We Study Billionaires - The Investor’s Podcast Network - BTC087: Bitcoin Fedimint - A Decentralized Custody Protocol w/ Obi Nwosu (Bitcoin Podcast)

Episode Date: July 20, 2022

IN THIS EPISODE, YOU’LL LEARN: 01:26 - How Obi became familiar with Bitcoin. 13:39 - What Obi learned from running a major exchange for 8 years. 21:02 - Things people should look for when selecting an exchange. 27:44 - How Obi became a board member with Jay-Z and Jack Dorsey. 37:15 - What is the Fedimint Protocol? 51:41 - What is a federation and how does it work? 55:28 - How inventions in the 80's are now finally being put into application 40 years later. 01:06:15 - How Fedimint can be used on the base layer and L2. 01:11:07 - What does a federation bring to custody - what is its importance? 01:15:30 - How Obi envisions Fedimint protocol being used in the future. 01:15:30 - What Obi is building on Fedimint. *Disclaimer: Slight timestamp discrepancies may occur due to podcast platform differences. BOOKS AND RESOURCES Join the exclusive TIP Mastermind Community to engage in meaningful stock investing discussions with Stig, Clay, and the other community members. Obi Nwosu's Twitter. The FediMint.org protocol website. Obi's company Fedi. Obi's company Fedi on Twitter. The FediMint Group on Telegram. Our tool for picking stock winners and managing our portfolios: TIP Finance Tool. Check out our favorite Apps and Services. Browse through all our episodes (complete with transcripts) here. New to the show? Check out our We Study Billionaires Starter Packs. SPONSORS Support our free podcast by supporting our sponsors: Hardblock AnchorWatch Cape Intuit Shopify Vanta reMarkable Abundant Mines Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm Learn more about your ad choices. Visit megaphone.fm/adchoices Support our show by becoming a premium member! https://theinvestorspodcastnetwork.supportingcast.fm

You're listening to TIP. Hey everyone, welcome to this week's episode of the Bitcoin Fundamentals podcast. On today's show, I have a Titan in the Bitcoin space with Obi-Nuosu. Obi is one of the leading experts and builders on the custody protocol called Fedemint. And during our discussion, we cover what the protocol is, why it's so exciting and important for future growth in building, how Obie became a non-profit board member on B-Trust with J-Z and Jack Dorsey, the lessons he learned from founding owning, operating, and selling a large exchange among many other fascinating topics. This isn't one you'll want to miss. So get ready for my chat with Obi-Nuosu. You're listening to Bitcoin

Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey everyone, welcome to the show. Like I said in the introduction, I'm here with Obie. And I'm really excited to do this conversation. It took a little bit of preparation on my part to get myself smart enough to have this conversation with you. So I'm really excited to have you on the show. Okay. Well, I needed to probably do the same level of preparation. And I haven't for my sins. So you're probably going to outsmart me on 30 minutes. No, no, sir. Hey, so tell us, tell us your Bitcoin story, because you've been in this space for a very long time, very, very long time. How did you find this? How did you find Bitcoin originally? Originally, originally,

Well, by background, a geek. I studied computer science and cognitive science in the University of College, London. And so I was trying to make our new robot overlords. And it seems like they've been doing fine without me. And then I went into the tech industry in the European space. I was involved with massively multiplayer role playing games, 30 million users, all this sort of stuff. Wow. Yeah.

And as a background, I was. always interested in just the disparities in the world. You know, my family was from Nigeria. I could see the difference between the global South and the global and the Western world. And I was really into technology. So when some friends of mine heard about Bitcoin in 2011, they just thought this is going to be right up of Obie Street. And they, and they informed me about it. And lo and behold, I found it very interesting. I looked at it intensely for about three. months, but I was running my own business at the time. So other than buying a very small amount, I didn't, I found the technology very interested, but I didn't sort of dive in because I was

focused on life. And then two years later, well, the price crashed, actually, from my perspective, I think it went from $100 down to like $20. And I thought, okay, the technology is great, but I have concerns on a long-term viability. So I focused on my business. Two years later, a company I had Angel invested in, the founder approached me again. The company didn't succeed, but I thought the founders were really clever guys. And they said, look, while running this other business, we came across because it was a sort of voucher token reward system. They came across this thing called Bitcoin. And I thought, well, that's still around. I checked it again, 2013. And lo and behold, it was now what a few hundred. And so I thought,

okay, this is great technology. The mission is great, making, you know, meritocratic money, is the way I would put it. And it had staying power. And there was a clear problem that the exchanges around at the time were Mount Gox was in the middle of failing and they weren't trusted. So there's a simple idea of making a trusted exchange in the UK where it focus came about. And so I decided to, with my co-founders, co-found Coinflore, which was the UK's at that time, a young exchange, but eight years later we sold it, was the longest running Bitcoin-only exchange in the UK. And yeah, that was the story. I started off as a CTO. Within nine months, I was the CTO and CEO of Coinflore. And we had multiple ups and downs, but ultimately,

more ups than downs. And I sold at the end of our shit. So that was my background. That's unreal. This is unreal. And I can't believe your regulatory, like, trying to do this back when it had never been done. I mean, like you said, it was Mount Gawks over in Japan. And that was basically like it.

And it was very boutique. And you're probably looking at trying to do this in the UK. I just couldn't imagine the regulatory burden that you were dealing with. I've had, I've been in the vehicle space for eight years, and that's about 80 years of when we started, we applied, in fact, before started, we applied to the FSA at the time. Now it's the FCA, and I believe FSA was the financial standards authority. I can't remember. It changed.

Now it's the financial conduct authority. And we said, look, we're saying on this company, we want to be regulated. And here's what we're doing. doing and they came back very politely saying, thank you very much, but what we believe you're doing is not a regulated activity. So you go ahead and do it, but we're not going to regulate you. And so with that letter, we started. But that was where we began, but we still wanted to be incredibly transparent.

There was a Bitcoin core engineer who suggested this idea called provable solvency or proof of proof of proof of reserves. we decided to implement that. I think a number of other exchanges, Cracken, Coinbase, blockchain. Info at the time, now is blockchain.com, BTC China. Now it's defunct. And I think this stamp as well, they all also made these public statements that they would also improve reserves. Unfortunately, we're the only ones who actually did it. I think Cracken did one and stopped. All of them remove the public statements off their websites after six months. But you can go back in the way back web machine and find the original promise to do this.

You can, I'll leave it for the readers or the listeners to determine why they decided not to do proof of reserves. But we did it every month for eight years. And this is something in fact, Nick Carter talked about continuously. And yeah, many other things. We, in the Bitcoin, Bitcoin cash wars we were one of the few exchanges to be not a fan or this sort of Segwit 2X sort of compromise. We said look,

whatever they used is it's right to be Bitcoin or is Bitcoin. We educated everyone ranging from the intelligence services to the police to politicians. I gave evidence in front of the

BBC, the UK Parliament Treasury Select Committee, which is a bit like the Senate committee hearings. We did everything to try and educate people and educate the regulators. We started at a position when it took us talking to nearly 200 banks across Europe to get a bank account at that time. Now, for this new project we're working on, I've talked to four banks and four banks listen to me and are interested in opening bank accounts.

