The Pomp Podcast - #1052 Chase Perkins On Building On Bitcoin’s Layer 3

Episode Date: July 18, 2022

Chase Perkins is the Founder of Impervious.ai. In this conversation, Chase helps to explain what Bitcoin's layer 3 is. We also discuss the brand new browser that Chase & Impervious are building on top of the Lightning Network, the expansion of the Bitcoin Network, and how Bitcoin will begin to integrate into our daily lives in the coming decade. ======================= BCB Group is the leading payment services partner for the digital assets industry. BCB Group provides payment services in 30+ currencies, FX, cryptocurrency liquidity, digital asset custody and BLINC, which is BCB’s free, instant settlements network for the BCB client ecosystem. Find out more by visiting bcbgroup.com/pomp ======================= Exodus is leading the world out of the traditional financial system by building beautiful and user-friendly blockchain products. With its focus on design and user experience, Exodus has become one of the most popular and loved cryptocurrency apps. It’s supported on both desktop and mobile, allowing you to sync your wallet across multiple devices so you can have access to your funds anywhere. You can instantly exchange around 100 different cryptocurrencies straight from your wallet. Interactive charts let you view an asset’s price history and your portfolio’s performance over time. And maybe the best part, Exodus is integrated with the Trezor hardware wallet - making advanced security easy for everyone.  Visit exodus.com/pomp for your free download or search Exodus on the App Store or Playstore. ======================= The Pod Pro Cover by Eight Sleep is the most advanced solution on the market for thermoregulation. It pairs dynamic cooling and heating with biometric tracking. Go to https://www.eightsleep.com/Pomp to check out the Pod Pro Cover and save $150 at checkout. Eight Sleep currently ships within the USA, Canada, and the UK. =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Chase Perkins is the founder of Impervious.ai. In this conversation, we talk about the brand new browser that they're building on top of Bitcoin and the Lightning Network, what the consumer will be able to do, why incumbents aren't competing yet, and how the world will change if Impervious is successful. I really enjoyed this conversation with Chase, and I hope that you guys enjoy it as well. Before we get into this episode, though, I first want to talk about our sponsors. This episode is brought to you by BCB Group. With a dedicated focus on institutional

payment services, BCB Group provides business banking, cryptocurrency, and foreign exchange market liquidity for many of the world's largest crypto-engaged financial institutions. BCB business accounts allow businesses to load fiat currency and cryptocurrencies for payments, operations, and trading purposes. BCB's clients can trade FX and cryptocurrencies quickly and at scale with market-leading value. BCB's Blink Network is the European crypto industry's first instant settlements network and one of the first real-time payment networks of its kind to allow free real-time transactions across fiat and digital currencies. BCB's vision is to empower the global financial revolution through sustainable and innovative banking. You can find out more by

visiting bcbgroup.com slash Pomp today. Again, if you want to learn more, go to bcbgroup.com slash Pomp today. Today's episode is brought to you by Exodus, the world's leading desktop, mobile and hardware crypto wallet. They offer beautiful user-friendly blockchain products that sync across all of your devices, making it easier to send, receive and exchange over 150 or more crypto assets in one place. And with world-class customer service available to you 24-7, Exodus always has your back. But the fun doesn't stop with staking and trading. They recently launched a new NFT marketplace where you can buy and sell your favorite NFTs on the Solana network. By partnering with the popular NFT platform Magic Eden, they're offering the full Monty on verified collections

with more added every single day. Ready to check it out for yourself? Run, don't walk over to Exodus.com slash Pomp for your free download today. Again, if you want the world's leading desktop mobile and hardware crypto wallet go to exodus.com slash pomp today this episode is brought to you by eight sleep eight sleep is the single best product that i have purchased over the last three years it completely changed my life i'm not joking pay attention the pod pro cover which goes over your mattress by eight sleep is the most advanced solution on the market for thermal regulation it pairs dynamic cooling and heating with biometric tracking you can go to eight sleep dot com slash pump to check out the pod pro cover and you save one hundred and fifty dollars at

