Don’t Lose Your Coins

Hi everyone, welcome back to the show, the Stephan Livera podcast, a show about Bitcoin and Austrian economics, brought to you by swan dot com. Today my guest re-joining me is NVK from CoinKite. Welcome back, NVK.

Hey man, thanks for having me back, it's been a while.

Yeah, been a while since our last chat on the show, and of course, there's always, you know, new people learning about Bitcoin, and sometimes, the listener base is sort of Turning over a little bit. So, obviously the cycle

always restarts.

Right. Yeah, that's, that's true. I think it's, it's funny because, people sort of, comment online like, "Oh, I don't listen to podcasts anymore," I'm kind of like, "Yeah, it's a cycle." Like, not everybody, you know, people listen when they're new, and then sometimes they listen to specific episodes, and, you know, that's okay, that's, that's, that's normal. I think it A hodler unfortunately lost twenty-five BTC. Now, I know you commented on this. The objective of this isn't to, you know, isn't to, not to attack or criticize that person, but just to, as an educational story for people, there was an individual, who posted on X that he had lost twenty-five BTC, and I know you commented on this also. So, do you have any reactions to share?

Oh, absolutely. And, and I've talked to him privately a little bit. I, I, I think it was, it was quite brave of him to sort of like talk about this publicly. Y-you know, like nobody wants to be the quote-unquote idiot who lost a bunch of Bitcoin, right? Like it, it sucks to be in his position, and it's very unfortunate. You know, there is some developments that maybe, save his Bitcoin, but that's besides the point. anyway, so, I'm thankful that he talked about it publicly, and, and, and hopefully, like everybody learn a little bit about it. You know, the, the story really is, he had his seeds. Well, first of all, he was using paper wallets, right? Because, he, his coins predate hardware wallets. They were a very And, he had his seeds on the password manager, which is, is an absolute no-no, right? and I, I think this was a great example of don't bake your own security setup, even if you're pretty smart about it, don't ever have private key material on general-purpose computers, right? Contrary to some, some commentary by, by folks online, like, don't, don't take your Bitcoin security advice from Twitter.

So essentially, like, don't, don't use general purpose computers, right? They're not designed to hold secrets. Even if you're ultra smart person using Qubes OS on your specific vintage of IBM ThinkPad or whatever, just don't do that, because See, time passes and you forget stuff. maybe you pass and your family has to recover. And, you know, and another thing too is that, you know, maybe you do have a perfect setup, and, you know, maybe you broke up with your girlfriend that day, and you're in a pretty sort of like dis-disjointed mood and, and not paying attention, and you accidentally plug in the wrong USB drive on the computer, and then money gone, right? So anyways, so, so that's, I guess, like the biggest take from this is like, here's Like another example of don't use computers for Bitcoin, right? And, you know, we do have hardware wallets. I can speak for Coldcard, and, you know, you don't hear people losing money using a Coldcard. it's, it's a whole different thing. It forces you to have good security hygiene It, it forces you to make backups, ideally use it airgapped, and, you know, like, i-it's just, it's just an astronomical improvement in security.

Right, so the key, I think, in this case is, as you said, this individual was keeping keys on a password manager, which was also an online connected password manager, and I can understand in one sense because these keys were from twenty twelve, I believe, and that predates BIP thirty-nine, you know, in the, in the current hardware wallets or hardware signing devices, model, but, I guess maybe there's also a question Around updating of setup as well. Like, now it's not to say that you shouldn't be updating your, your setup super often, but, maybe that's also a question that, you know, perhaps, not, again, not to attack this individual, but it's something that-

No, there is no attack. He's, he's very aware that, like- You, you know, he is now the poster child of "don't do this," right? Like, he was pretty cool about it, like, you, you know, like, don't, don't, don't feel shy about it, like, he, he understands that we're gonna use him now as an example of "don't do this." Yeah. Yeah. So, so to touch a little bit about the upgrade is, y-you know, say, say for example, you bought your coins on an exchange, right? and, you know, don't, don't Cold card, the first move you do. Don't, don't do that, okay? you know, withdraw fifty bucks worth of Bitcoin to a phone wallet, learn how to send and receive Bitcoin, y-y'know, learn how to make backup of the seed, learn how to recover the seed on the phone wallet, y-y'know, play a little, get comfortable with, with like the primitives of, of how Bitcoin custody works, right? And then, you know, then you set up your cold card, like read online, we have lots of manuals on our website on how to do Always set up a passphrase, you know, you're gonna have a nice little key ceremony where you're gonna go and stamp your keys into metal as well, you know, you're gonna send a little bit of money to it, you're gonna test recovering the backup, y-y-you know, you're gonna maybe play a little and then you send the rest in, right? Like when you're absolutely comfortable doing so. I, I think it's very important for people not to rush, but also for people to move their asses, right? Like, you know, be somewhere in the middle.