It's still tough. You still have to fill in 70-page forms. But it's much better than when I had to try. to Estonia to become an Estonian East Citizen just to get a bank account or travel to Poland or travel around Europe. So I've seen a lot when it comes to regulation. So your impetus for starting the exchange in doing this was custody-related, correct? Yes. Well, the impetus was to solve the problem of helping people go from fiat to Bitcoin. We saw ourselves as this Robin Hood-like,

or I saw myself this Robin Hood-like character, sort of rescuing people from this world of this regulated inflationary money and allowing them to move over to this regulation-free, inflation-free money. And as part of that, you had to provide them a custody solution that was safe and reliable, etc.

And so we decided that we wanted to be as transparent as possible because we're holding people's money on their behalf. And also to bring back trust, especially in the wake of Mount Goss, we felt that we would go down this road to regulation. And that was the way to do it. Because at the end of the day, we're a third party. We are effectively a stranger to our customer. And we're incentivized to earn money.

And you're asking us to look after your money. So there is a perverse incentive there where in most cases it's incentivized to make money, that leads to competition, innovation and so on, because to earn money, you have to provide incredibly, the most efficient way to earn money is providing incredibly good service your customers. But in the case where you're custodying money, then the most efficient way to earn money can be just to take the money. And especially some entrepreneurs who walk the line might start, as we've seen recently, start doing things like gambling with your money, or they might abscond with your money,

or it might just disappear, et cetera. And so we felt that the way to bring that trust back is to go for regulation. Little did I know that actually that was led you from one problem into another, but I discovered that over the next eight years. So I'm assuming you had no experience with exchanges before going into this. And you hear are these people who build something really large and substantial, like what you did with coin floor. And they'll jokingly say, if I only knew what I know now, I would have never taken the first step because it was like climbing Mount Everest or some type of like massive, massive undertaking that you just don't know. So like your lack of knowledge or understanding

of how hard the problem is would have prevented you from starting. Do you have a little bit of that sense when you look back at those eight years of running such a... I mean, I've had ups and downs and so anybody has a startup for eight years. And there were many, many, many times that I wished I had to start the business. It was eight years, but I probably lost 20 years of my life expected. I've had some of the first health days in my life, some of the most stressful periods. Now that I've gone through it, and because of what I've learned from it, I'm grateful for it, because it's prepared me for what I'm doing now, which I cannot feel, I cannot describe how

happy and excited and passion I am about what I'm doing now. And if I didn't have those skills applied to this, then it wouldn't have been a same thing. But, yeah, I didn't have any experience of running an exchange at a time. We were very naive. Eight years is a long time now. So I've got not only experience running exchange, but running a Bitcoin exchange in and a regulated Bitcoin exchange. We were the first exchange to be regulated in Gibraltar,

one of the first jurisdictions to provide regulation in Europe. We were one of the earliest in Europe and many different things. And in fact, actually not coming from the traditional markets was a boon for us. Because a lot of people who run exchanges come from the market where they were traders themselves. And there's always, we found with certain customers, there's always a, a slight concern when the person on the exchange has the same mindset as to traders. There's always a worry, are they trading against you? Are they doing all these different things? Whereas with us, my background was that of a technologist. So I just wanted to make the system

works as well as possible. And I'm not a good trader. So we have no interest in doing anything other than making sure the systems worked incredibly reliably. We were never hacked. We never had these issues which seemed to play exchanges, orders of magnitude larger than us. We were a medium-sized exchange, we were a good size of change, but exchanges that were much larger than us when there were these massive moves in the market and people really needed to trade, they all seem to just go down. I know exactly which exchange you're talking about. I won't name names, but they always seemed to go down.

But we would keep on ticket, and people like that, even they knew that. We just made sure we kept people happy. We made sure we were reliable. We were very conservative. So philosophically, we were always aligned to the ideals of Bitcoin. So it was like, it was, you know, TikTok next block. And it was also the same for our exchange. And that's, I think, because we were first and foremost, engineers and second commercially

minded traders. In fact, we were zero in that regard. Yeah. I love that. I love that background, which led to the success of the performance, which is really what you're trying to get at with the customer providing the customer a service. Now, when you're looking back at that experience, if you were going to explain to your kids, all right, these are the two big things I learned from those eight years that felt like 80 years. How would you summarize your two

big takeaways of what that was all about? Oh, I have immediate thoughts to mine, but let me just not. No, I think there's two things. One, you have to realize that you need to avoid regulation if you can. Even though we got it, I think that the innovation for Bitcoin is to be able to be regulation-proof. So I'm using all that learnings to build systems which I just don't need to be in. If you really want to do something of global impact for what we're doing, you want to build systems that are cognizance of how the world works,

but don't wait for the world to catch up for you because that just don't. So that's the first learning. And the second is to be very, very, very careful of who you partner with. and who you, you know, whether it's partnering, partnering organizations or people within your organization or so on support. So that would be the second thing, I think, or who invests in you, all of this sort of stuff. That's if I look back, although everybody had their own perspective and I don't wish anybody and you will, I do think that there was a lot of differences of perspective in all those regards in terms of the direction of the organization.

And that caused us a lot of challenges. I was very focused on going a Bitcoin only road. Some people came around to that, but it took several years. Some people never came out of that. And then they led us to just like a forking Bitcoin. They led to a forking coin floor where we eventually split ways and recreated, we created the world's first physically dividend futures exchange, Bitcoin Futures Exchange. But that was eventually, there was a schism and that was sold off.

We retained a small equity sake, which we eventually sold last year. But that became CoinFlex, which you now see in the news. And they went their own way, which was very much a Bitcoin Cash, multi-cry crypto 200x leverage approach. And we went to the Bitcoin-only spot, focus for retail, dollar cost averaging approach, which was closer to my philosophical view. But these things by themselves and if you focus on them are different business models. And it doesn't really matter what you think of each one.

There is a way where they can flourish. But when you have two philosophies and where to go with a business and they're so different, you end up in this sort of no man's lands. But in the end, it was actually a really good decision for us to spend two. and everybody could then go the direction. They wanted to go in and they could have the future that they were destined to have. Let's take a quick break and hear from today's sponsors. All right.

