Hello, everybody.
Welcome to another episode of Simply Bitcoin IRL.
Today we have a very special guest, Jameson Lopp.
Jameson Lopp is the co-founder and chief security officer over at Casa.
Before we jump into the show, I do want to give a quick shout out to the Bitcoin company
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Let's bring up Jameson up on stage.
Jameson, I'm so happy that you're joining us today.
I've been trying to get you on the show for a very long time, so I'm very hyped that you
agreed and it's truly an honor.
You bet.
Is this sufficiently IRL?
I feel like I'm still in cyberspace.
Yeah, I mean, it is because, you know what, compared to our live show, which is a little
bit more scripted and this is more kind of conversational, maybe it's semi IRL to be
safe.
I guess.
Fair enough.
Yeah.
I mean, I like to do it live.
Absolutely.
Live.
Live makes it a little bit more spontaneous.
Right.
So anyway, so Jameson, the reason I reached out to you is you came out with this article
recently, March 24th, 2024.
And the headline of the article is Congress is unconstitutionally criminalizing privacy.
And this is actually something that we've been covering personally on Simply Bitcoin
live for quite a while now.
And it seems like the Fourth Amendment has completely been thrown out the window.
You know, the recent FinCEN proposal that, you know, Elizabeth Warren took advantage
of the, you know, the tragedy that's going on in Gaza and Palestine and Israel.
And to, you know, try to make certain moves.
Her bill in Congress, which has 20 senators signed up to it, including two Republicans,
which would be, to use Pierre Richard's own words, a de facto ban on Bitcoin mining in
the U.S.
The pressure that was put on the FinCEN with that crazy proposal.
Basically every single address had to be reported.
You know, basically it would affect lightning as well.
And then, you know, the the congressional testimony by Tom Emmer, where he got the head
of the FinCEN to admit that terrorists prefer using the traditional financial system.
But of course, none of these proposals, none of these laws are ever walked back.
Right.
So clearly this is something that you've been on top of as well.
So I just want to get your thoughts on it.
Well kind of.
I mean, really, like you were speaking to, these attacks are coming from many different
sides.
And unless you're a lawyer who specializes in cover, none of us really even have enough
time to stay on top of all these things, especially if you're talking about trying to stay on
top of all of the laws and changes.
And so this one in particular, this Corporate Transparency Act that I just wrote about a
few weeks ago, it had been in the works for many years.
I mean, I think it was originally proposed back in 2019, if not earlier.
And it just took them a number of years before the proposed change got rammed through.
And in this particular case, it got rammed through with the National Defense Authorization
Act, which is basically one of those 1500 page, you have to pass it or else everything
shuts down type of bills.
So when people have something that they want to get passed, they try to shove it all into
this omnibus bill and then hope that nobody reads the multi-thousand page bill.
And so I don't think I even heard about the Corporate Transparency Act until maybe late
last year, where it had already been passed several years ago, but it wasn't going into
effect until January 1st of this year.
And so I really started hearing about it this year because I have at least 10 different
corporations that I operate for a variety of different purposes, investments, asset
ownership, especially privacy around asset holdings, real estate vehicles, stuff like
that.
And so basically I started getting hit up by all my different attorneys and other legal
entities that are managing my various companies and assets, because they're basically telling
me, "Hey, we need you to go fill out all of this paperwork by the end of the year for
all of your corporations, otherwise," I think at least in some of the cases they were threatening
to drop me as a client if I was not in compliance.
So it started to affect me personally, and I started looking into this.
And then when we saw this judgment come out recently that it was unconstitutional, I was
like, "Hooray, I won't have to do any of this bullshit."
But then I read that, "No, I still have to do it anyways because FinCEN is saying that
they're going to enforce the unconstitutional law."
So that's what really threw me for a loop and got me to write about this.
And I mean, we've seen many different outrageous and sometimes hypocritical things coming out
of authoritarian land.
But when it gets this far, and I'm actually facing having to jump through a bunch of hoops
in order to comply with a law that has already been deemed unconstitutional, the level of
ridiculousness just goes through the roof to the point of like, "I'm going to shout
it out."
It seems like you cut off there for a sec.
I kind of wanted to read some of this, what some of the consequences are of the "noncompliance."
So it says civil penalties of up to $500 per day, criminal fines of up to $10,000 and imprisonment
for up to two years.
So I mean, this is pretty, you mentioned it, right?
It's unconstitutional.
What's the fourth amendment, right?
No unreasonable search and seizure.
I think this is unreasonable to say the least.
But if it was already deemed unconstitutional, how do they keep getting away with this anyways?
Well, the legal system is really complicated, right?
I'm not a lawyer.
I've only dabbled in trying to follow some of the legal cases in this space over recent
years.
And especially on the civil side of things, like following a lot of the Craig Wright shenanigans,
I've certainly lost a lot more faith in our legal system than even the modicum of faith
that I had in [inaudible] to start with [inaudible] justice as a five-year deal was not fun, was
not something that I recommend going through, but I think the short version is that there's
so much complexity within the legal system that it's almost never over as long as someone
who is fighting a battle within the legal system is willing to continue devoting resources
to fighting.
