You're listening to T, I, P. Pay, everyone.
Welcome to this wednesday release of the bitcoin fundamentals podcast. This episode is brought to you by river, the place that I personally go to securely invest in bitcoin with confidence and with zero fees on today's. I have one of the most talented developers in the bitcoin space with mister roy shine fold.
Roy is the C E. O and founder of breeze, which is the premier business enabling the interface of the bitcoin lightning economy. During our show today, we talk about roy's point of view that in order for big winter remain truly decentralized and open, IT not only needs to deliver on its store value properties, but IT also that needs to be used as day to day money. This is an important conversation and one that helps to listen to truly understand the importance of the lightning network sitting at the center of gravity for the bit in network. So without for the delay, here's my chat with roy.
Celebrating ten years, you are listening to bitcoin fundamentals by the investors podcast net now for your host pressed in pesh.
Hey, everyone welcomes the show on here with the one and the only roy shine field. Welcome to the investor's podcast in between fundamentals.
Thank you for having me interest.
right? So you know if people don't know, yeah i'm just going to i'm going to shoot them straight here. In my opinion, I think you're one of the best developers in the entire space. I ve had numerous opportunities to talk with you in person.
And every time I just kind of walk away with just how clear you're thinking is, there's a couple developers out, their engineers that aren't just talented devis but are greater explaining things and kind of seeing A A vision of where a lot of this stuff is moving in the future. So where I want to start off, you have a company called breeze and it's on the lightning network. Uh, you're doing payment processing.
But the thing that I want you to kind of a start off talking to the audience about is really your vision. Like where's this all going? We talk about the lightning network all the time on the show from a payments processing standpoint, how our vendors going to interact with this.
There's been a lot of comment and debates as to the how robust and reliable the lightning network is. So somebody this building in this week, where do you see this kind moving and evolving in the coming five to ten years with respect the lightning network? And then you, as entrepreneur and builder with breeze, talk a little bit about the mission of breeze.
okay. A easy question to start me off. There's a lot of back. H, so let's let's take a stay back and can try to understand what is is that freeze trying to achieve. And it's really about evolving be going to be a global currency that that's basically mission.
If we talk about in this time, things that you are talking about like ten, even twenty thirty years, let's let's talk about one hundred years, what will happen in one hundred years? Uh, we think there are two options basically, uh, we think the world, we will have a global currency. But there are two options on on the global currency that will be used in the world.
One option is CBDC. One global currencies that is control by an entity. We don't know like which exactly is gonna the ruling entity, but there will be an entry, the government, this currency.
And the second option is decentralized currency. We think betwen has the best chance of being this decentralized the currency. yes. So when you talk about vision, debris mission is basically to help between evolve to be in a place that he will be able to perform the task of a global currency. And that's where we had IT.
And everything that we do in breath is to make sure beat coin escaped in performing the task of being a global currency. And it's not easy because bitcoin is based on the blockchain. The bit on technology is based on the block chain.
And block chains in general don't scale. So how can you evolve bitcoin to a place that he will be able to perform the task of money? We tend to call medium of exchange. And there's a lot of lot of that people kind of confused medium of a change with the emergent adoption, like I think already be kind is a tremendous market change.
But in order to get to a point where it's widely accepted by merchant, we need to scale bit con in order for bit abuse by at least two other magnetites that is being used right now. We started the breeze six years ago with the like, the emergence of delighting network, because we think the best way to scale bitcoin is by using big coin, meaning, like me, network is an extension of bacon. IT uses bitcoin as a very acid and IT provides a level of capability that IT can be achieved on the biton, mainly on the biton and IT works.
There are chAllenges, as you've mention, and there are inherent problems to the light network, the ten, the user observance, mainly the what we call the inbound liquidity problem. We can talk about that if you want, extend on that later. But another point of fortune is also in the fact that he doesn't direct with the change from time to time.
Many in order to on board to the lighting network, you need an on chain transaction to happen. And sometimes channels get close. And when channels get close, you need to interact with a change.
And every time users interact with dimension, it's a cause of friction, is because the chains are slow and the chain are cost h. So if fees, uh, our high IT means that there is a, there is a cost to be paid. I think we've done a lot specifically at, but generally also in delighting ecosystem in the past six years. I don't know if people remember how I can looked like six years ago, but I remember myself like in the big on conference in berlin trying to pay for rebel using lightning and IT took, on average, took us thirty times and to get .
a payment thirty twice.
thirty twice. Yeah, yeah. I think IT was one of thirty or one fifty tries to get the beer spelling in this happy going conference. And today you don't see that. H, no, we're not in a place where we have ninety, ninety percent reliability.
