TFTC: A Bitcoin Podcast - #446: The State of the Lightning Network with Matt Corallo

Episode Date: September 14, 2023

Marty sits down with Matt Corallo to discuss the state of the Lightning Network. Matt on Twitter: https://twitter.com/TheBlueMatt 6:38 - Hot mics, soft forks 13:34 - Should we focus on what we have? 18:27 - Core dev burnout 24:58 - State of Bitcoin adoption 35:23 - The year of LDK 40:46 - Stablecoins and AI 46:44 - Where should the focus be? 52:42 - LSPs and improving LN UX 59:21 - Crypto impatience 1:05:26 - Using lightning every day 1:07:02 - Regulations 1:21:01 - Bitcoin and Crypto have different regulatory concerns 1:23:34 - AI and energy 1:27:31 - Is LN a panacea? 1:35:54 - How is LN success defined? 1:38:35 - PTLCs 1:43:46 - Bitcoin’s success probability Shoutout to our sponsors: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Unchained⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠River⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Bitcoin Talent Co⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ 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 bent here to introduce this rip of tftc sat down with og tftc guest matt corralo i think he was guest number three on the show this may have been his fifth or sixth appearance but it's been a while since we last sat down he's in town right out the door here in the bitcoin commons in austin texas working on ldk so we had to sit down and catch up it was a great catch up you guys are gonna enjoy it it's about the state of the lightning network and other things and other things before we jump in to the episode i have to read the top four boosts from rip 445 dispelling nuclear energy misconceptions with ryan mcleod at dasbia 21 000 sats fellow pleb here an intimate knowledge of

grid substations and transmission networks if you'd like to further expand on these themes at dasbia from at looking glass edu dms are open i'm down for a pod thanks for flagging that for me dasbia i'll keep you keep you posted on that at letter 6173 7777 sats sevens across the board palindrome boost most of us are here to fuck fat girls and stack sats and we're fresh out of fat girls i had to read the boost i'm not in the most of us camp i'm happily married with children and the profanity at bad career advice chad responded to that stay classy san diego at gert 5 000 sets nuke luier nuclear i can't pronounce nuclear nuclear i just have to say nuclear new clear i have to think about it separate it logan's helping me with hand signals

here at pi as 1000 sats thank you gentlemen thank you pious it was a top four set it's boost of rip 445 great conversation go listen to it this rip was also brought to you by good friends at river rivers here to bring you bitcoin to do it the right way they built their own infrastructure they have no fee dcas so if you want to dca into bitcoin and you don't want to pay fees the other exchanges charge you for dcaing go to river it's free uh there's a lightning uh river lightning services which is an api for a company looking to incorporate lightning into your stack go hit up river uh what else they have a bunch of things they have customer support you actually have a problem and you need to talk to somebody on the phone you can call somebody

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you've had a dynamic where money's become freer than free If you talk about a Fed just gone nuts, 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. if your phone catches fire then maybe you know you had to have it on the cloud somewhere

have a live backup that doesn't change with l2 right with l2 you get that data doesn't grow unbounded it doesn't like keep increasing in size it's just fixed size but you still have to do that same that that step that adds all this latency and adds all this complexity you still have to do it and the reality is even though the data today grows unbounded in size it's just not that big um and so like it to my to me it doesn't solve that that hard part of the problem um something like vls solve that in a more creative way no i mean vls has the same problem VLS also, anytime it does an update, it has to like durably save the fact that it's about to do this update to disk somewhere or to the cloud or, you know, live backup, whatever

the, your, your storage solution is backing your lightning node. You know, you always have to, every time before you do an update, you have to do these live, these durable writes. What does fix it? Nothing. I mean, it's not, like, the hardest problem in the world. Like, it's fine. We can do durable writes.

This is a solved problem in computer science. It's just a thing we have to do. And, like, that's the, to my mind, that's the annoying part of lightning storage, not this, like, oh, the size grows unbounded. It, like, keeps growing and growing and growing. That isn't the hard part to me. And, in fact, with splicing, you know, if people start using splicing, once you splice, you can throw away all your old state.

so it's like oh yeah it kept growing unbounded and then we spliced and then we threw it away and now it's back to zero and we start again so it's like okay and well you know that that's not a lot of data i don't all right let's get into it we're already recording did you hit go oh we hit go already oh all right that's all all hot mic that was all hot mic all right we got matt matt corallo back in the studio for the first time and first time in person since williamsburg It was me, you, Val, Eric, and Matt. Yeah, it's been a minute. That was a while ago.

Yeah. Thanks for having me back. Thanks for coming back. I left New York, you left New York, I'm in Austin. I'm in SF. How is SF these days? It's good. It is good.

Don't go downtown, but that's true of a number of cities. But aside from that, like, you know, the city's back. There's a lot of people there. as always sf has great nature lots of places to go go walk go be in a forest um yeah it's good do you miss new york at all yeah yeah i like the energy but my wife likes uh likes sf so i don't want to uh denigrate the austin bit devs because this is an incredible bit devs but the og bit devs i do miss yeah it's hard to beat the new york bit devs they just celebrated their 10 year anniversary they've been doing bit devs in new york for 10 years it was the 200th bit devs wasn't

it that was a while back but 10 years was a month ago or not even i was like two years ago yeah yeah um well anyway logan ninja launched us into hot mic we were discussing the original question i asked talking about all the potential soft forks that people are discussing right now whether it be drive chains op ctv op vault in apo that's what we were talking about was apo yeah somebody working on ldk i was running with the assumption that maybe apo would be appealing to you yeah i mean i think you know a i'm really excited that the people are working on covenants i think we need some kind of covenant scheme you know obviously covenants the word is a little overloaded now all of these things actually do subtly different things um have very

different properties in terms of what you can build what you can build easily what you can build cleanly um but i am excited for the future of things people are talking about building these payment pools these um all kinds of cool things but you know the lightning world is very excited about building l2 and thus kind of is pushing increasingly for what is the minimum set of things we can change to get l2 and that's largely apo um and and i'll piss off a bunch of the lightning folks saying this because they all i think strongly disagree with me so take what i say with a grain of salt but i don't care very much about l2 um i don't think it solves the hard problem that we were just chatting about this i don't think it solves a hard problem in lightning

the hard problem in lightning is every time i make an update and this is multiple times per payment is like four times for every payment you want to send or, um, or receive, uh, you have to like take whatever data, your, uh, uh, information about this update and you have to write it to disk. You have to make sure, you know, if you're doing a live backup, you have to like write it to your like cloud backups engine. You have to like do whatever you have to do, but you have to make sure this hits disk and that like adds a bunch of latency. It adds a bunch of complexity. Um, especially if you're talking about like a phone and you want it, you know, you don't want to trust that the phone's not going to catch fire or whatever um that is hard and that's a lot of

work i mean it's very solvable but it is a lot of work uh and apo and l2 specifically doesn't change that you still have that property it's just that that that amount of data doesn't kind of keep growing right so like lightning the data you have every time you do one of these rights you can't throw away the old stuff you're just adding more stuff on top um and with apo you you replace the old data. You can throw away the old data. You just, every time you do one of these rates, it's pretty small. It's nice and compact. That's cool. And that's great. But the total amount of data just isn't that big and lightning. And as we move towards splicing, if people start using splicing, every time you splice, you can throw away all your old data that resets your

state again anyway. So to my mind, like, you know, if you're a mobile phone and you're just sending a few payments, your data is never that big to begin with because you're just sending a you're not routing payments. If you're routing payments, I mean, you're on a server that's online all the time. You can buy a terabyte SSD for 30 bucks. Like, why are you worried about your data storage? That's on the order of less than a gigabyte. You know why that shouldn't be a concern of yours. Um, so it was not something to my mind. It doesn't solve a lot of the important problems in lightning. Um, it's cool. It cleans up a lot of stuff. It simplifies stuff. Um, but it doesn't solve a lot of the heart problems so you know well if he's saying that it really makes

me think back to the conversation i had with rob hamilton a few weeks ago obviously he's working on miniscript at anchor watch and a big part of that discussion um we dove into the perspective soft forks that people are talking about and then we really leaned into So, okay, these things could be cool. We don't know how they're going to get merged. We don't know how we're going to come to consensus to actually activate them. And we really fell back on like, all right,

let's just run with the assumption that none of this ever gets merged, none of it ever gets activated. Maybe we should be focusing on pushing the limits of what we have at our fingertips right now. It seems like with this particular subject, there's things that we can do without APO to make the thing that make the process better, more efficient. Um, yeah, I mean, I don't know. I feel like we should assume we should get some

of these things eventually because we do need them for things other than lightning. Um, you know, I think I keep coming back to this, like, you know, if we assume that Bitcoin is truly going to go global in a big way that we, that we really need, you know, Bitcoin is all about like being able to transact without trusting someone without trusting anyone specifically but usually because you don't want to trust one specific group um and if the world we end up in is like you can only use bitcoin custodially obviously we've lost that value for a lot of use cases um and so if we assume that like all right let's assume a country is going to implode tomorrow and uh they need to be able to onboard to Bitcoin and, uh, you know, they're, they're not going to move to a stable

coin for whatever reason, uh, they're going to onboard to Bitcoin. We can't have every individual have a UTXO, which is the current lightning model, right? That like, you know, everyone's going to have a UTXO. Maybe they're going to do a few transactions to get the liquidity rate for their channel with their LSP or whatever. Um, but they're going to have their own UTXO or maybe a UTXO between them and their counterparty. And there's other things you can do. There's like these multi-party channels with trees of transactions. They also have a lot of overhead, and they're not going to scale that far.