Yeah, absolutely.
And also, you know, there's something that me and my co-host were kind of theorizing
about just essentially a lot of these regulations, it's almost as if they're structured in a
way where they're specifically being hostile towards not only the industry, but the technology
itself.
And that was kind of a theory that we had for, you know, a couple months, right?
I mentioned the Elizabeth Warren proposal earlier in your specific case in this piece,
right?
It's another, of course, proposal or recommendation from the FinCEN.
But what was interesting to me is yesterday during the Bitcoin Policy Institute Summit,
we had a US Senator that basically said the choir part out loud.
I actually have the clip, it's about a minute or two long, so I'm going to play it and then
we'll talk about it.
Sure.
So, the state of play on Capitol Hill is, I think, best explained by what I see as the
overarching motivations.
And in this administration, there are a number of high-ranking policy positions that are
held by people who are threatened by Bitcoin because they know they can't control it.
They know it's decentralized.
They know its potential.
And these are people that are so wedded to the government being in control of the money,
how it's spent, how it's used, that they find it threatening, that something exists that
they can't control.
And so, with that policy overarching motivation, we're seeing things like a proposed 30% tax
on Bitcoin mining.
We're seeing things like that truly odd regulatory overreach by the EIA, Energy Information Administration
over at Energy, to send out questionnaires about mining consumption of energy that was
just egregious.
And so, these are the policy headwinds that the Bitcoin world is facing right now.
And it's really, I think, entirely based on this administration's fear of things they
can't control.
So, what's your take on that?
I mean, this is something, at least I'll speak for myself and my co-host Opti, basically,
we didn't find a smoking gun, but for me, it just seemed like, how do I put this in
a nice way?
It just seemed like their intention, I questioned their intentions and their motives.
So, someone who has been in this space for quite a long time, I would say is successful
in his own right, Lopp, what's your take on this?
I mean, it's a center saying this, so obviously it holds a little bit of weight.
What's your take?
Yeah, I mean, this is nothing new.
Government is, by design, an authoritarian entity, and it seeks to have as much control
as possible over everything within its domain.
Of course, when we talk about the United States, basically, the United States considers the
entire world to be its domain, so things get even trickier there as the United States tries
to exert its control and influence in a variety of different ways, regardless of what jurisdiction
you're in, especially by claiming, in many cases, that if you even interact with United
States citizens, that you're going to fall under their sphere of influence in a variety
of different regulatory ways.
So it's not anything, I think, against Bitcoin in particular.
Government is afraid of any technology that threatens its ability to observe, to surveil,
and therefore to control the actions of the people within its sphere of influence.
So we're seeing similar types of ridiculous proposals to strip people's privacy away,
for example, even proposals to basically KYC your very internet connection, just to make
sure that anyone who goes to an adult website is actually an adult, for example.
So this type of cat-and-mouse game is going to continue, I think, in perpetuity, that
we continue to invent technologies that help us evade government and other authoritarian
surveillance regimes, and then they react, and this type of battle, I think, is never
really going to end.
And so anyone who really cares about it, I think, should be paying some amount of attention
to it, and be willing to put some -- a big advocate of things -- actually powerful, and
make it more difficult for the authorities to exert control over you.
But here we are, just talking about it in general is one way that we're contributing
to this, you know, getting awareness out there.
So it's interesting the way that you approach it, which is basically kind of like an arms
race in a way, right?
You know, you're just trying to like constantly trying to stay ahead of the curve, and maybe
I'm naive to think this, but I've come to this kind of this realization that current
U.S. sanction policy and current like how the government views the relationship with
money in a way is kind of incompatible with how Bitcoin works in the sense that, you know,
if enough of the populace adopts Bitcoin and they're using it for, you know, transacting,
their ways of controlling the money flows are going to be severely diminished, if not,
you know, like, they're not going to be able to assert as much control as they once have
had in the past.
So I mean, won't there reach like kind of like a breaking point, in a sense, where,
you know, it either goes one way or goes the other way, like, are we going to go the route
of, you know, communist China, are we going to go the route of what this country was originally
founded on, which we've completely gone away from?
So is there like an inflection point, so to speak?
I mean, I generally like to remain optimistic, but you know, I'll say, you know, in this
particular example, we're talking about flagrant violation of the Constitution.
I do believe that any government, at least historically, regardless of how a government
is formed, power tends to consolidate power, and of course, power corrupts, and so on and
so forth.
But I think what power corrupts really means is that any sort of entity, whether it's a
single person or an organization or whatever that has power, over a long enough period
of time, they want more power, like you never have enough power, and so the incentive is
to use your power to create more power, gain more resources, so on and so forth.