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That's Shopify.com slash WSB. All right. Back to the show. Fascinating. I love those two points. Avoid regulation if you can and be careful with who you partner with. And I think with the three arrows capital situation, boy, that last point really hits home for a lot of people these days of who they're partnering with or who they're working with and such a salient point across all time. When people are, this is a, I think a question that I get a lot when I'm just talking to anybody about Bitcoin in particular, people are always asking, which exchange to use. Do you have any tips for people as they're looking at selecting an exchange? What are like some rule of thumbs or something that's really simple for them to do a little bit of an analysis on who to select as they're trusting? Because what we're about to talk about kind of

gets into the future of trust and custody and all that kind of stuff. But for people today right now, as they're looking at exchanges that they can trust, what are some things without naming names that you would look at or things that should make your eyebrows go up when you see it as a person who has built an exchange? So I think I guess you start off deciding what is your reason for wanting to use an exchange. I use someone who wants to speculate is comfortable with the risk of speculating, effectively somewhere between the spectrum of trader to gambler. you know, that's, that's the spectrum. Some people consider them all the same thing. Some people consider them different.

But if that's where your mindset is, you should be open and truth to yourself, in which case, everything is about risk and you should be focused on who has the most features, who has the most liquidity, and just accept that there's a risk that they could blow up as a business. But that's just one more risk you're taking along with the trading risk. If you are someone who is interested in using this as a custodian for holding your value in the long run, you see this as a savings technology as opposed to a speculation technology, then you should have a very different set of criteria. It isn't about who's the biggest name. It's about who has a consistent commitment to focus on social capital over financial capital. capital, i.e., it's more important for them to maintain honor and dignity and a good reputation,

and their actions have shown that over the shorter money. They want to make money, of course, because they have to be to be profitable, but they want to make sure that they maintain their own social credibility, and that's a high value for them. And so if that's the first thing you do now, how do you do that? Well, you look for signs and symbols. So one, how they speak, what they talk about, what they prioritize. Do they have a clear set of criteria for what they list?

And is their criteria based on the safety of their users, or is the criteria based on how much money they can make from their users? If it's the prime first, then this is probably the biggest indicator. If it's the first, then that's a good sign. If it's the second that is a sign of it, probably the place to go if you want to speculate. Now, if they don't clearly communicate their criteria or they communicate it but don't follow it, those are both, you should assume in that scenario that they're in the latter camp. Unfortunately, the vast majority exchanges are in that latter camp.

What we found is we came up with criteria, which are just very sensible. But we thought, one, we would only list items which were technically mature because if you're asking people to have money with something which is not technically mature, there's a high risk. It could explode and that's not good for your customer. It can make a lot of money for you, but it's not good for a customer. Two, you would list something which had very good community support because if it didn't, it could fluctuate a lot, it could disappear. Money has network effects. You need such strong community support. So again, it seems a very sensible criteria.

small cap tokens and so on, didn't make sense that. Three, there needed to be regulatory currency, because we're a regulated exchange, you need to have regulatory, regulatory clarity around the token. And for, ultimately, you want this to be store a value, money.

So it needs to be have a core use case which was around storing value of money. Because if it wasn't, then it wasn't a thing to store your value in. If you're thinking of customers, want to say, that didn't make sense. Now, when you take those four criteria and we thought they were four very sensible criteria for if you're focusing customers trying to save and dollar cost average or sensibly invest in the hold for the long run, we only found one currency that actually

fit those four criteria, which is Bitcoin. So when I say that I'm a Bitcoin maximist, I just think it's actually from a very rational position. If I found something else that pled those four criteria. I would have listed it, but I've never found any thing that came close to those four, which is why. And Bitcoin only just meets those four, by the way. Even Bitcoin only just meets those four. Otherwise, if it didn't, then we would just shut up shop and say, well, there's nothing to offer people. But Bitcoin does meet the criteria. And we were reviewing it every month, and it was only Bitcoin. And in fact, with further decisions by other cryptocurrencies, they've further and further gone away from being able to fit those criteria.

So, for example, Ethereum, you might think it fits free of those criteria, but in terms of technical readiness, the Ethereum developers decided and announced publicly that Ethereum 2 was coming out because Ethereum was never going to meet the original objectives of Ethereum of community of the Ethereum developers. So if the developers of Ethereum say it's not good enough, objective. it's not good enough at that stage. So at that point, it was very obvious that we delist a period after only listing

it for six months. It was only in a short period. And so we delisted it at that point because the developers of the film themselves are telling you it's not good enough. Yeah, you don't want to argue with them. So, Obey, you are a board member on B trust. This is a non-profit.

Talk to us about what this is about. Be trust. and it's B is the Bitcoin B in B trust. It's always difficult to type to find that symbol. We need to make it as a permanent character on the keyboard. So it was originally a year, over a year ago, Jack Dorsey and Jay-Z tweeted this idea that they're putting 500 Bitcoin towards a trust

to promote the development of Bitcoin protocol engineers in the global south, starting in Africa and India, but ultimately all across the global south. And so they were on the lookout for board members, three to four board members, to take this 500 Bitcoin, form this trust, and locate, educate and remunerate talented Bitcoin engineers so they could hopefully become the next generation of Bitcoin engineers. because there are only a few people who actively work on some of these vital, globally vital technology. So lightning, Bitcoin core and other core protocols. So the idea is great.

The impact is also great because if you take Bitcoin Core, it's talking to the two main Bitcoin Core maintainers in Oslo a month and a half ago. And they're saying actually right now, although there's a few hundred people who are contributions, the people who actively contribute to Bitcoin Core, for example, is about 10 right now. And you can see Peter Willer just announced something down, so it could be even less. So even if you add one or two or three people so that, you're making a significant increase in, and this is a point where the global south is not only you're helping increase the education of global self, but they're going to then contribute to something that is of global importance.

So the global self is supporting the world as opposed to the West supports, in the global south. So I love the idea. I applied with 7,000 plus other people because it was an open invitation. I didn't want to have these things where it was backrooms, you know, old boys club type application. And I know many people from the Bitcoin space applied, but many people from outside it applied as well. And so began 10-month process. This also began in the same year that I was already looking to move on from cornflon. And there's a reason why, but that was all because I started to realize that we needed to get a lot of people off exchanges. But that's something we'll talk about in a bit.

So over that 10 months, while I was still working on coin floor, but looking at, started to look at offers before I were just taking to ignore them, but starting to look seriously at offers to acquire the company. We went from 7,000 people. I applied. And then a few months later, I went to the next round, the next round. And at some point, around just before adopting Bitcoin in San Salvador, which I was planning to go to, because at that point, it was getting close to us to finding buyers. We were in the last negotiation phase. And I had finally opportunity to do things like to go to Hackers Congress for the first time in Prague.