checkout. They currently ship within the United States, Canada and the UK. I told you it changed my life. It helps me sleep deeper, helps me sleep longer. I feel much more refreshed and I have better energy. You want to know how I have relentless energy every single day because I sleep on an eight sleep. Seriously, go check it out. Eight sleep dot com slash pump today. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his

personal opinion. This podcast is for informational purposes only. We've got Chase joining us. Chase, how are you? Hey, Pomp, what's going on? I'm super excited to talk to you. I first saw impervious and somebody was explaining to me and i literally was like what are you talking about this sounds absolutely insane uh talk us through when you said okay i'm gonna go build this what was the problem that you identified that needed to be solved before you ever thought of the solution totally so the foundation and the crux of the issue is removing third-party intermediaries and dependencies for data transfer, storage, access, and permission. We've had the great consolidation of the internet over the last 20, 25 years.

And that has led to choke points and dependencies and the lack of discretion and control over how we send, receive, use, and host our data. And so the whole idea is that you're going to do this on top of the Lightning Network, which most folks would understand layer one bitcoin kind of the blockchain itself uh is great for security layer two is supposed to be uh the scalability uh with lightning network you can make cheap uh near free transactions explain the idea of layer three what the hell is that yeah sure so about a year ago we released a series of apis that allowed any party any developer to incorporate peer-to-peer capability based on the lightning network into their applications so we basically

created a layer three a programmatic layer so any application developer could use the lightning network which is like a real-time uh liquidity layer for bitcoin they could use it as a uh as a data network and command and control layer for messaging for video for payments for command and control. So we started there and we decided to unify all that capability together into the impervious web browser with some additional capabilities and technologies. So it's a web browser with a suite of peer-to-peer capabilities for peer-to-peer communications, data transfer, and payments. So we use the Bitcoin Lightning Network as an additional enablement, discretionary option for routing and transferring information and as a single command control layer and for

payments, but we're not dependent on it. So it's like interlacing the existing internet with the Bitcoin Lightning Network. Walk me through a use case or like a direct example as to how somebody that's watching this or listening to this would interact with the technology, you whether they know it or not. Totally. So examples and analogies are useful. So typically, let's use Zoom. You're in Pervious. You download the browser. You just initiate a call using any contact that you know that's also using the browser. We'll use Zoom as an example. Typically, I call into Zoom. You call into Zoom. Zoom conducts the media mixing. It issues the encryption keys, but we rendezvous on Zoom's cloud servers to facilitate the call.

That, with the peer-to-peer internet, can be provisioned individually, and you can use either Lightning Bitcoin network or HTTPS or WebSockets to provision what's known as an out-of-band web RTC call. So we can establish a peer-to-peer cryptographically secure data transmission channel. All that means is you and I can talk directly without depending on a third party like Zoom or WhatsApp. And you may have heard us say, look, it's Zoom without Zoom. It's messaging without WhatsApp. It's Google Docs without Google. Real-time document collaboration on a third party hosting or facilitating payments of banks and identity without the state. So it's like a ground up, an entirely new way to think about the internet. If typically you rely

on, you know, these great consolidated centralized parties to facilitate, and you don't need them to host or provision, what good are they? So I think another good example, like an ad extremist example, WeChat, the Chinese super application, you go to one place for messaging, for social, for payments, for search, it's very convenient and effective. But it represents complete and total information dominance. It relies on identity delegated by WeChat and permissions set and determined by WeChat, which serves as a proxy for the CCP. So we built the antithesis of that, we demonstrate that data mining, surveillance, censorship, lack of security and privacy are not necessary evils in order to reap the benefit of ordinary consumer technology. You can have video

messaging and a live collaborative document without Zoom, WhatsApp, or Google. So how does Bitcoin play into this? Obviously, there's the Lightning Network and then there's the Layer 1. Are you just building on top of it? Or do I need to have Bitcoin in like a software wallet or a hardware wallet in order to actually interface with and get value out of using the impervious browser? Yeah. So the impervious browser acts as a command and control, a simplified command and control, you can connect a third-party node. It can be a virtual node like Voltage, your buddy Graham, or it can be a physical node. It basically is saying, hey, look, you're not dependent on Bitcoin Lightning in order to facilitate a peer-to-peer call. It can be HTTPS,