We have around ninety to ninety five percent damage reliability, which by no means is good enough, but it's likely used by millions of people. The largest exchanges, the already like best in recent, all the major changes sliding. I think I can be really some statistic few months ago that six point eight percent from all the big and devoted are done using lightning oh wow. And it's going .
to yeah that's .
we're looking about definitely a significant number. There are other statistic. I think O K, X are reporting seventy k of active lighting users on the exchange.
So I didn't took the world. But I think one of the mistakes that some people have done years ago is to set to the wrong expectations of what liking is. I think he never the less we've did achieve the next level in the foundation that we feel.
Lighting is a foundation which is remarkable, and millions of people are using lightning. And I think we are ready to use lightning as a way to scale, beat, coin and bring to the next level. And the way I see now, and I think I have a different vision that then the vision that I started, brees, I think liking is gonna at the common language between and users, enterprises and sub networks, meaning we're starting to see sub networks evolve.
That brings speaking to end users, what we call the last mile solution. So we see solutions like fade, and we are seeing solution like a cash solutions like cash is and we're starting to see arc evolve and we're starting to see many big one layer two. I think all of the self ness works gonna speak lightly, like gone to be the interpretation al language between all the sub networks. So lighting is here to stay.
Yeah, I really like that last point. And I think that last point is sometimes lost on people because they see e cash, they see feet or any these other ones you're talking about. And they might not understand that those other networks are dependent on lightning being the second layer.
If you want to call those third layers or whatever, I don't know what the correct terminology would be, but they're really dependent on lightning being that middle road between where they're at, acting in a very high frequency kind away, but requiring more trust in bitcoin layer one, which is store of value, settles every ten minutes, a lot more robust security set up required and in all of the things. So I think that, that such a key point before we go into further, you have this amazing article that you recently wrote. This went out on between magazine.
The name of this article was bitcoin in's false economy between store value and means of exchange. You are using a term. I want to clear up some terminology for people that are listening to this. You were saying the currency.
And when I think currency, I typically equate IT with paper money or something that happening at a very high frequency, like the money that you would have in your wallet is a currency is, you know, we can get into the baking, which is really mutilated in the difference between currency and money, because these are the two terms that I think are really important for people wrap their head around. And we're talking about money. Typically, we're talking about something that has some type of proof of work or some type of backing to IT call IT gold.
Like I think nobody would disagree that gold is money either. It's actually salable, and you can use IT as a form of currency. And you read a little bit about this in the article.
IT gets a lot harder because in order to make IT more salable, you really need to kind of write a paper currency on top of IT because it's just so it's not portable. That's a Better way to put in. But these two terms, currency, which is high frequency representation of money and then you have money itself, which is this proof of work back.
And with bitcoin, we have something that has the potential and is both of these things simultaneously with respect of being able to spend IT at a very high frequency way. But we get into the technical chAllenges of doing IT, which I find really interesting because it's a representation of what we've seen throughout human history that right? And even though we've moved completely into the little realm, these things that existed in the physical realm of, you know, it's really hard to make gold sAiling. It's really hard to do, and it's mind blowing to me. The biton has the exact same chAllenges even though at the base where it's still digital.
So one hundred percent talk us through.
So like people are hearing that and they are saying, well, how is that even possible? Like what are you talking about? So how do we explain? And you do this in your article and you do a lot more in the article too, but let's start there to explain. Like why is IT also hard to make IT salable in a secure way? And like all .
that new ones, okay. Again, I want to back here, I think comparing to to goal. For example, gold didn't became gold as a clip asset until people started maintain gold coins. Now the question is my mind, as bacon reached at the point where we mean becomin as a coin, meaning is is easy enough, convenient enough to exchange bakin in a portable, divisible, fungible way. So let's take a back and look about story of value and medium of change because basically that these are the properties we're talking about then we talk about.
And that question you proposed, I think, needs just a touch more to IT, which is, can you do that on your own without some type of custody or assistance from somebody else, right? Can you transact in a way that it's just you doing IT? Or you are you reliant on some other person to provide a service for you to do IT?
So when I talk about big coin, when I talk about bitcoin, I talk about self custody bitcoin, everything, all the work that we do in please, is self a bitcoin, meaning you own the keys. You on the big coin, you're not relying on party or an interpreter or to do that change for you. When I say bitcoin, I inherently implicity say self in.
And I know it's maybe that's not the way people are using the term bitcoin and people equating the term bitcoin with self custodio. But when I say bitcoin, I mean self custodial IT on because that can capture late the value proposition of big coin, which is basically to our two pillar to the value proposition of the coin. One is the charity of bitcoin, the fact that we only will have twenty one a medium coining.