And so I think that, you know, that is generally the impetus for what causes declines in civilization,
and so, you know, America has had a great run, and we did a really good job putting
a lot of these laws in place at the inception of America, and those laws have staved off
the decline and the rise of various authoritarian regimes within the government, but, you know,
it's been several centuries, right?
It's only going to last for so long, I think, before there will be some sort of inflection
point, breaking point, whatever, and hopefully it can be peaceful rather than violent.
But this is one of the questions that I've been grappling with for a while, which is
that it seems like we are the frogs in the proverbial simmering pot that's, you know,
close to boiling, and, you know, every time one of these egregious new laws comes out,
I ask myself, you know, at what point will people say, "Oh, well, we're not going to
do that," because this is obedient, complacent, naive, you know, too busy living their lives
to pay attention, you know, just trying to survive because their purchasing power keeps
going down, you know, a million different variables at play, but is it the case that
there are so few of us who are even paying attention anymore that there's not going to
be a sufficient pushback?
My only, or at least my primary point of optimism of pushback, at least in the Bitcoin regulation
space, is the fact that Bitcoin has become so valuable and there are so many people and
organizations with so much money and resources on the line now that they're going to be more
willing to put resources into fighting the political apparatus.
But with regard to all of the other stuff that's infringing on our freedoms, I'm not
quite as optimistic.
Yeah, and it's interesting the way that you phrase that because it's almost, of course,
you are on Bitcoin Twitter, Lopp, so of course you've seen this meme, but basically, you
know, there's this guy cooking a barbecue and it's like, you know, it's Bitcoin or Slaver
or something like that.
And then the meme like says it like basically like, "That's cool.
Did you see the game over the weekend?"
And it's just it's almost as if so many people are still, how do I say, basically stuck in
the fiat matrix, like they're so blind to what's going on.
They're so distracted by the bread and circuses that it's like, yes, there's definitely, you
know, a group of us that are awakened, but we're definitely in a minority compared to,
you know, the rest of the populace that is just kind of like willingly, like kind of
it's what you said, they're being, you know, metaphorically boiled in this pot.
And they're like, "It's nice and warm in here and, you know, I can order Uber Eats and I
can watch Netflix from here and it's very nice."
You know, I think there's a few things going on, right.
On one hand, I've seen plenty of people speak out about the sort of homogenous nature of
a lot of us in the space, or in a more crass way to put it, a lot of Bitcoiners are, you
know, young to middle age white guys.
I would say that it's like a Maslow's hierarchy of needs things.
And I've seen similar stuff sort of in the libertarian space.
Or you, some might call it the sort of like weaponized autist space as well, when you
get to some of these fringe groups that are just thinking about the sort of the state
of existence differently and not agreeing with the status quo.
You know, I think that you have to be at a certain level of comfort and time and resources
to even be thinking about that stuff in the first place, much less to even have the level
of optimism that you can do anything about it and that you should even spend any of your
time thinking about it, talking about it.
So we certainly should recognize, I think, that we are privileged enough to be at the
level that we can have these types of more philosophical discussions.
But the next question is obviously, OK, talking about it is great, but what action can we
take?
And then that's where the questions get much more gnarly of like, do we do we fight the
system within the rules of the system or do we exit the system and try to fight it from
outside of the system?
And obviously with Bitcoin, that's it's great because it allows us to exit.
But we still have a lot of ties to the existing system.
And I think we should assume that the powers that be are going to put more and more pressure
on all of the choke points.
What are all the choke points?
I mean, it's basically all the custodians, all of the bridges from traditional finance.
And one of my bigger worries lately is the fact that over 80 percent of the Bitcoin and
all of the ETFs is held at Coinbase.
That's a single point of failure.
It's not great to think about the sort of extreme edge cases, attacks, things that could
happen if far too much of the Bitcoin supply gets into the hands of far too few people.
But I guess we'll cross that bridge when we get to it.
Unfortunately, the incentives and the way that the system is set up tends to push things
towards centralization.
Yeah.
100 percent.
By the way, there's about 450 of you guys watching live.
So if you guys are enjoying the show so far, make sure to smash that like button.
It's a lot.
You mentioned the kind of the centralization of the custody of the Bitcoin ETFs, right?
All the Bitcoin that's being custodied with Coinbase.
I also heard a rumor that Brian Armstrong keeps it in his nightstand on a cold card.
And that's that's where it's that's where all the Bitcoin that.
But maybe it's just a rumor.
No, but seriously, I think, though, like what I'm seeing and one of the things that I've
run into, you know, being in Bitcoin for my eighth year is the specifically for the older
generation is the difficulty of of self custody.
It's something that you guys do incredibly.
I recommend Casa all the time that you guys make the the multisig aspect of it easy and
easy to use, where if you were if you were to set it up yourself, it becomes incredibly
kind of complicated in a way.
Right.
You guys have the two of three that you offer.
You guys have the three or five.
And not only with the haptic feedback when, you know, you sign and it makes a little nice
noise when you do the key check and all that stuff.
So I guess what I'm trying to say is that you create a a pleasant experience to take
self custody specifically for the older generation.