Maybe you can get another few X on top of where we are. But at the end of the day, we really need to get to a world where multiple parties together share a UTXO on-chain. um and so you can do that kind of one of two ways you can do this kind of lightning multi-channel world where you have like an n of n multi-sig right it's like 10 people are going to share this utxo and it's a 10 of 10 multi-sig and we do state updates like we do lightning and all 10 people have to be online at the same time in order to do an update or have to at least be able to exchange messages to do an update so obviously this doesn't scale like everyone has

their phone they're not online all the time we can't scale that to you know a thousand people because then you'll never be able to do an update there's always somebody offline there's always somebody who like won't respond for a month like that's not a solution um the other world if we have covenants we can build payment pools so we can build these multi-party utxo schemes now i don't want to be too kind of like this is the solution because there's not a lot of concrete solutions here there's like various proposals that are um there's there's more naive payment pools there's like kind of the arc thing which doesn't scale very well either um there's a lot of ideas in this space and there's a lot of excitement in this space there's not a lot of

like real concrete oh yeah that's been worked out someone's really designed this all the way to the end and it's clearly going to work and we should like be deploying this now we should be thinking about this now um but there's a lot of excitement in this space and you kind of have to end up there in one way or another um so i do think we need some kind of fork to get us there it is not clear to me which one um and we don't need it now we've got a while so we can get this right we don't have to rush this um and i don't think but i don't think we should just be like let's just focus on what we have now let's just like build with bitcoin as it exists and not worry about this in the future i think we we do need to get there it's just we can take our time and get it right

let's not try to like rush into this let's not you know be like oh we have to do you know apo today because we need l2 it fixes important problems in lightning no we can wait yeah it's interesting because there's a couple factors you have to take in here it's like i agree i think we can wait and i also agree i don't think we should just say like this is never going to happen let's just push the edges to what we have now and see how far we can get i think we should do that and have these conversations in parallel but then you have this overarching theme of burnout within the core project where it just gets really frustrating

for the people that are pushing these ideas and they've been waiting a while already. Like, how do you keep people engaged and motivated? Yeah. You know, I think Bitcoin Core is doing a lot better than it was a few years ago. You know, there's this kind of this long, there's this kind of story of Bitcoin Core

where it was like, you know, during the block size wars, there was a lot of intense focus um a lot of people trying to do a lot of really good work to like you know to show that that bitcoin core you know is you know moving forward etc um there was a lot of pressure at that time that led to a lot of burnout kind of as soon as segway 2x imploded um basically i mean maybe i shouldn't say this but we were in the chain code office and like the announcement came through the mike belcher sent that famous email it was like segway 2x is dead we're not doing this whatever uh and we pull out the whiskey from the top shelf like it was i don't know 11 a.m or something we're like all right we're just drinking today it's all

right um and and so but i but i think that really did you know i think at that point people kind of stepped back and people said like okay there's all these other projects i want to do in bitcoin some people wanted to do other projects outside of bitcoin but other projects people wanted to do in bitcoin you know i spent time working on uh you know i started working on lightning stuff other people started working on other pieces around bitcoin core that aren't necessarily bitcoin core and that sucked the wind out of bitcoin core all at once and at the same time you had a bunch of people trying to get excited and like contribute to bitcoin core and all the people who'd been doing it for a while stepped away um and suddenly you just had a bunch

of people who like didn't know the project super well were kind of new to the project trying to contribute you know doing good work but like didn't know the project very well and not a lot of mentors to help them out and so that that caused a real issue in the culture for a while um but that that's largely fixing itself now you know those folks who were getting involved at that time now know the project really well and are still working on bitcoin core um and so there is a lot more momentum in the bitcoin core project to really ship new features to really get stuff done with a lot of people. There's a lot more excitement in that project now.

So I do think Bitcoin Core is a hell of a lot healthier than it was, you know, even two years ago. Yeah. But to your point, you know, when Twitter is spending all its time talking about like, oh, we got to get one of these soft forks activated. I prefer this one. Screw you for liking that one, whatever.

Yeah, I mean, that does, you know, drives a little bit of burnout. But also I think Bitcoin core folks are just going to ignore that because it's like, you know, there's not a, there's not a strong technical consensus. There's like some, there's some thinking that maybe we should do this, something in this vein, et cetera, et cetera. But like which one, and like, there's not really, you know, there's some arguments being made here. There are technical arguments that like this one is better, that one's better or whatever, but there's not a lot of great. And to go back to the point about, like, you know, we want to build these payment pools, but they're not really fully thought out and, like, fully designed. So it's, like, how should someone be thinking about designing a soft fork to enable these things if these things aren't fully fleshed out and fully, like, scoped out?

And so there's, you know, there's kind of a, like, well, it's not there. It's not, like, there's not a good way to evaluate what we should or shouldn't do yet. And I think that's still a ways away now to the credit of some of the folks working on these covenants design. There is a lot of work going on to formalize how to think about different ones and compare them. So that's making a lot of progress. But, you know, people on Twitter just screaming about we got to do this one. We got to do that one. It's just not it just kind of gets ignored and it's certainly not helpful.

yeah do you think ultimately what will lead to something getting activated is something similar to segwit2x where you have this pressure maybe it's not like i hope not i mean maybe it's not people like threatening to arbitrarily double the block size and do what they did back then but maybe it's economically driven this time around where bitcoin garners significant attention and adoption and we sort of reached a limit so the utxo limit that you were describing and then that sort of forces like all right we really got to figure this out maybe i mean i wouldn't assign a high likelihood of like a massive flood of users in that vein and you know maybe we should talk about that uh too but i wouldn't assign a high likelihood of like massive flood of users suddenly

getting onboarded and this causing you know massive uh fee spike in that way um is super likely in the next few years um and i certainly hope we're not put in a position of trying to rush things and you know i mean if we don't have a good payment pools design then trying to rush a soft fork to ship payment pools isn't going to help anything because we don't have a good payment pools designed to like actually build on top of the soft fork um so i yeah i i don't think we're likely to see that outcome i think we probably have some time we can get it right and i think you know eventually there will be like taproot i mean there wasn't a lot of pressure to rush taproot there wasn't a lot of you know there's there's demand for snore you can do

multisig a lot easier there's a lot of folks who wanted it but didn't need it you know there's a lot of folks who like yeah we can do our multisig way more efficiently you know maybe we can do uh more private lightning we can do more private other things it's great but it's not like existential to bitcoin it's not like really important right now um so i i think we've got time and i i think more likely we're going to end up there than some huge pressure event we got time so with that in mind i think you were alluding to it like what is the state of bitcoin overall in your perspective from the adoption perspective yeah kind of um yeah i mean Yeah, it's a good question.

You know, obviously Twitter's now, there's a lot of... It's a crap bucket. Yeah, I mean, social media in general. But there's a lot of narrative around, you know, has Bitcoin failed as a mechanism of exchange, a medium of exchange, you know, whether that's payments or settlement, whatever it is, but kind of, you know, moving a lot of value back and forth.

You know, has Bitcoin kind of fallen flat? on that front and and lost to stable coins and i think i mean largely we have right it is true that for you know maybe let's taste it bitcoin fundamentally is all about providing a currency and a value transfer mechanism and a value movement mechanism where you don't have to trust anyone else right that that's the goal that's the north star that's why people are at least i hope are building in bitcoin care about bitcoin etc and there's a lot of factors to that there's like yeah i don't want to trust the fed because money printing and something something m2 inflation and like i i worry about that there's oh i i don't trust my local banking sector because

they're forcing me to use you know argentine pesos and these are inflating away or you know i don't trust my local banking sector because they are, you know, if you're, you know, the history of redlining, you're a black American, you know, you're worried about banks, you know, charging you a high fee, you know, because you overdrafted right when you're poor in America, you get whacked with a fee right when you can least afford it. And that sucks. You don't trust your banks for that reason. Whatever the reason is, there's some reason you don't like the solutions available to you or there are just no solutions available to you so you use bitcoin right um and on some of those fronts you know stable coins don't compete obviously if you're if you're thinking i don't

trust the fed stable coin's not going to solve your problem um but if you're thinking oh i don't trust my argentine pesos then stable coins are competitor there right we're in like usdc usdt whatever it is often usdt on tron um and in that particular use case bitcoin is obviously not winning right obviously people are preferring uh dollars for for many reasons they just prefer dollars has a much larger brand in most of the world and all of the world probably and so i i do think we as bitcoiners need to consider how to build better for those people you know if we think that bitcoin has value for you know if we think that uh you know in the long term you know are these stable coins sustainable these centralized issued stable coins sustainable

from a regulatory perspective you know are they sustainable from uh you know just from a practical perspective in many ways. Can you trust Tron? Is Tron well-maintained? Yeah. Well, yeah. I mean, I think most people using USDT on Tron aren't using it for very long, right? They have a USDT balance on Binance or some big centralized exchange. They move into Tron, they make a payment with it and they have moved out. So people aren't trusting it for very long, which is great. it it worked well for them um there's this kind of there's this meme in crypto right where it's like the the three parts of crypto there's like the the scientists and the engineers and they're all like trying to build uh you know the best system they can and coming up with all these

clever ideas and then there's like there's the priests and it's like the bitcoin versus ethereum people and they're all fighting for their chain to win and then there's the solana people also fighting for their chain for some reason um and then there's like the actual product market fit And it's people just sending USDT on Tron and that's where the PMF is. And to some extent, it's true. And, you know, obviously, a lot of the value of Bitcoin is also people not trusting the Fed and people not trusting the financial system and wanting this truly trustless money. And we cannot compromise on that front. But we should also be building things for other users.

