TFTC: A Bitcoin Podcast - #717: Building The Financial Rails Bitcoin Deserves with Jesse Shrader

Episode Date: February 16, 2026

Marty sits down with Jesse Shrader, co-founder and CEO of Amboss, to discuss the evolution of the Lightning Network, how Taproot Assets are bringing stablecoins and multi-asset trading to Bitcoin, the launch of Amboss's RailsX peer-to-peer exchange and Magma MCP tool for AI agents, and why Bitcoin is positioned to become the backbone of global commerce and foreign exchange settlement. Jesse on X: https://x.com/Jestopher_BTC Amboss: https://amboss.tech/ STACK SATS hat: https://tftcmerch.io/ Our newsletter: https://www.tftc.io/bitcoin-brief/ TFTC Elite (Ad-free & Discord): https://www.tftc.io/#/portal/signup/ Discord: https://discord.gg/VJ2dABShBz Opportunity Cost Extension: https://www.opportunitycost.app/ Shoutout to our sponsors: Bitkey https://bit.ly/4pOv2L4 Promo Code: TFTC99 Unchained https://unchained.com/tftc/ SLNT https://slnt.com/tftc Lygos: https://bit.ly/4koiJmB Salt of the Earth: https://drinksote.com/tftc Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Newsletter tftc.io/bitcoin-brief/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Nostr https://primal.net/tftc Follow Marty Bent: Twitter https://twitter.com/martybent Nostr https://primal.net/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://www.tftc.io/tag/podcasts/

you've had a dynamic where money's become freer than free if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for Bitcoin. If you're not paying attention, you probably should be. Jesse Schrader, Bitcoin just passed $69,000, but it's back down below. How are you, sir? Doing great, Marty. Despite the Bitcoin price, we should be higher, but in due time. Well, as they say, building happens in the bear markets. That's what we're here to talk about

today you guys have been building at ambas yeah uh non-stop building i think it's five years in the making it really has all built up to this to this moment where bitcoin can become the medium of exchange before we talk about rails x and sort of mcp server plugin you guys have built for the agentic economy let's uh let's talk about the history of ambas like why'd you start the company what was the sort of initial idea how's it evolved over the last five years and on top of that what was bitcoin done in parallel that has enabled you to to build out mboss kind of what what got me into bitcoin was that it was an alternative to to the banking system where the customers of the banks you know aren't beholden to the banking policies anymore instead we have bitcoin which

is freedom but then i went to go use bitcoin to actually pay for something and it was a horrible experience um i ended up paying 60 in transaction fees and i was using overdraft.com which was like one of the few places where you could spend bitcoin at the time this was like late 2017 and my transaction didn't arrive in the in the 10 to 15 minutes that they had allotted um simply because a block didn't come in and the transaction got rejected so they ended up refunding my money and had to make me send it again. So pay another $60 transaction fee. And I was listening to a ton of Andreas Antonopoulos at the time. So

he was talking about something called the Lightning Network. So I started experimenting. And in that process, I got connected with Anthony Pottevin, who created ThunderHub, which was like one of the first UIs that you had on for running a lightning node and we got chatting in a telegram group like as two anonymous plebs that were building the space and he saw that like i was help i was customer support for thunder hub um and so he reached out to you know explore starting a company and building out lightning network tools so that was really the genesis of it and so i imagine this around like

2018 when the lightning network was just launched and very rudimentary at that stage yeah this was like the only thing that you could spend lightning on was feeding chickens with poyofeed.com oh i remember that i remember that i fed that chicken this chicken they well they did um so that was like that was the major retailer on lightning uh proving the micropayments uh point from from day one but it's it's evolved so much since then um and really it was like command line tools the lightning torch had just happened um folks were running raspberry pies they were blowing up but things have matured so so much more and now like now like the protocol development things have like matured through like the ordinals explosion and now we've got taproot assets that

that are coming to the lightning network yeah well before we get into taproot assets when you guys built rails x i think it's important to to since you've been along for this journey of the maturation of the lightning network and ambas playing a role in making it easier to use a lightning network i i think that's one thing and i just um was talking to a bitcoiner earlier today it's like we do a bad job of setting expectations i think the lightning network is one of the prime examples where it launched and everybody's like yeah we have instant settlement with very low fee transactions and the medium exchange use case has been solved after the lightning network's launched this was in 2018 and we all came to learn that um the lightning network is a distributed

protocol built on top of another distributed protocol and rome is not built in a day so what um with that in mind like in terms of the maturation or development of the protocol uh what has been what has happened that has enabled things like taproot assets and And now what we're seeing with this sort of flurry of other second layer protocols that are using lightning as this connective tissue. Yeah, I think kind of like Segwit, for one, was was the the soft fork that kind of made lightning network possible by fixing transaction malleability. And then the next one was Taproot. And so getting consensus around that piece and getting a successful soft fork into Bitcoin was one of those pieces. And the Lighting Labs team really did some technical wizardry to be able to figure out how you could contain UTXOs within UTXOs and introduce additional assets that are minted on Bitcoin in an extremely chain-efficient way.

