{ "episodeId": "SLP209", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "samourai_wallet": { "name": "Samourai Wallet", "role": "guest", "tag": "SAMOURAI" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 9.09, "text": "Hi, you're listening to the Stephan Livera podcast, a show about Bitcoin and Austrian economics. Today, for episode two hundred and nine, we're talking about Bitcoin culture, where it's going, and Bitcoin privacy tools with Samourai Wallet. But first, a message for the sponsors of the show: Siswan Bitcoin dot com, the best place to auto-stack your Bitcoin in the US with incredible- Really easy setup and low fees. I personally appreciate that Swan is Bitcoin only and is dedicated to Bitcoin education so your friends won't get confused. Go to swanbitcoin dot com slash livera to get ten dollars of free Bitcoin when you start stacking with Swan. 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They've also got the Bitcoin backed loan product and they've also got a range of interesting and educational content on their website, so go to unchained dash capital dot com. Here's the interview with Samurai Wallet. Samurai Wallet, welcome back to the show." }, { "speaker": "samourai_wallet", "time": "02:33", "start": 152.89, "text": "Thank you for having me again. am I, is this a record? Am I the most frequented guest on the VeriPodcast?" }, { "speaker": "stephan", "time": "02:40", "start": 159.64, "text": "Haha, you'd be up there. You're definitely up there. This is, I think this is your fourth appearance. So I think there are some who, there might be some who are up on five, but you're definitely getting up there. So Samurai Wallet, I've seen you've been, well, obviously there's been a bit of back and forward on Twitter with some of the recent" }, { "speaker": "stephan", "time": "03:01", "start": 180.81, "text": "And also some of your comments around Monero culture, and, I wanted to jump into some of these discussions and play some of those discussions out for people. So maybe let's just start with a little bit around what you see as Well, well, do you see any cultural issues in terms of Bitcoin users today?" }, { "speaker": "samourai_wallet", "time": "03:20", "start": 199.58, "text": "Yeah, yeah, absolutely. I, I mean, I've been talking about this since about 2015. I, in fact, it's the whole reason why we started Samourai Wallet. We saw a beginnings of a cultural degradation of, of the space as more institutional money and, and more, price driven, actors entered the space when we had a huge, price increase, had a big drive of retail investors, and the ethos of the space was shifting as early as 2015. So, so we were warning about that then, and, Samourai was a direct response to that, Samourai wallet, the software. and I think it's only exacerbated, it's only gotten, it's only gotten worse as, as far as I can tell. In terms of cultural acceptance of, of things that even in 2015 wouldn't have been acceptable, such as closed source software and Bitcoin, such as custodial, solutions being praised, all that sort of stuff, is what I talk about." }, { "speaker": "stephan", "time": "04:19", "start": 259.21, "text": "Let's bring that to today then. So you're saying today, essentially, you're seeing this practice of custodial being seen as \"quote unquote\" okay and, closed source software. Do you view that then as people are making trade-offs to try and get further adoption? And essentially, that's why you are, you're anti that, because, and perhaps this is an area where you might wanna comment also. I've seen you comment on this, in saying- Mass adoption is the poison pill. Why do you say that?" }, { "speaker": "samourai_wallet", "time": "04:52", "start": 292.03, "text": "Well, that's exactly why you got-- you, you hit the nail on the head. If you, if you're coming into this solely as a way to, to, increase your bags, as I like to say. as a way to, as an investment, then, then you have a different mindset and anything that threatens your investment becomes a problem to you and, and, and privacy, especially on the main chain, to a lot of people, they believe that threatens the, their underlying investment in Bitcoin. and as such, you have, you see not only, A lack of desire to work on privacy features, which is just normal because it's always, it's always a niche thing, it's, it's always required, but it's always the, it's a niche thing that people do, to being outright hostile towards privacy." }, { "speaker": "samourai_wallet", "time": "05:45", "start": 345.46, "text": "On the main chain, because it's, you know, they believe it th-threatens their investment. so mass adoption is a poison pill because we're no-- Bitcoin's nowhere near ready to deal with that type of thing. We should be years ahead in terms of privacy on protocol layer before we can even start to think about mass adoption, as far as I, I can tell." }, { "speaker": "stephan", "time": "06:11", "start": 370.8, "text": "So you were mentioning there around privacy tools, well, privacy on chain. I notice that yourself and some of the other Samourai Wallet guys, such as T Dev, the CTO, have been a little more skeptical of the idea of, let's say, some of the more protocol level privacy enhancements coming. So for example, if we were to get Taproot, and then in future we were to get the, cross input signature aggregation, which would be a future soft fork. So in your view, are you skeptical that those things will, come to Bitcoin?" }, { "speaker": "samourai_wallet", "time": "06:46", "start": 406.43, "text": "I'm not skeptical that they'll come to Bitcoin, I'm skeptical that they'll come to Bitcoin in a way that maximizes privacy. So we've already seen that with the cross sig aggregation, initially it was originally part of one spec, then it got broken out, we'll do that later, and that's the part that provides the privacy benefit. you know, so I, I mean, you, you would have to ask T-Dev exactly what his thoughts are, 'cause we are two different people, contrary to what P- what Twitter thinks. We are completely separate people." }, { "speaker": "samourai_wallet", "time": "07:20", "start": 439.98, "text": "I agree with the overall sentiment that we aren't going to see protocol level privacy changes, anything that makes a real big impact on Bitcoin. I think that ship has sailed. the time for that was prior to the institutional money coming in. getting that on the protocol level before they got in was kind of Kind of the essential key to the appa, to the whole operation. otherwise, Bitcoin basically runs the same risks as what happened to the internet, which is total capture. And the internet is totally captured, with the exception of the fringes who are running, you know, on the inser-- hidden servers on the dark net. but all intensive purposes, the internet as a decentralized network is completely captured and surveilled. and we saw the same possibility with Bitcoin, and the same, you know, we've see- we saw the same kind of things start to play out with the SegWit 2x fork, and that's why it was such an important movement and such an important," }, { "speaker": "samourai_wallet", "time": "08:35", "start": 514.57, "text": "point to get across that the chain can't be, and the protocol can't be captured so easily, or, or shouldn't be able to be captured so easily, and that users have the final say. That's why that whole movement was such an important, important event. and, and why I was so bullish, it was because it showed that, okay, the same type of capture events that happened with the World Wide Web, are still, is still possible in Bitcoin, but it's not gonna be as easy. and, and here's our first, first, show of force. Now the opponent wasn't very sophisticated, and the opponent wasn't very organized, and, you know, they made it kinda easy to- For them to lose, if we had a much, much more sophisticated opponent, a nation state, for example, would, would that still be the case? and, and would that still-- would that be the case in twenty twenty, versus, whenever? Whenever the two, two X fork, which was like two thousand eighteen or something. So, those are all questions I think that are worth, worth considering, as mass adoption, grows I think the, the likelihood of that type of event succeeding increases." }, { "speaker": "stephan", "time": "09:50", "start": 589.87, "text": "I'm somewhere in the middle here, right? Like I obviously, I want tools like Samourai Wallet and privacy tools to exist, but I think I, I'm also Of the view that most people coming into Bitcoin, maybe we could think of it this way, the amount of number go up demand versus the amount of privacy demand, and I, I think what we're going to see over time, well, even now and over the next few years, is we're gonna see just vastly more number go up demand than privacy demand for Bitcoin. And so it becomes difficult then, because it's like- It's not that people don't want privacy, it's just that that's not their priority, if you will. What do you think?" }, { "speaker": "samourai_wallet", "time": "10:37", "start": 637.17, "text": "Yeah, I think you're absolutely right. there's no, there's no disagreement. people don't want privacy until they, they need privacy, and then they'll go, they'll go seek it out, and it might be too late for them in some cases because of their cavalier attitude to, towards it in the past. You know, when I, when I criticize the culture of, of Bitcoin, it's not necessarily just a Bitcoin culture, cultural problem, it's a wider cultural problem. So, the problem of KYC isn't a Bitcoin problem That is a, that's a global problem around the world. you know, you have, you have global task force, set up, Across all the major economies that share data with each other," }, { "speaker": "samourai_wallet", "time": "11:21", "start": 680.59, "text": "and use-- and people are just completely fine with, with, handing over that information, and this is a relatively new innovation. In the world, and, and in the last twenty-five years, it's been completely normalized. Now, when we criticize Bitcoin, because, Bitcoiners for, for submitting to KYC, in order to acquire Bitcoin, it's not that we're trying to shame them, we're just trying to explain to them that they don't, they don't really understand the implications of what they're doing here. Bitcoin is a sub- it's, it's a subversive technology, it really is, and, it can, it can, Things can shift very, very quickly as we've seen in the first half of 2020. Things can change very rapidly, and you could go from doing something completely legal, which is acquiring