{ "episodeId": "SLP489", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "graham_krizek": { "name": "Graham Krizek", "role": "guest", "tag": "GRAHAM" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.51, "text": "Hi and welcome to Stephan Livera podcast, a show about Bitcoin and Austrian economics, brought to you by Swann dot com. Do you believe every company will be a Lightning company? Founder and CEO of Voltage, Graham Krizek re-joins me on the show to talk about this idea, as well as what's happening in Bitcoin and Lightning. We talk about why big companies are doing financial services, and is it 'cause they wanna be near the printer? What does Lightning Differently. What use cases are there and who's looking at them? Products at Voltage, as well as thoughts on LDK by the Spiral team. Brought to you by the team at Swan is Pacific Bitcoin Festival. Now, Pacific Bitcoin was a hit last year in LA, so it's coming back this year in October, and this time it's going to be a festival. The feedback was fantastic, we had so many people telling us it was their favorite experience. Lynn Alden said she had more fun at this conference than at any other conference before, seriously. And Steve Barber said, no joke, Come to this, really blew it. Place is vibrating with pure signal. Another attendee said, \"If I could make it to only one Bitcoin event, this would be it. \" So Swan is putting this on again with awesome speakers like Greg Foss, Preston Pish, Corey Klipstein, Alex Gladstein, and so many more. October fifth and sixth in LA, so market in your calendars now. I'm looking forward to speaking there and seeing you all. So use code Livera for a discount over at pacificbitcoin dot com. Make sure you get your tickets before prices go up. That's Mempo.space is the leading Bitcoin visualizer. I use it all the time before I send a Bitcoin on-chain transaction. Mempo.space shows you multiple aspects of the Bitcoin ecosystem, whether that is mempolls, the blockchain, to second layer networks like the Lightning Network. And with Mempo.space, you don't have to trust a third party. You can host and run this yourself on various full node distributions. If you're with an enterprise, Mempo.space offers custom mempo instances. You can have your company's branding as well as increased access. to the team, and they also have a new product coming soon, the Mempool Accelerator, which was announced recently. So keep an eye out for this, and go and find out more at mempool.space. And now onto the show with Graham. Graham, welcome back to the show. Hey, thanks for having me back. There's lots going on, I know you guys at Voltage are doing a lot of stuff around, obviously the Lightning Network, and you wrote this piece recently, \"Will Every Company Be a Lightning Company?\" Now, yeah, maybe for some people that's controversial, maybe for others in our world that's not so controversial, but let's start, like, what, what spurred this article? Why did you write this article?" }, { "speaker": "graham_krizek", "time": "02:36", "start": 155.55, "text": "So I, yeah, the, the original, inspiration for it, I guess, was really-- So I, I, there's, it, it references, a post or, it was a really a presentation from Angela Strange at, Andreessen Horowitz, a year, a couple years ago. and it, it gets referenced a lot, and it's called \"Every Company Will Be a Fintech Company,\" I think. And so it, I kept hearing that a lot, and then, you know, I actually took the time to Really the, the inclination for her, the presentation originally is that, no one really enjoys their bank, no one likes the banking system in, in its true form, and, to provide a better experience, more apps are gonna be adding in financial services into their products and services. so take a example of like Uber or something where they, you know, you keep a balance in your Uber account, to either, you know, for the rides that you, you do or rides that you're gonna do that kind of thing. and so being able to bring Services closer to your end user instead of always having to go to a bank to, to do anything, makes a lot of sense and it provides a better user experience, all these different things. and so I kind of with this, I, I said, \"Yes, I think that makes sense, but I'll take it a step further of not only are we gonna, is it make sense to move financial services closer to the end user, but if we look to do that, there is Lightning, the Lightning Network is the superior payments network in the entire world, it's the best Before sending and receiving payments. And so, I'm gonna take it a step further and say every company will be a lightning company because as we look to move, more financial services to the end users, there is no better system than the lightning network and Bitcoin, you know, Bitcoin inside of the lightning network. So, that was kind of the original idea, and really expanding on that and like, how do we, how does that literally work? Like, how do we bring financial services to the end users and why is lightning so important for that?" }, { "speaker": "stephan", "time": "04:34", "start": 273.59, "text": "Got I think you can, we can understand that in some ways where this is a common term people use, even in business school, they talk about vertical integration. This idea that you might not just do one thing, you might do one thing that's above you or below you in the, the stack per se. So as you said, like Uber or some of these other companies who want to launch their own card or hold value inside, you know, have Uber Cash, like an Uber balance, and that way they can cut out, they can start to try and cut out middlemen in their own way and maybe take But as you're saying, Bitcoin and Lightning opens that playing field even further, and so I guess that's part of the argument. So, what are some of the reasons why some of these, let's say, non-financial services companies, or at least not traditionally financial services companies, are gonna try to innovate in financial services?" }, { "speaker": "graham_krizek", "time": "05:24", "start": 324.08, "text": "Yeah, I mean, it's, it's several things. So kind of like I've just mentioned a, a second ago is around like the user experience. So if you, don't like the, the user experience of using something like an Uber Good because you don't have to like always, you know, be ACHing in and out of your bank account for like every, every Uber. Like they, they have, they have some forms of abstracting a lot of that away. similarly with like, you know, the, the point system or like, take Apple for example, and their like Apple Card and being able to provide, a better user experience when you're buying Apple products with their own card. And so I think ultimately it boils down to the user experience. the more that you can, the more" }, { "speaker": "graham_krizek", "time": "06:05", "start": 365.27, "text": "So, so to speak, the better the user experience is gonna be when you have to start connecting four different pieces together, it really, the user experience really suffers gener- generally. and so I think that that is one aspect, and then kind of like you mentioned on the, the efficiency gains of, actually, one, being able to do transactions inside of your own application and services. So if you're able to keep a lot of that inside of your own ecosystem for your application, you're able to probably cut, you know, a lot of fees or just unnecessary, Something like that, your application can just function more efficiently. And then finally, it generally speaking is more sticky for your end user. Your end