We Study Billionaires - The Investor’s Podcast Network - BTC113: Bitcoin Lightning Tackling Spam w/ Vida Founder Lyle Pratt (Bitcoin Podcast)

Starting point is 00:00:00 You're listening to TIP. Hey everyone, welcome to this Wednesday's release of the Bitcoin Fundamentals podcast. On today's show, I have Mr. Lyle Pratt, who's an entrepreneur of multiple successful businesses. He's a telecommunications and spam expert and fellow Bitcoiner. On today's show, we talk to Lyle about the intersection of the Bitcoin Lightning Network and how it offers this amazing solution to the worsening spam and bots that litter our social media and phone calls. This is a fascinating chat, and Lyle is just a wealth of information on this particular topic. So with that, I hope you guys enjoy this conversation with Lyle Pratt.

Starting point is 00:00:41 You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. Hey, everyone, welcome to the show. I'm here with Lyle. Lyle, welcome to the Investors podcast and Bitcoin Fundamentals. Howdy? Yeah, I'm happy to be here. I'm a long time.

Starting point is 00:01:09 I'm a long-time follower of your feed because I capture tons of valuable technical knowledge from you, sir. You are a wealth of information. I really mean it. You are a wealth of information and you've built things in the past, which is where I kind of want to start off with the interview here. You were the founder of a company called Better Voice. You sold this in 2016, but I'm real curious. I love hearing entrepreneurial stories. what sparked the interest or like, how did you think of this idea?

Starting point is 00:01:44 What was the timeline of when you started it? Like, talk us through the foundation, like you founding this company. Yeah, I guess maybe we should back up even a little further. You know, I've always sort of been interested in entrepreneurship and always sort of been, I don't know, ourselves taught programmer. And, you know, even when I was in college, I ran a little startup, a way. website called BG Pro. At the time, it was a, it was a place for people that made mods for video games, you know, and exclusive content, sort of custom content for video games and things like

Starting point is 00:02:20 that to share their content with the world. And, you know, we even had ways for them to monetize that content. We would let them, you know, include their own AdSense, AdWords API key so that, you know, any downloads or visitors on those pages, you know, would earn them money. And, you know, We grew that myself and Noah Hay is actually one of my co-founders at Vita. We grew that to get to about a million and a half unique visitors a month. Hold on. Hold on. What age?

Starting point is 00:02:45 What age were you at this? This is VG Pro. What age were you when you did this? Yeah. I guess I was in college. Noah was a college roommate, you know, so I've been kind of tinkering with websites and, you know, building stuff like that for quite a long time. I guess long story short with that, you know, we sold that.

Starting point is 00:03:04 Noah moved out to the Bay Area and did more startups. I completed a couple of master's degrees at school and ended up moving to Texas. And then we get to the part where I decided to start Better Voice. And in fact, it started as a completely different company with a completely different idea that we ended up committing away from, as you often do when you're, you know, attempting to provide value to the marketplace, which is, you know, what a startup is, you know, fundamentally. But with Better Voice, it was when Twilio, you know, the Twilio APIs, I don't know if you know what Tullio is. I've heard of it. They'd explain it because I can't remember what this. They were sort of one of the first products that let you programmatically control phone calls and send messages, you know, and construct, you know, voice IVRs, which are like voice phone menus, you know, and things like that.

Starting point is 00:03:56 They got started that I guess originally at about 2008, 2009. So I was sort of hyping tinkering with their APIs. And I guess long story short, we built one of the first online only, sort of exclusively online small business phone systems. And we built it originally on top of Tullio's API. And at the time, you know, there was a ton of new businesses coming out

Starting point is 00:04:23 to sort of serve small and medium-sized businesses. with these internet, you know, phone systems. And we got a lot of interest from sort of smaller and regional players that had, they were serving regional, you know, business clients, and they wanted to be able to offer their service online and, you know, offer these slick user interfaces and mobile apps and stuff for interacting with your phone system. And so we got into essentially doing white label stuff under BV. So we would power, you know, some other person's business with our platform.

Starting point is 00:04:54 but we quickly sort of figured out that Fulio's API, Tilius pricing, was too expensive to scale sort of the white label, more wholesale-ish business. So what we did is we ended up cloning Tullio's voice and messaging API functionality on top of an open source stack. And it was definitely a get-your-hand-your-hands dirty and the VoIP and Telcom world, you know,

Starting point is 00:05:21 with SIP and all the rest of the VoIP protocols. But it ended up working out really great because in 2016, the largest wholesale telecom provider in the United States called Intelliquant. At the time, they were a public company on the NASDAQ. They acquired our company for our API stack. So essentially, they wanted to be able to compete with Twilio in that space as it was growing massively. Tuolio IPO, you know, it was a huge IPO. I guess long story short with that was that Tullio ended up becoming one of Intellectualent's biggest customers. you know so I ended up getting to work a lot with Tullio and in that industry over the five years that I worked for them after they acquired better voice.