As a CEO of a regulated exchange, it's not a good look to go to Hackers Congress. But now I know I'm selling it, I can finally do that. And to go to San Salvador, I got down for the last like a few hundred, I believe. And I thought, okay, then maybe there's a chance here. And yeah, we kept on going through and then we got some final interviews. And just a few days before I was about to sell the business, it was pure coincidence. It was finally announced that I was going to be one of the four board members. We had our board meeting with Jack and Jay on the call and all these other incredible people who had helped and give and donate

their time from spiral, from chain code, from brink, from just everywhere. And yeah, we, the four board members met each other for the first time on that call as well. We introduced ourselves to everybody. And so it began. I mean, it was formally announced in the same day as I stepped down as a director of coin floor, just like pure coincidence the same day. I mean, I only think my other board members know that happened. So one life ended and then new like, began. Insane. Everybody listening to this right now is doing a fist pump in the air like that is awesome. That is so cool. I'm blessed the people I'm working with are incredible and amazing. Wow. So you had mentioned lightning and core obviously. So do you see Fetament in that mix of

protocols potentially moving forward? How does the board view Fetiment? Is it something that's been brought up? Yeah, I mean, we have a number of principles that you put on our site. And one is, I'm very careful not to bring up for 30 minutes in, in Beatrust meetings. Other people have, and sometimes candidates that we talk to have brought it up, which is really good because there's so much just natural excitement for it. So that's actually, but what I don't want to do is we seem to be promoting something that I'm working. working on. And that's one of our policies as board members to not try to promote our own bags as it were, even though this is an open source project. But I do fundamentally see this

as the third key pillar of the Bitcoin open source ecosystem. What are the first two? What are the first two, Bobi? The first one, the central pillar is Bitcoin core itself, Bitcoin. So this is decentralized censorship resistance, store a value of money. That's the base that everything else is built across. Figs supply, immutable, decentralized, and also very, very secure. In terms of extra function, the sacrifice it makes is it's not got very much functionality and so on, and that's where other technologies can add to it over time.

But it needs to be a sub-based, very, very, very secure and very, very very decentralized. And what you don't want to have is compromise those two for bells and whistles in the core protocol. You know, because if you're compromising on centralization, then what's the point of using a blockchain? It's a massive overhead. You might as well use the database.

If you're compromising on security, then you end up with something like terror, you know, and so on. Why would you store money on something that's insecure? It's eventually going to be lost. It makes no sense either. So you kind of compromise on those two. The next pillar, is decentralized censorship-resistant payments,

and that has been provided through lightning. And that allows you to, if you're set up correctly, and the network is architected correctly from a scaling and congestion point of view, allows you to settle between parties at the speed of lightning and at incredibly low cost. So that allows you to scale the payments aspect, but it's built on top of the first layer. And then the third pillar, which is missing, is decentralized censorship-resistant custody.

And at the moment, if you think about it, we've really got two choices. You come along and you're someone who's passionate with Bitcoin and knowledge about Bitcoin. It's invariably friends and family, when it's the right phase, in the bear period, no one wants to talk to you and you're the social pariah. But in the bull period, everybody comes back and goes, you're the one who always, goes on about Bitcoin, can I actually, can you tell me, well, they first were asking for financial advice, where can I buy it from? And whatever you say, because they trust you, they're going to do. But you really have two choices. You can either tell, you take a view. Are these people

technically proficient enough? Then maybe you suggest to go with a hard red wallet approach. But for nine times out of 10, you don't think they are, especially early on. So then your only choice is to tell them to go to a regulated exchange. Even though you know that's not a good thing to do, that's literally the only. And that's not centralized, and you're basically telling them to store their money with a stranger, effectively.

It's stranger custody, by definition, third-party custody. What we need is a solution which is much simpler to use and also can be rolled out anywhere. It's decentralized. It's censorship resistant, which is not the case of a regulated exchange. And it allows you to custody safely and secure. And ideally, just like lightning, baked in privacy into the standard, because everybody needs it, but they don't actively do stuff for it.

Your custody solution should also do that. You shouldn't have to go up and do extra things to get privacy. It should be just baked in and you shouldn't even think about it. So that is missing, and Fediumen provides that. I can go into how I discovered it and discovered the person who invented it. Yeah, I have that as a question here. I wanted to hear how, because you don't know this person, correct? Well, now I will know him.

Okay. But at the time, I didn't. As I mentioned, last year in the sort of the final few months of negotiating sale of coin floor, I decided to visit Hackers' Congress, and I was going there for two reasons. One, I've always wanted to go, but I just felt as the CEO of a regulated exchange, it wasn't appropriate for me to go to certain events. At the time, at this time, I thought, well, you know, now I can go. You know, it doesn't matter.

And I've always wanted to go. But there was another reason. In 2019, it seems that there's a Segway vest related. The Financial Action Task Force, FATEP, approved something called the travel rule. at that time, people who are in the industry, especially were very of favor of what was happening in regulation, realized how significance was going to be. The Fad is this unelected body who advises people,

regulators around the world on appropriate regulation. But that's just advice. But throughout the history of FATF, there's no piece of advice they've ever given that hasn't been unanimously implemented by the different countries who have signed up to the FADF policies. But almost every country in the world

has signed up to the FACI policies. People with their war and we reach other or so on, they've all signed up. Now, the only question is how long it takes to implement. The quickest, smallest agile countries do it in route three years. The less agile hours will take five, six years. But they all do it eventually.

So 2019 was when the clock started. And we're in 2022. We're now at the period where you're starting to see the countries implemented. And many people think, well, this is not going to be implemented, but there is not a situation of a policy implemented by the product that hasn't been implemented. So knowing this, I realized that as we were getting close to this timeline, that we needed to get more people off exchanges.

We as an exchange, and again, as an exchange, you generally not incentivized to do this, but again, an exchange who's concerned about their customers would be one that's constantly trying to get them to self-custody. If they're not trying to do that or they're trying to explain why it's better to custody with them, again, you need to be careful if your objective is to be safe. If it's a trade and gamble, it's a different thing. So we were constantly trying to get people to self-custody.

And after a number of years, I realized that this was just not going to happen. We might get 5% self-custarding, but we're never going to get anywhere near 100%. One day, one of our customers, amazing women, really funny and now a very good friend of mine. Very smart switched on, but not super technical. So, okay, Oby, I get it. I understand what you're saying, and I understand I should self-custody.

But the problem is I trust you more than I trust myself. I think you have a lot of this, Oby, I think you have a ton of this. You do, you do. And I realized that this was what was stopping most people moving across. So then I asked her, and I thought about it, well, who do you trust more than me as an exchange? And she thought about it. And she went, well, I guess my friends and family,

because they're the ones I asked for where to custody. And they suggested you. And they could have suggested Whibble Wobble Exchange. I would have just gone with what they've said. So implicitly, I trust them more than you. I only using you because they told me too few to use it. And so that was something I, to use as, you know, Sherlock Holmesism, I stored in my mind palace, just feels up there.

And, but then I just left it. But then a number of years later, I was at Hackers Congress, thinking about ways in which we could help get people of exchanges. I also had a very strong interest in the global self, especially even more so. It's always been running through my experience at Coinfield, but it's just never going to happen. a UK regulated exchange with UK and European-based traditional finance-based investors.

