← TFTC: A Bitcoin Podcast
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- [00:07]
Ryan Gentry
You've had a dynamic where money's become freer than free. If you talk about a Fed just gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where.
- [00:21]
Marty Bent
Central bankers are tripping over themselves to.
- [00:23]
Ryan Gentry
Devalue their currency, Bitcoin wins. In the world of fiat currencies, Bitcoin is the victor. I mean, that's part of the bull case for Bitco.
- [00:32]
Marty Bent
If you're not paying attention, you probably should be.
- [00:34]
Ryan Gentry
Probably should be. Probably should be.
- [00:37]
Marty Bent
Ryan Gentry would say it's been a while, but it hasn't been a while. We catch up behind the scenes quite frequently. But it's been a while since you've been on the show. Five years. Five years.
- [00:47]
Ryan Gentry
Five years. Depriving your audience of me, Marty. I mean, but in serious five years, that's a long time, especially a long time in bitcoin, isn't it?
- [00:59]
Marty Bent
That's basically a third of bitcoin's life. We've gone without catching up on this show.
- [01:05]
Ryan Gentry
That's a wild way to think about it. Yeah. I mean five years ago, November 2020, Bitcoin was at what, like mid teens?
- [01:14]
Marty Bent
Let me check.
- [01:15]
Ryan Gentry
15Kg started buying.
- [01:19]
Marty Bent
I go on the five year chart. It's been six. It doesn't even come up on the five year chart to all. Was it November 2020?
- [01:29]
Ryan Gentry
I think so, yeah.
- [01:30]
Marty Bent
We were climbing. We were climbing. We were at 17k. 17k ran all the way up to 65, back down to 16. Here we are sitting at $89,332 and everybody thinks our pets heads are falling off. Bitcoin.
- [01:50]
Ryan Gentry
We don't know how good they have it.
- [01:53]
They don't know how good they have it.
- [01:56]
Marty Bent
They really don't. In honor of your first, our first ketchup on air in over five years. I'm gonna have a beer for you OG freaks over there. For the original Ryan Gentry appearance on this show, we drank a lot of whiskey, talked a lot about the Lightning network, talked a lot about Texas.
- [02:20]
Things were much different at that point. And we will probably do a retrospective on what happened between now and then. And look at what we were saying back then, what actually happened and where we maybe may have been wrong, where we were right. But first you've got some big news. Personal news. Launched the bitcoin infrastructure acquisition Corp. Looking for bitcoin operating businesses. Another SPAC equity SPAC hitting the space.
- [02:55]
A lot of attention on this part of the market over the last six months. What are you trying to do here. What are you doing?
- [03:03]
Ryan Gentry
I'm really excited. I think in the five years since we've talked the whole ecosystem, Bitcoin and most importantly the companies building bitcoin products and building products around bitcoin, the asset and the network, we've all grown up, we've all grown up significantly. And I think.
- [03:27]
Public markets, as seen by the ETFs, as seen by microstrategy, as seen by kind of the wave of digital asset treasury companies last year or this year rather than public markets, have a huge appetite for bitcoin. And so I was approached earlier this summer with an opportunity to raise us back a special purpose acquisition corporation.
- [03:55]
That'S charged with taking an operating bitcoin company public. And so we just completed that IPO this week, raised $220 million. Very excited to note that, you know, the deal was five times oversubscribed. You know, again, like there's a, a really big appetite amongst public markets investors for bitcoin company exposure. They're, they're excited about the possibilities and the prospects of, you know, bitcoin native companies and, and what they can do from a cash flows and growth perspective and want to be really clear here that, you know, I'm not, this is not a dad, this is not a Treasury company. I'm not interested in competing with Michael Saylor, with Jack Mallers, with Adam back, et cetera.
- [04:43]
My five years at Lighting Labs was all focused on building real products and services and working with bitcoin focused entrepreneurs that have customers and again, cash flows. And so that's where I'm specializing, that's where I'm focused is the companies who've been building bitcoin products for the last seven, 10, 12, 15 years. Those are the companies that I'm focused on. And I'm focused on wanting to take them into public markets.
- [05:17]
In a manner that materially benefits their companies. I think one thing that we've learned, that I've learned at least is being a public company, there are, there are specific advantages, specific things that you can do as a public company that you just can't as a private company. And I think there is a subset of the bitcoin space that is ready to take advantage of those. And I think in order to take the next leap in their businesses and to provide kind of the next amount of value to their customers, to us, right as bitcoiners, they need a vehicle to take them public. And I'm really excited to have the opportunity to provide that opportunity to one or a couple of Our favorite companies.
- [06:08]
Marty Bent
Well, maybe since you framed it in that way, maybe it is a good time to do a retrospective on our conversation for five years ago. From what I understand, you re listened to it recently. We're laughing not only at our mental state, but the conversation we had. And I think maybe the retrospective, we jump into it right away, it's just to really highlight where we thought the market was five years ago, where we thought it was going and how it's actually progressed since then. And why you think now is a good time to be launching this particular spac. Looking for operating businesses in the bitcoin space serving bitcoiners.
- [06:51]
Ryan Gentry
Yeah, I think that the core part of our discussion that as I was listening back to it, I was like, you know, we really, we were onto something here and are onto something here was, you know, we talked about how like what the bitcoin revolution is really is, you know, a war for the world's capital, a peaceful, you know, economic war. But it's, you know, there's as you're growing a brand new store value from scratch. Necessarily the value that is coming into bitcoin is leaving other assets, right? And is leaving us Treasuries, is leaving German bonds, is leaving, you know, you name it, right, all the other assets in the world and coming to, to store itself in bitcoin. And I think we talked a lot about the order of operations of how that again, kind of war, quote unquote, progresses. And one thing that we bonded a lot over when we first met was how enthusiastic we were over how the first cohort of big companies that really got bitcoin and were interested in bitcoin was the energy industry through mining. We talked a lot about oil and gas back in the day, but like, look how that has panned out, right? Like all of these companies that you know, went public, a lot of them actually via SPACs, right, that were. There were mining companies in 2021, 2022, have since become hugely important in kind of the AI build out space, right where they.
- [08:36]
First kind of got started, just focusing on bitcoin mining. They build great relationships with energy producers and utilities and all the folks in the energy industry generally, and then now have these hyperscalers just paying an outrageous amount of money to leverage the skills that they built in the bitcoin industry to build out kind of this next great thing in the AI space. So I think that's kind of where things started and where we've seen again public companies, companies that took the leap and became public.
- [09:10]
You know, really benefit from being public companies and from having their name out there and being able to raise the capital. Like in Iris Iron, just raise like a billion dollars at 0% coupon convertible note. Right. That's. They don't have to pay back for five years or something like that. Like, it's just, it's absurd what's been happening. And I think those are all companies operated by bitcoiners. Right.
- [09:43]
That are out making a difference in the world, building with bitcoin treasuries, operating their company on bitcoin principles. And I think that's super important.
- [09:55]
Marty Bent
Yeah, I'm looking it up. It was. Iron just did 2 billion. 1 billion at 25 basis points. 1 at 1. And clean spark did 1.15 billion earlier this year or last month. Less than a month ago.
