The Pomp Podcast - #1247 David Marcus on How Bitcoin Will Increase Global GDP

Episode Date: September 25, 2023

David Marcus is the CEO & co-founder of Lightspark. In this conversation, we talk about one of David’s big ideas, how global GDP is being constrained by existing archaic technology. Topics also include, what they are building at Lightspark, demand from customers, stablecoins & bitcoin as payment options, and why allowing people to get paid in real-time could completely transform humans working in the global economy.  ======================= Trust and Will has simplified the process of creating and managing your will or trust online. They leverage a data-driven, design-first approach and amazing customer support to help you protect your legacy from the comfort of your home starting at just $159. Sign up today for 10% off using ⁠⁠⁠https://trustandwill.com/pomp⁠⁠ ======================= Get Better Crypto Data: Do you want faster, easier crypto data? Sign up for Velo Data, a new product that we have been working on to solve this problem: ⁠⁠⁠⁠⁠⁠⁠velowaitlist.com⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 250,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. David Marcus is the CEO and co-founder of LightSpark. In this conversation, we talk about one of David's big ideas, how global GDP is being constrained by existing archaic technology. We then get into what they're

building at LightSpark, where he's seeing demand from customers, how he thinks about stable coins and Bitcoin as payment options, and why something as simple as allowing people to get paid in real time for the work they do could completely transform humans working in the global economy. I always enjoy talking to David, and this conversation was no different. I learned a lot, and it's a peek into one of the great entrepreneurs in the tech industry and what he thinks is the next frontier to start building on. Here's my conversation with David Marcus. 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 guest 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. Today's episode is brought to you by Trust and Will. I've gone through a number of different changes in my life over the last few years. I got married, I had a kid, and I had to start thinking about how could I ensure that my wife and my child would be okay if anything ever happened to me. That's where trust, wills, and estate planning come into play. Now, most people, what they do is they get introduced to a friend, an uncle, or someone in their local community.

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Myself and a couple of friends, we invested in the business. We're advising the founder, and we think it's pretty cool. This one is something that keeps me informed on a daily basis, So you should check them out at VeloWaitlist.com. That's V-E-L-O Waitlist.com. All right, guys, I've got David here with me. David, I thought a great place for us to start is you have this idea that the current system could actually be limiting our ability to grow GDP. What do you mean by that?

I think it's even worse or better than that, depending on how you look at the thing on the side of the opportunity or the problem. But I actually think that GDP is constrained by the limitation of our archaic payment rails and financial system. And I think that you can unlock a lot of value for the world, for people, for the global economy, if you remove all of the obstacles that stand in the way of money moving globally in the way that it should on the Internet, like every other bit of data out there. Um, so yeah, I think that's, uh, I mean, when you think about it, Stripe in the early days, I think had this mission of growing the, the GDP of the internet's GDP, um, which is, I think a really good mission, but I think it's broader than that.

I think the, the, you know, global GDP, uh, in the real world is constrained and not only on the internet, I feel like, you know, when you think about the time it takes for people to get paid, um, you know, why do we need to get paid every two weeks? Why do creators on the long tail of platforms get paid every six months? You know, why don't drivers for Uber and everything else systematically get paid everywhere they are at the end of every ride? And, you know, what are the downstream effects of money flowing on the Internet like everything else when you get money much earlier and then you get to spend that money locally in your local economy? uh much sooner i i think there's just a lot there and then capital and lending and all of that so it's really interesting um i've thought a lot about something that's tangentially related so

i may have some very nuanced questions just because uh i don't have the answers right you think about these things and it's like maybe this is possible one of uh the data points that's always stuck out my mind is i think it's the top four banks make about eight billion dollars a year from overdraft fees and so these are basically taking money from people who didn't have money at the time that the overdraft occurred. It seems like just paying employees at the end of every day could potentially solve some portion of that. One of the reasons why companies don't do it, I'm assuming, is because there's revenue that could be generated by holding onto the capital for two weeks. But two is there's massive accounting issues in terms of the complexity

of doing this. How do you think about payment technology, but then also maybe the things that wrap around it, like accounting and kind of keeping track of doing it in a different way. Yeah, you'll definitely need a lot of companies addressing real-time money flows and adapting their systems. I think that's going to be an interesting investing category for a lot of venture firms. And a lot of entrepreneurs will have a lot of opportunities to go build these solutions out there to meet that demand. But the same is true. I always like to go back to comparing things to the internet and the way that information moved. The world had to adapt to real time information. We went from sending letters to each other and reading news every day, delayed

