{ "episodeId": "SLP355", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "julie_landrum": { "name": "Julie Landrum", "role": "guest", "tag": "JULIE" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 8.4, "text": "Hi and welcome to Stephan Livera podcast, a show about Bitcoin and Austrian economics. Now, OpenNode are a company that years ago were started and were known primarily around merchant adoption and helping them accept Lightning payments. But now the truth is that they're actually evolving and involved in a lot more around payments infrastructure. And so Julie Landrum of OpenNode joins me to talk about this. We talk about That journey of providing infrastructure services, dealing with the cyclical nature of Bitcoin spending versus hodling and earning, chargeback risk, dealing with regulatory requirements, as well as some of the stories around what happened in El Salvador with the Bitcoin law and what's coming up next with international adoption of Bitcoin. This show is brought to you by Swan Bitcoin, and as you might know, I'm working at Swan. So Swan has a division called Swan Private. Now, Swan Private was launched because we talked to so many people that had issues with the major- exchanges, some had accounts locked and customers couldn't easily get support to help them. They couldn't onboard their accounts, many of them simply wanted to talk to an actual human being who could answer their Bitcoin questions, but they wouldn't get a reply or this just wasn't an option. Swan Private is a one-on-one Bitcoin advisory service for high net worth buyers. The team is here to actually support you in your Bitcoin journey, whether that's expert guidance on choosing the right custody options or just having direct access to a dedicated Bitcoin expert by text, email, or call. If this is Something that you're interested in, or if you've got friends and family who are high net worth individuals and would benefit from this kind of guidance, go to swanprivate dot com. Coinguide dot com are the creators of my favorite Bitcoin hardware wallet, the Coldcard. This is one of the most recommended hardware wallets by Bitcoiners. I think it's the best in the market. They've got awesome features like the ability to use it totally air gapped. You don't even have to directly plug it into a computer. You can instead use a micro SD card and ferry that information back and forth. With wallets like Specter, Sparrow, Electrum, or BlueWallet. Coldcard also has various features like a DurasPin or a BrickMePin, a pin that will actually wipe the device when you enter it. So it's got all these little features, and you actually learn more about Bitcoin when you use it this way. And don't forget, over at the CoinKite website, you can also order your metal seed backup product, which is to help you backup your seed words in the case of fire or other emergencies. So that website is CoinKite dot com. Compass Mining is the world's first and largest online marketplace for Bitcoin mining, hardware, hosting, and ASIC reselling. Bitcoin mining is only getting bigger, and so is Compass Mining. Compass is adding over two hundred and eighty megawatts worth of hosting capacity this year alone, with more to come. So over on the website, you can select from a variety of ASIC machines, some of those you can have them ordered to your home in the US to do home mining, or you can use the hosted facilities that Compass Mining have vetted. They've also got a marketplace where you might be able to select a machine that is second hand or already used at a discount. So there's all kinds of options and education available if you go to the website. They've got audio material, they've got blog posts and a newsletter. So go to compassmining.io to stay up to date and get started with Bitcoin mining. Julie, welcome to the show." }, { "speaker": "julie_landrum", "time": "03:23", "start": 202.93, "text": "Hello, Stefan." }, { "speaker": "stephan", "time": "03:24", "start": 204.13, "text": "So Julie, you're at OpenNode, and, I've been a fan of OpenNode for a while. I believe the last time I had some people on was Rui and Joao from almost three years ago, just off the top of my head was the last time, you know, but I have been mentioning you guys, and, I'm interested. I, I like seeing what you guys are doing. So, yeah, I'm looking forward to hearing more about what's going on," }, { "speaker": "stephan", "time": "03:48", "start": 228.12, "text": "and" }, { "speaker": "julie_landrum", "time": "03:52", "start": 231.82, "text": "Sure. and thanks for the opportunity to speak to you and, and to your audience, first podcast, so newbie. So, the, the best place I think to start, is, I worked in traditional payments for almost twenty years. I worked at JPMorgan Chase, I worked at American Express for like eleven years, then I spent a couple of years at Visa. So I- I've been a payments obsessed person for a really long time, and one of the first memories that I have of Bitcoin is around, in twenty fifteen. My role at Amex specifically was, network strategy, and what was amazing about that was that it gave me the opportunity to travel, it gave me the opportunity to learn about all the different facets of the network, from a product- standpoint, capabilities, policies, which are very important, components of how the networks manage change, throughout all of the bank partners that they, that they work with. Also traveled the world with American Express, did a lot of voice of the customer, work with, with our bank partners, and, was also involved in things like the UK rollout of contactless. I mean, this is ages ago. The, the The contactless rollout in the, in the tube. and then the last project I did at Amex was the, was the implementation of Apple Pay, also very fascinating, hugely fascinating. But in all of those projects, what you could see was that actually nothing was changing the base layer of how things worked-- authorization, clearing, settlement, three kind of consecutive processes steeped in, you know, decades Of old technology, and very inflexible, and so when new products came about, we sort of had to kind of fake how the, how the backend really worked. in twenty fifteen, I remember putting together kind of a strategic assessment of Bitcoin, of Bitcoin for, you know, you get sort of like the revolving door of, of bosses when you work in those types of places, and I, and I remember just thinking, \"Wow, this- This is amazing, you know, we should be looking at this, we should be thinking about this, and the feedback I got was twofold. One was that the report was too long. And secondly, that like it wasn't gonna be possible for Bitcoin to help us with our, with our numbers the ne- the very next quarter. so a lot of times those places can be very roadmap deficient in the sense of, you know, just looking for growth spurts, very short term kind of thinking. And I was like, \"Huh.