Starting point is 00:06:04 So you had mentioned very quickly there, SIP, which for people that aren't familiar with that terminology, it's session initiation protocol. This is a signaling protocol used for initiating, maintaining, and terminating communication sessions that include voice, video messaging. a protocol, right? So here you are very early in your career, getting experience working around a protocol. I'm curious for SIP, this protocol, how long had that protocol existed before a lot of this VoIP calling took place? Was it years, decades before? Years before, but it got popular as VoIP got popular. And SIP is essentially, you know, the most widely used protocol for Andal A voice and video and messaging worldwide. You know, if you make a phone call from your AT&T cell phone and, you know, call like

Starting point is 00:07:02 a Verizon cell phone, at some point that call is hitting, you know, a SIP powered network and that protocol is being used to sort of connect you to the person on the other side. It's very similar to HTTP. It's just as, you know, specific messages for setting up and tearing down, you know, phone calls and video calls and things like that. So in fact, some of the listeners might be familiar with HTTP 402, which is the payment required error code in HTTP. Dick has the exact same one, SIPP 402 payment required.

Starting point is 00:07:38 So back in the day, when VoIP was new, a lot of people had these ideas about how SIP was going to be used to sort of open up the communication, the market, and expand the communication market and all these infrastructure providers were just going to sort of accept traffic amongst one another, and prices would fall, which they did slowly over time, just not nearly as quickly as people thought. So the designers of these protocols, both SIP and HCTP, you know, envisioned a world where digital payments were going to be a thing.

Starting point is 00:08:13 It's just that nobody really expected it to take so long, you know, for it to happen. And even when Bitcoin came out, you know, it wasn't very useful for, you know, taking payments directly to serve HTTP requests or, or initiate phone calls or settle phone calls in real time because it was too slow. So fast forward in 2018, when, you know, the lightning never became real, you know, the first note instances were available for people to run. Suddenly, that future, that world was possible. And for me, at the time, I was working inside of Intellectuary on a big fraud and spam problem.

Starting point is 00:08:54 So, you know, people may not be familiar with this, but, you know, that company did billions and billions of minutes of call by M every month. And so you can imagine that Sharon and Sam is a giant problem, you know, for them and for the industry as a whole. And, you know, we were doing all sorts of things. You know, we were collecting data and training machine learning models and, you know, trying to spot this front. and spam quickly so that we could cut it off before it did $2 million in damages, you know, overnight. We would wake up and there would be, you know, death level fraud and spam that had been run through the network that, you know, essentially the company was on the hook for.

Starting point is 00:09:31 So at the time I was working on that and the lightning network was sort of becoming real. And a light bulb sort of just went off in my head, hey, you know, we can actually settle and build this and charge for it in real time. And if we just did that, all of the spam and fraud and abuse, or at least most of it, would disappear. It would become uneconomical. We could guarantee that every minute that traversed our network was paid for in real time without any risk. And at that time, it's sort of, I don't know, it's what led to me creating Vita and sort of getting into what I'm doing now. But it was sort of interesting to think, like, how would the white landscape and the telecommunications landscape

Starting point is 00:10:17 And the internet evolved, how would it evolve differently if we would have had the ability to do these real time payments from the beginning? It's very interesting. So, Liao, this is around 2017, the summer of 2017 when there was the fork, now we have the ability to do lightning. Were you a bitcoiner prior to that? Yeah. So, I mean, I've been a bitcoiner, I guess I would call myself a Bitcoiner since about 2014. I started doing a little bit of mining and getting interested in it after it didn't completely die from the MTGox, you know, crash and craziness. It was sort of like, okay, well, if it didn't die after that, then it's not going to die.

Starting point is 00:11:01 So I started sort of paying more attention to it and getting more interested. So it's been a bittern for a while, I've owned Bitcoin for a while. I guess I probably really, really got interested in after reading safety Dean's book. I'm an undergraduate degree in economics and I've always sort of been, you know, a gold guy. My grandfather was like a big, a big gold bug. You know, so I sort of had the seeds, you know, planted in my mind already.

Starting point is 00:11:28 But yeah, I guess when the lightning network became real, it sort of overlapped, you know, with the industry that I was in. And, you know, it sort of. set up, set a light bulb off in my brain where it's where I'm like, hey, I can, I can contribute to this. You know, I can, I can use my skills and knowledge in the space to, you know, help Bitcoin to help the Bitcoin community. So that was definitely sort of a driving force in me deciding, you know, to sort of go down this path to me. Get-in-lawful was just, you know, my lawn for Bitcoin, basically. I don't mean the backtrack a whole bunch here, but I, I love

Starting point is 00:12:06 asking this question to people that have founded a bit, a successful business, have sold a successful business. When you look back at Better Voice, what were the number one, two, three things that you learn from that experience? Like, just retrospect, like, that you hold core to who you are as an entrepreneur. What was, what does the thing that you learn? Yeah, I think probably the most important thing is just realizing that, you know, you can, you can really, you know, believe in something and believe that you're going to be able to do something that you haven't all figured out. And in reality, you don't. It's the classic, you know, this classic startup story of, you know, of a pivot, you know, a startup pivot. You know, you go into

Starting point is 00:12:54 something and you're just sure that you have it all figured out and that everything's going to fall in place, you know, and one domino is going to fall after another and you're going to be off to the races. But in reality, you know, providing value at scale is difficult, you know, and there's a lot of competition out there. And that's influenced what I'm doing today and how I'm approaching me today. You know, I don't have this assumption that I haven't all figured out. But what I do know is, you know, 10 years from now, the landscape of the world is going to be very different.