Right. And I think this is a, a, this is another angle because there are some people who are, when they've just started, when they're new to Bitcoin, and they've not learned the lesson of "not your keys, not your coins," as we always say. There are people who've not learned that lesson, and they don't have that urgency to at least go and buy a hardware device and to learn how to use it, right? I think have urgency to, you know, get a hardware device and to learn how to use it, but don't have urgency in terms of like, Once a cycle, if you even do it, you know, that often, right? And that might be something that, you know, you see, oh, okay, maybe there's like some better technology and it's now well battle-tested, and I'm, you know, I'm sort of comfortable with that. Now is the time, or maybe I'm now better. Like, I know how to do multi-sig now, as an example, right? Like, and, and then, you know, you've been playing around and you're comfortable with how to do this, and okay, now it

Something that you take lightly. I think that's the other thing that I've found when I'm trying to teach people how to self-custody coins and things like this, I sometimes the actual biggest problem I find is that the person doesn't understand how seriously they need to take it, right? They, they just sort of lackadaisically write down You know, twelve words, twenty-four words, but then they don't take it seriously and keep them safe. And it's like, no, you need to treat this like you treat your passport, like you need to just explain that to people, the importance of this because there's no, there's no bailouts here.

Well, it's not like a password, right? There is no reset. It's just money gone, either because it got taken or because it got forgotten, right? I mean, there, there, there is no, there is no redo. So, you know, self custody comes with a lot of responsibility, but, but I really think it's like, it's fairly straightforward. Like, it, it sounds scary, it seems overwhelming, but it's not. I mean, like, Nathalie Brunel just did on her show, like, you know, like, you know, totally noob, just set up a cold card, a-and, and got it going, right? Like, and, and it's totally like, able to, to use it. So, like, people who are a little bit less technical can totally A bit of effort trying to understand what's going on, a-a-and get it done, right? because like we can't, if we make the setup too much easier than whatever it is now, it means you're now trusting some other, part of the system, right? a-and, and each abstraction that we do, causes another level of complexity and trust, right? So this is, for example, one of the reasons why we don't have an app or, or, or a, a computer wallet, right? Because For example, it just happened now, right, that there were, a fake Electrum, a fake, fake Blue Wallet, a fake Foundation Wallet, a fake, a bunch of fake wallets on the app store. I, I might be getting some of the names wrong, but, there were a bunch of fake wallets on the app store, and Apple approved them, and a bunch of people lost money, right? So You know, it's important, for people to, to sort of pay attention, stay on their feet, but, but still do it.

Yeah. And so I think the other challenge for people is maybe they're looking online and they don't know who to trust, right? They sort of don't understand who's a reputable person, and they just sort of see random comments online. Do you have any thoughts on how people should deal with that? Who, who should you look at as who's offering? You know, good security advice and who's offering bad security advice. Do you have any advice for people there?

Yeah, I mean, that's a tricky one, right? Because like, in, in Bitcoin, you know, we don't have like a, a cathedral, right? Like, i-it's not like there is a, a official source of truth. I, I think that's where knowledge comes into play. That's why it's important for you to read and come to your own conclusions. But, you know, reality is You know, there is, three major hardware wallet providers, right? Like, you know, Coldcard, Trezor, Ledger, right? Like, there is, you know, like some podcasts that've been around forever, right? Like, th-there is some lindy in some of the opinions in the space, right? So you can use the lindy that these people have, right? The history and the reputation that some of these people have in the space as a sort of heuristic of, of like, okay, you know what, like, I should take this person's opinion seriously I don't only listen to one person, maybe I, I have a, a few that, that I want to sort of like listen and, and have my own conclusion from, right? But, but I, I think it's, you know, like, there is enough and good enough out there that like we're safe, right? Like, most people don't lose money in Bitcoin, right? Right. So, and I think it's important to point that

out because like nowadays, it's social media can blow up one example and make it look like, oh, wow, everyone is losing Coins out here, and I think that's not reflective of reality, but it can be, it can present a view that's not representative, and that can trick people as well. So I think, you know, the key points are look for things that have been around for a long time, things that are battle tested, things that are, have some level of, you know, popularity or professionalism.

You know, like, like or dislike, reality is commercial products, like, they do come with some assurances, right? You know, there is people to sell So there is, you know, there is money being injected into like improving the product, right? There is reputations to be had, right? And this is a customer support team. Yeah, I mean, it's like classic capitalism, right? Like, I mean, you make something good, you know, you create a reputation, and the free market will like sort of like push it to the top, right? Like because it's good. So, so like that, that's something to keep in mind, right? Like don't, don't go fiddling with things when Right? Like, you know, try to find things that are sort of battle tested and market tested.

Yeah. and so a-ultimately, I think it's just coming down to just getting started and understanding and just following some of the guides out there, right? I, I think I might, I might actually do-- This is one of those things where I should probably do a video guide myself of, "Okay, here's how you set up a cold card. Here's how you do these kinds of things."

Please

do it. Absolutely. People need that. Yeah. So that's out work in terms of showing you, like, literally, here's a video, here's how you set it up, here's how you write down the twelve words, here's how you generate a receive address, here's how you receive the coins into it. The, those are the key sort of steps to take, and let's now talk a little bit about, you know, as, as you mentioned, a little bit about the space, what's going on and what's evolving and changing, let's talk a little bit about the, the Q, the new device

The, the, the painful things, right? Like, you know, I work in security, therefore I'm here to always like talk about that. so, so yeah, so now we have a, a new device coming, the Coldcard Q. It's, Q4QRT. So it has like a full keyboard on it, for people who wanna type passphrases and passwords and things. it's gonna have a QR scanner, secure QR scanner. it has, two, SD drives. It has like a big screen So, my friend, my boomer friends can read, better on the screen. Yeah. And you've got even like standard battery charging as well, right? Yes. Yes. We have, three triple-A's, USB-C and, NFC. there's like a lot to this device. you know, we really sort of like-- This whole thing started as, you know, me and Doc Hex really wanted to, to build a, a mountain man device, like the device I wanna take to the woods with me and do my Bitcoining. And then, like, there wasn't enough demand, they were like, "Okay, fine, let's just refine it a little bit and make it into a product because everybody wants one." I, I'm actually quite surprised that, the people want like a big hardware wallet, but few is an important thing, and, yeah, so, so it should be coming hopefully early next year. We're, we're pretty much done. The main thing is just sort of like some plastic iterations, and unfortunately, plastic suppliers move too slow. But aside from that, it's like we're, we're there. It's pretty exciting.