Bitcoin, stacking Sats, et cetera, et cetera, and that could go to illegal very quickly. Your tax authority or your government or your whoever could ask you, what could target you very easily because you're right, you, you've submitted your name, identity, where to find you, Your government-issued ID, sometimes your passport, and a biometric photo in a lot of cases. So you've, you've handed all this over, willingly." }, { "speaker": "samourai_wallet", "time": "12:46", "start": 766.37, "text": "Yeah, I think it's, I mean," }, { "speaker": "samourai_wallet", "time": "12:51", "start": 771.13, "text": "I think the KYC, issue in Bitcoin is, is a bigger issue, Because of the nature of the technology, and I think that users coming in solely to as an investment for a number go up have a different kind of incentive set and, They don't, they probably don't care about all that sort of thing, but they might very, very soon, depending on the shifting attitudes of this thing. And I don't think anything is, is sure bet really. In terms of the way governments perceive this and, and accept this." }, { "speaker": "stephan", "time": "13:25", "start": 804.99, "text": "Of course. So it may come to that in terms of how private a person is when they first acquired bitcoins. Obviously, nowadays it's quite difficult to have, only non-KYC coins, although it is still possible if you, let's say, go to a Bitcoin meetup. Taproot is" }, { "speaker": "samourai_wallet", "time": "13:45", "start": 824.96, "text": "being used more and more frequently, and that's a, That's a decentralized exchange, so the volumes on there are growing rapidly and there's no KYC requirement. So if you wanna do, if you want K, non-KYC Bitcoin, it's completely easy, not easy, but it's completely reasonable to do. You just have to do a little bit extra work." }, { "speaker": "stephan", "time": "14:05", "start": 844.74, "text": "Yeah. With that point of view as well, I, I think it's also worthwhile talking about kind of realistically what happens also, right? So I'll give you a quick example, right? So again, my intention here isn't to, like, to fund non-KYC trading. I, I want people to be able to do that, but here in Australia, there was a case where, I think it was like a fifty-three-year-old lady in, in a suburb in Sydney, where essentially the police came after her for doing non-KYC Bitcoin trading, basically. And now they were saying, okay, you're operating an illegal, virtual currency exchange without doing the KYC, et cetera, and that to me looks like it was probably an example-- again, I'm speculating a little bit because I don't know all the details-- but a, a probable or likely scenario there is that lady was probably running a lot of volume through her bank account, the bank, as in fiat volume, because obviously, you know, buying and selling, and then with- A lot of those transaction monitoring rules in the bank that probably flagged it up to the Australian Federal Police or some other, you know, law enforcement agency like that, and then they probably ran a, a sting, and then they caught her and went to her house and probably raided her hard drives and all of that. And so to me, it's sort of like- I want people to be able to have these non-KYC ways of interacting with Bitcoin, but it seems to me like somewhere at some point, unless you're staying under certain thresholds, that It's, it, it may not be feasible for a, a, a big proportion of people to be able to do that. But what, what do you think?" }, { "speaker": "samourai_wallet", "time": "15:42", "start": 941.75, "text": "Well, I, I don't know the details of that case, I know that in Australia they'll, the police will come harass you for not wearing a mask and for having a party in your own backyard, so, you know, I don't- I don't know that they're the best example of, of, reasonable, state. I mean, I, I don't know what exactly the question is. You're asking me The government makes it hard to acquire Bitcoin, so therefore you should submit to the way the government wants you to acquire Bitcoin. Like, so what's the point? To me, you know, like, I don't get it. I don't understand what the point of- Of buying Bitcoin is, if, if you have to give up so much information to acquire it, I certainly wouldn't do that. I don't see the, the, the, the appeal to that at all. I think if you, you should be acquiring Bitcoin in a way that doesn't expose you, and you shouldn't break any laws to do that, and, and as far as I know, there are no laws saying that you have to buy Bitcoin from a certain type of exchange, whether that be in Australia or in the US. now in the US, what they u-that type of story I've heard for, and that's been, this has been going on for years. in the US, what they have to do is they have to get the, the person who is involved in what they claim is an unlicensed money transmitting business To essentially admit to knowledge of, the source of funds being illegal. So they'll set up a sting operation with the, the local Bitcoin trader, for example, and then they'll, they'll say something like, \"Oh, yeah, I got these from, you know...\" Well, hacked, hacked the bank, bank accounts, or I got these from illicit, drug purchases, and as soon as the trade is made with the knowledge that these came from allegedly illicit means He's, he's, he's committed a crime and now he can be arrested. and that's how they, that's how they get him in the US, and they've been doing that since like 2012. in, in Australia, I don't know the details of the law there. You know, but I'm not, not entirely surprised. I, I, again, there's more of us than there are of them. They're making an example in, in all these cases, and I believe that people should resist and, and should, should, not, not- Sacrifice their personally identifiable information to unknown third parties, just to be able to get in on what may be a good investment for them That, that I don't understand." }, { "speaker": "stephan", "time": "18:21", "start": 1100.79, "text": "I see another common view, out there might be something like, \"Well, yeah, of course I might be able to try and buy some in a non-KYC way or earn in a non-KYC way, but they...\" wouldn't be able to earn, they wouldn't be able to earn as much or buy as much if they had to do it all non-KYC. So I guess in your view then, is it that essentially you think it's worth paying the premium or having less of a stack to get non-KYC or how, how would you frame that or how would you think about that?" }, { "speaker": "samourai_wallet", "time": "18:53", "start": 1133.49, "text": "Yeah, I mean, I think that there's always gonna be a privacy premium, there always is with stuff. you pay, you know, you pay more, for a privacy premium, and you have to be okay with that. So, and again, it comes down to what I said earlier, where you don't, you don't know you need privacy until you need it, and when you need it, you're willing to pay the premium, it doesn't matter to you. It's just whether that, that's gonna be too late. Like, so for instance, we get a lot of users who truly believe that by mixing their coins, they're erasing their KYC record, like that somehow mixing their, their, their Bitcoin after they've submitted KYC to an exchange breaks that trail of KYC, and it doesn't. And we have to explain this to users, so there's a big misconception of what, what's happening, the privacy of Bitcoin, where we get people who are thinking they're get, they're buy, they're buying from Cash App, they're stacking Sats and Than sending to their samurai wallet, then mixing it, and then saying they're gonna go, on the dark web with it. They're crazy." }, { "speaker": "stephan", "time": "19:54", "start": 1193.95, "text": "I guess then it also comes to what sort of culture and what, what you're looking to do with those coins. And I guess, yeah, bringing it back to what we were saying around how much number go up demand is there versus privacy demand, in my mind, that also brings in this point of whether over time, privacy gets priced out on chain relative to all the people who wanna stack or- Do something else with it. But, how, how are you thinking about that kind of idea of if, you know, fees were to-- like a lot of people were to come into Bitcoin and would that basically make doing coinjoins more expensive or how are you thinking about that?" }, { "speaker": "samourai_wallet", "time": "20:31", "start": 1231.48, "text": "It'll definitely, it would definitely make coinjoins doing, doing coinjoins more expensive. we've-- I mean, We've been hearing this for a long time, right? We've been, we've been hearing about how all these users are gonna make fees go up, and how privacy is gonna be priced off, off-chain, so you have to go to second layers, et cetera, et cetera, et cetera. well, we haven't seen it yet, right? Like the closest we got was Roger Ver's spam attack, between 2017 and 2018. And That's when there was huge mempool congestion and the beginnings of a fee market starting to emerge, but it was all based on, on spam and lies. and since then, you know, well, the mempool has been pretty much empty. we get, we get small spikes every, every now and then. and we've had the last couple weeks, there's been a sustained small, kind of low level non one sat kind of fee, fee rate for a while. I don't think it's, it's a huge concern for us right now. Right now, our coin joins are, are relatively small in, in size. We have five participants in a coin join, And, and the way that the coin join is structured or the, the transaction is structured, we have, between two and three," }, { "speaker": "samourai_wallet", "time": "21:52", "start": 1312.24, "text": "free riders in there who aren't paying a miner fee, so the miner fee is paid by, two or three premixers. And if we were to increase the size of the coin join to ten? That means the miner fee, miner fee would be paid by, between more people, so it would actually go, the cost of a coin join would go down. so I think time is on our side. We can deal with higher fees on, on chain, it's not really that big of a deal. And I think that, I think that while privacy isn't gonna be focus of, of, core developers in, on the protocol layer, I think that they, that they do have a focus. On, transaction efficient, efficiency, UTXO efficiency, and, and I think we'll, we still will see innovations on, on the transaction side and keeping sizes down and keeping costs down. So I'm not, it's not something that we're, we're actively worried about. It's obviously an identified threat, if things get out of control, but, it's not, you know, not, not