And we should take our North Star and still build things for people who want dollar denomination, right? So let's not go down the same path and just build, you know, issued assets on Bitcoin, not to call anyone out. Let's not just create these centralized issued stable coins again, because what's the point? We're not going to beat Tron. I mean, it's basically a database. It works great for these fully trusted systems. We don't need to, we shouldn't be trying to compete on that. Let's actually build something that follows our North Star of having not having to trust anyone or certainly having to trust as few people as possible.

Right. So let's build DLCs. Let's build, you know, if you want stable U.S. dollar value with the ability to pay over the Bitcoin rails, which I think is something that, you know, if you're a Bitcoin, you hopefully think people will value. You know, you hopefully think that there's some value to the world in having the monetary rails be open and trustless and not having, you know, Circle or Tether Inc., you know, Bitfinex, having the ability to say no and take your money, block your payment, whatever, based on, you know, whatever chain analysis happened to say today. if we think there's value to that then we should be building that and we shouldn't be building just the same thing again we should be building something better you know you can't build a stable coin without having some trust and that has historically always taken the form of either an oracle price oracle or a centralized issuer tether circle um and i think obviously given the two options an oracle is way better option they're much lower regulatory overhead you can more easily federate it you can have a ton of different oracles and you you trust you know some some subset of

them um so but let's build that you know there's like the 10 10 1 guys there's there's various other folks trying to build dlc based you know dollar denominated wallets in bitcoin using lightning where you can just pay over lightning that's awesome like that is as trust minimized as we can get and you know that's that's a more trust minimized stable coin than almost anything that exists on eth there's some that that try to do something similar they don't have a lot of usage and you know you look at like maker or whatever they die they've all moved to usd usdc as their back or usdt and usdc as their backing which you know what was the point why we haven't built a decentralized stable coin um so you know let's focus on building these things and then let's

try to compete in the marketplace because it is true that bitcoin is failing in some of these markets where we should have have some value and it is harder you know we are trying to hold ourselves to a higher bar than usdt on tron but let's let's build to that bar yeah no you mentioned the 1010 one guys we were talking about them yesterday i believe last week or the week before they they launched um a cfd dlc a contract for difference right um and they're leveraging crypto garages dlc's over lightning spec right i don't actually know if they're using probably should know extension is it extension signatures what is it um uh um uh you're thinking of um Yeah, I know what you're talking about.

They had to use a hack because PTLCs don't exist yet. Right, yeah. And that's also coming in Lightning. People are working on it more now, now that Taproot in Lightning is starting to be a thing. Again, one of those things in Lightning, Taproot in Lightning doesn't really have any value by itself, but it enables PTLCs in the future,

which will be really nice. um but yeah i yeah i mean well there's people building in that space and it's really awesome but we should we should have more we should have more in that space and we should have competition in that space and actually give stable coins some real competition i agree but also would put forth like patience is important too because that's that's another thing i've been writing about a lot recently is i think this year particularly has really highlighted that the first five years of lightning development whether it be the robust competition at the implementation um layer or the the sort of development of ldk which you've been working on

um like it's taken time to get you know these different areas of the lightning developer stack to a certain point where you can then go build these things and i would say it's still very early yeah you know that stack's still fairly immature there's still you know i think the the history of lightning is is one of you know people building people getting excited and just like this stuff is hard and you know we're finally at a point where like lightning as it exists is stable is is working and it's a great demo of how you can build this kind of thing and get it stable for custodial stuff you know we're finally getting to a point we're building out the features we need to make a good first class non-custodial experience

um you know we need async payments based on bolt 12 we need bolt 12 for some privacy like we're finally at a point where we can start fixing all of these issues like you know recipient privacy we need bolt 12 like uh you know good first class mobile experience we need async payments like you know we're fixing these major flaws that we've had and just haven't had time to fix because we've been too busy just like getting stuff actually working yeah so with that in mind i mean there's a lot of people in this office actually only ben carman has been saying that this is the year of ldk so what is the state of ldk everybody that i talked to at his beginning from i don't say everybody but many people that i've been talking to that are

beginning to build products on lightning seem to think that ldk due to the fact that it was built in rust and is very modular is sort of primitive to build their products on why is this yeah i mean we're kind of the only modular game in town right uh eclair is to some extent as well um it is in Scala, so it's a little harder to get running. They had to actually reimplement it largely to get it running on iOS. They reimplemented it in Kotlin, and then they maintained the

Scala one, which is flexible as well, but not as flexible, and certainly not designed with flexibility as the sole North Star. So if you want to do something super custom, we're kind of the only game in town. If you're

like an exchange and you just want to like integrate lightning support there's there's good tools for you you know whether it's eclair cln or lnd they're they're pretty good you know use one of those probably they're they work great off the shelf if you want really tight integration you want your own you know custom data storage you want to do some extension you know you want to run in wasm like the mutiny guys do uh you want to you know build you know remote signing support with like a multi uh multi that's the word i'm looking for just mini nodes in one machine uh cln is working on stuff around there for the green light product as well but also you can do that with ldk um and you can do it a little lighter weight i think with ldk um so there's just like

a lot of these more interesting ways of thinking about deploying lightning that you can't do with lnd you can maybe do some of them with core lightning you can maybe do some of them with eclair but for the most part you can only do them with lek so we're really trying to enable more experimentation more different ways of thinking about deploying a lightning node or mini lightning nodes um and and we're really moving moving good towards that and so you asked about the state of ldk we have a lot of people doing really interesting and very different deployments all at once right now and they're all very you know we have a number of folks building on ldk uh building uh very divergent types of nodes and right kind of all reaching

this point right now where they're kind of you know they've built something they're testing it they're kicking the wheels on it they're finding you know edge cases and ldk so it's crazy right now uh we have a lot of stuff you know improvements for this use case improvements for that use case this that whatever uh going on while also trying to execute on you know we put out a really aggressive roadmap at the beginning of the year just based on kind of what everyone's working on and what they thought their timelines were we're making good progress on it it's a little delayed but uh you know so we have a ton of stuff we're working on shipping so we shipped anchors we're working on bolt 12 we added watchtower support in this coming release we have like

better async support and rust um we're going to move towards async payments we did there's just so many different po taproot channels too is coming um so there's a ton of different things we're working on and also trying to improve the state of everything in ldk for all of the users building you know new and kind of innovative types of lightning nodes um so it's it's a little nuts right now there's a lot going on um but you know i'm really happy with with all the contributors uh you know we have a handful of folks who are downstream implementing stuff with ldk who are contributing back to ldk which is really great and the team working full-time on ldk at spiral as well as some folks who are on grants is great um so i'm really happy with where we are and the

progress we're making but yeah it's there's a lot going on right now digging into the contributor base like is it is it growing pretty rapidly or are you guys trying to keep it tight knit so no we want we want as many contributors as we can we really really want to avoid the outcome that we've seen with some other lightning nodes and i won't name names where it really is a corporate open source project and it's hard to contribute outside we really really want to avoid that we want to encourage as much contribution from externally as we can we have some folks externally to ldk both other teams at block using ldk as well as other teams outside of block using ldk who are contributing stuff that they need and we're really excited

about that and we really try to have as good a contributor experience as we can try to get peers reviewed very quickly um from everyone uh and so we that is a a key goal of the project to to be a true open source project in the sense that like anyone can contribute and we we try to make that contributor experience as good as we can yeah that's important and just lightning more broadly like to me it seems like again going back to i think we can bring this even back to the stable coin conversation i think it's inarguable more people are using stable coins globally than the lightning network for payments today and again i think that's just a timing issue i think in the future we can get to that point where

you have feature parity and the user experience parity yeah we have to get we need stable value People do want wallets that have stable, but we'll get there, you know, DLCs, you know, I do wonder, we'll see, you know, the marketplace will decide people will try different stable coin approaches and Bitcoin, you know, I'm not a fan of the like issued asset stable coins, because I think reintroducing trust in the system sucks. um but the market will decide and i am looking forward to people trying different things seeing what fee structures customers want you know compared to you know obviously usdt on tron is pretty cheap you know it's a pretty centralized blockchain it is really cheap to transact um so yeah i'm looking forward to seeing what comes out there and i think it's gonna be great yeah when we get there yeah but it does seem like this year particularly the activity at the product level on the lightning network has been somewhat impressive it feels

like five years in we're finally getting to the point where people are able to create experiences that work well i think yeah the emergence of the intersection of lightning and ai particularly through the spring and summer is something that i've been paying attention to you're you're remissing right now yeah i feel like the whole lightning and ai thing is like it's a little bit uh no no no we're cool we're we're in on the hot new thing now too we're in on it you don't think it's uniquely suited to solve some of the problems there no no why not i like i mean what is the problem like the problem is that people want to pay for ai uh output like model run output like okay but this is like every this narrative has come around many times in bitcoin right this like

you know you're gonna have some api that you want to hit and you want to like pay micro payments to hit the api and small scale the reality is no one's ever wanted to do this like in really no one has ever wanted this um it sounds great in theory because it's like oh yeah you know it is true all of these api hits are like you know a fraction of a penny whatever we wanted to make these small cheap API hits. It's true. At the same time, paying up front or totaling it and paying it on a credit card at the end of the month works pretty damn well.