Gotcha. And so, also this has a bigger screen, so I presume you're gonna, you're gonna make use of that bigger screen for the users. So as I understand, it's going to be some similarities with the The, the, the cold card, like the Mark IV, but with new features and things like that, but you're gonna make use of the bigger screen in some other ways.

Yeah. So, we are- See, security was still sort of like paramount, right? Main reason why we don't choose, a touchscreen, 'cause touchscreens can't really be secured in the way that people think they can, and, We, the way we designed it, right, is very rudimentary, so that like lowers complexity and low-- lowers attack surface. so it's not gonna be like, you know, a Windows-like sort of UI on it, right? Like, it's still gonna be fairly sort of like Coldcard-like UI on it, but bigger fonts and like, you know, you're gonna be able to type in things and, and it's, it's a lot easier to use because of that bigger screen. and you're gonna be able to see full addresses. Is and, you know, as we have multisig, tap script, scripts and other things to, you know, you're gonna be able to have more visibility over things and the QRs are bigger on the screen for you to scan and, that, that sort of stuff, right? Like it's a huge sort of upgrade in visi- like legibility, let's put it this way.

Right. And then also for the more advanced users who wanna verify more things, bigger screen might make it a little bit easier. So as an example, when you're setting up a The other xPubs in this clorium, things like that that you can scroll. Now, you can do that on the Coldcard now, the Mark IV, but I presume with the bigger screen, it's gonna be a little bit easier to do this. Yeah, I mean, it's much nicer, right?

The address explorer is much nicer already on the bigger screen. you know, and now we have this, we, we've sort of like started like switching things a little bit. We have this new concept of, a seed vault, right? So, Mark You can even store passphrases as a seed in the device as well, and you can also store xPub parts in them. Like, it's just like more flexibility. It's this idea of like, this is a device to handle secrets, right? that may be multiple seeds, there may be some passwords, and, and you can sort of like handle all that safely in a secure environment, right? and then when you lock it down, it's like locked down.

Gotcha. So it sort of, it allows you to use these more ephemeral seeds, let's say, and that might be useful in the context of like managing other people's or other setups, if you've got multiple setups, or let's say you're being Uncle Jim for your mom or something.

I mean, and realistically speaking, like most people have multiple seeds, right? a-and, and they need to be able to handle that. Not everybody's using bip eighty-five, which is deterministic seeds. So, you know, they might, they might need to be able to, Seed QRs to, to like recover, you know, like a broken Raspberry Pi or something, right? Like they, they might need to, like, you know, like essentially manipulate seed, and, and we wanted to make that as safe as possible and also make it either temporary, so read only, or make it so you can store it a-and, and you can do both. Cool thing too is that, like, you know, you can have one device, and then maybe you say you don't wanna have the two seeds on the same device, you can get a second device migrated over just that seed securely and then delete on the previous device. It's just flexibility, because the main issue is like people shouldn't be handling seeds, right, unencrypted around their house, right? Like that, that is a really bad thing. and, so we wanted to make it so that you can handle all the seeds that

The lead sponsor of this show is Swan dot com. Swan dot com makes it easy for you to buy Bitcoin and also learn about Bitcoin. You can use the website over at Swan dot com or use the Swan Bitcoin apps, which are available on Apple or Android. Bitcoin is volatile, and Swan makes it easy for you to regularly accumulate some Bitcoin over time so that you can treat it like an automated savings plan. Or of course, if you wish, you can do a smash buy. Swan also makes it It's easy for you to withdraw your Bitcoin and it's done in a free and automated way. You set up a threshold and whenever your Bitcoin stack reaches above that threshold, it's automatically withdrawn into your Bitcoin address. So if you wanna start stacking Bitcoin, go to swan dot com slash livera and get a free ten dollars of Bitcoin dropped into your account when you start stacking with Swan. This show is also brought to you by CoinKite, who NVK is the CEO and co-founder of. CoinKite make the best Bitcoin hardware se- security devices in this industry, you can get the Coldcard or other devices such as the TapSigner or the upcoming Q device, which are all making it easy for you to self-custody your Bitcoin. As we say in Bitcoin, it's not your keys, not your coins. And with the Coldcard, you can easily secure your coins using software such as Specter Desktop, Sparrow, or Nunchuck combined with your Coldcard. If you are a beginner, just get the Coldcard and get a USB-C cable to plug it into your computer. If you Intermediate or advanced, you can get a micro SD card and you can plug your cold card into the wall and you don't even have to plug it into a computer if you know what you're doing. And don't forget, CoinKite also offer a range of other products such as the seed plate which you can use to backup your twelve or twenty-four words or the block lock devices. You can get all of this over at coinkite dot com, use code livera for a discount on your cold cards. And now back to the show. I see, so that means like in the vault environment or in And, you know, you-- that's where you can be manipulating the seeds and doing this sort of thing as opposed to in your house with everything there. And I, I guess while we're here, we should chat a little bit about the QR QR codes, right? This has evolved a lot over the years, I think. You know, just a few years ago, it, you had to do everything with, you know, either plugged in or with a micro SD, and only recently, I think, the QR codes have become a lot more popular, and we've seen support for the QR codes in things like Specter Desktop and Sparrow and Nunchuk and things like this. So, do you wanna just comment a little bit on where QR codes are and where you're seeing that with the Coldcard Q?