high on our list of, of, of" }, { "speaker": "stephan", "time": "22:59", "start": 1379.45, "text": "I guess it could be seen like that's a bit of a longer term consideration and not one that's so important in the short to medium term, and it could also be that Your customers, the Samourai Wallet users, are the ones who are willing to pay that premium." }, { "speaker": "samourai_wallet", "time": "23:16", "start": 1395.8, "text": "Yeah, for sure. I mean, we wanna keep, we, we wanna keep things reasonable for them, right? We don't want them paying enormous miner fees just to mix, because The, the, the privacy premium at a certain point, you know, you won't stomach it anymore. It will just be too expensive, and you'll look for other tools and solutions, to achieve the same goal. so, so I think that it's, it's a long term, not even really a long term threat, it's just a long term consideration to keep in mind, to keep an eye on. I, I, I'm not, not worried about it in the short to medium term, and I think that there'll be plenty of technological innovation both on the protocol level and within our, our application level and our application stack, where, where we'll be able to, to keep up with things and make sure, That users are, are paying the least amount of miner fees that they have to pay and the least amount of coordinator fees that they have to pay, which, I mean, already, already we do a, a good job at, and I think both on miner fees and coordinator fees. we try to keep things, we try to keep an eye on things." }, { "speaker": "stephan", "time": "24:20", "start": 1459.79, "text": "Yeah. And actually, while we're here, it might be a good point as well. I think this is a common confusion when people are looking at CoinJoin, is they look at the fee and they think, \"Oh, it's five percent of whatever amount I'm putting in.\" Can you just clarify for listeners who are maybe not so familiar with the Samurai Whirlpool model, what sort of fees can they expect to pay?" }, { "speaker": "samourai_wallet", "time": "24:40", "start": 1480.37, "text": "Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah The denomination of the pool you choose. So we have three pools. We have the 0.01 BTC pool, we have the 0.05 BTC pool, and we have the 0.5 BTC pool you can choose to put any of your UTXOs in any one of those pools," }, { "speaker": "samourai_wallet", "time": "25:07", "start": 1507.28, "text": "and the fee that you, you pay is just based on which pool si- which pool you choose. the- Regardless of what amount you put in, so you can, you can mix a thousand BTC in the zero point five pool for the same price as mixing one BTC in the zero point five pool. Doesn't, doesn't make any difference at all." }, { "speaker": "stephan", "time": "25:27", "start": 1526.89, "text": "In terms of your users, as I recall from our recent, our most recent episode, y-you were talking about how, in some sense, you're designing the wallet for yourself and the users are coming along for the ride with you, but, It, to some extent as well, I guess your, your software has a kind of target user in mind that, you know, they may be a dark net market user. Do you have any thoughts to share there in terms of who is like a typical profile, who are the typical kinds of samourai wallet users?" }, { "speaker": "samourai_wallet", "time": "25:59", "start": 1558.73, "text": "Well, it's, it's kinda hard to say 'cause we don't really know, you know, our users, the only users we know are the ones that, that make themselves known to us in our Telegram rooms or on Twitter and stuff like that, and it's such a wide ranging gambit that- you know, I, I, I found one, one family that uses Samourai Wallet, and two, two daughters, between like ten and, and twelve, that use Samourai Wallet, a, a grand, a, a grandparent. We have very low, low technical users and very high technical users." }, { "speaker": "samourai_wallet", "time": "26:30", "start": 1590.45, "text": "we haven't targeted the wallet to a specific type of user. What we've tried to do is create a toolset within the wallet, that would be attractive to, to Bitcoin users in general and, Bitcoin users who interact with Bitcoin, not just Bitcoin as an investment where they, they pop it on a hardware wallet and leave it there. that's people who are interacting with, with the token, either spending it, transferring it, whirlpooling it, doing something with it. The tools that are in the wallet are, are essentially built from our experiences and out of necessity, and it's- Because they, they fill that, that same kind of need for a whole wide ranging group of people. I think that the people that end up, the users that end up using Samurai regularly They just require, whether it be, they just require, they want control of their UTXOs, they want control of their coins, and Samurai Wallet provides them an extraordinary amount of control of their coins for, especially for a mobile wallet. it, it, it provides them a lot more control than, than many, desktop wallets do, let alone other mobile wallets. So, I don't think it's an experience level thing, and I don't think it's a type of like hacker man type of thing, or dark net type of thing, I think it's just generally anyone who's interacted and used the Bitcoin token for any, any amount of time will al-will have something that says, \"Man, I wish my wallet could do X, Y, Z,\" and it's very likely that Samourai Wallet can do that." }, { "speaker": "stephan", "time": "28:09", "start": 1689.19, "text": "Right, and yeah, I think, Samourai Wallet does, in my view, offer the best privacy available within Bitcoin today. I think one thing that I've noticed as well from online discussion, and I think this can be a bit difficult for people because if they're following online discussion, it can seem like, \"Oh, there's all this fighting going on,\" and I might just ignore and just not even try to use any, you know, CoinJoin wallets and privacy wallets. Because it's just too confusing for them. Do you have any, thoughts for listeners out there who are trying to make heads and tails of, of this?" }, { "speaker": "samourai_wallet", "time": "28:49", "start": 1728.89, "text": "Well I think that if you don't understand what you're doing, then you, you should probably not use a feature. Right? Like you shouldn't just use a feature because your friends and everyone, you, you know, your, your influencers and whatever tell you to use it. You should use it because you need it. And you should use it because you, you should use it when you understand what it's doing. so we try to explain to users and we try to explain to people what our tools do, and, and what the actual outcomes of, of using the tool will be. we- We take great pains to explain these things, to people. it would be a lot easier just to kind of say, \"Yes, you get privacy.\" as opposed to, \"Yes, you get privacy, but you need to be aware of X, Y, and, and if you do this and this, you're gonna undo what you, what you've done.\" Right? So that education, that education gap is, is kind of something hard, to, to overcome." }, { "speaker": "stephan", "time": "29:53", "start": 1793.47, "text": "To that point you were making there, do you think that contributes to when people say things like, \"Oh, Bitcoin isn't private\" because they saw some examples where someone was doing something the wrong way, and that- Gives people the wrong impression that you can't be private, you using Bitcoin, when really they just don't know the right way to go about that." }, { "speaker": "samourai_wallet", "time": "30:18", "start": 1817.53, "text": "Yeah, I think there's a lot, there's a lot of that. I think that, I mean, it's a misnomer that Bitcoin is private, it's not, it's pseudonymous, you know, because it's, it is a public ledger. The idea always was that there was no personal identifiable information attached to your UTXOs, which isn't the case anymore for a large number of UTXOs as we were just discussing with the KYC problem. but as a system, it was always assumed that it was, gonna be a pseudonymous system. so getting users to understand that, getting users to understand that privacy on Bitcoin is a game of breaking heuristics and, and breaking links and disrupting the movement of- Of UTXOs or the flow of, of UTXOs. I think, I think that's, you know, getting users understand that is, is one of the major challenges. and then the second thing is when there's, when there's Deeply flawed implementations of CoinJoin out there that are, are receiving hype and praise by influencers a-l-a-and regular people alike. It creates a, a, a problem for the technology as a whole, because it's assumed that all of the technology is flawed because of the one flawed implementation. I think that's the bigger, the bigger issue right now within the CoinJoin space." }, { "speaker": "stephan", "time": "31:38", "start": 1897.98, "text": "So essentially, it's a, it's like the well is being poisoned by certain instances of, implementations of the idea, and that may color people's perception, to make them believe that it's not possible, et cetera." }, { "speaker": "samourai_wallet", "time": "31:53", "start": 1913.13, "text": "Yeah, yeah, definitely. I mean, we're, we're seeing that already. So the, the, the narrative is CoinJoin is, is flawed and CoinJoin is broken. CoinJoin gets, gets your account flagged, et cetera, et ceter This is true at all. a flawed CoinJoin implementation is flawed, a flawed CoinJoin implementation is, is broken, and a flawed CoinJoin implementation is resulting in people's exchange accounts getting closed. but that doesn't have anything to do with CoinJoin, it has to do with the flawed implementation of CoinJoin. which is, you know, which is why we've been vocal about this thing, why we, we've been looking at, at not just Wasabi, but what JoinMarket and even the, even ChipMixer, a custodial mixer, because these are all in the realm of, of what we're doing and what we're trying, and what, of the technology we're trying to get users to, to use and normalize. And, You know, we'd, we'd, we would rather not have to, not have to fight against internal actors who are, who are, you know, harm-- as, as far as we see it, harming the, the space. It'd be better to focus on hardening the space for external attacks." }, { "speaker": "stephan", "time": "33:05", "start": 1984.93, "text": "There's also been some discussion around, you know, shitcoining and people talking about like, and I think, I think some of this is kind of like, there's a bit of trollish mentioning of things like Monero and things like