- [10:12]
As well. Yeah. So they're raising a ton of capital. Is that the only advantage to being public in your mind? That's a lot of what we hear. And I mean.
- [10:21]
I think there's, when.
- [10:22]
Ryan Gentry
I think about it, from first principles, I think there's three. There's three main categories that I would. And a down to. I think number one for sure is being able to raise, like having a public trust from a kind of debt and equity capital perspective. And I think there's kind of two ways that you can raise the money. So first is like, you know, being able to raise debt capital through these convertibles or through preferreds, like MicroStrategy is doing. Like, you just, you can't do that as a, as a private company because you don't have the public equity to pair with the debt capital. You can only really do that as a public company being able to issue securities.
- [11:03]
The other thing is, I had the great pleasure of talking with MicroStrategy CEO Fong Li yesterday. And Austin, he's doing a little roadshow and he was talking about this new USD reserve that they built the dividends. And he was like, you know, look, you know, we did this mostly to combat the fud. Like, it helps me sleep a little bit better at night, but it wasn't really necessary. But, you know, we raised 1.44 billion in eight days just by selling equity on the public markets through the atm. Right? Like, that's absurd. Think about, I mean, you're, you know, vaunted venture capitalist now, Marty, like, how hard is it for a company to raise 1.4, for a private company to raise $1.44 billion? And on like, what timeline? Even $100 million, like, on what time long does that take.
- [12:01]
Marty Bent
It depends. What if you're in AI right now, maybe not as long as others, but.
- [12:06]
It'S not as easy. It's definitely not as easy. Right.
- [12:10]
Ryan Gentry
And so that's, and not, of course, not every company is microstrategy. So that's, you know, not every company can do that. But it's, it's materially easier as a public company to be able to do that type of stuff. But that's not the only benefit. I think that's the most obvious one. The second one that I think is very important is public trust for me, like business development perspective. Having the audits, having.
- [12:36]
The kind of rigor around your financials, having the just trust that you're a public company, it just makes it easier to do deals, especially with kind of banks and the more.
- [12:51]
The more conservative entities and public markets, it's just easier to do that type of stuff to get those doors opened if you're already a public company versus a private company. And so I think, you know, especially for the kind of the bitcoin companies that are financially minded, financial services minded, that will materially improve their ability to gain new enterprise customers. And you know, also having a public equity, right, Letting your customers share in the upside of your business. Right? That was always the argument for tokens in the shitcoin crowd. Right? But you don't need a token. You just need a public equity to.
- [13:36]
Marty Bent
Maybe it'll be tokenized. Maybe that public equity will be tokenized at some point in the future, you.
- [13:40]
Ryan Gentry
Know, and at some point maybe we'll see. I'm, I know there's, you know, I'm following the Clarity act with interest. I'm not super optimistic, but maybe they'll figure out something that, that works there. It's possible. But so too is I think that public trust for BD perspective and, and you know, institutional customers will kind of, you have more, you have more substance as a public company than you do as a private company. And retail customers like getting to share in your upside is, is a big deal. And then third is just hiring and retention, right. As we were talking about before the call, like.
- [14:20]
Not all potential employees like being paid in illiquid stock options, right? Being able to play your employees instead in RSUs, restricted stock units and like public equity that they can sell whenever they like. That makes a big difference for a certain class of employee. Employees that have families or different situations and aren't really willing to take the startup risk. Being a public company allows you to just hire and retain a certain class of employee that you just can't get otherwise? I think those three are, those are real material benefits that help offset the downside of being a public company. You have to spend couple million dollars in compliance costs and audit costs like every year just to, just to be public. Right. And so there has to be some benefit for that additional cost. And I think for a certain class of companies, those benefits.
- [15:17]
Very materially outweigh those costs.
- [15:20]
Marty Bent
Yeah. And I mean, and all these benefits can only be gained too if you have something legitimate to bring public. So I think that's again, going back to the retrospective and really leaning into the timing of this and why it's right now is, I mean, when we met five years ago, outside of industrial scale miners, how many companies were in the right spot from a product market fit, revenue, cash flow, EBITDA perspective for this to even be viable outside of maybe Coinbase and a few others? And why that's what I think is.
- [16:00]
Ryan Gentry
That's exactly what I think is so interesting about thinking about this time in terms of the order of operations that we talked about. Because the way we talked about it, it's like, look, if you wanted to.
- [16:14]
As a bitcoin community.
- [16:17]
March forward and grow Bitcoin's total market cap as a measurement of world domination of reserve asset, right? Like first you'd want to start with the energy industry. You want to make sure that energy executives, energy companies, were aligned and bought in on bitcoin, understood the value prop and were hodlers and incentivized to protect 21 million.
- [16:44]
And then kind of the next area you want to verge into is financial industry is tradfi.
- [16:51]
And you'd want to make sure that.
- [16:55]
Companies were holding Bitcoin on their balance sheet. You want to make sure that the financiers were.
- [17:03]
Comfortable with bitcoin as collateral. And we're starting to adopt Bitcoin as a collateral for people to borrow against.
- [17:13]
And I think we're right smack dab in the middle of that right now.
- [17:19]
And I think there's a lot more work to be done there. But it's interesting that like this current cohort of bitcoin companies, crypto companies, if you'll excuse the term, that are going public, right, Are companies like Bitco, companies like Kraken, companies like Circle, but they're this kind of next wave after Coinbase are the kind of fintechs built on bitcoin and crypto rails. And that makes sense, right? That's kind of the next wave of companies that got started in bitcoin that started making a lot of money in bitcoin and are at the scale where they can be public and.
- [18:02]
Bear the cost of being a public company but also tap the upside all the new things you can do as a public company.
- [18:10]
Marty Bent
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- [20:39]
Ryan Gentry
I think a very.
- [20:43]
Simple left curve model of it, which we also talked about five years ago. I think the Bell curve meme was new.
- [20:54]
We talked about that a lot. But it still remains, I think, the best model of the world. And I try and be as, as left curve as possible, as much as possible.
- [21:04]
Think about like a bitcoin lending business that's lending against, you know, dollars, against btc. And that, I think is, you know, although of course, we would all love to be just 100% bitcoin only spending bitcoin through, you know, all the square terminals of support lightning now, which is a fantastic development.
- [21:24]
There just necessarily is a need for dollars if you're operating in the modern world.
- [21:32]
And I think if you're lending against bitcoin, your main challenge right now is interest rates are high. Right? Like, I think, you know, unless you're borrowing, I think like clean Spark borrowed $100 million against Bitcoin from 2 Prime, and they paid like 7 to 8%, 7.75% or something like that, which is. That's probably the best rate against Bitcoin that I've seen, because they borrowed $100 million. If you're retail and you're borrowing 50 grand, 100 grand, something like that, I mean, you're paying like 10, 12%, something. That's steep, right? So you think about these businesses that are lending their cost of capital. What they're doing is they're borrowing dollars from somebody else, and then they're lending those dollars back out to the end user. So their ability to make money is 100% dependent on how can they lower that cost of capital, how can they lower that cost to borrow? And that's something that's really only unlocked by accessing bigger pools of capital.
- [22:43]
And the way to access those bigger pools of capital is to do what MicroStrategy is doing in terms of getting credit ratings, which necessarily involves, you know, to get the best possible credit rating being A public company.
