Bitcoin Audible – Chat_146: Building for Sovereignty with Craig Raw

Host: Guy Swann
Guest: Craig Raw (creator of Sparrow Wallet)
Date: October 8, 2025

Episode Overview

In this episode, Guy Swann sits down with Craig Raw, the engineer behind Sparrow Wallet, to discuss what it means to "build for sovereignty" in the Bitcoin ecosystem. The conversation spans technical innovations in wallet software, the legal risks of developing privacy tools, the evolution of multisig and PSBTs, personal philosophies on custody and financial freedom, and notable trends in global adoption—especially Craig's firsthand insights from South Africa.

Key Topics & Insights

1. The Philosophy of Bitcoin Self-Custody

• Permissionlessness: Craig and Guy emphasize that, beyond number-go-up, the lasting appeal of Bitcoin is the control you have over your own money.
  • Quote: "What makes them stay is the permissionlessness of it, is the fact that you can have this money and it's your money and the bank can't decide. We're not going to bank with you anymore." — Craig [00:00]
• Risks of Custodial Services: Even as exchanges have become safer, true sovereignty comes from holding your own keys.

2. Meet Craig Raw – Background & Motivation

• Entrepreneurial Past: Craig comes from a background of building and running businesses before shifting to open-source development.
  • He specifically wanted to create rather than just manage people or organizations. [15:08]
• Non-Monetized Project: Sparrow is a passion project, full-time but not commercially motivated; Craig relies on previous successes and values tips/donations.
  • “I don't seek to monetize Sparrow in any way. It's really not my goal…” — Craig [16:42]

3. Sparrow Wallet: Purpose, Design, and Unique Features

• Transparency and User Empowerment: Designed for users who want deep visibility into what’s happening with their Bitcoin, not just simple flows.
  • "Sparrow is there to kind of help you out if you really want to know what's going on." — Craig [07:37]
• General-Purpose & Fail-Safe: Acts as a backup, a go-to tool when other wallets fail or for troubleshooting [07:37].

4. Legal and Regulatory Concerns: Building Under Uncertainty

• Patriot Act Extensions: Recent attempts to apply onerous restrictions on privacy tools and mixing services create a chilling effect.
  • Developers in the US still have some First Amendment protection writing code, but operating servers is the legal gray zone. [10:39]
  • “What we're seeing there... they've been prosecuted not for writing the [code]... it's about running the coordinator and that’s the server part. So that's really where the line lies.” — Craig [10:39]
• Political Winds Shape Law: Much of enforcement and prosecution is politically motivated rather than strictly legal. [10:39]

5. Evolution of Wallet Standards – PSBTs and Miniscript

• Era Matters: The time when a wallet is built shapes what is possible and easy to implement.
  • "Because all of the code and the technology is tied around a certain way of seeing bitcoin, you have to then migrate and evolve all of that over time." — Craig [20:00]
• PSBTs (Partially Signed Bitcoin Transactions):
  • Standardized format allows interoperability between wallets, essential for multisig and hardware wallet workflows [23:13].
  • Coldcard team instrumental in popularizing PSBTs.
• Miniscript & Decaying Multisig:
  • Miniscript allows for more complex spending conditions, but comes with potential UX and privacy pitfalls—especially for self-sovereign individuals.
  • "What you don't really want is users coming up with all kinds of weird and wonderful ways to lock up their coins. And some of them are definitely going to lock up their coins forever." — Craig [28:11]
  • Craig is cautious: best suited for institutional setups for now, not everyday users [34:35].

6. Technical Challenges in Bitcoin Usability

• User Experience: Discussed importance of UI revealing enough detail for advanced users, but also not overwhelming beginners.
• Hardware Wallets: Strong support for QR-based hardware wallets for usability, compatibility, and security (see [72:10]), and general advice on seed safety, passphrases, and adopting multisig for significant holdings [78:25].