Now, my question to you is, do you see a world where people are taking self custody?
Because it almost seems like if they had a choice between the convenience aspect of it,
it's like, yeah, I got Bitcoin.
I have the BlackRock ETF.
This is great.
Right.
And then as Bitcoiners are like fighting this uphill battle, whereas in specifically in
my family, I'm like the Uncle Jim, like everyone has their Bitcoin in cold storage, but they
don't know how to access it.
They have to call me every time.
So, you know, is that a solvable problem?
Is that something that, you know, is that something that perhaps us Bitcoiners don't
really.
We haven't come to terms with the fact that human nature is human nature and people are
just going to sometimes just like convenience is convenience.
Right.
Yeah.
Yeah.
You know, this is one of the difficult things when it comes to having discussions, especially
around CASA and our design decisions and trade offs.
And a lot of the more.
And some of these absolutely correct that, you know, if you want the strongest possible
security model, if you want to actually benefit from all of the things that Bitcoin has to
offer, then you have to be your own bank.
You have to take custody and you have to take some modicum of responsibility when you do
that.
And this is certainly the biggest thing that we're fighting against.
And as you noted, you know, CASA has a lot of really cute little design quirks and aspects
and things that are meant to help engage the person and make the app as easy as possible.
And that's by design like we are not designed like a lot of other wallets out there.
We try to keep it as simple as possible.
And in many cases, it's and actually has, you know, potential foot guns and pitfalls
in there for novice users.
And we want to have them avoid that.
So, you know, we go for ease of use, safety and simplicity over pretty much everything
else.
And, you know, in a perfect world, yeah, I would love for everyone to be doing self-custody,
doing it on their own themselves without having to get help from anybody.
But once again, I think it comes back to the sort of issue of time and resources and what
are people willing to spend their time learning and doing.
So we basically try to bring down the amount of effort that is required to get yourself
into a self-custody setup.
And we kind of put in guardrails to make it hard for people to shoot themselves in the
foot.
You know, it's always going to be possible to shoot yourself in the foot if you have
custody of your keys.
But we just try to make it so that you basically have to shoot yourself multiple times before
you enter into a catastrophic loss.
But this is, I would say, our greatest enemy.
You know, from time to time, I'm sure you've seen on Bitcoin Twitter that there will be
beefs and stuff between various hardware and software companies and self-custody and stuff.
And it's always interesting to see the sort of different perspectives there.
And it should be very clear that our competitors, our enemies, are not other self-custody companies.
It's the custodians.
The self-custody companies should really be directing all of their fire at the custodians.
And how do you do that?
Well, unfortunately, we're competing against convenience.
And convenience, and this is one of my more, I guess, black pill perspectives on this,
is that over the past decade, it seems to me that humans tend to prefer and prioritize
convenience over everything else.
Obviously, there's some edge cases, and I am, you know, an edge case.
I don't fall into this.
A lot of the people watching don't fall into this.
But by and large, humans tend to take the path of least resistance to meet whatever
their objective is.
And so if the vast majority of people coming into Bitcoin are mainly looking at it as an
investment, then they're going to say, you know, what's the easiest, fastest, quickest
way for me to have financial exposure to Bitcoin as an investment?
And they're probably not going to go deeper into the rabbit hole and think about security
models and hedging against 6102 attacks and all the other things that us super paranoid
Bitcoin folks have been talking about.
So that's why it's, I think, tantamount for any sort of self-custody service, manufacturer,
provider, whatever, to put an extremely high amount of effort into their design and their
user experience to make it as dead simple as possible.
Because otherwise, what you end up with is a story that I've heard quite frequently is
even amongst a lot of people who get to the stage where they buy a hardware device, in
many cases, that hardware device just sits in their drawer unopened and they don't actually
take it out, set it up and much less move any funds to it because it's just it feels
like too much work, too much friction.
And it's too scary to take on that responsibility for a lot of people.
Yeah.
And that's something that, you know, I've I've unfortunately I've you know, because
we all come from it from the from and I'm sure Jameson, you fall into this category
right where you just you come to it from like the utopian vision.
It's like, oh, we have the tools now, right?
We have self-custody.
And it slowly starts to hit you right when, you know, you meet with your family or Thanksgiving
and then, you know, you're the Bitcoin, I'm not saying in my case is like I'm the
Bitcoin guy.
And then, you know, it's just like, OK, how are you doing, sister?
She's like, I have my I have I have I have the ledger, but I forgot the password.
And I'm like, OK, no problem.
Do you have the words?
She's like, what do you mean?
What words?
And I'm like, oh, right.
And it's just it's it's happened so many times.
And then it doesn't matter how many times you explain it to them.
And then that kind of leads me back to what you guys offer specifically with the three
of two, the two of three and the three of five, where in a way I don't I don't want
to you guys make it idiot proof essentially.
Right.
You guys make it extremely difficult for what you said for someone to shoot themselves in
the foot if, you know, they at least write, you know, secure some of their words.
