The Breakdown - Muneeb Ali on the Future of Bitcoin Building

Episode Date: December 29, 2022

This episode is sponsored by Nexo.io, Circle and Kraken.   Today’s guest is Muneeb Ali, CEO of Trust Machines and founder of Stacks.   Find our guest on Twitter: @muneeb - Nexo is a security-first platform where you can buy, exchange and borrow against your crypto. The company ensures the safety of your funds and keeps innovating with products like the Nexo Wallet - a non-custodial smart wallet that allows you to create your Web3 identity. Get early access at nexo.io/wallet. - Circle, the sole issuer of the trusted and reliable stablecoin USDC, is our sponsor for today’s show. USDC is a fast, cost-effective solution for global payments at internet speeds. Learn how businesses are taking advantage of these opportunities at Circle’s USDC Hub for Businesses. - Kraken, the secure, trusted digital asset exchange, is our sponsor for today's show. Kraken makes it easy to instantly buy 185+ cryptocurrencies with fast, flexible funding options. Your account is covered by regular Proof of Reserves audits, industry-leading security and award-winning Client Engagement, available 24/7. Sign up and trade today at kraken.com/breakdown. - “The Breakdown” is written, produced by and features Nathaniel Whittemore aka NLW, with editing by Rob Mitchell and research by Scott Hill. Jared Schwartz is our executive producer and our holiday theme music is "Spike The Eggnog" by Two Dudes. Music behind our sponsors today is “Back To The End” by Strength To Last. Image credit: Namthip Muanthongthae/Getty Images, modified by CoinDesk. Join the discussion at discord.gg/VrKRrfKCz8.

Can we have all these Ethereum Solana-like applications built directly on top of Bitcoin? That's the core thing, and that sounds simple, but doing it is actually much, much harder because you need to figure out how to trustlessly move PTC from the main Bitcoin layer into the smart contract layer and then back. Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. The breakdown is sponsored by nexo.io, circle, and cracken, and produced and distributed by CoinDesk. What's going on, guys? It is Thursday, December 29th, and today my guest is Munib Ali, the CEO of Trust Pilots.

Before we get into that, however, if you're enjoying the breakdown, please go subscribe to it, give it a rating, give it a review, or if you want to dive deeper into the conversation, come join us on the Breakers Discord. You can find a link in the show notes or go to bit.ly slash breakdown pod. All right, guys, so as I mentioned, today, my guest is Munive Ali. Lee. Muneb is a founder of Stax, which has spent the last few years trying to build a Bitcoin layer for smart contracts. Mnib is also the CEO of Trust Machines, which builds applications on that Stax's Bitcoin Defi layer. In our conversation today, we discuss where Stacks and Trust Machines came from, Bitcoin is a base layer for truly decentralized finance, historical shifts in Bitcoin or community attitudes, and much, much more. This is a great

conversation, and I hope you enjoy it as much as I did. All right, Muneb, welcome back to the breakdown. How are you doing, sir? I am doing good. How are you? Good. It's great to have you. It's super fortuitous. So this came up on Twitter. The other day, you, you kind of announced a couple interesting papers that had come out that you guys were a part of. And someone said, hey, you got to get Muneib or, you know, someone from Stax back on the show. And I'd actually already plan to invite you guys for these end of year shows. So for those who don't know you, can you give just a quick, quick introduction to yourself to Stax, to Truss Machines? Just tell us what you do. Yes. So I think Stax is a Bitcoin layer for smart contracts. So I started the project in like 20, 2017 or so over time, it has decentralized a lot. On a day-to-day basis, I am the CEO of this

company called Trust Machines that has the mission of building Bitcoin applications. So we use stacks as a technology along with other things like Lightning and DLCs and so on. Awesome. And so, so just just so people really have a sense of kind of what the, maybe try to give a state of kind of what you've been working on within the Bitcoin ecosystem specifically. What sort of, you know, what has been building? And maybe an even sort of more important question is,

what was missing that made you want to kind of build this stacks layer and then, you know, everything that can be built on top of that? Yeah, I think that's a great question. I would say this has been one of the biggest challenges or unlocked. in the Bitcoin ecosystem. Like, imagine that Battalic actually tried proposing fully expressive smart contracts on top of Bitcoin. And there are many good reasons why people don't want that.