news the next day in the newspaper. And now we have information flowing 24-7 in real time. And the world adapted to that in so many different ways. And I think the same will be true for money when it moves the same way information moves on the internet. Now, how much value do you think could be unlocked here, right? If we look at kind of global GDP, are we talking about like a five to 10% difference? Or are we talking like a doubling potentially of global GDP? Like how big is the opportunity if we were to get kind of real-time money flow? Well, I think that we need to internalize several things. The first thing is we need to internalize what the inefficiencies are constrained, how much of the inefficiencies are constraining in terms of GDP today with what's

possible today. And, you know, I think that this is already a pretty sizable portion of global payment volume. If you look at the correspondent banking network, I think it's about five to six trillion dollars a day of volume that moves not in real time, not Friday after 5 p.m. uh and you know sometimes takes days it's really inefficient for people to to use it as a global settlement uh payment network um and that's five to six trillion dollars dollars a day uh when you look at um as a comparison again to to internet era stuff uh sms messaging peaked at 2025 billion messages a day when it was over SMS. We're now in at least a good order of magnitude on any given day. And the 2025 billion messages was probably New Year's Eve on telecommunications

networks. So that's an order of magnitude volume. So can you actually get global money flows to be 50 trillion dollars a day maybe yeah if you unconstrained lower the cost make it 24 7 enable people to move money internationally for just one cent or five cent cost efficiently versus now a an international wire is 45 50 dollars and so that constrains the amounts that are transacted and how it moves it's not real time etc etc so i think in terms of global payments volume it could be 10x. And then the question is, how much net GDP globally does that actually impact? That's a really hard question to answer because there are also secondary effects. So imagine if money travels globally in real time at a fraction of the cost of current costs. And now I'm a seller

of any item or i'm a creator somewhere i get paid at the end of every day i spend that balance locally in my economy said person has cash earlier can probably have access to global capital much faster much cheaper and so the the the network effects the downstream network effects of money moving in real time at a fraction of the cost is is really hard to imagine but i i would assume it's going to have a very significant positive impact on global GDP. Now, when we think about kind of the acceleration of money flows, it's very obvious to see the professional world, right? Businesses paying people, paying each other, that kind of accelerating and then being able

to handle various differences between currencies and exchange rates and kind of all the complexity that comes now with cross-border type transactions or payments. The retail or individual that would go and start to do this, it seems like they may have a harder time, right? They don't have a finance department. They don't know exactly when they're actually, you know, kind of in the positive or to negative. And so I think that there's an entire group of people who say, well, let's just go to a neutral currency, right? Let's use something like Bitcoin. It is truly global. There is no need for all of the kind of currency exchanges, et cetera. How close are we to being able to do that versus it's more of first, let's get real

time payments and kind of unlock this GDP growth. And then we can move from the fiat currencies to potentially something like bitcoin i think it's it's a really it's something i've spent a lot of time thinking about um and there are so many people in our circles who are fixated on that one thing of people are going to use bitcoin to buy their coffee um and i think in some regions where your local currency is terrible or mismanaged, massive inflation, devaluation, it might happen. But I think in economies that manage their currencies really well, people will continue to transact in their home currencies for the foreseeable future. The value of Bitcoin being such a neutral store of value and settlement asset is that it can be

used to move value on the internet natively and and that the only way that you do that with fiat currencies is with stable coins and we can talk about that uh in a bit as well but i think that stable coins are good optimizations uh for transactions that happen within the same currency but if your entire network depends on one uh then that's a real problem and i think it doesn't survive. And certainly I've experienced this firsthand. And so Bitcoin is a net global neutral settlement asset for the internet, for the world, for transactions between real-time payment systems is really the way it's going to happen. And there's an interesting development in the last five, 10 years. You've had more and more real-time payment systems emerge in very

large regions. So you have PIX in Brazil, you have UPI in India, you have real-time payments in Mexico, you have somewhat real-time payments in Europe, will eventually have FedNow become a thing in the U.S. And so if you have those real-time payment rails at the edges of the network, the question is, what is the global interoperability layer between all of these regional payment systems? Because they're not going to talk to one another, and no other country is going to accept anyone else's other, you know, another country's payment system. So this is where I think Bitcoin shines and is the only way to actually provide global real-time 24-7 settlement of value on the Internet.