user is gonna stay in your application for longer, use it longer, if you have that experience. Again, like the more the users have to jump around to different applications and services, the less likely they are to stay in your experience and really, live in it. And so I think that that's another, area is really focusing on the end user and not only keeping them inside of your app and being, having them return as a customer, but also keeping them happy as a customer and that, you know, that they can get a good experience out of it." }, { "speaker": "stephan", "time": "07:12", "start": 431.77, "text": "Gotcha. Yeah. So let's summarize that then. It's you can deliver a better customer experience in some ways, so that's part of the argument is customer UX. There's maybe some efficiency there and stickiness, right? Apple is famous for having their walled garden, right? This idea that you have the iPhone and it connects with your Mac and it connects with, et cetera, other aspects of the Apple cloud system that it all kind has this and Google has this and they all, everyone wants to try to keep users in the ecosystem as long as possible because that's where you can make the money on them. and perhaps there's, there's even a profitability argument as well, whereas as, as you said, some of these gift card balances, some of these companies can make some money off of that too, because now they can take that money that the customer is storing, quote unquote, with the, with Uber or Apple or whoever, take that and turn around on the backend and be running some of that with a money market fund So there's like a profitability argument to it also." }, { "speaker": "graham_krizek", "time": "08:09", "start": 489.37, "text": "Yeah, yeah, I mean, there, there is, in that, and I think that the other, like, I think the other opportunity here is if you look at, so say in a world like if we, if we take kind of what, what I'm saying to the extreme of, every company will be a lightning company and that like maybe those Starbucks rewards aren't Starbucks rewards anymore, they're actually sats, and you can, you know, use, like, your, your Starbucks, application is then a lightning" }, { "speaker": "graham_krizek", "time": "08:35", "start": 515.29, "text": "ability of that amongst everything else in the world, and if more and more folks are starting to, you know, accept Lightning, then that turns into, your Starbucks application being able to, the points that you get from buying Starbucks coffee is actually more-- has more real-world use than like the Starbucks rewards points. And so, I don't really drink Starbucks at all, I don't really like it, I don't care about it, but I would definitely drink it more if they gave me Sats instead of the Starbucks rewards, because that has real utility, that has real value that I can go and Do something else with. And so I think that there's, that's a big element as well in this, in this kind of equation is the ability to, if we were to really, really leverage this, you know, open monetary network that is, you know, global, being able to do that, adding that into an application opens up to a lot of new possibilities as well. So I think that there's a whole area of kind of untapped potential for these, these companies, to be able to, connect into this global ecosystem." }, { "speaker": "stephan", "time": "09:34", "start": 574.27, "text": "Yeah. Interesting, as you said, so it's kind of that trade-off then, because on one side, there's the stickiness angle, right? If you, as the company or the big, you know, massive mega-corp, mega-corp, want to keep people in your ecosystem, in your little walled garden, but on the other hand, there's this open ecosystem and it's competing. But there isn't, there isn't, there is a difference here, right? Because you could say getting access and plugging into that open network might make people more happy to use this thing to begin with" }, { "speaker": "stephan", "time": "10:05", "start": 605.31, "text": "Versus intranet, right? If everybody's trying to build their own intranet, but rather people wanna be accessing the open internet or being able to email anybody, not just people who are using the same email provider, let's say, and so there's kind of a-- there's an open angle to that that maybe there will be more users who can plug in and connect to that. I think similar arguments are also being made about Nostr as well, that like this idea that Nostr is this open protocol that because builders on Nostr, you're building an application on Nostr, You've got this automatic inbuilt base of po-possible users, and so it's not just like, \"Oh, this is Twitter's monthly active users, or this is Facebook's monthly active users,\" it's just anyone who's using Bitcoin or anyone who's using Nostra could potentially use this application. So in a similar way, maybe there's an angle around that. So let's, let's talk a little bit about, I think there's pa- perhaps one other angle to this that I was thinking about as I was reading your article. I was thinking there's also this angle- Angle of the monetary spigot, right? So those of us who are fans of Austrian economics and understand that money isn't neutral, it matters who gets that new money first. And so what happens in a fiat monetary system is that companies try to subtly jockey for position. Everyone wants to get closer to the money spigot because if you're closer to the money spigot, you win, right? The, the he who is closest to the monetary spigot wins, and those who are furthest away from the money spigot, they are losing, and savers are obviously losing. Saving money, as in saving fiat in a fiat system, is losing because their money is just getting inflated away, whereas the new purchasing power is going to those people who get you money first. And that's why we see some of these companies who try to, let's say, become a quasi bank, and that's why we see even some of these airlines aren't actually profitable on the actual airline, they're profitable on their frequent flyer programs, which are paired up with, guess what, credit card providers who are, again, close to the banks financial institutions. So There's an angle there as well that it's not that they want to do financial services per se, or maybe, you know, the reason they want to do that is because they want to get close to the monetary spigot." }, { "speaker": "graham_krizek", "time": "12:16", "start": 735.71, "text": "Yeah, no, I, I, I totally agree, and I think that that is, when we think about, there, there's a lot of uses that can come out of getting close to the, the, the spigot or even just, enabling more experiences that allow you to, like, I think there's The lowest transaction fees that you can imagine inside of a payment network, you can save tons of money just by doing that specifically, and then the ability for you to do these other, other things, alongside it, maybe you can take, you know, new revenue streams by, adding in these different financial services. So I think that ultimately, yes, I think you're, you're absolutely right, and being able to, and provide either new, revenue streams or increase efficiencies inside of your organization is incredibly, interesting, especially in today's- Today's day and age where, you know, kind of things have, you know, flip flopped a little bit in terms of like how companies are operating, over the last, like, you know, year or so, and so I think that that's, it's, that is definitely increasingly interesting and, being able to get, yeah, closer to the spigot, so to speak, is definitely