The Bitcoin Kodas don't want it because you want the Bitcoin base layer to be simple. And it just focuses on being, you know, hard money and being a settlement layer. And then Battalik went off and created Ethereum. And you've seen that, you know, there is a lot of interest in building with fully expressive smart contracts. and with having applications like Uniswap, which is decentralized trading, or OpenC, which is a marketplace for NFTs. So those applications have a place, and Bitcoin as a money layer has a place.

And where Stax comes in is can we have a Bitcoin layer? So think like an L2 like Lightning, which is good for faster payments. But can we have all these Ethereum-Solana-like applications built directly on top of Bitcoin? That's the core thing. and that sounds simple, but doing it is actually much, much harder because you need to figure out how to trustlessly move BTC from the main Bitcoin layer into the smart contract layer and then back, which is the trustless, you know,

our trust minimizes a more precise way of moving BTC into the layer and back. And that's the paper that we released recently, which is a collaboration with many, many kind of like, you know, computer scientists and research. researchers, who have been working on similar things for a while. So at the high level, I would say this is about really unlocking the true value of BTC as an asset, because then you can directly use it in applications in Bitcoin layers, in the Bitcoin ecosystem. So if you want to take a USDC loan against your BTC from a smart contract, you can go and do that.

Like if you want to participate in a lending protocol, you can do it. If you want to trade atomic swaps into a stable coin, you can go and do that. So this is what the goal of the project is. And so let me ask you, this may sound like a weird question, but I think it's actually probably an interesting way to come at it. Obviously, there's sort of a real hesitance within the Bitcoin community. There's a conservatism, right? That's sort of related based on exactly what you were describing, the sort of the first

do-no-harm principle. As you have introduced this, obviously, you guys. have had a very different stance than some Bitcoiners and some Bitcoin technologists around the right approaches to this. What do you think are the best, the worst critiques that you've seen, not just about you, but about anyone building on Bitcoin versus not good critiques, but good concerns that are the same types of things that you guys are also concerned and thinking about? Yeah. No, I think that's a great question. So first, a little bit of a context, right? So I've been in the Bitcoin ecosystem since like 2013.

And I think there's a marked difference between the attitude of the community between, let's say, 2012, 2011 to 2016. And very different between 2017 to like 2021 or so. And the difference is that the back of the earlier days, people were actually much more interested in experimentation, in discussing. ideas and there was a ton of interest and there's still some interest in the concept of like side chains and Bitcoin L2s and the general idea is you go and experiment in side chains and L2s as much as possible do whatever you want because you're not changing the base layer right and people are very intellectually interested in things like NFTs which actually started on Bitcoin. Even ICOs started on Bitcoin. Like there was a product called MasterCoin that did that. So a lot of these innovations and they actually

started from Bitcoin, but the divide really became, I think 2017 was at this time, when Ethereum started attracting a lot of the builders, and they were much more, and Bitcoin was going through a civil war, right? Like they were kind of like internally fighting with each other between bigger blocks, smaller blocks. And the culture really became that, you know, people who feel like they're defenders of Bitcoin, they are basically saying no to any change, right? They're saying, hey, don't change Bitcoin at all, which is helpful in some ways, but it's all. But it's also drives away potential innovation, right? And then a lot of builders are gaining momentum

on other ecosystems and other chains. And just the total number of developers in the Bitcoin ecosystem in the last four or five years is relatively less. And I think we can acknowledge that. But Bitcoin still remains the largest, you know, crypto capital base, the most secure blockchain. So there's a little bit of a revival

of Bitcoin builders' culture, which I think is a very, very healthy thing. So in terms of criticism, I think the worst type of criticism is when people just write off all of these applications and say, we don't need this in Bitcoin. Like that's just a blanket statement. It's a very naive way of saying that there's no useful thing any developer can build. That's just like a blanket statement. It makes no sense.