\" I was very disappointed because, it had definitely piqued my interest. I definitely thought it was something special. And then the- The last thing I remember before leaving American Express was, you know, Amex is a huge company, it's a global company, and I became very interested in the way that, that as a company they managed their treasury, and for me that became like a much more interesting and valuable network, than the kind of card payment transaction network that they were operating. And the reason for that is that you realize that a large multinational Who are, settling, net settling, large amounts of funds across the world have to work with, settlement banks, they have to manage currency risk, and actually that presents a ton of opportunities, and I think, when I think of TransferWise, like, you know, fast forward five or ten years later, they sort of took that kind of internal, multinational network of bank accounts and created a product product offering created a, a service, from that. So that was really interesting." }, { "speaker": "stephan", "time": "08:08", "start": 488.16, "text": "Yeah, that's really fascinating. And I think one point that you touched on there was over the years that there were these big changes that, let's, I mean, even from my perspective as a consumer, and also I actually was working in the banking industry for a couple years in a, in a past fiat life. But as you said, there were these big shifts, so things like chip and pin, and then contactless, and then, and so on, and but you were mentioning- Questioning how it's almost like it was like fake, because on the front end it looks like very slick and smooth and oh, I just tap and it, and it works, but actually on the back end, there's all this stuff that goes into it. Could you expand a little bit on that contrast of like what the nice, flashy front end looks like for the day-to-day user on the ground tapping their card at the coffee store versus what's actually going on in the nitty-gritty in the background?" }, { "speaker": "julie_landrum", "time": "08:57", "start": 536.91, "text": "Sure, yeah, exactly right. And I think, you know, that capsulates, the fintech developments that we've seen over the last ten years or so, which is that they tend to be-- they're great because they're user experience focused, as you mentioned, but they're limited because they're actually quite superficial. They don't necessarily, transform the guts of how money actually moves. so counterparty risk still exists, fraud exists, you know, because specifically the- Card payments, world works on the basis of pull payment transactions. There's all this back and forth, the possibility of your personal information being collected and breached. There's chargebacks. There's just a lot of kind of antiquated but necessary interactions, and they're necessary because the system requires all of those things in order to work. So, you know, when you look at- Fantastic companies like I just mentioned TransferWise, but also, you know, Stripe and Square and Adyen and all of these like fantastic processors who over time have created, like a layer of abstraction for merchants and consumers in the product offerings. They've done an incredible job modernizing, or seemingly modernizing, payment solutions in, in the world, but actually, you know, nothing- changed on the back end, and this goes for banking and cards until Bitcoin. And for me, like that's what I realized, after leaving Visa, so a couple years later, and I was thinking, you know, I wanna work in payments, but I want to work for, and I wanna work for a great company, you know, with, with amazing, mission and incredible products, and there was not one single company that didn't trace the transaction back to these anti- equated centralized, arguably monopolistic gatekeepers of our global financial system, so banks, payment networks. And that's when I started to get much more interested in Bitcoin and much more interested in the notion of incredible technology that would allow the instant and final settlement of value that would allow people to access a monetary system that was not controlled by centralized actors and that didn't require intermediaries. And, you know, it took a while for me to find Bitcoin in that way. You know, I think a lot of people talk about kind of walking through the desert for a few months or, you know, up to a year just trying to think like, \"What am I gonna do with my life? How am I gonna spend, you know, the next twenty, thirty years of my professional career?\" I just didn't, I just no longer wanted to To contribute to what I saw as, kind of the dinosaurs of payments, and then super luckily, I just, I came across OpenNode, and I didn't reach out to the guys, but I definitely just started following everything that they were doing and talking about and learn-- and starting to learn about the Lightning Network, and, and they got in touch, and, I'm quite a bit older than those guys, and, but I definitely saw- Huge promise in the work, that they were doing, completely shared the mission, and, yeah, I've been working with those guys for about three years, or nearly three years. At the beginning, I was almost like, \"I'm, I'm based in Europe, I was the only person who wasn't actually based in LA.\" but I just remember thinking, at the very beginning that these guys are building a global company, and we can start, we should start doing that now. So Yeah, it's been an incredible ride, especially thinking what a risk, to join a startup, what a risk to work in Bitcoin, what a risk, to have so much belief in the Lightning Network, you know, almost three years ago when it was, a lot less liquid, a lot less, talked about, and it just seems like all this time the world is conspiring to make everything that we have been working on successful, so it's been an incredible- Incredible journey, and it's not even like, it's not, it's not even the beginning almost." }, { "speaker": "stephan", "time": "13:39", "start": 818.76, "text": "I think you're right there. It is extremely early in this whole Bitcoin journey, and I think for me, at least looking at OpenNode as I first saw the company, I believe it was twenty nineteen or around there, that, I think the focus was very much around merchant solutions and merchant services. And so, do you wanna tell us a little bit about what that's been like? And as I understand now, it's not-- that's not the only thing Open- Node is doing now, it's actually a range of products, but perhaps that was where OpenNode first got its name, at least inside the Bitcoin community." }, { "speaker": "julie_landrum", "time": "14:11", "start": 850.6, "text": "Sure. Yeah. So OpenNode is a, Bitcoin payments and payout infrastructure provider. So we believe that, you know, we focus on, empowering individuals, including individuals who work for businesses, because businesses are people too, and just providing access to the best monetary network that the world has. has ever seen. That's our entire mission. And the way that we started on that path was, as you said, predominantly in the early days, it was enabling online merchants to accept Bitcoin and Lightning Network powered payments. Very quickly, we established some great partnerships in the e-commerce space. So we support plugins for some of the major e-commerce platforms like Shopify and BigCommerce, and, and so we very quickly saw how the right- Distribution partnerships can really help us scale the business and, and increase our reach. And that's actually one