- [22:57]
You know, selling.
- [23:00]
Debt for lower, lower costs and just kind of through growth, through selling securities, through working with the credit agencies, you know, getting that cost to borrow down closer to, you know, whatever a bank has to pay, which is closer to 4 or 5%. So there's like a big delta between this current cost of capital for these private bitcoin lenders and what kind of like the terminal cost of capital should be. And I think that's only unlocked by being a private company or being a public company. Sorry.
- [23:33]
Marty Bent
I think it's very important to dive into the details of this too, because I think a lot of people will look at the rates attached to the bitcoin collateralized lending desks that are currently private across the industry, and they see 10, 12, 14% depending on where you go. And they say, oh, these guys are ripping us off. Not understanding that the company itself would love to give you lower cost of capital, but they have liquidity providers, so that does that are demanding a higher cost and they simply take a little rip on top of that. There's a delta between the cost at which their lending provider gives them the cash and the cost to which ultimately you take the loan at and the company issuing the loan or your counterpart. Whether any of the companies offering collateralized loans just takes a little, a little rip on top of that. And to your point, like make more money in this product, you need to basically get more volume or more liquidity on that desk. And so the only way to attract that more and more liquidity is to get those rates down, the cost of capital down for the end user, and then the margins on top of that cost of capital will be similar, but you'll just have so much more volume that you're able to make more money. And I think that's an unfortunate reality of the currency of the bitcoin lending market is a lot of people think the companies offering new services are ripping off the end customer, but they're really beholden to the risk takers on the other side who are offering private credit dollars.
- [25:07]
Ryan Gentry
Exactly. And I think that's. That was a really interesting thing that.
- [25:13]
Falling from MicroStrategy said yesterday was this is public information. When MicroStrategy got their credit rating, they got a B minus credit rating. The ratings agency.
- [25:27]
Didn'T value their $59 billion worth of Bitcoin at all. Right. It didn't count for their creditworthiness, despite the fact that it's $59 billion. Right. And that's obviously a mistake and obviously an oversight but one thing that is just again, if what's really happening here is kind of bitcoin is competing to store all the world's capital and just kind of needs to be convincing bigger and bigger institutions of its credit worthiness and of its safety as a store of value. As he talked about how next year the big banks are going to start releasing custody products for bitcoin, right? Morgan Stanley is going to not just offer ibit but is going to offer being able to buy bitcoin that they custody or Bny Mellon or somebody custodies. And the next step beyond that is just logical for them to be able to count your bitcoin as collateral in a mortgage or something like that. But before these big banks can do that, they're going to have to go to the credit agencies and say, hey.
- [26:38]
I want to lend against my customers bitcoin, I want to give them some dollars for it. Like, how should I score this? Can I lend it at 40% loan value? Can I lend it at 70? Like what's the right number? You got to give me some guidance. So although of course we all got into this or to disrupt the banks or to allow people to be their own banks, ironically, just due to the power of bitcoin and the incentivization that it takes hold in all institutions that touch it, where all of a sudden they start acting in its best interest, the big banks are ironically going to be acting on our behalf.
- [27:26]
To help bitcoin on its next leg in its journey. And I think that's one of the things that to me running the spac, I see that and I say, oh man, Bitcoin native lenders, Bitcoin companies that we all know and love. You have a year to start getting big or else these banks are going to come in and it's going to be really tough to compete with Morgan Stanley rates if they're custody bitcoin. Right? It's going to be really tough to.
- [27:58]
Marty Bent
Compete.
- [28:01]
Ryan Gentry
With the entities that have the lowest cost of capital in the world unless you really start raising money and getting big now. And so I think there's a sense of urgency.
- [28:11]
For these companies if they want to maintain their business. And I don't just want to sell out to the banks to take the leap now.
- [28:21]
Marty Bent
Yeah.
- [28:23]
How do we square this round hole? Is bitcoin being co opted? Is this good? Is this what we want? It's inevitable.
- [28:28]
Ryan Gentry
It's a great question.
- [28:31]
Bitcoin is for enemies, right?
- [28:36]
Bitcoin is for enemies. And I think the co option question.
- [28:46]
My Bitcoin is not being co opted because I hold my own keys and I run my own node, right? And I think as long as a plurality of bitcoiners have that attitude and maintain their self sovereignty, and as long as protocol development is focused on making that barrier entry as low as possible, then I doesn't really matter.
- [29:15]
What the big institutions do with their Bitcoin. Like MicroStrategy has done all of this work and bought all this Bitcoin. They only own 3% of the network, right?
- [29:27]
Marty Bent
And they've been at it for five years and they had to stand for.
- [29:30]
Ryan Gentry
Five years and who is going to come out and buy 650,000 bitcoin to a club stock? Right?
- [29:40]
I totally understand and get that the focus on dragfi adoption appears antithetical to Bitcoin principles. But again, it's like if the goal is to become the global reserve asset and the global reserve currency.
- [29:59]
At some point these big boys are going to have to buy it, right? And if you really believe in what Bitcoin's about and you really believe in.
- [30:10]
Bitcoin's principles and you focus on the fundamentals of what does actually decentralization mean? One big entity buying 100,000 Bitcoin does not affect Bitcoin's decentralization at all. Bitcoin's decentralization is up to all of us to hold our own keys and run our own nodes, right?
- [30:28]
Marty Bent
No.
- [30:31]
Ryan Gentry
And I think as long as the.
- [30:35]
Protocol development focus isn't focused on.
- [30:41]
Marty Bent
How.
- [30:42]
Ryan Gentry
Do we make it easier for MicroStrategy to buy more Bitcoin, which is. I don't think any of that has come up in the knots versus core debate.
- [30:53]
I think we're fine. I think we're okay. I really do.
- [30:58]
Marty Bent
No, I do too. And it's been tough this year because you've seen obviously the digital asset token companies, SPACs hitting the market this year really forced people to be like, what's going on here? And if you're not pragmatic and nuanced, it's easy to. And again, I'm not trying to speak from a high horse or come off as pompous, but I, I've thought long and hard about this and I've had to grapple with it myself. And it's like, yeah, to your point, like what did you expect to happen? To see that for Wall street and all these institutions? To see us plebs riding the monetization wave and not participate? Eventually this is part of the process. And to your point, it's Incumbent upon us to make sure that we're holding on our own keys, running our own nodes, supporting payments infrastructure to make bitcoin everyday money, which you dedicated the last five years of your life to, or many more. Six or seven. And you still are.
- [32:02]
And it's just like, yeah, we're playing in this ocean with bigger fish now, and we just got to hold our own. And that's like, at 10:31, we have the bitcoin development company SPAC out there right now, and we're looking to acquire just an operating business that wants to bitcoinize. Right. And that's similar.
- [32:27]
If Wall Street's getting in, we want mainstream to get in as well. So you want businesses that have nothing to do with bitcoin, but would benefit from incorporating bitcoin, whether that's if they're an energy company into their systems, if they're a large retailer into their payment systems, and then obviously any company, no matter what industry you're in, I think it's incredibly advantageous to use bitcoin as a Treasury asset. And this makes people uncomfortable. But this is what growing up is like. Look at us. Five years ago, I had a beard. COVID lockdowns. I was drinking whiskey like a sailor. Now I got a nice, nice sweater on. Enjoying a nice pint of Guinness on a Friday afternoon. You got to grow.
