{ "episodeId": "SLP557", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "kilian_from_boltz_exchange": { "name": "Kilian from Boltz.exchange", "role": "guest", "tag": "KILIAN" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.5, "text": "Hi, you're watching Stephan Livera podcast, brought to you by Swann dot com. Today, Kilian from Boltz dot exchange joins me on the show, and we're talking a little bit about, what Boltz is and this idea of swapping around between Bitcoin main chain, Lightning, and a federated side chain such as Liquid. And so we get into some of the different trade-offs around this, who it works for, and who it makes sense for. I think this will be really interesting to see, because- What's gonna happen as fees rise is people are gonna need to use other layers or sidechains, and so I think this will be, an important conversation that people will have to have. So onto my chat with Kilian." }, { "speaker": "stephan", "time": "00:51", "start": 51.05, "text": "Kilian, welcome to the show." }, { "speaker": "kilian_from_boltz_exchange", "time": "00:53", "start": 52.95, "text": "Thank you for having me, Stefan. Nice to be on." }, { "speaker": "stephan", "time": "00:56", "start": 55.95, "text": "Yeah, so, had a chance to chat with you, in person before various, some Bitcoin conferences. I know you're doing some interesting work with Boltz dot exchange, and, yeah, interested to get into it. So, let's start with a little bit on, you know, how you got the idea to do this whole thing, Boltz dot exchange." }, { "speaker": "kilian_from_boltz_exchange", "time": "01:13", "start": 73.28, "text": "Oh yeah. so Boltz, yeah, interestingly, Boltz started out as a, as a side project" }, { "speaker": "kilian_from_boltz_exchange", "time": "01:23", "start": 82.65, "text": "The day, which was two thousand eighteen, nineteen. So actually, Boltz has part of history, was an atomic swap exchange, but decentralized. You know, the i-idealistic idea of having this decentralized atomic swap exchange, and Boltz was really born as a band aid, because this decentralized exchange was based on Lightning, we had actually issues, for people to get onto Lightning and off Lightning. So Boltz was really born out of necessity for this main project to, get people on and off and Lightning and easily open channels and get a couple of, you know- Additional features for, for folks to, to open their lightning channels from this, for, for this, decentralized exchange. So that's how Boltz was born, as an idea, just as a fix. and interestingly, it's the thing that survived. So the other thing died off, at some point, probably a little bit too idealistic, and Boltz, became the new venture, the new main venture, but I would say it was a, a hobby project until Spring 2023, so we only do Bolts full time with like, you know, seriousness, since a little bit more than a year now. So, until then, it was basically Lightning to Bitcoin Mainchain only, nothing, nothing special, no new features for a couple of years, and since one year we are, we are, we are on it, in full time." }, { "speaker": "stephan", "time": "02:43", "start": 163.33, "text": "Interesting. And it's also fair to say that sometimes you build a service and maybe it's a bit early, like maybe there just wasn't as much demand for it, and now, you know, now, now that fees are starting to rise, at least on Bitcoin main chain, maybe now there's more of a use for this thing. So let's just make sure we keep this all accessible for everybody. So when we're using Bitcoin and Lightning, sometimes we need to swap things in terms of Off-chain to on-chain or using Liquid or various things. So there may be, different users who need to manipulate their Lightning channel balance. I guess the other aspect I would explain is that sometimes, let's say the lis-- for the listener, you, the end user, might not really know about what's going on in the background, but actually your service provider, your LSP, your Lightning service provider, might need to use this kind of service in their background because it helps them save on fees. And so maybe that's another- element of what this is, and obviously listeners of this show tend to be people who are more technical or more interested, and so we're gonna sort of dive into more detail about exactly what this is. So if you had to just kind of zoom out at a high level, what does Boltz Exchange do today? What's, what, what is the use case here?" }, { "speaker": "kilian_from_boltz_exchange", "time": "03:57", "start": 237.38, "text": "In, in one very simple sentence, it helps you to move in between different Bitcoin layers. Period. Right? That's what it does. It helps you to move your Bitcoin from the main chain to Lightning, especially, those are the, two, two main layers we started off with. And now we are slowly, gradually adding, more layers. So we added Liquid, in the past, and there will be more, coming down the road. so what it really helps you as a user, we have different various- Let's say use cases or, target users, that do different things with Boltz. The, the main use case for most, like, of our history was, lightning channel rebalancing. So it's actually for the more sophisticated users that probably operate a node, that, that do that for, as a, as a business, as a profitable venture, so they wanna be a profitable lightning routing node. that's was our main target user base for basically since the inception, twenty nineteen, until like a year ago. and what they do is, what they, what the use case here is that the channels get, imbalanced, right? So, channels, need, inbound liquidity and outbound liquidity in order to be able to send and receive. so usually you run out one of the two. so in general, one could also say that the inbound liquidity, the, that you can receive, on, on, on a lightning channel is the scarce resource, on the lightning network. So a lot of users use Boltz as Like send Lightning out to get, inbound liquidity. So this is the more professional user, I would say, yeah." }, { "speaker": "stephan", "time": "05:33", "start": 333.41, "text": "Gotcha. So let's just quickly walk that through just to make sure everybody's following along, 'cause there are times where we kind of get into these really technical rabbit holes and we lose people. So let's just, again, make it very simple. So let's say I am a merchant, as an example, right? And let's say I have opened my channels and, I've been receiving, right? Because let's say, you know, business is going well, I'm doing lots of sales. Think about what's happening. So for users, just imagine you've got an abacus and there's beads on that abacus. But think of it