And secondly, the fact that you can do an exchange without relying on a third party or another empty or individual to perform the death for you at the exchange of and i'm justify i'm not in historian and i'm not an economic scholar, i'm justified. But when I say store value and when people say a story value, the word value exists in the sentence store of value, meaning people want two things. When they use something is a story value.
They want something that is durable, and they want to do something that will retain value. But the word value means the future change. You don't want to store something for nothing.
You want to store something because you know you're gonna sell asset later on. IT can be years. IT can be decades.
You might not even select, but IT means that you have the ability to sell something in the future. Again, there are different theory of value. There's the lab theory value. The value reflects the work that you put into something that kind of the martis theory of value. And there is a frequent use, the term interesting value there, like an value or something .
very warm buffer, like yeah, yeah.
yeah. I don't think there's something. I don't think that like I think people use IT without understanding there's no value without context and meaning of water in the desert worth like all the gold in the world in a very specific context.
So all value is contextual. What you understand that all value is contextual, you understand there's nothing like that. The in intrinsic value doesn't really exist. You don't use goal because you have the ability to make IT to a jewelry. Let's take a quick brick.
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Alright, back to the show .
that there's an idea that often discuss called the coincident of once, meaning if you're in a desert and you you know like ready to die and you need water to survive, and I have that water and I can somehow get IT to you, like the value is it's dependent on the situations. So some people, some people want an apple, the other person wants an orange. And if you have a bunch of apples and I have a bunch of oranges, and we know the value proposition, even though if you're looking at the energy that was required for you to that and for meta harvest, that was maybe the same amount of energy because of where we sit and because of the circumstances of our environment, the value changes dynamically for each one of us. And this is this a of once?
exactly? exactly. If all value is contextual, the only way to determine value is to exchange the asset for something else. Yeah, Price discovery is inherent to a store value.
Because if you have value and the value is contextual, and you want to trade IT someday in the future, you need an exchange to happen in order to discover the Price of your story again. And you see that we be going right now, by the way, like IT all the time, like beat going is being exchange for feat value. And we know the Price of becomin as the store value because because of its exchange with a with other fiat currencies.
And if you flip the going to the mediums of exchange side, you understand there's no mediums of exchange without some a portion of being able to retain that. If you have a good media exchange is is an asset that you can exchange for goods and services. H, but if he doesn't retain value, it's a bad, which you be big chance that you wouldn't use. I don't know where. Like the first, I love this ideas .
from a first principal standpoint, going back to what we are talking about with the apple and an orange, right? If I exchange, let's say, I have the apple and I give IT to you as soon as IT passes out of my hand and to hit your hand, let's just imagine that IT immediately becomes rotten. And you can't eat IT or use IT for any thing immediately just upon arrival because I didn't have some type of store of value properties. IT then becomes worthless immediately.
Exact exactly that cases, by the way. Yeah, where IT IT happens, for example, like you might be delicate. I give IT in the example of a cigarettes in prisons. Yes, it's something that is very it's about like they can they Carry after one or two weeks, but they use as a medium change all the time in prison in a very specific context. Of course, he doesn't extend outside of the prison wall and because it's a very, very poor store of value.
So if you do kind of in your head, you do the the diagram of the medium of a change on one hand and store of value on the other end. You see most of the assets that we use, our actually both are both store value and in the our media will change in bittle. I got tired of the discourse like I got a sick of hearing sale or talk about.
And people try kind of to push the etf narratives and their own stocks in order for you to buy bitcoin via proxy. So and they use kind of the the the store value medium of exchange generative in order to say, listen, this one isn't the media need direct access to be going. So if it's a store value, you can buy IT via proxy because you're not gonna sell any time soon.
Maybe, but he doesn't mean isn't bacon is a very is a very good medium change like bitcoin is being traded in the trillions of three dogs of dollars every year yeah and if you compared to the market cap of bitcoin, it's very one or two out of many yeah man, yeah yeah. I kind of I I wanted kind of to save my piece and be done with IT. And if people don't get IT OK or let them and continue with this narrative, but become is a great store value and become is a great medium of exchange.
Yeah, now let's go back your original question. If I am cleaning such a great medium change, why it's not being widely adopted by all the merchants? And why aren't we transacting bitcoin in our day to day lives? And and that's basically why I started to breeze.
And that's why we have a lot of work to do because I don't think we can add c gold coin movement, where we kind of transformed gold from something that is used in ceremonies and for in rituals to something that can be easily exchanged and transferred. Elected network is one piece of the business. So we definitely made a lot of progress in that regard.