So this isn't going to be spamming the blockchain because these assets are meant for Lightning. They are on-chain assets, but the purpose of them is so that they are lightning compatible, which we know is extremely chain efficient because we're seeing it today because there's hardly any fees on Bitcoin today. Yet there's so much commerce that's still happening where we've got, you know, Coinbase, it's making up a dominant portion of its transactions. We got integrations with Kraken, Binance, like the whole ecosystem has developed around this. And at this point, we've got 28% of all retailers that can accept Lightning. So it really has immersed itself in the digital economy and in a scalable way. So that change to the protocol enabled us to start bringing new assets or new data types into Bitcoin. And then talking about liquidity management, channel management, I think it's one problem that you guys have worked hard to solve.

how how much have we learned over the last seven eight years about this interoperable distributed protocol on top of bitcoin how it works and how it should be managed if you're trying to use it yeah um after starting to run a lightning node i realized that getting connected and connected well on Lightning was a challenge. And so we were just doing this via Telegram where I would say, I'm a well-connected node. I'll connect to you in exchange for payment. So you pay me and I'll open a channel to you

and we'll agree upon a duration. So I was doing this already just via chat. And that was the precursor to us creating a marketplace so that other folks could be able to sell channels which was like one of those key pieces because at the time there was 1ml.com which was like one of the first lightning network explorers and i i have i had a chat going with with tony who created thunder hub and you know in boss co-founder and cto that the 1ml experience was terrible it was all like uh it wasn't dark mode um so it was blinding to look at uh for us all of like thus basement

dweller lightning node operators um and it was really difficult to get the information and there was no way to easily contact other people and get them to open up Lightning channels to you. I mean, and that's how you receive payments. So we decided that there has to be a market here. So we created Magma, which is now the largest liquidity marketplace on Lightning. We've got 99% market share.

At this point, it's growing 20% month over month. And it solves a real problem. just getting connected on lightning so that you can receive payments very simply yeah no it's a massive pain and again like talking about like growing pains and setting expectations i think in 2018 so god lightning's long we got segwit transaction availability solved we're gonna spin up this network and payments are solved but along the way you learn oh channel management is not trivial you need a two-sided marketplace to make it easier you need to bring liquidity to the network and then along the way too as lightning scaled and

matured learned other lessons was like oh maybe i don't need this much capital locked up in these channels which leads to a lot of misconceptions in the broader public they'll look at whatever it is four thousand seven hundred five thousand bitcoin locked in lightning and then looked at something like wrapped bitcoin on ethereum it has tens of thousands of coins locked up and say well lightning is not having the success that is this is but it's like well the way these payment channels work um you can actually do a lot more with a lot less and so capital efficiency um is something that the lightning network has gotten extremely good at over the last three years specifically yeah it's uh it's a great point because lighting is extremely capital

efficient you're connecting it to a network so you've got a single connection and that's And it becomes a nexus so you can reach anywhere in Lightning in just a few amount of hops. So you can reach the 15,000 or so nodes out there in four hops or less quite easily. You really don't need a whole bunch of extra capital. And that means that to handle the level of commerce that we're seeing on Lightning today, which we're we're estimating it over 10 billion dollars annually is flowing through lightning that means that the entire balance of that's locked in lightning is cycling twice monthly because we've got you know 500 million dollars of capital in lightning which means it's super

super chain efficient super capital efficient we really just have liquidity sloshing back and forth that's generating fees for the lightning node operators and the the ones that are well positioned especially yeah 10 billion a year we need to pump that number you think that number is gonna go up uh moving forward i gotta say these are the numbers i mean it's already growing but these are the numbers before agentic payments really take off and before stable coins get involved which are both massive drivers um so i'm incredibly bullish on where we're headed with this um even before those things were growing yeah well let's hop into it taproot assets uh for anybody who's listening out there that's completely unaware of what that um that phrase means at all

let's let's do a a high level explain it like m5 what are they why do they exist what are they competing with and how are they implemented um within bitcoin and the lighting network yeah so in order to create a taproot asset you're gonna construct a specific bitcoin transaction that says what asset you're creating how many of these tokens exist and what group are they part of so that means you could do an initial burn or an initial mint of this asset bring it to bitcoin and then you can do subsequent mints or subsequent burns on that to control how much of this asset is created and the real purpose of this is that you can you can create a token and then have it backed by something outside of bitcoin or another blockchain or whatever