like, what's happened now is because I, as the merchant, have been making a lot of sales, a lot of the beads on the abacus are on my side, and now there may not be enough" }, { "speaker": "stephan", "time": "06:13", "start": 373.26, "text": "Sales. And so what I'm doing, I might, I need a service to be able to push some of the beads on the abacus back to the other side. And so in this example, right, so with Boltz exchange, I might be the merchant and I might say, \"Oh, look, I've got all the, all my channels, all the balances on my side. So I'm gonna use this service, I'm gonna do what's called swap out, I'm gonna push the balance out on Lightning and then take it back on chain, in Bitcoin main chain or potentially on Liquid. Right, that's one example, the merchant, let's call that the merchant use case, and then I suppose there might also be an LSP use case also, right? Or if you are a routing node, that might be another use case." }, { "speaker": "kilian_from_boltz_exchange", "time": "06:59", "start": 419.23, "text": "Exactly. So, in general, you, I think one could summarize the, liquidity problem that sometimes helps called on the Lightning Network in a way that, if you only do unidirectional, only one direction payments, that's an issue on Lightning, right? So as soon as that's the case, like you said with the, in the example of the merchant only receiving, at some point everything is on my side and I can't receive anymore, so I'm, I'm forced to rebalance, I am forced to push Lightning to the other side in order Lightning, again, otherwise my, my business stops, right? I can't sell products anymore because I can't receive. That's, that's a serious issue. so that's definitely one, one, one use case. LSP uses it probably in the background, and routing nodes, they use it for both directions actually." }, { "speaker": "stephan", "time": "07:42", "start": 461.82, "text": "Yeah. And I think one other point that's really crucial to make here is that a lot of people, when they think about lightning, they're just thinking in terms of stock, they're not thinking in terms of flow and throughput. And I think As a routing node, you might not really think about that concept, and so I think this is something that obviously you are very aware of, this Kilian and your business, because that, that's your business model, right? But just to explain that for people, imagine, you know, you might have set up a ten million sat channel And you might think, oh, if I'm gonna receive from all these people, I need to-- I, I don't know, let's say over the course of the, you know, you could use that one channel, but you're reusing that same channel. That's kind of the point, right? Because it's, it's not just the ten million sat-satoshi channel, you might be taking funds in and then periodically rebalancing out, such that you're getting some actual ongoing flow and throughput here, right? So I think that's an important point for people to appreciate that maybe The Lightning, or if you're not as familiar and savvy, you might not get that point, right?" }, { "speaker": "kilian_from_boltz_exchange", "time": "08:48", "start": 527.7, "text": "Correct. Yes. Lightning needs flow both directions. It's, it's designed that way. Yeah." }, { "speaker": "stephan", "time": "08:53", "start": 533.18, "text": "Yeah. And so then, then the other point is you might be in a situation where you have this kind of unbalanced flow, as you were saying, like you may be, even if you are spending and receiving, it might just be that over time you're on net receiving more than you're spending. So then again, it necessitates using these kinds of swap in or swap out services Keep the channels roughly aligned in, in the direction to have liquidity in the direction that you need it." }, { "speaker": "kilian_from_boltz_exchange", "time": "09:20", "start": 560.44, "text": "Yes. So that's actually what we, can testify for as, as we see in the usage of Boltz most Lightning nodes, most users on the network tend to receive more of the more inbound flow, than outgoing, at least ones that are using our service. So they use our service exactly to, to counterbalance, right? So that's, that's precisely the usage we're seeing." }, { "speaker": "stephan", "time": "09:42", "start": 581.57, "text": "Yeah, that's interesting. And so then let's talk a little bit about, the other use for where maybe an LSP is using you guys as well, because that might be interesting to just talk through, what does it look like when an LSP wants to use Bolt" }, { "speaker": "kilian_from_boltz_exchange", "time": "09:56", "start": 595.9, "text": "That's a good question. So I, I don't have a real-world example of an LSP that is using us directly integrated in a product because they usually have their own ways. To, to manage the channel or they have to manage the channel liquidity between their users. So an LSP is always defined as basically the entry to the Lightning network, I think, like you introduced before. So there's one single channel between a user, maybe on a mobile phone, yeah, a mobile app, and the LSP, and then There's one channel, and then there's the rest of the Lightning Network, and it gives access to the rest of the Lightning Network. So the LSP's task really is to manage the liquidity of this particular channel, it's usually a private channel, that's not available to the public, to the user. usually LSPs managed as via Lightning native ways, so they aren't necessarily using, a service like Boltz, in the example of Phoenix, for example, is a very famous, a Lightning wallet, they use, Splice in and splice out to manage the liquidity, of the channel they have with their users. Breeze as, as an LSP might be doing a similar thing, honestly I have to look at it in detail how they will, I believe they actually might" }, { "speaker": "stephan", "time": "11:09", "start": 669.49, "text": "be using you for the swap, for this, like, if they wanna do it on-chain payment. On-chain," }, { "speaker": "kilian_from_boltz_exchange", "time": "11:16", "start": 675.88, "text": "exactly, but it's a different functionality in a sense that the use case is different. So this isn't for the liquidity management of the channel, but this is giving additional functionality to the user. So in Breeze, they are using, Breeze is using Boltz to offer an additional functionality to the user to also pay to an on-chain address, right? So if the user says, \"Okay, I'm a Lightning only, Lightning only wallet, but I want to pay an on-chain address because, I don't know, a merchant isn't accepting on-chain,\" they're using a Boltz swap to swap Lightning to on-chain and be able to pay this, this on-chain