Right.
I mean, two two of the two of the keys are relatively easy to recover the, you know,
the cost of recovery key and then the mobile key.
And then, you know, all you really need is just hopefully one of those twenty four words.
Right.
So.
Well, yeah, I mean, that's the nice thing about that two or three setup is even if they
if for some reason they don't store the seed phrase for the hardware device or they lose
it or whatever, then it's almost impossible to lose your mobile key because we do an encrypted
cloud backup of it.
And then, of course, the Kasa key has multiple redundant backups, so it's not going anywhere.
And so that's that's what it kind of comes down to is assuming the user is going to make
a lot of stupid mistakes and actually trying to design the product around the understanding
that people are human and people make mistakes.
This is where, you know, a lot of the wallets and products that are out there, I think,
are built by nerds for nerds and they aren't really.
They aren't putting.
A person off the street interact with all the different ways that they can screw it
up.
You know, that's that's one of our very important design philosophies when we're building stuff
is actually put non nerdy people in the driver's seat of the beta product and just watch them
fumble around with it.
This is kind of the level of convenience that you need to have in order for technology to
get adopted.
So let's travel back a few decades to the 90s.
And let's say we're cypherpunks and we're really excited because this PGP thing is pretty
good privacy has been put out there and it allows anybody with a computer to engage in
encrypted communications with with other parties and knowing that they can't be intercepted
even by nation states and military level hardware that can try to crack that encryption.
This is this is great.
Right.
And the crypto anarchy is right around the corner because the state has has been effectively
neutered and can no longer surveil all of our communications.
Well, that didn't happen.
And it's because PGP never had a good PGP probably never even got a fraction of a percent
of adoption across the world.
Now, obviously, I use it regularly, but it's incredibly difficult and I I don't even recommend
it to anyone else.
I figure you basically have to be an uber privacy nerd to be interested in sort of that
level of communications.
And if you care that much, then you'll probably be willing to jump through all of the hoops
to actually get it working.
But thankfully, and over the past few years, we've had much better secure communications
technology and apps coming out and they seem to be coming out faster and faster.
You know, I'm a big fan of Keat, for example, the whole punch protocol, like getting some
real peer to peer encrypted communications going on.
It's still got a fair amount of work to go.
To see it is that with the usability of any regular chat app, if you can use Telegram,
you can use Keat.
Yeah, 100 percent, I think you hit the nail on the head, because if the level of convenience
is not close to or it's you know, it's it's the human experience is the convenience aspect.
And you kind of see this with the you know, with the I'm a huge fan of kind of like the
rise of sovereign computing that we're seeing, right.
Which is so cool, right?
You know, it started with the Bitcoin node.
And now you're seeing all these other applications that are starting to build be built on top
of it.
And essentially, it's kind of the same thing.
But if the convenience aspect is not there, right, people are always going to pick the
cloud option because the cloud option is the convenient option, right?
It's the less friction option.
So yeah, it's it's it's interesting.
So I would I would ask I would ask this to you.
Do you ever see a world where Bitcoin self custody?
I wouldn't say goes completely mainstream.
I think there's a portion of the population that are always just going to, you know, they're
just they're just never going to go down that route.
But do you think that we'll ever get to a point where, you know, 10, 20, 30, 40% of
the population are, are actually, you know, holding their own keys.
And the reason I'm throwing those numbers out there is because I think that's when things
really start to change.
I think, you know, if you have, you know, 10, 20, 30% of the population is as like truly
sovereign individuals where the state can't just, you know, confiscate their wealth at
the flick of a switch.
I think things will change.
I think, you know, and perhaps this is like the, you know, Bitcoin utopian idea.
Perhaps this is like kind of the sovereign individual thesis that we all want to see
play out.
But, you know, do you think that we'll ever get to that point?
And then, you know, of course, your company is playing a major kind of role in this to
make self custody convenient, right?
Make self, make self custody accessible, I think is a good word as well.
That's tough.
I think that we should be looking of better incentive technology.
There's also just the scalability question, right?
So it seems to me like a more likely scenario, both from a technical scaling perspective
and from a sort of user responsibility perspective, is that something like the Fede model seems
to me like it's a more feasible path forward where, you know, the vast majority of people
aren't directly only controlling their keys, but they are outsourcing it to a sort of semi
trusted group of other people, you know, that, that is an improvement upon having a just
a single point of failure bank that can basically rug pull you and do everything.
But I think there's still a lot of work to be done.
Like we said, it's a complicated question to answer because it's a big world and different
people have different incentives and accessibility to systems that are more convenient.
So people who are in first world countries who have decent access to financial infrastructure
I think are going to be the laggards to adopt this technology just because the incentives
aren't there.
So, you know, watch Africa and watch some of these other nations where I think we're
going to see Bitcoin adoption accelerate faster than in the first world, or at least the adoption
that's happening in the first world is all financialized adoption through traditional
financial investment vehicles, which is not particularly interesting from a sovereignty
or cypherpunk perspective.