WebSockets, via Tor. But if you choose to use Lightning, you can connect it and go what we call cypherpunk mode, where you're controlling from soup to nuts, not just the local storage of your information, but you're choosing how it's routed. So how it's sent and received. So if you and I were to get on a call right now, we're on that Zoom call, we would just establish that. We'd use it as a signaling layer to say, hey, Pomp and I want to chat here. Here's my web socket. Here's my port. However you provision that call. And then we establish a peer-to-peer connection. And once we establish, it's like a wormhole. Once we establish that connectivity, that data path, it's almost arbitrary. I'm

oversimplifying, but what bytes are flowing through. So it can be video, audio, messaging, collaborative document. Yeah. So the sky's the limit. And if you think about instead of like logging in with your Web3 wallet, like a Metamask into, let's say, an NFT marketplace to sign a transaction and buy or swap an NFT, you're actually connecting with another person's computer. And that's just part of our capability. So it's normalizing, using decentralized identity to circumvent and to not require the permission or identity of like a WeChat, establishing peer-to-peer comms channels, data transfer, file transfer, and then payments and Bitcoin lightning is interlaced throughout. So you don't answer a question. You don't need Bitcoin in order to transact.

But if you choose to use it, you can use it like for the cost of one transaction for like 10, 15 satoshis. We can then establish an out-of-band peer-to-peer call that's unlimited, unfraudal. It's higher resolution than Zoom because we don't compress and it's secure. And there's no one to censor it. There's no one to survey it. There's no one to sell your data. And you don't need anyone's permission. So it's an amalgamation of technology.

Why won't the incumbents do this? Is this too technically complex? is it something that they just are distracted and they're not even paying attention to this stuff is it a user experience that has higher friction and they don't think that people actually adopt it like like what's keeping the incumbents from doing this because from a user standpoint it sounds amazing right it's like oh of course everyone wants this why are the incumbents not doing it i think there are a few uh points and and that's a great question the first is the ads model um why would they want you out of their walled garden you know they uh we've grown

dependent on them as facilitators so um and they use our data we either um give permission or we tolerate how they use it and the other um is you know that's just like how the systems are designed they're definitely paying attention and um they understand encryption they understand the normalization of it, but the incentives are all skewed. Why would they want to give up the walled garden and allow you to control your identity and permission, how you route, send and receive data? Because frankly, why would you use Zoom if you don't need them to provision the call or to facilitate it or to host it or for reliability? I think it relegates them and it's an entirely new way to think about the internet. When you think about that, what is the risk

for either users or companies going ahead and kind of taking this approach? Is there like platform risk? You know, God forbid the Lightning Network ended up not working. How do you think about like what the risks are that are presented here? Yeah, so user risk or platform risk.

Whatever risk that when you think about what you all are building and building on top of the Lightning Network, how do you identify what risks are out there? And then what do you guys do to mitigate them? Yeah, so I think the biggest risk is really the consumer where we just maintain reliance on them. We're actually data transport agnostic,

meaning that we don't care how you send or receive information. So if the Bitcoin Lightning Network went down, you could still use WebSockets, TLS, Tor, HTTPS. You can still communicate. But if you choose to provision your own node and route the information that way. So the Bitcoin Lightning Network is not a risk. It is an enablement and additional discretion,

additional freedom tech. I think it's a huge risk to the platforms where what's the first thing you need to log into Gmail or Zoom or Facebook? You need a Google identity. You need a Google profile or a Zoom. And they use those walled gardens to justify not exporting.

If you're Facebook, do not export the social graph. For Gmail, they use it to be stuck on their system or for Zoom to get on their walled garden or their network. And so permissionless networks and permissionless capability really confounds the existing model, which is advertising. And the ancillary component of that is data mining and harvesting surveillance. So you justify the latter for the former. What is it going to take to get users to start to use this stuff, right? Like I always think about there was all these ideas in the late 90s. We had the huge tech bust. Most of those ideas came to fruition 10 years later. And if you have kind of the benefit of hindsight and you look, why did the ideas of the late 90s not actually get built for about five or 10 years later? Some of it was consumer behaviors changed.