the thing is it's a token and of course you're going to be introducing you know trust assumptions in whatever is backing it i think genius act and whatnot have you know done a lot of things to support how this should be done. But at the technical level, it's creating a new token, how many of them exist on Bitcoin, and making it provable that there's only so many of these assets in existence. And so I think that's... I think people hear that and are like, okay,

is Pump.Fun coming to Bitcoin? is the shitcoin casino coming to the lightning network are we enabling this proliferation of what many bitcoiners myself included would deem to be um sort of casino like games or in your view i mean you mentioned stable coins and tether is publicly stated that they're leaning into this like is it going to be something like stable coins obviously real world assets is a big meme tokenizing real world assets uh this cycle um how do you envision this this playing out and for stable coins specifically what is the benefit of minting uh in issuing and transacting with stable coins over lightning compared to something like tron or solana whatever they're running on

today sure so solana might be easier to issue some of these assets especially you know any of crypto casino tokens um for bitcoin specifically what makes sense is for us to focus on what's meaningful for finance and settlement so i think that's where stable coins fit the best because minting and burning is cheap today on bitcoin but we know that the global financial system is coming to bitcoin and we have to be extremely chain efficient so if you want to introduce these other types of casino tokens i wouldn't bother doing that on bitcoin itself i would really focus on stable coins because what you're paying for is a blockchain that can't be stopped that has extremely high uptime like there's a reason that we we build on bitcoin

itself because it does have that full decentralization and we've got the most decentralized layer two built on top of it which is lightning so i'd focus things as much as possible on stable coins we may see other things like uh real world assets you know tokenized gold etc um but i think where we see the most momentum and where we need lightning scalability is on stable coins especially us dollars stable coins yeah and so uh my wanted co-host of rabbit hole recap matt odell he's uh he's been a longtime bearer of tap ass and uh stable coins on lightning specifically and his argument and i can see it i think it's a valid argument but i think you're the perfect person to play devil's advocate here is stable coins benefit from the centralization of networks like tron

in solana the relative centralization um and trying to introduce them to a truly decentralized layer two enlightening you sort of get the worst of both worlds where um you have to play in this world that's distributed you have all this channel management you have wallet compatibility considerations to think about what is the case for what is the steel man case for issuing and transacting with stable coins on lightning specifically if you're going to create a new token it will be centralized you're going to have one uh one set of assets and liabilities you want to be looking at one balance sheet you don't want to look at a ton of them um i think things that i find interesting might be like caitlin's long

caitlin long's tokenized deposits where those could become taproot assets uh and so you could have something that is on the lightning network being being traded that's backed by one bank that has solid assets and liabilities that match up so i think there there is a centralized component to this and you do want to have one person that you can summon into a courtroom to answer for the assets and liabilities not matching up i don't think you want to be in a fully decentralized system trying to seek out individual parties that are behind a single asset um for bitcoin it's a different story because this is an an asset without an issuer it is fundamentally different which is why that bitcoin is superior to any of these other tokens um and

you know i was just in el salvador i heard paulo from tether talk about this the guy is a bitcoiner and also witnessed hey you know we created this token it's a us dollar stable coin it's kind of dumb thing however it has extreme product market fit because the world's demand for dollars is immense but it doesn't need to be an issue where like it it could be it could be a government i think you know all of us are terrified of cbdc's however i'm less terrified of them if they're on bitcoin itself because you don't have that censorship ability on bitcoin itself um it's a it's a different story yeah that was uh i saw paulo speak at the bitcoin policy institute event in june and it was funny how he described the recreation of tether it was like somebody asked us

uh to build it and we said okay we'll build it like sort of hand-waved it no way like maybe this will get a hundred million dollar market cap is that but we have the capacity and the ability to do it so we'll go do this and obviously it's turned into I don't know what its latest market cap is, somewhere north of $180 billion, I think. And they're probably the most capital-efficient company that's ever existed in terms of profit per employee. And obviously, they're one of the, like it or not, one of the most important companies in the world right now. And to your point, product-market fit really proved itself out. yeah uh i think proof is in the pudding um overall people want dollars and tether found a way to

support the u.s government and i mean in many ways at finding a buyer for all of the government's debt through purchasing treasuries tokenizing them and delivering them to the rest of the world And I think the the Trump administration has really figured this out to recognize this does help U.S. interests and has been a big part of why the U.S. is now embracing stable coins is it does solve a problem. It finds the buyers for the debt that otherwise would not be attractive because the dollar has incredible brand name recognition and is deeply liquid. So freaks, if you've been listening for a while, you've probably heard us all talk about BitKey. It's a Bitcoin wallet built for people who want self-custody to actually fit into their lives.