address. So in that sense, it's, yes, it's an" }, { "speaker": "stephan", "time": "11:54", "start": 714.32, "text": "In that case, the Breeze user is, Lightning has a Lightning native balance, and if they need to make a payment to a vendor who only takes on-chain payments, that's where they are Using you in the background where they make the lightning payment to you, and then you, Boltz, are making that on-chain payment for them. Exactly." }, { "speaker": "kilian_from_boltz_exchange", "time": "12:14", "start": 733.61, "text": "So this leads us to a, a second major use group that we're seeing since, let's say, six months roughly, or with Breeze we have it since a little bit longer, but it's really taking off, in the last half year. so a-apart from these very professional use cases of LSPs, driving notes, or even merchants, which I would, you know, categorize as professional as well," }, { "speaker": "kilian_from_boltz_exchange", "time": "12:36", "start": 756.28, "text": "Have the nice experience of, having one balance only. So it's either a Lightning only wallet or an on-chain wallet only or a liquid only wallet, right? So these users, while they only hold Bitcoin in one particular layer, wanna be able to pay to different layers. So it's adding this additional functionality to pay from on-chain to Lightning, from liquid to Lightning or receive via Lightning into my liquid wallet. so that's, that's a huge use case that is starting to take off for us now on what we are helping. To enhance functionality for these wallets, to make a very simple wallet like the Lightning only wallet actually a multi-layer wallet by helping users, to move to these other layers and, and be able to pay to these other layers." }, { "speaker": "stephan", "time": "13:19", "start": 799.11, "text": "Yeah. Okay. Yeah. And we'll, we'll get into more of that later. And we'll also get into the debate of what counts as a layer two, because I think that's another area around. I'm, I'm, I'm probably more on the unilateral exit side, so Liquid is- That's fine. Not exactly a layer two for me. but anyway, we'll get into that later. Let's talk a little bit about the other element here, because you are attempting to do this as a, as a non-custodial service with atomic, with an atomic quality. So can you just explain a little bit about how that aspect of it works, right? Because people might just be thinking, \"Oh, is it just like a custodial thing?\" Well, no, it's actually a bit different here. Can you explain that?" }, { "speaker": "kilian_from_boltz_exchange", "time": "13:58", "start": 837.74, "text": "Yeah. So most other services out there are actually custodial. So these typical interfaces where you go" }, { "speaker": "kilian_from_boltz_exchange", "time": "14:06", "start": 846.08, "text": "Bitcoin stuff involved. This is all custodial, be aware of that. So none of them that I am aware of is actually, non-custodial, right? So, the default is, custodial. So we thought we, we, we got, we gotta do that differently, not only for the user to, to be, to be sure, that we cannot misuse funds, that we cannot steal funds, because that's the main thing why you would want to have atomic swaps in the first place. but also for us as a business, atomic swaps are a necessity, for us to not be a custodian, right? So this puts us from a legal perspective in a, in a, in another box, right? so how it works is if you wanna do cross-layer atomic swaps, there's one key technology, that is needed, and that's called HTLCs. So HTLCs are this magic bit of cryptography that we need, on all the layers that we wanna support, in order to do the atomic swaps and be able to swap in, in between them. So that's that common, functionality that all of them have, have to support. HTLCs are natively supported by the Lightning Network, and actually there's- Not much else, so you're kind of limited to HTLC anyways if you wanna, if you wanna swap to Lightning, in and out of Lightning. They have support on the Bitcoin main chain, they have support on, on Liquid, and they're interestingly also supported on all EVM-based chains. so we are currently also working on integration with Rootstock, which is a Bitcoin side chain, but, has a fully fledged, EVM, and there you can replicate, HTLCs as a, as a smart contract, right? So those are-- And how it works is, in simple terms, it, it, it has a two-stage process. so first there's a, I always call it like the lock-up process, so both sides basically send funds, lock them up, and then there's the unlock or claim process where, each side claims their respective coins. So imagine, for your use, for your, listeners to visualize that a little bit in their mind, you have like a lockbox, right? So you have this treasure lockbox, where both parties Where, put their Bitcoin inside. and this lockbox has the-- it's, it's, it's just closed with one key, with the same key, right? So the same key is closing the box for both transactions. So, in the case of Boltz, it's the user, for example, sending Lightning to Boltz, and Boltz is sending Liquid to the user. Both put the Lightning funds as well as the Liquid funds in the same box, close it with the same key. That's the key principle here, huh? So the HTLC is locked with" }, { "speaker": "kilian_from_boltz_exchange", "time": "16:39", "start": 999.03, "text": "Unlock process, basically the same key opens that lockbox and the assets are being swapped and go to the, go to the respective owners, right? So the key principle here is the same key." }, { "speaker": "stephan", "time": "16:49", "start": 1008.74, "text": "Gotcha. And that's what gives this concept known as atomicity, this idea that either both parts of the exchange happen or none of it happens, and that's the key idea here. So that's what people say, that's what makes this non-custodial rather than a custodial swap. so that can give people different qualities or different, you know, characteristics of the- The wallets and the services that they are using, and maybe that gives them more confidence in the services because they sort of know either it all goes through or none of it goes through. And so there's some, maybe some confidence that people get out of that, and so let's talk a little bit about the wallets that we talked, we" }, { "speaker": "kilian_from_boltz_exchange", "time": "17:25", "start": 1045.48, "text": "talked about the wallets before that use us, as an enhanced functionality to, to go, to go to different layers. Those wallets, they market themselves as non-custodial. They shouldn't market themselves as non-custodial if the swap service they were" }, { "speaker": "kilian_from_boltz_exchange", "time": "17:39", "start": 