something that people are gonna be looking at more and more, and again, like cutting out, you know, the middlemen of everything that you, you Sought, sought out for organizations, and then so I think as we move along, again, Lightning is gonna come out as the superior, the obvious choice for doing, these kinds of payments because it's, it's just the best. And so, I think as we look for people that are trying to get closer to the spigot, and not being so beholden to just like whatever this credit card provider is saying that they're gonna give you, having a little bit more of opportunity to, to set your own destiny." }, { "speaker": "stephan", "time": "14:02", "start": 841.71, "text": "Yeah, gotcha. And Seeing the Lightning network is growing, of course, we would all love to see more self-custodial, self-sovereign adoption, but at the same time, it's, it's starting with a lot of custodial use, I think we have to be honest to that. But that said, there are a lot of companies and exchanges who are plugging into the Lightning network, and by plugging into this network, you've got access to everybody else who has at least a Lightning-enabled provider, whether that is, you know, Bitfinex or Kraken or, you know, whoever. And once Cash App and some of these other big names who have a lot of users, that's now we're probably in the tens of millions of people who could use Lightning with an, you know, with an app. So, you know, that's a, a big network effect that you can plug into by being a Lightning company, right? Because all of these other people, maybe they don't know it, to be fair, maybe, maybe they have Cash App installed on their phone and they could use Lightning, they just don't know it, they just don't understand that yet. But I think that's part And maybe in this coming cycle, that's gonna be, you know, in the next hype cycle, we don't know when. Again, I don't have a crystal ball, I'm not saying it's, you know, coming right now, but I'm just saying Bitcoin moves in these hype cycles, and w-in the next cycle, I think that's where we'll see a lot of this Lightning use start to come." }, { "speaker": "graham_krizek", "time": "15:21", "start": 920.95, "text": "Yeah, no, definitely. I, I completely agree, and I think that it's, yes, I think that there's a lot of people that, well, w- so as an organization, when you look at adopting Lightning, like there, it does open you up into a lot of new people, like new people that maybe weren't your customer before that can be your customer now. It opens you up into a, a whole global audience, and so I think that that is a huge benefit for, organizations as they're looking, at, you know, some new and then, and then secondly, I think that, yes, I think there's a lot of folks out there that are, becoming increasingly aware of Lightning and maybe they're, yeah, just using like the cash app version of Lightning if they even know about that or something, you know, getting there. And then I think that there's a lot that is gonna happen over the next, you know, year or so in like more non-custodial Lightning usage. That's something that us at Voltage are very, very focused on, and we've been doing a lot," }, { "speaker": "graham_krizek", "time": "16:21", "start": 980.63, "text": "Build out, non-custodial like mobile applications and things like that. So, I think that we're, we're definitely like, at the point where a lot of real things are being built for non-custodial lightning. take Mutiny, for example, they, they're, one of our first users of our LSP, and they're building a, a, a fantastic, mobile experience, or it's even, it's, goes beyond mobile, it's kind of anywhere. but they're, it's a great Sociable lightning usage. So, I definitely agree with you. I think the next, you know, we're-- this next cycle is gonna be very lightning focused, and I think that we're building a lot of the tools now to really enable that and make it a great experience." }, { "speaker": "stephan", "time": "17:02", "start": 1022.42, "text": "Yeah. So, I think there's probably one other area where I was sort of disagreeing. Like, of course, I, I probably agreed with, let's say, eighty to ninety percent of the article, there's probably one other area where I was like, \"Oh, maybe there's a slight disagreement department, or perhaps maybe, maybe that wasn't quite what you were saying. You were saying something along those lines. But then I was thinking, well, doesn't this vary on, on the kind of service that's being done? So as an example, if we-- more and more companies become quasi-lightning banks, then th- those customers may actually end up getting hacked and having their lightning balances spent from by the hacker, and then maybe that still necessitates some kind of internal fraud department at these lightning-enabled companies, right? Even aside putting AML stuff to the side, AML compliance, just internal Only having to deal with some of that fraud aspects, you know, so there's maybe some elements there, that I might slightly disagree, but do you wanna just spell out some of the benefits in your view as well?" }, { "speaker": "graham_krizek", "time": "18:03", "start": 1082.56, "text": "Yeah, definitely. I mean, I think that the, like, there's, yes, I, I, I'm not meaning like everyone, you can fire your finance department, you can fire your, you know, don't, don't comply with any laws or anything like that. It's more so along the lines of like, in, in the original post, like they" }, { "speaker": "graham_krizek", "time": "18:21", "start": 1100.67, "text": "Hundreds or thousands of employees just in like, kind of the chargeback department, just dealing with people that are, you know, refuting charges, you know, trying to get refunds, whatever. and so, you know, just looking at Lightning from that angle of just, you know, chargebacks don't exist. You know, there's instant finality. When you send a Lightning payment, it is done. You can't, you know, you can't claw that back. You can't claw back a Bitcoin transaction, those kinds of things. And so you can significantly reduce the amount Inefficiencies, and so it can, it can drastically reduce headcount as far as that goes in terms of like, you know, chargebacks and things like that. there is still some, amount of, you know, you, you still have to like monitor for fraud and all of those things, but I think that there's a lot of, a lot of efficiencies that come with the, the benefits of the network of, you know, the instant settlement and all of those things that really benefit, organizations that are looking at, at adopting this. And so, being Of payment, so there is no, there's no refuting whether something, you know, got sent or not, every, you, you can prove every single bit, and so that reduces significant amounts of, headcount and, and just inefficiencies inside of organizations that spend a, a, a giant chunk of time just dealing with that alone." }, { "speaker": "stephan", "time": "19:40", "start": 1179.64, "text": "Gotcha, yeah, yeah. and so one other area that you spell out in your article is current fintech, like, let's call them fi- fiat fintech, right? The, the fintechs that don Bitcoin stuff. So of course, everyone knows some of these, like Wise and Revolut, and I think in Europe there's a popular one called N26. Anyway, there's a bunch of these. In your view, Graham, why are the current fintechs not adequate here?" }, { "speaker": "graham_krizek", "time": "20:04", "start": 1203.72, "text": "yeah, several reasons. One, that they're, they're all usually very, tied to their specific, you know, region or geography. They're