that, although as you've said, the wallet is Bitcoin only, I, I- What's spurring, the discussion around, the Monero or the Monero culture as opposed to just talking about Bitcoin privacy?" }, { "speaker": "samourai_wallet", "time": "33:31", "start": 2010.9, "text": "I guess I don't, I don't really understand the, the question entirely. my tweet about Monero, well, my tweet when I mentioned Monero wasn't, it wasn't talking or praising Monero culture, it was criticizing Bitcoin culture. That was talking to Bitcoin users. My audience is Bitcoin users. I'm a Bitcoin user, you know? I don't, I don't really know what else, you know, the, the whole, the whole accusations of shitcoinery or whatever, I think is- So, so absurd it doesn't even really warrant a response. my, my work speaks for itself. I mean, for" }, { "speaker": "stephan", "time": "34:08", "start": 2048.27, "text": "God's sake. Of course, of course. Look, I, I think I, I think I understand where you're coming from. as I, as I read you, it was sort of like we are essentially not happy with the way culture is going in Bitcoin, but I think what, what spurred some of that discussion was when you said, I, I can't remember the exact wording, so correct me if I'm wrong, but I think you said To our hearts or something like that." }, { "speaker": "samourai_wallet", "time": "34:33", "start": 2072.64, "text": "Yeah." }, { "speaker": "stephan", "time": "34:33", "start": 2073.16, "text": "And that was probably what spurred the discussion, right?" }, { "speaker": "samourai_wallet", "time": "34:36", "start": 2076.28, "text": "Well, that's what, that's what triggered people. It was, it was, it was the use of XMR and the fact that, that it hit close to home, you know? you know, custodial cooks and, and satstackers and, and whatever else I said in that tweet, it was designed to trigger. You know, you don't, yeah, you should be offended. And if you're offended by that You're probably one of the people I was targeting, and talking about. there's nothing really that controversial, you know? I was, I was, I was-- It was, it was a tweet against closed source software, it was a tweet against voluntarily KYC-ing yourself, it was a tweet against just blindless hopium shilling, and, and, you know, like, these are pretty, these are pretty basic things. it doesn't seem that radical." }, { "speaker": "samourai_wallet", "time": "35:31", "start": 2131.0, "text": "The, the shitcoinery thing, I think, is just a, just a new way to attack, you know? It's like, oh, you can, you can disregard what this person's saying because they're a shitcoiner. It's a real-- It's like kind of an SJW tactic. And, you know, I've never, I've never been partial to those types of things, and in fact, I'll call it out, and I've never been shy about, about calling shit out, so, I'm not gonna, I'm not gonna stop now, so, you know, I can, I, I don't mind being called a shitcoiner. if that's, if that's what it is. as for Monero, look, the, the whole point is when, when something-- it's, one, it's a small community, and they haven't had the, the pressures that Bitcoin has had, right? They haven't had a huge, huge retail movement into their space, they haven't had a huge, push of institutional money into their space. A lot of exchanges haven't, haven't even added them to their, their offering, right? Like, it's a very insular and small community, and because They've been able to retain the same kind of culture that was, that was present in Bitcoin. That's all I meant." }, { "speaker": "stephan", "time": "36:38", "start": 2198.04, "text": "Sure. And it's probably also fair to say that as, you know, everything gets bigger, it just becomes harder to maintain that, and perhaps some of this also comes into this whole concept of eternal September, right? Or just, you know, at, at the start, it's kind of the geeks and the fanatics, and then later it's the mops and the sociopaths who turn up, right? Yeah." }, { "speaker": "samourai_wallet", "time": "36:59", "start": 2218.71, "text": "Yeah, yeah, exactly. I This isn't a Bitcoin thing, this is a any, any sort of, subculture, any sort of group, anything. I, I was just talking, to the Monero guys on one of their, podcasts, I think it was Monerospace, just recently, and I was talking about, you know, I-- We see this happen in IRC channels all the time. Anyone who was around for IRC could watch the evolution of an IRC channel, you know, evolve and then devolve, and we're just seeing, we're just seeing that on a Something that was foreseen, and expected. The, the debate, the debate is, was more really about, You know, the anger and discontent is more about we, were we ready for it? We knew it was gonna happen, but we did-- and we, we, we were preparing for it, but did we, did we prepare enough? And is the protocol, is the protocol- Happy? Are we happy where the protocol is because it's not really gonna be changing much from this point on, right? and you get, you start to get into that ossification stage of, of, of a protocol, which is a good thing, but is it, is it too early? et cetera, all these questions come up as a, as a result of the, the adoption push. And it's still, and, and, and keep in mind, man, this is still-- that was a small adoption push overall. Right? Like this is still a very niche, niche thing, globally. we haven't seen a real big retail push into Bitcoin or crypto at all. so when that happens, we're still gonna have a lot to deal with. And again, I think we're less ready now than we were in, in 2018." }, { "speaker": "stephan", "time": "38:46", "start": 2326.06, "text": "The, the, also we have many users who might be using Samurai Wallet to send to an exchange, and might be useful now to talk about exchange flagging. So this has been occurring in relation to, from my understanding, it hasn't occurred for Samurai Wallet or Join Market, it has only occurred in relation to Wasabi. Sends into an exchange or even in some cases withdrawal from an exchange. So, I, I guess some of this comes down to, again, the, the proximity versus, footprint stuff we were mentioning earlier. I guess to your knowledge as well, currently so far, it is still that same case, correct?" }, { "speaker": "samourai_wallet", "time": "39:29", "start": 2368.84, "text": "That is correct. we've had no reports of account closures, for Samourai Wallet users." }, { "speaker": "samourai_wallet", "time": "39:38", "start": 2377.91, "text": "We also test a variety of the, the biggest exchanges, we, we send directly from Postmix into the exchange account to see if there's any issues or if anything gets flagged. there's been no issues, nothing's got flagged on our own tests. I don't, I'm, I'm very, very confident that exchanges aren't flagging CoinJoin transactions. There's no need to. what they're looking for is proximity to, illicit activity or, or blacklisted addresses, because that's what they have to. Be looking for. if there's proximity to, to an address that, that they don't like the look of or that they are told not to like the look of, they'll shut down your account or they'll freeze your account. By, by its nature, a coin join shouldn't leave any proximity to anything. Everything that comes out of a coin join should be zero proximity, zero links, freshly, freshly minted so to speak. And that's, that's true of Whirlpool, and that's true of Join Market, for the most part, that's true of Join Market. It's not true of Wasabi, and for a very, very long time, they had a static, fee address that polluted every single mix that every single, every single mix that occurred with that static fee addresses, because blacklisted addresses were paying that fee address, and that fee address was a part of every single mix. secondly, unmix change is a part of every mix of Wasabi, and unmix change can be linked directly to a blacklisted address or a blacklisted transaction, and your mix UTXO, a Wasabi mix UTXO is in the same exact transaction as a blacklisted. Address or blacklisted change address. So, I mean, it, it was obvious this was gonna happen. We tried to warn people that this was gonna happen." }, { "speaker": "samourai_wallet", "time": "41:41", "start": 2500.55, "text": "we tried desperately, and then it started happening, and it started happening over and over again, and totally innocent users who have absolutely zero links to criminality, who have absolutely zero links to anything wrong. Had their stuff shut down, not because they used CoinJoin, because they were sharing a transaction with a blacklisted address. Now, I don't agree with blacklisted addresses at all. I, I, I think the whole notion is revolting, but it is the, it is the case, and exchanges are looking for them. So you have to build a tool that doesn't, you know, yeah, I called it \"tainted as a service\" with Savvy, because you were literally paying to get your UTXOs tainted." }, { "speaker": "stephan", "time": "42:19", "start": 2539.48, "text": "Yeah, and so with the exchanges, I think, and listeners, you probably, if you are a regular listener, you probably remember from my discussions with Rafael Yacobi, he was explaining as well, essentially, the way he's explained it is kind of using that, saying, they pretend to work and we pretend to pay them, and so I guess from an exchange point of view, some, for some of them, they feel like they have to do this minimum level, and so long as they are In from their perspective, flagging incoming bitcoins that had any association with a blacklisted address or, let's say, the OFAC sanctions list or things like that, they, they can't-- so basically, you can't rub it in their face that you, you know, they're ticking boxes," }, { "speaker": "samourai_wallet", "time": "43:05", "start": 2584.88, "text": "right?" }, { "speaker": "stephan", "time": "43:06", "start": 2585.76, "text": "Yeah." }, { "speaker": "samourai_wallet", "time": "43:06", "start": 2586.28, "text": "You know, they're, they're ticking their boxes, they're not-- they're in compliance, right? As long as their legal team is happy, they're in compliance, and that's what, that's what the chain analysis people are selling them. They're selling them They're saying, \"Look, you don't have to worry about it. We'll do it for you, and we'll provide you a compliant report. We know we're compliant, and you can be too. And all you have to do is pay us whatever, eight K a month or whatever it costs to, to, join up with Chainalysis. And they'll, they'll do that. oh, condition being you've got to share your data with us, you know, customer data. that has- Happens. They'll never say it 'cause they're