Starting point is 00:13:28 And if lightning is the de facto settlement rails for, you know, online. value, which I personally believe will be because it makes the most sense, then, you know, there's going to be an entire market available to provide value for at the time. And so I don't know exactly the path, you know, to get there. But I do know that it's going to be necessary and there's going to need to be experts in the field and there's going to need to be people providing resources and infrastructure and tooling for that field. And, you know, I guess to boil it down, you know, keep the big picture insight, have a big thesis that you're working toward, and don't get caught up in, you know, the details and, you know, get discouraged when

Starting point is 00:14:11 one path fails, just move on to the next one, you know, try something else. So I want to talk about Vita because I'm on this platform. I'm on your mobile app. I saw Jack Dorsey was on and I saw some other people who were on. I was like, what is this? What's he building? And so I downloaded it. and this is just, this is really neat stuff. So I'm just going to hold up my phone. I got all this shadow stuff here. But if people could actually see that, what I just held up on the screen, it says message me and it says request a call. And I have a rate set. I personally selected this rate for the message, the text message, and for calls per minute. And so if anybody wants to call me or text me, they can download this app, and then they can, if they really want to talk to me,

Starting point is 00:15:05 they can pay the rate that I set and you can set your rate as high or as low as you think your time is worth. And it's all over lightning. So if somebody talks to me for a minute and 30 seconds, that per minute rate is just immediately, it's being streamed. The money is being streamed as that calls happening. And same for the text messages. And you never give up your number unless during the call you want to give the person your number and you never give up your number for the text message either, which I think is just, you know, for people that are really guarding against their time and are, you know, have gatekeepers or whatever, whatever it is, it's just, it's kind of mind blowing to think that you can do all of this over an app and a completely decentralized money and literally stream.

Starting point is 00:15:54 the money. So that's the app. But I think your vision, I suspect your vision is even more than what I just described. So talk us through what your vision is for this. So maybe it would help for us to sort of step back and think about how things used to be when, you know, when phone calls were expensive. You know, back in the day when you made a long distance phone call, you didn't actually cost, you know, your money. And so you kind of, you know, chose, and you were going to do them. And funnily enough, spam wasn't a thing, right?

Starting point is 00:16:30 Your phone didn't constantly ring with these fake phone calls, you know, trying to sell you insurance for your, a car you don't even own anymore, you know, because it was uneconomical. And, you know,

Starting point is 00:16:42 back then, the telecom companies sort of reaped, you know, the costs and the profits, you know, from that costs. But if you sort of think about it, like,

Starting point is 00:16:52 why did the spam not exist? It didn't exist because there was economic disincentive. There was costs associated with it. But today, now that we have lightning and now that we can beam value directly to an individual directly over the internet, why should a network provider sit in the middle of that value flow? Why shouldn't an individual be able to set their own rate for their time and attention? Because fundamentally, your time and attention is a scarce economic good. There's only so much of it, right?

Starting point is 00:17:26 And depending on who you are, the demand for your scarce economic good, your time and attention, you know, can be higher or lower. And so just fundamentally sort of from an economic standpoint, the only way to allocate a scarce economic good to a market is the price, right? the price is what allows the market to function and allows the good to sort of be distributed to the demand in the market. So, you know, the concept of Vita is very simple, and that is to give individuals the ability to send a price on their time and attention. Today, that looks like, you know, some calls and messages and live streams. Tomorrow, maybe it looks a little different. Maybe there's other things that we let you, you know, price, other things that we let you price. But yeah, your description's great.

Starting point is 00:18:18 Basically, if somebody wants to get in touch with you, they pay your rate. They either send you a message or talk to you on the phone. Maybe they're watching a live stream. Maybe you're doing some sort of educational live stream or maybe you want to do some sort of AMA. But you're in total control over the price. And that lets you sort of have a nod to turn to either increase or decrease the amount of contact that you're getting. Because if you're getting too much, what do you do? you just raise your price until, you know, you hit market equilibrium for the value of the time

Starting point is 00:18:48 and the amount of it that you're willing to, you know, provide to the market at large, you know, and there's other sort of instances of paid communication, you know, Vita is not the first to do it by any means. I mean, you can think of there are services like, like, I don't know, only fans, perhaps. This is an example of one or intro.com. You know, there are other expert networks, you know, where consultants charge, you know, by the minute for their time and lawyers charge by the minute for their time. But there's not really a standard that makes it easy for anyone to do that about anything. And so, you know, Vita is

Starting point is 00:19:24 starting with this consumer product where we love people set a price for their time for phone calls, messages, and live streams. But ultimately, the vision is that the entire telecom network is going to work under this principle where you have individuals at the other end of, you know, some communication network that are setting a price to be able to contact them and all these networks are going to talk to each other and the value is going to flow through as the communication happens because it just makes sense. You know, that's the way telecom networks sort of work today. It's just that the value is settled like 90 days later. And, you know, that's why the, that's why fraud exists. It's because, you know, somebody gets access to some phone system or somebody can pump a bunch of traffic

Starting point is 00:20:11 through a network without ever having to pay for it because there's a settlement delay. So, you know, we're starting with this consumer app, but our vision is to provide value to, to, you know, the entire telecommunication space. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord. And every conversation you have is with people who are.

