← THE Bitcoin Podcast
THE Bitcoin Podcast
SAVEOURWALLETS.ORG, MINING POOL CENTRALIZATION, VIBE CODING WALLETS, FILTERS, & MORE| Matt Corallo
01:19:55
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- [00:00]
Matt
It's great. The Trump administration has walked back some of that. They said we're not going to bring these kinds of charges. But whoever is in the White House next can undo that and probably will. You know, the pendulum likes to swing both ways. It will presumably swing the other way soon. Whether people are happy or not with that. That might mean anti crypto, anti bitcoin, and this is something they will probably try again. And if they do, that means we don't get access to the kinds of good wallets we want. We don't get access to, to Phoenix. We're not going to get access to lightning wallets. Roll ups are dead, Arc, spark, all of these things that you might have heard of or might not have heard of yet that are coming down the pipeline to wallets to improve the ux, make it really, really usable, make bitcoin awesome. We can't have as Americans, we can't build an America and we can't allow others to service to Americans. So we need to get the law change so that developers, so that people running these kinds of wallets are protected so that we can have access to these things in the US Foreign.
- [01:06]
Walker
Plebs.
- [01:07]
Unknown
My name is Walker and this is the Bitcoin podcast. Bitcoin continues to create new blocks every 10 minutes and the value of one bitcoin is still one bitcoin. If you are listening to this right now, remember you are still early. Find me on noster@primal.net Walker and this podcast@primal.net Titcoin on X, YouTube and Rumble. Just search at Walker America and find this podcast on X and Instagram at tcoin Podcast. Head to the show notes for sponsor links. Head to substack.com walker America to get episodes emailed to you and head to bitcoin podcast.net for everything else. Without further ado, let's get into this bitcoin talk.
- [02:02]
Walker
Matt, glad to have you here. Hopefully you're also relatively recovered from Vegas, but I know you've been, you've been hitting the circuit of podcasts, so that can be, can be quite taxing.
- [02:13]
Matt
Yeah, thanks for having me. Yeah. I've been on tour, as it were, trying to get the message out. It's been, you know, it's fun, it's fun to hang out, chat bitcoin with people for an hour at a time. But it also means I don't get my normal work done. Yeah.
- [02:29]
Walker
And just for. So you are, what, what is your, your head of something at Spiral, right?
- [02:37]
Matt
I don't know. I'm. I'M an engineer. I'm. I guess I'm the most tenured engineer on the Spiral team. So we work on lightning. We work on making Lightning more accessible, better for wallets, and hoping to. Our real goal is to make bitcoin the best money. I mean, that's, that's the top. One of Block's top line goals and to use that within Block. But then our goal at Spiral is to just, just make bitcoin the best money.
- [03:02]
Walker
I still remember, and I, I mentioned this to you at, in Vegas, one of the bitcoin conference presentations from all the conferences I've been to that has stuck with me the most and that I will just always remember was your Talk at the TAB comp in 2022. I think that was basically the, the premise was like lightning screwed, but maybe not. But it is, but maybe not. And I don't know, it was just, it was, it was, it was masterful. And I kind of, I maybe want to revisit some of your theses from that a little bit later on in this just because I thought that was just a banger of a talk. Also, your, the keynote that you gave right before you were the last speaker, before Trump went on stage last year, which was amazing because you gave a really important, like, not just some fluffy, you know, NGU talk. You gave like a, hey, this is a thing we need to pay attention to with mining centralization, and you gave it to the most packed house you possibly could have. So I thought that was the most. That was pretty cool. Yeah.
- [04:02]
Matt
The most packed house of people on their phones.
- [04:04]
Walker
Well, okay, fair, Fair enough. I was paying attention to it for what it's worth. And for sure, for sure. Some others were as well. But yeah, that's fair. But okay, today and like, the reason that you had reached out, we chatted at the conference a little bit. You had some very cool hats, which I believe you're wearing now. Yep. Okay, awesome. So I'm just going to preemptively tell people to go to saveourwallets.org which I thought initially, just knowing you, I was like, is this going to be some.
- [04:31]
Unknown
Sort of a deep troll?
- [04:33]
Walker
Is this, like, is this Matt playing some sort of a long game? No, no, no. This is, this is very, very real and a very serious thing. So I want to just kind of get right into that to make sure we cover it. Can you tell us, like, what is going on? What is saveourwallets.org and what are we talking about here? Why is there, why did you create a website Just for this.
- [04:52]
Matt
Yeah, yeah. So most people are familiar with the Samurai and the NATO cash cases. The DOJ brought charges against non custodial wallet, non custodial platform, saying, oh, you were a money transmitter, which basically is the class of rules that requires kyc, aml, all the stuff that you'd have to do at a bank, all the stuff that you have to do with a custodial institution. And they said, no, no, no, even though you were non custodial, you had to comply with all these laws. It was not possible for them to comply with these laws. The, the people they were supposed to register with would not have accepted their registration because they didn't think they needed to register. But nonetheless, the DOJ brought these charges and, you know, maybe they'll win in court. The DOJ has now dropped some of those charges. But, but importantly, it had a chilling effect. Right. We saw Phoenix, this great lightning wallet, decide to pull out of the US market and a lot of developers were asking questions. So, yeah, it's great. The Trump administration has walked back some of that. They said, we're not going to bring these kinds of charges, but whoever is in the White House next can undo that and probably will. You know, the pendulum likes to swing both ways. It will presumably swing the other way soon. Whether people are happy or not with that. That might mean anti crypto, anti bitcoin, and this is something they will probably try again. And if they do, that means we don't get access to the kinds of good wallets we want. We don't get access to Phoenix, we're not going to get access to lightning wallets. Roll ups are dead. Ark Spark, all of these things that you might have heard of or might not have heard of yet that are coming down the pipeline to wallets to improve the ux, make it really, really usable, make bitcoin awesome. We can't have as Americans, we can't build an America and we can't allow others to service to Americans.
- [06:47]
Walker
Which is kind of insane because purportedly we're the freest country in the world.
- [06:52]
Matt
Supposedly.
- [06:53]
Walker
Supposedly. And by many metrics. Yes. Like, you know, I forget who it was that described it this way. It may have been Greg Foss, a Canadian who, you know, is looking down from our American attic at America but saying basically, you know, America's the prettiest horse at the glue factory. Like, yeah, it's still a horse at the glue factory, but it's the best looking one there. But this is kind of insane though. And just to, to loop back on One thing you mentioned, because I think this is actually really important for people to realize why the pendulum swinging back and forth actually makes such a difference. And you need, like, you need actual protections like that are codified into law. The FinCEN basically said, no, this, this, they're not violating anything. Like the this doesn't apply. Money transmitter doesn't apply. From our perspective, like, no, it's all good. The prosecutors went ahead with it anyway, knowing that. And I think Sam Shapiro at the BDC Policy Institute has done like a lot to kind of uncover that and showcase. I know a lot of people have. His is just what I've seen. But this is kind of like why there is actually some really dire need to make this stuff happen at a regulatory level. Because if it's just prosecutors from an administration being left up to it, they'll just do whatever they want. Like it doesn't matter what a particular agency says, right?
- [08:08]
Matt
Totally. Yeah. And you know, there are a lot of prosecutors in the United States. They can make decisions, you know, the, obviously their boss can tell them no, but whether they're paying close enough attention. But yeah, more importantly, the next administration, who knows what they're going to do? And so we really need to get the law changed. We need to make it clear that, look, if you're not a custodial platform, you know, you still have to enforce sanctions, you still can't, like open a channel with someone in Iran, whatever, but you don't have to do kyc, aml, these things that you can't actually do. Right? We're not talking about stuff where it's like, ah, well, these wallets just don't want to do. It's like, no, they can't. You cannot do AML at that level on lightning on any of these platforms. You know, you can't run a lightning wallet and submit to yearly examinations about whether or not your AML system is up to par. It's not practical, it's not feasible, it's just not a thing. And so we need to get the law changed so that developers, so that people running these kinds of wallets are protected so that we can have access to these things in the US And.
