Podcast Summary: TFTC #686 — Living on a Bitcoin Standard in 2026 with Steve Lee

Host: Marty Bent
Guest: Steve Lee (Lead at Spiral, Bitcoin open source advocate)
Release Date: November 22, 2025

Overview

This episode explores the present and near-future realities of living on a Bitcoin standard—using Bitcoin not just as an investment, but as real, everyday money. Steve Lee shares his perspectives from years at the forefront of Bitcoin development (especially at Spiral), focusing on merchant adoption, spending vs. saving, advancements in payments tech (like Lightning), privacy, policy challenges, and building crucial grassroots momentum. The discussion highlights practical innovations, candidly examines hurdles, and offers optimistic paths forward for making Bitcoin the foundation of daily commerce by 2026.

Key Discussion Points and Insights

1. The Case for Bitcoin as Real Money

• Money Has Become “Freer Than Free”

  • Central banks are aggressively devaluing fiat currencies, making stateless, scarce Bitcoin an increasingly attractive alternative.
    • “In a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor.” (Steve Lee, 00:07)

• Store of Value vs. Means of Exchange

  • Many Bitcoiners focus solely on the “number go up” (store of value) narrative, but broad utility as daily money makes Bitcoin more resilient, distributed, and trustworthy.
    • “Even for that group of bitcoin users, they should care [about daily usage]. It makes Bitcoin more resilient... more people will care about it. It grows as a political force...” (Steve Lee, 02:20)

• Spending vs. Hoarding

  • It’s possible to spend Bitcoin while maintaining savings—emulate a “checking and savings account” model: “spend and replace.” Proactive spending encourages adoption and strengthens the network.
    • “If you feel that strongly that fiat is crap money and Bitcoin strong, then go all in on Bitcoin... have all your money in Bitcoin... So I think people can still be strong hodlers and still spend Bitcoin.” (Steve Lee, 04:12)

2. Bitcoin Payments: Technology and Adoption

• Recent Moves by Block (Square)

  • Multiple new products enable seamless Bitcoin payments for merchants and consumers, including in-person options and integration with Square’s infrastructure. This solves key UX friction points and makes “preference optionality” real.
    • “With Cash App’s announcements… now all four combinations work… each party in that two-party transaction uses whatever they're comfortable with.” (Steve Lee, 07:16)

• Importance of Merchant Adoption

  • Widespread acceptance by merchants creates a “strong voting block” and accelerates price discovery through real-world transactions, not just exchanges.

• Incentivizing Consumers

  • Merchant discounts for Bitcoin payments (e.g., Pink Owl Coffee’s 21% sale) kickstart behavior change. Once consumers have a Bitcoin wallet, all merchants benefit from that one-time onboarding.
    • “21% discount at your favorite merchant... that’s going to get a lot of people over the hump... you don’t have to do it over and over again.” (Steve Lee, 41:31)

3. Lightning Network and Payment Infrastructure

• Advances via Spiral and Lightning Development Kit (LDK)

  • Spiral focuses on developer tooling and protocol work that isn’t naturally profit-generating, including major efforts on LDK—making Lightning integration simpler and more powerful.
    • “We have these magical dollars for bitcoin to give to developers to work on high-impact projects that don't have a business model behind them.” (Steve Lee, 08:51)

• Lightning’s Role and Criticisms

  • Lightning acts as the “glue” between different subsystems (custodial and non-custodial wallets, payment protocols, etc.), enabling seamless, widespread payments. Criticisms that Lightning “failed” are dismissed as misunderstanding its role and realistic scaling trade-offs.
    • “To call [Lightning] a failure, I think is ridiculous... It definitely has won at being the glue between a bunch of different subsystems.” (Steve Lee, 11:59)

• Activity & Usage Metrics

  • TVL (total value locked) stats are misleading; payment volume and efficiency have been rising steadily, especially as merchants and Lightning node operators optimize for capital efficiency.
    • “All the popular metrics that are reported are misleading... Lightning is relatively private, which is a good thing.” (Steve Lee, 21:02)

• UX Improvements

  • Products like Phoenix wallet prove Lightning can be user-friendly, although the full vision (“everyone on earth running a Lightning node”) isn’t realistic or necessary.
    • “Anyone who uses a Phoenix wallet... we can certainly still find things to critique... but it’s a good user experience.” (Steve Lee, 16:02)