They were never going to have Nigeria as the second market, which is not going to happen. But I'd always wanted to do this. And I also realized that self-custody and the hard-dow wallet solutions don't work in places where if you send 100,000 or 10,000 hard-red wallets to Nigeria, you're lucky if 1% get through and don't get stolen on the way in libraries or in certain regimes, are they, going to be sabotage or all this sort of stuff. It just doesn't, it works in a Western context, but it doesn't work there. So I was thinking about ideas, like using existing things that were already there, like Nokia phones. They're everywhere. They're users door stops in most places

now. But they have the functionality in power to be hardware wallets, for example. And they pre-existed the dimension of Bitcoin. So it's hard to think that chips could have been added to something before the threat was actually in existence. So I was looking to talk. I was talking to some of the hackers and cypherpunks there about how we could redeploy them. And then at one lunch break, we were outside the front of Paranili Police, I pronounced it correctly, where Hackers Congress takes place. And I bumped into El-Syrian, Eric Syrian. And he was wearing his, you know, cap and sunglasses and face masks and so on and so forth,

because he's very privacy focused. And I told him about my ideas, and he gave me very, very honest feedback. I thought these ideas were terrible. And I really appreciated it because I liked to get good feedback on these things. And then I wanted to hear about his ideas, and he then told me about Feddy Mint, which is a portmanteau of federated Chalmy and Mint.

And it's the idea, and I thought, this is a really interesting idea, but isn't it going to be stopped by regulators and so on and forth? Because, you know, I've had eight years of background dealing with regulators, dealing with some of the largest law firms in the world, regulatory advisors and so on. And so I had a very strong knowledge of all the different regulations that are happening in other places.

And he said, well, I don't really think about that. I'm just making this incredible privacy system market, which it was. But then I thought about it for a bit and I realized, when I, if these people who are, and I can explain how it works in their business, bit, but if the people who are running these nodes effectively, these pediment nodes, we now call them guardians, if these people are friends and family or they have some sort of pre-existing non-commercial relationship, and if they are not looking to do this by way of business,

they're basically not earning money. I mean, they can earn them if they want, but if they're, and certain jurisdictions are fine with that. And if the way federations work, it means that they don't have a majority of keys, they have a minority of keys, they can't act single-handedly, then through various exemptions, they would be exempt from, depending on the jurisdictions, they'll be exempt from regulation in most reasonable jurisdictions. By that, I mean, West of Europe, UK, and US, for example, they would be exempt from regulation. As long as they're not doing it. As long as they're not doing it for profit, you're saying? There's multiple things that the system does, and the design is designed to make it so that

the people operating it. I have a strong case to be exempt from regulation. So one is, and this is very clear, you can see it on the website or very helpful websites or the FCA, for example, is this guide, do you need to be regulated? And one clear exemption is, are you doing this by way of business? And then he goes, well, how do you know it's doing by way of business? well, there's no hard-and-fast rules, and they never give harder-of-fast rules. They're examples, are you looking to make a profit from it?

And to make revenue. Well, so if you say, I'm not. And also, if you add on things like, well, if you add on that you're doing it for people you have pre-existing relationships with and they're not, and it's clearly, it's friends and family, that also just adds to the argument that you're not doing it by way of business. If you can think of the idea, if I'm going to store money in a piggy bank for my my kid, I'm not a, I don't need to regulate it. It's a licensed custodian. If I go to the shop

and buy stuff for a friend, I don't need to regulate this as a payment institute. They give me money to buy stuff for them. Or if I buy something in a restaurant and I said, I'll pay you, you can pay me that next week. I don't need to be a credit institute to do that because I'm doing it not by way of business. And it's the same. If you are holding your private keys for, if someone has got a hardware wallet and then they ask you to hold a backup of their private keys. That backup is also the wallet. But we realize that that's not regulated because you're not doing it by way of business. But you are literally custodying their money as well by holding that backup of their private keys.

And most people will be storing the back of their private keys with friends or hopefully or they might be storing it in a bank boat, but in which case you're still storing it. your money in a regulated third party bank at that case, in which case why use the harder wallet if you're going to store your backup in a third party regulated institution. So, you know, all of these things, you don't expect those to be regulated, and it's the same thing here. It's effectively. Feddiment is the same as you storing the keys for, as a backup for your friends, but just on steroids.

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Talk to us through, like explain an example. Let's say that you, me, and four other friends. So there's six of us. Is that kind of a federation size that you see this? playing out in application and then walk us through what that application would look like. So that's all a matter of experimentation and it's also very flexible. It's a technology, it's a protocol and we're going to see a lot of experimentation. If I talk to 30 people, I get 30 different topologies of how it could be set up, which is a great because that tells you that this is a really

flexible tool. But let's just take one example. But before I do that, go back to the last, When I realized that that was the case, that it was possible to be exempt from regulation, but the experience, and then I realized that this was far more than just a privacy technology. This was a decentralized custody offering. You could have the user experience of an exchange, but better. You can have privacy levels, which were better than both an exchange in a hardware wallet. You could have access to the Lightning Network as in natively. and you could also have a level of custody security,

which was very strong, you know, approaching that of a hardware wallet, but it was still a software solution, which could be delivered anywhere in the world for free. This was decentralized, censorship-resistant custody. And so that's why I became really excited, and I wanted to do everything to support it after that point. But let's go back to your question about a given example. let's say

you and some other friends of yours are Bitcoiners through and through and you run your own full nodes and you're always going to get friends who want and family who want you to become like their uncle Jim

to support that. I think that's the phrase to support them and help them provide them advice, maybe help buy Bitcoin on behalf, maybe hold some for them, etc. But you're then taking a lot of risk on. And if something was happened to you, you lose your own Bitcoin. But now something else you lose yours and their Bitcoin, which is extra stress.

You could then say, and also your Bitcoin, you want to work out, how am I going to hold my 24-word backup seed securely? And again, if you go to a size like 10x Bitcoin security, Glacier Protocol, all this and things, the recommendation would be multi-signature custody. And then where do you store those different multi-signature keys with trusted friends and family? So what you'll do is you take your Bitcoin nodes, you install the FedExit software as well. They need a full Bitcoin node running, but the Feddimin's services only adds a very little additional overhead to that. And then with a little bit of configuration, just like you have to configure your Lightning node or Bitcoin node, a little bit of configuration, mainly just putting the IP addresses of the other

federation members, the system will form a federation. They will connect to each other. They will form a multi-sig wallet. And that's it. And then just like Bitcoin, and to a lesser extent, lightning, but just very much like Bitcoin, once you do that, you can just make the idea is you just keep it running, other than the odd bit of maintenance running out of hard drive space or something like that. you just have to keep it fed and watered with electricity and internet.

And that's it. It would just run. So let's say the six participants in this network. Let's just say we have six. And each one of us has Bitcoin on an exchange, all six of us. And now we're going to deposit it into our own local addresses inside of that federated network that we just established. So we all have our own private keys or walk us through what something like that would look like? So each, it's a multi-signature address.