So, like, I I am a, a fan of the Sneekernet, for very cold operations, because I don't necessarily want the hardware wallet close to the computer where I'm broadcasting a transaction, for example. So, you know, I wanna travel to the location where the seed is, do the transaction, take the microSD out with me, and then travel to some other place and then broadcast it, for example. but that's just me, like, you know, that's like going very paranoid and, and like, it's a whole other sort of ball game of security, right? you know, like having a QR scanner is a nice thing to have, it's just that like up until now, all the hardware wallets what they're doing is they have a general-purpose camera sending all their unfiltered data to the, to their processor, right, where their seed is in memory. It's terrifying. You, you know, like you, you could, you could try to have a buffer overflow kind of bug there. There's all kinds of things you can do. So we, we spent quite some time trying to sort of like understanding one, you know, i-if it's worth doing and two, how to do it safely, right? a-and, and what we arrived to is, we got a, it's a, it's a, a QR scanner. Right? It's not a camera, just a camera. It's a, it's a scanner module, right? And this module, will read the barcodes or QR codes or a few other things, and you will return over serial Which is almost like a, a, a, a firewall just because it's so simple, just the string of the, that you're looking for, right? So it's not sending all that data to the processor of the wallet. I know it's a little technical and people are gonna gloss over, but it's important. So Essentially, like, we, we have a very, very sanitized, piece of data coming in, right? And that's how we do our QR on, on Codecard Q. and, I, I, I think it's like, it's really good. And my personal preference for this is like, it's for address double-checking. So, for example, in your computer, when you're receiving money, you can sort of scan the screen and double-check that address that Sparrow generated is correct and is not like a virus QR, so- Yeah. As in,

that you truly hold the private keys associated for that address. It's like checking, it's like, it's known as checking your receive address.

Yeah. Exactly. So that's a, a great use case I see. I, I really dislike the current, animated QR. We, we might support it, we might not support it, I'm, I'm still uncertain on that. We might just put out a new spec. because like you see people trying to scan those animated QRs and it's like, it's, it's horrific, right? Yeah. It's a pain. Yeah. So we're, we're trying to sort of like, y-you know, put some real thought into it, come up with some good standards, and, you know, if we do, then we'll make it easy for people to, to sort of implement and stuff. That's still up in the air. And, and we're also gonna support a seed QR so people can import, those, those seeds

All kinds of things to-- you can encode all kinds of things into a QR code, but in the Bitcoin context, there's different things that you might be encoding. In some cases, as you mentioned, there's seed QR, which relates to the, you know, the twelve or twenty-four words, or you could be doing PSBT, partially signed Bitcoin transactions, or you could even be doing something like the multi-signature configuration file, you know, the output descriptor file that could be encoded into a QR, and then there's the other angle of like you're scanning it, and then You know, if you're in, Sparrow or Specter or something, you might be scanning it back out of the device because that's now the, the completed PSBT. So these are some of the different ones. I understand maybe that's a little bit of jargon if you're new, but, these are some of the different types that your, device, together with your software or the, the client, can be, coordinating. and so I guess one other thing, just kind of thematically, this is something- One thing I'm seeing now is people are sort of talking about how they wanna bring a certain level of U-UX, a certain level of experience to make it easy for the customer, but at the same time, you've mentioned NVK, you know, just earlier, you're mentioning there's only a certain amount that you can simplify. So could you just elaborate there for people, why is it that there's a certain level to which you can go with that, but going beyond that actually creates security risks?

Yeah, so for example, like, you know, I highly discourage people having, for example, Around the house, right? Because you just made it easier for a camera to see a seed. You know, your computer has a camera, your TV has a camera, y-y-you know, your phone has a camera, everything has a camera. So like, you know, things like that. you know, it's-- Everything is not without trade-offs. I, I, I just, I just think that people need to put some real thought into it.

Right. And as an example, it's like people are talking about, you know, maybe not as much in Bitcoin land, but in Talking about these, you know, MPC style setups where maybe they don't necessarily know what are the underlying seeds, and so then they can't necessarily go and recreate that, right? So it, it makes it more difficult from a reproducibility perspective or a verifiability perspective, even if it makes it easier, it, you're sort of making trade-offs in other ways where that user can't now verify things as much. And so that's where this notion of having twelve or twenty-four words and, you know, doing a multisig setup or doing some of these setups That's where I think that's where you're seeing it, right?