But there are seal orders. Some of the orders are technical readers. Some of the hurdles are kind of, marco, related to the to the wider acceptance of big coin as a currency, and they fight that we're still having with regulating entities to accept big kind of a currency from A U extent point, I think would be there soon.
You ask me about like the five to ten a years vision. I think we'll get there sooner than that. I think IT would very, very easy to a transaction in bitcoin even without the pain points of lightning, which is the interaction with the main chain and the fees, the inquiry, the result of interacting with the chain.
So we will get there very soon. You can already see solutions like fadi and solutions like issues and solutions like art, and solutions like what we are doing weekly in. We are basically using block chains, other block chains in order to scale the they be on both blow chain. I think you'll see a redefine ration of solutions that are kind of targeting in solving the the last my issues and were very.
very close. I just want for the audience to understand the text to that last comment. So block stream has the liquid network, which is a federated, just like we were talking about fet earlier. This is another federation that you can pig in, pig out. IT comes with its own security chAllenges or whatever any federated system does.
It's a different trust profile. I think when you're talking about scaling a beats on, you're basically talking about compromising in the trust profile. And then you once you accept. Another trust profile and even like has some constraints that h you need to subscribe to a not in the terms of kind of the consensus, but in terms of you need to be online, you to valid to check your channels and to make sure that you're not being for all is a different transfer then using the main uh, change.
And in fact, did you accept the like the gardens, you need to trust the dies and you want you need to trust the and want de to to take your money with liquid we're talking about currently it's a federation of fifteen organizations and you need eleven out of fifteen function aries to sign a order for them kind of to steal your money. Next you were gonna scale the federation to in another older memory ude. So the trust for perfect and improve uh with the solutions like catch you're talking about the matter.
You need to trust the minturn not to see your funds in. Are you talking about ten A S C like they are? No, you need to trust the art. No, in some regards. So every left, my solution, including, by the way, other becoming layer tools.
I am using layer two in a very, very free form right now because there's it's a very controversial term, what what is a layer to, but i'm including for the sake of the sirico and including all the layer to even like those that don't have unitary exit from the chain. H, you basically trust another federation and other consents are already thing that he's different from the IT. And mention once you do that, we solve the last my solution in a different a way that is so using the lightning network only just talk .
about my own personal experience of running my own node, opening a bunch of channels, taking a self custody wall, IT and linking IT to my my node, and where I had all this liquidity that I created and then going out in conducting transactions on you layer to lightning bitcoin in.
And you had talked about earlier about the reliability being like ninety and ninety five percent of the transactions going through on layer two today based off of just global metrics. And what I found personally was that I was a little IT, was slow relative to just trying to find a pathway right when I was doing literally all the technical side. By the way, this was no task that I would ever want my mother to do, or my father.
IT doesn't scale like I could. I do IT, yep, did to take a whole lot of effort. IT didn't take a terrible amount of effort, but I feel like i'm somewhat technically inclined. And so I was able to do IT. The reliability wasn't great.
Was I able to conduct and of course, like I had a pretty good success rate, but then I go out there and then other people were providing this service on my behalf, call IT a wallet of soshi or I download the primal APP and there's a native wallet in there that using strike back end. And like all these other things that just really make IT easy to do, and I like, I just look a hundred dollars worth of sats onto this wallet that somebody else is holding. Where was I at? I was in mexico last week, and I was buying something in.
The person literally had we accept bitcoin here. And I went and IT. I download the primal APP.
I had the primal APP in my phone. I scanned IT, went straight through, no issue. And probably the transaction settled in a second or last first try.
So I think from a user standpoint, having gone through everything that i'd done you know before to then seeing that you can see how a bunch of people are just want to basically outsource this. I'm not too concerned if I lose one hundred dollars and there's a hundred dollars on the wall. If I ran out of money, I could just loaded IT up with another hundred dollars worth a bitcoin.
And just kind of using in this manner, is this a concern that that this is the way that this is going to go? What are your thoughts on this being how meeting room of exchange kind of maybe the natural market forces are pushing us in this way? Talk is through your thought around all of this.
First, I don't argue with the market like that. The market does what the market does IT. It's a good thing and again, a lot to contact.
But what we done with freeze is to create this, the notion of analysis like the service provider, meaning when you download the self cathodic wallet breeze, you are connected to a professional and know that, that is very professionally maintained and very tune to make sure that your payments are going through. One of the reasons that is lighting matured and became more more reliable is because we no longer had this. you.
You were part of the reason that the network was flaky. So the less obvious we have as no runners, the more professional the network become and is part of the reason that the in payment success is increased in the best full of years is because we went through the space of a problem from obvious to to professionals. And it's a good thing like I see as a positive evolution in the evolution of of liking the more professionals, the more money they have have, the more liquidity they have, the like you of the payment to go through these reasons by a lot.