not, and as we look to, you know, what it's like today, everyone is increasingly more global. Everyone knows someone in a different country, everyone has family in a different-- Like, everyone is increasingly more global, and so they're generally very, restricted to specific geographies ac-across the world. So I think that, being able to leverage a global payment network to go global is, is very Also, a matter of being able to, there, I guess there's two more things. One is like the, the amount of like the settlement and the counterparty risk involved in that. If we think about, you know, what if those same folks offered like a non-custodial experience where someone could actually hold their funds and you aren't, at risk of the things of, you know, Prime Trust and FTX and all these things that have, you know, happened recently, and then finally, the ability to actually, go more internet native, where On top of, of a, the internet that really, don't provide the same kind of experience where like lightning can be, you know, literally embedded into whatever you're doing, both inside of like, you know, a browser like Alby or Mutiny or something like that, as well as like doing it more mobile native. So I think that there's, the ability to go more truly embedded into the internet, do micropayments and things like that, significant, you know, they, they just basically can't compete on that. the counterparty risk involved still exists The, the restrictions on geography and where, who your reach can, who you can reach to." }, { "speaker": "stephan", "time": "21:38", "start": 1298.08, "text": "Yeah, and I think you make a lot of good points there around the barriers that are erected by governments across borders, right? It's difficult, and that's part of that is why some of these fiat fintechs exist because of those difficulties. but even still, it makes it difficult for them. Now, I guess the follow-up question from my point of view, and I'm curious to hear what you think, so we've got some of these current fiat fintechs, why aren't more In your view?" }, { "speaker": "graham_krizek", "time": "22:04", "start": 1324.48, "text": "Yeah, I mean, I think it's just been, it's a couple things. It's one like education. I think that just frankly they don't know enough about it. They maybe see it as this like big scary thing or it's just too hard to parse or something. I think that they're, just not educated on it very well, which is something that we're, you know, we're working on a lot is trying to get more education for those, for those kinds of users. and then additionally, I think that there, They're just doing it kind of silently behind the scenes, internal departments, R&D, that kind of thing. And so from, you know, the conversations that we've had, there's significant amounts of traditional fintech companies looking at adding in Lightning support, like we know that for sure. And I think that there's, so I think that over the next, you know, year, two years, whatever, you know, the next cycle, we'll see a significant amount of those, actually come out of, you know, this kind of silent R&D and get them more into the Anyone that's not, is just, not aware of like what, what this is, how it can help them, and then how do they implement it? so there's a big gap that we need to fill there to help them understand, what the opportunities are." }, { "speaker": "stephan", "time": "23:17", "start": 1396.77, "text": "Well, that's interesting, as you said, that many of them are actually considering it, but maybe it's early stage and it takes time, and maybe for them, it's lower on their priority list compared to some other thing that they're trying to do. Maybe they're trying to expand, maybe they Court cases and legal battles and things like this, maybe it's just lower on their priority list, but I guess that's probably why we don't see a lot of fiat fintechs today using Lightning. but of course, it would be fantastic if more of them did, and I'm sure there's probably a, an established Bitcoin base of users inside some of these fintechs who are already users of some of those fintechs who would love to use Bitcoin or Lightning, it's just not an option yet in that particular service. And, as you said, it's early, I Building conversations, having APIs, having SDKs, having, you know, these, the right, things for those fintech companies, the fiat fintech ones, not the already existing Bitcoin ones. it's difficult for them to sort of quickly plug and play, and I guess that's part of what Voltage is doing, as part of what other, you know, people in the industry are trying to make it accessible for them. and so maybe Lightning has gone through this adoption cycle where it started out as the, you know, the true hardcore Bitcoiners And, you know, they would run their lightning node and, you know, figure it out, and then it took time for lightning businesses to sprout up and come to a level and get to a certain stage of maturity, development, ease of use, clarity. Maybe that's, again, that's where we are in the cycle, right? So we're, we're just early in that cycle, would you say?" }, { "speaker": "graham_krizek", "time": "24:53", "start": 1493.13, "text": "Yes, definitely. No, I think that, that, that is, that's right, and that's something that we, you know, we focus on a lot is where we want You know, very similar to any other tool or service that they integrate. You know, there's, they're already integrating all kinds of different SaaS platforms for, you know, analytics or business intelligence, whatever it is. Like, they're, they're already doing things, and we don't want to come to them with Lightning and say, \"Hey, here's this completely new thing that your team has to learn, like, do all these different things.\" We want to give them, \"Hey, it's ju- it's just similar to all these other tools. Here's the APIs, here's And so, you know, we're, we're working on that. I think that there's a lot of conversations that we're having with, with folks to, make sure that we are, I guess, building along that path. And there's, been a lot of, a lot of interest, in traditional fintechs to understand and, and get on board with Lightning. So I think that we're, we're definitely on the path. We're not there. I don't think that any, any service is like, you know, perfect," }, { "speaker": "graham_krizek", "time": "26:01", "start": 1560.9, "text": "by The reception from traditional fintechs that we've seen over the last year, and I think, again, next cycle, I think that there's gonna be even more, kind of eyes, eyes on the, on the industry. And so there is, there's a significant amount of opportunity, and I think that we're, we're just trying to solve it in a, in a really good way so those folks that are coming and wanting to explore lightning can get the maximum benefits with, you know, the, the least amount of uniqueness or engineering lift, possible." }, { "speaker": "stephan", "time": "26:32", "start": 1591.61, "text": "Back to the show in a moment. This show is also brought to you by Plan B Forum Lugano, October 20th and 21st. As you might know, Lugano is a city in Switzerland taking on Bitcoin adoption with hundreds of places you can spend Sats. They're also hosting a forum or a conference which will host awesome speakers like Nick Szabo, Adam Back, Paolo Arduino, Prince Philip, Jocko Mazzuchelli, Mike Peterson from Bitcoin Beach, and many more. And there's going to be a range of stages. There'll be a main stage as well as" }, { "speaker": "stephan", "time": "27:01", "start": 1621.37, "text": "Classes where Bitcoiners