- [09:12]
Walker
I mean, does this, is this something that potentially has ramifications further than just like, if an individual's listening to this and they're thinking, well, okay, maybe some companies need to worry about this, what's the big deal? But like, this could conceivably this kind of precedent could be used to go after just like even individual node runners, right? Who are operating lightning channels with each other. Like there, there's, there's no reason, like if they, if they have a bone to pick with you, they can use this as an attack vector essentially.
- [09:36]
Matt
Oh totally. Especially lightning nodes. You know, any of these, I like to refer to them as ancillary services to non custodial wallets. So these, these service providers, these sequencers, these lightning nodes, you know, sometimes it's decentralized networks, sometimes it's an individual company, they can all be targeted with this kind of reasoning. You know, the, the DOJ said that a frying pan transmits heat and thus anyone involved in transmitting any data for a non custodial wallet as a money transmitter, that was their argument in the filing, is a frying pan transmits heat and an ethernet cable transmits data and thus everyone is a money transmitter. And it's like, well if you take that to its logical conclusion, your ISP is a money transmitter because they let you use Bitcoin on the network. Right. It's absurd how broad they wanted to define money transmission here. And so it needs to be clarified. Like this is nonsense.
- [10:32]
Walker
I mean that, that's, I'm now remembering this because I think there were jokes about like you know, stainless steel versus cast iron pans and you know, which was. But it's just like, it's, it's just so insane like that, like that, that's like an argument that was made like by very serious people who can just literally throw you in jail. Like that's, those are people that can come and take away your freedom and they're making arguments based on like, you know, fucking heat transfer. I mean it's just, it's just, that's just nuts.
- [10:58]
Matt
It's just insane. You know, they can, maybe you end up winning in court, it doesn't matter. You still spent three years sitting in jail, rotting in a cell and no developer, no wallet software vendor is going to take that risk, right? And so you know, there's a lot of bitcoiners like oh well we shouldn't let the government, whatever, we should take our freedoms, not, you know, ask the government to change the rules. And that's fair. But no one is going to take that risk for you, right? So you need, in order to have, in order to use Bitcoin in a way that has not shitty user experience, right? So on lightning, on Arc, Spark, whatever, on any of these L2s, you need these ancillary services. Maybe they're a company, maybe it's decentralized network, but you need them in order for that wallet to function. And no one is going to take that risk for you because no one wants to sit in a jail cell. Even if they're confident they're going to win on the, on the law, they're not going to want to sit in the jail cell. No developer is going to do that, no wallet vendor. And these things just won't be available to Americans.
- [11:56]
Walker
And, and I cannot blame them. I wouldn't want to sit in a jail cell like for that and, and not even have the, you know, the, like. Nothing is certain once, once your freedom is stripped away and you are put behind bars. I mean, like we just saw, you know, Ross Albright finally made it out after so many years behind bars. Like nobody wants to be put in that cage. And the state does have that ability to exert violence on you. And they will do it. It's just the reality. So with that kind of dark preface.
- [12:30]
Unknown
To all of this.
- [12:32]
Walker
Okay, what's the bright side here in terms of this Blockchain Regulatory Certainty Act.
- [12:38]
Matt
Yeah. So we have a shot here to fix the law. So two Congress people, Representative Emmer, who is the majority whip, so that's the number two position on the Republican side of the House for those who aren't familiar with their US Civics. And Rep. Torres, who is the Democrat from the Bronx co introduced the Blockchain Regulatory Certainty act which fixes the law. I mean it's a super straightforward two page bill. You can go read it, anyone can read it. It's not complicated. You don't need a legal background to understand everything in there. It just says if you're not a custodian, you're not a money transmitter, you're not regulated as such. You're not regulated as any of this nonsense. And so we need to, we need to put pressure on them. We need to call our Congress people. We need to say, look, we need this to pass. And that means we have to work with our friends or more often enemies on the crypto side of the House, not the bitcoin side. And we need to get them pushing it. And they are. We, we need to work with our friends in Congress and lobbyists who support us. And they are pushing on this too. But ultimately we need the politicians to feel pressure from the voters. People need to pick up the phone and call their representatives. I know it sounds cliche, but it does work. It takes five minutes of your time. You just local, you go to saveourwallets.org, you type in your zip code. It'll pull up all the phone numbers for you. You know, you've got two senators and a House member. You hit all three of them. You just pick up the phone, you say, hi. If you haven't heard of the Blockchain Regulatory Certainty Act, I think it's really important. It fixes some issues in the law where there's regulations that people cannot possibly comply with and they shouldn't be subject to jail time in exchange for not complying with something they can't comply with. And then you hang up the phone, you go about your day, and they listen. You know, they, they do feel they, most senators and representatives don't have good information about what their constituents want. And most of them want to turn their place in Congress into a lifetime career. For better or for worse, they want to stay there forever. And so if you tell them, look, you vote yes on this or I'm not going to vote for you, they do listen. If they see, you know, 10, 20, 30, 40 people calling in, they're like, oh, actually a lot of people care about this. It doesn't take much because not that many people actually do it. Not many people pick up the phone and call.
- [15:11]
Walker
It's, it's very true. And it's like if they see that there are highly motivated people who are taking the, like, taking that five minutes, even though it's easy, you're right. Most people just don't even take that step because there's honestly not that many things that most people care about enough to take that step. And so it's like it, it can actually move the needle. They will pay attention. Because honestly, I feel that with politicians, it's like they have so many people asking them for so many things all the time. They need to have a way to filter that. And usually the way to filter things is, okay, how many people are complaining about this? Like, how big of a problem is this going to be for me down the road? Is this an economically important group of people who are also complaining about this? They can probably logically make some assumptions there. So I would encourage people again just to go to saveourwallets.org and to check this out. It's a really nice little, little site as well here, but it breaks it down. The bill is linked there. It's, it's all pretty as you said. I mean, it's a super short bill. I had it up here earlier, but it's like literally like two pages. And can you, so can you break down just like for the bill? I mean, how does this actually protect Developers though, like, is this something that, if it's, if it's passed through, does this actually offer the kind of protections that are needed?
- [16:26]
Matt
Yeah, I mean it really, it's super clear and pretty comprehensive. It says very explicitly and it has a legal definition of what non custodial means, but it's a pretty reasonable definition. I think it passes the smell test of what people understand non custodial to mean. But it says very explicitly, if you are a service provider or a software developer, and there may be one other category, and you are non custodial, then you are not subject to money transmission laws. You are not considered a money transmitter as defined in federal law. And you're not a financial institution. So you're not regulated as a financial institution. That is, you don't have to do all the aml, KYC and stuff. It doesn't protect people from sanctions. There's like one or two other things that are strict but that you can actually comply with and that, you know, you hope prosecutors will be reasonable about. But things that you actually could comply with. If you're like an lsp, you could not open channels to people in Iran. Right. It'd be great if we didn't have that, those rules, but we're not fixing that. But it does fix very specifically the Samurai case where they were charged with money transmission. They were also charged with money laundering, but that charge is harder without the transmission case. Money laundering is a weird thing. You normally have to charge someone with a crime and then money laundering on top of discharging money laundering is, is harder. But for the most, you know, unless that's a thing you're doing and like running a mixer, running a mixer might still be challenging, but non custodial wallets, very specifically, you're not a money transmitter, you're not a financial institution. And that's really thing that people are worried about. That's why Phoenix left the United States after the Samurai charges. Um, and that's why LSPs aren't as plentiful as they should be. You know, we'd have a lot more competition for non custodial lightning wallets if we had this kind of protection. Frankly, I've looked into running an LSP for people. Not that I have boats of, you know, buckets of Bitcoin, but, but enough that I could run an LSP at least for developers to test on and whatnot. And without this, I'm not comfortable doing it. But with this I'm very comfortable running an lsp.