So that's one thing. I think the network needs to become more professionals. I think L P is a notion that we prove to market and is now widely adopted. When you use the photo x, when you use a breeze, when you use that, there are other zoo or others have because to do what you're immediately connected to a professional elv, which helps you in the rate of the payment and solves the input equity problem at a you were talking about a cathodic, meaning when you use prime, you said is correctly, you're using strike at the back end when you use, blink when you use, I don't know being not being in africa or porch in the Philippines, you're basically using a custodio service. And about cathodic services is two fold one.
They can scale globally, meaning it's a big quent bank and a big one bank won't Operate globally because all of their regularity orders and there's no way to use this solution globally. There is no the payment that works globally. And if we want to provide the service to all of the people in the world, we can rely on the sodium service because that won't happen.
We have twenty six thousand the amid network. There is no single fiat network networks globally. So they only wait for equal to be widely and globally accepted is maintaining its few. That's a one thing. Uh, secondly, I think that if will continue in building big combs, which again, like you said, it's a natural evolution in the acceptance of bitcoin, the acceptance of bitcoin in the market, I think that's a positive in the guard but will get into the same thing problems that we are getting that we have, we have with feet to day. A M, L, O, K, I see and I know so opposed yesterday over someone would spend from wise IT happened to me like I try to use wise and and suddenly the day after they bend me, you will get to the same problems. If you're being reliant on big on bank, the fact that final works right now doesn't mean IT will work to work if they will continue using a big bank at the let's take a quick brick and hear from today's sponsors.
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All right.
back to the show or I think this is a really important topic because what you're really you're effectively saying is there's a to buy for cate, the lightning network into a ky seed network and a non ky seed network. My stating this correctly as far as a concern yeah yeah .
lacking network is just an implementation detail of bitcoin ah because in in general can be very uh like you you you can have White and black pick in the future. You already have that you which another season, another product very kind of using to a differences between different types of bitcoins. But definitely can happen, by the way, is already happening.
A if in the early days of lightning, every note was able to connect to another note in the network, you can do that right now if you're trying to connect to the cash note, for example, you can only a regulated entities in the U. S. Can connect to the cash APP. As an example.
Do you think that this is is this policy driving that is the the past administration that we're moving away from? One of the reasons why cash APP was very hesitant to just allow anybody to connect with them. And you see that changing potentially if we get more friendly policies, what do you think .
that this is hanging? I think a cash up is, is a start of lock, which is a public company. You can take the risks that the company like risks can take definitely being in the U.
S. You need to be concerned about the risk and the regulatory landscape as we saw we the summary trial and and in other occasions. So yes, I definitely think that a more open administration can lead to less, to be less respect. Les, nevertheless, I think we all need to keep in mind that you can't avoid the inherent issue here.
If you let someone else take care of your money, that entity is gonna be heavily regulated and that regulation gonna have implications is gonna have user experience implications, meaning as a user you will have to K, Y, C in A M L every time you make a transaction. And there are risks in their preventing you access to the network in the future. IT happens in the happening in beat coin as well, is going to only get warped in the future.
The only way to circumstance that, again, we started this conversation by taking kind of the one hundred years vision of the one single CBDC verse is peer to peer. The only way to serve and death is by everyone only their own money and executing peer to peer transaction. That's why we're so focused on the people to care, assets of picking and the technology improvement.
I A technology you are the by saying that I am a developer, yeah I believe in technology. I believe in the ability of us to evolve and improve technology. I think we will get to a point where party the transactions are super easy and not just for us, the the beginner, but for every main item users. And if everyone of us will be able to make pretty perfection, there's no reason that pear to pear won't be an alternative to banks.
Yeah, one of the interesting things that you get when you should start talking about federated systems or like cash o is you get way more privacy with the movement of the coins because of the way that federations work. Do you think that this technology, and I know we called a later three early, would do you agree that it's called a later three year? Like what would be the correct terminology for these types of technologies.
I think actually isn't really a layer three because it's not build a bit going at all. I think I don't like to add another layer to is enough OK, it's complicated enough. Let's end the discussion on what's a layer two and then move to a layer three. I don't think it's this point.
We need to add another. So the reason I bring this up is because IT IT almost seems like this technology that people are just starting to build on in the last year and a half is going to be instrumental in almost being a tail wind to non K Y seed lightning. And allowing these properties to allow us to continue to propagate where not everything has to be. Ky, c.