It's just not really a problem. Amazon AWS has solved this really well. They're a massive business based almost entirely on racking up small charges across different APIs as you use them. um even open ai has a has a whatever monthly service fee for access to gpt4 and some of their newer works um what value is bitcoin providing there like okay we can add we can do micropayments better okay is that a 10x better experience than like credit cards suck for many reasons but and lightning improves on that but it's not specific to micropayments

i think yes i agree with that i think the one interesting sort of development there is the accessibility that it that it enables where fewer people have lightning access and credit cards i wish it weren't true but like i don't i don't think that it enables more accessibility than than there was really no i mean like the lightning lightning is awesome and bitcoin is awesome i've spent more than a decade working on it but we're still not there in terms of in a adding bitcoin adds more accessibility it it doesn't really except for some niches where you know if you want to enable people in iran to use your your product maybe you need lightning but also if you're an american company you can't do that anyway you gotta block them anyway um you know

maybe you're you're a european company and you're allowed to have iranian customers um and but you can't charge them with visa or you know bank transfers are annoying i don't know like there are there are niches where it might make sense but it's not like you can easily get bitcoin and iran anyway right so there are niches where it makes sense you know i'm optimistic about the long run bitcoin being more broadly available i mean we see it built into financial services today I mean, what's the, like, you know, you can pay, I don't know that PayPal, does PayPal do on-chain deposits? Can you deposit into a PayPal account? Think you may be able to.

Okay, let's assume you can. I mean, that's the only way you can pay directly from a cash-up account to a PayPal account, right? Like, that's cool. And, like, as more places integrate it and have that as an option, as a first-class option, then Bitcoin becomes more broadly available, becomes accessible, and then we can start having these conversations. but we're not there yet um the reality is you know cross-border finances financial systems suck for many reasons but you know bitcoin where they suck so much that bitcoin really adds value is still relatively small niches and if you're someone like open ai or someone like aws whatever that's such a small percentage of your customer base that you don't care it's almost not worth

adding that option to your checkout flow yeah all right so with that in mind outside of like contracts for difference and like mimicking stable coins on lightning what do you think from a product perspective should be prioritized right now yeah i mean i think that yeah that's that's a big part of it you know certainly i mean i'm not that's not to say we shouldn't build things like you know what it's l402 is the the lightning labs design for uh just paying for apis with the lightning like we should build those those are cool we should we should have these options available in the marketplace um we shouldn't anticipate that they get adopted broadly um but again in some certain niches they might and

in those niches that's where we start to demonstrate value right like you have to first find niches where like it makes sense and it adds value and then people see it people people want to access that service people use it people see how great it is how how easy to use it is and then they start to think like okay maybe i maybe i do this i have this in my service even though it might not be as required for my customers i mean like uh snowden had a great noster post uh whatever week ago two weeks ago it was kind of like look people uh hat people still think bitcoin sucks still think bitcoin uh is these slow 10 minute confirmations where you send a transaction it goes into the void and you don't know what happened for for an hour

10 minutes whatever it is um and they haven't used lighting and they haven't updated their priors for what bitcoin looks like and so having that more visible to people having that be exposed to people more will make people start thinking more about how to integrate lightning and how to use it in their domains so you know that's why we work on work on all the k is to provide a toolkit for people to integrate lightning in whatever way they might come up with because we're not going to come up with you know this great idea for how to integrate lightning and build this great lightning user experience we're not a user experience team we're not a ui team you know people like mutiny are going to go build a progressive web app and see if that

resonates in the market people are going to go build um you know pseudo custodial lightning where like the the no the the client side has a key and they like uh run some little signer daemon on their end and then can just hit the api and like not worry as much about lightning kind of the green light model but people are building it with ldk2 um you know we want other people to come up with some of those ideas and build those things out because that's not where we're going to do it where we're going to kind of shine as a team but we can provide the tooling for people to be able to do it um so i didn't quite answer your question but you know broadly what do you want matt what do you want to see don't talk about the tools talk about the end products yeah i mean but yeah i

think i think u.s dollar denominated bitcoin transacting uh is a huge one just in terms of like being able to truly compete in a marketplace where i think bitcoin should be adding value um you know people have been posting about how bitcoin has lost um but hasn't to your point you know patience it hasn't really started competing in those marketplaces and we we should start moving towards that direction um similarly you know i just want to i want to see better end user tooling you know there there are some great lightning wallets out there there's phoenix there's no no i don't know if moon is actually rebooted since they had some issues with their their non-lightning design and i know they were working on switching to lightning

basically um you know there are great user experiences for it but i want to see them more broadly available you know uh moving towards getting lightning and exchanges and coinbase announced yesterday uh that they were actually going to add lightning they announced a while ago that they were thinking about it and now now they are going to do it um you know getting lightning to a point where we've worked out all the kinks so that it is always a great user experience not just usually a great user experience part of that is the long tail of wallets that suck um you know there's a lot of great lightning wallets out there and then there's a handful that have integrated Lightning and still struggle with, you know, payment reliability isn't always

great depending on, you know, your node. There's a lot of documentation out there that says like, oh, you want to use Lightning. First install LND and then like become a routing node and like now you can use Lightning. That is bullshit. No one that, that causes so many problems. People do that. They're like, oh, I installed LND. I opened a channel and then I tried to pay myself from cache up and it doesn't work why doesn't it work well you have no inbound liquidity how do i get inbound liquidity i don't know like that that is not something for normal people to do and we need to update the way we're telling people to integrate with lightning so that they're not doing that but that also means building better tooling so that means we need you know we have people are moving

that towards that direction in the mobile front where it's like you know it's great experience you don't have to think about channels you have an lsp they pay you etc um but we also need that on the merchant side on the like i want to run a web store and i want to integrate bitcoin i want to integrate l402 whatever it is we need that to be a one-click install where it has baked in lsp that's going to deal with your inbound liquidity and maybe you're going to pay for it but there's a marketplace of them you can choose who you want to use um it's not like you're trusting them you're just relying on their liquidity. We need that to be a one-click install,

and it is very far from that today. Let's dive into that, the emergence of LSPs over the last few years. There was robust competition, like you just mentioned. There is increasingly. It's not easy to switch right now. They're all custom APIs, so there's some work to define an LSP spec,

so just a standard specification for how an LSP should interact with its client. Um, and that should enable much more robust competition. Um, and so I'm really looking forward to that becoming available, being integrated and a few LSPs and having clients for it that people can just use off the shelf. And ideally having, you know, servers that people can just deploy to be an LSP off the shelf if they want to do a bunch of management of liquidity and inbound and outbound liquidity and actually, you know, be that kind of routing node.

Um, and so, you know, we have seen a handful of these big routing nodes be like, okay, I'm now an LSP too. You can pay me to get a channel, but it's this very bespoke, like it was a custom API and you'd have to integrate with just this LSP and it's like Bob's routing node to LSP service. And maybe they have a great routing node,

but like it's Bob, like who knows if Bob's going to decide that he's bored and not do this anymore. I don't know. But having a spec for it and having that integrated in Lightning clients that people can just take and run is going to be big.

You know, like I've interacted with some, you know, credit cards are great, but sometimes they're a pain. And sometimes I want to buy a server from someone in Lithuania and my credit card decides it's, it's fraud and just makes it a hassle. So I prefer to use lightning. Um, but I've interacted with some folks who just like have installed BTC pay server and one click, okay, I added lightning and it just like spawns a core lightning or an LND node and doesn't do anything. And then I've interacted with them and they're like, why are your payments failing? I'm like, well, you have no inbound liquidity.