Yeah, yeah, no.
And I agree with that.
I think I tweeted this out actually a couple of weeks ago, which basically said like, I'm
more bullish on the adoption of Bitcoin in the developing world versus the adoption Bitcoin
in the developed world.
And it just because it not only convenience, but also the, the, what better incentive than
necessity, right?
If you know, if you live in a country with relatively stable fiat currency, again, are
you and, and the bread and circuses are strong and you have cash app and you have Venmo and
you have pen pal and you have Zelle, you know, what incentive do you have to try an alternative?
Right.
And I think, you know, if you live in a country like Venezuela, Argentina, you know, Nigeria,
like Africa, like what you said, like Africa, and I think you have the incentive to try
something new to try an alternative because the current system is so fundamentally broken
that you don't have a choice but to find, but to try something new.
Yeah, I mean, I spent my first couple of years when I was interested in Bitcoin, extolling
the virtues of this new protocol and, you know, trying to convert people, but I gave
up after a year or two because I realized I was only getting like a 1% conversion rate.
I was, I was basically preaching to a bunch of people who didn't see the need for it because
we had a stable system where people's money wasn't getting inflated away and my claims
that the money was going to get inflated the way, you know, basically came off as like
conspiracy theorists, even though there was so much history to show that it happens.
It was once again, the frogs simmering in the pot of water and me yelling at them that
it was going to start boiling.
So, you know, people didn't actually take notice until just the past few years when
it finally caught up with them.
So yeah, you go where the incentives are.
That's my time and you're trying to convince people.
We just need to keep making the products better so that when people realize that they do need
it, that they don't feel overwhelmed when they try to use it.
Yeah.
And I think, I think that's, you know, you hit the nail on the head, right?
I'm so, I'm so sick and tired of trying to, and then they think you're crazy, right?
So it's like, oh yeah, like this is, you know, my crazy, you know, Bitcoin brother or whatever.
And you know, of course they always remember the first time you told them about it and
the number go up, does its thing and they're like, wow, okay, maybe this was a good idea.
Right.
But yeah, I'm at that point.
I know my, my co-host is as well.
He's super jaded.
He's like, you know what?
I just, I don't care anymore.
You know, we cover this, we talk about this, but we've reached this point where it's like,
like, you know, I can show you the door, what's the Satoshi quote, the famous Satoshi quote.
Like, you know, if you don't get it, you don't understand that, I don't have time to explain
it to you.
Something along those lines.
I totally butchered the phrase, but, but, but, but yeah, you know, I've definitely got
to that point.
So, okay, great.
So a couple of questions for you.
So we're kind of entering into this new era in Bitcoin's history.
So I mean, what do I mean by that?
You have the approval of the ETFs, right?
This large amount of Bitcoin held by Coinbase, which is just 16102 order away from the U.S.
government.
You have the kind of the validation or the vindication of the using Bitcoin as an alternative
to cash on the public company level.
You have Bitcoin entering the kind of nation state discussion with what Naeem Bukele is
doing it, what Naeem Bukele is doing in El Salvador.
So glad that he made his reserves public, by the way, he posted that address.
I think that's a great step in the right direction.
So you know, it's almost as if, and Lop, you've been here a lot longer than I have, right?
But it's almost as if, you know, Bitcoin is growing up in a way, right?
You know, it's almost like as if it's, it's, it's heading into this next phase.
So you know, what does this look like from your perspective?
What what are the next five years look like?
Well, so it's all about the game theory and the incentives, right, is all the stuff that
you just mentioned, it's, it's new, and yet it's not new.
Really, the difference is that the level of players who are entering the game is orders
of magnitude greater in terms of wealth and power.
But they're doing it for the same reasons that we did it 10 plus years ago, which was
that, you know, we wanted to exit the system that was corrupted, and that had rules that
couldn't be relied upon.
And and so we basically opted out, and we did so with whatever money we had available
to us.
And, you know, it just took a long time for a bunch of relatively poor, autistic nerds
to, you know, come together and build the system up.
And you get more people interested in it and understanding like why it could be beneficial
to them.
And and now we're playing in the big leagues.
And so we're, we're at the sort of global corporation slash small nation state level.
And I think this is where things get really interesting, right, is because the small nation
states, especially those that don't have their own currency, and are basically pegged some
other nation states currency, that is a massive point of control.
And if you're a nation state in that position, then you would probably be pretty interested
in exiting from that particular arrangement as well.
So I think that it's only a matter of time that basically, you know, what happened with
with me and a bunch of the other early adopters where, you know, we would adopt Bitcoin, learn
about it, use it, understand its pros and cons, and sort of hone our narratives and
our pitches of why other people should be interested in it.
That same thing is now playing out.
But you've got Michael Saylor going around and pitching it from a sort of business perspective
to a lot of his billionaire buddies.
You've got Bukele going around, you know, pitching it to other leaders of nation states
that are in similar precarious positions and basically saying, look, we don't have to play
by the rules of the Bank of International Settlements.