1058.99, "text": "Necessity for them for, to be able to integrate our API even, and say, hey, we are non-custodial, like 100% non-custodial. There's not bits and parts that are custodial that would be dangerous and, and difficult to understand for the users." }, { "speaker": "stephan", "time": "17:53", "start": 1072.59, "text": "I see, yeah. And so now let's just talk through the failure case, right? So people to understand like, how does, how do these, you know, the atomic part, how do we, how is it working if, let's say, there are certain cases where- Alright, so a quick example is maybe the user-- it could be going the other way, the user wants to make an on-chain payment to you in order for you to make a Lightning payment out to somebody else, but your Lightning payment, let's say, fails because maybe that user was trying to pay a node that didn't have enough inbound liquidity, and that's like, you know, a failure mode. So could you just walk through an example of like how does that work so that the user can get his coins back or the other way around in, in the Lightning swapping case?" }, { "speaker": "kilian_from_boltz_exchange", "time": "18:32", "start": 1112.31, "text": "Yes. so send lightning out, that's the crucial, that's the, the difficult case, and the other case is easier, we'll come back to that later. lightning payments fail for very, a lot of reasons, we know that, right? It's, it's just lightning. so if that happens, lightning payment doesn't go through, current, right now, oh, let's talk how we did it before. So before, what happened was the atomic swap actually had, either, like a claim path At the same time, or there's actually a time lock in there, a time lock path, that's how it's called on, on the Bitcoin, on the Bitcoin chain. So, when you go through the time lock, you have to wait a couple of number of blocks, and then you could claim back your Bitcoin. So it was an active refund process. Which, you know, UX wise isn't great, right? So basically users, if they use our web app or in the wallet, they had to wait, let's say, twenty-four hours until they could, could come back into the app, had to actively- Press a button, say \"Refund now,\" get it back to my wallet, or in the case of our web app, even put in a, an address where they wanna have their refund on. If they forget that or if they don't, it's really hard to communicate you have to wait until you get it back, and it's because of cryptography, it's not because of us holding the funds back. Now that's, yeah, you know, you actually said that was a real issue. That's why we upgraded to something called, Taproot swaps recently, we deployed in January Greatly improves, the UX, of, of refunds. so Taproot enables something additional for the technical listeners of yours. It's, it's called a key path spend. if you wanna learn more about it, and we actually have a blog post up at, at Boltz.exchange, you can read up on it. So a key path spend works, works, works differently in that it doesn't need to adhere to the, to what's already on the, on, on the Bitcoin blockchain with the, with the time lock. It actually can corporately, corporatively Transactions and broadcast them immediately, right? So in layman terms, that means the user and Boltz could just agree, \"Hey, we don't wanna wait, we wanna refund now. If we both cooperate and both sign our parts of the transaction respectively, we broadcast it, the refund goes, you know, it's immediately, right?\" so if Boltz is online And users online and both do this corporate, signing process, the refunds are actually immediately, and that's the UX we are betting on right now, and that's what wallets are upgrading to and implementing right now is actually, that they do that even under the hood, the user doesn't even necessarily know that, his or her wallet is, is s-is doing this corporate refund. So basically, say, \"Bam, bam, bam, transaction failed,\" \"Oh, that's, that's bad,\" but then I press the back button, and the moment I Because it's all happening automatically under the hood, the key path spent happened and, and the refund happened immediately. So, that's the refund process. It's active, we need the users' cooperation for that, but it's a necessity for the atomic properties to be kept so that only the user is control of the funds and not us, that's why it needs, active participation of the user." }, { "speaker": "stephan", "time": "21:42", "start": 1302.45, "text": "Back to the show in a moment. CoinKite dot com are the creators of Bitcoin security hardware, most notably the Coldcard. I use the Coldcard as part of various security setups of my own. It's a really versatile and secure device that you can use in a range of different setups, whether that is in single signature, whether you wanna use a passphrase, or whether you wanna use it as part of multi-signature or with SeedX, or there are just so many features that you can use on the Coldcard. The Coldcard is really good because you can use it offline and generate your Bitcoin priv Private keys offline without even phoning home, without connecting to a computer, if you choose, you can just plug it into the wall. Now, once you've done that, you can use the SD card to move information back and forth, such as your xPub or your output descriptor, so that way you can manage it on a laptop or a desktop, but while keeping the cold card offline. And so that's a really cool feature. I like using the cold card with software such as Sparrow Wallet. You can also use it on mobile with things like Nunchuk. The co- the cold has so many different features, and you actually learn a bit about Bitcoin while you're going through the process of learning how to use it. Over at CoinKite dot com, you can get a range of gear, not just a cold card, but things like the TapSigner or the SeedPlate, which is a metal seed backup product for your cold card, and all these other accessories like the BlockClock. So to get yours, go to CoinKite dot com, get your cold cards with a discount using code LIVERA. This show also brought to you by Nomad Capitalist. This is a Residence and citizenship for those of you who are looking for ways to get an alternate citizenship or residence to structure your tax affairs so that you can lower your taxes legally and also allow you to do things like invest overseas. I left Australia, as many of you know, because I was annoyed about high taxes, as well as the freedom, or the lack of freedom, given the COVID tyranny. But with Nomad Capitalist, they can help you strategize in terms of Understanding what are the different options, because the-- it may not just be one place that you're going to, it