So each person has their own private key. But then they use their private keys to form a multi-signature address, which requires a subset of the keys to sign a transaction. So three of six, if we decided that or four of six. Let's say five people and it's free of five. Or if it was six, you know, probably you want to go, again, you could do whatever you want, but I'd probably suggest you to go for four of six. So you need an absolute majority. Yeah. But let's just say if you want to go six, and you choose to have a four of six multi-sick. So each person will take their own private

key that then manage itself, but then they would put in the IP addresses of the other federation members. It will create a multi-signature address, which requires four of those six keys to sign. And if you lose any two of those six keys, you can still keep ticking along and still keep sign. So it provides a bus factor of free. So it needs at least three people before it stops being in sign. And you have a, and you need at least a majority of four people to sign as well. So no one person in that case, no two people can cause the system to stop. And also, it will keep going and also vice versa. So that forms his multi-signature address.

Now, at that point, to send money to any one of the OU, you would send it to the same multi-signature address. But when a deposit comes in, there will be additional information that we passed along that will allow you to know which address that's related to. So, for example, if it was on chain, you'd create an address and the Federation, the Fedimin Federation will know that this address, just like when you use an exchange, an address is created and it's associated with a user, that address will temporarily be associated with a user as well. And so when the deposit comes in, Federation knows that that's allocated to a given user.

Now, here's the thing. Unlike an exchange where you have this concept of accounts and use account one, two, three, four, there are no accounts, there is no permanent accounts in a, Edelman Federation. A temporary account is set up just to receive the money, but it's not actually attached to a person. Instead, what's implemented internally as well as this multi-signature wallet is a Chao-Mean Mint. So a ChaoMean Mintz were, it's a privacy or Charmian e-catch, is a privacy protocol that was invented by David Chown in actually 1983. And it was used in his company DigiCash, which was one of the first sort of e-money systems.

Now, this protocol is actually very elegant, relatively simple. It's obviously using very mature masks because it started in. It was invented in 1983. So we're talking about 40 years old now, four decades old. And in theory, it provides for cryptographically perfect privacy, not near perfect, not Monero near perfect or Zcash, trusted startup perfect, cryptographically perfect privacy. And it's been around for a long time as well, using very mature cryptography.

The only problem was it was that it required a centralized bank to receive your cash, whatever that cash would be. This is unreal. And then on the back of that, when it received money in, you'd receive in its place these digital tokens, which would effectively be eCAP. What they call e-cash. So you can think of it conceptually like you're going to a fairground with lots of different rights, lots of different things you can do, and you go there with your family and your children,

etc. You go to the front and there's no money for the rights. You have to buy tokens for everything. So you get to the entrance and there will be a cashier or a teller, you give them some cash and then they would give you tokens. Once you receive those tokens, let's say the mother buys these tokens, She can give some to her husband, some to her children, and they can go off. They can go around, see a friend's passed into a friend.

Within the confines of this fairground, these are bare instruments, tokens. And it's the same with e-cash. Each day, you have literally a different token for every single individual coin. So in the same way, you have, if you want to give someone five pounds, 50, you have to give them five pound notes. I'm just saying pounds, because my British background, but $5.50. example, or 52 cents. You give them a $5 note and then you'll, or let's say $6, you get a $5 note, a $1 note and then you give them a 50 cents coin and a $2.0. In the same,

it will be the same with eCatch. You'd have to do the same. You have to create, you'll add them to the numbers. So it acts exactly like conceptually how you think cash works. And when people talk about Bitcoin, how they naively think it works. That's exactly, but they find out later it doesn't work that way. E-cash works the way you naive. and intuitively, and intuitively think digital cash should work within the confines of this, of the domain or of the Federation.

So one Federation member can send the ECHA tokens directly to another as well. But where the cryptography comes in, is it provides this ability for these tokens to be signed, but in a blinded manner. So basically a user can receive the tokens, blind them locally, send them to the to the, to the mint, the mint will then stamp them to say, this is valid, and then return it back,

and then the user can unblind them, and now they can spend them, but the mint never knew who requested it for it to be blinded. So to stretch the metaphor of the fairgrounds, you can imagine it's the same fairground, but it's still of this big glass window, you replace it, you brick it up, and all that the people in the front can see is this whole, where money comes in and they give back tokens, or tokens come in and give back money. If you add that addition, that's the blinding, then you effectively do not know how many people are in the fairground, who's got what, and also most of the transactions don't even need to interact with you for long periods of time, only if they want to blind them and to prevent double

spending. But again, you won't know who it is. So with this deposit coming in for one of your users, you would have some sort of shared secret which the person who's receiving the money would have known, and they will therefore add that shared secret to this address. And then when the money comes in, once it arrives, they can then provide you some information to prove that they're the ones who are the rights recipients for that money that came in,

and therefore you release it to them and you issue tokens to them. But that way, you can issue tokens to someone when based off a deposit coming in without knowing who you're issuing tokens for. So the Chalmy Mint system allows you to hold money on behalf of someone about knowing who you're holding for for. It allows you to receive deposits for someone and pass it on to them without knowing who it is that you're passing it on for. And also the opposite can happen. Someone can send back tokens to you, which you then destroy it because you mint the tokens and they destroy them. And you can then send off Bitcoin on chain or over the lightning network without knowing who made that record.

So it provides, it's very simple, it requires cryptograph and perfect privacy. What was the additional innovation? And someone actually theorizes in 2002, actually someone recently showed a paper that someone thought Chammy Mintz, lots of people have looked at them again and again. Someone thought that Chammer Mint would be great, but maybe is their way for us to decentralize the bank, but they didn't think about how to do it, but it was proposed. And then a year and a half, two years ago, Eric Sirian looked at the end of the end of the idea of that was popularized by block stream of federations with liquid, where you're taking

this one address and you're federating amongst multiple people and thought, well, instead of having this sort of global scale federation, why don't we apply this technology to Charmium Mint and refederate the bank so that it's not just one person, but a number of people work together to provide the service of this Charmium Mint. And that was where the idea of so removing one of its main weaknesses, which is the fact that it was one centralized actor. And it's, and it's solved that by federating a centralized actor. And federated charmaments were born. And then where I came in, I realized how you could have a use case where it could be

exempt from regulation, which would, and if you look at a modern exchange, 80 to 85% of people working there one way or another are only there because of regulation. So if you are exempt from regulation, it just simplifies everything. And it makes it global scale. Do other people know the size of the transactions? So if there was a substantial transaction inside the Federation, would the other participants know the size of that? No.

The other participants would know the size. And the Federation guardians, the people who are running the Federation servers, will be very limited in what information they would have about the size. They will be aware of the type of coins used. So they might know they use a combination of $5, $5 coins, or let's just split it in Sats.