- [33:12]
Ryan Gentry
Were you a dad yet? Five years ago?
- [33:14]
Marty Bent
I was. I was.
- [33:15]
Ryan Gentry
Yeah, you were. Okay, so that's. I mean, that's been a big change. I guess that wasn't a change for you. That's obviously been a big change for me.
- [33:21]
Marty Bent
Right.
- [33:21]
Ryan Gentry
That changes your whole perspective on what's important and where priorities lie.
- [33:27]
Marty Bent
And.
- [33:27]
Ryan Gentry
Yeah, I have, you know, a little one now and another one on the way. And. Yeah, yeah, growing up, it happens.
- [33:34]
Marty Bent
I was a father of one at the time, and two more have been added since the last time we talked on air.
- [33:40]
Ryan Gentry
Yeah.
- [33:40]
Marty Bent
And at that, I mean, the more children you add, the more chaotic. In a good way that it gets.
- [33:49]
Ryan Gentry
It's all wonderful, for sure, but it is, I think.
- [33:55]
Going back to.
- [33:58]
What we're doing here is we're helping bitcoin progress and soak up more and more the world's capital as it becomes the global reserve asset. You know, one thing that I think a lot of us just didn't understand was.
- [34:13]
You know, what that actually requires in order. Like. Like, you know, the cypherpunk looks at kind of institutional mandates and, you know, investment agreements and all this stuff is like, that's just nerd lawyer Talk, right, Like you should just buy the bitcoin, but like, you know, these insurance, these pension plans, these insurance companies that legally they have to hold 40% of their money in bonds or in public securities.
- [34:46]
That's the brilliance of what MicroStrategy is doing, is they're kind of meeting these investors where they are who want bitcoin exposure and they're saying, okay, well here we've created this little funnel where you buy our preferred because you can, we'll give you what you want, which is this cash flow so you can pay off your pensioners and all that different stuff. And we'll go and buy bitcoin with the proceeds, because you can't. Right. And I think that's kind of the state that we're at where.
- [35:24]
Needing to do these kind of clever financial engineering in order to allow these big pools of capital to get the bitcoin exposure that they desperately want and need is just the work that's required for this next step. And I think again, what we were talking about before we got on the call or before we started recording is.
- [35:47]
The thing that we didn't understand five years ago was that rather than bitcoin.
- [35:57]
Like out competing with all the world's capital and being adversarial against all the nation states of the world, what we found out is like, oh no, the US dollar system desperately needs bitcoin. It desperately needs more high quality collateral to support the system. All of these different fiat institutions are struggling just as much as individuals in the face of inflation and rampant money printing. And they need a lifeboat just like we do. But they're not able to just buy bitcoin with their dollars. Right. They need different sort of structures and products to be able to do so.
- [36:41]
Marty Bent
Sup, freaks? Have you noticed that governments have become more despotic? They want to surveil more, they want to take more of your data, they want to follow you around the Internet as much as possible so they can control your speeds, control what you do. It's imperative in times like this to make sure that you're running a VPN as you're surfing the web, as we used to say back in the 90s. And it's more imperative that you use the right VPN, a VPN that cannot log because of the way that it's designed. And that's why we have partnered with Obscura, that is our official VPN here at tftc, built by bitcoiner Carl Dung for bitcoiners focused on privacy. You can pay in bitcoin over the lightning. So not only are you private while you're perusing the web with Obscura, but when you actually set up an account, you can acquire that account privately by paying in Bitcoin over the Lightning network. Do not be complacent when it comes to protecting your privacy on the Internet. Go to obscura.net Set up an Obscura account. Use the code TFTC for 25% off. When I say account, you just get a token. It's a string of token. It's not connected to your identity at all. Token sign up pay with Bitcoin completely private Turn on obscura surf the web privately obscura.net, use the code TFTC for 25% off. Sup freaks? 2025 left many wondering was this an underwhelming year for Bitcoin or the quiet setup for an extended bull run? On December 17th at 1:00pm Central, join Preston Pysh, Connor Brown and Unchained for Bitcoin in 2025 a year in Review, a concise breakdown of the macro trends and policy developments that truly shaped the year. You'll hear what mattered most, where the market stands now, and what these inflection points reveal about Bitcoin's long term direction. If you want clarity on where Bitcoin has been and where it's headed next, don't miss this event. So go Register now at unchained.com tftc that's unchained.com/tftc. It's almost like it's too good to be true. Like wait a second, what's happening? And that's. And I would attribute this reality to the very understandable apprehension, like are we being co opted right now? It's like maybe some, maybe some people are, maybe some institutions are, but I think the stronger force is this external recognition of oh crap, we've got a big problem here and Bitcoin is a tool that can help us begin to solve that problem. And I think maybe taking a slightly different direction too, bring it back to the bitcoin industry specifically and the companies within it.
- [39:09]
And why they should go public now, get access to public markets. And then putting it in the broader context of SPACs, which particularly post 2020had a negative connotation associated with them. A lot of SPAC offerings were simply, in retrospect, proved to be sort of exit liquidity mechanisms. But I think you and I, we've talked about this at length over the last.
- [39:40]
Few months. The timing for these bitcoin Companies again, if you're mature, you've got revenue, product, market, fit your cash flow and you got material ebitda. And if you basically take what we've been discussing today, particularly with the institutional foray into bitcoin, if that's happening in earnest, like the upside potential, growth potential for these companies is massive as well as we're looking at a $1.8 trillion market cap right now. There's Vanguard, open up the floodgates, bank of America 1 to 4% square, rolling out to 4 million merchants. Like the need for.
- [40:22]
Individual consumers, enterprise consumers to get access to bitcoin infrastructure is only going to increase from here.
- [40:30]
Ryan Gentry
I couldn't agree more. And I think obviously.
- [40:34]
I think what's important too is one of the things that my chairman of my board, Parker White, who's an Austin bitcoin guy, worked at Kraken for a number of years and is now the CIO of a public dap.
- [40:53]
One of the things that he kind of convinced me on when he was pitching me on the opportunity was he was like, look, this merging of public markets and private crypto bitcoin companies is happening now. It's a one way merge.
- [41:11]
And these trap flight people have no idea what they're doing, right? They have no idea what value looks like. And so if people who, if nobody who understands where real value is in this community, in this ecosystem don't stand up, all this traffic money is going to go into a million avalanche. Dats right? It's just going to all get destroyed and all of these capital markets people are going to feel like they got scammed. Just like what's happened in every single single crypto boom and bust cycle we've seen so far, right? And so I think there's, you know, there's a responsibility to try and direct some of this capital into some of the great companies that we know exist, right? And that we know around and put it in the hands of, you know, quality, responsible entrepreneurs that can really put this capital to work and you know, not only build great companies but also be great spokespeople for bitcoin? Like are we happy that you know, obviously Saylor does a great job, but are we happy that the other people that get to talk about crypto all the time is fucking Tom Lee, hey.
- [42:23]
Marty Bent
We'Re going to do in January of.