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employee at uh hyperliquid compared to coinbase they're doing far better uh it seems like there's product market fit outside of bitcoin for decentralized exchange um why does something like rails x a dex on lightning makes sense i think this is going to be the first dex without its own token uh the token is bitcoin and we have other assets that can now be traded on bitcoin via the lighting network so just about lightning's efficiency now we're going from blockchain level efficiency which we know does not scale you look at tron they're seeing three to six dollars per transaction and we're moving to the level of a data network which is lightning so it performs much similar to that so that means that we can have a decentralized system

with no new token created that is operating like the internet in terms of scale so that we can achieve extremely low spreads and you can have a full decentralized economy that is all self-custody each of the players that will use rails x can bring their own infrastructure we can help them set up their own infrastructure they can buy and sell digital assets peer-to-peer and choose their counterparties choose their own policies like this is the decentralization that i wanted to see when i was you know in a call center listening to folks be beholden to a bank's adversarial policies when This is about self-determination for Bitcoin. This is about sovereignty.

This is about freedom to transact with who you want, associate with who you want, and be able to trade seamlessly. Yeah. How did you guys land on the idea for RailsX? Beyond that, let's talk about the implementation. How does it actually work? What's happening under that? Yeah. It solves a problem for us internally.

um the thing is we back in may we announced rails which is a yield service so we got rails x that's doing trading peer-to-peer and for rails it's a bitcoin yield service where you keep self-custody and the the point of introducing rails was that we needed incentive alignment between the bitcoin treasury companies and bitcoin's adoption as a medium of exchange we wanted we wanted all that yield seeking behavior to be saying i want bitcoin payments and i want bitcoin to be the medium of exchange because that's honest yield that's no lending that's no rehypothecation but for routing you've got bitcoin that's sloshing between your channels and you're collecting fees when that happens however when you introduce a new asset into this the sloshing that's happening and that

means that your portfolio is shifting around so if i'm routing a whole bunch of stable coins to some business that wants to receive stable coins that means that me as the next peer over I'm accumulating Bitcoin and I'm losing my stablecoin balance. So if I allow these customers who are using Rails to keep self-custody, then I can't rebalance their channels for them. So because we introduced that limitation and we thought self-custody is important, then we needed some other force in there to rebalance the channels for them between assets and keep their portfolios relatively constant where they can have sloshing back and forth so what we did for rails is we started generating price quotes which is what lighting labs would

call the edge node service. So rails as a yield service, in multi assets, they're quite they're quoting prices between assets. And now those prices get piped into rails x. And so for rails x, you see all these different prices being quoted. So a rails x user can do simple buy low cell high between different nodes on the network and they are rebalancing the channels and capturing arbitrage opportunities for accumulations and shortages of assets within the lightning network okay i need to get uh i need to get my agentic bot in this network everybody's focused on poly market rails x is here there's probably better arbitrage opportunities there in the early days you know

I think the the bot play is like one of the first things that came up, like as soon as we built this, because it's all just going to be circular rebalances in lightning, but across assets. And it is something that is completely programmable, but it solves a problem for the people that are seeking yield and the people that are receiving payments across assets and want low spreads. so it is an open market approach to solving multi-assets in lightning what do you think this does i think uh for capacity on the lightning network like obviously we're talking about lightning's capital efficiency earlier but it's let's just run down the thought experiment like people wake up to like oh like why would i want to have my stable coins run on Tron or Solana when they can run on the Lightning Network and can be compatible

with Bitcoin invoices maybe at the end of the day too. And you see a ton of activity flood to the Lightning Network. Obviously, it's very capital efficient, but that capital efficiency will hit a limit which would dictate that more capital needs

to be locked up in channels. And so in terms of the growth of channel capacity and Bitcoin locked on the network, what's that going to do? um what effect is something like rails x and tappered asset that's taking off going to have on that and yeah just broadly where do we go where do you see this going from here i think the capacity the bitcoin public capacity may not increase all that much um interesting so

there's a couple reasons for that is because all of the tappered asset channels are private So if you want to continue to use the Lightning Network, you say, I don't want to deal with any other assets or any other tokens, you can continue to operate purely in Bitcoin. This does not affect you. The only thing that changes is the volume of transactions that are flowing through. So we're going to see much more cycling that's happening. and i think just uh just this week voltage announced the million dollar payment on lightning it's a huge achievement for them i think a massive proof point to say you know lightning's no longer for for micro payments the max size channel that you can do on lightning

