of the

network uh alone that's crazy um yes well with that but that is important right so sorry well i got you all right go ahead um the the reason why we grew so big that we wanted to prove so when we first decided to go on with lightning we were sick and tired of all that narrative like was 2019 there was the narrative that lightning was not secure for big transactions so what we did was you know putting lightning um installing lightning launching the node and also opening with the selected parties five bitcoin channels so we were we said look you know we are going to put up our money to show that this thing is will work and is in fact safe we are running our node since years never had a problem you don't know how many problems we have in running all the

other blockchain nodes but never had a problem with lightning of course we have watchtowers and so on but it's it's part of um it was a learning curve for us but also proof that the lightning was in fact safe and ready for scale yeah and well i'm very happy to be talking to you right now because you've been experimenting with it at scale for years how has the lightning network progressed since you guys first spun up your node and and started running it in 2019 what what is the lightning network in 2022 compared to what it was when you first started interacting with it well at bitfinex we are processing tens of thousand transactions per month um on network also we have created with bit refill the settlement mechanism so that our users can that have

have BTC balance can actually buy gift cards directly from Bitrefill paying in sats. So that interaction is like, you know, blazing fast is, doesn't require like deferred segments between us and the Bitrefill. So that use case is by the way, is growing by the month, right? Bitrefill usage is going through the roof. They are great team, great guys, great product. I mean, I think is one of the most wonderful products that we have in that was conceived in our industry.

And we have been experimenting a lot lightning channels together. John Carvalho actually came to us from Bitrefill. As you know, he's a big advocate also of lightning, right? So we have been discussing and growing our lightning use case together. So John is now with Synum is creating this way to buy and sell channels.

And so Bitfinex will integrate that part into its product suite so that people can actually buy channels directly through their Bitfinex interface. So we are adding all these use cases because we feel like there is a lot of education still needed and people need to understand that like network is not scary but can be used like really simply in in their day-to-day lives um so we are seeing more and more wallets integrating with uh with with the lightning of course there is el salvador um make el salvador kind of help

a lot there because now we are seeing we the there was this force uh request to the big corporates like McDonald's and Starbucks in us or to have to support Lightning payments. So in a way, even, you know, that proved that even big corporates can move fast and can actually adapt really quickly to technology. So there is so much to do and so much to talk about. But Lightning completely changed since the first time we started supporting Lightning in Bitfinex. Yeah. I mean, I use Lightning every day. I mean, there will be people streaming us that sort of lightning network as they listen

to the show. And I'm not sure if you know that, but we in Lugano, part of the Plan B movement, so merchants will start accepting by in the next days, actually today we had the first test run. So they have a point of sale, a pause that is lightning enabled. So now they can receive payments directly to their cashier, directly via lightning. there is the plan to deliver 1,000 of these point of sales in the next two months. And then we get to the chicken and the egg problem.

Like, how do we get people spending at these merchants? Well, I think that, you know, as a Bitcoiner, that I hold Bitcoin, I prefer to keep in Bitcoin and then spend part of the Bitcoins that only when I need to, rather than have to try to balance my cash accounts and so on. So and also there is the difference between El Salvador and Lugano, all right, is quite big. Lugano is in Switzerland, is a rich city, and Lugano can still use Bitcoin as a way to attract Bitcoiners that are, you know, there is a category of Bitcoiners that are wealthy people that could actually spend in Bitcoin because they have Bitcoins and they want to to feel the experience and bitcoin and tether are supported right so there is a lot of

liquidity in both of those currencies and um that is a way we want in lugano to prove that who is starting support bitcoin um is going to attract a new wave of customers that want to spend directly in bitcoin and that could bring additional uh revenues to to the city and to the the merchants And in El Salvador, instead, it's different, right? So Bitcoin is a lifeline for people. So we see that. So in a way, it's beautiful to see how two different countries and cities from two different wealth that have two different wealth standards are using the same technology for different purposes. Yeah.

It's crazy how it feels like it's happening. I mean, there's a lot of people. I mean, I tweet this out pretty often. And I think many people out there are sleeping on the lightning network. It still blows my mind that particularly over here in the United States, all the big funds that are getting in the space, like, oh, we're going Solana, we're going to NFTs, we're doing all this crypto stuff. But it's like, oh, you guys are missing the actual signal, which is the build out of the lightning network and its maturity, which seems to be hitting a breakaway speed at this point. the amount of companies that i'm coming across that are building products using the lightning network what you guys are doing that whole punch and keith and bitfinex to integrate it like it i

think there is a lot of people around the world that are sleeping on what's happening on the bitcoin stack completely agreed yeah well you're at a conference i'm sure you've got dinners you got people to meet up with i don't want to take up too much of your time um paulo it's been it's been great getting to sit down and speak with you i've been as i mentioned an observer of the products that you've been building um for many years now and uh matt and i always call bitfinex like the pirate ship of the industry and it's always great to see you guys just uh um evading uh evading the people that want to bring you down and just delivering value and just proving like hey, we're here because we like Bitcoin,

because we think it's an imperative for the future, for humanity. And like you said in the beginning, you guys have just been head down building for many years now. And I'm very happy to see that you guys are making an effort to be more public-facing these days because I think people need to hear exactly what you guys are doing because you guys are on the cutting edge of everything that's going on in Bitcoin and distributed systems.

I really do appreciate that. And thank you very much, Marty, for having me. It has been a real pleasure. Pleasure was all mine. Is there anything on top of your mind that you want to leave the freaks with before we wrap up here? Just give a try to Keet and you won't be looted. You go to Keet.io, K-E-E-T.io. Very easy domain name to remember.

um yeah i tested it it works beautifully so um go check it out paulo go enjoy your night in paris thank you again um hopefully we can do this again sometime absolutely anytime thanks man have a good day all right peace and love freaks