may be a combination of jurisdictions that you are using, and part of that is they, they can help you strategize in terms of what options are available for you and also for your business. And so I think they offer a really holistic solution, and they can help you strategize as well as help you implement that plan. Now, Nomad Capitalist is, working best for people with a liquid net worth above one million dollars. dollars, you can apply over on their website, that is nomadcapitalist dot com slash apply. So that's nomadcapitalist dot com slash apply. And now back to the show with Kilian. Yeah. And it's interesting that, you know, that's an example of Taproot adoption, right? We're seeing this protocol called MuSig two, which is underlying what you're using there. I had a quick look at the blog post of that, and listeners, we'll include that in the show notes so you can read about, read about it in more" }, { "speaker": "stephan", "time": "24:42", "start": 1482.11, "text": "So yeah, it's interesting to see that we're getting more Taproot adoption there, and as you said, that's the key path spend, so that's in some ways helping from a privacy perspective, or at least there's less here and there that you can kind of make about that. and then in the other kind of cases, that's where the user is using a script path, and that's where you're disclosing that particular script path, when you broadcast that on chain, so that's kind of exactly. So the script path is, is" }, { "speaker": "kilian_from_boltz_exchange", "time": "25:11", "start": 1511.25, "text": "always there as a base Back up, right? So in, in case, you know, we could just disappear or the user never comes online then, or not in time to do, this immediate refund. so in that case, the strict path always, applies and, you know, like the user can refund by the, by the strict path." }, { "speaker": "stephan", "time": "25:26", "start": 1526.1, "text": "Yeah, I see. and so- Let's talk a little bit about the actual fees here. So what are the bolts fees involved here, whether it's main chain or liquid fi-liquid fee, and if you could just explain a bit about the fee that the user will pay, will be paying there?" }, { "speaker": "kilian_from_boltz_exchange", "time": "25:43", "start": 1543.14, "text": "Okay, we take a fee, and it's, it's the fee for, for using the service. reasoning is, is, is mainly it's our capital. So when you do a swap with Boltz, it's always Boltz funds that are being used directly, not some other users. It's always our own funds that you, you swap against. We always swap counterparty, you may put it that way. so we have a cost, right? We have a cost of running the service, we have a cost of development, so that's, that's In general, they are cheaper if you're going from the chain to Lightning and a little bit more expensive if you go from Lightning to the chain, simply because we have an imbalanced volume. I hinted on that before, that we have a higher cost of, of, you know, managing our liquidity because more people are swapping from, Lightning to, to the chain. So going from, chain to Lightning right now is zero point one percent or one thousand ppm for the Lightning people, of, of your listeners and, it's po- point five percent, for the main chain and point two five percent for liquid going from lightning to the chain. yeah. So between zero point one and zero point five percent, depending on, on what you're doing, that's, that's the range." }, { "speaker": "stephan", "time": "26:58", "start": 1618.3, "text": "Gotcha. And so the- the liquid fee you mentioned is zero point two five percent. That's, that's if you are going from a lightning balance into liquid chain? Correct. Gotcha. Okay, yeah. And so just to, if you could spell out for people a little bit around what kind of fee savings some people are getting by using these, you know, these different swaps, because I think that's an interesting dynamic to explain. I guess let me, let me put this in context, right? So there are, some people now who are talking about in a high fee environment, right, with With all the spam, ordinals, whatever, whether it's going on, even in bull cycles, like we get these fee spikes, and at that time, to hit the main chain and use the main chain just a lot more, people would otherwise be paying a lot, and so that's where, now we're starting to see some people talk about this. I know BTC Sessions is talking about it, Francis Poliott is talking a little bit about using some liquid things. So if you could just explain from your perspective, or at least, you know, just from the user's perspective, where" }, { "speaker": "kilian_from_boltz_exchange", "time": "28:01", "start": 1680.6, "text": "Okay, so, the Boltz fee that I just described before is just one part of the fee. There's a second part that is, the chain fee, right? So in order for you to send on the chain or to receive, on chain, there's actually there are chain transactions involved. In the case of Atomic Swap, it's actually always two. So it's fairly expensive and it adds up, especially if you're using the main chain. so if you wanna do some quick math, there, it, you always have a cost saving, to put it really simple, to use the liquid side chain instead of the main chain if main chain fees are higher than one sat per byte. So that's, that's basically the math. so main chain fees had to permanently go back to one sat per byte if they wanted to compete with the, fees that you're paying on, on the liquid chain. So the Boltz fee is, is, you know, it is what it is, and it doesn't really, discriminate between, between the Is, is the important part that you wanna look at, and on the, on the, on the main chain, this can easily go up to being, you know, like, ten percent of your swap or twenty, thirty, depending on, on, on, on how much you're swapping, what the current fees are, but it's, it's significant. So it's, that's the only thing to remember, main chain fees are significant, and you really don't wanna use direct main chain swaps if you're doing, let's say, larger amounts, and you're probably, you know" }, { "speaker": "kilian_from_boltz_exchange", "time": "29:25", "start": 1764.76, "text": "Because the chain fees on Liquid are significantly cheaper, at the level of one cent per VIBIT, if you wanna compare it, to the main chain." }, { "speaker": "stephan", "time": "29:35", "start": 1775.02, "text": "Gotcha. Yeah. And so this is where, and I, I mean, I should just point out here, and I'm sure, you know, not that you're hiding this or anything, but just for listeners to be aware, Liquid is a different trust model, right? Like Liquid is like a multi-sig. Let's talk about it, yeah, yeah. You