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Starting point is 00:24:16 sign up for your $1 per month trial today at Shopify.com slash WSB. Go to Shopify.com slash WSB. That's Shopify.com slash WSB. All right. Back to the show. So, Lyle, you're, I mean, you're an expert in. spam. You're an expert in how to defend against those types of things. You have a quote. You said, as you remove central authorities and sign up barriers, spam will become worse, not better. Walk us through

Starting point is 00:24:55 why. And as I'm saying that, there's a lot of people in our space in particular that's looking at the world and saying, we're kind of reaching peak centralization and we're going to start swinging more towards a decentralized world. So your quote is a little unnerving as you're saying it's going to get worse as we move to a decentralized world. But walk us through what you're thinking here. Well, I guess think about Twitter. So if we all know that spam and bots and things like that exist on Twitter. And Twitter is a centralized entity and they can exert whatever power, you know, and whatever filters they want on the spam bot problem, except it still exists, right? There's still utterly failing at it. Another example would be Gmail. For me, at least my spam that's

Starting point is 00:25:43 making it through Gmail's filters is getting worse lately. I don't know what it is, but I'm definitely getting more of it. So here we have these centralized platforms that have total control over what is actually reaching your inbox, what is actually reaching your eyeballs, and yet they're failing. So if we sort of just extrapolate a little bit and think about a decentralized set of infrastructure or decentralized social network where there is no centralized control or ability to filter spam and where there are no barriers, you know, or verifications, you know, or anything like that, where the only thing you need, for example, with us, you know, is to stamp a key pair, you know, and start sending messages. So, you know, the problem is going to definitely get worse because the ability

Starting point is 00:26:34 to actually do centralized filtering just isn't there. And we're already seeing Noster node operators, Noster Relay operators, think about ways that they can prevent spam. Maybe it's through PubQ White Lists, or maybe it's by paying to be able to access a relay. There's talk of doing appreciation of work attached to sending Noster messages. So there's all these sort of possible solutions for this. problem. But my opinion is that they're all sort of futile in the end because ultimately the value

Starting point is 00:27:12 of your time and attention is not zero. It's significant, right? It's significantly valuable. It's what the entire online economy runs on. It runs on advertising to try to get your attention, to try to get you to buy something, you know, to try to get you to take economic action that works in the advertisers' favor. And this is the same thing that drives the stammer's and pots, right? So there is this essentially a honeypot out there, which is our time and attention. And as long as that value is not zero, but the cost to actually reach you as zero, spam is going to continue to be a battle.

Starting point is 00:27:52 And, you know, I'm a little bit skeptical of things like proof of work, using proof of work share for messages and things like that, because it ultimately is going to come down to who is actually, you know, performing the work. Is it the relay operators? You know, are they're going to be an ostrac clients that actually perform some sort of print of work before sending the messages? But unfortunately, you know, those are still decentralized individuals or relay operators that are extending this proof of work and they're going to be battling, you know, centralized spammers and bots who have figured out, you know, some way to capture some portion of a user base's attention, you know, because ultimately it's profitable. That's why they do it

Starting point is 00:28:36 over and over again. When you, yeah. When you think of proof of work, doesn't a SAT just represent proof of work as a digital unit? I mean, a SAT is, you know, recycled truth of work, you know, and it's just as good of a filter. I just think that individuals should be able to set up price for their time. And it shouldn't be left to relay operators or other sort of middlemen. Like you as an individual should be in control of what it takes to actually send you a message,

Starting point is 00:29:09 you know, unless you're already following someone or unless somebody's already in your contact list. You already have some other connection. Where I have trouble wrapping my head around this is from a direct message, like if I'm going to send you a DM, it makes all the sense. in the world how to assign a cost of that. Where it gets tricky for me on Noster, we had a whole episode on Noster two episodes ago. So if you're just hearing about this for the first time, this is decentralized social media. It's basically Twitter in a decentralized environment. You guys can listen to that podcast if you want to learn more.

Starting point is 00:29:42 As I'm looking at Noster and I'm using it, there's not much spam there right now. But I can only imagine what that could potentially look like in six months from now. how could I utilize a proof of work cost to somebody that's putting in comments? Would it be whatever client I'm using? I'm using Damos, right? So if I'm using the Damos client, I can set a bounty that if somebody wants to reply to one of my comments, they've got to post five sats. Is that how this would work?

Starting point is 00:30:13 You know, for proof of work specifically, you know, there's lots of different ideas. One is that, you know, perhaps clients would only show messages that pass up some sort of threshold. So you can imagine networking either for like real, you know, personal work electricity or, you know, via some sort of SAT threshold. So, you know, maybe the relay could attest that X SATs was sent to actually, you know, submit this message to the relay. And anybody's clients that, you know, had some threshold, they would only see posts, you know, that passed that threshold. So, you know, that's one idea. I think a lot of it is still sort of up in the air, and I'm by no means an expert on what has gained the most traction in the Nostrid community.

Starting point is 00:30:59 But, you know, I do ultimately think that, you know, running infrastructure isn't going to be free. Running relays is going to be free. If we want to offer a good experience to users at large, then, you know, it's going to involve somebody putting up money, you know, to actually run and operate. the infrastructure. And, you know, they're going to have to recoup costs and they're going to want to

Starting point is 00:31:23 discourage spam, just like anyone else. And, you know, in my opinion, we should keep it simple and rely on payments. You know, use the Lightning Network and saw the liquidity into the Lightning Network as we perform our, you know, social addictions, you know, online. Yeah, I'm just trying to think through it. I wish I was smarter on it or if somebody out there is listening and you've got a good source, on some of these monetization to demonstrate proof of work in order to cut back on the spam. I'd love to see what you got.