- [18:50]
Walker
And like the TLDR on This is basically this line right here that's you're not going to be designated as any of these things unless you have control over digital assets to which a user is entitled under the blockchain service or the software created, maintained, or disseminated by the blockchain developer or provider. So basically, if you are not in control of user funds, you're good. That's essentially what it boils down to, right?
- [19:16]
Matt
That's it. Yeah, that's. That's really all it is. It's not a complicated bill, straightforward, and it protects developers and wallet vendors against a very specific and a very real threat that they're worried about.
- [19:30]
Unknown
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- [22:45]
Walker
Yeah, I mean, and to me this just seems like such a common sense thing. Like it seems that the Biden DOJ was just, I mean, being very, almost just like malicious like this was. This seems like one of those cases where it's like, we're going to make an example of you, so you best not do it again unless you want to end up like these guys.
- [23:03]
Matt
Totally. Yeah. I mean it's. You know, there were definitely a number of groups within the Biden administration who thought that crypto and bitcoin, which of course they considered all to be one thing, were bad, should be destroyed and we should use anything at our disposal to do so. You know, Gensler at the sec, obviously that didn't affect Bitcoin as much, but here in the doj, they were really coming after Bitcoin as well. And we don't know what the next administration is going to bring. It might be that again. Right. So we need to try to front run it a little bit, keep it from happening. And we just need to make clear to the Senate and to our Congress people that this is a priority. You know, maybe they would pass if it got a vote, but it's hard to get a vote. We have to make sure that they know that this is worth their very limited floor time to debate this. Bring it up and bring it to a vote either individually or as a part of a larger package. But either way, we need to all make sure that they, they hear us.
- [24:03]
Walker
I think that the difficult thing that people need to understand too is that it's like precedent that is set now becomes a huge pain in the ass forever. Like essentially. So if we don't, like now is when it's easier to fight back against these things from a regulatory standpoint because it's still kind of like people are still figuring it out. But one of the ways they figure it out is by setting precedent.
- [24:26]
Unknown
And if all of this goes through.
- [24:27]
Walker
Kind of unchallenged, then it's like, well, okay, this is just how we treat this stuff now. So, you know, any of you, like, we're just going to toss you unlicensed money transmitters into jail. And I mean, I think the frustrating thing about this is like as a citizen, like you want there to be as much innovation as possible, as many companies building cool and, you know, useful.
- [24:47]
Unknown
Products for you to use as possible.
- [24:50]
Walker
This kind of treatment of open source developers and non custodial wallet developers, it literally just, all it makes them do is do what Phoenix did. Like, okay, we're gonna leave then. Like, we're not gonna go risk jail time. And I think that's like, that's such a shame. Like, that's not the environment we should be fostering. Like nobody, nobody, nobody wants that environment.
- [25:08]
Unknown
No one.
- [25:08]
Walker
I mean, except for maybe some like people suffering from a totalitarian temptation that they can't quite explain. They're like, they're in their Elizabeth Warren phase and they're just like, I need to suck all the freedom out of the room as fast as possible. I don't know, I don't understand.
- [25:21]
Matt
Or people who want to drive all the crypto assets and bitcoin into custodial platform so that they can be controlled that way. You know this, if it limits non custodial platforms, everyone's going to go to Coinbase. And to your point earlier about, you know, getting the president right, right now, I think it's important to recognize that a lot of countries tend to follow the US when it comes to their regulatory approach. So if the US says screw this non custodial thing, we're going to ban this, we're going to make it, you know, really hard to have a good non custodial wallet. Well, a lot of other countries are going to look at that and say, oh look, the US did that. This makes sense. We're going to do the same and so it's not just the U.S. obviously, Europe's already trying that and they're all way down there, down that road. But many other countries will follow what the US does here. And so if we take a stand and say, no, no, no, non custodial is fine, custodial will regulate that, gets monitored, care very closely, whatever, but non custodial is fine, then, then that will probably take hold across a decent portion of the globe.
- [26:26]
Walker
Yeah, I mean, I hope that it does because again, it's so much of this stuff just seems like it should be common sense. It seems like this shouldn't even be a debate. Like of course, if you're not controlling any sort of customer funds or user funds, of course you're not, shouldn't be slapped with these ridiculous, you know, legal categorizations. But apparently it's very non obvious to people or they pretend that it's non obvious. Either way, I'm curious too. So I mean I saw just right before we hopped on here, I saw that all of the different, basically both bitcoin and crypto kind of advocacy groups or you know, policy groups have basically joined together to issue some statements around this, which is nice to see like that, I mean, you know, granted it's like, okay, you know, don't shitcoin, it's bad for you. But it's like ultimately this, the fact that these laws or these actions do affect everyone building in this space, at least, hopefully some of that, you know, sweet, sweet shitcoin money flows through the lobbying channels and maybe benefits bitcoin in some way. So at least there's that.
- [27:33]
Matt
Right? They spend a lot of money on lobbying and we, we as bitcoiners don't. And they spend a lot of money lobbying about the SEC and securities regs and whatever. And we don't care about that. That doesn't help us. And so it's, it is nice to get a little bit of their money and a little bit of the air in the room going towards something that affects all of us, including bitcoin.
- [27:54]
Walker
Yeah, it's, it's a nice, a nice change of pace versus just them trying to fund bitcoin smear campaigns.
- [28:02]
Matt
Thanks.
- [28:03]
Walker
So, I mean. Yeah, right. But hey, at least the, I mean it was. I did not know if I was, you know, gonna get to see the skull of Satoshi in person, but that was pretty cool. Not cool that they did it and like screw them for it. And I will never forgive or forget because you just pre mined all of your tokens out of Thin air. Then use it to fund disinformation campaigns when you dump on retail. But at least we got that cool piece of art. Cause like shout out to the artist, incredible piece of art.
- [28:29]
Matt
Yeah, true, true.
- [28:33]
Walker
And fuck you, Brad Garlinghouse. But anyway, but that's beside the point. So. Okay, is there anything else on this in terms of like, are any kind of like other deadlines people should be aware of? Is there anything that like actionable stuff? Just I want to make sure we like, we really drain this. If there's anything else you like, want people to know on this.
- [28:51]
Matt
No, I mean, I think, you know, we want to get this done. This Congress, obviously, you know, who knows what will happen in the midterms in another year and a half. So, you know, we want to, we want Congress to feel the pressure now. We wanted to get it done. But yeah, I mean, I think it's the most important thing happening in bitcoin right now. Certainly the most important thing that everyone in bitcoin can contribute to by again by picking up the phone and calling the reps. But yeah, I don't. But I think that's. I think that's about it. Even though it's super important. It's just not a complicated issue.