know, yeah. And we'll, we'll go People can peg coins in to liquid, and this is where people are talking about someone like Francis Pauliot, because he's running Bull Bitcoin, he doesn't wanna have a custodial balance, so he's talking about this idea of, hey, maybe people should be using liquid, or someone like BTC Sessions might say, hey, if I'm stacking, I might use liquid as an intermediary stage before taking it out on main chain. But while you're in liquid, you aren't, you know, you are trusting the eleven of fifteen, in a sense, to not rug you, and that To be fair, there are swap in and swap out providers, of which Boltz is one of them, and so that's, I guess, that's the main trust model that users have to understand, and so- I guess that, and this also comes into what we were saying earlier about this kind of what counts as an L2, what counts as a unilateral exit. So it's not a unilateral exit, but there are multiple swap out providers, and so I guess that's, you know, that's the important trust model aspect people have to think about. Anything you wanna add there on your side?" }, { "speaker": "kilian_from_boltz_exchange", "time": "30:57", "start": 1856.62, "text": "Yeah, don't put your life savings on, on, on, on Liquid or in any other layer two for, in, in that sense. So, all layers of Bitcoin are making a trade off, right? So nothing is as secure and as, decentralized as, as the Bitcoin main chain. Period. That's it, right? So your life savings should be in a cold main chain wallet, that's it. So, but you have to decide for yourself what are you comfortable holding on Lightning in a hot wallet, right? So that, that's the hot wallet risk. It's" }, { "speaker": "kilian_from_boltz_exchange", "time": "31:26", "start": 1886.14, "text": "The percentage of my net worth I wanna, you know, expose to. The same with liquid, there's no hot wallet risk, but you have, like I said, the, the risk of, of the federation, the, being malicious, or of being forced by some state, nation state to do things. you know, it's, it's a low risk, but there's a risk, right? The main chain practically doesn't have that risk. So, it's, it's a, it's up to you as a user, but in general in, in one of his, videos, go up to amounts that you are comfortable holding in an actual wallet. Yeah. So that's, that's the kind of, mental, mental model to compare to. If I'm comfortable holding a thousand bucks in my wallet, then it's a thousand bucks. If I'm comfortable holding, ten thousand bucks in my wallet, then it's ten thousand bucks. And once it's ten thousand Vox on, on, on Liquid, move out, go back to the main chain, put it in a cold wallet, but it's an intermediate step, you shouldn't have funds there permanently, especially in the first savings. That's, that's the idea. The same goes for the channel rebalancing use case, it's all intermediary, right? So it's an intermediate step, in, intermediate balance, and at some point you move, you move out again. That's the idea." }, { "speaker": "stephan", "time": "32:37", "start": 1956.7, "text": "Yeah. And so I guess the other question people might raise is this question of, what if the regulators-- and, and you mentioned this, right? What if regulators or the government goes after Liquid? They try to sort of say, \"Liquid,\" or they go-- they try to find the Liquid functionaries and say, \"Hey, Liquid functionaries, don't allow this person to peg out,\" or block this person from pegging out coins for whatever reason. They may say AML sanctions, whatever, of-- you know, they may give whatever reason to say this person's a Drug laundering, terrorists, whatever, whatever, whatever. do you see that as a serious risk or is it just more like, \"This is gonna work for now\"? Like, what, what are you thinking there?" }, { "speaker": "kilian_from_boltz_exchange", "time": "33:15", "start": 1994.88, "text": "Yeah, I mean, can it happen? Definitely can happen. The issues, this particular nation state would have, like, the trouble they would have is first finding the functionaries because, they are anonymous right now, so it's actually not public who of the federation members are the functionaries. w-what we can tell is all of them are, located in different jurisdictions around the world, so it would have be-- would have to be like a multinational organization actually. Enforcing, whatever they're trying to enforce, so it can't be the states alone, for example, doing that because, they would have to find, they would have to find a majority of, of the functionaries in the United States where they, you know, actually have jurisdiction. so, the, the goal of the liquid network is actually also to, to decentralize it more, to have it, you- To have it more decentralized in the sense that they're in, in even more countries, especially now in new countries where, where the, the law is actually favorable, of liquids, yeah, example, Asawa, Argentina, you know, all, all the countries that are, that are going a different route now Slowly probably move out a little bit of Europe and, and the US, like the classical West. that I think that's a very good idea. but it can happen. Stephan, who am, who am I to tell you it can happen? It's a risk, and that's exactly what we're talking about. what kind of the probability is, is not that high in my personal opinion, but it can happen. Yeah, definitely." }, { "speaker": "stephan", "time": "34:39", "start": 2078.68, "text": "Yeah, yeah, and I think it's fair to say that. I think it's fair to, just make sure You know, we talk about the risks of liquid, but at the same time, it's also fair to say there's a lot of these random shit coins or shit chains, like as an example, Tron or Ethereum, that are being used for massive amounts of stablecoin transfers today, right? And, it's also fair to say, like I, I believe, Tether, the corporation or the company behind it, has also been quite public saying, \"Yeah, they interface with the US government, right?