under NDA, but it, we've seen the contract. so, you know, the exchange just wants to make money, right? The exchange wants users, and the exchange wants the least amount of friction possible because the least amount of friction means more money. they have to be compliant, so they'll, they'll go with whatever compliant s-solution that they can, that's easiest for them to implement and doesn't result in them losing too much money to, to lost users." }, { "speaker": "stephan", "time": "44:16", "start": 2656.47, "text": "Also touching on the earlier point around, Wasabi, probably also a good point here, just to discuss around the recent disclosure there. So, I guess from your perspective, you've identified, this, well, there were two, crucial, points, and you've disclosed them to Wasabi, the team. or maybe if you could just give, maybe just a high level of what, what, what were the two key points, just for listeners? Listeners who might not have, read through that report." }, { "speaker": "samourai_wallet", "time": "44:50", "start": 2689.57, "text": "Yeah, sure. So, so we, we're always looking at, at, other coin join implementations, whether it be Wasabi or Join Market, specifically, we're always looking at these things. What we're specifically looking for is on-chain privacy stuff, right? We wanna see how transac-- transactions are, composed and whether we can, we can figure out the links mathematically and whether we can break through them. And if so, how can, how can we, you know, how can users, what steps can users take and wallet developers take to prevent this from happening? Right? That's the kind of the whole point of OXT research. in, in preparing a report for the upcoming, OXT research report on the Twitter hack, we stumbled across a different type of, of issue in Wasabi, related to its codebase, not towards its on-chain footprint. So this is a completely different type of thing. and what we found was that the way that the client, selects coins to be queued automatically, this has nothing to do with what the user does. The user en- en- enqueues some, UTXO, And then the client takes over from there on, on how it gets selected and which," }, { "speaker": "samourai_wallet", "time": "46:14", "start": 2774.12, "text": "which UTXOs to, to move and, and register for which mix. That all happens behind the scenes. Now, in that process behind the scenes That should be a random process, there should be randomness introduced into that process, but there isn't at all. It's a completely deterministic process. So what this, what, what ends up happening is, if Your, attacker or y-your observer knows the state of your, your Wasabi wallet UTXO list, or at least partial the state of that UTXO list, they can determine which mixes you're gonna be a part of. And which out-outputs you're gonna be a part of as well. so effectively, there is no benefit to remixing in Wasabi because your mix is always as good at-- your anon set is always as good as the anon set of your last mix. so if you get, let's say a quote-unquote 50 and nonce on your first mix and a 30 and nonce on your second mix, your first mix isn't validated and your second mix is the one that, that remains. because there's no randomness introduced and your attacker can determine exactly which, which UTXOs are used in each mix." }, { "speaker": "samourai_wallet", "time": "47:25", "start": 2845.36, "text": "this is obviously a huge problem. This isn't something that we would publicly disclose, 'cause we, we considered this something that c-could easily be fixed by the Wasabi team and should easily be fixed. and we really didn't think it was gonna be a controversial thing. randomness is something that you want in a, in a coin join implementation, you don't want really anything deterministic at all." }, { "speaker": "samourai_wallet", "time": "47:53", "start": 2873.41, "text": "So we, we reached out to them privately, about that. We made a couple conditions because we've, we've interacted with this team before, we're not on the best of terms, and we know they have a history of sweeping stuff under the rug. so we added a condition to our disclosure to say, \"Look, if you don't fix it in forty-eight hours, then you have to tell users that there's, there's been something found and they should, they should, Mitigate and provide the users a way to mitigate against it, whether that be don't remix or, or whatever, or, or manually stop mixing and then restart mixing to add some randomness or whatever you want to, tell users to do, you should tell them something if it can't be fixed in forty eight hours. Instead of trying to fix it or instead of even responding to us, they said that you-- that we were blackmailing them, and then Milperra released the full disclosure on PaySpin on Reddit. after he did that, we just said, \"Okay, well, we'll write up our, you know, our report on it, that's a little bit, hopefully a little bit more digestible for average readers.\" Because what we sent to, what we sent to them was, was really for, you know, the developers of privacy tools to the developers of privacy tools, it wasn't trying to explain things to, the average reader, you know?" }, { "speaker": "stephan", "time": "49:16", "start": 2956.04, "text": "Yeah. And so, as I saw some of the discussion, people were saying things like, \"Oh, well, some of this could be mitigated by user, action. So, for example, they could manually only queue some UTXOs at a time.\" and I guess the other one also, probably the one of the other pieces of feedback that I was seeing with people, people were saying, okay, but how likely is it that, some outside observer would know the state of your wallet and your UTXOs? Sure. in what sort of circumstances would you say that's not true? Would you say perhaps that if, let's say Chainalysis or one of these companies is working with an exchange, the user has KYC'd with that exchange? Change if there is information sharing, how, how, how feasible would you say that is?" }, { "speaker": "samourai_wallet", "time": "50:10", "start": 3009.62, "text": "Very feasible. so it's-- but just, just first to answer the first, the first response. So, so we, we waited and got all the-- So first, the, the, the creators of Wasabi Wallet never responded. officially to us, and have never really acknowledged that this even is a problem or, or exists, or if they have acknowledged, it, it, they've said that, That it, it can be, it doesn't exist, but it can be re-fixed with the user added randomness. So it either exists or it doesn't exist. So if user has to add random randomness, then it exists, right? If the issue, if, if, if the issue can be solved, quote unquote, with best practices enforced by users, that's just not a satisfactory so- solution. That's not, that's, that's not good for users or for coordinators as a service. the coordinator should be enforcing best practices wherever it can and shouldn't be relying on, on users to, to add randomness. 'cause one, users are, are not computers and they're bad at randomness. so it's, that's just absolutely ridiculous. Now the second point is, is actually more valid, right? So what is the, the probability or what, what's the possibility of someone knowing the state of your, your wallet? Well In the default way that Wasabi works, it's ve- a-and the way that it is suggested to be used by the developers and the community, it's very likely, it's very, very likely that Users of exchanges that where they are KYC'd and have data sharing agreements with Chainalysis and, that's shared across the spectrum between other exchanges. Send a, send a UTXO from exchange directly into Wasabi wallet, and then on-queue that, that, that UTXO and start mixing. Well, the exchange and by extension Chainalysis know the contents of your wallet. They know that. UTXO belong to you, and that went into Wasabi, and as soon as you enter into a mix, if they were deploying this attack, they would be able to, to easily, easily watch what you're doing, where that UTXO goes in, in each mix transaction. And the more you remix, it doesn't matter at all" }, { "speaker": "samourai_wallet", "time": "52:33", "start": 3153.39, "text": "to me, that's the-- what's the point of, of mixing if, if your adversary can, can watch right through a-a-to the other side? What's the point? You know, what's the point of mixing if there's all these conditions attached to it to say, \"Yeah, I wouldn't use it for...\" I mean, there was the developer of Wasabi Wallet, one of the developers of Wasabi Wallet was on a, a podcast just, just yesterday or the day before. Admitting that he wouldn't use it for anything like a darknet market or anything like that. Well, if they can't use it, what the hell's the point? You know, it's not like we're advertising for these people to use our, the coinjoins or stuff like that, but wouldn't those people need it? Wouldn't they use it? If they can't use it, you know, is it really even worthwhile? Right? Like if encryption only works for, like email encryption only works For the good guys, quote unquote, what's the point, right? It has to work for everyone." }, { "speaker": "stephan", "time": "53:34", "start": 3214.36, "text": "Yeah, I think that's quite a powerful one. I think it's, to me, it, it seem-- it, it, it all seems just very similar to a person's views on, say, gun control, right? Like if you view guns as a, a check against government, well then, you know, i-- it needs to be available to a reasonable, like, everyone. Like it can't just be only, you know, for the government, let's say." }, { "speaker": "stephan", "time": "53:59", "start": 3239.23, "text": "private manner, if the person chooses to, then it needs to be available for them. So I guess, yeah, I mean, that's how I'm, I see it." }, { "speaker": "samourai_wallet", "time": "54:06", "start": 3246.04, "text": "Well, I mean, if we want it to be any s-any form of good money, then yeah, it has to be. Right? Now, I, my take is that the number go up, guys, the investment thesis for the investors is that Bitcoin has the possibility of being the best and hardest money, right?" }, { "speaker": "stephan", "time": "54:23", "start": 3263.33, "text": "sure." }, { "speaker": "samourai_wallet", "time": "54:24", "start": 3264.47, "text": "Well, no it doesn't if, if it's not fungible. And fungibility comes with a lot of, a lot of nasty actors, lurking on the sidelines. You know? They like with cash, right? It has to be fungible. if it's not, then it's not good money. So I think there's an intersection between the, the, you know, the investment thesis as good money