- [42:25]
Ryan Gentry
Next year, like is that the representative or do we want, you know, I don't want to put any people on the spot but just like people that come top of mind, like wouldn't we love to have Alex Leishman talking about bitcoin on CNBC and giving that perspective. Right. Wouldn't we love to have Elizabeth Stark? Wouldn't we love to have Joe and Drew from Unchained? You go down the list. There's all of these wonderful representatives of the bitcoin community that have focused on their customers and their products and their companies. But I do think at some point there's a duty.
- [43:01]
To educate the rest of the world and traditional financial markets on what real value looks like. And instead of just hoping and being disappointed when the masses fall for shitcoin scams over and over and over again.
- [43:16]
Marty Bent
What about the zcash debt? That's a big one.
- [43:19]
Ryan Gentry
Just unbelievable, right? But I mean, we've been in this ecosystem long enough that I. I'm not mad, I'm just disappointed.
- [43:29]
Marty Bent
Yeah, well, I mean, this brings up a good point. It's something.
- [43:33]
Like, obviously I think you'd be an incredible representative. But it is, it is frustrating. Like, excuse my language, almost 17 years in, because I remember when I first got in like 2013, 2014, you had. Was it Brian Kelly on CNBC? Tom Lee was around back then. They let Trace Maron, but obviously he's had his downfall. Still the quality of people actually highlighting where the value is. And listen, credit where credit is due to Saylor and other people. Now the last six months it's been all this DAT thing where it's like, all right, it's going up, buy the stock. I think strategy is far and away separated and demarcated from a lot of the DAT focused companies that have hit the market this year. But like, again, I think really bringing the public the message of like, hey, this is superior savings and payments technology that is objectively better when you actually touch, see and feel it. I mean, you saw this and you see this at Lightning Labs. Like the ability I was just talking about, I was on Noster, we were live streaming, was live streaming @WALKER 3 hours ago and people were sending bitcoin to his wallet as we were live streaming. It's like that is a twitch competitor that nobody realizes yet, but it is superior. Like you don't have to wait once a week, once a month, whatever it may be. Like you are getting paid immediately. You have the proliferation of other second layer solutions like ARC Spark, Cashew Mints or E Cash Mints Liquid. These are all becoming interoperable. Obviously the development at the protocol layer with miniscript and what you can do to secure your collateral is getting extremely robust. And it is true Sci fi Tech that is better. And we need, in my opinion, and I think in your humble opinion as well, more people telling this side of the story, which I think is being very underappreciated. Obviously we have luckily, I mean, I think outside of Jack Mallers, I can't think of anybody who's going on CNBC and telling a story like this.
- [45:45]
Ryan Gentry
Exactly. And I mean.
- [45:48]
I think there's a.
- [45:52]
Bitcoin has always had.
- [45:55]
A little bit of a. Not a marketing problem, but like it's.
- [45:58]
Marty Bent
Had a marketing problem. You can say it.
- [46:01]
Ryan Gentry
Yeah, it's had a marketing problem. Right. And I think bitcoiners are not predisposed to the salesmanship and the marketing that needs to happen. But it just, it's important, right? It just is. And I do think that, you know, now that we're at this, at this point and at this level of scale, you know, I think there's a real responsibility. You know, there's kind of like, there's kind of two choices that you have when you've been a bitcoin for a long time. One which is, you know, respectable is to ride off into the sunset with your bitcoins.
- [46:37]
And just go enjoy your life, right. And be financially secure and kind of do whatever you want. The other one is the other choice is to give back to the community that's given you so much and do, you know, incur a little bit of self sacrifice to help get other people into the lifeboat. Right. And I think that that's kind of a little bit where we're at. Where.
- [47:04]
You know, as we've heard this year has seen a ton of OGs selling, right. We're over 100k. If you bought Bitcoin at 10 bucks, 100 bucks, something like that, like, you know, congratulations, that's fantastic, you retired your bloodline. That's awesome.
- [47:21]
But I would challenge those people that like, you know, there's a. There's more going on here. We're not done. 100k is $1.8 trillion is not the terminal end of bitcoin. Right. Like, we got another 100x to go to really fulfill the mission. And this next leg of the journey is just, necessarily takes a little bit more than just buying and holding. Right? There's more convincing to do. There's more convincing of, you know, entities that aren't just retail people looking to make money. Right. This is like serious institutions that need to be convinced of volatility, of safety, of.
- [48:04]
You know, that the custody of the bitcoin is with reputable entities, etcetera. Etc. Like there's more work to be done on this next leg of the journey and I think we need all hands on deck. And you know, I think that's kind of the next thing that I'm really interested and really passionate about doing. And you know, I can, I think I have a unique skill set to be able to do that. And so that's why I'm focused on, on this back and on working with, you know, the best bitcoin founders to take this, you know, next leap of the journey with me.
- [48:42]
Marty Bent
What you're is a, you're going to find a founder with an operating company spitting out cash flows, set up for growth. But before you find that, that founder, it's going to be you. You're going to be on cnbc.
- [48:58]
We've heard the pitches from Saylor and everybody. It's digital capital. It's the best asset on earth. What would your unique pitch be? Why we should lean it to Bitcoin. Why bitcoin? Why now? Is it a store value hedge? How would you paint the full picture? Because I think you are particularly suited to, to do a good job of it.
- [49:19]
Ryan Gentry
One thing, a, a term that's been rattling around in my head for the last several months.
- [49:29]
Has been like, look, I'm outside of bitcoin. If you remember like my background, I'm an engineer, right? Like I started my career at intel.
- [49:38]
Marty Bent
Which was like a lot about, in the first episode.
- [49:41]
Ryan Gentry
We talked a lot about it in the first episode. It's like it was the, I think, you know, arguably the preeminent American manufacturing company.
- [49:50]
You know, for like our entire lives, right? You had kind of, you think about the, you know, ge, Boeing, intel, right? Intel does massive, massive investments in manufacturing in the US and so one thing that I'm like extremely interested in and have been following very closely is, is all of the efforts to kind of reshore manufacturing in the US and like bring back, you know, those.
- [50:17]
Post Covid bring back supply chains and things like that. And so this is a long winded way of saying that like in order to do that work and another thing we talked about five years ago is that like bitcoin is just as much a hardware evolution as it is software one, right? But in order to do that work we need to, without inflating everybody away, we need to re collateralize the financial system.
- [50:43]
The financial system is dramatically under collateralized and without re collateralizing this financial system, we will not be able to successfully make the capital expenditures we need to make to bring back manufacturing and ensure American national security. Right. And I think if you adopt that frame, what asset can we use to re collateralize the financial system? Right. Like it's not going to be Treasuries. Gold's been doing great obviously, but like gold kind of had its time as collateral and we're not going back to it. Really the only option that you have is Bitcoin. Right. And imagine if adopting Bitcoin as a, as a collateral asset to, you know, lend against, to, to recollateralize this dollar system as Bitcoin goes from 1.8 trillion to $100 trillion. Right. Like that 50x in growth could provide. You know, I don't depending on what multiple like another hundred x of capital expenditure of dollars issued in order to provide new productive capacities in AI and robotics and space travel and all the things that we want to invest in. But you need that underlying collateral in order to do that lending to productive entrepreneurs. You just, you have to have it. And so I think that's, that's the thing that I've been really interested in is like.