\" So the US fa- US government is getting a look in to what- What's going on in Tether balances, as an example. And so hypothetically, I mean, the US government could go after TRON or Ethereum, right? Like they could do that. And so that seems to be-- that's the environment where, you know, we're operating in, the world, you know, people who are using stablecoins on various-- on, on these various chains, they're kind of using it in that way, but in reality, the real balance kind of sits with Tether, right? Like- And Tether, underlying that is, there's some US dollars in, in some bank account somewhere, and there's some US bonds or US government bonds that are being held by Tether, and so that's ultimately the trust model for some of those users who are using these different, you know, stablecoins. Now, Boltz, Boltz dot exchange is not using stablecoins, is' we're, we're dealing here more with just Bitcoin and Lightning and obviously, and Liquid Bitcoin, right? L BTC, which is like an IOU for Bitcoin. But it's an IOU held by, as we said, the eleven of fifteen multisig, which is distributed around the world. So just to make sure people are sort of understanding some of the trade-offs and the models there. Yeah, just to" }, { "speaker": "kilian_from_boltz_exchange", "time": "36:26", "start": 2185.94, "text": "let add on a little bit on, on your comparison you had with John, also you probably should compare it to, so the Lightning wallets, right? So, they're also, most famously still, wallet of Satoshi, right? So, it's just It's one custodian holding your cash balance, your spending balance that you have in this, in this Lightning wallet versus fifteen. I would choose fifteen because, you know, that something happens to these fifteen and that they can be forced to do malicious things is just significantly lower than this. One entity, right? So this, this one big honey pot. That, that's really, this is really dangerous. So I think the trust model is significantly better than having any, one entity being the custodian. I think that's, that's, you know, the metal comparison, we probably should do." }, { "speaker": "stephan", "time": "37:08", "start": 2228.38, "text": "Yeah, I see. And so, yeah, we'll see what happens, like if governments or the regulators go after some of the, you know, whether they-- I mean, maybe they would go after Tron or Ethereum first, right? Before they even go to li" }, { "speaker": "stephan", "time": "37:24", "start": 2244.27, "text": "In terms of fi- let's talk a bit about sizing as well. So here, in terms of the asset sizes or the swap sizes, what kind of limits are we working with? from looking on the site, I think it's liquid up to zero point one BTC. Can you just explain a little bit around the, the, the transaction limits you're using today?" }, { "speaker": "kilian_from_boltz_exchange", "time": "37:44", "start": 2263.95, "text": "Sure. on the main chain, we have a relatively high, minimum, swap size that depends on the current mempool actually, to make sure that we don't create anything near the, near the dust limit. so, the default limit is fifty thousand, satoshi. That's the minimum you can do on, on, on swaps involving the main chain. but it goes up as the mempool moves, right? So if you are looking at our side of Boltz exchange in a, in a high mempool, high The minimum swap size will be significantly higher, and, back in May, we had it like one hundred and fifty thousand satoshis, and folks were complaining that they couldn't do swaps because it was, yeah, it's just too small. on Liquid, this is significantly lower since, transaction fees on Liquid are reliably cheap, you, we, enable swaps down to one thousand satoshis. So in comparison, that's like less than a dollar, I think it's like fifty, sixty US dollar cents right now. so it is actually Buy coffee use case, that, that's kind of the, the, limit we wanted to reach with that. And with regards to maximum, we allow, swaps on all layers up to a quarter Bitcoin right now, zero point two five BTC is, is the maximum." }, { "speaker": "stephan", "time": "38:58", "start": 2338.1, "text": "Back to the show in a moment. Mempool dot space is the leading Bitcoin and blockchain visualizer. You can visualize Bitcoin, you can see the Liquid chain, you can also look at the Lightning explorer, and there's also a mining dashboard also to keep an eye on what's going on there. I use mempool dot space all the time because I like to keep an eye on what's going on in Bitcoin's mempool. You can see when the fees are high or low, and that is also really useful when you are sending on-chain transactions, because I like to use, the estimates that are And you can use that to make sure that you get your transaction into the next block or, with a good probability of doing that by using the high fee estimation. Or if you are a little more patient, you can use one of the other estimates. Over at mempool.space, they're continually rolling out new features and ways to visualize things. You can even search Bitcoin transactions by putting in the transaction ID, aka the TX ID, for that transaction. If you want to sign up for the accelerator program, that's over at mempool.space/accelerator. And finally, the lead sponsor of this show is Swann Bitcoin. Over at swann dot com, you can buy Bitcoin, you can learn about Bitcoin, and there is also a Swann Bitcoin mobile app available on Apple iPhone or on Android, so you can send in your dirty fiat using ACH or with wire, with a wire, and you can buy Bitcoin and also learn about Bitcoin. There are instant smash buys, you can purchase a lump sum, or you can set up an automated recurring savings plan or Bitcoin purchase plan. And this is a great way to deal with the volatility of Bitcoin by just regularly accumulating some every week or every month at an interval and in an amount that you choose. Swan makes it really easy to learn about Bitcoin with a range of content and material, things like free books, free courses, free podcasts and newsletters. There's so much there that you can learn. So with, Swan, for example, if you go to swan dot com slash free book, you can get Jan Pritzkir's book, Inventing Bitcoin, for free. So go and sign up. Stack your sat over at swan dot com. And now back to the show with Kilian. I see. Yeah. Okay. And so at current fiat prices, I mean, as we speak today, it's about sixty-nine thousand. So, you know, I can't do the math. Yeah, yeah, quarter, whatever a quarter of that is. Quarter of that is, yes, yes. Yeah. You know, but, so the other question people might have is, hey, what if the liquid chain fills up, right? Like, what would happen then? so, I mean, a typical Bitcoin block today, nowadays, in terms of on-chain transactions, roughly three, four thousand transactions per block, but Liquid has a different, again, different model. It's one minute block times And, I believe it's, smaller block size. Yeah." }, { "speaker": "kilian_from_boltz_exchange", "time": "41:45", "start": 2504.95, "text": "there we're testing around a little bit, but it's going back to four megabyte, like the same, same as Bitcoin. Oh, I see. Four, four million" }, { "speaker": "stephan", "time": "41:50", "start": 2510.48, "text": "units or whatever, so yeah." }, { "speaker": "kilian_from_boltz_exchange", "time": "41:52", "start": 2512.0, "text": "Yes. So," }, { "speaker": "kilian_from_boltz_exchange", "time": "41:56", "start": 