Now, you obviously led PayPal. You then went to Facebook, and you not only did the Messenger kind of product and did some amazing things there in terms of growing it and really building some Robux functionality, but then also you did Libra. when you left Facebook, you pretty much could have gone and done almost anything in tech and business. There was tons of opportunity that you were given. You chose to start a company called LightSpark. Talk a little bit as to why, one, subject yourself to the pain and the glass eating of building a company from scratch, but also to kind of the idea and what got you energized about starting LightSpark. So I think I have determined that this was going to be my life's mission to try to help bring to the world a real-time standard for open payments

on the internet or standard for money on the internet and something that enables people, companies entities to move value on the internet like everything else 24 7 global interoperable cheap and we tried a version of that with libra that then became dm but same thing and and it failed because it had this dependency on a centralized stable coin and you know algorithmic stablecoins won't work. And so you have to have a reserve. If you have to have a reserve, you have to have a centralized form of governance managing that reserve. And that's a proverbial fat throat to choke. And when the main sponsor is Facebook, and at the time wasn't the most popular company around, it makes things 10 times more difficult. So I think that the lessons learned here was you

need to really build this open neutral settlement network or asset uh this neutral settlement asset and network on top of something that is really truly decentralized and truly neutral and and um and that's why we're building on top of bitcoin and so when uh when i left i i had this super deep sense of unfinished business and i decided that this was going to be the thing i was going to try to do or die trying in the process. And that's basically what LightSpark does. It builds on top of Lightning. Because once you've decided that Bitcoin is that asset and is that network, you need to make it as efficient, real-time, reliable as possible, because Layer 1 is expensive and slow, but very secure. And so Lightning enables you to move Bitcoin in near

real-time at a fraction of the cost. And so what we've built is a series of capabilities and services that enable enterprises to use Lightning in a very reliable, dependable way. And then we're working on a number of other things to ensure that companies, exchanges, wallets, banks can move value on top of Lightning, whatever the currency is. And I think that's where the impact will really start to reveal itself. Before we talk in more detail about the actual products you guys have built, talk a little bit about Lightning. Obviously, I think layer one being unscalable became a topic of conversation. There was this proposal for the Lightning network. It goes into beta,

done pretty quickly considering there wasn't a centralized effort and all of the things that make decentralization great. I think that there is some debate even within the Bitcoin community. Some people say Lightning is amazing and here's all the stats around the nodes and the transactions. Other people would say, hey, we thought it was going to be further along than it actually is. One of the things that makes it difficult is you can't actually see everything. And so, you know, there's some part of the network that's kind of hidden. But how do you evaluate the progress of Lightning and what are the things that you're really excited about there that give you confidence to go and build a company specifically on top of that technology? So the reality is Lightning right now has made progress.

progress but it's still so incredibly early uh and i think to your point it's really hard to estimate the actual value of uh transactions moving on top of lightning what you can see is the amount of bitcoin that's locked on lightning but that is actually not a good representation of transaction volume because the liquidity moves around um so it's that the same amount of bitcoin can actually carry a lot more than the value that it represents because it can do round trips across channels carrying value around uh and um and so i think it's the the volume of transaction is growing but it's still super super early if you compare it to any mainstream payment network out there uh and so there's a lot of work to be done and i think the the reason why it hasn't had more

adoption is that a channel-based payment system the way that it was designed is actually quite complex to scale and to use reliably and so the the exchanges that are our clients um have for the most part looked into implementing lightning in the past they started spending the cycles on trying to figure out how to implement it they had a few engineers look at it or some have even implemented it and then they realized that okay now i need to have a full-time person if not several people, rebalancing channels every day, trying to figure out how to open up new channels with new peers and new nodes that are going to be more conducive for transactions and do all of this manually because there's just not great tooling out there. And so that's what we've

built, which is an enterprise grade experience for companies to spin up a lightning node that they control that they have only they only they have control over the funds that are locked in inside and then predictably send and receive transactions on the network with a lot of reliability and we've built this thing called light spark predict which actually has a real time updated map of where the liquidity is on a network and how to route transactions in the most efficient possible way and deploy liquidity in real time and channels to make those transactions successful. And that has been a game changer in terms of capital efficiency, transaction success rates, and then LightSpark Connect, which is the enterprise-grade node management stuff that

stuff and software that we have is actually doing marvels and keeping your node up and running so you don't have to worry about it. And so we made using Lightning a lot easier. And that has resulted in more adoption from exchanges and wallets that in turn are now building on the stack. And I think the analogy that I use a lot is early days of the internet. If you wanted a web presence, you had to get a server. You had to rack the server.