- [29:23]
Walker
Right. Which is nice. It's easy to wrap your head around. Okay, so that's actually kind of a perfect transition here because you said this is the most important thing happening right now. There are obviously a lot of debates going on within the bitcoin community right now, if we can call it that. Presumably then just given your last statement, you would say that those other debates are not as important as this one. But I'm very curious what you think as far as what is the signal right now versus what is the noise amongst these various debates that are going on, whether it be around filtering and this knots versus core, which I think is somewhat of a false dichotomy, or if it's about perhaps the most important thing is sats versus bits versus just first bitcoin. I don't know if to me that's not the most important thing. I enjoy SATs, but also call them whatever you want, label them in your app however you want. What are people being distracted by versus what else should they maybe pay attention to a little bit?
- [30:31]
Matt
Yeah, yeah. I mean, I think you're right on the filtering debate. It's a weird dichotomy. It's a 10 year old debate now. Probably more so. I'll admit that I'm a little tired of it. I've had it a few times. I know there's a lot of bitcoiners who this is their first go around so they're excited by it. But I'm a little tired. I think a lot has been written there. I think Bitcoin core has a PR up to put up a blog post that explains, I think in very clear terms the way the mempool works from their point of view. And I think it is super straightforward and easy to understand. So when that comes out, I encourage people strongly to go read that. Hopefully they'll post it in the next day or two. And I don't know that I have a lot more to add on that debate. But yeah, I mean I think it's such a distraction. No amount of screaming about that is going to change anything. It's just it is what it is. Whether you like it or not. No amount of screaming is going to change it and no amount of bitcoin core changes is going to change reality there either. It just kind of is what it is. So I find that to be quite a distraction on bit sats and bitcoin. Oh man, I think the ship has sailed. But people are going to push it anyway certainly. I have always held the view that more experimentation in user experiences built around bitcoin is good. That is part of the way we look to achieve our mission at Spiral. We want to provide software that enables people to build a great non custodial wallet and that enables more experimentation of different user experiences to see what resonates with people and what gets people really using bitcoin. And you know, I mean our goal is that hopefully by the end of the year, if not the middle of next year, you will be able to go on replit, ask it to build you a bitcoin wallet and it's going to build you a super slick non custodial bitcoin wallet that works, has instant payments, low fees and is super reliable and you can build whatever user experience you want and then we can see what actually works in the marketplace. That's our top line goal right now. So I'm excited for that. But yeah, I mean I. Sheesh. On bits and sats and whatever. I don't know man. I'm not a user experience person. It does seem like the fragmenting the user experience is only worse. But hey, what do I know?
- [33:18]
Walker
Yeah, and what about, are there any other topics, I mean that you think are again are worthy of consideration right now when it comes to like these, in these internal debates that the bitcoiners.
- [33:32]
Matt
Have I mean there's a lot going on in bitcoin. I think the debates are very often not the point. Like, you know, there's always a lot of debates going on in bitcoin about this or that or whatever. In general, I find them to almost always be distractions. Like, you know, certainly the block size wars was not a distraction that was, that was really about how to define bitcoin and that there was a lot of. As painful as it was, there was a lot of value in having that debate and pushing through those wars. But for the most part, I think most debates in bitcoin tend to be a distraction. But there is a lot going on in bitcoin. There's. There's more developers building bitcoin applications than there ever have been. There continues to be a very slow but non trivial growth in available resources for developers and funding for developers. Tons of new protocols and things coming out, whether it's roll ups and L2s, whatever you think of some of those going in the shitcoining on bitcoin direction, some of them going in the, in the providing better privacy direction though, which is cool, or ARC and other new L2s that aren't roll up based. Plus I think lightning is finally getting good this year I mentioned earlier, but I really think the non custodial lightning wallets that are going to ship in the middle of next year based on the work we do on LDK at Spiral, are going to be really, really good. I mean I know a lot of people wrote off lightning for a lot of very good reasons. Non custodial lightning has sucked, but it's, it's getting there and we finally do have a lot of the pieces in place and will have the pieces in place over the next few months to really make it awesome. So there's a lot of really great work being done. It's just that a lot of the plebs, either people who are developers or maybe more importantly, just don't have a ton of time. This isn't their full time job. They don't have a ton of time to contribute to bitcoin, don't really get to help with some of these things. And so a lot of people want to just have debates because it's very understandable and it's easy and you can feel like you're doing something and not sure that you always are.
- [35:47]
Walker
Well, let's. I'd love to dig into the lightning piece a little bit because again that, that talk you gave and I'll link it in the show notes for people. I'm sure I can find it on YouTube. But basically, lightning screwed, but it's not screwed. But it's, it's, it's screwed, but it's okay. Can, how maybe if you could give the, just like the high level premise for that talk, like what led you to give it and then kind of how has your view of lightning either evolved or shifted or changed since then?
- [36:17]
Matt
Yeah, I think when I gave that Talk, you said 2022 is probably something around then.
- [36:24]
Walker
I think so, probably.
- [36:26]
Matt
I think lightning was a little overhyped. There was a lot of like, lightning is perfect. Lightning is super secure. You're on a node, you don't have to worry about it. Whatever, whatever. And I think there were a lot of very big open, hairy questions about lightning, including in the security model, including the trust model. I think many times in that talk I told people like, you probably should never open a channel with someone you don't trust. At least kind of trust, you know, you don't have to like think they're the, the best person in the world, but they're at least not going to go to a lot of effort to take your money. And I think since then the communities come around the other way. And now lightning sucks. Lightning is broken. Lightning will never grow. It's just a way for custodial platform to settle money. And then maybe it's a, a way for other L2s that people actually use to settle. You know, whether it's you're using ecash or spark or arc or whatever, you're going to pay people over lightning. I'm gonna, you know, pull a little bit of a cliche and, and pretend that my view hasn't shifted. I've been rock solid and the community was here and now the community is here and I'm still chilling in the middle. But I think, you know, a lot of the stuff that was in that talk too was here's a big problem. It's really hairy. We think we have a solution kind of right here and we have to figure it out and we have to go build it. And it's a lot of work to build it. And now for many of them, not everything. But for many of those big hairy problems, we do have solutions and we have them built or almost built. You know, the biggest one really being these pinning attacks. So lightning has this really weird OG Lightning has this really weird trust model where we're creating all these transactions but we're not broadcasting them right away. That's classic lightning. We're creating these Transactions, we're updating them all the time, and then eventually we'll broadcast it later. The problem is we got to put a fee on that transaction. We're building these transactions every minute or whatever. We're assigning a fee. And that fee needs to be sufficient to get into a block at some point in the future that we don't yet know. And obviously, if you follow Bitcoin fee estimates or you go to Mempool, Mempool space every now and again, you notice that the fee does fluctuate. And sometimes the fee fluctuates a lot. Sometimes the fees spike up, you know, hundreds, 100x over one day because somebody's doing something crazy and they put a lot of transactions on the chain. So creating transactions that have a fixed fee right now, so for inclusion in the chain some point later where we don't know what the fee rate is going to be then is not a solvable problem. It's not just a hard problem. It's like we can't solve it. And over the course of the last four or five years, Lightning has done some work at changing the protocol. But also Bitcoin Core has rethought how they deal with transactions in the Mempool to address this problem for Lightning. And it also fixes problems for other, you know, related problems for other L2s. So Bitcoin Core now, as of, I think, the latest release, maybe the one before it, when you take a transaction, when nodes send transactions to each other, you know that you're sending a transaction, they're like, okay, I got this transaction. I'm going to see if I want to put it in my Mempool and then relay it onwards. Now, nodes are able to look at multiple transactions at once. So a node is able to say, hey, Walker. You know, your peer can say, hey, Walker. Hey, I've got some transactions for you. Instead of sending one, it sends two. And now your node can look at those two transactions and can say, okay, I'm going to look at the overall fee rate of both of the transactions together and not just one at a time. And that lets us play fun games like assigning zero fee on these transactions in Lightning that we update all the time and then hanging another transaction off of them that pays for them. And so this second transaction can have a high fee. It pays for that transaction, but nodes have to relay them together, together so that nodes can say, okay, these two transactions together make sense even if the first one didn't. And that's a huge change, you know, as you might imagine there's a lot of parts of Bitcoin core involved in looking at transactions when they get added to the mempool. To be able to now look at buckets of transactions instead of singular transactions is. Was a lot of work. A lot of research and development, a lot of thinking about all kinds of crazy denial of service attacks, a lot of thinking about ways people could break these things. And it took 2, 3, 4 years for Bitcoin core to finally conclude some of that work, some of it's still ongoing, there's more work to be done there. But you know, fixing these things was hard. And so I think the point of the talk was to point out, like, these things are hard. We might have solutions for some of them, some of them we might not have solutions for, some of them are unsolvable, most of them we can fix. But there's a lot of work to be done. And I think now we're in a position where we can say, okay, actually we've done most of the work we needed to do. It's not 100% there, but over the next, I think six to 12 months, it's going to be mostly there. Not in all lightning nodes, but certainly in ldk. And for the folks using LDK based wallets, those features that we needed to make lightning good are finally there.