And they're like, what is liquidity? I don't know what the fuck you're talking about. I just run BTC Pay Server and everything else just works and this Lightning thing doesn't just work. So we need better support for that. BTC Pay Server is working on, they're going to do a mobile client now. So they're going to rethink how BTC Pay Server works,

especially on the Lightning front. So they're going to start playing with LDK on a mobile. uh client side um and hopefully we'll also have lsp support i think that's one of their goals so that'll that'll clean that up a lot um but yeah i mean this this needs to exist across the whole lightning stack well many people point to lsps and say hey this is a massive centralization risk in the long run do you agree with that yeah i mean it kind of is um but that's why you define a spec and that's why you create a marketplace for it right um it is the case that you know bob's lsp service a handful of them exist you know a bunch of these larger routing nodes that

are just run by one guy or you know not even a team probably don't even have 24 7 coverage you know it's just one guy um do have lsp services now and they will open a channel to you for a fee and they do have good routing performance because they are you know run a big routing node um and i think that is also going to be the future of this it's not just well you know you're going to use c equals blocks like professional um you know for-profit routing node that that exists as a whole team within block with however many engineers on it you're not it's not just going to be that it will still you know we need this spec so that it's not just always tightly integrated right where you you know someone builds a mobile bitcoin wallet and they use their own lsp and it's

bespoke and custom and something something you know there will be a true marketplace for it and that i think that will cut down on the centralization pressure of it um it is true that there's there's valid centralization concerns there um but if we don't build it no one's going to use lightning because the user experience sucks ass so you know i don't know what your alternative is agree that's you need that robust marketplace for it and with the spec like what is the state of that is it just early stages it's still early um what needs to be specced like what what would the spec define yeah just all the the how you get a channel how you you know obviously a big focus is kind of the zero conf channel use case right we're like um you know

you want to especially on the mobile side where you you're a mobile phone you know you that that first payment user experience is really critical like the first time someone installs your app and receives a payment like your you know their friend is like look how awesome this lightning thing is install this app i'm going to send you a payment well if that first payment requires that transaction to confirm on chain and then the payment and then all the later payments are instant but that first one sucked well you know that user is going to get turned off and not think that bitcoin is just still this shitty like 10 minute thing so zero comp is obviously a big part of it um and that does introduce some trust now you're you're restricted from just picking a

random lsp you kind of have to pick somebody you sort of trust at least for that first payment um and you can you can do better things in the ux you can display it pending yada yada but in any case um so it so that's been a focus of it you know there's there's some folks working on breeze folks working on it there's some of the c equals folks working on it uh one of the folks when the LDK team works on it some. There's a handful of folks working on building that. But it's really just all about just defining the messages, right? Like most of the LSPs are just an API.

You hit it, you say like, hey, I want a channel. Here's my note. Here's how to get the channel to me. Gives you a price, you pay it, you get the channel. You also want to support zero comps. You want to be able to say like, hey, if I receive a payment, what's the fee going to be? All that kind of stuff.

So it's early stages. there's it's kind of two versions of it there's kind of v1 and then v2 and v1 is defined people are working on implementing it there's some early implementations that people can play around with I think v2 is a little

further off it's much more complicated to solve some of the problems in v1 but it isn't like you know a massive win but it's more complicated it's going to be a while before v2 gets implemented but v1 is there starting to be there there's starting to be implementations people

can start to play with it. Yeah. It's going to take time. It is going to take. These things take time. That's what I'm getting out of this. Yeah. It's weird because there is this

impatience that exists out there, particularly from, and I don't know if it's disingenuous impatience or just pure ignorant impatience from people on crypto or like, oh, look, it's failed. It's always been crazy to me to think, number one, Bitcoin,

people point at the volatility um and they've basically shit on bitcoin for years being like oh it's a terrible store of value look at the volatility and similarly with lightning like launched five years ago like oh it doesn't work this stuff takes time to build like it just doesn't magically appear yeah lightning is is people underestimate how complicated lightning is and how hard it is to get some of these things right um you know i think by comparison like you think about like a pseudo centralized blockchain is pretty easy thing to do you know an issued stable coin you know there's a lot of work that goes in i'm not saying like it's trivial to build circle

overnight but a lot of that work is just regulatory um and it's not really a huge amount of technical work like like lightning is um and especially like building dlcs on top of lightning and you build lightning get that stable and the build dlcs on top that's a ton of work um that's a crazy amount of work um so so yeah i mean patience is the name of the game there's a lot of people in broader crypto who are like yeah look lightning has failed in the marketplace we've already won because these stable coins are just so much better and it's like yeah that that is you know a concern of mine that like you know these things are going to become more entrenched and and trustless options are not going to win in the marketplace because they're harder to build

the ux isn't always going to be as good um and they they came to the game later so it is a concern but you know the game's not over like the number of people in the world who use usdc and stable coins still very small even the number of people in the world like a number of people in argentina who use usdc or tether directly is very tiny you know we're talking about you know some people settle their cash trading people still get us dollar cash some people settled back into those cash trades using usdc but the normal people are still just doing cash so there's there's a lot of room there to still compete these things aren't entrenched yet but we need to execute yeah and do you think the entrance of companies like light spark you mentioned coinbase earlier you think

them getting into lightning and providing some intellectual capital helps with that at all Do you think it can muddy the waters if they're sort of coming in like, I'm new to Lightning and I'm here to fix it? You know, more of that or? I don't, we haven't seen that behavior very much, which is good. We haven't seen the kind of,

we've seen a lot of I'm new to Bitcoin and I'm here to fix it, but we haven't seen a lot of I'm new to Lightning and I'm here to fix it. I think people get in and look at it and they're like, wow, this is complicated. All right. So we haven't seen that much of that

and that's fine. I think it is definitely, I think LightSpark, Coinbase getting into it, these things are great And we should be excited that lightning is becoming available because at the end of the day, that's, that is where a lot of the consumers are, you know, people use USDT on Tron, not necessarily by having a Tron wallet by like going on Binance and clicking withdraw USDT on Tron, because that's the like faster and cheaper withdrawal option of the five options that are listed on Binance, right? Like, it's not like they're like, oh, using this all the time. And so having Lightning integrated in these places, I think is going to be a big boon, right? So having a Lightning withdraw option on Coinbase, having a Lightning withdraw option from some of LightSpark's future partners, right, where LightSpark can provide this integration easier for companies. I think that's big and we really need to encourage that and that needs to exist. And that is partially what enables these like DLC wallets to function, right? If you are, you know, you have whatever 10.10.1 is an example or, you know, there's a bunch of people working on building these things too. You have that app. How do you get money in? You know, you need an exchange that supports sending lightning. So you need to be able to go on Binance, send money in your pesos or whatever to Binance, click buy Bitcoin, and then click withdraw in Lightning, and then have it come to your 10.10.1 wallet, and that does conversion back to dollars for you.

That is a big deal. So we need that to exist. That's a core part of Lightning being able to exist. And Binance now supports Lightning. That's huge. um we really can't underestimate how big that is um so i'm really excited about that but just as a this is a requirement to get to where we need to be on non-custodial lightning not as a like this is going to solve our problem for us no at the very least it just brings more liquidity

to the network as well potentially i mean i don't know how much these guys are going to run routing nodes it was like you know i know cash app has nodes that that don't route right they they their compliance team said no you you shouldn't be routing um which sucks but it's fair um you know so i i don't know how much these nodes like we don't you know talk about centralization just like having uh coinbase and and others run big fat nodes that everyone routes through is not a great outcome either you know we do need these these plebnet style nodes but of course we need ones that that have sufficient liquidity and are really really you know to some extent actively maintaining it not just like the the folks who just start a node and are like why

can't i use my node it doesn't have enough liquidity but i don't understand that you know um so so i i'm not a huge fan of that part of it i'm just a huge fan of of it enabling people to have a lightning withdraw option wherever they already buy bitcoin yeah that makes sense yeah it's um i'm really excited i've been using i use lightning every day it's uh that's like the one thing that frustrates me the most like nobody uses it i use it literally potentially every minute of every day if i post enough podcasts via podcasting 2.0 there's people streaming sets to my to my node that i've been paying a lot more lightning invoices myself like it does feel like it's happening so it really i mean you know it works great whenever bid pay still has is

integrated in a number of places and as long as as long as the merchant's not in europe where you have to kyc yourself separately to bid pay and upload your id to pay which is nuts um and as long as you're not based in new york and your ip address doesn't come up as new york lightning is an option uh and it works great you know when there's you you want to buy on new egg or whatever um you know you want to buy stuff lightning is an option and it works great and there are a lot of again you know credit cards usually work even better um but where credit cards you know credit cards are sometimes a pain you want to pay a merchant in a foreign country it's going to flag as fraud you know you got to type in this whole thing like the ux of lightning is

actually genuinely better than a credit card um you know you don't get the like fraud protection whatever um so it's not necessarily always competitive but the ux is great like really genuinely great um and so i'm really happy with with where things are going and where things have gotten to yeah and so that's the technical aspect of it and you touched on a little bit the regulatory landscape what are your thoughts on that are you yeah fuck new york are you worried about anything on the horizon here in the u.s or fuck ben losky uh fuck are we allowed to say that yeah yeah we can say that sorry sorry wolf um yeah but uh but yeah i mean i think i mean the travel rule travel rules concerning especially you know where europe's going was it aml5 or amld5

what did they just launch yeah um they had the standard aml their new aml regulation um they also have their separate cryptocurrency regulation um europe likes to be a leader in regulation which is nuts to i think most of us americans um but yeah there there's stuff we'll see where the aml stuff lands um definitely concerning um with people just ability to withdraw from exchanges to their non-custodial wallets that is something that that is currently allowed um potentially is going to create some real big hoops to jump through it already is on some exchanges you have to like sign a message to say i have to like a signed message to say like yes this is my address um to withdraw uh and so i mean to some extent the travel rule is going to because the