We don't have to play by the rules of the Federal Reserve.
We have other options now.
So let's explore those options.
So that is why I think there is going to be another massive wave of adoption.
You could call it institutional level of adoption or whatever.
But it's just more people entering the game, and they're doing so because they understand
that it's beneficial to them.
And this could also it goes all the way back to the original Satoshi quote of like, you
know, it might be worth getting a little bit just in case it catches on.
I mean, absolutely.
Drop mic moment there.
Does it surprise you?
Does it surprise you that Bitcoin has come this far?
Did you know from initially that it was, you know, of course, the incentive structures
there.
Right.
Bitcoin just has superior incentives.
I truly believe that's why it's winning the way it is.
And I think that, you know, government money, fiat money relies a tremendous amount on coercion.
If I were to make a bet on, you know, who's going to win that race, incentives versus
coercion, I'm going to put my money on incentives every single time.
Right.
Usually when you have to kind of build a wall to keep people, it usually tends not to work
out for you.
So did you know?
Did you know that it was it was going to, you know, did you know that did you have some
type of like intuition, some type of gut feeling that, you know, Bitcoin had the potential
to reach the heights that it has reached in a considerably short amount of time as well?
No, I definitely did not expect the acceleration.
I remember, you know, when I first got on the Mount Gox back in the day and I was like,
I should get me some of these bitcoins that I saw it as a like 30 to 40 year type of investment
of like, I don't know that this thing is necessarily going to become much more valuable, but I
do have confidence that the rules and the incentives of the system will make it not
become as less valuable as the fiat currencies, as you know, just looking at that like hundred
year time scale value of the dollar chart, I was relatively certain that that was not
going to happen with Bitcoin.
But I certainly didn't expect the heights that we've gotten to already so quickly.
And so, you know, from from that perspective, in some ways, it feels like Bitcoin might
have kind of gone over its skis a bit in the sense that I don't think that we have improved
the protocol, the scalability, the privacy, so on and so forth.
I don't I don't think that we've quite got the protocol to the level that we can have
the mass adoption that we would all like to see.
And and I think that's going to become a particularly interesting contentious issue in coming years
like you're already seeing discussion happen around it.
And some people are trying to turn it into like another scaling debates of small blocks
versus big blocks versus layered development and so on.
And it's going to be a really complicated road to travel down, I think, because we are
going to have to ask ourselves a lot of questions around what tradeoffs we believe are important,
because, you know, if we if we continue down the path going right now, there's a take here
on the technological progression scale.
And my main thing is I want us to explore as many paths as possible, you know, trying
to sort of optimize for the potential outcomes of what can happen with Bitcoin, because,
you know, how many, I think, theorized very early on that Bitcoin would basically turn
into another type of gold where it was all held by a small number of banks and that basically
those banks would issue IOUs and stuff.
And that's one potential dystopian future.
If we don't continue to improve the scalability and really what people can do with self custody.
But I think we're also going to see a lot of hybrid and new types of models, especially
on second layer networks, where it might be a lot more difficult to reason about what
is your level of sovereignty on these networks.
That's kind of where we are right now, I think, with a lot of debate happening around, like,
what is a real layer two network or what should be considered safe enough to store your funds
on a layer two?
Or is there any layer two that's safe enough for a long term store of value?
A lot of open questions and a lot of work remaining to be done.
Yeah.
A hundred percent.
And I agree.
And, you know, the and again, I'm going to use this word.
I'm approaching it from a convenience standpoint at the the not the self custody aspect, but
from the my just my lightning wallet.
Right.
And I remember the I don't want to say it was a rug pull, but just Wallet of Satoshi
deciding that they're going to leave the U.S. and, you know, I had a couple hundred dollars
on Wallet of Satoshi and I was using that as like my daily driver for for lightning
custodial wallet.
Right.
I had a little bit of an improvement of trust there.
Then they rug pulled in the U.S.
I'm like, oh, I called a good friend of mine, Ben Perrin, like, hey, man, like, what do
I use?
You know, like he's like, you have to use Phoenix.
But however, you have to send a large amount first.
You can't just send a small transaction.
I use I use my wallet for a while, had a terrible had a terrible experience in a certain situation
with with with Moon or Moon.
I don't know how to pronounce it.
And then I finally kind of ended up with using the primal and then the get Albi and then
you connect the get Albi wallet with with the blue wallet.
And then that kind of creates a good experience.
Then strike.
Yeah.
But almost nobody is going to do that.
No one's going to do that.
And it's like highly complicated.
Right.
Like it's not an easy like kind of step.
So and then, of course, like I think it's like semi it's it's it's it's it's self custodial,
I think they make you write down 12 words, but you don't really know what's going on
in the back end.
So I guess what I'm trying to say is that, like, you know, the current state of lightning,
the current state of second layer solutions after Wall of Satoshi left the US is not in
a good place right now.
Like, it is not in a good place.