- [41:49]
Walker
Which is, which is great. Like the fact that to hear your positivity on it is fantastic because again, what I enjoy about you, Matt, is that you're always very realistic and balanced about things. No one would accuse you of overly hyping something, to put it mildly. So I mean, that's fantastic. And I do think that it is funny now that you kind of pointed out, I'm remembering in kind of that 2022 era where it was a lot more talk about how great lightning was. And lightning is like it is ready and it's good to go and you know, it's perfect and it wasn't and now it's kind of like, you hear there's a lot of like lightning, like doomerism now and just people, you know, trying to dunk on lightning when it, from just a, as a casual user of lightning and of a bunch of different lightning wallets in a lot of different contexts. It's pretty incredible now. And like from what you're saying, like it's going to get better. Like it's, it's, it's, it's funny how, how narratives change, I guess. But I'm, I'm glad to see it under hyped. Then I guess currently maybe that's a good thing. A little, a little bit less hype is, is not going to be bad. Yeah.
- [43:02]
Matt
And it'll take a while as wallets start to adopt the newer technologies. I mean, I think, you know, over the next few months the good lightning wallets are going to get really good and the ones that maybe aren't as actively maintained or made some technical decisions that are harder for them to pivot are going to stay. Okay. But over the next, as they all start to catch up, it's going to be I think really good. I think the user experience is finally.
- [43:30]
Walker
Going to be great and hopefully just more options because for a while even like Wallet of Satoshi was such a widely used wallet and then they obviously they're a custodial wallet to clarify for anyone who is not familiar and they left, they ceased operating. I mean you could, you could still access the wallet if you were using a vpn. Like, you know, it was fine. But like for all intents and purposes they were not available to folks in the U.S. you know, because they were worried again about the whole money transmitter thing. Now they're coming back, they're saying we've got a non custodial option. I don't know if you have any thoughts on that, but just more broadly it's like, okay, it's nice for people to have more than just like one option. Like we should have a bunch of custodial options and a bunch of non custodial options and you should be able to easily choose and they should be nice experiences versus like well, here's the one custodial option that we can still use and oh, you can get a hold of this non custodial one if you want. But the developers fled so like, who knows, I don't know, it feels like we're in a better place now for that at least. But do you have any thoughts on the Wallet of Satoshi thing?
- [44:35]
Matt
Yeah, I mean the BRCA is needed here. And again our goal on Spiral is really that we want everyone to be able to yolo a good secure non custodial wallet with an LLM and repl it and just like build me my own non custodial wallet and it'll be good. That's our goal by the middle of next year. That's really our goal is that it'll just work, it'll be great and we'll have real competition there on non custodial on Wallet of Satoshi specifically. My speculation and I haven't gotten this confirmed is that they're using Spark, which is LightSpark's new not custodial, but also not non custodial Bitcoin L2. So it's a really interesting product. I think it's really cool. And for low balances, I think it makes a lot of sense for a balance where you can't really open a non custodial wallet, it makes a lot of sense, but it is fully trusted. So it's this really weird dynamic where you trust their server to delete keys so that you know, as you transact, they're deleting old keys and you trust them to do that. And if they don't do that, then they can potentially take your money. But if they do do that, they're not a custodian. They don't have an active key on their server that someone could hack into, take the key and then take your money. Right. So it's not. It has a very different trust model in practice. So it is in practice much safer. But it is still fully trusted. You're still trusting their server to do the thing correctly.
- [46:15]
Walker
And yeah, so it's somewhere kind of in the middle.
- [46:21]
Matt
I mean, it's definitely not custodial because they don't have a key that has the money that they could get hacked or whatever. But it's not non custodial either because you don't have the key. You don't have the only right to your money either. Like it's somewhere in the middle. It's a weird middle ground, but it's a really cool middle ground. It's cool that people can build a middle ground. And then on top of that, you know, I think so. On the Spiral team, we similarly are looking at using Spark for some things. And very specifically, our goal over the next number of months is to start thinking about what a wallet looks like when you have both a custodial or at least this trusted thing and a non custodial option. Because you know, if your wallet only has 1000sats, if you opened a new wallet, you linked your nostr and you received a 21sat zap, you can't, there's not. No, no non custodial wallet makes sense. You can't have 21 sats in a non custodial wallet. Even with an LSP, they're not going to allocate money into that channel. It doesn't make sense. And so you need something custodial there or at least trusted. And Spark is a really cool option because it's not really custodial and it doesn't have that really bad trust model of like they could get hacked and the money taken, but it is still fully trusted. So we're not going to call it non custodial. And then if you get a decent balance, if you get, you know, 10,000 SATs or whatever the threshold is for the wallet, could pick a different threshold. You open a lightning channel and you go to an LSP and you say, hey, look, I've already got this money, I don't need you to allocate any liquidity to me, just open a channel to me and I'll put this money in my channel. And so it, it really makes for a nice wallet across different balances. So you don't have to like pick, oh well, I'm going to have low balance so I need to pick a custodial wallet or oh, I'm going to have you know, a whole bitcoin in there. So I'm going to, I need a non custodial wallet because I don't want it to get stolen. It lets just one wallet service both roles. And okay, maybe if you have a thousand bitcoin or 100 bitcoin, you're not going to use this kind of wallet. You're hopefully have some kind of offline, air gapped, whatever. But for a spending wallet or for a wallet that only has some savings, I think it makes a lot of sense. And as lightning continues to mature and we address these issues that where the protocol bleeds into the user experience and it leads to a really bad user experience. As we address these issues, then having this wallet with both sides is just going to be super seamless. You shouldn't have to notice any of this because lightning is going to be totally reliable on this side, spark is going to be totally reliable on this side and the wallet is going to get you the best trust model that makes sense given your balance at all times and it's just going to work.
- [49:16]
Walker
I feel like I kind of glossed over something that you mentioned earlier where basically you said we're like, if I heard this correctly, like 6 to 12 months away from like basically somebody like me being able to vibe code my own lightning wallet. Is that kind of what you were, you were getting at? Basically like that's really cool.
- [49:32]
Matt
That's, that's our goal. That's definitely our goal. And I'm not going to promise 12 months on that. I mean in 12 months I think we're going to be there, but I'm going to, I'm going to say 18 months just because things slip, you know, I think we're going to have a really good product in the next 12 months. Certainly whether it'll be good enough for you to just vibe code something and have it be secure and robust. Maybe certainly in 18 months, by late summer of next year or fall of next year, yeah, you're going to be able to vibe code your own Bitcoin wallet and it's going to be a good wallet.