travel rule fundamentally says that you have to include this information if the transaction is going to another regulated financial provider that means if the transaction is going to someone's non-custodial wallet travel rule does not apply so the travel rule to a large extent trying to enforce it is really just going to push everyone to withdraw to non-custodial which may be great as long as the hops that it creates for people to do that isn't too high you know i don't know if anyone's ever bothered to read kraken's terms of service but forever the terms of service has said that if you withdraw it must go to your non-custodial wallet you are not allowed to withdraw from kraken to another exchange because of the travel rule it says that in the terms of

service you're not allowed to do it now i mean that's not sufficient the question is what hoops are in the future people going to have to jump to to prove that this is their non-custodial wallet um and you know maybe lightning will just maybe they'll just allow it because it it the invoice looks different in one way or another i don't know um but yeah i mean what are those hoops but it's a concern it's not it's not the biggest concern you know i also worry about uh just you know there's there's now this chain analysis case i'm just gonna bring that up you got pretty heated on twitter oh well not the case you got oh there's a separate yeah it's a separate question um the chain analysis case is brian bishop an expert on on bitcoin yeah well i mean a usual

legal uh legal wrangling saying like fuck your fuck your expert he's not an expert um but i mean broadly in that case you know they're really relying on chain analysis heuristics to throw somebody in prison on a criminal matter i mean it's not even not even a civil matter this is a three people right now the tornado cash right that's separate and i think the tornado cash oh We were talking about Bitfrog. You're right. Bitfog, yeah. The Tornado Cash case, I mean, I think it is relatively clearer that North Korea put some money in Tornado Cash.

There are other issues with that case, unlike is Tornado Cash a business? The Tornado Cash case, they're arguing basically Tornado Cash is a business, and as a business, it has to act as an MSB. should have been registered as an MSB and thus it has to comply with Bank Synchronicity Act and all the usual MSB, AML, KYC requirements that is concerning from a

like you know is this a business point of view and they the prosecution really muddled the argument around like well but obviously that argument is muddled just because like they raised money from VCs they operated as a for profit with this token

in that made money not a fan of where the prosecution went there but but at least it's a more muddied case um the bit fog case you know they're really relying on chain analysis as heuristics to throw someone in prison like chain analysis heuristics are you know i mean they're not bad at what they do but they're still heuristics they're not a concrete trail of evidence like like we've seen for some of these other cases where the the the indictment and the arguments the prosecution raises are really look we see this address which was the hack or the stolen money it went to this address it fanned out like this it fanned back in like this and we can like draw a nice graph that is fairly compelling about what happened in this case it's well chain

analysis is saying that the heuristics say that this guy was to blame it's like uh what that's not an argument yeah because what he went from mount gox to buy the dns to buy the domain name and then they use like the change from that purchase i think to try to right and they're like the heuristic is like that this is the change and like you know unclear um but yeah so anyway um we'll see where that case goes you know i think a lot of these you know privacy in bitcoin and blockchain is is going to be a constant battle and you know what does um you know i think obviously i i think i made the point you you mentioned the the chain analysis paper that vitalik co-wrote with some chain analysis folks and some other folks basically

arguing that like we should build a tornado cash where uh you when you withdraw you also prove to people that you weren't on some blacklist like some chain analysis list of bad stolen money addresses you proved that you weren't on that list the money you put in wasn't on that list um which i you know obviously relying more on these like centralized gatekeepers of chain analysis is for profit whatever is like so shitty um and really antithetical to cryptocurrency i think broadly uh but you know where do we get the privacy you know how do we how do we get privacy in a future where you know tornado cash and like if you use a privacy creation system like you you go use tornado cash you go use a mixer or whatever that's

immediately demonized it's like why are you hiding your money um that's a concern and then and then there's kind of the you know my view has always been that we should get privacy as a side effect of building better technologies right like lightning where you know fundamentally having everything on a blockchain is public and like you can do these heuristics and whatever um but so that that's where the privacy loss comes from but if we do anything that's just designed to have a better payment experiences instant payments you know uh more scalable payments fundamentally in order to scale we have to move off of a blockchain and by moving off of blockchain we create more privacy like that's just kind of fundamental to building better systems on

cryptocurrencies um and so you know what does that look like regulatorily when we build systems that are better that happen to me more private you know we weren't lightning wasn't designed with a goal exclusively of being private you know that's something we've we've tried to build things into lightning that do improve privacy but that wasn't necessarily the singular goal the singular goal was like how do we get instant cheap fast payment instant and cheap payments in bitcoin um that was the goal and that also had a side effect of privacy so what does that look like regulatorily do regulators question that do regulators say no um you know so far that hasn't to my knowledge been something that's been raised aggressively you know obviously new york has

basically banned anyone from doing any regulated financial institution from doing lightning if you're a merchant you can probably accept lightning you can use lightning in new york but if you're a financial institution you can't touch it it's not clear that that's fucking ny dfs doesn't have to tell us why they think that you know they don't have to tell anyone that like no you can't do this they just have to say like oh you have to ask us if you can do that and we'll never respond so they haven't really like said why um but some folks losky uh like to talk about lightning nodes are somehow should be routing nodes should be msbs and so that's not a privacy question that's not like a oh we don't like it because it's more private that's a like we don't like it because

there's there's nodes that you're routing through that aren't really intermediaries but they're they're still routing through them um and we want to regulate those um so yeah so there's a lot to worry about on the on the regulation front i don't panic about it um i don't think that you know obviously there are a number of regulators who want to completely kill bitcoin who want to completely kill everything cryptocurrency yada yada um i don't think we are at huge risk of going that direction in the united states um europe i thought was at more risk of going that direction but so far really hasn't the regulations they've passed have been i i would not say good i do not you know i i would prefer them to have been very different

but they are not of the we need to completely ban cryptocurrency from europe kind of thing that a lot of MPs and a lot of European legislatures, uh, legislators had spoken about wanting to do. Um, so yeah, I don't, I don't think we're at, we're at huge risk of that and that's good. Um, but other countries much more so, but you know, countries are in competition for this industry to some extent and that, that is good. And that, uh, regulators and legislators have seen that and do think in that mindset to some extent some of them do at least yeah and i think that's being acutely acutely highlighted in the mining industry you're seeing crazy competition at the nation state level to appease miners to come in uh well and use energy except for the

current uh current u.s regime right we're uh talking about creating an excise tax for mining yeah that's bad um but i saw well that's the that's the like people who don't understand the electricity industry who are no we need clean energy and also we're going to build it with solar and wind and then we're going to blot out the sun right yeah yeah and then and then we're gonna and then we're gonna somehow turn off the nat gas plants because we have enough solar and wind and batteries maybe but don't worry electricity will only go up in price by 100x or something like it's just yeah i mean it's a real failure of understanding of of like the environmental movements do we live in an idiocracy

we we just may certainly the uh the i mean it's the the the problem is the history of environmentalism right the history of environmentalism most of these old environmental groups you look at the green parties in europe most of them were founded as anti-nuclear parties they're not anti-global warming anti-climate change parties they're anti-nuclear parties and so they're that's their first goal and they're like oh yeah climate change we should like build solar and wind something something but like we shouldn't build nuclear because that that's bad and we were founded to fight that meanwhile like if you want to turn off the gas that's your option yeah that's the only option that's right the episode we um posted yesterday

It was Ryan McLeod, who works at the Canadian Nuclear Laboratories, and we dove deep into the nuclear conversation, and it's crazy how muddied that whole conversation is. It is a mess, yeah. It's all right there. In any case. We can have cheap, abundant, clean energy. We could.

We really could, but we don't want to because politics. Politics. I'm so tired. Yeah. I tweeted this out yesterday. I think national politics is the biggest intellectual time suck. I think this gets highlighted, especially during election season. It's like the amount of time that people spend talking about.