- [52:17]
Thinking about Bitcoin as the tool that allows us to re collateralize the financial system and invest in all of these new productive economies that we're so excited about.
- [52:29]
Marty Bent
Yeah. Another way to say it is we're, we're for the bitcoinization of finance. It's not the financialization of Bitcoin.
- [52:34]
Ryan Gentry
Right. It's a thousand percent. I mean that's. And so that's, you know, Elizabeth Stark is, you know, my former CEO, boss and CEO at Lightning Labs is phenomenal at kind of all things branding and turns of phrases. And so she was about, you know, bitcoinizing the dollar is that, that's what we were doing with, with Tapard assets. And I think similarly to your point, bitcoinizing the financial system, building it, allowing it to, you know, grow on a firm solid foundation based on 21 million, based on lack of rehypothecation based on, you know, audit, auditing and verifiability. That's a better way to organize as we move into the future.
- [53:21]
Marty Bent
Yeah. I'm not sure if you caught up at.
- [53:25]
The National Security Strategy memo that went out this morning about the Trump administration. It's pretty profound. I've only read a few pages I recorded with somebody right before this about it. If you're listening to this episode and listen to preview previous episode, you heard it with Susan. But just this whole idea like leading into reshoring. We're getting away from the global wars. We're going to focus on the western hemisphere. I think that's another great frame for Bitcoin is like hey, not only does the system need to be recollateralized, but a lot of the bagging infrastructure and securities infrastructure, if we're being honest with ourselves, is running on tech that was built in the 70s and it's not fine tuned. So we have this incredible re industrialization or re engineering of the financial system potential. We can build a new banking stack, a more sovereign banking stack, obviously a modern banking stack on this protocol as well. So there's a number of different narratives. There's recolateralization, the supports of the energy infrastructure build out and like one that I don't think is getting enough tick yet. Maybe it's because the timing's not right. Order of operations type thing is like literally. I think Ethereum probably for being objective does a better job of marketing it this way. But you could rebuild the financial system on top of Bitcoin. And it is.
- [54:54]
I think that seeding that in the minds of not only the administration but the American people of like, hey, there's an incredible opportunity here to do something brand new. It's going to create a ton of jobs, a lot of opportunity. And when it's all said and done, the monetary and financial system is going to look completely different in a better way.
- [55:14]
Ryan Gentry
One thing that's really interesting about that, and I agree with you is we talked a lot about this with tacard assets was at Lightning Labs. The protocol was predominantly focused on stable coins and bringing stable coins to Lightning. But there was this whole other aspect to it of you know, doing tokenized assets. And I always kind of thought that that was like a little silly and like, you know, why would you, you know, mint a token, a tokenized asset instead of, you know, just issuing equity on a stock exchange. But one thing that was really interesting as we talked with you know, other, other folks is, you know, if you grow up and you create a company in Mexico, in Guatemala, in Colombia, like there isn't a capital market like it, it doesn't exist, right? Like, like you, you can't go and raise money or do the things that you can do as a US company in these other places. And one thing I've always thought about Bitcoin is like what, what the revolution really is is it's extending like the best property rights the world has ever seen to anybody with an Internet connection, right? Like if you want to have Texas level property rights, like you got to be in Texas, right? If you're born in China or, you know, I don't know, name a worse country in terms of property rights. Like, you just, you can't get that level of assurances over your property unless you move to the jurisdiction of Texas with the exception of holding your own Bitcoin private keys. And I think extending that same level of property rights to people that want to issue equity, that want to raise debt, that want to do these different capital markets activities.
- [57:00]
Via the bitcoin blockchain is an unqualified good. And I think, to your point, I think that will unlock a tremendous amount of prosperity.
- [57:10]
By extending these property rights to. Because as we know well from some of the best entrepreneurs I worked with at Lightning Labs were based in Nairobi. Right. We're based in Medellin, we're based in, you know, Chiang Mao in Vietnam. Right. And you know, thankfully, you know, they were able to get into the bitcoin community, figure out how to, you know, create a corporation, all that sort of stuff. But, you know, to take the next step to really operate at, you know, billion dollar company scale, like you kind of need US capital markets access and lowering that barrier to entry to just anybody with an Internet connection, I think is, is an unqualified good.
- [57:53]
Marty Bent
Yeah, it's very optimistic too. It's very.
- [57:58]
Motivational, if you will. There are a lot of black pills out there, can't do it. You can have a black pill. It's all.
- [58:04]
Ryan Gentry
Never black pill.
- [58:05]
Marty Bent
It's all open source, all accessible, not all of it, but the protocols are mainly open source and you can, you can build. But I mean, with that being said too, I mean, I think it would be remiss of me not to really lean into Lightning Network, how it's developed over the last five years, and again mentioned it earlier, but that's something that's made me incredibly bullish. I think it's incredibly, I mean, it's not even on the radar of the broader public, but it's incredibly underappreciated within the Bitcoin space, which should be paying attention to it. But like the emergence of the Lightning network not only as this very decentralized distributed payments protocol on top of Bitcoin, but this connective tissue between these budding second layer protocols that many would have assumed would compete with Lightning, but we're finding out they're actually symbiotic.
- [58:59]
Ryan Gentry
Many years ago.
- [59:01]
A guy, Zachy Manion, who was like one of the main engineers and architects of the Cosmos ecosystem, I remember when I was at multicoin, him telling me that, look the master architecture or a blockchain based payments network. And again, this is a guy who worked on Cosmos, he was not interested in lightning, any of that sort of stuff. He was like, the master architecture is you have a single settlement blockchain and then on the sides of that single settlement blockchain you have these.
- [59:35]
Trustless two way pegged liquidity pools, side chains, roll ups, et cetera. And then all of those liquidity pools are connected with a payment channel network. Right. So I've kind of always had that vision in my head of like how things were going to develop. And it's just interesting that the bitcoin community chose to have the settlement network and then build the payments channel network. Next the interoperability layer, and then we had all of these custodial venues, like old Wallace Satoshi, the exchanges, which were kind of our liquidity pools, which obviously be better if those were noncustodial. But now we have this heterogeneous mix of liquidity pools, whether it's Alpen Labs style, roll ups, Botanics style, Spider chains, Spark with State chains.
- [60:28]
Ark, of course the Cashew emints, all of which interoperate via lightning. And the really funny thing about that choice versus the choice that the crypto people made is thanks to having a native interoperability solution, all of these bitcoin side systems just kind of work together naturally. Right. There's a native interoperability language. Going between roll ups and Ethereum is a fucking nightmare. They still haven't solved that and they have no idea how they're going to solve.
- [60:59]
Marty Bent
Well, let's dive into that again. Going back to order of operations, which has been core theme of our conversation throughout the last 10 years or seven years, however long we've known each other.
- [61:11]
This is order of operations by like. So like Ethereum. Other blockchains went for like, all right, we're going to build these second layers, they're going to compete with each other, but some have properties that others want. And if you're in this one, you want to use that one. Like, how do we connect them? The bridge has become the popular nomenclature for how you connect them. But then once you build these second layers is like, how do you agree on a, on a standard language for them to communicate? And then you get into dict, measure, contest and coordination issues where it's like, oh, you built the common language first, built the individual second layers after that. Yeah, and I don't think there was any intention behind that too, to your point. I think it just happened almost.