7. Layer 2, Scaling, and the Maturation of Bitcoin

• Fee Dynamics and Scaling:
  • Anticipate rising fees as institutional adoption and real-world use cases expand, shifting Bitcoin from payment/retail pipe dream to a base layer for capital and settlement.
  • Ongoing experimentation with Lightning, ARK, statechains, etc.; no single solution has yet "won," but self-custodial tools are crucial [43:38].
  • "We have to invent self-custodial ways of doing things... The custodian will always fail in some situation somewhere. Right. They're always just waiting to fail." — Craig [43:38]

8. Global Adoption – Case Study: South Africa

• South Africa as a Lightning Trailblazer:
  • Apps like Money Badger bridge Bitcoin Lightning payments to the widespread QR-based payment infrastructure in South African merchants.
  • "...At least half of the places you would normally visit... you'll be able to pay with Bitcoin now and that’s really, I think, a game changer.” — Craig [60:57]
• Contrast to the U.S.: Guy notes the U.S. lacks such seamless integration with QR codes for Lightning payments [66:43].

9. Personal Bitcoin Journey

• Skepticism to Conviction: Craig spent years trying to "disprove" Bitcoin, finding that other financial assets (stocks, gold, bonds) were less appealing.
  • The "aha" moment was realizing he couldn’t find the flaw, and that sovereignty and economic soundness were unmatched [58:04].

10. Final Advice for Newcomers

• Don’t Overtrust Banks/Exchanges: True risk is not immediate hacks but creeping loss of permission to your own assets.
• Take Custody, Even for Small Amounts:
  • "When you hold the bitcoin yourself, you already have the control over it that you don't get with any other custodial financial instrument..." [85:26]
  • Accept that the world is trending toward more financial uncertainty and potential authoritarian controls [89:37].

Notable Quotes & Moments

• On Building for Yourself:
  • "I've always felt those have like a special place because those projects seem to last." — Guy [18:04]
• On the Decay of Asset Control:
  • "It's a trend and it just seems to be getting stronger in the world that the authoritarian control over assets is becoming just more..." — Craig [90:51]
• On Bitcoin Treasuries vs. Bitcoin:
  • "I still think buying bitcoin rather than a bitcoin treasury makes a lot more sense. You may get some short term gains, but ultimately you are buying into a company..." — Craig [82:16]
• On Advice for Safety:
  • "If you are putting your life savings on it... go multisig. Invest the time, invest the effort. Yes, it’s worth it." — Craig [78:25]

Timestamps for Key Segments

| Timestamp | Segment | |-------------|-------------------------------------------------------------| | 00:00 | Why self-custody/sovereignty is Bitcoin’s core appeal | | 08:05 | Legal risks for privacy devs; Patriot Act application | | 14:59 | Craig’s pre-Bitcoin background and why Sparrow is free | | 19:41 | The era in which a wallet is built shapes its features | | 23:13 | PSBTs explained: origin, impact, Coldcard’s contribution | | 28:11 | Miniscript, decaying multisig, and UX/privacy dangers | | 43:38 | Scaling: Layer 2, fees, institutional/retail adoption | | 60:57 | South African Bitcoin adoption, Money Badger, QR payments | | 66:43 | Differences in adoption between South Africa and U.S. | | 78:25 | Hardware wallet hygiene, passphrases, multisig | | 85:26 | Final advice to Bitcoin newcomers |

Further Resources & Where to Follow Craig

• Sparrow Wallet: sparrowwallet.com
• Craig Raw on Nostr/X: @craigraw, craigraw@primal.net
• Apps Mentioned: Money Badger, Phoenix Wallet, Zeus, Blink, Aqua, BTCPay Server

Closing Thoughts

This episode offers a deep, practical, and philosophical dive into what it means to be a sovereign Bitcoin user and builder. Craig Raw’s experience with Sparrow Wallet provides both a technical and human perspective on the necessity of user empowerment, privacy, and open, permissionless infrastructure. South Africa’s case highlights how rapid progress can occur in unexpected places, reinforcing the global, grassroots ethos of Bitcoin.

Essential takeaway:

"When you hold the bitcoin yourself, you already have the control over it that you don't get with any other custodial financial instrument." — Craig [85:26]

For further exploration:

• Episode [Chat_145: John Carvalho] for deeper technical/protocol discussions.
• Check show notes for sponsor links, Money Badger, and more.

Summary by Bitcoin Audible Podcast Summarizer. For those who haven't listened: this episode is a practical masterclass in why and how to build—and live—for Bitcoin sovereignty, from one of its most trusted toolmakers.