And when we look at that five, ten, fifteen year horizon, is this the thing that maybe actually allows and enables bitcoin to remain the freedom tech that we all, you know, see IT being because of grassroots and instrumental level of, just like a one dollar payment or a, you know, a cup of coffee type payment that you can do IT with, call IT cash or affected ment or something that or these like tokens that have an an enormous amount of privacy to them once you get down. And I also find this interesting, and I started to me under all over the place that layer one bitcoin, where it's really being used to store of value, has a ton of issues with respect to privacy. But as you go further and further away from IT in really high frequency, low value per transaction size, that you get way more privacy once you push down on that part of the spectrum. And I find that really fascinate, right, that that's kind of how it's naturally put out.
One easy way to explain this is that is the chain keeps track. It's a global ledger and IT keeps track on all of the transaction. And once you start billing on layers, you no longer have to persist a global state.
And if you don't need to persist the global state, then inherently you can move a privacy. You have that lightning by way as well, because there is no global state. The state is persisted in the node.
And if you are executing transaction, basically the date is persist in the channel, which mean IT needs to purse by two parties. But there's no global stating lightning as well. Only if you open the channel or close the channel, then they say the kind of the resurface in the chain.
So there's no ledge. There's no public ledger of the lightning transaction. I always laugh when people give me statistics about the adoption of lightning, because the only thing that they can see is how how much public liquidity is locked in lightning. They don't see the private liquidity that is not in lighting, and they don't see the velocity.
the frequent .
of the payment, the frequency of the payment. So you can have a solution like Allen market. And if you take a look for for and outside their view, you take a look at their note.
I like how big is? Know that thirty, forty big coin, something like that. But I think people will be shocked when they realize how, like what's the velocity of payments and markets are actually processing and what's the fruit of these payments. And I say that because this information is not consulted in the chain, that you don't know if you have no way to retreat this information, only if you go and inspect the specific note, which, of course, naturally you don't have access to various specific notes.
But this is an interesting difference from physical reality to the digital realm of money, where I think of IT in terms of, like electrical engineering, when you open these channels in your running frequency through the line, you need the wired to be really large. If you're putting a lot of current through the line or there is a lot of altering current going through the line, that the line would heat up and I would melt down with this, that's not necessary case.
You could have a massive channel and you could be using IT very salumi IT will yeah, it'll still Carry the communication of of the money transfer and the line could actually be really small because I think the frequency unlimited cause you're in the digital realm just doesn't matter. And so this is really fascinating that you're right. Like I guess, all we can look at all the sizes of the lines connecting the network.
That doesn't necessarily tell you how much the newark is being utilized or what the frequency of that exchange is. Yeah very fascinating or hate. Like just taking a step back. I guess i'm just like as an engineer, i'm looking at certain things that just like make me say wow like cause is happening in the digital realm and it's so in parallel to the physical and then some mother aspects that .
are just know slightly different and saying you have a one gigabit connection at your home so you can watch movies that are larger than not the case like you're downadup gigabits or maybe terribles or da on a very .
small yeah right .
yeah and the same happens in the next ork. It's actually intuitive, but you have a more efficient let me know if you get the rest right between local liquidity to meaning you need to be very efficient with your liquidity. And the more you can roll using less liquidity, the more money, and that's the incentives of the lighting network, the ratio between the pho city and the three books of the channels divided by the channel size, that is, the calculation for the profitability of the channel and the node. So the less liquidity you look, but you're still able to process the payment that going you are not the more efficient, the more economical, the more money you make as a let you know yeah and the many note Operators are making the very beginners the notes mistake of putting a lot of early on.
Yeah.
channels are all the channels .
are just get exhausted to the to the edge node of where all the buying is taking place, right?
Even if if you're gonna be used at all, that's that's .
a yeah no exhaust .
means there's frequency. There is statements coming through. It's a good side. If your channel is is exhAusting, again, that depends on the time spent. But if your channel has been exhausted, IT means that you were able to successfully payments, which is a good thing. There's a lot of notes if you look at kind of the like terminal or rambles or other like so you immediately and you get the notes that like tons of liquidity there. Something question about these notes because either they want to artificially capture a traffic h or simply don't know what they're doing.
which in my case was exactly what I was.
I note I .
still want to know the channel capacity and all that. I was just too much effort and too much hassle. But I learned a ton by doing IT like I learned an absolute and and according to you, network can run a little bit more efficiently because amateur IT isn't there, clog in things.
Let's talk about your software development kit. So breeze has an SDK. That's what that stands form. It's very popular amongst developers that are building on lightning. Explain to the audience what this is, why it's important, what value IT really provides two vendors or people that are building businesses on lightning.
Yep, allow me to take a step back again. And because we talked to a lot about big bitcoin as a global currency. Is the part that we want to play in that regard is that we want to bring lighting to every application, basically biton.