and the privacy people, because we want the same thing in terms of fungibility. And i-if it's not, i-if it can't be used by the dregs of society and the most hated and most reviled people with the, the most awful views. If it can't be used by them, if they can't transact privately and freely, then what hope do you have of transacting privately and freely?" }, { "speaker": "stephan", "time": "55:18", "start": 3317.63, "text": "Yeah, right. I, I guess the only thing to me that seems a little difficult with that is it- I wonder how feasible it is for large wallets or large, you know, basically any large wallet to use, some of these, coinjoin features and especially the, the on-chain fees required for that kind of thing, where, I guess to me it seems like if you wanna be private at smaller amounts of money, it's easier to do that right now." }, { "speaker": "samourai_wallet", "time": "55:48", "start": 3348.29, "text": "well, I, I don't know, it depends, it really- It really comes down to the source. once, once you've sourced Bitcoin, it's relatively easy to obtain forward-looking privacy with our, with the toolset of Whirlpool and PostMik tools like Stone Walls and Stowaways, et cetera, and upcoming stuff even. The, the amount is, is not really, the amount of Bitcoin doesn't really play into it, doesn't really matter. it's really about the backward-looking privacy. how did you source that large amount? Did you, you know, did you KYC yourself to get it? Etcetera, etcetera. And, what, what third parties know about that? Yeah," }, { "speaker": "stephan", "time": "56:33", "start": 3392.57, "text": "I see. Okay, let's put it this way, well, pool volumes are growing and it's, that's a good thing, I, I'm excited to see that. but I suppose if you tried to move into well pool right now with a huge stash, you wouldn't be able to because it, it kinda, it depends on there being enough people, who are also trying to move through the mixer, correct? Right," }, { "speaker": "samourai_wallet", "time": "56:55", "start": 3414.91, "text": "right, right. So, so we, we definitely impose a lot of restrictions. so for example, if you had a single, let's say, like a single five hundred BTC UTXO, because we've seen this, we've seen five hundred BTC UTXOs come into the whirlpool it's not that, that rare. you have a big 500 BTC, you go into the 0.5 pool. you're, you're basically, yeah, you're gonna be waiting around, for a while because you're, you're that whale, right? Like, we know- You've come in on one UTXO, and each one of those zero point five UTXOs need to be queued up and mixed separately from each other. We do, we do not allow UTXOs, to be mixed together, that have been seen together before. So, so that's a self-imposed rule that improves the quality of the mix on chain." }, { "speaker": "samourai_wallet", "time": "57:49", "start": 3469.24, "text": "So yeah, you're gonna be waiting a little bit. That being said, the, the amount of time you'll be waiting has been, what would have been three months ago, you'd been waiting a month, now might be a couple weeks. Right? Like so, it, it's growing every month, and the available liquidity unspent within the pool is growing every month as well, which shows that the pool is very healthy, that people are remixing, and by people remixing, the anonymity set for everyone is, is increasing. in the pool. So, you know, there's, there's trade-offs. It's not, it's not gonna be extremely fast if you're coming in with a huge amount of Bitcoin. but if you're coming in with a, well, you know, between- Whatever the smallest amount is, zero one, which is what, like a, like a hundred dollars or something, you're coming in with between a hundred dollars and, I don't know. Hundred thousand dollars, you're gonna mix pretty quick. You know, you're not gonna be waiting around that long." }, { "speaker": "stephan", "time": "58:56", "start": 3535.76, "text": "Yeah, and that's good to see, and I think, hopefully over time we see that build further and further. And, I, I guess if a person is looking at, you know, looking on the blockchain and so on, I think this is one point, and we, I think we touched on this last time we were chatting, is that It's like there's this samurai cluster, if you will, that, as people come into it, they sort of become a part of a samurai cluster, and it then becomes a bit harder to sort of, analyze inside of that. And so I guess, is it the case then that? Some of the chain surveillance companies essentially, they sort of see the samurai cluster and just kind of leave it alone as long as it doesn't touch any of their blacklisted addresses. Is that the way you're thinking about it?" }, { "speaker": "samourai_wallet", "time": "59:40", "start": 3580.24, "text": "Well, yeah, that's right. So we, we already know that, for at least one of the chainalysis companies, when they encounter the samurai cluster, it's not that they blacklisted or, or ignored, or, or, avoided. they just basically know that they can't make any reasonable assumptions with it, right? So if you're, if you're making a payment, to an exchange, for example, and it's coming from the samurai cluster, quote unquote, which maybe it came out of a, a, a Stonewall x2 or a, a Cahuets or something like that You don't, as an exchange or as, as not the exchange, but as the chain analyst, the analyst who, who, or software algorithm that's analyzing that, you know that Whatever you think is probably not right, and it's as long as it doesn't hit those tick boxes of proximity to something blacklisted or, or some other thing, then It's better to just put a question mark next to it and move on, because it's just an unknown. There's too many unknown variables in the mix, and, or, you know, in the mix, so to speak, and, and, When, you know, seventy to eighty, probably even more, like ninety percent of the transactions out there are deterministic and can easily be linked together? It makes more sense to focus on what can be linked with, with a hundred percent probability or ninety percent probability or seventy percent probability, whatever, as opposed to, you know, the wildly Varying probabilities of the samurai cluster." }, { "speaker": "stephan", "time": "01:01:19", "start": 3679.14, "text": "I see, yeah. And, also some of this turns on the idea that some of the coinjoin tools are there to actually try and break these heuristics. And so the idea is that the more these tools are used, the less reliable that heuristic is, over time. So obviously, it'll take time for that to build up and for that to really become a factor, but for example, if a lot of people are using StoneWall or StoneWall X2, then it becomes a lot A lot harder for a chain surveillance analyst to try and understand exactly what's going on when they look at a specific transaction. but I suppose one criticism there might be something like, \"Well, fine, but what's the actual volume of Samurai users and how many of them are using these collaborative methods?\" and I, I suppose this is probably a good point to bring up, Soroban. So can you tell us a little bit about that? What is it and how does that help?" }, { "speaker": "samourai_wallet", "time": "01:02:15", "start": 3735.14, "text": "Soroban Oh, well," }, { "speaker": "stephan", "time": "01:02:16", "start": 3736.8, "text": "Soroban, sorry." }, { "speaker": "samourai_wallet", "time": "01:02:17", "start": 3737.76, "text": "Yeah, yeah, yeah, no, no, no problem. So, so actually, before, before I talk about Soroban, maybe your users aren't aware, but Earlier in the year, we, we had a disclosure presented to us privately as well, and the disclosure said that they, that this person had found five thousand instances of address reuse within post-mix spends. from, from Samurai. So we took this obviously very seriously, and we launched a, a, a very in-depth, investigation into post-Mix spending," }, { "speaker": "samourai_wallet", "time": "01:02:55", "start": 3775.82, "text": "In Samurai Wallet, and what we found, well, well, we found that the five thousand instances of address reuse was completely bogus. It was actually-- there was small, a small amount of address reuse, but it was nowhere near five thousand, it was about two hundred instances. But we, we resolved that issue. But what I bring this up is because we did such an in-depth study that we know how many users as of whenever we wrote the disclosure, was in July. We know how, how much, activity post-Mix spending, how much post-Mix spending has been Stonewall x2s versus, single direct spends, for example. so we have a pretty good, good idea. So in July when we, when we did ran the numbers, twenty-six percent of posts, all post-mix spends that have ever happened From the launch of Whirlpool, 26% were Stonewall or Stonewall X2s, and 19% were Standard normal payment transactions, well, we can't tell whether those are stowaways or just a normal, normal, you know, single party payer. And then the rest basically were sweeps, so sending a specific UTXO with zero change back to the user. So we have an idea of how many people are interacting with the postmix, tools, and it's very, very, compelling. We're very impressed by that number. We thought it would be far less than twenty-six percent, we thought maybe it'd be like fifteen percent or something like that. So, so we know people are using, Stone Walls and Stone Wall X twos, and they might be using Stowaways. Now, this, now we can tie into Soroban, because what Soroban is, is a, It's a Tor based encrypted communication layer, and what this is gonna allow for is for two clients, two samurai wallets, to talk to each other, in an encrypted fashion over Tor," }, { "speaker": "samourai_wallet", "time": "01:05:05", "start": 3905.26, "text": "And what they can say to each other is limited by your imagination basically. What this, what this communication layer unlocks is, so many, so many valuable, feature ideas and, and, and improvements. And also, Because it's an app agnostic layer, has nothing really to do with Samourai Wallet, it's, it's completely a, a independent, development, it can be implemented by, by other projects who require a communications layer for their tool. so for example, the biggest, the biggest example would be Join Market, which right now, relies on IRC to communicate between clients. Well, Join Market could implement Soroban as a, as a communication layer, and, you know, a lot of the reliability issues and a lot of the latency issues would be solved, immediately. what we're doing with Soroban as our first, our first application is tying it into the communication