The amount of time that people spend arguing about it without being informed is frightening. Like people who just don't, who argue about who they like more without really diving into what their policy positions are is frightening. um and that's i mean that's just the reality of a democracy i guess but but yeah i mean it's a massive time suck but at the same time you got to fight it some you know we we have to we have to have bitcoiners in washington or we get regulated away or people pass regulations that don't make any sense and make lightning nodes msbs or what have you um or miners msbs even worse um so it's important but you're right spend the amount of time people spend on it is is wild it's nauseating with that being said that's been another positive trend in the last few years i feel like the

bitcoin lobby has gotten off the ground gotten off the ground got more organized yeah yeah totally and you know historically we've we've just relied on like a broader cryptocurrency lobby which was fine when we were a really small industry but also the problem is the issues we care about are fundamentally different than most of the rest of cryptocurrency you know cryptocurrency and bitcoin really are two totally different communities and worlds you know that you know i think most of the cryptocurrency people still love bitcoin still buy bitcoin but they're working on something other than money and payments and they care about regulation around securities laws around issuing share you know public issuance of shares and their their their protocols and

their tokens and whatever. And we don't care about that. And so they spend, you know, the cryptocurrency lobby broadly spends almost all its time on that. Meanwhile, you know, we're sitting here like, well, we care about, you know, MSB regulation and onerous AML KYC that, that causes substantial damage to the economy, substantial tailwinds on the economy, um, without much benefit headwinds sorry headwinds um you can tell it's early and i haven't coffee hasn't fully kicked in yet um what are you drinking there what is that oh i just put more water in my coffee cup after i was done it's just coffee back thought it was like cider no it's coffee backwash um the the so so you know we we care about something different so we really do need our

own lobbyists we really do need our own our own folks and it's great to see that we're finally getting there and we're finally you know getting getting folks who who care about bitcoin and who are going to argue the bitcoin position and you know we're not gonna not to take away from like securities regulation in the u.s is also bullshit in many ways but that's not something we're as worried about as the bitcoin community and as people who want to use bitcoin no like kyc aml privacy energy right i think energy is going to be one of the most important right well and that's that's an important thing for humanity generally you know having having abundant abundant clean energy is like really important for humanity to to to you know have a good experience you know

people to be able to live good good lives for you know have have good whatever you want to call it lead good lives well and it's going back to ai not really directly connecting it to bitcoin with this line of thought but i actually think that's a massive benefit when you consider the amount of energy intensity that comes with that industry and all the money behind that we may get an ally on the energy policy front yeah possibly i mean we'll see how much they're willing to go super interruptible right so the bitcoin energy policy argument is really focused around like look we can turn off when the grid when it's not sunny and when it's not windy um and we can fund more solar and more wind on the days when it is sunny and more windy by buying any excess power

um the ml training folks you know they might be willing to go interruptible theoretically their problem is fairly you know they can turn the machines off and start up you know where they left off tomorrow um but whether they will is less clear whether that market will really bear that cost um and whether those companies are just willing to say like look no we we want to have this model trained and we want to do it quickly so that our engineers can can get feedback rather than taking a few days off from training just because it got got cloudy um i don't know we'll see and i think that does to some extent determine whether they become a true ally or whether they just you know find cheap cheap power that they can fund um here's how it happens you co-locate the

asics and the gpus and i think that's what these ai companies are going to need to figure out or come to realize is if they want to go get these massive power contracts they're going to have to have that carrot of demand response and to do that if they want to keep training their models are going to have to have ASICs that can be interruptible alongside. Yeah, I mean, demand response does help those conversations. The other thing that helps those conversations is jobs, and data centers have a hell of a lot more jobs than mine. Most electricity is provided by some form of government

or private-public partnership, and when you show up and you say, yeah, we're going to have all these people working in the data center and it's going to boost the local economy, that also helps those conversations a lot um in a way that bitcoin miners really don't you know we really bitcoin miners are like yeah we built up this farm we're trying to be super cheap uh you know we might have somebody who's going to fix some basics and we might have a security guard but our contribution to the local economy is really the build-out you know a bunch of people doing construction during the build-out phase

um and a handful of jobs but not a hell of a lot um and so that that does change those conversations and that that makes the demand response part much more important whereas for like a more traditional data center you might not and you see this all the time you know google and all these folks they'll like build a data center and then they'll they'll talk about how they have also an engineering office in the corner of the data center and they're also building an office there and then actually they only hire like three people there but they told the local government they were going to hire 50 um when they got the contract but it is different we'll see where they end up going um and we'll see how much how much that ends up being a good ally for us um in

congress but you know that the other issue is it's also very easy for them to say yeah fuck those bitcoin people they're doing like on we want economically interest you know bad bad things with their proof of work and it's useless computation but our computation is really useful and thus we should we should be exempted and you should just kick those bitcoin people out we want the energy we'll see you know i i wouldn't get too excited about it yet hey ai guys we can work together on this we can figure this out let's brainstorm but i do want to bring this back to lightning and scaling bitcoin because i do think it's important conversation to have like would you agree

or disagree with the statement that lightning is not the panacea of scaling bitcoin on a second it's a really critical first step i mean yeah it doesn't yeah i mean the popular narrative now on twitter is like lightning is stupid and like you know you you end up with so many on-chain transactions and the lsp uh liquidity allocation problem is unsolvable and that that leads to a ton of splicing and uh you know lightning is just just useless something that's that's naive but also the flip side of like you know lightning is going to be great you're going to like open your app once it's going to open a channel with the LSP and you're never going to touch the chain again is just as stupid, right? The reality is somewhere in the middle, right? So the LSP, like LSP

liquidity allocation is hard. You know, you have some bucket of money, which channels do you put how much money in based on how likely it is that they're going to receive a payment in the future. That's a hard problem. If you get it very wrong, you will do one on-chain transaction. If you get maximally wrong you'll do one on-chain transaction per lightning transaction um and that sucks but it's no worse than on-chain was to begin with um there's maybe a little extra overhead and multi-secure there but with taproot maybe not maybe it's all the same so it's like okay you haven't done worse um and if you get it slightly less wrong you get let's say a compression ratio of 1.1 transactions to on-chain transaction or if you get it very not wrong maybe you get a

compression ratio of 10 X or a hundred X, maybe you have a lot of liquidity and you, uh, have a ton of people making a ton of small payments. Now you're talking about, you know, much better compression, you know, we should talk about this as a function of compression ratios. Um, and it's going to be good. You know, there, there is a lot of compression to be had there. Uh, there's a lot of, uh, you know, you get all these nice UX benefits, you get these instant transactions, some of them require zero confidence trusting the LSP, but you know, in many cases not, um, And so the narrative of like, well, lightning is stupid because you can't solve this problem is dumb. It just means that the compression ratio is not infinite. The compression ratio is some fixed number. And this brings us a long way towards scaling Bitcoin better. Bitcoin, it doesn't, I mean, define panacea. You asked, is lightning a panacea to scaling Bitcoin?

It doesn't fully solve the problem, but nothing does. Everything that we can possibly think of to start building today improves the state of things, but does not have an infinite compression ratio and always has certain trust drawbacks here or there. And so the question is, how far is lightning? What is that compression ratio going to be in practice? and and how much do we need how many people are actually going to be using lightning on a day-to-day basis in the next 5 10 25 years and what do we need from it to support those people and what other solutions might we come up with that might support it better or worse might add on top of lightning lightning might be a nice multiple on top of lightning um you know whatever it is so i

i reject the premise of the question well the the what i was trying to get at there is there's this idea that Lightning may end up being the connective tissue between many different second-layer implementations, whether it's FettyMints, Liquid. Yeah, and that's definitely going to be a part of it. You know, I hope we don't end up in a world where everyone using Bitcoin chooses to just trust a multi-sig federation of one form or another.

I think that would be kind of a bad outcome for Bitcoin. And Lightning will certainly be a part of that connective tissue just because it gives us this instant transaction primitive you know those those types of use cases don't really care as much about the on-chain footprint they care about this instant transaction property and so lightning is great for that and payment channels will always be used for that i think um but you're right like you know some people will opt to use these other systems and lightning might sit in between the reality is we don't have enough bitcoin demand right now for this to be a big issue

in terms of a scalability bottleneck. It does allow them to offer better competitive fees, which may draw some more users in. And so maybe that will also succeed in the market. I'm very excited to see that competition in the marketplace for users. I think the hard part is, of course, how do you communicate to users

what this trust model is? It's very important that we builders and bitcoin people building applications for users and bitcoin accurately communicate to the user who they're trusting why and for how much um and that's hard that's a really hard ux element to build in a way that that is accurate but also not overly frightening to the user um and where the user actually looks at it and understands it and thinks about it um which is generally hard users i mean some ux people like to say pretend your user is drunk i like to say pretend your user has five other things going on in their life and they don't care that much about the thing you

care about um so it's hard and i think that's that's going to be the hard part is accurately communicating these trust model differences and that's something that we as a bitcoin community need to hold ourselves in high regard and hold hold as something we need to to work on and accomplish um but uh but i am excited to see these other trust models in the marketplace competing for bitcoin users competing for for just users of financial services and offering financial services in a different way um using bitcoin with with lightning as the connective tissue to your point that will definitely be a part of it but i do think some people will use lightning you know if we do a good job of communicating these trust model differences

some people will use lightning because some people will look at fediment and your fediment's going to have some some interesting regulatory questions in the western world uh you know i think they're they're kind of targeting outside of the western world to some extent they're targeting this kind of like small community node thing um that's going to work great where it works and i think in many cases that's like i don't i don't know who who's my community that i'm going to stand up a fediment node with maybe the people you did the new york city mesh with maybe i there there are there are worlds where this makes sense but like that's a lot of mental overhead as well is my point and that is going to be a drag on their usage in some parts of the world and some

parts where there is maybe lower regulatory overhead maybe that that mental overhead can be avoided with just you know trusting a basically a custodian or a group of custodians more like the liquid model um so that you know that's going to work in some places not in others i think in others lightning will still exist non-custodial lightning is going to be a thing you know all these people saying non-custodial lightning is dead because turns out liquidity is hard and something something i don't know a ton of people use fucking phoenix like phoenix is great the user experience is great ton of people use it you can't tell me lightning is dead when a ton of people are using it and you know i think that that user experience in spite of the fees they charge and

people will try different models for the fees see what works in the marketplace part of why ldk exists just so that you know it's a lower overhead to build a lightning wallet out build out different features that might compete differently in the marketplace and we'll see what resonates but i think there will always be people using it and non-custodial lightning is going to continue to be better we're solving the user experience pain points of it um that people point to and say like ah lightning is dead because you can't receive offline payments reliably and lightning is dead on mobile because uh you know the fees are so these things are are being worked on they're being improved upon um and we will continue to see

people adopt that as a solution even as there's more competition from other solutions yeah which made me think of another thing like how do you even define lightning success outside of like ux ui usability considering the fact that unless you're directly sort of connected to particular nodes you don't actually know what the overall activity on the network is which is like a pretty cool thing but also like if you're trying to pump lightning is this thing that has a lot of utility and a lot of use yeah it's harder to do yeah i mean you you can you can get proxies And, you know, I don't know what the numbers look like, but I wish folks like River and Cash App and, you know, Phoenix would publish a little more numbers. I think River does actually do a good job.