Especially given the fact that if you look at Bitcoin trading, most of BDC that's even trading against stable coins, it happens on centralized exchanges. Like Binance and Coinbase, there's billions of dollars of trading that happens. then Bitcoiners would be like, take your BTC off of exchanges. Well, great, but then there's no decentralized way of trading your BTC with stable coins. So you need to have real options on Ethereum, for example, Uniswap has the most liquid eith trading pools. People can just have self-custody of their assets. And if they want to swap into a stable coin, they can just do that without going to a centralized exchange. That is good for Bitcoin. That should be built in the Bitcoin ecosystem.

And I think it's applications like that. So that's the worst type of criticism where it's like a blanket statement, you know, all of these things are useless. We don't want any of that of Bitcoin. Absolutely not true. I think early Bitcoiners have this thesis that all of the useful applications from the rest of crypto would eventually be built on Bitcoin. And I think that's the right attitude towards it. In terms of the good criticism, I think there are very good criticisms about, you know, how is it this going to impact the Bitcoin L1? on, right? Are there going to be MEV type opportunities, which is basically saying that miners are

kind of like reorging the chain to extract certain value because now they can do that because of the L2, right? Or criticism around, hey, are you going to increase the data embedded in the Bitcoin blockchain so much that a normal person on a laptop can run a full node anymore? That's a very, very good things to point out. And over the years, like, we have been very, very careful about these things where the ways the stacks layer is designed is that most of the data is in the stacks layer and Bitcoin is only getting a settlement. So you can do thousands of transactions

on the stacks layer. Bitcoin is seeing very small amounts of data. So you still get the security benefit, but you're not polluting the Bitcoin L1. Similarly, for the Mavit type opportunities, the miners are actually it's much easier for them to reorg the Bitcoin layer stacks

than to try and attempt those attacks at the Bitcoin layer, right? Like the direct Bitcoin L1. So those are some really good critiques, and there are technical solutions to these things which people can evaluate and see and say like, oh, yeah, that makes sense that this problem is addressed. It sounds almost like part of it's just sort of the difference between general and specific, the bad critiques being an unwillingness to, it's almost like an unwillingness to get to real points of concern versus theoretical points of concern and to kind of find out if there are ways to

address them or not. Yeah, I think it's also, like this is something, you know, whenever I criticize Bitcoin community, I do that as in a friendly way. Like, you know, I consider myself a Bitcoiner, and it's good to be self-critical. Like, that's how you improve. Right. So one thing that I've noticed is that over time, the relative number of technical people in the Bitcoin community has actually gone down as a percent of the size of the Bitcoin

community. Whereas if you look at some of their ecosystems, there's a much stronger concentration of developers. So in Bitcoin, sometimes what happens is that there are a handful of people that a lot of normal Bitcoin community members just look up to. They're like, I don't understand any of this. I'm just going to look at the opinion of like who these people are. And over time, the people, the technical people who have sort of like survived in the Bitcoin

community, they're the ones who can kind of like stick with this very much approach of like everything, any change is bad, don't make any changes, all the all the, all the, all the, NFTs are bad, all these things are bad. So there is now a bias that because you don't have a lot of technical people, you can't get into real nuanced discussions. And the ones that are sort of like survive, they have a very negative bias towards any application. So I would encourage people to think about this, that the more builders and engineers and

computer scientists that actively work in the Bitcoin ecosystem is extremely healthy for Bitcoin. And that would actually lead to much more nuanced, actually. discussions around topics and overall the Bitcoin economy can actually grow a lot. Your BTC can become more valuable if more developers are building things in the end of the Bitcoin ecosystem. In an ecosystem where innovation is the norm, it's the basics that are in the spotlight. Nexo is a company that has never put the safety of clients funds in question. With over 50 global licenses, $775 million in insurance, and a real-time audit of custodial assets,