of the things that was established in traditional payments that we think is, you know, continues to have tremendous value because all of the fintechs that we talked about before You know, it used to be that they were, they built, you know, huge, customer bases and offered great services, but the backend was still a mess. So now imagine, you know, Stripe and Square and TransferWise and every like really amazing company that has been doing, incredible work to abstract complexity for users and, drop fees and all the rest of it. Imagine all those companies now having a Bitcoin payment rail as part of their offering. From that point on, you have kind of end-to-end optimization of the tech stack and OpenNode now is very focused on not just merchant payments, but helping businesses with payments and payouts as well. You know, we talk about the payments landscape Escape as, you know, going to buy the proverbial cup of coffee. The reality is that payments is another, way to talk about global money movement, and wherever there is money to be moved, OpenNode plans to be there. So we've evolved from being a payment processor for merchant payments, online to offering, you know, in-person merchant payments as well, working with businesses, platforms to, allow them to white label our payments capabilities and our custodial account capability, capabilities, and we're very quickly headed to a, to a place where we are going to be powering the Bitcoin rail for major payment processors, payroll processors, donation platforms, remittance providers, you know, these types of businesses don't necessarily need need to, they don't need to disappear. There's value in, for example, the services that a money transfer operator provides. The difference is that they, in the past, have either been predatory or have been constrained to using rails that are expensive and slow and therefore impact the customer experience. The important thing too that I would note is that when we work with distribution partners today, we're very focused on making sure that we don't- So recreate what was not good about traditional payments, which is you start with a base layer that costs X, and then everyone in the value chain kind of adds their piece, and then, you know, the end, the end merchant or the end business ends up having to, to pay loads. Or the, you know, the largest businesses get these incredible volume discounts, where it's actually the small businesses and the medium-sized businesses that are always left holding the bag or paying the, the most expensive rate. So what we do is when we work with distribution partners, we work backwards from the rate, the transaction processing rate that the end merchant pays. It allows us to make sure that we can maintain equity, that we can m-maintain some kind of equality and, and also, and also to make sure that our distribution partners feel like they're sharing revenue with us, not taking something and reselling it, marked up to the end client. And we've found that to be extremely effective Actually, this Justin, I can, I can announce today that we have completed, integration with Primer, which is an, an automation, platform for payments. they will be-- so with Primer, OpenNode becomes a connection partner, and any merchant or business that's using Primer for their payments can now add Bitcoin and Lightning network payments to their checkout, just as part of their Primer setup. Up, which is automated, no code, they also have, you know, dozens of connection partners like Stripe and Adyen. They sort of aggregate all of the processors, all of the major processors as well as fraud solutions, et cetera, and then make those available to merchants so that they can pick and choose what, processing paths to follow, as part of their, their processing setup. So we're really excited to work with Primer and again- And this is like tip of the iceberg stuff, we're going to be present in many more payment processor offerings. We also announced this year a partnership with Deskera, who are a large small business software provider in Asia, you know, similar to like a QuickBooks or a Xero, with an X. any payment flow where there's invoices, where there's receiving payments, where there's sending payments, digital wallets, we've started to integrate with, we've- PowerBelo and Cafficito in Latin, or also, you know, in, in process, we have like a ton of digital wallets in the roadmap, exchanges, doing lightning network transfers. So again, like our infrastructure offering is gonna be massive and it covers a complete range of solutions from no code to API integration to managed accounts to- To even infrastructure type services like at the node level for, you know, companies that are coming onto the Lightning Network and wanna operate at scale." }, { "speaker": "stephan", "time": "20:49", "start": 1249.04, "text": "Yeah, that's really fascinating because I think in the early days, it was, at least for those of us in the Bitcoin world, it seemed like the conversation would be like, \"Yeah, tell this merchant to take Bitcoin,\" whereas it's almost like what you guys are doing is trying to play more of an infrastructure role now, at, on top of that merchant role. And so this idea is if you can hook it up so that merchants who can just use their Payment providers, then they can just kind of piggyback on that and then automatically have Lightning based on that. Now, I, I didn't know, about Primer, and I just, I just had a quick search on them as well. So that's interesting as well. So can you tell us a little bit about how many, do you know how many merchants are using Primer?" }, { "speaker": "julie_landrum", "time": "21:26", "start": 1285.51, "text": "I don't know, I don't know. What's really interesting about Primer is that they, you know, as I mentioned, they aggregate connections with all The leading processors in the world and all of the leading alternative payment methods. And what they do is they don't charge a transaction processing fee, they charge a service fee to the merchants. So it's almost like what's new about what they do is before Prymer, as a merchant or as a business, you kinda had lock-in with one payment processor or you didn't, you had redundancy and maybe you had, you maintained like two relationships, but it was sort of, it would have been quite rigid, you know? You'd have one and then you'd have the other and you'd have to manage what you sent where. Primer almost makes these payment providers like building blocks for your overall payment strategy, and in that sense, they charge in a way that is, reflects the value of just that service. I don't know how many merchants they have, but, we already have a pipeline, we'll be anou- we'll be starting to announce some of the major merchants soon. It's really, it's great. They're global, they work with merchants from many different industries, and they also, you know, when you work with very engaged distribution partners and allies, again, specifically these processors who have huge knowledge of traditional payments, they also have very, very sophisticated, very advanced sales teams. So for a company like OpenNode, there, I mean, there were ten of us until the end of last year, you know, that's