You had to find routers, configure the routers, get an E1 or T1 line, do all of that crazy stuff. And nowadays you get a web server in minutes on AWS and off you go or any hosting service. And I think that's a good analogy of how the web was able to develop because tools and services were put in place to reduce the friction and the cost of operating those services. and that's what we've been doing at LightSport for like now what are the types of companies that are interested in this today obviously i think people jump to the finance sector and banks that are kind of dealing in payments every day are probably one um what are you seeing there from those finance type customers and then are there other industries where you're seeing a lot of interest so banks so we have bank customers but outside of the u.s because in the u.s given the

regulatory regime right now. Banks cannot really touch Bitcoin at scale. So Bitcoin has the most regulatory clarity in the U.S. compared to any other asset, because I think that's the only one that the SEC has declared is not a security. So there's that. So institutional players can do Bitcoin 401ks. They can do all kinds of financial products. I think we'll have a Bitcoin ETF before the end of the year. So all of that is happening, but banks cannot still touch Bitcoin. So we have bank clients outside of the US, but not in the US. Here in the US, it's mainly exchanges, wallet players that have the ability to move Bitcoin or custody Bitcoin. And those are our clients and also a lot of market makers and liquidity providers internationally that need

to move Bitcoin in a more efficient way. Now, when we start to look at some of these companies, how many of them have teams internally that are like actively working on this or even quote unquote Bitcoin teams? I think of it almost as like there's engineering teams, There's, you know, business teams. Are they dedicating resources or is this kind of 5% of what the existing teams are doing? And they're trying to kind of figure it out. And really a job you all have is you have to educate them on the importance of it and how to do it. And there's almost a technology component to your business, but there's also that education component that really helps to kind of make the customer successful. Yeah, I think that so there are several parts to that education. The first part is a lot of exchanges before looked at this and the equation didn't compute for them because the amount of effort and sustained effort to operationally be live in a reliable manner on Lightning versus the perceived lack of activity on the network just never resulted in them prioritizing the work of being on the Lightning network.

I think a lot of education work has to happen to understand that actually now that it's easier to be on the network, there's a flywheel effect of having the most efficient real-time payment network out there available for them to build products and services on. And so that's the first part of the educational journey. The second part is, OK, now how do we build really great consumer experiences on top of this network that enable people to move value around the world in real time versus just faster Bitcoin deposits and withdrawals? And that's the second part of the education journey and the time we spend with our clients, with our partners, trying to paint a picture of the ginormous opportunity that we all have in front of us to go build on top of this network. Talk a little bit about the super apps, whether they are actual super apps internationally, or even we see, you know, Twitter now known as X trying to really integrate payments and they're getting some of the regulatory approvals and things like that. Is this every company eventually becomes a payments company is maybe like the trope that people will say online. And we're

seeing that kind of play out here in the U S for the first time, or is this specifically because there's been some sort of technology unlock or are they seeing something in the market that's forcing them to go do this i think that um and i think that for x it's uh it's maybe a little different i think that um that this is elon wanting to build more financial services and payments experiences on top of this network that is already primed for that but i think that ultimately the the big problem right now is that all of these apps are not interoperable with one another. So if you are on Venmo, you can't send money to Cash App and vice versa. And I think that's constraining for the same reasons we talked about correspondent banking payments earlier and

how much of the legacy rails was actually constraining for economic value to move around. And I think the same is true for these apps. They'll need to interoperate. And we believe certainly that doing it through Bitcoin and through Lightning as an interoperable network is going to be the way it's going to happen. And as you see more proliferation of payments experiences across all of these apps and across all of these surfaces, the ability to move liquidity around and send transactions across these apps is going to be really critical. And that's one of the the values of a network like lightning that can do that irrespective of the currency you're sending or irrespective of the app that you're using and um and and i'm a big believer that this is

going to become a very major use case for this network obviously we're seeing kind of this crypto winter if you will and so uh there's a lot of people who either walk away from the industry become less excited. And it has to do with the price of the assets normally. But it seems like a lot of the legacy financial organizations, a lot of the companies that are building in the space, they are kind of full steam ahead. How do you think of the difference between maybe the enthusiasm online or kind of price action versus what's actually being built from an infrastructure and technology standpoint? Well, I believe that in those downturns or crypto winters, if you will, there are the best, the best innovations are created. And the reason for that is people