Some of it was psychologically, like people were more comfortable putting their credit cards online, things like that. Some of it was the infrastructure had to get built out. And then some of it was like the iPhone got created and had GPS in it. And so now like ride sharing was way easier because the rider and the driver could match with each other. So when you think about kind of what you all are building, are there milestones that you think need to happen in order for this to become mainstream adoption?

Yeah. So I think for the first part of that, it required an amalgamation of technologies that had to mature and it required interlacing them. So we use the Bitcoin Lightning Network. We incorporate decentralized identifiers. We had to build out a decentralized command, decentralized communication network system. We incorporated IPFS and WebRTC. So instead of picking and choosing which network, like just the Bitcoin Lightning Network or

just something else, they can be complementary technologies. So I think the biggest hurdle was presenting this, I mean, incorporating decentralized identifiers and making this seamless and easy and familiar, like any other Zoom call or Google Doc was an application development issue. And then letting users understand that, hey, you don't have to be technical. You don't have to know anything about Bitcoin Lightning. You don't know anything about peer-to-peer. You just have to know, hey, this is a data duplication issue. And why are you relying on these third parties if you're not dependent on them? And do you want to pay them like $99 per month to Zoom for the pro? Do you want to rely on Google's

ad model for Google Suite, and also from a privacy and censorship component, data privacy, it's the foundation for consumer protection and national security-related infrastructure initiatives. So you hear a lot of people talking about, oh, for consumer protection, and there's innumerable state and federal agencies that exist for retroactive punishment, But there are a few mechanisms that actually prevent the data duplication in the first place. Every time you rely on these third parties as service providers or applications, we're sharing and we have to accept how they use and send and receive information.

And the peer-to-peer internet and the first incarnation of that is the impervious browser demonstrates and allows you to go, hey, look, here are these initial applications, Zoom, Google Docs, without Zoom, without Google Docs, file sharing, messaging. And then we can continue building out the scope of like, wow, unless these third parties are providing some novel, profound value prop in a way that you can't do on your own or you can't facilitate, why are you using them? So challenging those assumptions. And then you can join like, you know, there's tens of thousands of early access requests. There's a lot of enthusiasm kind of across the board from privacy and lightning enthusiasts to the one thing everyone can agree on. And say policymakers on the left and the right is basically hampering big tech and consumer protection.

So people, for a lot of different reasons, find their way here. And then it's our job to simplify that, make it easy and as normal, familiar as experience possible and normalize the peer-to-peer internet standard. One of the things on your website that caught my attention is streaming payments. The whole idea that you could send, you know, micro transactions quickly, cheaply to people in exchange for doing various things, listening, watching, consuming content. Talk a little bit about what the promise of that is and how you see that actually playing out in real time.

Yeah, so it's significant. So I had mentioned using Bitcoin Lightning Network as a signaling command and control as a data transfer network. But of course, you get the payment component. So we interlace this payment layer with all the applications that we incorporate with all the capabilities. So like if you're on an impervious video call, you have a little SAT indicator you can send and receive in real time to anyone while streaming video. So you're cutting out Stripe, you're cutting out payment processors, and no one's in the loop, including impervious. That is a peer-to-peer video call. It's encrypted end-to-end. It's private. It's not controlled. It's not throttled by anyone.

And then you can send those payments. It upends a lot of models. streaming micropayments, performance, you know, concerts, content, and then also for publishing, for messaging. You can incentivize how and when you speak to people, and you can use Bitcoin, which is, you know, native internet money without a third-party payment processor. Anyone in the world does essentially for free. John, what questions do you have? Chase, nice to see you again. When you look forward to the future, how do you guys measure success? Is it number of people on the platforms, payment sent? How are you guys thinking about

success? Yeah, I think success is adoption. Yeah, number of users, but really standardizing the peer-to-peer internet. There's going to be some people that are there for peer-to-peer video, others that are there for collaborative live documents without a third party or messaging. And our focus on cost of user acquisition, how do we make it as easy as possible to transition from these third parties that are convenient um but you know they're anachronisms they're not necessary and so uh user acquisition ease of use and familiarity um and the fewer kind of the the more familiar it seems the like the i i think the higher success we have if it feels like a zoom call if it's a message just like you know what's that message if it's a google docs experience we