Yeah, I mean, you know, again, trade-offs, right? more complexity could give you more security, but it also gives you more complexity, more room for error and room for, for problems. I, I don't think there's perfect answers and, and, you know, maybe there will never be perfect answers. I think people are just gonna have to sort of like find the solutions that work for, for their needs. I think most people need different solutions at the same time. Right? So for example, you want your phone wallet for lightning, you want your phone wallet for small amounts of Bitcoin, maybe you want a little bit more Bitcoin on your phone to travel with a tap signer and nunchuck, right? and then, you know, and then you have your code card with passphrase, maybe you have a code card without passphrase, and then maybe you have a, a multisig for like some deeper sort of colder storage, right? And then, you know, I'm not even gonna get into MPC and all that stuff because it's so early there, right? We but it's gonna happen. y-y-you know, one of the purposes of the Satslink is for people to create like, coordinators for MPCs and, and, and for, you know, try to experiment with Frost and all that stuff. So, you know, again, it's early, right? Yeah. you know, the banking industry have been doing this for, you know, fifty years, a hundred years digitally, and, y-you know, we have been doing this for twelve. Right. We're

trying to speed run, security in Bitcoin. I mean, in fairness, there's some things that Bitcoin has-- Bitcoiners and Bitcoin companies have innovated, and I think, some people- Say, "Oh, it's too hard to self-custody your Bitcoin, "or it's too hard to manage it overall, "but at the same time, they neglect all the security failures that are happening in, in normie fiat finance world, where maybe people are losing their banking credentials or, you know, they're losing, you know, people's data is getting hacked and lost, and, you know, we're hearing about the Equifax hack where, you know, so many Americans had their private information hacked and stolen, and, you know, for better or worse, we're going, Some of these cryptographic secrets and learn to use password managers and things like this, for better or worse. And so, you know, it, it's, you know, I think this is also showing why people have to just fundamentally spend a little bit of time learning the, at least the basics of, doing Bitcoin, security in terms of your self-custody, at least if you wish to be self-sovereign. so One other area, so you, you spoke about the TapSigher a little bit, could you just explain a little bit about the TapSigher, in terms of how you're, you know, how, how are you seeing people using that now? In terms of November twenty twenty-three, are you seeing more and more people trying to, playing around with that for multi-signature, or is it maybe more like they're using it as an in-between instead of like fully phone hot wallet, they use it as like a somewhat more, secure device than just a, the

I mean, w-we've sold like piles and piles of this stuff. I-it's fairly affordable, right? So like people are really experimenting, but I really think the two sort of main use cases really shine so far. That we see people using a lot. One is for travel, Bitcoin wallet. So say, for example, you wanna take a non-trivial amount of money, not your savings, right? But non-trivial amount of money with you when you travel. Say, you know, five, twenty grand worth of Bitcoin, right? Like because, I don't know, maybe you wanna buy a car when you arrive at the place. Who knows what people gonna do with it? But they do it. And what, what we see people doing is they will have, the funds on Nunchuk with a Signing key or as a co-signing key for that amount so that if they get stopped by, say, border agents or somebody like that, or even a robber on the street, they don't have to be worried that they can be forced to give the money out. so we've, we've seen a lot of this so far. and, and the other thing that we see a lot is people using as a long-term, like, multi-sig quorum kind of photo, right? So they, they're using the, the nunchuck, two out of three or the three out of five kind of thing. you know, they have a cold card, they have a co-signing, nonce, they have the tap signer, and, and they use it that way. We've also seen people do that with Sparrow, on the, on the desktop with the reader. i-it, this is very conducive to enterprise, right? Enterprise is okay having little readers around, and, and they do use it that way. I guess the third order case-

And they can

store People are used to sort of storing a card, right? and I guess the, the other thing that we've seen that's really cool is people using it as a two-factor authenticator. y-you can use it as that, right? So you can use it to log in into your company systems, and, and not sort of like trust some backdoored UB crap or, or, you know, any of that phiral stuff. That, we all know it's, you know, secure, quote unquote. Yeah.

And when it comes to tap signers, I guess one area people might be a little bit hesitant is just this idea of a blind signing device. Now, some of that is, of course- The trade-off here is the costs, right? It's a cheap device and it's accessible in that, but then it doesn't have a, a screen, so there's kind of a trade-off there of, of course, you know, maybe that gives people a little bit of pause there, Do you have anything, any comment there on, on the aspect there of it, it just blind signing, so you don't necessarily know what it's signing?

yeah, so it doesn't know, it's just blind signing. it's a message digest signer, it just challenges you for the PIN. it, it's, it's meant to be that simplistic, so that, like, you know, again, it's like, it's one of the keys, it has trade-offs, right? One of the trade-offs is that it doesn't have a screen, but, but it does give you that insane sort of extra security if you're using this on a Quorum, right? Because now you have an extra key that is on hardware and it's, different hardware, right? Like it's a different vendor for this chip than we use it for, on Coldcard, and it's very cheap as well. So, so you, you do gain a lot in that sense.

Gotcha. Okay. So let's talk a little bit about the Sats Link. I know, you did a demo of this at Nostrasia, and as you mentioned, the idea is this is like an experimental device, and, you know, could you just explain a bit about where you see people using the Sats Link?