process of our Stowaway and Stonewall X2 transactions. So right now, if you wanna do a Stonewall X2 or a Stowaway You have to basically go through like a four to five step process, where you're sending a QR code back and forth, or sending a payload back and forth, or if you're in person, scanning four or five QR codes. Sauravon completely automates the procedure. So all you basically have to do is say, \"I wanna do a Stonewall x2 with Stephan Livera,\" and go. And it will basically happen in the background, and it's been, I think we've clocked it at eight to ten seconds, to complete, and that's with base, zero interaction from the user. So it really abstracts away the entire, Stonewall X2 and Stowaway, process and, and creates a transaction that is very familiar, right? You put in an amount and you press at, you press go and send. And it kind of just happens. So that's a huge achievement, and we're really excited to, to bring that in, and I think that's gonna increase, significantly the amount of StoneWall X2s and StoneWalls." }, { "speaker": "stephan", "time": "01:07:23", "start": 4043.12, "text": "Yeah, it sounds really cool. So maybe just to clarify, so let's say, you know, you wanna do a Soroban Kahoots style transaction with me, would I have to have my wallet, like my phone on and the wallet open in order to do that, or how, how would that, like, how would that work? Yeah," }, { "speaker": "samourai_wallet", "time": "01:07:39", "start": 4059.87, "text": "yeah That's, that's obviously a limitation. there would have to be some sort of out-of-band communication, like so I would tell you, \"Hey, let's do a-- you wanna do a Stone Molix 2 with me?\" and you'd go, \"Okay,\" and you'd open your wallet, and provided your wallet's open, then we'd be able to communicate. With," }, { "speaker": "stephan", "time": "01:07:55", "start": 4075.74, "text": "very cool." }, { "speaker": "samourai_wallet", "time": "01:07:56", "start": 4076.76, "text": "Yeah, a-and, and that's sort of like, that's the version one, right? Like by version three, that we might be able to have some sort of queuing system, we might be able to have, you know, a notification system to say, \"Hey, You know, Samourai Wallet wants to make a, a Stonewall X2. Do you wanna accept it? And you can then, you get that notification on your phone and then you can open up Samourai and accept it, for example. So, you know. as but as a version one, yeah, you, you both would need to be online." }, { "speaker": "stephan", "time": "01:08:23", "start": 4103.89, "text": "Gotcha. And so how would the connection work there? Is it some kind of Paynum thing or how, how does that part work?" }, { "speaker": "samourai_wallet", "time": "01:08:31", "start": 4111.22, "text": "so the identity, yeah, we're, we're using Paynums as the identity part of it, so I would, I would know I, I would have you in my payment list, not necessarily, I wouldn't necessarily have to have a connection active with you, I wouldn't have to pay the connection fee or anything like that, I just need you in my list. and I would be able to say, \"Uh, this is the person I wanna, I want to, stonewall X2 with.\"" }, { "speaker": "stephan", "time": "01:08:54", "start": 4134.52, "text": "that's pretty cool, man. I'm excited to see that because, that, I guess that makes it a lot more feasible because, in practice, you know, there have been times, obviously I've been able to, sometimes I've been able to successfully get a cahoots transaction done, which is the stonewall X2 or the stowaway, but in other cases" }, { "speaker": "stephan", "time": "01:09:16", "start": 4156.82, "text": "There are times where it, it just kind of bugged out or, or in some cases, it might be that I didn't, or my partner didn't have the, the correct amount of UTXOs or that, it's something about the composition of their wallet didn't make sense for it. But I suppose hopefully if it's kind of like a more automated process, then that makes it a little bit easier for people who wanna try these kinds of things." }, { "speaker": "samourai_wallet", "time": "01:09:40", "start": 4180.71, "text": "Yeah, definitely. So, so one, one way that makes it easier is because you're not limited to manual transmission. And if the UTXOs aren't available, it can immediately pop up and say, \"Uh, no, sorry, can't do it because you don't have enough UTXOs, or the amount is too high or something like that,\" so we can interject earlier. And the, the other nice thing is that if there is some sort of failure, it can automatically retry without the user, without the user having to do anything different. So it really, it, it really should, Increase the, the UX of the, this functionality, 'cause you're absolutely right, right now it's still more, you know, you-- it's still more of a hobbyist feature, right? Like you need to, you need to- Really wanna, want to achieve that, privacy gain in order to, to, to, to gain it, right? You have to really work for it in, in some sense, whereas this is gonna bring it to a wider audience where they don't really have to do much, they just have to know someone." }, { "speaker": "stephan", "time": "01:10:45", "start": 4245.41, "text": "I'm curious then, is that a possibility? so obviously the first round would be more, as you mentioned, having that, pay name for the identity. Would that mean in future you might- Collaborate with a totally random other samurai user that you don't even know?" }, { "speaker": "samourai_wallet", "time": "01:11:00", "start": 4260.96, "text": "No, we don't wanna necessarily do that, not for the, not for the Stonewall X2 or the Stowaway. The only reason we're not, we're not doing that for, for those, for these features is because you are exposing AU TXO to this counterparty, right? So I would be saying, \"Hey, I, this paynim or this me owns this UTXO, would you like to s- you know, swap it around?\" And you would say, \"Yes, I own this UTXO.\" So you're, you're sharing knowledge of UTXOs with your counterparty. so we wouldn't wanna do that with just totally random person. but there's, but there's absolutely, use cases, for, for Soroban where you can, where you can see, For example, multi-party TX zeros. so where you have multiple TX zero, multiple inputs of, or sorry, outputs of a TX zero belonging to different, different people. So you, you can no longer assume that a TX zero from, from Whirlpool is one entity or one person." }, { "speaker": "stephan", "time": "01:12:09", "start": 4329.83, "text": "I see, yeah, and that makes it a little bit easier as well, because right now you, you do have to be a little bit careful with your, with your TX zero change or also known as Doxic change, and if you were to- Send that in with some other incoming UTXO, then you might be linking things in a way that obviously you don't want to. so this might be a way to break that heuristic as well. Yeah, well, this will break" }, { "speaker": "samourai_wallet", "time": "01:12:36", "start": 4356.28, "text": "the heuristic, right? So as soon as we turn that feature on, from that day forward, you can no longer look at any TX0 and say, \"This is this entity.\" You would have to go, this could be this entity, but also other entities. So yeah, it's just a way of, and, and it goes back to what I said earlier that privacy on Bitcoin, on a public chain, is really about messing with heuristics and disrupting, flows of, of inputs and outputs. And that's just an example of it, it's, it's throwing in additional confusion." }, { "speaker": "stephan", "time": "01:13:10", "start": 4390.4, "text": "Yeah, so, I guess just kind of summarizing the, the flow, I guess, just for listeners who maybe they're not as familiar with how it works. So, let's say, I guess, in the ideal case, you're running your own dojo, so, you know, you can buy a nodle or you can run a Ronin dojo, or my node has it also, or you can run vanilla dojo as well if you wanna run that. And so then you would send" }, { "speaker": "stephan", "time": "01:13:35", "start": 4415.48, "text": "You would, on the way out of that, you would wanna do a Stonewall or a Stonewall X2 spend so that you are, you know, making every spend a coin join. Now, in that example, let's say the user has done that, How often should they be like sweeping and running it back through the whirlpool from their postmix wallet? from, you know, different discussions I've had, some people have said, \"Oh, you can do a few spends in that state and just keep using Stonewall or Stonewall X2, and then after a little bit of time, you should be sweeping some of that and then going back around through Whirlpool and doing it for another, you know, rinse, if you will.\" Could you just articulate, just for us, what's kind of a recommended- Flow there for, you know, privacy purposes." }, { "speaker": "samourai_wallet", "time": "01:14:20", "start": 4460.56, "text": "Sure. good. That's a great question. so, so after you've whirled pooled, after you've, you've bought your Bitcoin or, or got your Bitcoin into Samourai Wallet, you've added your- Your Bitcoin to Whirlpool and it's mixed. My suggestion is to leave it in Whirlpool while it remixes for free, so you can leave Whirlpool running and it will register for remixing. Remixing is really important for your privacy and the privacy of everyone else in the pool. and it doesn't cost you anything extra. so until it's time for you to spend. Now, it depends on what you're doing when you spend. Now, there's two types that we've seen, Of spenders out of Whirlpool, one is they're spending on goods and services or products," }, { "speaker": "samourai_wallet", "time": "01:15:08", "start": 4508.15, "text": "and the other type is they're spending to their cold storage. So they're going through Whirlpool, they're getting a couple remixes, and then they wanna move those UTxOs to their cold storage device. so for the first set of users I'll talk about first, so for the people who are spending on goods and services. The change that, or the, the transaction that gets created when you spend, in, from Posmix will by default be a stonewall if it's possible, and it should be possible because it's, it's, it's usually, very easy to get stonewall transactions from Posmix because you have plenty of like size UTXOs, so it's, it's usually, not a, not a problem. So, provided that a stonewall is created, and it will be by default There's really no issue with, with, continuing to use the wallet for post-mix spending, provided that you can get stone walls. At, if at a certain point when you go to spend, you can no longer obtain a stone wall, transaction