can learn skills relating to things like self custody and so much more, and don't forget it's real adoption. You can walk around the town and you can find cafes and restaurants and bars and clothes stores, barber shops and hairdressers and watch stores and so much more where you can spend Lightning. So it's a fantastic experience. I enjoyed it last year and I'm looking forward to it again this year. Go and book your tickets over at planb.lugano.ch for Plan B Forum October 20th and 21st. I'm looking forward to seeing you there. To self-custody, and with CoinKite dot com, we can get the hardware that we need to secure our Bitcoin. So most notably, the Coldcard Mark IV is a great device for doing this. It's very simple and easy to use. Some people like to criticize and say it's too hard for beginners, but really it's not. Anyone who has bought a Coldcard and all you've had to do really is plug it in, either to power or into the computer directly, and use it easily with Sparrow or Specter and things like this. You follow the prompts on the screen, 12 or 24 words, you can generate your addresses and away you go. The coldcard is a fantastic device, it's ultra secure, it has all kinds of features that you can use in all kinds of different configurations. Whether you're a beginner, you're intermediate, you're advanced, it has something for you. So to order your coldcards with a discount, use code Livera over at CoinKite dot com. And now back to the show. I see, and I think one other area where, let's say, a lightning skeptic could look at us, now of course, I'd probably count both of us in the lightning promoter camp, but obviously a skeptic could look at us and say, \"Well, hang on, guys, public lightning network capacity, last I checked, is around fifty-four hundred BTC, right? this is, we're recording fifth of July twenty twenty-three, just for anyone listening, and so public lightning capacity is around fifty-four hundred BTC, the total amount of BTC out there is something like" }, { "speaker": "stephan", "time": "28:53", "start": 1732.64, "text": "Why is Lightning adoption so low? Why is it so small? Why are there only eighteen thousand, you know, nodes on the public network, let's say?" }, { "speaker": "graham_krizek", "time": "29:00", "start": 1739.68, "text": "Yes, no, so, so, yeah, that's a great point, and I think that, we do hear, we do hear that like every now and then. So I think a couple things that I usually respond to that with is, one, the channel capacity is only like, what, what you see there is only the public metrics. So like, for example, our LSP, all of the channels that we open" }, { "speaker": "graham_krizek", "time": "29:23", "start": 1762.66, "text": "Functions. And so there is a significant amount of capital that's just private, that's just not part of that metric. So it's, it's naturally a incorrect or maybe not full picture, metric, for gauging the, the total, you know, amount of Bitcoin that's locked into the Lightning Network. So I think that's number one. And then number two is that, you know, the, the, the channel, the co- the metrics that we have of like node count, channel count, channel capacity are basically the only ones that we have to Those are poor metrics to really gauge the, the, the success of the system on. The real, like, success of the system are like, how many, how many transactions are we doing? How many, you know, how much, how is the value of these transactions? Like, what is the success of these transactions? All these different things of like, how, how are people actually using it? Where are they using it? All of those kinds of things. And those are naturally very private, metrics. Like, you know, the Bitcoin layer one is very public on how, who is sending Because it's a peer-to-peer network, and so we don't have visibility into all of those kinds of, I would call them the more important metrics. So, we could have, you know, five hundred Bitcoin locked into the Lightning Network, and it could still be doing, you know, significant amounts of volume and doing real, transactions across the world, and so it's still-- they're just not, accurate metrics in tracking how successful is this thing actually doing. And that's one of, depending on who you talk to, that's one of the great benefits of Hell, you know, it's that private that we really don't know how many transactions, all of these things. and so, you know, those are the things that we track more closely as more, I would call them metrics that are more si- like closer to the success of the network or our product or things like that. And so, they're just, they're just disconnected. And so it's, it's a hard one to, to compare to." }, { "speaker": "stephan", "time": "31:13", "start": 1872.8, "text": "Yeah. And any thoughts on payment reliability? Have you seen that improve over time?" }, { "speaker": "graham_krizek", "time": "31:19", "start": 1879.48, "text": "Yes, yeah, I mean, we, we've definitely been seeing payment reliability improve over time, especially, you know, when we got started, when I was starting to look into this, it was like twenty nineteen and like, I mean, payment success was, I don't know what the percent was, but it wasn't good. It was definitely not, good. And we, like, where we see it today is, you know, much, much higher, much more reliable. It's actually, it's, I would call it, an anomaly" }, { "speaker": "graham_krizek", "time": "31:44", "start": 1903.92, "text": "to have a Our LSP is focused on, just in time liquidity, so we are able to detect if a payment is coming through that doesn't have enough capacity to reach its end destination, we will automatically zero-conf open a new channel to facilitate the payment, so that thus just, you know, increases the payment reliability of one that might have failed previously, you know, now it's able to succeed. So there's a lot of work going into, the success of lightning payments as well as new pathfinding algorithms and things like that. So huge, huge amounts of, increase in payment success and We're seeing, you know, a lot of-- We're seeing a lot less complaints about, you know, failed payments or things not working correctly." }, { "speaker": "stephan", "time": "32:26", "start": 1946.27, "text": "Yeah. any comments around volume then, in terms of like, even though it's, you know, I don't know if people say it could, would consider we're in a bear market now or whatever, but, have you seen volume still going up even if the price is down massively from all time high?" }, { "speaker": "graham_krizek", "time": "32:41", "start": 1960.66, "text": "Definitely. Yeah, absolutely. Especially because like we're even, you know, in this bear market, whatever Come and integrate Lightning, so we're definitely seeing, more people adding Lightning into their products and services, and so with that, it's naturally increasing, you know, payment volumes and all those things. So def- still seeing new entrants, as well as folks that are, that are still, you know, that have always had Lightning, we're seeing increases in their, you know, volumes and payments as well. So like Kevin Rook does a good job of kind of like having these like Lightning visuals of like how, you know, what is, how many payments did Wallet of Satoshi You know, trending upwards, and so we definitely are seeing, increase in volume both from new entrants as well as existing, providers doing more payments." }, { "speaker": "stephan", "time": "33:29", "start": 2009.19, "text": "Gotcha. in terms of Lightning protocol stuff, and latest developments, is there anything in particular