I don't think bitcoin I don't think merchant adoption, there's a lot of this course about merchants doping. I don't think because right now provides enough value for people to use IT in the context of buying physical goods or even digital goods. I don't think that kind of the play where we're gonna be an adoption.
So what we want to do, we want to drink big coin to every application and service out there in this kind of concept of breaking bitcoin or setting bitcoin as a global currency. So imagine you using tiktok and you want kind of to a tiktok or or you as a tiktok or you want to earn monday, we want be going to be the currency that you do that we want be going to facilitate these digital interactions. But the barrier of entry for developers today to embed become payments into their solutions is super hot.
In order to before the if you wanted to add like payments to your a solution or your application, you have to have dedicated lighting team working on this project for two or three years. And basically, what we do with the lightning edicated, with the breath s IT, is lowering the number of entry. And we are continuing to lower h every day for you as a developer to integrate, be on payment into your application h or solution.
He takes days. And we have been had developers integrating lighting hours. So we are continuing to to kind of lower the Better of entry of the evidence, the compliments into apps and services.
And basically, that's our role. Our role is kind of to provide the best development experience out there for and bedding bed compliments in in applications and solutions. We have two flavors of our S D.
K. We have a native and native implementation, which is spill on top of Green light by blocks stream. We learnt a lot from the reasonable that in the work that we've done on lighting over the and we have manage time to simplify everything.
For example, by running nodes in the cloud using the Green light infrastructure, providing automated lightning quidd services, providing automated the own change ability services, and everything is in absolutely in the education, a very simple A P, I. You have one A P, I to some payment, one APP to see the payment. And all the heavy lifting is done on the bacon.
And we recently added a very popular, took off much faster than I expected. We created a noteless implementation. And in the noteless implementation of R, C, K, users don't even need to run, letting me know, because the underline technology is liquid, so people hold their fancy liquid, but the interface is still living interface we talked about lighting is the common language. Basically the educate exposes liking interface, but he uses a different side chain order to preserve funds and people .
in in that scenario, somewhere started in outsourcing somebody else running the no, which means there is private keys associated with that no, that's interacting with layer one bitcoin. Is that correct?
Or are you so in in the notist architecture, yeah uh you still hold your funds and you hold the keys, but you hold IT in the liquid wallet. When you want to do a lot in transaction, you basically do an atomic swap, a submarine swap, OK between liquid to like him. So you are always in custody over your fun, and there's no way for an intermediary or third party to see your fun even in the implementation in the novel implementation. But there's no need for analysis and there's no need for on chain fees to occur because you're not interfacing with lightning using lighting channels, you're interfacing with lightning using atomic swap, got IT.
So while while you'd be holding funds in liquid, that's where your trusting federation, 真的, federation? okay.
Thank you. So if you compare the native s to the noteless S D K lamentation, the trust profile is different because in the nineteen implement, you just trust the chain. Now in the nosing limitation you trust the liquid federation comes with.
comes with the benefit not running no and doing all the technical sweepy things I talked about earlier or being so chAllenging.
Well, in the native of limitation, you don't do that as well because everything discovered by the nc, basically the nsp open channel l sy and deliquium l sy, watch the payment. The difference is, is that you don't have channel management fees. Yeah basically, you don't need to pay an on chain fee in order to own board to lightly.
And there is no a friction when he comes to closing channels or anything like that because one of the functions of the policy is to allocate liquidity, to reallocate liquidity. So IT means that if you don't use in the channel, the elsy needs to take your liquidity and use IT for other users. And that that means that they effectively will either close your channels or decrease your mean liquidity.
And that creates friction because next time you want to receive a payment, then another on chin fee will occur. You don't have that with the notist lamentation. So from a developer experience is much easier to integrate the notist implementation because you don't you are not dealing with anything the other than you are not dealing with opening or closing channels and fees. But yes, you need to kind of subscribe to the liquid transfer ile.
when I look at all these technical solutions and I see how robust all of IT is, i'm starting to like up until now, I think if we went back four years ago, you were talking about how poor the reliability was when you were at the conference in the land or whatever you were at. And today, I think that we're really we're quickly moving away from that where the barriers or the chAllenges for a vender to start being on board, paying in bitcoin, I don't think it's originating necessarily from technical chAllenges anymore.
What IT seems to me is if i'm a vender and all of my bills are done ominous in dollars and i'm receiving payments coming through the door and let's say my top line is one hundred dollars and my expenses are ninety dollars and the domino, lars, that means I have free cash of ten dollars, which I can then sweep in the bitcoin if I want to preserve that buying power and put IT into something that's going to continue to grow. And I think this is how everybody is functioning today. This is how i'm Operating as a business today and many others that I know, microstrip gies may be a little bit fancy here with how they're implementing this.