Yeah, so, so right now, this first iteration is for nerds, right? I'm just gonna put that out the bat. Yeah. It's like, stop here if you're not a nerd, right? Like, so essentially, is a, is a ESP32 based device, right? We are adding a secure element to it, y-you know, it leverages the same case as the Coldcard Q, that's how we made it economical. It has a QR scanner, and, so the device is essentially designed Going to be a sort of like a, a, a embedded general purpose computing device, right? So kind of like a Raspberry Pi or something like that, but a little bit more restricted, and, it's very low, battery use as well, which is kind of great. So, anyways, it has WiFi, you can connect peer to peer to others, so you could use it for communication. I do a demo of that, on, on Australia, the video is out on the, on the Satslink Twitter account, And, you, you're gonna be able to, say for example, build a, a frost coordinator, you're gonna be able to use, you know, to do a lightning wallet, because it's connected, right? So there's all this slew of things you could do that you can't do with your hardcore cold card, right? Like this is sort of like a, a warm, hot device, that, that you can use for things, and you don't have to trust a phone, because again, phone super ultra complex device, it's amazing, but System and all that stuff, right? There's a lot going on in there. While this device gonna be able to do a lot of those functions, in a more sort of restricted, stack that, that allows it to be quite secure.

Yeah. And so when it comes to nostra uses with Satslink, what does it look like? Well, I mean, you

can chat. you, you know, like we can have a little chat app in there so you can talk locally, for example, mesh P2P. you should be able to talk back to

you know, it's, it's fairly early on Noster, so, you know, maybe this is your Noster signer. we're, we're working on NIP forty-one, which is, essentially like a key rotation NIP and with that NIP, you know, maybe this device has your master key, and, and that's what you use to sign your new keys in case your, your previous key got compromised or something with a website. I, you know, at this point, it really is sort of like experimentation and trying to figure out what, what people need and how it's done, and then as we sort of like progress on that, then we can change the form factor, change the design to sort of like pursue a path. that people are interested on.

Yeah. And you also mentioned Frost earlier. Now, for listeners who are unfamiliar, I've got an ep-- I've got episodes on Frost, you can check those out, they'll be in the show links, sho-- in the show notes. But NVK, can you explain a little bit of your thoughts on where Frost is at, whether you're interested in supporting that from a hardware perspective, yeah, and, yeah. Basically, where, where do you, where do you see Frost,

and do, do you On Bitcoin review, pod, like, about it. It's, it's a whole rabbit hole. So like, frost is multi-party computation essentially, right? it's a, you have like, it's a single signature, but you use multiple keys to create a single signature. it's, it's, it's quite complex. so we're still trying to figure out how that fits with hardware wallets. We don't have a good schema yet on how to do it on hardware wallets, because you do need to share Pretty share nonsense. There, there is no, there's no perfect spec yet, so it's early. So I don't have good answers yet, Livera.

Yeah. Yeah, fair enough. I mean, I'm, I'm, yeah, just curious if, if it's something you see, if you're bullish on it in general, but you're sort of still curious how it would work from a hardware perspective. I think those, those seem to be, that seems to be where people are at this point. Also, we should talk a little bit about Miniscript as well.

And, oh sorry, Anchor Watch rather, and I know that they are sort of bullish on using Miniscript as part of Bitcoin security and for insurance purposes. We've got things like Lianna as well, their sort of software and related, related very much to Miniscript, and using that, I'm curious how you're seeing, Miniscript use, and how that might evolve with hardware. Yeah,

it's the same as Frost, right? I mean, Miniscript, Miniscript is, is one of those things Like, you know, we do have an edge release that, that does support miniscript, it's something that Rob from, Anchor Watch and Trident is using already. you know, w-we think there is a, an interesting future there. you know, you can do the tap signer, as well,

if you're not using, if, if you're not using Schnorr, And, you know, we sort of like wanna see where it goes. Right now, I personally don't like any of the implementations, like just because, like, I, I, like, I don't like the idea of having to rotate UTXOs, for all the deprecate-- for the, the, how do they call them? Not deprecating multisig, Oh,

like the, degrading multisig or whatever it's

called. Degrading multisig, yes. Yeah. Yeah. Yeah. Yeah. Yeah I, I think all this stuff is gonna be very interesting once we have covenants. until then, it's kind of like not quite there, in my opinion.

Gotcha. And just to explain for listeners, so this is referring to things like CTV, Check Template Verify, and the idea is currently, if you wanna do these sort of more fancy setups, they would require a regular refresh or cycling of the UTXO maybe once a year or once every, you know, whatever. but in a covenants context, if we had some of these soft forks Like CTV and OpVault and things, you might-- you can take away that requirement for cycling the UTXO, which maybe makes it more interesting.

That's, that's a good way of putting it.

Yeah. Okay, so let's talk a little bit about hodlers and, you know, we're, we're probably-- Well, fingers crossed, it looks like we're entering a bull cycle now and-- And then

the price just dropped to daily, Vir, it's over. It's over, it's over, all right. It's dead. Let's

have another two-year bear cycle. But, you know, I think this is a time when there's gonna be, you know, the, the questions around the life cycle of a hodler and how many, you know, people they start out Things like that. How do you see that journey evolving, you know, in, in, in this coming, you know, next year or two?