I think strike, you can make the argument that they have a, you know, relatively good
lightning experience.
But it's like, OK, so now my lightning wallet is an on ramp like that's pretty crazy.
So I want to get your like.
So I want you to take on that.
And then I hear that you mentioned Fedelec and Ben was actually showing me or we were
talking about Fedelec and kind of like the things that are moving forward in that.
And I kind of want to join a minute like I got invited to one.
So that seems really cool.
And like no one really knows each other's identities.
And I think that's super cool.
So what is the current status in your opinion on second layer Bitcoin?
Do you see do you see a hope for this kind of getting to a point where it's convenient
and accessible enough for people to just, you know, kind of download it and access it?
There's some regulatory hurdles like we saw with Wall of Satoshi.
Do you ever get do you ever see it, do you ever you ever see it getting to that point?
It's certainly possible.
So I am somewhat optimistic because it seems like there has been an acceleration in development
of second layer Bitcoin networks, though I think a lot of these are also somewhat questionable
in nature of how permissionless they're going to be.
More along the lines of like the potential impact of better second layer networks is
that there seems to have been renewed interest in discussion and making some opcode changes
to the Bitcoin base protocol, which could potentially greatly accelerate the deployment
of some of these second layer networks.
I think I also wrote up about a year ago, I did a blog post about spider chain, which
is another.
Think of it as like a different type of game theory and pegging mechanism to create a second
layer networks.
I don't think that they've actually launched on main net yet.
I think they might have a test net, but mostly going back to what I said earlier, from a
development perspective, I just want to see more experimentation, like that's the only
way that we're going to continue to try to optimize amongst the many, many different
potential paths that this ecosystem can take or those paths.
And we have to look around and then debate the merits and the trade-offs of the different
technologies that we could deploy off of Bitcoin and try to understand, how does this help
the network?
How might it weaken the network?
What are we actually introducing?
And what's it worth to us, trade off in terms of being able to get hopefully more adoption,
hopefully more self-sovereign adoption of people actually interacting with these protocols
directly rather than through a third party.
Lightning is a very interesting thing that you can easily spend hours talking about the
merits of, and I think one of the issues that has come up with Lightning is just due to
its complexity, that once again, people seeking convenience and wanting to get a lot of that
complexity abstracted away, it leads them once again to centralized custodial solutions.
And I have spoken about Lightning at length, including from the sort of node operation
perspective because you know, Kasa, we actually had one of the first plug and play Lightning
nodes back in like 2019 or so, and we discontinued it because it was quite honestly, it was a
great way to lose money as a business.
It was such a high support load basically for getting, for helping people manage their
own networked hardware within their home environments, within a network that we had no insight into,
and then all of the different things that can go wrong, lots and lots of points of failure
within that entire hardware and software stack.
So I can understand why so many people used Wallet of Satoshi because you didn't have
to deal with channel management and liquidity and all of these other things that I was saying
from the very beginning, like if people even need to know what a Lightning channel is,
it's never going to be a mainstream thing.
So one way or another, that type of complexity has to get abstracted away.
100%.
100%.
Jameson, I do want to be respectful of your time and it seems like we are getting to the
top of the hour.
So I want to give you this opportunity to our audience, about 805 people watching live
right now at the moment.
If you have any last words for our audience in regards to our conversation, in regards
to the future of Bitcoin, in regards to Casa, what would those last words be?
Well, you know, I focus on education.
I think that that's probably the best that we can hope for.
You don't need to be an evangelist, but I think that you should at least be able to
explain some of the concepts of these systems fairly simply and do so in such a way that
you know your audience.
If you're talking to someone who is not particularly nerdy and you're talking about all the cool
technical aspects of Bitcoin, then you're just going to lose them.
There are probably at least a dozen different ways that people might be interested in Bitcoin.
And I think one of the sort of superpowers of a Bitcoin evangelist, if you want to call
them that, is the ability to ask a few questions, understand what that person's life is like
and what they care about, what might trigger them.
And then if you can find one of those things that they care about, you tie in the positive
aspects of these systems to get them to understand why they might want to at least put some time
into researching it, study it.
Tell people to study Bitcoin rather than buy Bitcoin.
And that's one of my favorite things to say when people ask me, like, should I be buying
Bitcoin?
I say, you know, if you have to ask, the answer is no.
It means you need to go back and you need to study it more until you're convinced that
you cannot possibly live without having some Bitcoin.
Amen to that.
Amen to that.
Well, Lopp, it's been Jameson, it's been an honor to have you on the show for the first
time.
Hopefully, we'll get you back on the show in the future again as well.
Guys, you can follow Lopp at Lopp on X and go check out Lopp.net.
So many resources on your website that I've used in the past.
My personal favorite are the stress tests, the stress tests of the seed plates and stuff
like that.
That was really cool that you did that.
So anyways, Jameson, thank you so much for joining us on the show today.
Thanks for having me.
Appreciate it.
All right, guys.
That was our show.