You use some point point one Bitcoin coins, some number, some number of point zero one coins and some number of point zero one points. But you won't know that's to the extent that they would have awareness, but they wouldn't know how much

of each could have used a million of one or one of one. They won't. If we wanted to, you only had one denomination of coins. then you wouldn't even know that. But that's where there's the theoretical perfect privacy. You would only get perfect if you had one denomination only, because then they would just know some number of coins was used. But you lose some information because you do know the denominations,

but that's still incredible levels of privacy. So let's say that somebody, a member of the Federation, wants to send some of their coins onto an exchange, call it coin floor. and they're doing it, let's play two different scenarios because my understanding, or at least my perception of how this works is you can do this with Lightning Bitcoin, Layer 2, or you can do it with Layer 1 Bitcoin setting up these federations. So let's say that they take funds, they deposit it over at an exchange through both of those

scenarios. Let's say they do it on layer one and then they do it on layer two. Is the exchange receiving those coins the same way that they are before any of this protocol would potentially ever be stood up? From that point of view, it appears like a normal likely transaction, a normal Bitcoin transaction. There's Bitcoin transaction. Ultimately, the e-cash is only within the domain of the Federation. The Federation.

The Federation will destroy the tokens that are being spent and then release or to the address that has been instructed to send to. an on-chain transaction, for example. If you're sending a Lightning transaction, what will happen is a Lightning service provider would also have a connection, be connected to the Mint. And you as a user can connect up to your own Line Service provider.

You don't have to actually interact with the Guardian to do this. But what would happen is you would send your e-cash tokens to the Lightning Service provider, and they then, in a trustless way, would effectively emulate the logic of a hash time lock contract, but where one part is e-cash, as opposed to one part, being on chain or on network. And then they would, with their own Bitcoin, within their own channels, send off Bitcoin over the Lightning Network to the address sent. But from the recipient's point of view, they receive a Lightning transaction. and so what happened is their channel balance would go down

but their e-cash balance of the LSP would go up. The beauty of that approach is that means the LSP needs to have some trust for the guardians so they will probably know the guardians as well or be comfortable with them be part of the community as well. But the federation members don't have to have any trust for the lightning surcerer. So only one way. And they don't have to also lock up. any balance. The Federation doesn't need to lock up any balance on chain or on network as well.

And because it's not locking up balance, there's nothing to stop a Federation having connections to multiple different LSPs. So if one's balance channels were exhausted, for example, you could load balance over to another LSP, for example, immediately and provide a much more reliable payment experience for your users because you're not locking up funds. but it's also great for the LSP's because having after a four and a half hour conversation with Rennie Picard about this, a Fedium represents an ideal counterparty

for an LSP. If you imagine you have two choices, connecting to 500 intermittent lightning nodes with small amounts of balance and locking up balance amongst all of them to cover potential scenarios for all of them. So you have to over collateralize for these 500s. And they're also up and down irregularly so that you're constantly, your network graph

of how to root traffic is constantly changing and having to be calculated, which is very expensive for you and leads to a much lower reliability of your transactions. Or you connect to one party who represents the volume of 500 people. And it also is run by a federation of members who are running it reliably. And as long as a majority of them are up are running, it stays up. So it's reliability and uptime is much higher. And it also represents much more volume. And it's only one connection. So you now need to just put a lock up an amount of balance, which is based on the average for all of them as opposed to trying to figure out for every individual user.

You may never use it for a month and then use it once. You have to lock up. You get much more consistent revenue for much lower costs, allowing you to become much more profitable from it. So it's actually, and if it's much more profitable, you incentivize more people setting up lightness. So without realizing this, fettlements, widespread use of faddymins actually makes the likely network more reliable, more profitable, which again, grows the lightning network as well. So when I realized that, that was the final straw. All the incentives were aligned. Yeah.

All the incentives. It had to happen. Exactly. Yeah. Unreal. Unreal. It's, it's, the more you hear about it, the more you, you, you, realize that this is the missing piece of the Bitcoin

open source ecosystem. It provides at rest very good privacy, incredible privacy. It actually, in a community context, we haven't even got into the beauty of how you do social recovery so that you don't have to worry about the challenge of what do you do with a 24-world seed, or how do you recover it?

And ultimately, even how do you deal with it in the event of your death and inheritance planning and support on all covered and it's it's it's it solves that problem which is an important problem to solve especially as time goes by because right now if you're doing it in a first party custody context it's very complex if you think about again if you can do the first party custody approach you should have at it you should do it but if you want to do it properly it's complex you need to get a good hard red wallet you need to be able to get it to be delivered to that costs money as well. So you've got that.

You then need to work out what you do, which is the hard bit what you do of your 24-word seed. Because there's no point having this Fort Knox level security with AI, artificially intelligent robo-controlled shots in a moat in front of it.

Then you go around the back where your 24-word seed is and there's an open door because it's stored with a magnet on your fridge, your 24-words. It sort of defeats the purpose. I met someone the other day who's a hardcore Bitcoiner,

And this is not recommended, but he memorized his 24 words seed because he just couldn't think of somebody else he could be comfortable storing it. And they go, what happens in the case of your debt and your family? You said, well, you know, my my loved ones have a copy of the key. And I go, where do they store? I don't know where they store it. Well, but that's your security level. Yeah, that's right.

That's right. And it's a thing. You have to remember that is a security level. And the more you think about it, then what you do is you go online, check out 10X Bitcoin security, Bitcoin security guide and so on. And they will tell you, the ideal thing you want to do when all is said and done is for most people, unless you're willing to go to the grave with your keys and contribute your Bitcoin to the world for inflation, which is something we're willing to do, and I respect that. But if you do want to pass it on to anybody, then you're going to want to want to be.

make sure it's reliably custody. Or if you do want to recover in the event that you use your guy back up and so on, and the best practice way is to use multi-signature M of N type custody. And then where do you store each one of those? You store them with third party and with second party's friends, families, trusted friends, and probably reliable people that you've known and they hold it for you. And that's not by way of business.

They're not making profits. They are friends and family, but they are still custody. in a decentralized manner, your Bitcoin. And that's, and then you will want them to be people that you think can be reliably custody your Bitcoin. That should be the best practice. That's exactly what you get out of the box when you use. You get the best practice by doing nothing but just downloading a mobile app

and a federation will have an address. You enter the address or if you go to a QR code, scan the QR code, and you're done. No passport. no driving license, no selfies, but also no figuring out what you do with your 24-word seat. It gets immediately cryptographically split into shards using Shemir's secret sharing scheme, which is a cryptography-score mechanism to split up for key. And then it gets split and then it gets shared amongst third guardians, who are by definition your trusted third parties.

They're trusted in your community to be the knights of the community, the sort of reliable people who ideally value social capital more than they value financial capital. And I mean, anybody can custody it, but if I have the choice of who's going to hold my money, someone who's motivated by money or somebody's motivated by social capital. I know which one I would choose out of those two to hold my money. And yeah, so that's the idea. So, Obie, you are, my understanding is you're currently working on an application that simplifies setting up a federation.