Starting point is 00:31:55 Share it in the comments of the Twitter release of this episode or whatever. They'd be awesome. How does some of this happen at scale? I know you're talking about the relays. So explain a relay, a Noster relay, and I know we're going heavy in a Nostre right now, but I think it's representative of a decentralized way to share. and to guard against people's time in the future because right now social media is like you said, it's zero cost. And everybody using that is literally getting nothing.

Starting point is 00:32:30 I mean, they're just getting bombarded with spam. My God, my account is borderline unusable at this point because of the spam. But when you do this at scale in a decentralized kind of way, do you see the relays as kind of the belly wicket or do you see it more at the user level? So perhaps we should step back a few years and think about email. You know, email used to be a lot more decentralized than it is today. You used to be able to run your own email server pretty easily. And, you know, you could actually still communicate with people. You know, your email server wouldn't get blacklisted.

Starting point is 00:33:10 You know, you wouldn't get an undated with spam. But slowly, you know, that problem has gotten worse. and worse and if we sort of look at what happened, most people that, you know, have an email have moved to sort of these centralized email providers. You know, one example would be Google and Gmail, you know, Yahoo. Unfortunately, it's almost impossible to reliably run an email server anymore. And what is the reason for that? What drove that to happen? The answer is spam. Spam drove it to happen. And, you know, these big centralized entities have implemented all these sorts of blacklists, you know, across the ecosystem. And they only accept, you know, email if you have

Starting point is 00:33:55 these certificates and or if you're, you know, this known IP. And, you know, just to boil it down, spam has sort of centralized email. And so if we sort of take that example that already sort of happen and think about Noster, well, you know, today you can run a Nostra relay very easily, just like you used to be able to run an email server. And, you know, anybody can connect to it. Fortunately, clients can sort of choose, you know, which relays they're going to connect to. But unfortunately, bots and spammers can do the same thing. And so I think that, you know, we're going to see a world where users migrate to relays that are better managing spam. And if we leave it, you know, just to sort of relay operators to implement their own mechanisms and things like that,

Starting point is 00:34:45 unfortunately, that's going to potentially be a centralizing force in the Nostar ecosystem, because, you know, some are going to be better at it than others. But, you know, if we could come up with some standards about how to manage it, such that all relays sort of have access to the same technologies, perhaps that is some form of work, hopefully that is some form of, you know, stats payment or lightning payment, then we won't ever had the problem at all. We won't have these centralized pressures on the ecosystem, and we won't end up captured like email. So, you know, I sort of agree with you. You mentioned this earlier, but, you know, paying Satoshi is reusing Bitcoin's proof of work that already happened. You know,

Starting point is 00:35:29 there are some technical downsides. Like, you know, one would be that sending Satoshi over the lightning that requires some liquidity. Somebody has to have liquidity somewhere. So that's sort of a prerequisite if you're going to make all Noster messages, you know, requires that payment. That could be a downside. Whereas something like raw proof of work, you know, actually, you know, spinning compute cycles doesn't have that prerequisite. You know, so there's, there's lots of pluses and minuses. I'm following it closely. And, you know, I think the community is going to take the problem seriously as the problem gets worse. And I think that, you know, the right decisions will be made and will be able to dodge the bullet of becoming, you know, email 2.0. In reference to the Lightning

Starting point is 00:36:17 Network, transforming communications networks, you have this quote, you say, if Lightning becomes the de facto real-time settlement network, then Global Telek, running on Lightning behind the scenes is inevitable. It just makes too much sense. Is there anything beyond what we're talking about with the decentralized social media that you find this also to be true. Yeah, so the global telecom market, I mean, it's a giant market that has tons of moving parts and players. And, you know, I don't think that it will look exactly like it does today. I think it'll be, it'll be more open. It'll have more transparent pricing. It'll be more decentralized and less dependent on huge monolithic carriers. But what I think some people don't

Starting point is 00:37:03 quite understand is that the communication experiences that we're all sort of conditioned to like and that we're used to today, they can't all be enabled and solved with, you know, strict peer-to-peer flows. Individuals and businesses are going to have to provide infrastructure very similar to, you know, the way individuals are providing Noster relays. You know, the Noster experience couldn't happen if it was strict peer-to-peer, if they were. wasn't the, if there weren't these, these relays in the middle, you know, providing the functionality that they provide. And, you know, if you think about it, it's kind of like email, you know, the original PSCN network, the public switch token network, it didn't start centralized.

Starting point is 00:37:50 Back when the, you know, the telephone was invented, it started, you know, very competitive. And it was a, it was a land grab. And it became centralized over time due to the misaligned incentives and due to the inability to actually have value, traverse these networks as they were used. And it also became centralized due to customer demands. You know, customers wanted to be able to call anywhere, you know, and longer, further places away, you know, without as much cost. So I think fundamentally, you know, the Lightning Network is going to sort of change the landscape of Telecom. And because we can now transmit value in real time, these telecom networks are going to adopt the technology because it fundamentally does two things. It lets them expand

Starting point is 00:38:38 their customer base. It lets them reach a wider base of customers with zero settlement risk, whereas today they're very, very restrictive about who they let into their networks, who they let access their networks because of this huge amount of fraud and settlement risk. From a business standpoint, I'm curious if you're working on a Vita, API that they could then harness and use that makes it much more turnkey for them. Is that part of the business plan? Absolutely. So, you know, we actually built our API first.