also like- A fantastic, kind of partnership asset that we can, that we can leverage. And, you know, you mentioned you didn't know we were doing all these things, like we haven't really made a lot of noise in the last couple of years. We've been working really hard. When it comes to kind of conferences, we like to power the payments, we don't really talk a, a ton. For example, like all the Bitcoin conferences, we have a great relationship with the BTC Inc guys. So yeah, we, all the growth has been organic, and now we're, we're really looking at our, our roadmap and our pipeline, and, it's a, it's a massive hypergrowth kind of scenario." }, { "speaker": "stephan", "time": "23:48", "start": 1428.06, "text": "And so then the interesting part for the merchants, and let's say people are listening out there and they want, an idea of how it looks if they wanna sign up with OpenNode, what does that look like? Because I guess part of the idea is they might be thinking, \"Look, I wanna take Bitcoin and Lightning payment, but I don't have What exactly is OpenNode doing for them, and then how does that work on their side? Like they, they, you know, you take the Bitcoin in and pay them out the fiat, right?" }, { "speaker": "julie_landrum", "time": "24:13", "start": 1452.68, "text": "Yeah. So let's start with our, with the products that we offer directly, and then we can talk about how merchants can access OpenNode, payments through maybe their existing provider or maybe their existing, e-com platform like Shopify, BigCommerce. So if you come directly to the OpenNode site, there's a sign-up process There's a very kind of basic KYB, KYC process that merchants need to complete. when it comes to no code solutions, we offer payments, we offer, invoices, payouts, a dashboard that allows businesses to monitor and, manage their transactions and funds from a settlement standpoint. merchants can elect to receive Bitcoin payments. As Bitcoin, they can, also ask us to automatically convert Bitcoin to their preferred local currency at the time of the transaction. And, and the third option that we provide is what we call split settlement. So instead of having to take a hundred percent Bitcoin or a hundred percent dollars, you can elect to, have your transaction settled, let's say, eighty percent fiat, twenty percent Bitcoin. What, what's great about that is that it allows merchants to start taking some ex- exposure to Bitcoin if that's what they want to do without having to make like a totally black and white decision of no exposure, full exposure. So that's been really popular and that's a really good way for merchants to begin the journey of holding Bitcoin. And then on the flip side, when it comes to payouts, payouts can be funded, with BTC, they can also be funded with fiat. So if a business wants to pay a trade partner or pay, contractors in Bitcoin, they can fund that with, local currency, and then recipients, if they have an account with us, can, on the flip side, receive Bitcoin or their preferred local currency. So in the case of payouts we talk about payouts as being Bitcoin or Bitcoin powered, because sometimes, the sender-- n- neither the sender nor the recipient actually, holds Bitcoin. The whole-- the full transaction is fiat to fiat, but it's instant, lowest cost, final settlement, and, and a finite transfer of value because we've used Bitcoin as the intermediate cur- Currency and because we've used the Lightning Network as the mechanism to move that value." }, { "speaker": "stephan", "time": "26:58", "start": 1617.56, "text": "Back to the show in a moment. Now, have you thought about removing single points of failure in your Bitcoin security setup? Unchained Capital can help you here because they can help you create a multi-signature vault. So with this setup, you hold two keys, two hardware wallets, and Unchained holds the third key. They can countersign for you, and this can help you remove that single point of failure, whether that is an exchange, a custodian, or potentially even a single- Multisig Bitcoin hardware wallet. With Unchained, you can pay for a concierge onboarding program where they will ship you hardware wallets, they will do a call with you, get you set up, and then deposit a thousand dollars of Bitcoin in your vault to get you started. So go to the website unchained dot com, select the concierge onboarding program, and use the code Livera for a discount there. Brains are a Bitcoin company through and through, and they are a must-see if you are interested in Bitcoin mining. They've got Brains OS Plus. This is firmware for your ASIC machine that you can install to auto-tune and optimize your miner performance, so you get more hash rate for your electricity bill. Also, if you use Brains OS Plus and point your hash rate towards Slashpool, you actually receive a zero percent pool fee, so this is a great benefit. Also, with Brains, they are supporting Stratum v2, so this is- This is a great benefit and an upgrade, it's the next generation Bitcoin mining protocol, so this is also a great way to support that venture. Now, also on the website brains dot com, they've got an analytics dashboard, so if you go to insights dot brains dot com, there's also some really cool statistics and there's a mining profitability calculator, so go to that website, it's brains dot com, that's brains with two i's. And finally, Lend at HodlHodl. This is a peer-to-peer Bitcoin-backed lending platform. This is DeFi built on top of Bitcoin. You can lend or borrow stablecoins globally and anonymously. To sign up in just thirty seconds, you can borrow stablecoins without verification, and users control collateral together throughout that whole deal, and all the interest is paid at the end. Now, on the other hand, if you've got stablecoins, you can lend them out for high returns. You are issuing overcollateralized loans with the full interest guaranteed. So, Lend at HodlH coins on your terms at your desired interest rates. There are no hidden fees and the terms and conditions are transparent. Go to the website, lend dot hodl hodl dot com. Now, back to the show. I'm curious to hear a little bit more about that. Could you just explain a bit? Could you maybe walk us through just an example of how, how that would work if somebody's going fiat and you guys are handling the Bitcoin in the, in that intermediary stage and then it's a fiat payout on the other side?" }, { "speaker": "julie_landrum", "time": "29:33", "start": 1772.74, "text": "Sure. so imagine you are a business, operating in LATAM and you have, business partners, let's say, in, in Europe, and what you are- used to doing is paying out those business partners, in euro. So you need to start the process, let's say in, in Mexican peso, you need to go through the correspondent banking system and all the associated costs and delays of sending Mexican peso as part of some high value transfers to many different places in Europe with recipients receiving that in euro. with OpenNode And with the help of our exchange partners and our bank partners, we can take in peso, we can convert that to Bitcoin, send it across to the recipient account instantly, nearly feelessly, with very, very low transaction costs, and