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transparency and trust, while delivering on their mission to empower people with new ways to connect and transact. Millions of people around the world count on the Cracken mobile app as the easiest, safest, and most flexible way to start building their crypto portfolio. Cracken's industry-leading security keeps your funds and information safe, and their award-winning client engagement teams are available for support 24-7. Download the Cracken app on Google Play or the Apple App Store, or visit Cracken.com slash breakdown to join. I agree with entirely with the sort of wanting more builders. But I think I would say that there's, even within the context of people who are non-technical, there's more room for philosophical nuance than is given credit.

And I wonder to what extent, and I'm interested in your take on this, to what extent you have folks who have discovered Bitcoin and who find themselves attracted to some of the very, just a very core functionality, what it means to have sort of a non-sovereign store value and currency-like thing, and want to contribute to it, but because of the example of sort of social media, feel like the only way to contribute to it is to quote unquote defend it online at all costs, when actually, even, again, not being non-technical, there's other things that they could be doing to sort of better defend, support, grow, and evangelize Bitcoin. Do you think that there's an aspect of sort of people wanting to contribute but feel like that?

like the only path is yelling on Twitter, basically. Yeah, I think there's some of that, right? And I think there is also, like the same energy could be spent in my view, more healthy directions as well. Like a great example is the broader Bitcoin community has picked up on, hey, self-custry is good, right? I think that's a great thing. And they evangelize that.

And whenever they are evangelizing self-custry, I'm like, plus one, awesome, you know, everyone should try for self-custry. But they have also realized that centralized exchanges are bad. Again, sort of like a good thing that telling people that, hey, be careful of centralized actors. These are central points of failure. They haven't made the logical conclusion that this also means that decentralized exchanges are good. So if a lot of Bitcoiners are publicly saying that anyone building a decentralized exchange in the Bitcoin ecosystem is doing God's work, I think that's the logical conclusion from the previous two things,

but they haven't really made that conclusion. And I think part of that is also because of where they're learning stuff, right? So even though Bitcoin is like very, very decentralized, there are sources of information. There are certain people that people follow or look up to or certain magazines people read. And I think those circles are not paying enough attention to these applications because the general narrative has been everything that's happening

and the rest of non-Bitcoin crypto industry is bad. And I think that there needs to be more nuanced stuff about from first principles. Let's look at privacy and enabling features. It goes very much hand-in-hand with Bitcoin culture that this is my money, just like it's hard to track cash, it should be hard to track my Bitcoin spending as well. right, but they are not open to ZK-based solutions that might come with layers like stacks or others that can help with that. I think one way to think of this, their hate for Ethereum or the

rest of crypto is bigger than the benefits that Bitcoin can actually get from some of these applications that are actually really good for Bitcoin. Yeah, there's almost like an original sin of a technology first having, or even a terminology, and this is interesting, having first been associated with non-Bitcoin things, right? Like, decentralized finance is a, it's a neutral term, but it's not because it's associated with Ethereum and now other layer ones, right? Absolutely, I think this is a classic, like, not invented hair syndrome. And the funny thing is, it's not even that case.