one, but that superficial UI UX is where the familiar familiarities end because you're transporting the data. There's no third party to host or facilitate it's private. It's censorship resistant. Um, and it, and it's like restoring digital dignity and discretion. So I think, I think the more familiar it seems the, uh, the greater indicator it is that it's working. Yeah. Makes a lot of sense. Chase, we've recently seen members of the federal reserve talk about how decentralized finance could end up transforming traditional financial markets uh and so that is a sign to me that most people in bitcoin or larger crypto industry really focus on the financial applications right decentralized money decentralized lending decentralized insurance all that what

you're building is taking those same concepts of decentralization and saying no we can be actual technology products that aren't necessarily finance related what's the importance of the non-finance related part of this industry? Like how do we need to have that? Or is this a nice to have compared to all the financial concepts? Yeah, that's a great question. I think it's the necessity. So if you look back like a hundred years ago, when the telecom networks really were introduced, we decided almost a century ago to categorize them as utilities under what are known as common carrier laws, where the telecoms don't have discretion over how or when or for what party, uh, they have to connect a sender to receiver. They can't say, Hey, for what purpose

are you using the network? Have you abided by its terms of service? Um, are you, um, uh, who are you for what purpose are you using it? There's no questions. Um, we decided a hundred years ago, we wanted the machines to work for us and that we want to have discretion and control. And we have moved away from that. And we've created an incentivized system where i think it's out of necessity if we're going to have like a i think it's the equivalent of like writing the digital federalist papers now we have to decide like what values as a society we care about we care about freedom of expression you know the first the fourth the fifth amendment protection from unreasonable search and seizure due process um we need to inculcate those values

into the systems we use or else prior restraint will be normalized and i think it's incongruent And we become increasingly untethered and decoupled from those values and the fundamental rights. And, you know, what's the purpose of the Constitution if you can use a third party proxy to toggle on and off someone else's participation in society? So I think it's completely paramount to our success as a society. And I think also so much of the hate online and so many of the vested tribal issues, I think a lot of it comes down to people feel defensive and they also feel the need or the ability to control a third party. So why would I persuade you of anything if I can just go around you and toggle off, if I can convince a third party to interrupt your participation?

And then people also feel defensive because they feel like it can happen to them. And I think if we restore these norms to digital discretion, freedom of speech, due process, privacy, I am optimistic that it can change kind of the online dynamic. But I think it's essential for a free society or else we'll have perverse incentives where everyone just is increasingly trying to find a reason to toggle someone else off, to censor them, to control them, to survey them. You can always find a reason. Let's remove those fundamentals and the primary incentives behind that control. So right now, what you're building is obviously going to take incredible technical talent and also folks who understand technology industry, understand browsers. Like there's a lot going on here. Right. And then you obviously need just the underlying understanding of Bitcoin and how to build on top of that or the Lightning Network as well. Talk to me about the makeup of your team and where are you all finding some of these folks? Are they already in kind of the Bitcoin crypto, you know, ecosystem?

Are you going into traditional tech or find it? Like, where are you finding people to work on this? Yeah, that's a great question. Our team's phenomenal. So my CTO, co-founder Mark Stites, had an illustrious DOD and telecom career, has been building these systems that are critical. And for a long time, he was an OG Bitcoiner. I was a relatively early Bitcoin miner.