then the recipient can determine, for example, that they wanna receive that value in euros, in a, in an account that is associated with OpenNode, and the last mile for them is just to do a local bank transfer. From euro to their destination bank account in euro, that takes a day. I mean, it, you know, it just does. We can't change, we can't change the traditional, the legacy financial system. But already what we're seeing is that businesses have a lot more flexibility. There's so much that they can do from a cash flow standpoint when they know that the funds have been received. they haven't necessarily, you know, they need one more day to make it to their destination account, but there are lots of things that companies can do knowing that that value is- There and instant transfer of Mexican peso to, you know, Euro is unheard of, absolutely unheard of." }, { "speaker": "stephan", "time": "31:28", "start": 1887.86, "text": "And so what kind of fees are we talking about then for that kind of process? And actually, before we go there, I'm actually curious as well, are you seeing any merchants who actually just close the loop? Like, let's say they start maybe, you know, taking Bitcoin and sort of holding some fiat and then eventually they get to that point where they actually pay their own suppliers with Bitcoin? Do you see that?" }, { "speaker": "julie_landrum", "time": "31:48", "start": 1908.15, "text": "That's the best case because that means the best financials for those merchants, because then they don't have to convert back to fiat. I would say we more see payout recipients keeping Bitcoin and then, you know, having that kind of, help them start to operate in a Bitcoin standard. So a lot of times, we're seeing small businesses do that, like keep the Bitcoin, and then we know that they are only coming out of Bitcoin to pay, you know, in fiat when they have to. One of the things that, OpenNode is gonna launch to help those people, you know, kind of live in a Bitcoin standard world but have access to fiat is, we're going to be issuing, a debit card that links to the account, so that people can pay for things in fiat over traditional rails when they need to. the fees right now, the headline fees for pay- Payouts are one percent, but those are too high. Like we know, for example, that domestic payouts, which is really a bank transfer from a business to another business, can be as low as, you know, twenty to fifty p. They tend to be fixed amounts or they tend to be very low percentages with, with caps. We have the opportunity to be as competitive as we need to be in order to compete with that. But I would say, where we are going to, fulfill most of the demand in the short term is in the cross-border space. So we're pricing different corridors, and then also, of course, you have the value of instant. I mean, the fees are gonna be ultra, ultra competitive. There's, there's nothing that is going- Going to be a barrier to people using this technology to move value." }, { "speaker": "stephan", "time": "33:44", "start": 2023.87, "text": "Of course, and important to point out that using these kinds of techniques, this kind of technology, it will end up being cheaper than if they were using standard fiat rails, right? And so it would be interesting if you could talk about that difference in the fees and maybe point to where some of that is coming from as well." }, { "speaker": "julie_landrum", "time": "34:01", "start": 2040.88, "text": "Sure. so in the payments world, it's really, it's really hard to, come up with actual- Actual pricing, like you have to do average, because payments in the traditional world depend on what kind of card is being used, where the person is coming from, what is the industry of the accepting merchant. I mean, this is why when we see merchant statements in the traditional world, they're like novels. and then merchants are also hit with service fees relative to fraud, dispute management, open node from a payment acceptance standpoint has a one percent standard. Global fee for merchants to accept payment in BTC, one percent, and over Lightning, that is instant, your kind of average, acceptance fee domestic in a market like the US, let's say through partners like Stripe and Square, I think is something like two point nine percent plus thirty cents, so there is a fixed portion and a, and a variable portion, but that is kind of- A basic fee, it doesn't, it doesn't include foreign card payments, doesn't include high risk industries like cannabis, let's say. So we're talking, and it doesn't include like the recurring fees of having an acquirer, an acquirer processor, nor does it consider that the payment can take, you know, anywhere from one to three days, again, in a domestic context. I mean, it just blows it away across the board." }, { "speaker": "stephan", "time": "35:35", "start": 2134.55, "text": "Of course. And the other aspect is that many end- And consumers don't see the cost that they're paying, so they don't realize that the cost of all this has already been built into what they are purchasing, and so that's been a bit of a narrative in the Bitcoin world that, okay, maybe over time There could be some of that fees come out, and the end consumer might be the one who wins there because of more competition around businesses, assuming they take on Bitcoin and use Lightning to obviously lower their fees." }, { "speaker": "julie_landrum", "time": "36:02", "start": 2162.48, "text": "Yeah, I mean, those discussions happened in the traditional world as well, specifically as markets were trying to regulate the high fees that were being charged in tandem by banks and by Visa and Mastercard, and it's kind of an eternal debate of like, if merchants pay lower fees Will the consumer see those benefits? It's hard to say, it's hard to say, but what you can say is it's probably not right that global businesses, global merchants, global entities everywhere are taxed anytime they engage in the transfer of value by, you know, centralized entities, there are few of them. You know, there's probably like five to eight dominant banks per market, there's probably like no more than three or four dominant payment networks in the world, there is a way for transactions to occur in a way that's faster cheaper and, and in a way that benefits everyone, and that, you know, encapsulates why I was so drawn to, to working, in Bitcoin and specifically in Bitcoin payments. We, you know, we, open node is seeing the promise of this monetary system and, we intend to become the payment standard for the Bitcoin standard" }, { "speaker": "stephan", "time": "37:26", "start": 2245.62, "text": "That's really cool. And also in the payments world and the fiat world, there's all this talk about chargebacks and chargeback risk because it is such a big cost for banks and businesses and everyone dealing with this kind of credit card fraud and, people who are just charging back. So how much of an impact or how much does that matter into Bitcoin companies? Is that totally gone or is there still, some level of that that they are paying the cost for?" }, { "speaker": "julie_landrum", "time": "37:54", "start": 2273.98, "text": "That's a good question because- I think