you're excited to see or something that's, coming soon that you're excited to see?" }, { "speaker": "graham_krizek", "time": "33:39", "start": 2018.6, "text": "Yeah, I mean, there's a lot, like, there's, there's a lot inside of like the lower level, you know, super technical details like splicing and async payments, like Bolt 12, like all of those kinds of, advancements, I mean, I'm excited to see. I don't think that there's, there's probably not many people that aren't excited to see some of those, like, you know, protocol level improvements, so that's really good. And then we're also, like, from, for us as an organization, you know, To date, we've-- all of our customers or even people that aren't our customers have, we, as we talk to them, everyone's kind of building out this kind of metric system and like observability and all of these things like themselves, so we saw as an opportunity to build out a really robust system to be able to visualize what's happening inside of your node, view your transactions, get alerted of issues, all those things. And so we launched that, a couple weeks ago, to help with node runners and actually, you know, operating nodes. And then, additionally coming online, we're really trying to solve, like, make it, again, moving to that experience of this very, very easy integrated, system that allows people to, you know, just connect in and start sending and receiving lightning payments. but we, we focus on that very closely on the infrastructure layer, so actually giving people, you know, you have real transactions, you have real lightning channels, you have your own balances, you can, you know, if voltage goes away, you still have access to your funds, all of those things. And so, we're So, with that, it's one of the great things of all these new protocol improvements is that, you know, we are direct beneficiaries of that and circling them into our users. So, really excited for basically, there, there is, there's a huge amount of things being built both inside of Voltage and outside, and so, I think that, you know, over the next couple years, it's gonna be very substantial progress." }, { "speaker": "stephan", "time": "35:28", "start": 2128.45, "text": "Yeah. So as I understand with Surge, the idea is it gives you, in a way, it's like analytics for your Lightning node, Its usage, maybe it would be handy for customer support aspects, and maybe it's also handy for optimization. That's basically the idea that this is software that you are running on your Lightning node, and it can extract some of the key information that can then be used to optimize or update certain aspects of how you run that Lightning node. So as an example, maybe you see that a certain channel is inactive or it-- you know, there's something you can do to improve your Lightning node. That basically kind of the layman's understanding of what Surge is?" }, { "speaker": "graham_krizek", "time": "36:12", "start": 2172.1, "text": "Yeah, yeah, I mean, that is pretty accurate. It's really just a, a tool to give you kind of a single pane of glass into everything that's happening inside of your node, so you can have like, give access to like your finance teams to see, here's all of the transactions, here's all of our sends, here's all of our receives, here's where all of the fees went. So you can have very tight accountability of all of the, the money flows, as well as like engineering teams of" }, { "speaker": "graham_krizek", "time": "36:38", "start": 2198.4, "text": "channels that you have open that are, that are totally functional, but they are, maybe not routing payments, so it's basically just dead capital sitting there, so you can be more efficient in your capital allocations. And then, you know, there's a lot more that we're gonna add to it. So ultimately, we just wanna give, full visibility into what's happening. And like, you know, there's, Lightning is very, dense with the amount of data and things that are happening inside of it. And so, really trying to just show those kind" }, { "speaker": "graham_krizek", "time": "37:08", "start": 2228.32, "text": "And really give, full visibility across an, an entire organization, so, you can get buy-in from the compliance team, from, you know, the accounting team as well as engineering. So I feel like yours, it, it solves a lot of, a lot of different things for different departments, but ultimately that was, as we talked with larger enterprises, that was the big requirement of being able to have something that, you know, their, their other departments outside of engineering can get comfortable using and, and, you know, getting on board with." }, { "speaker": "stephan", "time": "37:38", "start": 2257.86, "text": "I see That's almost a, a customer requested, set of features around, monitoring the lightning node. And I guess for a lot of people at a business level, at an enterprise level, they need to integrate Bitcoin and Lightning into what they've already got. And of course, they might have some ERP, enterprise, you know, resource planning system, and, you know, they need something that, that can, can easily plug into all of that. And maybe they've currently got a lot of stuff that works on the fiat side, the fiat banking side, maybe they can download, okay, here Statements, here's the fiat aspects of it, but we need something to plug in the lightning aspect of it. And so I guess you're trying to build something on that, that's kind of where your business, or at least this particular product is sitting." }, { "speaker": "graham_krizek", "time": "38:21", "start": 2300.64, "text": "Yes, yeah, definitely. I mean, being able to give, like, again, like, you know, previously, as we talked with folks, like, they're basically the ways that they would do that is like, you know, writing their own scripts and, you know, software and everything to basically do all that. And so, you know, we heard every-- almost everyone that we're talking to that's integrating Lightning is rewriting the same application over and over and over again. And so we saw that as the opportunity of, like, let's just let's, let's write it for them and Or, well understood systems that, you know, large organizations usually have, and then also being able to be very, operations focused for, you know, engineers or operators that are actually, you know, doing the day to day activity of the node." }, { "speaker": "stephan", "time": "39:03", "start": 2343.39, "text": "Yeah. So, so if we look forward then in terms of where things are going, if every company becomes a lightning company, I mean, are you saying that in a similar way to, let's say, every company in the nineties needs to learn about the internet, because otherwise, you know, you're, you're kind At least you're, you're leaving all this money on the table because there's this massive opportunity out there. I guess that's the sense in which you're talking, we're saying every company w-will become or needs to, you know, consider the Lightning Network, although it may seem extremely early today, right? Because the number of Bitcoin users today is, you know, pick, pick your number, right, somewhere under a hundred million, probably, you know, in terms of on-chain users, it's probably more like five or ten million in terms of on-chain Bitcoin users today. But that said Those five to ten million on chain users, right? There might be one exchange who supports, you know, tens of millions of users, but they're really custodial. So in the same way, there'll be a lot of Lightning users who are just custodially, like the end user, let's say, who's