anymore, it's probably because The all the UTXOs that could be used together have been seen together and Stonewall won't trigger if that's the case. At that point, what you don't have to sweep it or anything, but at that point you can Select that UTXO in the wallet and add it into Whirlpool again, into a fresh TXO again, right directly from Posmix, so you don't have to sweep it back to account zero and then go into Whirlpool again, you can re-enter it. A new TX0 directly from the postmix side. and you should do that, like I said, when you can no longer create stone walls with your postmix wallet." }, { "speaker": "stephan", "time": "01:16:48", "start": 4608.59, "text": "That's like the mixing to spend case. And then, how about now the mixing to cold storage case?" }, { "speaker": "samourai_wallet", "time": "01:16:55", "start": 4615.68, "text": "Yeah, so mixing to cold storage is a little bit different. I would again try to achieve some target of remixes, whether that be two, three, five, ten, whatever, depends on how long you wanna leave the Bitcoin on, in, in Whirlpool, in, in, in the Samourai wallet. once the time gets, once it's time to spend, what I, what I usually try to recommend is try to send the largest amount that you can while still triggering a stone wall. transaction to your, your cold storage address, your first cold storage address, right? and that could be, let's say, you have one Bitcoin in there, i-i-in your post mix, and that's made up of various UTXOs or something like that. You send, you're, you're able to, to send point five BTC, right? and still obtain a, a nice high entropy stonewall. Then what I would do is send that transaction. What, what, what will end up happening is you'll have a nice point five BTC on your cold storage, high entropy, because it's a stonewall transaction. And in your post mix, you'll have a point five, whatever BTC, change output. It'll be the same amount. I would leave that there for a day, two days, three days, whatever, some amount of time, and then sweep that directly, that one UTXO directly into a new address on your cold storage wallet. so the, the gist of it is, try to attempt high entropy stone wall sends to your cold storage and Once you can't anymore, then directly single spend each UTXO over without linking them together. That's the best way for moving to cold storage. What you don't wanna do, what you're trying to avoid doing, is linking And merging all the UTXOs together that have, that have been mixed into one transaction that has only one interpretation, which is all these UTXOs belong to one entity, and now this new entity, which is your cold storage device, has all these UTXOs. Now you haven't, you haven't linked them to their pre-mix activity, but you've made it a lot easier for a targeted analyst to say, \"Okay, we know the output is X, Y amount, so let's look for...\" TX zero inputs of roughly that amount and start, you know, paring it down, right? Like so it's just giving peop-- it's giving analysts and observers a, a cookie crumb to, to, To pick up and to, to use against you, and there's no need to do that if you can avoid it." }, { "speaker": "stephan", "time": "01:19:37", "start": 4777.36, "text": "I see. Also, I wanted to chat a little bit about Solomon. So you mentioned, this, in the prior episode as well. Is there anything, further you can share around Solomon and, you know, what it is, how it's gonna work?" }, { "speaker": "samourai_wallet", "time": "01:19:50", "start": 4790.53, "text": "Yeah, so Solomon, is our all-encompassing, coin selection algorithm and, and UTXO grading algorithm. It, it essentially- it, it essentially gives a memory to the wallet, and, it, it gives a memory to the wallet in the sense that it remembers what UTXOs were used for, and it automatically tags them, and it remembers, What heuristics were, were broken with different UTXOs and then can start stacking different privacy heuristic busters on different UTXOs, or complementary UTXOs. All of this happening behind the scenes and without the user manually needing to intervene and manually, tag and, and note, notate stuff, which they can still do, we just don't need to re-rely on users to do that. so Solomon Basically takes all the different coin selection algorithms that are, that are available in Samourai Wallet that have their own little fiefdoms right now, and brings them all together into one, one algorithm that can work together essentially. so development is still progressing on that, and it's going very well, and we'll start to see, we'll start to see the first instances of Solomid making, making an appearance in Samourai Wallet very soon." }, { "speaker": "stephan", "time": "01:21:12", "start": 4872.69, "text": "What's, what are some examples of information that it could use? in, you know, composing a transaction, like how, what, what sort of information can it take in?" }, { "speaker": "samourai_wallet", "time": "01:21:23", "start": 4883.64, "text": "Well, for example, it might prioritize using TX zero Doxic change in stowaway transactions. Because that's a really, that's a great way, to break the heuristic that a single participant is the, is the owner of, of the Doxic chain and when they make a simple transaction, they're obviously the same owner on the other end, but in fact, a stowaway transaction is two participants, so you don't know, who the actual entity is. So it's basically like, like I said, it, it builds, it will, it'll be able to build on complementary heuristic busters and know Certain UTXO should be prioritized for certain, certain things, and, the UTXO of a Stonewall three or four hops down in the past maybe shouldn't be used as a UTXO in this transaction because that, for an analyst would link the two. thing. So it's basically having like a, your own little chain analysis analyst in your, in your wallet, and it's all client side, it's nothing to do with OXT or our servers, it's all using, client side logic and, to, to remember and, and understand stuff." }, { "speaker": "stephan", "time": "01:22:42", "start": 4962.04, "text": "Yeah, very cool. and I guess these are just things that, you know, no human is gonna be able to remember, which piece went to where and so on. So obviously it's better to have the computer manage that for you." }, { "speaker": "samourai_wallet", "time": "01:22:54", "start": 4974.63, "text": "Definitely, definitely. you know, for humans you can do it, but it has to be extremely targeted, and it takes a lot of time, and it's very frustrating, especially, especially when you start to encounter that samurai cluster, you know, or you enter into whirlpool or you enter into something like To do, having a computer do it, there, you know, you know that the, that chain analysis are doing that, you know that they have computers and algorithms running all day. We just wanna give that power to users as well, right? We wanna give them something to, to, to match The weapons that are being used against them, and, and we think Solomon is, is a great step forward in that direction because it doesn't rely on the user knowing anything. But it gives them, it gives them, the power of, of their wallet knowing, say, hey, you know, if I merge this UTXO with this UTXO, I'll be undoing a stonewalled transaction five or six hops in the past, in the, you know, like that's, that's epic because no user would be able really to go, no user's gonna go and analyze their UTXO history five hops ago to make sure that this current transaction is gonna, you know Not screw anything up. And, and it's a real way for users to degrade their, their privacy. so, so Solomon should really account for a lot, a lot less of that happening. And we're really excited about it." }, { "speaker": "stephan", "time": "01:24:25", "start": 5065.89, "text": "Cool. and also, Samurai has Sentinel, which is a way to have essentially a watching only, application. What's, the plan with Sentinel and Sentinel X?" }, { "speaker": "samourai_wallet", "time": "01:24:39", "start": 5079.54, "text": "so Sentinel X is just a, is a, fork by the Sentinel, our developer, Inverted X. he was trying out some new UI stuff and some new, frameworks with Sentinel X, and, it's kind of just like a test bed. Sentinel just received an update, a couple days ago, and I think an update yesterday, to add in Dojo and Tor, support and A very big update that has been in progress on, on Sentinel over the last, couple months, which is gonna very much increase the, offline mode functionality of Samourai Wallet. So it's gonna be more of a, a complementary, Application than just a watch-only wallet, it's gonna be more complementary to your samurai wallet, especially if you are relying on samurai being in offline mode or in cold storage mode, whatever you wanna call it. you wanna- do, PSBT type transactions, et cetera, all of that can be managed from, from Sentinel, in the next" }, { "speaker": "stephan", "time": "01:25:46", "start": 5146.91, "text": "update. yeah, look, I think that's, really exciting stuff to see. Is there anything else you wanted to touch on, before we, wrap it up?" }, { "speaker": "samourai_wallet", "time": "01:25:56", "start": 5156.92, "text": "Well, and I think we covered all the, all the big bases. Yeah, I think, I think that about does it. I just, I want to encourage people to, to keep whirlpooling, keep using the features. whirlpool volume is increasing every day and, and the amount of mixes are, are increasing, the throughput is increasing, so, so people, the message is getting out there, people are using the, the product, and I hope that, that people are, are Achieving what they're setting out to, achieve in terms of, of their on-chain privacy. I hope they're getting that, and they're happy that they're getting that with" }, { "speaker": "stephan", "time": "01:26:31", "start": 5191.81, "text": "Worldcoin. Fantastic. So, just for listeners who don't know where to find you, where can they find you?" }, { "speaker": "samourai_wallet", "time": "01:26:37", "start": 5197.08, "text": "you can find us at samouraiwallet.com, it's s a m o u r a i wallet dot com, and the same on Twitter, samouraiwallet." }, { "speaker": "stephan", "time": "01:26:45", "start": 5205.33, "text": "Excellent, thank you very much for joining me. Thanks again. Hope you enjoyed that, and just a reminder, if you are enjoying the show, make sure you give it a review on iTunes or whatever podcatcher platform you listen on, and you can find the show notes and transcript at stephanlivera dot com slash two oh nine. Thanks, and I'll see you in the citadels." } ] }