focus on the right thing. And I feel like in our industry in general, a royal industry, there has been so much conversation around asset appreciation, speculation, but so little conversation about how do you actually leverage that technology to build something that is going to solve a real world problem at scale and there's a lot of work to do there and um and i think that during these times you have the right people start to think about these problems rather than i'm going to list a token and then you know sell it to the public market um and so this is really good for us because we're at a time where first of all we're building on top of bitcoin which is here to stay is the only assets that can truly be a neutral settlement asset for the world

and we're focused on solving real world problems, arguably one of the largest problems out there. And I think we have the right approach. And so we can attract really amazing people to work at our company, which we have in the last year and a half. And it's been really, really a perfect moment to build these types of solutions.

I think a lot about some of the things you're talking about and what they remind me of is kind of the invention of the iphone and less because of the technology and kind of maybe this celebratory nature that the iphone is given but if you think of uber uber wasn't possible before the iphone we're now two people the rider and their driver had gps in the device they could find each other kind of on the side of the road and you know doing it somewhere in a rural area is one thing doing in the middle of an urban city is like a whole nother uh you know kind of chaotic experience but the technology was created it became ubiquitous and then we had this explosion of brand new applications and

companies what are some of the things that if you are able to be successful that you all see as opportunities where other companies may be able to either leverage leverage your technology or be built kind of on top of it right if we get this real-time money movement we get this explosion of gdp where are the areas of opportunity for other entrepreneurs so i'm thinking a lot about about um ai agents and how ai agents pay one another which seems a little uh out there but at the same time not so much when you think about where we're going i believe that you're you're going to have a bunch of ai agents that are going to perform certain tasks uh on our behalves and For instance, you could have a travel agent that's basically an AI system that enables you to book complex travel, and it'll talk to other AI agents from the various providers out there.

And how do you move value natively in real time? It's kind of a bizarre thing if you think about it. If you're trying to book something in a foreign country through an AI agent right now, you're like, oh, sorry, just complete this transaction on Monday because we're past Friday 5 p.m. You can't do it right now. That would kind of defeat the purpose of you having an all-encompassing 24-7 AI agent able to do these things for you. There are also really interesting applications of how do you pay rights owners for training your data, and is there a world where you can actually stream SATs natively to different rights owners as their data is used? The data that the LLM has been trained on is actually being consumed or used. There are lots of really interesting real-time global payments applications in this world that I think will be built by very, very good entrepreneurs out there.

There are also all of the things that you highlighted around what are the things that need to adapt to a world where money moves 24-7 in real-time globally, accounting and reporting and taxes and all kinds of different things, tax software. All of these things are going to have to evolve. And I also think about the way that you have an opportunity for global capital to be deployed. It's kind of interesting that right now the pools of liquidity for lending and capital are very domestic still in nature, except if you're a global bank and you're actually just taking deposits and not paying a lot of interest in one country country and then lending that money to another country citizens that you're operating in at double-digit percentage rates. And so all of that can be streamlined and people can have access to cheaper capital globally. And there will be companies built on top of that

that enable people to actually get their money around, lock their money to get it repaid in real time uh and so there's all kinds of innovation around that um and and the list is long it's it's literally a new internet of money uh and so what is the impact on the ability for people to innovate when they have an open network where they can move value natively on the internet i think it's like crazy amount of opportunity there one of the things you mentioned was this idea of streaming payments and um i invested in a company called fountain basically it's the value for value model where you can kind of stream you know sats back and forth between the listener and the podcaster and there was two components that uh just you know kind of working with those guys that

i found very interesting so first they were like oh uh the audience can stream sats to the podcaster and kind of pay them for the value they're receiving my mind immediately went to like well the podcasters are going to stream money back to get people to listen right and so you kind of do get this like two-sided component where uh um having the ability to do real-time payments in very small amounts make sense. But then when you go and you look at it, in the United States, if someone gives you 3 cents or 4 cents,

it doesn't really move the needle for most people. In other countries, you do that a couple of times and now you start to look at like, well, actually you can add up enough people listening to replace a day's wage or maybe a week. And sometimes even a couple hundred dollars could actually be the month's average wage for somebody in another country.