is 21 million bitcoin um so there's really no protocol limitation on how large you can go um So that means that as this takes off, we're going to see much larger channels that are created to be able to settle larger payments that are happening across assets because long term, this becomes the foreign exchange market. if everybody's issuing their own stable coins which ones are going to take off there's going to be much more of like macro level country-wide speculation on the performance of these tokens which are sovereign currencies and overall it's going to mean much more commerce because foreign exchange market is massive they do 9.7 trillion dollars every single day settled in that market um it's the whole market and that means that bitcoin is going to take that sector and you know bitcoin whenever its price goes up that means fewer of the tokens move around

on lightning because it's like the pipes just expanded for how much value can be settled so overall it's positioned to be long-term bullish and that that could mean that it can remain extremely capital efficient but we will see shortages and when there are shortages of bitcoin in lightning that means the yields spike up so overall much more routing activity yeah that's another thing we forgot to mention with the capital efficiency number go up just makes it so you have to send less sats per payment so freaks this report was brought to you my good friends at silent silent creates everyday faraday gear that protects your hardware we're in bitcoin we have a lot of hardware that we need to secure your wallet emits signals that can leave

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the code tftc10 at checkout to get 10 off your new bitcoin multi-sig volt that's tftc10 at unchained.com i love uh i love the confidence with which you're saying all this like bitcoin is going to take the fx market this is happening uh this seems very underappreciated right now i mean maybe i would argue most people are completely unaware that this is even possible on bitcoin right now your boots on the ground obviously you're on the cutting edge of all this i saw you in person in new york earlier this week making the rounds like what would you say to the relative awareness of something like tappert assets and or not even tappert assets specifically but the fact that this is possible on bitcoin um are people beginning to

wake up to it when you give the pitch um are you seeing people recognize the the benefits doing it way as opposed to on another change or combination of chains um how and to that point like how long do you think it takes for the market to wake up to this as far as as far as the adoption goes um lightning is going to solve one specific use case in pockets so bitcoin beach in el salvador it's like a great example of you know adoption happening in one place and for ambas you were we're a middleware provider so we're operating at the liquidity market side but then we have folks like voltage that are solving payments api adoption so they're mapping to the user cases so all the lightning network activity is going to happen in the background

so all we're going to see is widespread adoption of the lightning network invoice so this is going to do the settlement across the network it it won't matter what currency that you're transacting in so we just have something that's standard that's bitcoin compatible whatever currency you want to send whatever currency you want to receive it's all using the exact same invoice and what we're seeing from voltage is they're they're answering the needs of i gaming first which they are having an immense amount of trouble getting a simple bank account and stripe and the other payment processors don't want to serve them because those customers are they have incredibly high fraud rates they're getting killed by chargebacks so bitcoin is there for them

to serve like that market and they're doing incredible volumes all the polymarket stuff all of the like online gambling type of things that is going to get served by by bitcoin by lightning payments because it can do the micro payments it doesn't have chargebacks and it's more decentralized it can operate in you know many of the underserved markets and so when you said the everything's gonna be abstracted away to a lightning invoice you can pay whatever pay in whatever currency you know you deem necessary or prefer is that necessitate the local stable coins or like are we talking something like you're just going to pipe into like the like what strike's doing that's like you can send or cash app like dollars to bitcoin

is like integrations like that that interface with the banking system itself a combination of the two yeah like we'll still have on and off ramps and those on and off ramps that's what you'll where you'll have kyc aml type of stuff so if you want to move to the traditional financial system but if we're operating purely on bitcoin then you don't need to touch the traditional financial financial system you can continue to operate so like that's where there's going to be some friction is when you want to go to a traditional bank account however if you've got tokens that are issued on bitcoin now you can trade peer-to-peer you can start accepting currencies without needing a bank account anymore and you've got something that is widely interoperable so

anywhere that accepts a lightning payment then you could off-ramp to a bank account yeah i mean it seems extremely profound and again it's like i'm banging my head why doesn't the market realize this yet and obviously your answer is going to start in pockets but it seems like we have accessibility to sci-fi tech it's or to it's it's gonna it's gonna be flat flat flat flat and then it's gonna be vertical i mean this is a gradually then suddenly type of adoption for bitcoin payments yeah who do you think uh i mean outside of bitcoin beach like what uh or maybe a better way to frame it is what what would your ideal adopter look like uh for us massive volumes uh If you want to be moving a ton of value and not have anyone looking over your shoulder to kind of say to slow you down in any type of way, then like lightning is what you should be using because it's incredibly scalable.