I don't know, man. Like, you know, like ETFs is what the, the suits need, right? I mean, like, realistically speaking, like we don't have a choice on that. Like, they, they need those vehicles, they're not gonna buy and hold Bitcoin. you know, I tweeted as a joke that like, you can fit all the ETFs in a single code card. you know, but, but, but they don't get fees, right? So, you know, the, the-- I, I, I really think that we're gonna have a, a, a fiat versus sovereign Bitcoin parallel environments coexisting for a very long time, much longer than what the, the bigger Bitcoin bulls think. you know, I, I, I really think that there is- Eight billion people in the world, and that causes inertia. These people use fiat, right? So everybody's invested in making fiat work. So, i-i-i-it's a lot of inertia, it's like the Titanic, right? Like, sure it might hit the iceberg, but like, you can't just turn it, right? So, i-i-i-i-think the best case scenario is actually gonna happen. I think we're just gonna have a peaceful, slow move from fiat to Bitcoin as the fiat is sort of like sinking, but it's gonna be very slow. So, you know, like, I, I don't, I don't, I'm not like a doomer either. Like, I don't think, you know, everything is just gonna collapse. you know, like, if you turn off your computer, it's amazing how everything is fine. Y-you know, turn off your TV, turn off your computer, like, the world is just fine. you know, sure things aren't as great in some places or whatever, but like, you know, ultimately, things are still okay. So, so yeah, I mean, I I, I, I, I think it's, like we have to, we have to sort of like acknowledge as Bitcoiners that, like, you know, things aren't gonna go in how we think. Everything's gonna happen faster than we think and slower than we want.

Yeah, for sure. will a lot of p-users end up stuck in a custodial context, right? If they can't afford to go on chain? Absolutely. Yes, absolutely. Like,

reality is, you know, we're-- Bitcoin doesn't change human nature. It just, it just enable humans who want an out to have an out, right? So, you know, I still think we're gonna have proto-distributions of, like, you know- It's gonna be twenty percent of the people only who are gonna be interested in real Bitcoin, right? And maybe one percent of that sort of goes and takes the Bitcoin really off the exchange. reality is like most people don't want freedom, they just want a better sell, right? So, you know, if they have access to number go up through their, you know, a Citibank Bitcoin account, they might go that way. is that horrible? Yes. But, you know, that's sort of like the human sort of condition. Right? Like people will go on the path of least resistance. Now, what's amazing about Bitcoin is that everybody else who doesn't wanna participate in this insanity can, can just exit, right? We can just opt out. a-and that's the true power of it, like we're-- we have a voluntary system to opt out, and, and, and the city banks will protect our hodl too, because they're hodlers, and it's in their interest that Bitcoin doesn't break. you know, the game theory on Bitcoin is perfect that way. So I, I think that the tools for self custody are gonna improve. I think the, the, the self custody or partial self custody tools are gonna be so good That, people will be in a better place than having fiat in a bank, right? So maybe they're gonna do a city bank plus, I don't know, like, plus Amex bank, where each bank has one key, so neither bank can rug pull the user alone. You know, I don't, that, that's the majority, right? Like, the, the majority of the people are gonna be stuck in the hellhole, but they just might have a better hellhole. now, for the people who do want freedom, who do want self-responsibility, who do want to, you know, withdraw from the exchange, put in their cold cards, y-you know, that, that future is already here. Like, we already live in that, right? so, so like, it's, I, I don't even talk about

so, so it's like how many, how many people can we wake up so to, to join us, right? before, before regulators make it harder or, or less private?

Back to the show in a moment. If you are trying to transact right now, I'm sure you're noticing some transaction fees. You can go to mempool.space to target your transaction fees and also to check whether your transaction is close to getting confirmed or not. Bitcoin is a multi-layer ecosystem and mempool.space is your comprehensive Bitcoin explorer covering this ecosystem from the mempool to the blockchain to second layer networks like the Lightning Network. With mempool.space, you don't even have to trust a third party, you can host it yourself. And of course, keep an eye on Out for the upcoming transaction accelerator, which we'll be launching soon, so you can find out more over at mempool dot space. Yeah, I think there's gonna be a lot of people who unfortunately get a rude awakening. of course, you, you, you help people who you, who you can, you help the people who can be helped, but fundamentally there'll just be a lot of people who unfortunately, you know, hold paper coins or whatever, but at the same time, like you mentioned, there will still be possibilities For multiple institution setup, there'll be possibilities for, you know, Uncle Jim style setups, you know, there'll be all these other ways that people can get started with hodling. And, and lo- like you said, this already exists today, even if you look at the UTXO count, I think before you looked at like all the ordinal inscription stuff, it was maybe around eighty-five million. So that would be pretty much like the upper bound on how many actual sovereign Bitcoin users there are. And in practice, we know it's less than that because, you know, people have multiple and so it might only be a fraction of that in terms of who actually hold coins non-custodial, you know, even today, it might be like ten million or something like that, right?

Yeah. I, it's like we, we don't know, we don't know anything, we don't know where we're gonna go, how it's gonna be, it's just, it's just a fun ride.

Yeah, I think, I think it will be a fun ride as, as things go, you know, like, yeah, there'll be some downs

But I think the, the, I guess the question people might have is, if a lot of other people go custodial, does that impact those of us who are sovereign? Do you think that it, like, that there's some kind of negative externality of people just going custodial?