They do a regular-ish, I don't know, yearly, quarterly, or just whenever they feel like it, report on lightning stats. And they, you know, their lightning stats look good. Like, people are using it. People are using the lightning stuff from River. um and you know i've heard informally that phoenix is doing well the the eclair the async guys are doing well um you know but but yeah i mean you kind of have to ask them if you want to know how much people are using lightning how much people are paying with lightning um but i think the answer is yeah people are using it and it's not just custodial you know people uh have these

charts of like where deposits are going a lot of it goes to wallet of satoshi or whatever but people also use phoenix um and you know we'll see what the future of the regulatory question is around wallet of satoshi um what that what that looks like in in five years um but you know there are there are absolutely people who use non-custodial lightning and it even on mobile and it does work and it's continuing to get better and we're going to make it a lot better in the next few years um so yeah i mean it's hard to define lightning but yeah the people who point to various parts of it as as broken the reality is people are using lightning and the number is up and to the right and even though more people are using wallet of satoshi than other lightning

people are using lightning and if you can tell me that like you know fediment is a solution to you know people are going to move from lightning to fediment because lightning has gotten too centralized and then people are just using Wallet of Satoshi. Well, Fetiment's also a custodial model. It's a federated custodial model and maybe some people will use it in a kind of community sense and that's

great and that's awesome and that will be a part of it. But also community nodes don't scale to the world. They scale to some communities and for everyone else there's non-custodial lightning.

To wrap up so you can get back to work, you're here to work ptlcs we mentioned it earlier it seems like that would be a massive unlock for privacy yeah dlcs for all this stuff right how do we transition are we gonna have to close all of our channels no yeah yeah uh you're gonna have to have taproot channels um and uh that will require an on-chain transaction for your channel i have to close you might just have to splice maybe you'll want to splice money in anyway so you'll upgrade to taproot when you do that um ptlcs are going to be a big unlock for privacy um you know again this is one of those things where it like it substantially improves the privacy of lightning but it's not going to change

the ux depending on how we do it might even slow down payments which kind of sucks um so all I'm going to say is I'm not in a massive rush to ship it. I'm much more excited about it from a DLC perspective. People are already building DLCs without it. I haven't looked deeply into how they're doing it. So maybe I shouldn't.

They're doing crypto garages. Extension signatures? I always get it wrong though. Adapter signatures? Adapter signatures. Adapter signatures are a short thing. I don't know. They might well just be doing taproot outputs within the lightning channel i haven't looked into it so they might actually be doing kind of pseudo dlc thing or a pseudo ptlc thing anyway um they might have built

ptlcs on non-taproot lightning channels as like a second output thing um i don't know how they're doing it but uh point being in in lightning itself uh outside of the dlc thing it's it's nice we'll we'll do it we should do it but it's not you know it's not solving a major ux burden as it exists right now um and there are other lower hanging fruits for privacy right bolt 12 is a huge privacy unlock enlightening and so like pushing that forward is i think much more important than pushing forward the ptlc thing as much as ptlcs are important bolt 12 much more so and other you know probing and other other questions around monitoring payments flowing within the lightning network via active attacks um are also very concerning i think maybe even arguably more

concerning than than the just like payment hash correlation attacks that ptlc has solved so you know there's a lot of issues with privacy and lightning ptlc solves one of many um and it it is a lot of work to solve one of many versus some of the other ones maybe we can solve easier um so it's not not super high on my priority list um maybe for the dlc folks much more so because i do think dlcs are really important to enabling more people to build different lightning experiences that much better compete in the marketplace especially against stable coins um so maybe we'll work on it from that point of view but all right people in bitcoin like to get excited about really

technically hard things when there are lower hanging fruits sometimes that we should just work on first you know lightning is still early there's still so many problems in lightning that we just need to solve yeah let's get bolt 12 bolt 12 would be big

LDK shipping very initial bolt 12 support for people hopefully this month knock on wood you heard it here first soon TM soon TM um but core lightning also has experimental bolt 12 support eclair also shipping it i think they're working on shipping it in phoenix soon tm um so yeah you know if you haven't started thinking about

how you're going to integrate it it's time to start playing with it um it does exist uh it's not for lnd um but there's some folks working on building that which will also hopefully be soon tm a kind of sidecar daemon that you can run next to your LND that'll give it full bolt 12 support they have to ship blinded paths which I think they're going to do in a version or two but also soon TM to be able

to add bolt 12 support to your LND but if you're using something other than LND or even in general it's time to start playing with it's time to start looking at it because the code exists and you can actually run it now it's not just fictitious in the future something something

um you can start integrating it i wouldn't say it's the most stable thing in the world it's not gonna you know um it's not not the best privacy yet there's still kind of early versions but it is a version that you can start integrating start playing with and by the time you're ready to ship it will be much more stable it will in fact improve payment reliability over bolt 11 um so yeah it's good to hear well it's great to have you in town yeah thanks for having me on Great having you in the Commons you dragged Jeff into the Commons for the first time in a while It's great to see him here. Yeah, and you guys are doing great work. Thank you. Yeah, I'm very excited I'm excited about the future of lightning. I'm as well

So historically on this show when it's just me and you you give him probabilities of Bitcoin success in the future It started at 5% you bumped it you bumped it up to 40% at one point. Where are you now? it's a great question um yeah i mean i think we still have a lot of room did i really say 40 you said i think pretty sure you said 40 i don't know i have to check went from 5 to 40 you were very bullish uh yeah that is very bullish for me i would say 20 oh 20 i think we need to do a better job competing in the marketplace against other cryptocurrency projects and i don't mean that in the sense a lot of crypto people like to talk

about we've we've paid on it for the last hour but you know a lot of crypto people like to talk about like crypto's killing bitcoin and like bitcoiners just need to learn from crypto and i that's the wrong lesson to take because you know cryptocurrency broadly tends to not have this trustless goal as the north star and tends to just kind of build what they think is going to work best in the marketplace um even if it requires trusting circle or tether or what have you and that's not something we should be doing you know there's no oversimplification obviously cryptocurrency people broadly also do want to build more trustless solutions but the thing that gets built first is the trustful one and that just gets adoption and like the trustless one

often never does um or gets less adoption certainly not in the kind of consumer marketplace and i think the consumer marketplace is where bitcoin needs to compete because bitcoin isn't a dex platform it's not you know a token trading platform it's not a it's not a investment platform for uh various tokenized assets i mean the big thing in cryptocurrency now again is this this we're just going to take you know shares of regular old companies or investment contracts for regular old companies and put it on chain again to get get liquidity there like that's cool i mean it's not it's not something that bitcoin cares about it competes on you know whatever they can do that um there's some regulatory arbitrage games maybe they're

going to provide value there to some of these companies cool um but not relevant for bitcoin and uh you know bitcoin is not competing in that space we're competing in the payments and money space and to a large extent competing in that space does mean competing for consumer eyeballs it's not just you know just saying we're just going to compete on the money space and we're going to outcompete us dollar maybe maybe we will but that's a long tail outcome that's a long ways away it's not like going to happen next year it's not going to happen in the next 10 years it's a long ways out um in the short term in the medium term we have to compete for consumer eyeballs and it is true that we're not doing a good job there however it's also true that there's a lot

of bitcoin companies who are working on fixing that because the problem is felt acutely by some bitcoiners and the problem is pointed out often naively by many non-bitcoiners um and so i'm excited about where that's going i'm cautiously optimistic but i also know that that is a big marketplace that is hard to compete in and i want to set bitcoin up to make sure that we have the most comp you know we don't just want to have one app that has dlc wallet whatever we want to have many potential solutions for people built by different people in local communities who can tailor it to what is needed in that community um and you know that's why we build ldk that's why i'm excited about where bitcoin is going but we need more of that to compete much better

i would agree i would agree and and that is a hard problem and so i'm not gonna say that we're definitely gonna win i'm gonna i'm gonna put us at a low probability of winning in fact because i think our fees are going to be higher and people do care we're gonna win um but but matt's bearish so always bearish yeah you gotta be we need that stick in the mud

go write some code I've been a been a stick in the mud for 30 years so it's not gonna change you're in your 30s now

yeah wow yeah we're all getting old man we're all getting old alright this has been fun thank you

we'll do it again at some point yeah alright peace and love freaks dicky Thank you.