that's a point that is commonly kind of not fully understood, which is fraud and chargebacks, because of the design of the legacy payment system, are required. Like they have to be part of that system. When it comes to Bitcoin payments, and let's talk about kind of acceptance specifically, retail acceptance and widespread retail use, there is nothing that prevents any, you know, Any company or any group of companies from standing up like buyer and seller protection programs, because if consumers have become accustomed to a certain level of protection for purchases, that is absolutely something that can be built and managed. You know, it could be escrow, it could be-- it could take a ton of forms. It could be something that is actually a service that's provided by a third party, but maybe you pay like a- A little bit of, a little bit extra as almost like buyer's insurance in order to benefit from, from chargeback protection or from the ability to dispute, a transaction outside of a direct merchant relationship. The important thing is that this can be built, it's not a barrier to, retail payments being able to, being able to be sort of, adopted globally, but it's not an inherent- requirement of a flawed system." }, { "speaker": "stephan", "time": "39:28", "start": 2368.14, "text": "I see. Yeah. So it's almost like you're saying, in some weird way, they might build out-- there might be businesses who build out a similar kind of function even on a Bitcoin standard." }, { "speaker": "julie_landrum", "time": "39:40", "start": 2379.8, "text": "Absolutely, absolutely. There are, there are sort of cultural and, sort of ingrained expectations that both businesses and consumers have when it comes to payments. the important thing is that the base technology, the base settlement layer, has changed, and that has allowed for just a completely new, very secure, interoperable, decentralized, monetary system to- Underpin anything and everything else that's gonna be built on top of that." }, { "speaker": "stephan", "time": "40:14", "start": 2413.83, "text": "Yeah, and I think that's a, it's an interesting point to make, and I think it's perhaps running counter to what most people might have previously thought about Bitcoin and merchant payments and so on. I'm also really curious as well, I'm sure some listeners might wanna hear, if you've got any stories about El Salvador and merchants in El Salvador, can you tell us a little bit about your experience there?" }, { "speaker": "julie_landrum", "time": "40:34", "start": 2434.4, "text": "Sure, I'm happy to. El Salvador was, was a really exciting, time. I think it made for a very busy summer for, for a lot of people in the Bitcoin space and certainly for a lot of people in, in El Salvador. We've had the incredible good fortune to work with some of the largest telecom companies, retail, companies, fast food restaurants, insurance companies, and I guess what I would- I would say is, you know, until advancing Bitcoin, I'd never been to El Salvador, but I, I speak Spanish, so what did we do? We just, we started kind of targeting, prospects, sent them emails introducing OpenNode and, going through due diligence, going through a very quick educational process, and ultimately, you know, these guys, pretty much every company we worked with, they were Very sophisticated in terms of their understanding of payments, they were very knowledgeable about what their requirements were as soon as they were kind of announced and, and analyzed. and they helped OpenNode develop our service further because they challenged us to meet their expected requirements when it came to traditional providers, and I would say the whole process was just fantastic. you know, being able to answer questions, being able to-- our primary objective was to offer a solution that would be an operational success for these companies. We couldn't foresee or influence how much of a commercial success Bitcoin would be in El Salvador, how much of a, of a, you know, cultural kind of success it would be, but what we wanted to try to do was to ensure that, the experience of Bitcoin would be a positive one, a successful one. Our technology when it comes to API integration is very simple. It's very easy. We have, we regularly have clients who stand up an integration with us in a matter of a week in terms of integration with us, and then maybe a, a few other weeks on their end tying it into their operations. the tech teams were very sophisticated, as I said, and, you know, launch was dicey, launch was dicey because Chivo was, you know, the Chivo wallet, c-clearly there were, there were issues and it was very- Very difficult to identify and tackle those issues because we didn't actually have direct, we didn't have like a, like a d- a direct line to the, to the Chivo team. it's been great, it's been a, a great experience. Of course, we saw the initial impact of kind of the thirty dollars that was, Airdropped to, to the El Salvadorians, and there's been a pullback in spend from that time, but there are definitely certain industries and certain players who we've seen, maintain a level of, processing volume that is pretty, like, very material. Number one. And number two, I lost my train of thought." }, { "speaker": "stephan", "time": "44:02", "start": 2641.81, "text": "So, I mean, which-- So you were just chatting a little bit about which industries have- seen their volume sort of stay even despite that initial surge of interest, let's say. I think it'll be interesting to see what happens going forward. Like, will there be a lot more tourism in El Salvador? Will there be Bitcoin tourists who go there and spend it up down there because they want the experience of being able to spend it at all the different stores with that? So that'll be interesting to see. and, Julie, if you could mention, if you can, which- Companies in El Salvador are using OpenNode. I, I'd, I'd be curious if you, if you're allowed to say that is." }, { "speaker": "julie_landrum", "time": "44:42", "start": 2682.28, "text": "I can only refer you to Twitter and the screenshots and, and the videos of the experiences. I mean, I think what's really interesting is, you have a market where businesses were, responding to a requirement, a legal requirement, and then you have brands that- May or may not be planning further, rollouts who sort of don't necessarily want to shine a spotlight on themselves, for this. And I think you can actually extend that to lots of businesses, lots of places. Like in our pipeline, we have banks, who are looking at, you know, banks based in the US who will be offering Bitcoin payments and Bitcoin-based services. it's sort of, we went from a, we went from a, a time of kind of trying to, generate demand for Bitcoin payments to getting to a point where major players were like, \"You know what? It's not a matter of if, it's just a matter of when.