You can also do micropayments. I think this is what what makes sense for the machine economy. You want to have AI agents and your clod bot just running wild and making money for you or paying out money, hiring your fellow humans that that can happen on lightning at scale because lightning could do 40 million transactions per second. Well, any of these other chains like Solana, you know, going to cap out at 70,000 transactions per second. yeah well that's you brought it up the agentic economy how big is this opportunity and how real is it and most importantly um i'll just give this little preamble i think a lot of bitcoiners are just assuming oh the agents are gonna choose bitcoin because it's the best money it's obvious but uh if you've been playing with these tools

you realize that uh we're not at agi or asi yet and they are very subservient to their masters and will do whatever you tell them and so i think the the onus is on bitcoin is not to convince agents that bitcoin is the best money but the people actually controlling the agents that this is the best way to do it um but the opportunity is massive yeah i i think uh defy has already told us that bitcoin is the favorite um that's like the safe it's the the safe zone um or you You denominate your wins in defy in Bitcoin terms. Of course, you know, stable coins are probably second to that. Or you know, maybe I'm maybe I'm wrong on that.

Maybe people love stable coins as the first stop. But it's going to seek deep liquid markets. Yeah. And so thinking about equipping these agents, I mean, you guys released something for that too. I think that's been fun to watch the last two weeks specifically as everybody has realized, like, oh, maybe I should play around with OpenClaw.

And now they're realizing, they're mapping the territory and realizing that these agents can spin up. Mine has a PhoenixD server and is able to LNURL off into websites and then send Bitcoin and transact pretty autonomously. Um, and it's been fun seeing you guys, I think I saw, um, uh, Magnolia, I think for their bank accounts, I didn't know that they have Bitcoin compatibility, but we've seen, uh, money dev kit out. Uh, I think Bram, uh, Cranstein came out with something that makes it easy to get your agent

access to a Bitcoin wallet via Nostra Wallet Connect. And so we've had this explosion of skills in the Bitcoin space trying to equip agents, which has been fun to watch. Heck yeah. Yeah, we released the Magma MCP so that your AI agent can understand how to source liquidity so that you can access an open marketplace for liquidity. You're not going to be locked into one provider that might be behind some of these other LSP tools. So, yeah, you can access liquidity from anywhere on what makes sense. So the Magma MCP is like a step in that direction so that you can choose the right infrastructure, whether it be Albie Hub or Voltage or an LDK node and source liquidity in a decentralized way. yes i need a price i need to teach uh my agent martin bot how do uh i need to give it the

magma mcp plug-in it's right i opened the channel via a bolt submarine swap to async it was rather expensive and uh it is going to have to it's very profitable right now it's making some bitcoin it's gonna have to rebalance channels and it would make sense to to plug into liquidity pool that does it efficiently right it does um it's it's straightforward for humans to do um but also now your agent can do it uh it's really just paying a lightning invoice yeah well that's the point i think matt and i've been talking about others like the the craziest thing of the explosion of this sort of harness on top of these loms has been i mean i would push back and say like yes it's easy for a human to use magma but the humans that are using magma are

people that are like on not on the cutting edge but like understand bitcoin understand the lighting network understand channel management liquidity uh inbound outbound liquidity and all that but i think the layman is never going to take they're putting the effort to understand the intricacies of how this works and how to be capital efficient and the beauty of this emerging agentic economy is that your computer can just learn how to do it and do it for you without you having to do the hard work. Exactly. And I think that's going to be massive for adoption

and usage on the lighting network specifically. It's it's going to be huge. I mean, now we've got MCPs, which are like just forcing your AI to read the docs, read the manual and know how to use these tools and then be able to map those to the solution, which is you know earn money for your for your human yeah well let's get into that like so when you're building this mcp what is what are the docs what are the the uh manuals that you're handing agents yeah it really is uh just kind of teaching an agent how to use an api so overall you know

what Lightning invoice do you pay and what happens then? Like what types of authentication do you need in order to do this? It really is two or three API calls in order to order liquidity, but it would map into a larger set. So, you know, does your AI agent know how to run a Lightning node already? when does it need to purchase liquidity that's where it would use the mcp portion so it really is a small element of the overall stack but it's an important one because that's the piece that gets you liquidity which enables us to have a debt-free payment system that works for anyone

whether they be human or an ai have you been playing around with the ai tools a lot I haven't myself. However, my team has and overall, I'm seeing the productivity come out of it. That is massive. Any of these small elements that I see, like on our like UI that, you know, I would want to tweak or fix suddenly that it's on the table. That's a fun four minute project for them to do instead of spending a day on it. This is a productivity accelerator. We're in a completely different paradigm now. Well, as a founder, how does it how's it changed how you view scaling your business? I just heard that Twitter is now a team of 30. 30 people are running X.

um that tells me that there's incredibly lean teams that are able to take on the world um if you have good judgment um you now have rocket fuel added to your ability to execute that um if you execute if you have poor judgment now you become a slop cannon um and are just I saw that name. The four-quad, I mean. Yeah. You don't want to be a slop cannon. Don't be a slop cannon.