- [50:08]
Walker
That's wild to think about. So do you envision a future where it's like there are innumerable different wallet implementations because everybody's building kind of a wallet that works, or maybe not everybody is, but more and more people are able to build out a wallet that has the functionality and the features that they are looking for. Like specifically. Or do you think we still do these things sort of like, you know, is it like a winner take most? Where we still kind of trend towards like a couple of big players?
- [50:37]
Matt
I assume there'll be a handful of big players. I mean, you know, at some point there's some social value in like, okay, well this is the one that a bunch of people reviewed the code and it's not going to steal your money and whatever. If we really had a, a million of them and everyone was using their own, then half of them would steal everyone's money. And that's not a great outcome either. But aside from that, you know, I think, yeah, I mean there's going to be quite a few and I think it's, what it's really going to do is it's going to enable a lot of experimentation. You know, if you are a hardcore Bits maxi or a SATS maxi or whatever, you can go build a wallet and say, look, look at this wallet. Look how great the user experience is. I can demo it, it works. It's super slick. It's as slick as all the other wallets. But look how great this feature of the wallet is where I think I'm really delivering a better user experience and then it lets people build more innovative things. You know, let's allows for more innovation to say, well I, I think that there should be a bitcoin wallet with a built in chatbot and you pay for the chatbot with lightning or what? I mean, I know that's a common example now I'm not an entrepreneur, I don't have a million ideas, but we're going to really enable people to experiment with all kinds of different clever things and that's going to really unlock things in Bitcoin.
- [51:58]
Walker
I hope Can I ask you, I don't know if I've actually heard the story and if you're cool with telling it. How did you actually get into developing in bitcoin in the first place? Do you mind telling that story?
- [52:10]
Matt
Totally. I was in high school Wild and bitcoin got to the front page of Slashdot a few times. If you're not old enough to know what slash dot is, Slash dot was Reddit before Dig was Reddit and It's dig with two GS. So there's been a few of these kind of link sharing sites throughout history. And Slash dot was the cool one at the time. It was a little more tech focused. Bitcoin got to the front page a few times over the course of late 2010, early 2011. I ended up hearing about bitcoin from a podcast that I watch regularly, but they heard about it from Slashdot. There was kind of a, a flood of acknowledges people who got involved in bitcoin all at the same time in early 2011 to mid 2011. And I, I just found it fascinating. I mean, I didn't, I knew some things. I was a high school kid. I didn't really know how to code, I didn't really know whatever. I just kind of thought this was really cool. We could like build money and like send each other money based on, purely on the software that we were writing and not have to trust anyone else. No one else was involved in us sending each other money and we were building this, this money for the Internet. I thought that was really, really cool and I wanted to work on it. And luckily at the time, a few other folks got involved in bitcoin at the same time who were just brilliant. I mean, who were, you know, Greg Maxwell, Peter Woola, folks who were senior engineers, you know, had been, had been doing software engineering for many, many years and were more than happy to volunteer their time to teach some random kid like me stuff about software engineering. And so I learned from super brilliant people. I got to hang out with super brilliant people in IRC and work on a project I thought was fascinating. So I kept doing that through college, joined Blockstream out of college, did that for a few years during Chaincode. Now it's spiral. So I bounced around basically my whole career between positions, doing bitcoin, research lab kind of stuff. Just write good software to make bitcoin better. I've been very fortunate enough to be paid to do that my entire career. I guess probably more than five, more than a decade now. I've been doing it Full time. And I've been working on bitcoin for almost 15 years.
- [54:34]
Walker
That's wild. Oh, happy almost anniversary. Thanks for sharing that. I mean, that's just, that's just very cool. I mean that. So you were not like, you were still a very. You were very green when it came to your developer skills when you first discovered bitcoin and started trying to learn about it.
- [54:53]
Matt
Yeah, I have one of the best defenses for I'm not satoshi. I didn't know what a pointer was in 2011, so I clearly did not write any of this code. That is totally impossible.
- [55:04]
Walker
It's, you know, it's good to have plausible deniability these days because it seems the satoshi accusations really get, get tossed around.
- [55:10]
Matt
They really do these days.
- [55:11]
Walker
Yeah, it's. It's absurd. Well, thank you again for sharing that because I want to ask another question of you based on another one of your talks, which was again, this, this pre Trump talk that you had, which was essentially around what I, if I'm remembering correctly, what you viewed as one of the greatest, if not the greatest risks to bitcoin, which is minor centralization, specifically mining, pool centralization. Some of this, you know, basically we can get into the template side of that too. But have you seen any improvement in that since then? As far as I understand, the situation's still not very great. Where are you at with that? Is, is this still in your mind, like one of the, or if not the greatest, like long term risk to bitcoin?
- [55:57]
Matt
Yeah, it definitely is a major risk. It is definitely one of the biggest risks to bitcoin. I think I will say that we do. We are starting to see little shoots of grass poke through the dirt here. So on the stratum. So the fundamental issue to set context is that in bitcoin, the network, the thing, you know, the thing that gives bitcoin value is that there's this censorship resistance property. Like you, you own your bitcoin. No one can take that from you. No one can stop you from sending your bitcoin to whoever you want. And it is your bitcoin. You don't have to trust anyone else in order to use it. And that's great. Unless there's, let's say, two pools that control more than 51% of the network or three that control something like 70 or 80%. Right. Which is the case today. If you combine ant pool with all their proxies and then foundry, it's Almost more than 50%. Close to 50%. Sometimes a little more. Sometimes a Little less. That's not good. And that can potentially impact this censorship resistance property, which I think is really a major part of where Bitcoin gets its value. So what does this mean? So it is not the case that this is fundamental to the design of a pool. A pool says, okay, we have all these miners, you're going to mine. We're only going to find a block every so often. We're going to split the reward of the block across all our miners proportional to their hash rate. This is a simple business. This does not require that they select the transactions that go in the block. That is a technical shortcut that was done because it's an easier way to implement this business, but that's not required. And so there have been various proposals throughout Bitcoin's history to remove that requirement to say, okay, we can have a pool where the individual miners are selecting the transactions. And the pool still does this reward splitting thing. We now have a few pools that actually enable this. So there's Ocean, obviously, very publicly, which is Luke's pool. They don't have any kind of real material hash rate to speak of. There's a little bit of hash rate there. They've invented their own protocol, their own proprietary protocol for this that other pools don't use. But it does enable this and that's really good for Bitcoin's decentralization. There's also Stratum V2, which is a slightly older protocol standard that I wrote with the brains, which is the former Slush pool company CEO and CTO or co authors on that. They, for business reasons don't currently allow miners to select their own transactions, sadly at brains. But there's a new pool called Demand which is launching kind of in beta right now, which does allow transaction selection. And then so these early shoots of small pools enabling this as created a little bit of noise within the mining community. And I like to pretend that I also had a part in that with my Main stage talk you talked about in Nashville last year, where I really tried to hammer this issue home, as well as some podcasts, you know, trying to really talk to miners and say, this is a major issue, you need to, you need to fix this. And so there's Stratum V2. The software is finally becoming ready and I know they're talking to a number of pools who are hearing from some of their miners that they want this. And so hopefully that that starts to become an option at some of the larger pools and some of the moderate sized pools over the next number of Months and then almost entirely flew under the radar. Bitmain announced in Vegas on a side event that they were going to start enabling their miners to select the transactions in their block. Totally under the radar somehow didn't get picked up by almost any media in bitcoin or podcasts or whatever. I haven't seen people talking about it, but that is possibly the biggest announcement that was made in Vegas by an order of magnitude. That's huge for bitcoin. It's Bitmain. We don't know what protocol they're using. They haven't said anything. They haven't provided any details. Who knows, maybe it's something they will launch in five years. Maybe it's already running. We don't have any idea what's going on. But they said the fact that they even committed and said, look, we think this is important enough that we want to do this is huge.