Mark's thesis at Harvard was I'm paraphrasing the thesis but it was like fault tolerant federated cloud systems it was basically how to build resilient systems and when we met like sparks proverbial proverbially flew we found

we quickly made a lot of progress and we pulled in people we've worked with and friends we've had and colleagues incredible developers Mark Clayton amazing world class offensive and defensive red teamer, Stuart, incredible security engineer, Tony, amazing world-class lightning developer,

George, and others. And we're hiring as we speak, but we've come kind of an incredible way where in the next few weeks, and that's part of the reason I was excited to do this podcast with you, we've had a tiered release of the browser over the last few months where it was early adopters

some of the early access requests uh developers and some a subset of node operators but the next release that's going to be this summer is an open uh completely free production ready release where anyone in the world can use it um and the team uh we're gearing up for that release so i'm incredibly proud of the team and i think we've we haven't just empirically demonstrated that it's possible i mean it's production ready so um you know and all the all the comments we get on a daily basis um the thousands and thousands of signups the you know all that narrative it keeps the team going and it's like it keeps us on mission um like what's the future we want to see so we found people a lot of them were early bitcoin privacy enthusiasts or they worked in

in different capacities, building systems, either for like DOD or telecom, where they know how systems can be exploited and also what's necessary to preserve privacy and restore dignity. So everyone's pretty idealistic. And we'd like to see our values in society aligned with those technology and the systems we use. So if you're interested, you know, we're hiring and you're listening, we're hiring right now. We've had over a thousand job applicants for open positions. We're hiring like crazy for front-end developers, back-end developers.

We just brought in a new design team, security engineers, kind of you name it, product. And so, yeah, the next few months will be very interesting. And, you know, please let us know if you're interested. We'd love the help and the contribution. And not to mention it's free and open source upon release this summer. So anyone will be able to reproduce it

and build on it themselves. So you can contribute to the core platform or you can, you know, host, facilitate and build out additional capabilities on your own. And we may adopt and incorporate that into the primary product. I love it, man. It's super cool.

Do you want to get any other questions? No, I guess one question would be, how are you thinking about security? So we think of security, like I said, it needs to be soup to nuts. You need to have the privacy of the individual, control the identity. we unencrypted data never leaves the machine so information is encrypted at rest unencrypted data

never leaves the application side it's encrypted in transfer and it's storage those encryption keys are we have a quadruplicate redundant onboarding process where we try to force you to save your seed recovery phrase like four times because you're the only party in the world who controls those keys. And so I think, you know, giving that discretion and control to the individual, it's necessary for parties to really like achieve this vision,

but it comes with a little bit of, you can't, you know, you can't go to Impervious and ask us to recover your data. Those keys are generated locally in your machine. You control them, you have responsibility for them, but it also makes it so we're not a choke point. We are not a point of failure at exploit. And it's also another reason

that B-Release is completely open source because people need to trust the code. It needs to be analyzed and independently assessed. And also if there's a bug, everyone's aware. There's no back doors. It's, hey, this is the code. It is, you know, you seize what you get. And if you see a security flaw or vulnerability, let us know.

And everyone's working from, it's like, you know, Bitcoin itself. Everyone's working from the same universally verifiable information. Gotcha. Chase, where can we send people to find you on the internet? Yeah, sure. So you can check out impervious.ai. Go to our contact form. And if you register for a request early access, you'll be the first to know about the full open source release.

You can also go to at Impervious AI on Twitter or Chase the Truth or Mark Stites, handle my CTO and follow along. We communicate really prolifically on Twitter. We've got a newsletter and we're going to be pushing a lot of more resources, demo, tutorial videos, information. And as we support just the completely open production ready use of the browsers. So come check it out. The team loves the love letters and we read all of them. We take a huge chunk and then we'll go through it together. So reach out, check it out and stand by.

And by August, sometime in August, you'll be using the free open peer-to-peer internet. So thanks, guys. I love it. Chase, it's so cool to see this happening. We wish you the best. And once it's live, we'll definitely have to bring you back and kind of give people a walkthrough of it. But it's pretty damn cool to see you building this.

so keep going my friend alright we're psyched thanks guys we'll be back on and get your thoughts alright sounds good Chase see you later take it easy

thanks so much for listening to today's episode I really hope you guys enjoyed this one make sure you're subscribed on Apple, Spotify or your favorite podcast player and if you're looking

to try to transition to get a new job in the Bitcoin or crypto industry we've got you covered head over to palmscryptocourse.com we've developed a curriculum with the top teams

across the industry it's a three week intensive training program with over 50 events packed into that three-week time period. Go to pompscryptocourse.com to learn more, and I'll meet you guys for the next episode.