Starting point is 00:39:15 Yeah, so, you know, we do have a full-featured API behind the scenes that, you know, you can use to make these phone calls or send these messages or host these live streams. In fact, a Vita account can be used to paywall any SIP destination today. So, wow, to use a, you know, example of like a call center, let's say in the Philippines or something like that, maybe somebody, you know, there's a whole call center providing customer support about, you know, some software or something like that. Technically, as of today, they could paywall the entire call center or a stiff destination with a Vita account. So, you know, the API does exist. We haven't really productized it well yet, but our entire, you know, all of our consumer apps are built on top of our API. So, you know, we do think that the, you know, the longer term and bigger vision, our API is going to be an integral part of that.

Starting point is 00:40:07 And providing services, you know, to these enterprises is going to be an integral part of that. In fact, we're already talking to a telecom in Mexico that has a, you know, a concession they can issue Mexican phone numbers, Mexican DIDs is what they call them. And, you know, they have, they have direct access into telemix, terminate calls all over the Latin America. And, you know, they're very interested in using our API to use the Lightning Network to accept international traffic and route it into Central America with zero settlement risk. So, you know, it's already becoming a reality. You know, a lot of our time has been spilt on these stints on building these consumer apps. But, you know, the bigger vision is, again, to provide value to the entire telecommunication space and do more showing rather than telling about how the Lightning Network,

Starting point is 00:40:56 can be used to just improve the industry. Do you find that maybe it's a little bit slower for these companies and these service providers to pick up on it simply because the cost that's being actually paid for this spam is at the user's level and it's being paid with their time? Or is there other costs here that would make it much more enticing for them to start rolling this into their service plan? Yeah. Well, I mean, I think you, you know, you touch on a very important point. And the incentives in the telecom industry are misaligned for stopping Sam. Because, you know, if you are a wholesale operator, you know, what metrics are you looking at?

Starting point is 00:41:38 You want total, you know, minutes you're passing through your network to go up. You want that number to go up, right? So what is Sam? It makes that number go up. Yeah. Right. So the, you know, the government, there's a lot of sort of push in enacting, you know, new rules. There's something called stir-shaken. It's just kind of like SSL for phone calls

Starting point is 00:41:58 so that they can trace the source and destination of calls, try to cut down on spam. So there's a big, there's a big battle going on, but the truth is that a lot of telecom providers don't have any incentive to actually stop it. But let's pause and consider, you know, what would it be like if all of the downstream subscribers set a price for their time? Exactly. And the, and what if the, the network providers can actually take some portion for facilitating, you know, the phone call. That's right. That in and of itself would slip the incentives. It would incentivize the telecom operators to only give you calls that you're actually going to answer, right?

Starting point is 00:42:40 Because that's the only way that they got paid. So I think, you know, there's a lot of reasons to give individuals the power to set their price. because it realigns the incentives of all sorts of things. The telecom networks, you know, the advertising space, the advertising and marketing space. You know, think about the incentives right now. If you are a platform owner like Facebook, you know, they are incentivized to put as many advertisements in front of you as possible because they are monetizing your attention. They are monetizing your eyeballs and you get nothing for it, right?

Starting point is 00:43:17 You get to use their product, you know, perhaps that's something. but you're not reaping any of the rewards for the value of your time. And, you know, they even know, who's time is worth more. They have a, you know, they even provide APIs to make it easier to target ads at specific people because, you know, companies know that some people's time is worth more than others. So if we could just put individuals in charge of their own prices, we would change the incentive structure for pretty much everything online. because, you know, the incentives would be to give you things that you actually want.

Starting point is 00:43:57 Because otherwise, you know, why would I, why would I waste money? Why would I waste capital showing you an advertisement that you're not interested? And why would I waste money calling you and, you know, talking to you if you're not going to listen to me and you're not interested in what I'm, you know, what I'm saying? It's so, it's so bad. I mean, Twitter, I just got a message for Twitter Blue that they're raising the price now to $11. and I think the ads, I think the ads are like 10x what they were before Elon came in. The ads are insane, right? And they're charging a fee for this.

Starting point is 00:44:34 And it's not any better. The spam is just as bad, if not worse. So, Elon's got to recoup about $30 billion and overpaid, overpaid socks. You kind of run into an issue with like if people were going to set their price. you kind of, like, I'm thinking of it from like the phone company, like let's say the phone Verizon or AT&T is like, pay an extra five or $20 a month to have reduced spam to your account. So I might be paying for that service, but maybe my neighbor isn't willing to pay the five to $20 for that service.

Starting point is 00:45:09 It's something that they would have to apply across all the lines collectively, right, for that to really, because I mean, it doesn't require much. If you put a five cent, one cent or if we're talking sats, right, you put a really small bounty on connecting the call, you're going to stop the spam immediately because they're trying to do it at scale and you run out of money real fast, trying to pay those fees at scale. But you have to have everybody on board. And I think that's where it's the, it gets tricky for these service providers. I'm assuming that's correct logic or do you think you could do it individually where

Starting point is 00:45:47 If I'm paying $5 a month, then I'm going to be protected from these spam calls. Yeah, there's various ways to do it. And Verizon of AT&D do have, you know, extra services you can pay, you know, to enable some sort of spam blocking. But unfortunately, you know, if you're going to try to approach it through heuristics, you know, you're going to essentially limit access to someone. And the way they do it today is that they require that you send your calls into the network. This may be a little bit of a tangent, but they require that you send your calls into the network with a special certificate so that they can know that you're a legitimate person and not a stammer.