You want to be really thoughtful about how you're using these tools because they're incredibly powerful and you can be so much faster. Yeah. Yeah, what was the four-quadder's like? High agency, competent, top right. You're going to be fine, but it's like low agency, incompetent. You're just going to be a slop cannon, Where previously before AI tools in like very low agency, low competency, you can hand them menial jobs.

But in the world of AI slop potential, they can really screw things up. It's true. So, you know, we built we built a great team. So overall, I'm I'm loving how they're using these tools because we're able to achieve way more and deliver deliver awesome products faster. yeah what um i mean beyond what we've discussed today rails rails x uh the uh mcp plugin what are you looking forward to um in the immediate and medium and long-term future in terms like product suites and just bitcoin overall what do you what do you think needs to happen i think again And opining back to my comment earlier, or hearkening back to my comment earlier about the fact that I think, particularly in the last two years, Bitcoiners have gotten complacent in the sense it's like, oh, it's built, it'll just happen.

It's like, no, I think we need to get out there and really prove that it's worthwhile and you should be adopting this. uh what what do you think needs to happen for for bitcoin to basically hit that tipping point where the mainstream doesn't look at it as some volatile ponzi scheme asset but something that has incredible inherent value that can really um improve their lives and their businesses i i think um what i'll look forward to is you know bitcoin continuing to do what it does and be robust, reliable infrastructure. I think really it's underpinning our value system and it's going to be our rock going into the next years,

which are going to be increasingly chaotic. While the rest of the world does what it does, Bitcoin will remain our steady hands. And I think that's like that most important foundation And being that it's open source and now that we're equipped with AI tools, the acceleration of development in order to be prepared for what's ahead, we just become more capable so that we can continue to be productive and continue to do good things based on solid fundamentals where I'm more bullish than ever on our future. And I think that'll pan out. I think people will start to realize the Bitcoin builders are the ones that last and they're not being distracted by a whole bunch of token incentives. They'll continue to build. I think that will long term really pan out for the venture capitalists within the space that are investing in Bitcoin companies. And we'll watch it play out.

Thank you for that plug for venture capitalists there. It's most appreciated. Yeah. To your point, I think just like the long and steady brick by brick progression, just like staying the course is most important. I really like what you said about bitcoin just being this reliable anchor as we go through this crazy chaotic transition in the world where there's technology with ai and disruption that comes along with it the geopolitics the throwing the epstein files whatever's happening and to your point like i've always liked to when i explain bitcoin and it's been described as a truth anchor and all this but like like visualize it to people for some reason i always had this weird visualization of bitcoin that really harkens

back to um the first iteration of uh double entry accounting which is where you would live in a town square and you'd go to the bank and you'd say hey i did a deal with him i need you to change the debits and credits in our accounts to account for that and bitcoin is simply instead of going to that bank in the middle of that town square it's just like a beam of light streaming into the air and that is like what you anchor into and anybody can approach you you don't have to talk to an individual you just go up to that beam and you you anchor your uh your the truth of your transaction into it it's very esoteric probably a little gay but uh i think uh i think that visualization yeah it works for me at least but like to your point like having this stability i

don't think people really recognize the profound nature of this in these chaotic times but being able to depend on bitcoin to do what it does produce a block roughly every 10 minutes have a difficulty adjustment every 2016 blocks have a subsidy having every 210 000 blocks that is incredibly value in a world in which things are changing rapidly around us kind of speaking to you know being a founder one of the biggest risks that we can have is to get distracted um and not be laser focused so i deeply appreciate the bitcoin or meme of laser focus and i think bitcoin in many ways embodies that uh like you said in order to create that beam of light and bitcoin become in dan tapiero's words be a truth machine like what bitcoin is doing is

saying no to thousands upon thousands of garbage transactions that are out there to say you know no this is not going to be part of the record and only when you meet all of the stringent requirements of being provable in fact we know exactly where the money came from to make this transaction happen only then does it get approved to be part of the bitcoin blockchain and i think that is powerful it's objective um and it it gives bitcoin what it needs to be to be that solid foundation it's very simple too and i think it's important to i think it's another thing we've gotten away from um at least in the bitcoin public sphere on x especially just these simple truths that exist within bitcoin that are simple yet extremely powerful it's uh if you're not abiding

by the rules if you don't have a utxl a valid utxl with an amount of bitcoin that can cover the transaction you're trying to make to a public address that actually exists um and is compatible with the network as well like it's not going to happen that's simple it's relatively dumb from an engineering perspective but it's extremely powerful yeah i love it um another aspect that you know like looking forward um is really about privacy um i think we're seeing a lot of hand wringing of the stable coins you know talking about how they're going to incorporate privacy um but i think a lot of the stuff around lightning and its ability to keep transaction level privacy is is being undervalued when it may be that solution that the stable coins need in order