\" And now, there's so much activity, there's tons of activity, and we're happy just doing the work. we can announce it, you know? So when everybody feels more comfortable about getting behind it, for now we'll take their actions as, a really massive signal that this can work, you can stand it up within seven weeks, you can, incorporate it into your roadmaps outside of El Salvador, and, you know, there are many companies that will pull the trigger, that will pull the trigger." }, { "speaker": "stephan", "time": "46:32", "start": 2791.75, "text": "So that was an interesting point of discussion I saw as well, where people were saying, \"Look, Look, as an example, there may be large multinational corporations who have a presence in El Salvador, and if some of these multinational corporations are sharing infrastructure across countries, it's theoretically they would say, \"Well, if it's easy for them to turn it on here, then they might now find it easier to turn it on in some other countries elsewhere.\" As you were saying, that they may not be, willing to publicly make those kinds of statements or even overtures, but just the reality of having done an integration in one country and now you can leverage some of that- That work elsewhere, it's there. So that's really interesting to see. I, I'm also curious, as obviously OpenNode is a Bitcoin company, but you have to spend a lot of your time dealing with, ironically, fiat banking and fiat relationships, because you're still having to make that fiat payout for the merchant or the customer or whoever. Has that been difficult for you, and have you seen the fiat world say, \"Oh, no, no, no, we don't wanna help bank you because you're a Bitcoin company\"?" }, { "speaker": "julie_landrum", "time": "47:34", "start": 2853.59, "text": "It's getting better. I mean, same with It's, it's kind of the same story, right? Like, m-m-many years ago, many companies, many individuals were struggling, with banking relationships. Operationally, I would say, you know, our operations team probably spends like ninety percent of its time on fiat, like bank transfer related issues, not because of, not because of like nefarious turning us off, whatever, just because it's painful, like the sending bank Bank has an issue, the receiving bank has an issue in between, like nobody can see, you know, the thing about the, the, and when it comes to bank transfers in particular is that when a payment is on route, it disappears off the face of the earth until it reappears. It's just gone. So, there can be failures, at the origination point, failures at the, at the beneficiary, and in- Between nobody knows what's going on. I mean, that doesn't sound like an amazing payment system that works for people who are trying to figure out where the money is coming from, where it's going, how fast it'll get there. So yeah, we spend a lot of time chasing bank transfers, unfortunately. The, the Bitcoin transaction processing in comparison is, flawless. Like we don't lo- you don't lose payments, you don't drop payments. Payments, you know, obviously the blockchain, has never been hacked, there's no crazy latency when you use Lightning Fees are predictable, I mean, it's, it's very pure, it's very, it's very robust technology. And, you know, is it everywhere overnight? No, like, it has to grow, it has to be tested, we have to continue to strengthen and make it more reliable as we get more demand and more throughput. But there's, there's nothing that says, this isn't gonna happen." }, { "speaker": "stephan", "time": "49:46", "start": 2986.27, "text": "Right. And I'm also curious- This as well. So in the Bitcoin community world, there are people saying, \"Uh, who wants to spend their Bitcoin? I'm just hodling.\" But on the other hand, you've got the people who are like, \"No, actually, we want to be able to have this whole circular economy, and people should be able to spend it.\" And so I think what historically we might have seen is you see a lot of action around big price moves, and so as the price is running up, then lots of people are spending their Bitcoin, and that's where you would see the payment processing company see A bit of a doldrums for a while. I'm curious as well, like, are you just seeing just steady growth then, because you're seeing more and more companies who are onboarding into OpenNode?" }, { "speaker": "julie_landrum", "time": "50:27", "start": 3027.38, "text": "So what I would say is, you know, in a rational market, there will be spend impacts when the price, you know, with, with volatile, price moves, but that's mostly true on the payment side, because you have to make a decision as a spender to let go of your Bitcoin. But remember You know, OpenNode is involved in many payout flows, and when it comes to payouts, specifically those that are funded, in fiat, there is absolutely no impact So, and payouts, you know, even in the traditional world, and people don't really, they talk a lot less about payouts, which are more B2B, salary, remittances, you know, lots of flows like me to you, me to you, but actually, the B2B and the sort of general money movement aspect of me to you is much, much bigger than the spend, the entirety of the, of the spend market. So, y-y-you know, even processors like, I think I saw recently, there was a massive processor in LATAM saying, their payout volumes are probably seventy percent of their business, payments are thirty percent. So payouts are a hedge in that respect to massive price movements. And then on the other side, you could see, you could see lower prices driving someone to make a disposal. For tax reasons or for whatever, you know, for whatever reason, any reason that is going to, motivate someone to sell, will motivate someone to spend. And then what we also see is we have merchants and businesses who are starting to very much incentivize the use of Bitcoin in payments. and in those cases, again, if it's not like, if it's not like a stack that you're already holding, you might go out and buy Bitcoin coin in order to, benefit from the, from the kinds of, discounts or, you know, loyalty type things that, that a company is offering. so yes, it would be naive to say price has no bearing, but when we think of payments from both a purchasing, but also a sending perspective, the impacts on a business like OpenNode are, mitigated." }, { "speaker": "stephan", "time": "52:54", "start": 3173.99, "text": "Yeah, that's a really interesting point and probably one that many people- have not really thought through because there are a lot of people who are going to start receiving salary in Bitcoin, and if OpenNode is helping process salary for people, then that's just an ongoing every two weeks or every month or however often people getting, getting paid. So that's an interesting aspect, and I think that really comes in when you start thinking, instead of thinking just B to C, start thinking B to B, and then you start seeing it from that point of view, then I think you will start to see a lot more reasons that people are going to use Bitcoin for payments as a- Opposed to just thinking of the individual who's thinking about whether they spend some or not, and spend some fiat or spend some Bitcoin, if they have fiat, that is." }, { "speaker": "julie_landrum", "time": "53:36", "start": 3216.2, "text": "Exactly. And, and that's where the, the kind of, the intersection with the Bitcoin standard is so, powerful. Like there are communities operating on a Bitcoin standard, there are people operating on Bitcoin standard, there's sports