using Lightning custodially through their company, who, who in turn, that company is your customer, Voltages customer, right?" }, { "speaker": "graham_krizek", "time": "40:12", "start": 2411.74, "text": "Yeah, yeah, definitely. I mean, yes, I think that's a, a good way to put it. It's just the same Very helpful for your business than what you're doing and all those things, so it's very, very similar to that, and that, you know, there's a lot of opportunity inside of, you know, having a lightning strategy for, a business. And, and even to your point, like there is, there's a lot of, folks that can, you know, service Bitcoin and Lightning to like the end user and do, you know, a lot of things with that. But there's also customers that we're talking to that are, you, plan on using" }, { "speaker": "graham_krizek", "time": "40:50", "start": 2450.3, "text": "They have to settle in between banks, in just side of their backend, and they're looking at using Bitcoin and Lightning to do that settlement instead of, you know, the Swift network or the, the traditional payment rails. And so, in that context, the end users, everyone that's using their product, is still doing fiat, like 100%, there's no kind of Bitcoin exposure to them, but behind the scenes, they are using Bitcoin to do these international settlements. And so, there's a ton of opportunity to that as well. Maybe you don't have to show" }, { "speaker": "graham_krizek", "time": "41:19", "start": 2479.34, "text": "a Save you a bunch of money just by, using Bitcoin for settlement instead of, you know, these other networks." }, { "speaker": "stephan", "time": "41:27", "start": 2486.53, "text": "Yeah, that's interesting because I think the use cases that can appeal to us, let's say to the average user, average person, they're thinking B to C, but they're sort of forgetting there's this massive market of B to B, and that market is arguably even bigger than the B to C market, and so that-- there's an opportunity there for Lightning, and I've heard this, as well from other people I've spoken to. that they're considering it as part of their corporate, you know, they're looking at it, in their own ways, and so what are some of the other things you're hearing from, corporates and, and, lightning, are there any other things you're hearing from corporates considering this?" }, { "speaker": "graham_krizek", "time": "42:08", "start": 2527.85, "text": "Yeah, I mean, definitely. I think that there's, there's a couple different things. I mean, we're, we're hearing more and more, interest for people that just want to hold Bitcoin like as kind of a treasury system, you know, like just Michael Saylor's kind of, you know, made that famous by now of, you know, being able to like hold Bitcoin on your balance sheet and those kinds of things. So I see that as almost like it's, it doesn't have to be a step one, but I see that as a step one of like form where people, look at it from, business operations. So we see it from, like I just said, of like some internal settlement, use cases. We see it for, more of the, the consumer end. We see, we see a lot of people looking at it from like the rewards standpoint. I think that that's been sort of validated across people like Fold and, you know, with MicroStrategy's recent, you know, platform on kind of their, more enterprise level like reward system. So we see people, looking at it And finally, we do see some people, doing a lot of more consumer, types, so things kind of like cash out, deposits, withdrawals, those kinds of things, so we, we see it kind of across the board from like the internal B2B, types all the way to, you know, direct to consumer, so, it just kind of depends on the business model, but we're seeing people, you know, very interested in, at least as a number one, understanding how they can apply this to their business, and that's something Couple months ago, is that, you know, just look like you don't need to understand all the, the nitty gritty details on Bitcoin and Lightning, you know, as a get go, understand h-what you're, what you're trying to achieve from a product perspective and how can Bitcoin and Lightning fit into that, and then, you know, start, start taking a step into like actually looking at integrating it and how it could work. So I see it, you know, I think it's a great, way of thinking about it, of really just think about it from" }, { "speaker": "graham_krizek", "time": "44:07", "start": 2647.21, "text": "And, and, and go from there." }, { "speaker": "stephan", "time": "44:09", "start": 2648.77, "text": "Yeah, of course. And I think those of us who are interested in the technology, we have this tendency to go down technical rabbit holes, but at the same time, you can confuse somebody who's new to that. And the analogy I, I like to use is, I say, it's not like you have to teach everybody how to design a car, they just need to know how to drive the car, right? They just need to know the basics. and so I think a similar analogy there is stuff like Lightning Address, You, as an example, might tell your customer, \"Hey, what's your Lightning address? I'll pay you out to your Lightning address, right?\" So that's probably an easy example like where today, let's say a company, a builder, someone is saying, \"Oh, I need to get this to a customer, how do I do this? how do I route the mail to them?\" No, no, you just use an email. You just say, \"Hey, what's your email? I'll email it to you.\" It's the same kind of, shift" }, { "speaker": "stephan", "time": "45:04", "start": 2704.03, "text": "in" }, { "speaker": "stephan", "time": "45:07", "start": 2707.33, "text": "No, they can use it, and there's this easy, there are easy ways to plug in and use it, whether it's lightning address, whether it's an LSP or a provider, right?" }, { "speaker": "graham_krizek", "time": "45:16", "start": 2715.96, "text": "Yeah, exactly, exactly. And that's what we're, you know, really trying to push for, is just, you know, being able to make this all, you know, very easy, very plug-in, plug-and-play, which, you know, admittedly, it hasn't been that, you know, to date. You know, we, we are fully, you And running, but again, I mean, to your internet analogy, I mean, think about when you had to plug in, like, you know, the, the dial-up like systems, your modems, and like, you know, someone made a phone call, like you're, you would just get, get, get disconnected from the internet, those kinds of things. So, you know, we're, we're graduating from that level onto the next level, and so, really just making it, you know, the experience you have today of sending and receiving an email is where we're," }, { "speaker": "stephan", "time": "46:07", "start": 2767.23, "text": "And one other question I had, just around US versus non-US. So I'm curious in terms of when you're talking to corporates and business, businesses around there, are you seeing a difference in, you know, are you seeing a difference in countries or are you having a more advanced conversation with companies in the US or is it actually not that different depending, on who you talk to around the world?" }, { "speaker": "graham_krizek", "time": "46:27", "start": 2786.63, "text": "It's ge- generally been not that different. there are like, we see a lot of activity inside of like Africa, for example. There's a lot of, Lightning services or things like that. So it's even from like the more grassroots, like Africa Free Routing and, like those kinds of organizations, all the way up into like, you know, some more established like organizations. so it's, it's been