And so how much of some of the real-time payments and streaming and things that we're talking about here, do you think are centered on domestic United States versus actually maybe the adoption and really the value is seen much more aggressively outside of the United States? I think outside the United States is always more relevant because of several things, and one being what you're just talking about, and also the fact that typically for a lot of people in some of these markets having a global audience was not a thing until very recently and getting monetized is is harder even if you look at the the long tail of creators on youtube

i believe that internationally google doesn't pay out directly to creators and so you have to be affiliated with the third party that then pays you and you get paid very irregularly because like you accumulate maybe a hundred bucks over six months um and so that's when you get paid instead of getting paid at literally at the end of every video view or while the video view is actually happening um and so i think there's a lot of value to be unlocked with streaming money and streaming wages uh as you perform the thing that you're earning the wage for uh and um and having technology that enables that at scale with any currency, by the way, is really going to be the key. And the network that will transport that value natively on the internet is going to be

Bitcoin with Lightning. Now, when you go and you look at the risks or the biggest reasons that something like this could fail, what are the areas that kind of keep you up at night or you spend a lot of time saying, hey, we've identified the risk and now we've got to go kill it or mitigate it well first of all uh the tech is hard so uh i mean you and i have done a bunch of things that other companies uh that are using more centralized technologies that are hard to do this is significantly harder and um and the reason it's hard is because it's decentralized because it's a complicated protocol to really scale, to have the reliability and the user experience, the resulting user experience that people have come to expect from a modern payment

network. It's really hard. It's a lot of hard work from a technology standpoint. So there's that part. And then there's actually the part of, OK, now everyone needs to go build a really compelling consumer experience on top of this technology. And for our part, we're not touching consumers. We're at the core of the network providing interfaces and capabilities and SDKs for companies to go build these experiences. And so we have to try to get a lot of players out there to create really compelling consumer experiences and business experiences to showcase what the technology can do.

And we're not there yet. So Fountain is an example of something that has relative product market fit, but shows traction of streaming money to people. But what are the 10 other use cases that are mainstream that are going to really inspire other companies to jump on the bandwagon and build on top of it? So it's like network effect on top of network effect on top of network effect that we don't control directly. And I think that's the hardest part of the education and the execution of our company is really trying to light up the path to enable those experiences to become mainstream. When you see some of the people who are coming into this space, it feels like we now have gone from what I'll call the early adopters and usually younger people who, you know, they're kind of either coming out of school or they're tinkering with this stuff on the weekends. now we're getting some very, very big name executives, people who have built large companies in the past. And it feels like maybe the entrepreneurial energy is maturing a little bit.

Does that have like a kind of profound impact or how do you think about that? And I'd put you in that category of, you know, it's one thing when somebody says, hey, I'm going to go build this company. It's another thing when the guy who says, hey, I was the president of PayPal, right? And worked on Messenger and helped build Libra. And you say, you're going to go build it. Maybe you don't feel like that gives you an advantage but i think to other people they say oh this is a data point that the industry is maturing and so how do you think it's being part of that um you know the pros and cons of these people coming in i think it's only pros i feel like just getting um the compounding effects of more talent pouring in to focus on the right things which are you know which

is building technology and products that solve real world problems using the technology, I think is going to have profound impact because you will have successes and success begets success. You'll have more entrepreneurs coming and building and solving real world problems on the technology. So I'm actually really bullish about what's going to happen in the next decade on the on the network and and the amount of innovation and successful companies that will be built it's um it's really a a a very exciting time actually i think there's just more energy

you see what block is doing as a public company investing in core technologies around bitcoin and around solving problems for developers and others on the network all of these things are really encouraging. To me, you see PayPal doing more things on crypto. And they definitely have issued a stablecoin, but they're doing Bitcoin withdrawals now for the first time on top of PayPal and Venmo, which might pave the way for interoperability with other assets and other networks and other wallets. So I think there's just a lot of energy that will compound to a really good place. The last two things I want to talk about are stable coins and regulation. On the regulatory front, you mentioned earlier, obviously, the United States is probably the most

onerous when it comes to what people are able to do currently. How do you see that changing over time? And what are maybe one or two things that you specifically think, if these change, it would be a big unlock for the industry? Well, first, I think we're in a very sad state of things, especially when you look at this through the prism of what's happening internationally. You see Singapore, Hong Kong, the UK, France for Europe, a number of other countries that are fighting to attract the most innovative talent to come and build on top of these technologies. And we're chasing people away. And I think it's sad. It's really sad to see all this talent leaving the country to go build somewhere else because we don't have the