teams operating on a Bitcoin standard, there's countries that are looking to operate on Bitcoin standard, and in those cases, you know, the more prevalent- And it becomes, the less, daily prices will, will matter because people will have opted out and they will still have money movement needs." }, { "speaker": "stephan", "time": "54:08", "start": 3248.24, "text": "So at the end of the day, OpenNode is really providing a lot of infrastructure out there for people who are even Bitcoin companies who wanna use the Lightning Network, you're doing this play around helping power other people's use of Bitcoin network. So where do you see all of this going, like with the Bitcoin and Lightning standard? Do you see more and more people coming on to the Bitcoin standard every day, or is it just kind of like a steady growth thing, or do you see it more like we're going to see just like in Bitcoin history, these big waves up and down in terms of adoption? I" }, { "speaker": "julie_landrum", "time": "54:46", "start": 3286.23, "text": "think in the growth of- Bitcoin as an asset, you're seeing a reaction to the central planning of money, and I think that in the growth of utility of Bitcoin, the network, you're seeing a reaction to the failures of central, centralized payments. And I think, I think there's gonna be two things that drive our growth. One is growth of Bitcoin, but also the more biz- Businesses that we engage with, the more platforms, the more people, the more countries, the more governments, there are different pain points everywhere. You know, for Argentina, it's inflation, so, so merchants don't, you know, they wanna be paid in something different. In cross border, it's the time and the cost of sending money from here to there. There are just so many pain points that Bitcoin, the network can solve for, just as there are so many pain points that Bitcoin, the asset, can solve for. And, you know, we'll bridge for as long as businesses and merchants need us to bridge into fiat so that they continue to manage their operations, you know, manage, their businesses in, in currencies that are maybe more stable in some cases, less stable in other cases. there's just a ton of work to do to- To demonstrate and educate on the power of, of this technology that is really ch- you know, it's changing the game completely." }, { "speaker": "stephan", "time": "56:29", "start": 3389.32, "text": "I'm also curious as well, like regulatory pressure or things like, let's say FATF travel rule and things like this, where they are trying to basically force Bitcoin providers to then go and identify the other party in that transaction. Is that something you see as like a regulatory risk coming down the pipeline for OpenNode? Or not." }, { "speaker": "julie_landrum", "time": "56:50", "start": 3410.31, "text": "What I would say about the regulatory stuff is, first of all, OpenNode is a managed custodial, regulated service. We will always comply with regulatory requirements. Our hope is that the solutions that we build abstract complexity and onboard more people into this, Bitcoin standard. And two, as usage grows and- value and fungibility of Bitcoin grow, we expect that as a, an industry, as a movement, as a community, we will have a larger say in the regulatory developments, so for, so- For now, I think, you know, we continue to believe in the fundamental characteristics of, of the currency, privacy, sovereignty, scarcity, and, we will continue to, you know, to support that and to fight for that, and in the meantime We're gonna do everything we can to grow adoption and eliminate barriers to u-usage within the legal and regulatory framework." }, { "speaker": "stephan", "time": "58:10", "start": 3490.18, "text": "Okay, so, that's probably, most of the key questions I, I had in mind. I guess, just to finish off, if you've got any thoughts around what people out there can do if they're, if they're trying to grow adoption as well, what, what kind of ideas do you have in mind at, Bitcoin, enthusiasts? could be, what could they be doing?" }, { "speaker": "julie_landrum", "time": "58:33", "start": 3512.82, "text": "so I think like we, we see three main categories of end clients when it comes to Bitcoin payments. There are people who need Bitcoin. They need it because their currency is collapsing or they, are unbanked or they, are being like robbed every time they're trying to send money. And those people, the educate- Creation is kind of inbuilt, they don't need anything from us in terms of impetus to look at this technology as, as a, as an option. Then we work with a lot of users who want Bitcoin, they, they want to accumulate it, they think it's better, they already are sort of sold on the idea that this new alternative system is, is gonna work for them, it's gonna work for the world. So then we're sort of left with a thir- a third category of, of people who are sort of curious or skeptical or, you know, and I think when you think about the first two categories, the people who need Bitcoin, the people who want Bitcoin, these are the people who are gonna be your army of educators, not because they're gonna write books necessarily, but because they run businesses, because they make financial decisions every day. They have, many financial touchpoints, both in terms of how they accept payments and how they pay out, and we think that kind of this movement, when you add incentives, when you add individual experience, when you add communities, you know, sports teams, all of these kind of groups of experience and, nuclei for education It's a, it's a, it's a grassroots movement. Like nobody wants to, you know, we don't need to bukele the whole world. Like, let people come into contact with this technology, let them experience the benefits of it, and, and share it with the people that they work with and the people that they live with, and, you know, it's all happening." }, { "speaker": "stephan", "time": "01:00:52", "start": 3652.64, "text": "Fantastic, it's all happening. So, Julie, where can, people find you online?" }, { "speaker": "julie_landrum", "time": "01:00:58", "start": 3658.54, "text": "Oh, find me. I think I have like a hundred, I think I just broke like a hundred and fifty followers on Twitter. I'm, Julie City. I don't post very much, I just sort of hang out and see what's going on. but definitely follow open node at open node on Twitter, open node dot com. we are hiring, we are growing. particularly, engineering functions, sales functions, and also- So growing an international, will be at Bitcoin twenty twenty-two, and, you know, we have been relatively quiet for a while. we're probably gonna start to make more noise, celebrate achievements, bring more people with us, and, continue to, to get hyped about this monetary revolution." }, { "speaker": "stephan", "time": "01:01:50", "start": 3710.96, "text": "Fantastic. Well, thank you for joining me, Julie." }, { "speaker": "julie_landrum", "time": "01:01:53", "start": 3713.22, "text": "Pleasure, Stefan. Appreciate it." }, { "speaker": "stephan", "time": "01:01:55", "start": 3715.2, "text": "Get the show notes at stefanlivera dot com slash three. 5 5. Thanks for listening, and I'll see you in the Citadelles." } ] }