Yeah, I mean, you know, this happened to gold, right? This is how fiat won. Remember, gold had a nice five thousand year run, and then the fiat MMT people, like, literally, like, killed gold, right? you know, gold at, like, whatever, like,

Right? Like it's hilarious. Yeah. Like you should be way higher, right? Yeah, no, you lost, right? Like, I mean, take it out of its misery. you know? So, so like, the, the, the thing is though, like, Bitcoin is so much more interesting, like so much more useful, you know, because it's divisible, it's, it's a temporal, like, you know, like, you, you, it's, it's like transmissible, like, you know, it has all these properties. That like, it's Right? So i-it's gonna be hard for them to, to sort of do what they did to gold, because it is better, right? Like it is better than fiat. It's not just gold two point zero, it's actually better than fiat and gold combined. So in that sense, the technology itself is good and the technology itself is open, right? So it's very hard to contain it. Now,

right?

Y-you know, like if you are living in some jurisdictions, y-you know, like, and, and you don't wanna break the law, you know, it could become complicated, right? Because they're gonna have some expectations of, like, you know, KYC or whatever. You know, they might even say you can't hold Bitcoin, right? Like, totally possible. So, is, is it like realistically enforceable? Probably not, right? But you don't wanna be in a position where you're breaking the law. So I think what's gonna happen is like people are gonna move, and, and we're gonna have concentrations of extreme wealth of Bitcoiners in some spots, and those places are gonna win, and places that don't have those Bitcoiners are gonna lose. You know, like, i-i-it's, it's like, you know, you look at the amount of- Coders that moved from like India, China, to Iran, moved to like, you know, Silicon Valley or, or, you know, Texas and places like that, right? Like, a-and, and, you know, like, you have brain drains, right? In these countries that have, like, you know, laws that aren't appealing to the people who have the brains and are productive. So, you know, and with Bitcoin, people can just like get up and leave, right? Like, they, they can just take their, take their- You see them go. So, you know, sure you might be breaking the law on the way out, but if you're not planning on going back, it's kind of like, "fuck it," right? and, and Bitcoin sort of gives this opportunity now to a lot of people. so countries are gonna, are gonna first fight and, and they're gonna then eventually realize that there's nothing they can do except for, like, you know, make it, make it better for, for Bitcoiners to be there.

Yeah. And so even in the worst scenario, there, it's like you would still rather be Holding some Bitcoin than not, right? That even if they were to try to seize coins, you'd rather be at least in a position where you have some wealth than ha-have all your wealth inflated away. and I think it's also important to understand, as you mentioned, there are certain technological differences about Bitcoin that make it so much better than gold, right? With the current fiat world that we have today, we have one central bank, we have the Federal Reserve, and they just sort of, you know, every other country is just sort of Federal Reserve plus their own country. Country risk, as our friend Safety says, but in a Bitcoin world, there could be tens of millions of lightning banks, and there could be maybe someday with fur-further technological improvement, maybe it's hundreds of millions of lightning banks, lightning-enabled banks, let's say, and of course, if you're, if you hold enough coins, you can be fully self-sovereign and be your own bank, right? Which is a some- you know, something, as I'm sure you recall, that, that was the thing people said early in the early, in the early days of Bitcoin, Also incentivizes people doing bank runs, right? Because if they think someone's going fractional, they're gonna start just going, "Hey, give me the coins," or send them out to somewhere else. And so there'll be these games where- If you, if a certain financial services provider in the future is rumored to be going fractional, that's gonna cause this massive rush for the exit, and I think, I think that will be a dynamic that just remains in place, even if not all eight billion people can self-custody, I think enough can such that that bank run threat is there.

Yep. Yeah. You, you know, like it's, I, I, I tend to not focus on like the, like, you know, where we're gonna go in that sense. Like, I, I rather just sort of like put all the energy into like building stuff and, and, you, you know, like, you know, shitposting on, on number go up, of course. but like really, like just try to create the best technology that we can, so that we can enable people to sort of like go fight those fights and, and sort of like take us to a better

And of course, as you mentioned, I think people moving jurisdictions, I think that is also something that's really going to force, states around the world to actually be more competitive. And so I think that will result in a lot of better things for all of us, so, you know, I think that's, that's where maybe there's a- Impetus for us to encourage self-sovereign use of Bitcoin. Oh,

absolutely.

Yeah. And to, you know, actually go, you know, like my friend Andrew Henderson says, go where you're treated best, right? Go, go where, you can get better tax, lower taxes, less regulation, et cetera, or at least more favorable environment. so that you can hold all your coins and run your Bitcoin node and run Bitcoin mining and all of these things. So, you know, I, I, you know, I don't wanna be too, negative or bearish, I still think there's a lot of reasons why There will be incentive for some countries and certain companies and people to really push this and drive this and be accepting of Bitcoin, and there'll just be a natural pull towards those places.

Yeah, I mean, I'm super bullish. I mean, reality is we have this amazing new money that enables us to be sovereign if we want to, and, you know, it's designed for number go up. it's, it's all happening as described. So, y-y-you know, like, now it's just sort of like, let it work and let's go build stuff, right? Like, i-i-it's, yeah, I mean, it's, it's, it's, it's a strange, it's a strange optimism, right? Like, I, I, I used to joke that's deterministic optimism, right? Like, it, it just, it just is.

Great. Well, I think that's a great spot to finish up there Kite dot com is the key link for people there. NVK, thank you for joining me, and I hope to chat soon.

Thank you, Livera. That, that was great. I really appreciate it.