NFTs were invented on Bitcoin, right? Like, a lot of these ICO fundraisers were invented on Bitcoin. Even, like, the ideas of Tao's were first discussed on Bitcoin, like, name coin, the first fork of Bitcoin or even like a side chain that had a different asset for domain names. It was started by Bitcoin, supported by Satoshi. So it's a little bit like people think it's like not invented here and that's why it's bad. It's actually all these things were invented on Bitcoin. It's just that it was a long time ago and people have forgotten what the original Bitcoin

community used to be like. Well, I think too, there's the one that might be the hardest for some people to debate is whether tokens can ever be used as an organizing fund. function for any of these. I think that, you know, I think that even when you see, when you have bitcoins who are okay with the idea of sort of, you know, layer two is doing things, they'll still have that question of tokens as an organizing mechanism. And I think that those, every cycle when we see how tokens can be used to misalign financial incentives, those sort of convictions get higher, you know, and makes it more challenging in some ways. Yeah, absolutely. I think I think this is,

this is really about if you look at this as a spectrum. I think since 2013, when my friends or family would ask me about crypto or Bitcoin, I would tell them, look, Bitcoin is the least risky thing out there. It has the clear use case of like being a store of value or hard money. If you want to dabble in this area, go learn for yourself. But if you're really putting your money, buy Bitcoin, right? If you really must go experiment elsewhere, take a small amount and consider that like throw away money and do that. But the bulk of your, your, you're holding should actually be in Bitcoin. And that used to be a pretty normal message that a lot of Bitcoin people would give to new cars, back back in that 2020, 2013 or so. And I think over time,

since 2017, the message has become a lot more extreme on one end of the spectrum, that you're either Bitcoin only or you're just this bad person, right? Whereas most Bitcoin owners, they hold like maybe like, I don't know, 80, 90% of Bitcoin. They also hold other stuff, right? Like, who are we kidding? This be realistic. Most Bitcoin people actually hold other assets. But it became almost like socially unacceptable to talk about it or to say that, hey, yeah, there's Bitcoin and there are these experimental things that you can go and play around. And I think that was the culture of shift that is really at the heart of it, that you've just taken a very extreme stance, which is actually doesn't even apply to a lot of Bitcoiners, right?

Like, there might be very few people who are literally, literally Bitcoin only, and they literally don't hold anything else. In light of that, do you feel like this year sort of the growing debate and discussion around maximalism and maximalism alternatives has been healthy for Bitcoin? I think I have, I've sort of concluded a few things about maximalism. One is there are benefits, and I think we should recognize that. And the benefits are that their message is very simple. right because they're on one extreme end of the spectrum the message is very very simple they're like

bitcoin only forget about everything else just do this and if people follow that advice they will actually be better off right they will be better off than than getting you know burned by some experimental projects and so on so i can't disagree with the message in terms of like a very simple thing i think it's the energy spent trying to hate other things that i feel like it's just not healthy but I've also sort of concluded that I don't think they're going away either. It's a thing where every cycle, when new people come in and they lose money, Bitcoin maximism becomes very appealing to them. So it's a little bit like, I learned my lesson, now I'm going towards purity, right?

And there's the church of Bitcoin that is hammering the same message every single day. And people find that satisfying, right? Like it's simple. It's something they can understand. they can get behind it. And it's actually good for them in some ways, right? For a normal person, if you are, if you're like I still hold most of my savings. I put my life savings into Bitcoin like 20, 2013, 2014.

I still hold Bitcoin. So I can't disagree with the message. So I would say my conclusion is it's not going away. So you need sort of like learn to live with it. And the best way to learn to live with it is grow the Bitcoin developers. community, right? If there's a very healthy community of builders who are intellectually curious, who are actually building useful things, and then the other other thing is show, don't tell, right? Like, arguments don't go anywhere, right? So in the end, markets decide, like, what technology

wins or what people are using. So if there are like a ton of users who are actually using decentralized applications around Bitcoin, to the extent that maybe most of Bitcoin L1 traffic is actually because of those applications, then you just have hard data. Yeah, look, most Bitcoiners want to use these things. So no matter what you're saying on Twitter or other places, it doesn't matter, the market is indicating that these applications are useful and people want to use it. It's interesting. Earlier when you were talking about self-custody, and once you've self-custodied,