- [60:35]
Walker
I did not hear about that. Clearly I was like too busy in August.
- [60:41]
Matt
It was at some side event that I saw one tweet about it and that was it.
- [60:47]
Walker
Wow. Well, I mean, if they follow through with that, that's pretty massive though.
- [60:52]
Matt
Absolutely massive. Yeah. I mean, it would take the largest bitcoin pool by far and totally decentralize it. Now, of course, their miners have to switch their software stack and they have to start using it, but it makes that an option. It makes it possible to totally decentralize. Okay, 90% decentralized. One of the largest pools in bitcoin or the largest pool in bitcoin. That's huge.
- [61:15]
Walker
Do you think they're coming at that from an altruistic perspective of we want bitcoin or, you know, we want what's best for bitcoin? Is there another potential ulterior motive? I mean, or is it just that, hey, look, if bitcoin, if bitcoin pools are too centralized and you don't have this, you know, this, this, this optionality here. Well, ultimately that's not good for bitcoin, which is not good for our bottom line down the road. So, hey, like, you know, the game theory of bitcoin just works out that way.
- [61:43]
Matt
Yeah, I mean, I don't know.
- [61:45]
Walker
I'm asking you to speculate here. So, you know, but like, yeah, obviously.
- [61:49]
Matt
Bitmain has a long history of making, making decisions that look to be very bad for bitcoin but good for Bitmain's bottom line. So I'm not going to give them undue credit for suddenly having had a change of heart and just wanting to do what's best for bitcoin. I think there is now at least some non zero demand from miners to enable this. They might be feeling a little bit of heat from the competition of Ocean. Again, Ocean is almost no hash rate so I don't know how much they care. But you know, maybe they have some miners saying like hey look, here's this feature. I care about this, I want to use it. Why are you not offering this service? I could also take credit and say like well look, I got up on the main stage in Nashville last year and and put up a multi headed monster and pointed to it and said this is Bitmain and they're the evil monster pulling the strings. And maybe they said oh this is bad for a business if everyone thinks we're the evil flying spaghetti monster or whatever. Or I guess the flying spaghetti monster is good, I don't know, whatever. So you know, I'm going to take credit for it. I don't know but it totally was all my doing. But yeah, we'll see what happens. We'll see whether their miners adopt it, we'll see whether they ship it, whether they ship Stratum V2 or some proprietary protocol, who knows. But yeah, I mean potentially huge.
- [63:19]
Walker
That's massive. And can you, if you don't mind, just for folks that may be hearing this and saying like, well okay, what's the big deal anyway? Why does it matter that miners can choose what transactions go in the block? Why does that, like why can't the pool just do it? What is the actual reason why that makes a difference?
- [63:37]
Matt
Yeah, so I think we were talking about this censorship resistance property. The way Bitcoin intends to get or intended to always get, censorship resistance, intended to always have this property that you don't have to trust anyone else in order to be able to transact your bitcoin. Was that ashrate and mining was supposed to be decentralized? It was supposed to be that there are a lot of miners all around the world and anytime you want to get your transaction included, you just have to find one that wants to mine your transaction. Hopefully many do, but you really just have to find one with enough hash rate to regularly mine blocks and that there are enough miners who have enough hash rate to regularly mine blocks. That is not hard. That is not the case when the miners, the things who have to pick the transactions that go on the block, who you would have to go to to get your transaction mined are the pools, not the miners mining ASIC ownership. These farms filled with ASICs are actually fairly decentralized. There are a Lot of them owned by a lot of different countries, companies in a lot of different countries around the world. You know, for many practical purposes, mining is actually decentralized. A lot of people maybe don't recognize this or think that, well, there's these four big public companies in the U.S. well, if you add up all the big public companies, public miners in the US they don't actually have that much hash rate as a percentage of total hash rate around the world. There's a lot in Russia and Kazakhstan and China and like it's, it's in. It's all over the place. Right? That's really good. It's really great for bitcoin. But the thing that needs to be decentralized is this transaction selection is the like, who do you have to go to to get your transaction mined? And today those are pools. And pools are super centralized. So we want to take that power and give it to the decentralized group of people rather than having it be in the centralized group where there's only three or four actual companies who are materially competitive. You are totally muted right now and you are going to get so much shit for this later.
- [65:50]
Walker
This is so embarrassing. Oh my gosh. What I was going to say is it is great, honestly, to see whatever Bitmain's actual motivation behind it. It's incredible to see them make that move because again, that's a, a huge, huge deal. Which is just kind of wild that this wasn't covered more. I blame fellow podcast podcast bros like myself. We need to do better.
- [66:17]
Matt
I think they, like announced it Thursday afternoon on the last day of the conference when everyone was worn out. And like, I'm just gonna go watch Ross's speech and then I'm gonna go home and sleep off the hangover. Like, they announced it the worst possible time at a side event, not even the main event. And yeah, it was like the worst announcement possible, but also one of the biggest.
- [66:43]
Walker
That is wild. So this is a slightly different note, but I'm curious where you stand on just like the ossification side of things, because I think this is something that gets like, the word ossification gets thrown around a lot as though it's like this decision that is made versus something that's just like this natural progression that happens. And I'm curious where you think we are at in this progression. Maybe you disagree that this is like a natural progression, but where do you think we are at in this? A lot of people have made the points like, well, bitcoin's basically already effectively Ossified, you don't get a choice. And it just happens. And maybe it already kind of happened. Where do you sit on this? Where do you think we're at in that? Is bitcoin still going to change in a material way? Does bitcoin still need to change in a material way?
- [67:35]
Matt
Yeah, yeah. I mean, I do think there is definitely an element of as bitcoin grows, it will continue to, it'll be harder to change, changes will be less frequent, types of changes will be less major. I think that's the case. I don't think we're there yet. You know, bitcoin development is still very small. There's still a small group of people who, who work on bitcoin full time and contribute materially to bitcoin development. It's an ever growing group of people, but it's still fairly small. And I think that the community of people who pay a lot of attention to bitcoin, who really know a lot about bitcoin, who are deeply interested in everything that's happening in bitcoin, who are, you know, going to pay attention to the next software, can share an opinion and not just say like ah, developers, figure it out. It's still a small group of people. It feels like a lot of people because there's a lot of people screaming on, on social media and they're very loud on social media, but it's still not a big group of people. And so I don't think we're very far down the ossified direction. I know there's a lot of people who think we are a ways down that direction because it feels to them like, well, there's no changes happening in bitcoin and the changes that are getting proposed aren't getting adopted and yada yada. I, I think that's just a consequence of developers being busy with other stuff. You know, I talked about Mempool and these big changes happening in bitcoin core. It's like, okay, well, developers are busy with lots of other things going on and in part as a consequence they're not working on a lot of soft forks. They're, they're kind of look at various softworks proposals and they're like, yeah, okay, that, that might move the needle on some stuff, but not a huge deal. It's not like fundamentally rearchitecting bitcoin or fundamentally enabling new things as much as some proponents claim they're generally not. And so people are like, okay, we'll get to that. And so I think it's easy to read too much into the fact that there aren't many changes, haven't been many changes to Bitcoin lately and I don't think people should read that much into that. I think we'll see what happens, but I don't think we need to read too much into that. And yeah, I mean I think we'll get to an ossification point. I hope we're not there yet. I don't think we're even really all that close to there yet, but yeah.