- [61:53]
Ryan Gentry
Yeah. Once a Day I wasn't around at the beginnings of the Lightning network. I don't think I do know that in the very early days, I think because litecoin had segwit before bitcoin did. I think actually I know lnd had support for litecoin for a number of years. It was only sunset in the last couple years, but there was some early ideas that it could be used for kind of cross chain swaps, but never.
- [62:28]
It took way too long to figure out that Liquid and Lightning were a good combination.
- [62:35]
Marty Bent
Shout out to Francis and the Bull bitcoin team for really and the Aqua.
- [62:38]
Ryan Gentry
Yeah, I mean that works great. And you look at what Breeze has done with the Breeze SDK building on Liquid, like they built like a really slick, nice solution. What Bolts did with, with Submarine swaps between Liquid and Lightning like that, you know, a great solution that, you know, really provided a good user experience. Like that was something that, you know, I think I was, I was waiting a long time for. And then when it, once people finally started building it was like, oh, of course. And now seeing it work with, you know, that was another thing that like in my, my years at Lighting Labs.
- [63:15]
You know, I pitched a lot of things and a lot of things that were like not very well received. The most well received pitch I ever gave was to these Bitcoin layer twos about integrating with Lightning. And the pitch was very simple. It was look you as new side system, you're going to get spun up and you have two options. You can either go and do business development and get a direct integration with every single one of Binance, Coinbase, Kraken, Wallace, Satoshi, every entity on the Lightning network which now is in the hundreds, thousands. That's a lot of people, a lot of businesses, all of whom who have other roadmaps and trust me, as a guy that did integrations with Lightning, it is not easy. You can either do all of those integrations directly or you can integrate with one submarine swap provider that will bridge your site system to Lightning and you get instant deposits and withdrawals from all of those customers for free. Right. And every single Bitcoin layer two was like, oh, I want option number two please. I want to integrate with the submarine swap provider and get all the whole Lightning network for free. Right. It's the easiest pitch in the world.
- [64:28]
Marty Bent
Yeah. And then with the Ecache mints, it's like you just natively build in a Lightning gateway and throwing out on the mint and it makes a ton of sense. And again I think it's Extremely underappreciated right now. I think Baltic Honey Badger was an incredible example. They just ninja launched ARC from ARC Labs. Their implementation on the back end all the payment processors at the conference and it was so cool. Unfortunately, one of two Baltic Honey Badger conferences I've ever missed in my life. But like watching from afar, there was people paying from ecache mints to arc. So it was like E cache to lightning to ARC happened automatically, like completely interoperable. If you're an end user with your particular preferences.
- [65:17]
That'S like the magic of it that people really have not appreciated yet that unless you know ball. Unless you know ball, you don't really appreciate it. And again that's when you think of the potential to re architect the financial system from the ground up, the banking system from the ground up. And tying this into the whole conversation of people being worried that Wall street is co opting Bitcoin. It's like no, this technology is superior. User experience is superior, the ability to build on it is superior. Because they're open interoperable protocols. The shelling point is going to be through these systems whether you realize it or not. And tying the whole conversation of companies, whether they're in the bitcoin space or outside the bitcoin space going public to really accelerate this or to accelerate the bitcoin integration into their businesses and comparing it to SPACs of 2020 which people really anchor to, it's like they don't compare. The upside potential here is massive.
- [66:22]
Ryan Gentry
It's massive. It's massive. And I think like again the stat that I like, I couldn't believe.
- [66:28]
When Miles and Square first started talking about it, but is such a staggering stat is like no. The 28% of US merchants.
- [66:37]
Marty Bent
Oh yeah.
- [66:37]
Ryan Gentry
Can now accept payments over lightning.
- [66:40]
Marty Bent
We met right after we both went to like.
- [66:44]
What they cost Miles immediately after he got off stage. But I remember crap Corallo being like, oh my God, this is crazy.
- [66:53]
Ryan Gentry
Yeah. I mean the yield that, that was nuts. Again, that was a number that I'd been waiting for for like 10 years. A thing that we talked about five years ago was the lightning pool launch and about like earning yield as a routing node operator and how like eventually someday, you know, real businesses are going to be making real money running lightning nodes and now. Yeah, I mean a non custodial yield on your bitcoin, the risk free rate, you know, Nick Boddy was talking about that years before we got on to it. Like it's happening, it's happening for a public company, for 500 company yeah, yeah, like a big one. Yeah. I mean I, I think that's. Lightning has grown up so much over the last five years and has matured so much. And again it's, you know, there's so.
- [67:39]
Marty Bent
Much hate around it though. Why do people hate it?
- [67:41]
Ryan Gentry
I think I, I honestly think people hate it because.
- [67:47]
The mental model of what they thought it was supposed to do is not what it does. Right. If you think about what Lightning does from a fundamental basis is it removes the transactions per second limit from the Bitcoin blockchain. What it did was it scaled the transactional capacity of bitcoin, but it did not scale the number of people that can hold private keys. So like what. And this is, you know, again, the tie in to what we were talking about with these new site systems and interoperability is like what all those systems are really good at is allowing more people to hold their own private keys and transact efficiently. What Lightning is not good at is allowing people to hold their own private keys because you have to manage your own channel. Right. And you have to manage your own hot wallet. So I think the self custodial Lightning UX.
- [68:50]
Was never really able to get up to par of a Metamask extension or phantom wallet or something like that. But that's not really what Lightning is for. Right. We kind of always needed these additional systems to plug in at the end of Lightning to solve that problem. Because what Lightning is phenomenal at is, is allowing for instant global bitcoin transactions that settle, you know, for tenths of a penny. It's just, it's not good at the supporting self custody. That's not, that's not really what it's for. Yeah, people, people get upset about that. But hopefully this next generation of Lightning wallets that are built on arc, that are built on spark, that are, you know, built on these new.
- [69:36]
I call them Last Mile solutions. In a blog post I wrote a year and a half ago that are based on these new Last Mile solutions will kind of change that opinion. And you know, I think what Lightning is really good for is saving every 28% of U.S. merchants from having to pay Visa taxes. Right. MasterCard taxes, credit card network taxes. Right. Not having to pay that.
- [69:59]
Marty Bent
Reframing. Just call them Visa taxes, not interchange fees. Visa taxes, that's what they are.
- [70:05]
Ryan Gentry
Yeah. Visa, NASCAR are the most profitable. They have the highest operating profit of almost any company in the S&P 500. They make like 60% gross margins or something. It's outrageous.
- [70:16]
Marty Bent
At incredible scale.
- [70:17]
Ryan Gentry
An incredible scale for like not really doing that much. Right. They just pass messages between banks.
- [70:23]
Marty Bent
Yeah, well, right. Disruption, I mean we could not. That's why I like to nerd out about this stuff with you. The other thing too is like the Lightning Network I would argue is so good at what it does, particularly from a privacy perspective. It's really hard unless you have companies like Block publicly reporting their numbers to actually know what's going on within the network. And so people see that opacity I guess and say, ah, there's probably nothing going on there. But I, I can tell you for sure, I think literally via this podcast. I receive at least.