how would you exchange, you know, a Bitcoin for USC or take a loan against it or something like that without then going back to a centralized exchange? And the phrase that kept rattling around in my head was something like functional, self-custody. And it seems like a lot of what you're trying to build is if people are g rocking this lesson of self-custody following, you know, so much institutional failure in crypto this year, how do we make it more viable for them to keep Bitcoin self-custody throughout all the uses and life cycles of what that Bitcoin might do for them? Is that, is a fair way to put it? Absolutely, right? So one is the point that you just pointed out,

that this is much more practical self-country, if I never have to go to a centralized exchange, I'm way better off than trying to go there and then deciding that I need to withdraw now and so on, right? The second thing is, again, back in the earlier days of Bitcoin, a lot of focus was growing the Bitcoin economy, right? So the bigger the pie becomes, the bigger the economy of BTC is, the better it is for Bitcoin.

So according to that school of thought, which I still think is true, if a lot of people are trading BTC for NFTs, and there's like billions of dollars for trading going on, that is good for Bitcoin. If you look at the last cycle, so many people got introduced to these technologies and private keys and self-custody through NFTs. And you can't hate what normal people want to do.

If people want to have fun with monkey pictures, that's their decision. Like Bitcoin stands for freedom, and what you need to realize is, that by not having BTC NFTs or Bitcoin BTC trading against NFTs, the Bitcoin ecosystem is actually losing out because you're leaving space for other forms of money like ETH. So so many like millions of people came in and they skipped Bitcoin, right?

They are holding ETH in their in their self-custody wallet and they're they're treating eat as money. All of that, I think if NFTs and obviously Stacks has done a lot, Most of the Bitcoin NFT traffic that you would see happens, happening in stats. There's obviously counterparty on directly Bitcoin L1. But what we are saying is growing the Bitcoin economy, if let's say the Bitcoin use grew by billions of dollars because of NFTs or stable coins or other types of use cases, that's actually really, really good for Bitcoin,

both for the value of Bitcoin, the adoption of Bitcoin, for the education of Bitcoin. All these things are really, really good. And I think those are some of the differences. And I think another thing I would point out is a lot of people are also coming around to this. If you see, you know, there is now a healthy community of people who basically just don't associate with the more fundamentalist philosophy. And they are publicly saying, look, I'm a bitquiner, but my views are different. And I think that's totally fine. And I think I truly believe that there are more people.

The normal bitcoiners, they actually associate more with the early Bitcoin community. where it was not as strict on, hey, every application is a sin or bad. They would actually evaluate things in a more nuanced way, and they had different ideas for how to grow the Bitcoin economy. I think it is seeing a revival now, if anything. Well, on that line, maybe my last question is, what do you think a successful 2023 looks like for Bitcoin and what's required to get there? So I think one thing is clear that when the markets crash, people go back to Bitcoin,

it feels like the less risky thing. And it becomes very clear that if Bitcoin falls, everything else falls, if Bitcoin comes up, everything else is going to come up. So I think Bitcoin has again survived the test of time. It remained the largest asset by far during the last bull market and even in the bear market. So the first lesson is Bitcoin is not going away. So all those thesis around Bitcoin is going to become irrelevant. it's just not playing out right now.

So I think this is the time to take a really hard look, that if Bitcoin has staying power, which I truly believe it does, then what are the things that can be done in the Bitcoin ecosystem? Because that is a big mismatch that I see right now in terms of developer attention going to non-Bigcoin ecosystems

versus developer attention going to Bitcoin innovation. And I think that's where we are trying to play a role. And we really think with the launch of the DC centralized peg, the two-way peg and other systems. Like, I think we can make a huge debt in 2020-23 on this. Awesome. Yeah. Let's actually close there.