Starting point is 00:46:30 So it's like a blue badge. It's like the Twitter verification or something. It is kind of like a Twitter verification. Unfortunately, you know, the organization that's responsible for granting those certificates, it's like a big racket. Yeah. It's essentially a tax on the entire. ecosystem. So, you know, what does that mean? It means that, you know, it prevents people from making calls that could be. And it lumps them in with all the bad actors, you know, kind of like

Starting point is 00:46:58 operating your own email server, you know, and that being impossible. But what you're saying is, is true. Like, if we were to use SATs and if you were to set a rate for your time and I were to set a rate for my time, you know, what would the experience be like for somebody that hasn't opted into this before. Would they have to, you know, top up some wallet? You know, perhaps that wallet is controlled by their carrier. I don't know. There's quite a few options.

Starting point is 00:47:24 Would they have to link some wallet to an account, you know, perhaps? But ultimately, they're not going to be able to call you unless they sort of opt in, you know, by funding a balance somewhere. So that is a problem. And we're thinking very hard about that too. Like, how do we pay while your normal cell phone number? You know, your actual cell phone number without. having to give you a new one that is paywold only.

Starting point is 00:47:46 So how do we pay while your normal cell phone number, but let your doctor's office calls come through? You know, only paywall the stammerous. Yeah, it's a difficult problem. You know, there's not very easy answers.

Starting point is 00:47:59 That's why we haven't, you know, started with that version of the product. But, you know, we are thinking about it a lot. And we actually are looking forward to, to, you know,

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Starting point is 00:51:38 All right. Back to the show. person online that wanted to ask you, what I thought was a great question about decentralization. They said, if 90% of nodes are L&D, how do we keep the protocol decentralized permissionless because that's Lightning Labs and they're a company and they need to have profits and they need to demonstrate to their shareholder? What are your thoughts around that being such a high number? I think about it pretty simply. I mean, I think that Lightning Labs has achieved the market share that they have through L&D by offering a good product. And, you know, L&D got a lot of adoption when they released key send early.

Starting point is 00:52:20 I don't know if folks remember this, that, you know, L&D was one of the first lightening node that could do key send payments, which was essentially invoice list payments. This was before AMP came out. But it was, you know, you can send value directly from one node to another instantly without having to go through a typical lightning invoice process. So that would be an example of, you know, they released a feature that the community really liked and it drove adoption on L&D. And, you know, they've continued to do that.

Starting point is 00:52:50 Now, could it be a future problem that the lighting nodes that people are running are too centralized? You know, we just saw a few weeks ago that there was a problem that arose from it. There was a bug in L&D and it took down a good portion of the nodes out there. So it's definitely not optimal. but I'm not super doomy about it, you know, over the long term. Mainly I think that, you know, the lightning ecosystem is still very young. There's still plenty of opportunity for, you know, any other note implementation to gain traction. It's not, you know, there's not a ton of switching costs, you know, for swapping over to a different node implementation.

Starting point is 00:53:31 Not a ton. There are some, for sure. If you have a lot of, you know, liquidity routing into a node, it can be sort of a pain to migrate down. those channels and liquidity and the people that have open channels to you over to a different one. But it's not a huge deal breaker. So I think that over time, you know, competitive forces and market forces and economic actors in the space are going to make rational decisions, you know, that are in their best interests? And, you know, I suppose are there, you know, doomy scenarios where the entire Lightning Network is centralized because everybody's running an L&D? I mean, I guess I'm just skeptical that it's going to turn into a really big problem.

Starting point is 00:54:13 I think odds are that, you know, Eclare or Sea Lightning could come out with a new feature that drives a lot of adoption and the whole thing shifts, you know, seemingly overnight. We could look up a year from now and it'd be a completely different, different story. We'll just have to see. You enjoy Jiu-Jitsu. I'm curious. I'm curious. What parallels you see between Bitcoin being an entrepreneur and Jiu-Jitsu? Pref of work. As with most things in life, you know, most is a good one's come out of hard work.

Starting point is 00:54:54 Yeah, that's true for Bitcoin. That's true for building a company. And that's true for Jiu-Jitsu or any other martial art. I grew up doing various martial arts, you know, traditional martial arts. I have a third degree in Ishenru karate and grew up doing hapkido and taekwanda, all this stuff. But let's see, I found Jiu-Jitsu back in, I guess it was about 2015. It was when I first started training Jiu-Jitsu. And it was out there. I trained at Gracie Baja. I have a second two-stripe purple belt.

Starting point is 00:55:26 But, you know, the first time I was out there on the bat, I mean, I considered myself, you know, pretty good, you know, at martial arts, able to, you know, handle myself, perhaps, you had more bloody noses than most people, you know, in the world. But I just felt like a kid on those jih Tzu mats with like a blue belt, you know, some other kid, you know, was just making me feel worthless. It's totally, you know, powerless. And when you experience something like that, whether it's in business, you know, or anything else, you know, at least for me, like I wanted to get better, but I wanted to not, you know, not feel powerless and learn, you know, how to sort of thrive in this environment. And yeah, I guess the rest is history. I have been sort of accumulating injuries. It's just to me to pump a break so a little bit. I got seven screws in my hand here from jiu-jitsu injury. I just had my meniscus repaired last month. I've got, you know, neck disc issues. So I guess if I had some advice, I would say, you know, treat your injury seriously and, you know, treat your body with respect and, you know, don't have a big

Starting point is 00:56:37 egotistical attitude about, you know, taking breaks and, you know, keeping your health in mind. You said a comment earlier. I would suspect you would agree with this, but I'm curious if you would. you said earlier about what you learned in entrepreneurship is you have this idea of like where you think you're going to go. But then until you like sense your environment and you sense where you can create value or add value, you have to be able to move with that environment, right? I would imagine in martial arts, it's so much of it is you can go in there with a plan, but you have to be very dynamic.