And I'm curious how far along you are in that process. And more importantly, who is the audience or who is this intended for and what solution are you providing through what you're building? Fedimint and the product that we're making is called Fedai based on Fediment, but it's just a nice simple name and it reminds me of or reminds us of Jedi. So these guardians are like Jedi Knights almost. And you got the perfect name for that. I got the perfect name for it, but I'm more like a Mace Windy, who is Samuel Jackson's character, to be honest.

So I'm probably more of a Mace Winder than Obelow can be. Justin Moon, who's one of my co-founders with his mullet, is very much like the younger Obi-1, actually. We were discussing this the other day, so he's probably Obi-1-Kanobi. And so I don't know who El-Syrie would be, maybe he would be Yoda, you know, because he's the one who Hensk with the idea. We haven't decided who El-Syrian is. But, yeah, so it's called Fedai, and it's a very simple app. But ultimately, this is global scale of it and custody.

It's for everybody and anyone who wants to not custody on an exchange, but wants an incredibly simple experience, very secure, Lightning first and also with privacy by default, which is basically everybody I think would want something like that. However, what has made me really passionate in the last few months is to see how it can help as part of everybody, the billions of users who are excluded from the current two options. So if you are able to meet the cuts to be on a regulated exchange and you're comfortable, of the risks and trade-offs, which we've seen quite recently with some of the recent things that even regulated exchanges still can make you lose your money. Or if you have the technical

chops and you are, and the money to properly self-custody, that's great. But if you haven't got those two, really you're still talking about billions of users who don't meet those two criteria, either for reasons of complexity or through reasons of regulation, they're excluded from custody in Bitcoin. And these include some of the most oppressed people in the world. A couple of months ago, I was invited by Alex Glasstein to the Oslo Freedom Forum. And I got to hear some of the most heart-wrenching, but also encouraging stories of bravery against oppression around the world and generally in the global south,

but also in Eastern Europe, with Ukraine and Russia's happening there. And all of these people are coming to the realization that a big part of the challenge is money. These regimes are powered by money. They often use inflation, aggressive levels of inflation as a tool

to extract money from their people, even if the people don't want give them money. Inflation is a very powerful tax. And if you take examples like Venezuela, with 20,000 percent inflation right now, come down from 50,000 percent inflation. Even if you're donating or sending money back to your friends and family into that country, what you're effectively doing is donating to the regime, which you may not support, but without realizing you're supporting. So they need a solution and they exist, but they need a solution that could be deployed anywhere and it doesn't cost a lot of money. It's not going to be stopped in customs,

it's harrow wallet, and they can't wait years to be onboarded through a regulatory process, through irregular exchanges, each one going through KYC, and ultimately many of them not even being approved. Fettie Mint solves that problem, but it needs a very simple user interface for that. So having realized that and having formed really strong relationships with some of these incredible incredible, brave individuals, it's become a passion of ours to not only offer this to the world, but with a specific focus on working with some of these people to roll this out at scale in some of the places that need it the most. And the good thing is, if it works there, it can work anywhere. So it's for everybody, but that's actually a key part of why we

decide to focus now and build this interface and make it incredible. It's very simple, and we will be looking to roll out in these markets, in Africa, in the Middle East, in Eastern Europe, in Latin America over the coming months. So, Obey, are people able to go onto like an Umbral? If you're running a full node and you're using the Umbral software, are they able to download FETI on that? Or is this specifically for a smartphone like an iPhone or an Android device? Walk us through the software?

Great question. remember there's two things as the people who are running the federation the guardians or the feddite makes almost and there's the people who are using this app that we're creating which we're calling fedi and that's a mobile app you download it from google store or and or apple store and you have the app so if you take a fediment uh federation and the users let's say it's a village and there's 500 users and there's six people in the federation The six people in the Federation only need, are they the only ones you need to download a Bitcoin four node and the Fediamin software? We're looking to implement it on things like Noddle, on Raspi Blitz, on Umbrell.

So it's easy to install. If you can get the whole shebang and you get the set top or the actual device, you can do that. If you can't get one of those devices delivered to you because of import restrictions or whatever, but you have the beauty of Bitcoin is it's highly decentralized. It doesn't need a lot of hardware like others, other blockchains. So you've got an old computer, 15-year-old computer, so on. These exist everywhere in the world. You just need to add a hard drive, which is a terabyte in size.

You get those for $40, $50 now. And that's enough to run a full node. You can then download the Nodal software or the Umbrell software and use that instead. You also don't need the people running the federation don't need to be in the same place as the people in. They need to be the same place from a from a relationship point of view. They need to have close concept. They don't need to be physically in the same place. So, for example, members of the diaspora who are sending regularly large parts of their paychecks back to their friends and family in the global south are ideal candidates for running guardians because they are in the West.

they're already given money to these people. So if they're giving money to them, they're not likely going to want to steal the money that they've just given to the people they're protecting. And they could, for example, buy a noddle or buy an umbrella or set up a rastly blitz and create a federation amongst themselves

for all of their family back home. And the family back home just need to download a piece of software, scan a QR code, And I signed up knowing that these people, pulling them on protecting me. Yeah. Unreal. Bobby, I know you're active on Twitter. So we'll have a link in the show notes to your Twitter profile.

If people have questions coming out of this interview, I'm sure you're going to get a lot of questions. Give us a handoff to websites. I know there's the fedamint.org website. Is there any other websites that you want to highlight or timelines for various things that you guys are going to be rolling out? Thank you very much for that. So first of all, if you want to find out about the base protocol that this is this sort of third pillar of the Bitcoin and Opersource ecosystem, go to Fedimint.org, and that's FEDI-M-T-M-T-Og. If you want to find out about the new mobile app that we're producing, we've got a site and that's FedI-X-Z. So F-E-D-I-X-Z.

It's very simple as that. And then if you want to find out about my, we have Feddy Mint on Twitter. If you want to follow Feddy Mint on Twitter, there's a telegram group called Feddy Mint as well, which is very active and that's really interesting conversations. And then finally, if you want to hear my musings on Twitter, my occasional musings, you can find me at Obie on Twitter. So just Obi, I, because I was a very early Twitter user. So that's my Twitter.

That's hard to get, Obie. Yeah, that's really hard. It's a free letter Twitter handle, yeah. And I bet you Disney would love to own that handle, by the way. I get a lot of offers, but I'm comfortable keeping being the one Obie, the OB one. So in other words, anyone who's interested buzz off. Yeah, I think they'd give it up many years ago. I'll tell you what a pleasure. What a pleasure talking with you, sir. Thank you for your time.

I learned a ton. I am so excited about what this means moving forward. And I have no doubt that what your building is going to be a game changer and something revolutionary to add to this revolutionary technology. And can't thank you enough for coming on the show today, Obie. Thank you very much. It's been a pleasure talking to you. I really enjoyed it. I think you have, well, I personally think of it's an incredible energy. It's really enjoyable talking to you. You would be the ideal person as a guardian, you know? I appreciate that. I would be very comfortable being part of the guardian group that I would be using for everybody. Likewise, sir. Likewise. All right. Thank you for your time, Obie.

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