to protect transaction level privacy but still have things be fully accountable at the blockchain level let's jump into that how would um stable coins running via tappered assets over lightning provide an individual actor with more privacy compared to doing it on front or solana or whatever it may be yeah uh well at the blockchain level you can see every single transaction um and so if you've got something that's on tron well you can look up the the record of that um many of these blockchains operate that same way unless they have you know some type of cryptography like kind of uh monero but then for monero you lose the ability to do the widespread accounting calculation and making sure that there is a known supply that has not grown so like

that's that's one of the pieces that bitcoin has like we know there's never going to be more than 21 million like we can run the script it doesn't take long at all to count how many bitcoins have been created but when it comes to scaling things up you create a lightning channel and there's a certain amount of bitcoin in to create this what i like to call a joint account with a with another another peer any of the individual transactions within that lightning channel they don't exist on the blockchain nor will they ever and then you know after some years you may close out the channel and each each party in the channel gets their payout which is the net settlement after many years and thousands or hundreds of thousands or millions of transactions have occurred so it

gives you that transaction level privacy but what is lasting is uh your peers all the friends you made along the way um to connect to to other folks you're kind of building a reputation at the at the node level instead of at the individual transaction level where people are peering into everything you're spending money on yeah it is still mind-boggling to me just like seeing like people trading on polymarket or trading assets on chains like ethereum like due to their account-based system you can just see you just be like oh here's italics wallet like it says we know it says and see every transaction he's making and there doesn't seem to be any any qualms or um or worry about that sort of lack of privacy existing on all these chains especially when you're

especially for like polymarket indexes and things like that if you're trying to get a market edge but everybody can see your balance at any given point in time and what assets you're trading it's like it seems like we'll look i mean at least who knows time will tell and the market will decide but to me it's like i think we'll look back at this be like it was insane that we did things this way it's gonna be crazy because you know for lightning we're creating side ledgers um that's what each channel is it's a side ledger that you just have with one other party and i know lighting labs has been working on a tool to actually erase that history you know once it's over um there's no need to keep it around um yeah it's it's nobody's business

and it doesn't need to exist anymore but we don't have to live in a world where there's going to be massive data breaches where all of this information gets exposed and people are pouring through it later yeah yeah we're gonna do it the right way this is exciting i know you've been working on this uh very hard for the last five years it's uh it seems like the momentum at amboss has been picking up considerably over the last year uh and so it's really fun to see you guys succeeding launching new products and really honestly pushing the industry towards a place where i would argue it needs to be again i'm not i don't i'm not a trader i don't i'm not going to speculate on assets that are trading on dexes i recognize the value of stable coins the product

market fit they've had and for quite a while over a decade now um the whole meme is going to be like what you can do on shit coin trade chains is eventually going to come to bitcoin but i think the hard discussion within bitcoin uh across that decade has been all right we need to make sure we do it the right way with the um with a trade offset that everybody's comfortable with and i think pushing all this up into lightning makes a lot of sense from the scalability efficiency perspective but then to a large part of what we just discussed the privacy aspect of it as well um that's doing it the right way yeah uh thank you um we have been working hard at this um and overall it's just because we want people to have more control over their you know financial

futures um not be beholden to others and what policies they they institute in some backroom deal that you could have sovereignty over how you trade, how you interact, how you peer with others, how you associate. And this gives us quite a bit of power at the individual level to be able to select what currency we want to receive, what currency we want to send. And that information isn't even contained in the Lightning invoice. It's going to be private on what currency you are receiving.

and what currency you're sending. And Bitcoin is, at the core of it, going to be that connector. So Bitcoin can become the medium of exchange and not just a store of value. Is that privacy attained via Bell 12 specifically in the invoice? It's not. The way it works is you're going to choose which channel you're going to receive your payment in. And one of those channels may be a taproot asset. So it really just looks like a routing hint.

To say, hey, use this channel that is not publicly visible. OK, so just somebody can route it. Somebody can route it. They don't know what they're routing. Exactly. Yeah, it's beautiful. Well, Jesse, I hope the next time we're in New York together, we get to make a trip back to automatic slims and sing, sing American Pie. We did an epic night.

um i'm looking forward to it and we can catch a 4 a.m slice of pizza um yeah look look forward to it where can um anybody so curious find out more about what you guys are building on amboss test out rails rails x uh magma magma mcp um you can always find our information at amboss.tech for the company site uh if you want to dive deep into you know exploring lightning it's amboss.space for the explorer um but you can find us on x at amboss tech or you follow us on noster as well um yeah i'm available as jestifer underscore btc on x great x handle uh jestifer um we'll include all those links in the show notes i hope you enjoy the rest of your friday and uh can't wait to see you again brother yeah look forward to it thanks so much marty

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