Just so people have a next step you guys just put out, or not you guys, but you as a part of larger groups just put out these two papers. Could you just briefly say kind of what these two were? Yes. So I think the decentralized Bitcoin peg problem has been a huge challenge for the last 10 years or so. If you look at Blockstream, which is a very respected company in the Bitcoin ecosystem, when they started, the original paper that they put out was about side chains. They were, they believe, in a way, believe in that thesis that by creating these side chains

where you can move your BDC, use it in more experimental applications, and then take it back, is really good for Bitcoin. I think there were the differences that a lot of energy in the Bitcoin ecosystem, including by Blockstream and others, has gone into trying to enable these things without using tokens. And that's a double-edged sword, right? Because what happens is these folks hate the fact that there's another token other than Bitcoin. I can totally understand that as a Bitcoin. But the token is also bringing the economic incentives to create the layer, right,

or give the economic security to that layer. So without that, you end up with federated systems like liquid. Liquid is a federation. Everyone knows that. So people need to now trust the federation for moving BTC into the federation and then out, which as a developer is not that interesting, right? I don't want to be dependent on a company that can go bankrupt and then my application is gone, right, because I was trusting a federation or for users.

You can't trust any company with billions of dollars of BTC as we have seen, right? Company or a set of companies, a federation is really a separate. set of companies. So you can't do that. And I think that has held back the Bitcoin economy by a lot. So if you can have these pegs that are secured by economic security, similar to how Bitcoin at the end of the day is secured by economic security, miners have economic incentive to come in and mine, and it's an open system. Anyone can come in and out. If you design the peg that way, anyone can come in and out for being a signer and they have economic incentives to manage the peg. now it's an open system.

Now there can be free flow of BTC from the main chain into the layer and back. I think that was a very, very critical thing that we, meaning again, there are a bunch of anonymous contributors to this, people who have worked on this problem for a very long time. We think it's a major unlock

that if you can have this trust-minimized way of moving your BTC in and out, no federation in the middle, no kind of trust in any specific entities in the middle. Let's say that's a pretty big deal. Awesome. All right. Well, Mooneb, it's always great to have you on the show. Love your insights here. Excited to keep building with you in 2023. So happy New Year and happy holidays to your family and look forward to checking again soon. Yeah, same to you. Happy holidays and always, always great to chat. Thank you so much.

Cheers. All right, back to NLW here. And just by way of wrapping up, the thing I keep thinking about is this idea of what it means to make self-custody functional. One of the big takeaways from the collapse of so many crypto institutions this year is a return to the importance of self-custody, not your keys, not your coins. And if we think about the spectrum of people who resonate with that and who do self-custody, I imagine that there's probably a spectrum. Some only want to store their value, nothing else. They just want to have their Bitcoin in a safe place and keep it there forever. On the other end of the spectrum are people who want to be able to use their value-storing asset in a wide array of ways. I suspect most people are in the middle somewhere, and even to the extent that they slant towards just wanting to store value, there are some core functionalities of that that might need to get built.

Part of what makes Bitcoin so good as a store of value asset is how usable it is. By usable, I mean, among other things, that in bad circumstances, it can be sold. When Tesla sold a big chunk of its Bitcoin holdings to help its Q2 balance sheet, some saw it as a betrayal, but I saw it as validation of what makes Bitcoin a better balance sheet asset than something like gold, which is hard to sell. It means that you can use Bitcoin for what you need it when you need it based on changing business circumstances. To me, Tesla being able to sell Bitcoin so easily without tanking the value of it made it look like a better, not a worse balance sheet asset. I think the same applies to individuals who, whatever their best intentions are going to go

through a variety of experiences, situations, and contexts which might change how they need to interact with their Bitcoin. Now, of course, some will say, yeah, but if you just have to sell it, centralized exchanges are fine for that, but I think that might be missing the point. As a general rule, having self-custody be an entree to a more functional set of experiences, with more optionality that reflects the full range of hodler needs, seems to me like a valuable thing to spend some time on. Anyway, interesting thoughts coming off that conversation. Thanks again to Munib for joining me.

Thanks to my sponsors, nexus.com.com, CERCLE and Crackin for supporting the show. And thanks to you guys for listening. Until tomorrow, be safe and take care of each other. Peace.