regulatory clarity that is required to go build here. And the climate is generally very anti-tech, not only anti-crypto right now, and more specifically anti-crypto for sure. And I think for stablecoins, it's an interesting time. I think stablecoins are useful. I think they're here to stay. I think they solve real world problems around what is the digital version of your home currency that you can move on networks in a more efficient way i actually think that stable coins on top of lightning will be a thing as a measure of again optimization not something that you solely depend on but it's unclear where this is going there's a lot of animosity around private companies issuing a unit of accounts that represents your home currency

for governments and governments are very concerned about that and certainly we experienced that firsthand as a as a major irritant of saying okay now we're going to move the trust uh from the government to a private company that has to manage a reserve in the right way i think good regulation could help address that uh and uh and good regulation around what is a stable coin how is it managed what are the consumer protection what are the the reserve the acceptable reserve provisions in terms of management of said reserve etc i i think there's a lot of that that we we worked a lot on on that in the libra days to try to build or help define a framework for it um but right now we're we're nowhere near this i think there's a bill in the house that is

being being you know pushed but it's unclear whether it's going to pass or not and so there's a lot of uncertainty when you see the stable coins uh one of the data points that keeps coming up over and over and over again in recent weeks is stable coins now uh reportedly do as much transaction volume as visa uh bitcoin does a very impressive amount um really people i think are measuring kind of layer one bitcoin transactions they don't really account for layer two and so it's unclear what the total bitcoin uh transaction volume is but it seems like people are definitely using the stable coins for these transactions and so they're getting the benefit of some of the technology but still using the fiat currency how do we transition between those two is it

something where they both kind of win and like all boats rise together do you think that we will go kind of fiat non you know blockchain you go fiat blockchain and then eventually people start to use Bitcoin or what does that look like? So first, I think those are Apple and Orange's comparisons that people are making. A lot of the transaction volume on stable coins is still trading volume when you're buying and selling into assets. And those are for every time you buy and sell an asset on any exchange or a DEX or that's a transaction. um and i personally don't consider that to be payments i think it's a form of asset transfer but i think there are good use cases of stable coins being used for payments

and a lot outside of the united states when uh people would rather hold dollars than um than anything else and they have a digital form of dollars that they can use and certainly you can see that in some countries with USDC and even a larger scale with Tether that is being used in Latin America and Africa and all kinds of other countries to have a stable store of value and a way to move value around digitally at a fraction of the cost of everything else. So there's definitely a lot of value in stablecoins. And I think the way that I see the future is that Bitcoin and Lightning is the net neutral settlement network between all payment systems and all networks that don't talk to each other. It's the global fabric that brings all of these networks together and

people to move value natively on the internet. And in some cases, you'll just transact natively bitcoin in some cases you'll convert at the edges from one currency to another and from a consumer standpoint they won't even know it's like you know when you send an email you don't think about smtp uh when you'll send money you won't think about bitcoin and lightning you'll send your home currency the person on the other side will receive their home currency it'll be completely behind the scenes and then in some cases you will have stable coins on top of lightning because you're transacting in the same currency and you want the most efficient way to move value around.

And in some cases, it might even be CBDC, who knows. But making Lightning compatible with other assets is a key thing that many of us are working on. And I think that it's going to be an optimization and that stablecoins will be useful in that context. My last question for you is, you seem to be having a lot of fun doing this. And so what is the most rewarding part of working on LightSpark?

Well, it's really working with all of the amazing people that are right outside this door right now because I'm old fashioned and I like working in an office with talented people. And so the vast majority of the team is here in the office. And so it's working with amazingly talented people on a problem that is so motivating and inspiring to go solve because it hasn't been done before and money still moves like it moved in the 60s and 70s when you think about global money movement and same networks and same technology. And so going and addressing that and unlocking that GDP for the world that is constrained by antiquated rails and empowering people to move money on the Internet the way that they move anything else on the Internet is such an energizing and fulfilling mission for all of us. and getting to work with my team here on this problem day in and day out is amazing. And it's a small team, so it's great. It's after having been at companies

that are thousands, tens of thousands of people being in a small company is amazing. I love that. Where can we send people to find more about LightSpark? LightSpark.com. Awesome. David, thank you so much for taking the time to do this. I always enjoy talking to you and I'm cheering for you.

I think that what you guys are doing for the adoption of Bitcoin is incredibly important. So wishing you all the success and we'll definitely do it again in the future. Thank you. Great to see you.