- [71:03]
Maybe not every minute of every day, but like every five minutes at the very least. I receive a Lightning on average every day.
- [71:12]
Ryan Gentry
It just, it just keeps growing. And I think, you know, there's so much of the comparison to, is, was always comparing Lightning to these other shitcoin systems. But like if you just look at Lightning's growth independently and not comparatively, it's fantastic. I mean like the growth of a volume, the growth of nodes, the growth of channels, the growth of companies, the growth of investment dollars into startups, like all of the, everything is up and to the right very steadily at 20 to 50% CAGR or something like that. Like all, all of those things, all of the metrics that we tracked were, were, were great. And especially like the most important one, volume. You know, like I think we were. I don't know exactly where the network will end this year, but you know, if you look back at like the old river reports or the arc arcane reports when they did like the state of lightning, you know, it was like five, five years ago, Lightning was doing like single digit millions in volume annually. Right. Two years ago maybe lightning got to, you know, hundreds of millions, if not billions. Now we're already on the order of, you know, potentially $10 billion in annual volume, you know, if not more. Right. That's phenomenal growth.
- [72:37]
And there's hundreds of, you know, I think Visa and MasterCard combined generally for like $20 trillion in total payments volume and about half of that is debit, which is the right comparison for, for lightning transactional volume. Right. Like getting up to $10 trillion in total volume. Like the way I looked at that when talking to entrepreneurs and businesses, it's like, look, there's a hundred x here left, right or a thousand x here left growing.
- [73:03]
Marty Bent
At that rate, we'll get there quicker than anybody expects.
- [73:06]
Ryan Gentry
Exactly. And like again like, you know, and the way these network effects work is you just kind of unlock greater and greater scale as each entity comes on board and square, bringing on almost a third of all U.S. merchants. Access is an enormous unlock for scale. And the fact that it works and it's being operated by a really quality professional company like Block means these people are going to have a good experience. And all of a sudden, like, this stuff goes word of mouth. If you're as a brick and mortar retailer saving 3% because you switched to Lightning, you're not paying the Visa tax, you're not paying the Visa taxes anymore. You're going to put a little note on your terminal that says, please discount if you pay with Bitcoin. Right. Here's how you pay with Bitcoin via Cash app. That education is just going to be word of mouth, which is. I remember in the, in the early days of podcasting 2.0, with Adam Curry, Adam Curry being like, you Lightning people don't understand how big this is. Every podcaster is going to be shilling lightning to his audience. To his or her audience are all going to be saying, here's how you set up a Lightning wallet. Here's how you start streaming sats. To me, it's true.
- [74:25]
Marty Bent
Yep. And I mean, podcasting 2.0. I've talked about this a few times, but I think we were top five. One of the first podcasts one of the first five podcasts to put a Lightning address in our RSS feed. Like it is. And it's like it's not. Obviously it's not going to replace advertising revenue overnight, but like it is. The thing that makes me most optimistic is, number one, it's been consistent up and to the right. It's not crazy parabolic growth. But slowly but surely, more people are discovering Fountain and other Podcasting 2.0 apps, downloading them, listening, contributing.
- [75:01]
And it's happening. And the growth is there. It has not never, like, went up and then died and never went back up again. It's been consistent up and to the right. And the other thing, last thing, because I know we've got families, it's Friday afternoon here. I think it's important to touch on for anybody who's trying to compare lightning to other L2 protocols and looking at TVL specifically, I think that's another thing. They look at, like channel capacity. You're like, oh, look, it's up, it's down. It's not as much as what's in wrapped Bitcoin on this chain or whatever it may be, and completely misunderstand dynamics that that is actually an incredibly high signal. That this thing is working because you can do more with less. And another factor that many people don't take into consideration when they're just opining on this as a pundit is the fact that the bitcoin price goes up, so you don't need as much Bitcoin is these channel in these channels as before. If you're denominating the purchases in US dollars and it takes less bitcoin to complete that purchase.
- [76:03]
Ryan Gentry
Absolutely right. And you know, I don't pay nearly as much attention to the crypto people as I used to, but it was really funny a couple of years ago when the Uniswap founder all of a sudden started coming out and saying that TVL was a bad metric. Because actually what we should be optimizing for is like capital efficiency volume divided by like TVL capital. Yeah, yeah, locked capital. And I was like, oh yeah, that's what Lightning people have been saying this whole time. Like, yes, like, like we were supposed to be designing capital efficient systems here, not just having people stick their bitcoin in hot wallets and put them at risk for vanity purposes. Like that was never. That's always been dumb. And I think again, like the fact that Lightning can process the volumes that it's processing with the. Well actually the signal of Block being able to earn 10%, that is the natural signal that shows that there's a capital shortage in the network finally. Right? That means that there is more demand for payment capacity than there is actual capacity allocated. And that is the market signal that should incentivize more entities to add more capital to the Lightning network to soak up that demand. Right. And that's how it should work. Now the tricky thing is like, you know, how do you actually measure that? It's kind of hard. You got to like be constantly monitoring network. You got to look at the fee rates that are being charged. You gotta look at like how often certain nodes are opening and closing more channels. Right? Like you gotta look at I think most importantly how much volume is flowing through Lightning Labs loop service, which is, you know, a big sink in the network and processes a lot of, a lot of submarine swap volume. And without running the nodes yourself, like that's kind of hard to find. It's, it's doable to be able to suss out if you really know what you're doing, but it's kind of hard to find. And really importantly, the entities that are doing well, they don't like to share their secrets on Lightning because they're making a lot of money and they don't want to invite new competition.
- [78:15]
Marty Bent
Yeah, no, but now there's people that are noticing this marketing. You have companies like Voltage, Amboss, Lightning Pool. Obviously they're building the tools to make it easier than ever to do that, participate in that.
- [78:30]
Yield is a dirty word in this industry, but this is, this is true yield. You lock up your capital in a two or two hashtime lock contract that you have control over and you offer a service of facilitating transaction.
- [78:47]
Transactions on the Lightning Network and you're going to get paid for it.
- [78:50]
Ryan Gentry
Yep, it's a useful service and becoming more and more useful every day.
- [78:54]
Marty Bent
Yeah.
- [78:56]
We'Re going to have to wait five years for the next one. I'm going to be. I might have. I'm going to have like two more kids. My hair might be. My hair might be completely gone by then.
- [79:04]
Ryan Gentry
Who knows, who knows what's going to be happening in five years. I'll do my best to make sure it doesn't take that long this time.
- [79:10]
Marty Bent
All right, what, where should we send people? What should look out for last message?
- [79:15]
Ryan Gentry
Follow me on Twitter at Ryan the Gentry. That's kind of where everything is happening.
- [79:22]
I think it's going to be. I'm very, very, very bullish on 2026. I'm always very, very bullish on bitcoin, but most importantly, I'm bullish on bitcoiners and I'm really bullish on bitcoiners. Taking this asset and this market to the next level and all kind of growing up together, professionalizing and winning the war for the world's global reserve asset.
- [79:50]
Marty Bent
In other words, we're going to win. Stay positive.
- [79:52]
Ryan Gentry
We're going to win. We're going to win.
- [79:54]
Marty Bent
Freaks Peace of Love. Thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there. Also, wherever you're listening, whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that. $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time. And until next time again.