- [70:13]
Walker
Do you in terms of like how you view bitcoin development more broadly as it encompasses layer two, three, whatever development, what's your view on that in terms of where kind of like where does the quote, to use a just buzzword, innovation happen in terms of the user experience? Like it would seem that that happens on these, you know, on the layer twos, on the lightnings or going whatever layer you think this is like on the E cache side of things. Like is that where you think a lot of this stuff happens? And maybe that's why there's not so much of a, an urgency behind a lot of these current proposed changes to base layer?
- [70:53]
Matt
Yeah, in part, certainly the various layer twos, layer two and a half, custodial with more privacy, whatever you want to call these various systems move a lot faster. They can, there's no. Since that they don't have a whole group of different people who have different stakeholders who all have to agree to any change and so they, they move a lot faster. They still move slower than we'd like. Lightning still is taking a long time to get to a point where we're happy with it. But they, but they, they move fast. And so that is a lot of the focus and that, that's also a lot of the focus of user experience in Bitcoin. You know, what is, where is the wallet of the future? In six months, eight months, 18 months, what kind of wallet are people going to be building? Well, it's not an on chain wallet. No one's sitting down and saying I'm going to build a new on chain bitcoin wallet for people to use on their phones. Okay, maybe some people have some high security, whatever, but that's not what's happening. And so the focus is really on these second layer systems. And I think you're right that the. But I think at the same time that's not to discount how much work has to happen in Bitcoin core on the on chain side of things to enable those. There's a lot of people who would argue that we need various changes, soft fork consensus changes to Bitcoin to enable some of these L2s. I don't think that's necessarily true, but we have needed, for example, Mempool policy changes like big overhauls to the Mempool and Bitcoin core in order to enable Lightning to have a better security model and in order to enable Lightning to have a better usability story. Those changes also help ark and other L2s too. So that's where a lot of the work in Bitcoin Core has been focused on the softwork side. You know, there are various proposals that would improve some L2s. I think the improvements to Lightning are moderate, but the improvements to other L2s like ARC are maybe more substantial. There's still usability user experience questions around arc, but the wit. But most importantly, people are deploying them now without any software changes. People can actually sit down and build these things. And this gives you a much better story for, okay, as Bitcoin Core finishes up some of its fairly large overhauls to the Mempool, people are deploying these L2s, lightning gets good, ARC starts getting deployed, Spark and whatever else gets deployed and people start using these things, roll ups, importantly, start getting deployed. Then we can see, okay, well, how are these technologies being used? What does the usability look like? How are they faring in the market? Are people interested in using them? Are they really providing value? And then we can sit down and say, okay, here, you know, I think this specific technology would be 10x better if only we had this soft fork and it's just not providing the value that it would to the ecosystem if we. Because we don't have that. But we only really learn that as we start to deploy things, as we start to actually build things. And so I think we'll, we'll get back to the software game, we'll get back to it, but we'll come into it with a lot more information than we have now and with a lot ton, ton, ton more information than we had even two years ago, where a lot of these ideas like Spark, like Bit vm didn't exist. So we were kind of flying blind with like, well, we should do this soft fork to get this set of features. Like, okay, well, we don't know how to use that. Now we have ideas for how to use it. Now we can sit down and say, okay, how do we actually want it to look? Because we have ideas for how to use it and we have these systems that people are actually even building and we're going to see how they're going.
- [74:46]
Walker
To work more like practical versus just purely theoretical and saying, hey, this sounds nice, like, which is ultimately you're going to get more buy in from people if that's the case as well. Like, if you're just throwing out theoretical ideas, like, nobody wants to hear about your theoretical idea, that sounds cool. But if you have something in practice, that's a different story.
- [75:05]
Matt
And I think that was a huge reason why things haven't happened, is they just didn't degenerate excitement because they were theoretical. And even, even the practical ideas that people proposed were like, still too theoretical. And now there's like this real practical stuff. It's like, okay, I can see this. I can see how people are building it. I can see why people are building it. We can see how people use it. And now it's like, okay, well now we really should do this or that, and we should tweak it slightly because it would help this a little more and whatever.
- [75:42]
Walker
Be conscious of your time here, Matt and I want to give another shout out to people to go to saveourwallets.org I'm going to do it myself. I was going to try and get the call made before we hopped on here, but I did not yet. But you have my word that I will make my voice heard to my elected representatives. And I would encourage people to do this because it's genuinely such a. Like, it'll take five minutes of your day. And if you can't spend five minutes to, you know, to do a little something for bitcoin, well, like, I don't know what to tell you. Like, go use the.
- [76:15]
Matt
You just listen to an hour and a half podcast.
- [76:18]
Walker
Exactly.
- [76:18]
Matt
Pick up the phone for five minutes. You clearly have the time.
- [76:22]
Walker
Exactly. That's, that's the bet. That's the best argument. If you're listening to 40 hours of podcasts per week, you can take five minutes and go and go call your elected official. And I think this is important too, because people, I think, sometimes want to reject the political establishment entirely and say, well, we just don't even need to pay attention to them. We don't need to do it. And that's fine. You can feel that way. But it's like, you may not care about politics, but politics cares about you. And these lawmakers are going to make laws that you do not like and do not benefit you and do not make you more free because they're laws if you don't stand up and say something. So in this case, where it's a nice, simple bill that just allows developers to actually develop without the fear of incarceration. I think that's something that everyone should be able to get behind. So thank you. Anything else you want to anywhere else you want to Send people besides SaveOurWallets.org?
- [77:14]
Matt
No, that's the big one. Yeah. SaveOurWallets.org, you can type your zip code, you can put in your email. You're just giving me your email. We might send you an email. We might not send you an email. In fact, if nothing interesting happens, we won't send you an email. We're not going to use it to spam you. It's just going in database. Maybe we'll share it with mailchimp or something. Yeah, but hopefully they don't get hacked again. Hopefully. But just type in your zip code. We proxy it for you. We don't log anything. It's all anonymized. You're fine. Just call your reps. Save our wallets.org it's not complicated. Spend five minutes, help Bitcoin.
- [77:53]
Walker
It's a great pitch and also the website's very nice. It was designed by the bitcoin design community.
- [77:58]
Matt
Yeah, yeah, yeah. There's a whole community of people whose job is now to just make bitcoin look better. They're awesome. One of the people in that community stood up, I said, hey, I think we need to promote this brca bill a little better. And one of them raised their hand, said like, yeah, I can do that. And so they sat down, designed it, they had an LLM, actually turn it into real code. It's great what these things can do. And yeah, now we have a website.
- [78:28]
Walker
I love it. Just designing it and then vibe coding it into existence. It's a beautiful thing. Well, Matt, thank you so much. Appreciate your time. Thanks for all the work that you do and looking forward to another banger of a presentation from you at some point. I'll link a couple of these old ones so people can check them out because they are quite good.
- [78:46]
Matt
Thank you.
- [78:55]
Unknown
And that's a wrap on this Bitcoin talk episode of the Bitcoin podcast. Remember to subscribe to this podcast wherever you're watching or listening and share it with your friends, family and strangers on the Internet. Find me on noster@primal.net Walker and this podcast at primal.netcoin on X, YouTube and Rumble. Just search @walkermillion America and find this podcast on X and Instagram at tcoin Podcast. Head to the show notes to grab sponsor links. Head to substack.com walker America to get episodes emailed to you, and head to bitcoin podcast.net for everything else. Bitcoin is scarce, but podcasts are abundant. So thank you for spending your scarce time listening to the Bitcoin Podcast podcast. Until next time, stay free.