4. The Policy & Regulatory Landscape

• De Minimis Tax Campaign

  • The campaign to raise the “de minimis” exemption (so small Bitcoin payments aren’t taxed as capital gains) is ongoing. Current proposals ($600) could go higher, though even incremental wins are important.
    • “The proposal is like a $600 de minimis... There are other cryptocurrency stakeholders... pushing for $50... that's throwing bitcoin under the bus...” (Steve Lee, 63:39)

• Battle for Privacy and Minimal KYC

  • Ensuring developers can safely build open-source wallets (without liability for end-user actions) is a top priority. Trust-minimized payment protocols, like Lightning, are essential for future scalability and privacy.
    • “No KYC... is important for more than just privacy: it makes onboarding and user experience much better and is crucial for scaling micropayment and AI-driven use cases.” (Steve Lee, 52:14)

• The Need to Revisit Core Financial Laws

  • Repealing or reforming legacy rules like the Bank Secrecy Act would dramatically improve Bitcoin usability and privacy. SPIRAL is actively looking to fund research and advocacy in this area.
    • “SPIRAL will offer a grant to someone... imagine a world without the BSA.” (Steve Lee, 60:32)

5. Silicon Valley's Misreading of Bitcoin

• Tech Industry Timeframes vs. Reality

  • Valley investors and engineers expect overnight success—Bitcoin is disrupting money itself, a process that naturally takes decades, not a few years (unlike consumer apps).
    • “People thought that they compared it to PayPal or Visa... This is not disrupting Visa. This is disrupting the US dollar... that doesn’t develop overnight...” (Steve Lee, 27:45)

• Changing the Narrative

  • Presidio Bitcoin (Steve’s local initiative) aims to bridge the understanding gap in Silicon Valley, hosting events and podcasts targeted at “non-Bitcoiners.”

6. Grassroots Action & Optimism

• Marketing Kits for Merchants & Bitcoiners

  • Spiral’s ‘Bitcoiner marketing kit’ helps individuals evangelize Bitcoin payments to local businesses, focusing on fee savings as the hook.
    • “You don't have to be a bitcoin core developer... just go to your local merchant and talk about saving on fees.” (Steve Lee, 36:02)

• Small Steps Add Up

  • Even baby steps—using Cash App’s Lightning integration, giving “Bitcoin plushies” to merchants as conversation starters—accelerate adoption and normalize payments.
    • “Some of those Cash App customers will keep converting over to using Bitcoin.” (Steve Lee, 45:42)

Notable Quotes & Memorable Moments

• On the store of value vs. usage divide:
  “Even for [store-of-value] users, they should care about daily usage. It makes Bitcoin more resilient... a strong voting block... it also helps distribute the price discovery.” (Steve Lee, 02:20)

• On Lightning’s true role:
  “Lightning has won at being the glue between a bunch of different subsystems... Bitcoin Lightning is that backbone... It’s actually a great technology fit for that.” (Steve Lee, 13:15)

• On merchant adoption:
  “Being able to eliminate or significantly reduce that fee is an enormous value prop.” (Steve Lee, 38:40)

• On no-KYC and innovation:
  “No KYC is important for more than just privacy... it impacts everyone.” (Steve Lee, 52:14)

• On PayJoin, privacy, and efficiency:
  “PayJoin... destroys the common input heuristic which chain analysis heavily depends upon...” (Steve Lee, 67:01)

• On optimism:
  “People should remain optimistic on Bitcoin. Even if the price is going down, even if they're not happy with where Lightning is at... there's just a lot of promising stuff ahead. Keep your spirits up.” (Steve Lee, 72:34)
  “We’re going to win.” (Steve Lee, 72:51)

Timestamps for Key Segments

• The Freeness of Money & Central Banks — 00:07
• Why Spend Bitcoin? — 04:01
• Block’s Recent Announcements & User Experience — 07:16
• Lightning Network as Payments Glue — 11:59
• Addressing Lightning Critics & TVL Metrics — 21:02
• Merchant Discounts & Changing Consumer Behavior — 41:29
• Silicon Valley’s Timeframe Misconception — 27:45
• Grassroots Marketing & Plushies for Merchants — 43:12
• No-KYC, Privacy, and the Future of Payments — 52:14
• PayJoin and Breaking On-chain Heuristics — 67:01
• Closing Words & Maintaining Optimism — 72:34

Final Thoughts

This episode provides a wide-ranging, practical, and deeply optimistic look at Bitcoin’s evolution as real, everyday money by 2026. Steve Lee advocates for a pragmatic, grassroots approach—focusing on merchant onboarding, technological improvements, and legal reforms, while recognizing the gradual, multi-decade nature of changing money itself. The energy is hopeful and forward-looking: “We’re going to win.”