But at the end of the day, as long as that ninety dollars of expense structure exists and I mean, this could be a mom part, uh, just store gas station for all we could be talking about, right? As long as these bills are all denominated in dollars, a lot of them don't want to be accepting bitcoin payments because then they effectively know I get one dollar worth a bitcoin as a payment. I almost have to immediately take ninety percent of that based on the math that was just describing, immediately turn IT in the dollars, and then I can keep the other ten percent still in bitcoin because my bills at the end of the month are in dollars.
And I need to remove that variance of the Price action verses between bitcoin and dollars. And you go to developing nations, let's say we're going somewhere where the inflation rate somewhere else is fifty percent annualized. They are having to deal with this volatility in their underlying currency and their expensive still being the nominated in dollars or that underlying currency and IT just creates massive chAllenges for them to really want to accept this as a former payment. Do you think that's the number one, number one thing holding us up as or something? Yeah.
I think capital is think A A huge variation and volatility. Yes, although I think that voluntier ity can also be a feature not above if you're a bitt cleaner and you understand a bit contradictory and you understand that the number goes up, you want IT for extent. So let's take a company like the atom for example, like the shoe company that accept going, yes, not all the customers of atoms use big to purchase shoes, but let's say you have ten, twenty percent that do use between to purchase shoes and they put IT .
immediately into their treasury.
Same it's same. It's exactly so. So volta goes both weight. Yes, of course, you're if survival more than your dependent on every penny that goes into the business, you you understand that you need to pay expenses or buy groceries with the doesn't feed the model. But another thing I think the report and the more bitcoin is used as immediately change, meaning the more Price discovering happens for bitcoin, the less volatile bitcoin will be .
yeah especially compared to physical real things, not necessarily few currencies, but like real physical things exactly.
But like in the nigerian, my rise, and like you can really trust this right now, fluctuate forty percent after day. So I think crazy things happens in fea. Less frady things happen because, and I think the trajectory is very clear, they will be too sad.
So I think, of course, the the innovators and the early adopters already accept because in as them, and I think people will be surprised to understand and to know how many merchants already accept in, to say there is a reason they all the luxury friends except beacon, but you can buy the on bags and you can buy for our, you can buy everything. And of course, yes, it's luxury brand still in love, the fiber coffee. But in the ten, fifteen years, the times and that we're talking about, I think you would be able to buy everything .
in this is so fascinating. And I i'll tell you what, right from a statement c stamp point, just kind of understanding where so much of this is going. You have always been just so helpful for me personally.
I've just charisse the conversations we ve had a natural and other locations where we've had an opportunity to just kind of talk in person. And this is like all of those other conversations. So I thank you so much for your time and coming on.
Is there anything else that you want to highlight to the audience or throw out there that you guys are working on? I didn't want to say this with respect to the SDK that we were talking about earlier. I know you have this your poche case study that happened in mexico recently. I don't know if you want to talk about that anything I.
I the note your test is another that we have a two living flamenco of our noteless integration that just came out a month ago, a we have stashed by picture that is creating an APP for freeze answer to be able to IT the bitcoin. And you back is at the second implementation is a mexican and neil bank. It's a thing up, by the way, that shows you your pack is a good example to show you how much the things are in.
Applications are not rushed like everything is so emotional. Meaning you need to there's not one size fits all when IT comes to money. You need to speak in the language of your users and your your back is a great example for that because something like food and I love and I love, but something that people won't work in mexico because there is no culture affiliation to for in in your party, for example, they have a feature called the tera is a is that is very commin mexico like rather.
And they brought the same feature to their APP, and they're speaking the language of their users. And that's one of the things I like to see with the business decay. One of the reasons I was always kind of pushing to build something like the IT is because there's no one size fits all, and we need to have hundreds, thousands and and tens of thousands of application fulfilling different requirements and speaking different languages, addressing different use cases.
So we started to see like the the first in no less intervention coming to market. I think you will be surprised next year. See how many existing applications, not new applications, existing applications adopting lightning using the brazil city and even tens of millions of users using traditional things that production where we see that with cash up. But you're going to see other printed solutions like Robin hood and others supporting lighting. So exciting times.
amazing working people all learn more about breeze.
I'm everywhere and breeze everywhere. I think our medium is a good entry point. Medium becomes flash breath technology and our twitter x whatever I am on linking um i'm easy to find awesome will have links to all that and .
the show notes or I thank you so much for making time and coming on the show today.
Thank you present. Thank you so much. Thank you for listening to T, I, P.
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