a, a hot one, I would say, over the last like couple months. But then generally speaking, I think everyone's kind of on the same level. There's some people that are really trying to understand like the regulatory environment for a lot of these things, which I think is more, when On the altcoin side of things, you know, things outside of Bitcoin, of like, you know, what, this, you know, you know, Binance is getting sued for whatever, like, what does that mean for me? And so it's kind of, you know, things that you, you naturally have to deal with alongside just the general environment. But I mean, you know, being specific on Bitcoin and Lightning, I think that, you know, across most of them, it's all been pretty, pretty standard" }, { "speaker": "graham_krizek", "time": "47:31", "start": 2850.87, "text": "and, I think that like" }, { "speaker": "stephan", "time": "47:36", "start": 2855.53, "text": "all-- May also be worried about, let's say, capital gains tax implications, depending on their country, if they were to run, let's say, a platform and that platform is, let's say, paying out Sats, then maybe there's a consideration there around capital gains tax and how to deal with that aspect of it. Are you having, are you getting into those kinds of conversations and do you have any ideas around what, what can be done in those cases?" }, { "speaker": "graham_krizek", "time": "48:03", "start": 2883.47, "text": "we like a little bit, we don't, I mean, we're not, we're The tax side of things, generally speaking, but, we, we do kind of work with organizations to try and help, like, understand, you know, what, what that's like or at least writing, you know, again, Surge is a great, you know, tool for kind of looking at your transactions so you can kind of answer those questions more specifically. So we do work with organizations on at least providing them what they need to answer those internally. so, so we do work with folks to, to do that. We don't necessarily have like a" }, { "speaker": "stephan", "time": "48:38", "start": 2917.61, "text": "Yeah, of course. Yeah, I'm just saying, because I'm just thinking in terms of what might be a blocker for some of those companies. They might say, \"Hey, we would love to use Lightning, but actually right now the tax maybe for them, you know, maybe they're not ready to be a trailblazer, and so they wanna see somebody else go first before they decide to follow.\" As an example, right? and so if it becomes a blocker for them, well then maybe that's sort of, okay, they're gonna put that on the back burner, focus on" }, { "speaker": "stephan", "time": "49:07", "start": 2947.09, "text": "Cases that's, you know, as an example, in the US with GAP accounting, that they're gonna update the accounting standards. Now that's more for the hodling use case, but, you know, maybe there's similar sorts of things that have to happen so that, the rewards kind of platforms are a bit easier from a tax perspective. Well, that's just one thing. Is there anything else you're, you know, anything else you can share in terms of what is coming up with Voltage?" }, { "speaker": "graham_krizek", "time": "49:30", "start": 2970.44, "text": "Yeah, I mean, we're just, we're, we're working on a lot, you know, things like Surge and our LSP were big things that we really wanted to get out, this year, so we did, you know, the first half of the year, and so that, you know, more of the second half is gonna be very focused on, platform unification, so bringing it all really, all, everything clicked together really, really nicely, give users that experience of just, you know, a similar platform to any other thing You know, non-custodial mobile apps, and being able to integrate, with things like LDK and, using our LSP for that. So we're seeing, you know, l-again, l- lots of increase in that, and so I think that being able to build out, these kind of more unique, non-custodial, experiences is definitely something, that's going to continue, and so we're, we're really focused on that and being able to like beef up our, our L Better than you, than we can today. So a lot, I think, is gonna happen inside of our, our LSP going forward and being able to really, push that, forward. So a lot, lot of product enhancements, a lot of things that are gonna be coming down the line, here soon. So, yeah, not a lot that I can say specifically, but I think that we see a lot of interest in, mobile, mobile development as well as, you know, just more larger scale, enterprises looking to adopt it." }, { "speaker": "stephan", "time": "51:01", "start": 3060.72, "text": "LDK, as in why LDK with the LSP as compared to any of the other implementations?" }, { "speaker": "graham_krizek", "time": "51:07", "start": 3066.82, "text": "Yeah, I mean, we see people really liking the LDK experience, for a couple reasons. One, it gives, like, it gives the most control for a user over, like, the experience where it's, you know, it's literally the entire node is running on the phone, and so there's no, there's virtually no, like, counterparty like risk at all in it, and, you know, with the enhancements that LDK has done, there's Not as, it, when LDK first came out, it was a little hard to implement, but it's definitely come a long way and it's much easier to implement now. And then, you know, there's a lot of, a lot of enhancements that they're doing along. I think that, you know, from what they, what we've seen, they'll probably be the first like, add async payments and some of these newer things. and so, you know, we see people really interested in adding in, LDK because it's the, it seems I really like, the integration that, like, the Spiral team has done a very, very good job of, you know, working with the customers and making sure that it's all, you know, available and, you know, answering any questions. So, ultimately, you know, we see it as a very, very good, way to like build out, you know, the, the mobile experience." }, { "speaker": "stephan", "time": "52:18", "start": 3137.87, "text": "Oh, cool. Well, hey, well done to the LDK team. I'm sure they're," }, { "speaker": "stephan", "time": "52:23", "start": 3143.42, "text": "happy to see," }, { "speaker": "stephan", "time": "52:30", "start": 3150.08, "text": "interested to chat about, so, probably a good spot to wrap up here if you have any closing thoughts for listeners, and of course, wh-where can people find you?" }, { "speaker": "graham_krizek", "time": "52:37", "start": 3157.38, "text": "Yeah, definitely now. Thanks a lot for having me. you know, I think that ultimately, just, you know, I would say keep, keep on the lookout for Voltage, we're doing a lot of new things, we're gonna be releasing a lot, a lot of new stuff too. So, there's definitely, just generally speaking, a lot happening in Lightning, which you know, At g k r i z e k. our, our company account is voltage dot cloud, the Twitter account is at voltage underscore cloud. So, you know, definitely reach out if you have any questions or anything, you know, happy to answer or just, you know, generally chat about lightning and, and how to add it into your what you're doing." }, { "speaker": "stephan", "time": "53:17", "start": 3196.71, "text": "Awesome, well, thanks for joining me, Graham." }, { "speaker": "graham_krizek", "time": "53:19", "start": 3198.57, "text": "Awesome, thanks a lot." }, { "speaker": "stephan", "time": "53:20", "start": 3199.93, "text": "If you're enjoying the show, please remember to leave a review, thumbs up, five star, anything you can do to help me out and share See you in the citadels." } ] }