Starting point is 00:57:11 You have to see what your opponent's doing in order to dynamically adjust. I would think that there's a parallel there. as well. Any others that you can think of? Yeah, I mean, I think you make a, you know, you make a great point. It requires focus. It requires sort of a focus goal in mind. What are you trying to get to, right? If you, if you don't have sort of a big picture that you're trying to get to or a goal in mind, then when these obstacles, you know, get placed in front of you and, you know, or a path just stops, you know, you can't go further down this path. You need to change course. If you don't have somewhere that you're going, you're going to start going backwards, you know, you're going to

Starting point is 00:57:49 start doing the same thing. You're going to start doing the wrong things. They're going to take you away from your objectives. And, you know, Jiu Jetsu is the same way. You have an opponent that, you know, has a very clear goal. You know, they're trying to choke you out. You know, they're trying to submit you. And, you know, fortunately, when you're on those maps, you have, you know, one goal as well, which is to do the same to the other person, or at least at the minimum, you know, prevent getting choked out. I like to joke. It's really hard to be stressed about anything when you're on those

Starting point is 00:58:19 jiu-s mats because you only have one thing on your mind, and that is preventing lights out. In business and similar, you know, you need this big goal in mind that you can continually work towards so that when an obstacle comes in, you just keep looking in the future and, you know, go around it.

Starting point is 00:58:38 It's all you get there. Don't lose sight of the thing that's actually creating value. Absolutely. Lyle, I would think that for you, when you're looking at Bitcoin specifically, it would be much easier to tolerate the price volatility because you're looking at the tech and you're seeing how it can be applied and how it can achieve a network effect because of the benefit that it gives back to all these people that are having their time robbed from them. What else, if you could just, because there's a lot of people that listen to this show,

Starting point is 00:59:14 that are investors. They're looking at it from an investing lens. Maybe they're a technician and they're looking at the price chart and they're saying, it's down hard. And it's a lot easier, I think, for a person like that to lose sight of what's actually happening behind the scenes and what's being built. What are your thoughts on that? Well, the Lightning Network, let's just start there since we've been talking about it quite

Starting point is 00:59:38 a bit. There's nothing out there like the Lightning Network. You know, no other token can reach its scale. You know, it's actually impossible for anything else, you know, to reach lightning scale because you simply cannot scale to what the world needs on a layer one. You know, you have to have this layer two architecture that actually introduces a lot of complexity and complication, you know, into deploying it. Fortunately, Bitcoiners, you know, like to do things right.

Starting point is 01:00:10 And we've taken the hard path of building the life. network like it should be so that we can, you know, reach the scale that the world is going to need. You know, so if you're a, you know, you're somebody that's interested in Bitcoin and you're scared of the price, you know, like, oh, well, you know, maybe this was tulips after all. You know, I can assure you that it's not because the world needs the ability to instantly settle value. And the lighting network is literally the only way to do it at scale. With fees that are basically nothing. Yeah, with fees that are basically nothing, you know, at least today, but always will be, you know, even a fees increase.

Starting point is 01:00:49 They will always be more competitive. They will always out-compete, you know, some other layer one, you know, style solution. So in my opinion, you know, the reason why, like, I'm building Vita and building a company that, you know, is sort of hitching its, you know, its wagon to the lighting network. Because I do believe that, you know, the world is going to be using lightning in a much bigger capacity. over time because it makes sense. You know, I happen to, you know, think that I understand it perhaps a little earlier, but eventually, you know, much more people are going to understand it, much more people in

Starting point is 01:01:24 the Tocom space and the social networking space and, you know, money transfer space. Everyone's knowing to get it eventually and, you know, Bitcoin's still going to be around and it's still going to be growing and people are still going to be building. Lyle, I really enjoyed this, learned a ton from you, have been learning a ton from you for years now following your feed. Same. Give people a handoff to the app, to anything else you want to highlight, and then also your Twitter account.

Starting point is 01:01:54 Yeah, on Twitter, I'm at Lyle Pratt, my name. I guess you can find me on Vita, vita.orgia.com page slash Lyle Pratt. If you want to reach out and talk to me, I'm up 21, 21 cents a minute or message away. You can get direct access. Yeah, but, you know, give me a file. Hello, would love to talk. You know, again, Preston, thank you so much for inviting me on the show. Huge fan.

Starting point is 01:02:18 You know, probably listen to every episode and have for a long time. And cheers to all the other listeners out there like me. Thanks, Lyle. This was awesome. If you guys enjoyed this conversation, be sure to follow the show on whatever podcast application you use. Just search for We Study Billionaires. The Bitcoin-specific shows come out every Wednesday, and I'd love to have you as a regular

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We Study Billionaires - The Investor’s Podcast Network - BTC113: Bitcoin Lightning Tackling Spam w/ Vida Founder Lyle Pratt (Bitcoin Podcast)

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