2515.5, "text": "To sum it up, the capacity of, Liquid right now as is, is exactly the same as the main chain, even though they have, faster block times of, one minute, yeah, of one, one block per minute. And by the way, it's exactly one minute, so it's, it's not like statistically in Bitcoin where it can vary like a lot back and forth, it's always exac-exactly sixty seconds. So you can actually right, Liquid has" }, { "speaker": "stephan", "time": "42:18", "start": 2538.18, "text": "no mining, yeah." }, { "speaker": "kilian_from_boltz_exchange", "time": "42:20", "start": 2539.92, "text": "No, my good. Exactly. why, why is it the same? because, we are using something called confidential transactions on Liquid, and everyone is encouraged to do so, which hides the, transaction, the, the asset. So you don't know if it's LPDC or USDT or another asset, which exists on, on, on Liquid, and they hide the amounts. So in order to have this privacy gain, there's a lot of cryptography involved to, to actually blind that, that's how it's called, to hide it The transaction be roughly ten times the size of, of a regular transaction. so ten times the size of the transaction, but ten times the amount of blocks with the same capacity equals same transaction throughput than the main chain. So Liquid right now has basically the same scaling limit as, as Bitcoin, which is a lot, you know, Liquid has- to attract that amount of transactions permanently for a mempool to even develop, yeah? but after that, I, I think Liquid is, is much better positioned, to, to further scale up, namely increasing the block size, because it's just this limited amount of entities that need to agree to do so, and also the amount of entities that actually run a full node and, you know, validate all transactions is, is limited. It's not the same design goal as on, as on the main chain where we want everyone with a Raspberry Pi, you In the basement to be able to, to verify the Bitcoin blockchain, that's not the goal of Liquid. So I think it's fair to say that if that happens, meaning Liquid is very successful, we, we would see, adjustments like with the block size or even blo- block, speed increases, In a matter of weeks probably, or even shorter, because it's just this small amount of entities, number of entities that need to come to a consensus and decide to do it. So it has the same, it has the same scaling limit as, as Bitcoin. It's also blockchain, it doesn't, you know, scale to infinity, but it is much more flexible on what you can do." }, { "speaker": "stephan", "time": "44:15", "start": 2654.87, "text": "I see. And so generally, these fifteen functionaries, typically they are businesses, you know, and it's easier for, you know, professional staff to operate this kind of liquid node. So for their, from their perspective, raising the block size isn't as big a deal, so that's one argument I see from the liquid proponents. The other one I see is they say, \"Well, we could have Lightning on top of Liquid.\" And so that might be another-- maybe that's like another level if there's a lot of Liquid, if there really is a lot of Liquid use." }, { "speaker": "stephan", "time": "44:44", "start": 2684.21, "text": "To quickly and simply explain that trust model for a new person, right? So, yeah. You know, but at the same time, as we, as we were coming back to before, it may be that a lot of end users don't actually have to bother with Liquid, it's actually their service providers who are gonna use Liquid, whether that's, you know, Bull Bitcoin or, I believe even Jack Ma, who's mentioned, Strike, were playing around with the idea of using this kind of liquid swapping to save fees on their back end and maybe they pass on On some of those fee savings to the end, you know, user, the everyday, you know, retail user. So I guess that's, where some of this stuff may go, and we're seeing also Aqua as an example where They're kind of like a, almost like a moon wallet, but using in a liquid base, right? So the idea is you have like an L BTC balance, and you're using, you know, and I, as I understand, they're using Boltz dot exchange in the background to do these liquid, lightning swaps. So as an example, in your balance, you think you've got, whatever, a hundred dollars worth of L BTC, and you're paying out a lightning payment for ten dollars as an example, and so really what's happening in the background is they're kind of Boltz exchange, and then you are making that Lightning payment out so the user can buy his coffee or whatever, so, yeah, so I guess one, you know, one criticism people have, as we've been talking about, is this idea that, look, you can't scale a blockchain with a blockchain, right? Like it just, you know, it doesn't work. But maybe the answer would just be it's more for the service providers at that level, and like you said, raising Block's eyes or Lightning on top of Liquid. But, actually one other question while we're, while, while we're talking about, you know, some of these wallets like, as an example, Aqua, when the user is making an LBTC swap out to pay Lightning, Liquid has one block, one minute block times, and I believe two minutes are required for confirmation Does that mean on your side, you're taking a zero confirmation, and you're just kind of taking a bit of trust there? Because like, if they wanna make an instant lightning payment, they can't just like, be there at the coffee merchant and be like, \"Oh, just wait two minutes, I'll make the payment,\" you know?" }, { "speaker": "kilian_from_boltz_exchange", "time": "46:53", "start": 2812.78, "text": "I, I had heated discussions with Mr. Sampson about this, because he wanted exactly that use case, and I was like, \"Okay, I get what you, I get what you want, but let us look into it,\" and Safe. So that's a major difference to, to the main chain, you know, with mempool full RBF and, all that. Most miners supporting it right now, it's actually, it's simply, you can't accept zero-conf anymore, period, right? If you do, it's a huge risk you're taking. so in Liquid, it is designed to, stay safe and, for your technical listeners, it's basically based on the fact that there's only one central mempool, not like on the, on the, on the Bitcoin main chain where One mempool, once the transaction is in there, we can actually get a confirmation from one of the functionaries that the transaction is in the mempool and will be included in the next block, right? So that gives us, from our perspective, we are-- that's good enough for us to say, okay, we accept it, it's in the mempool, and immediately pay off the lightning and, you know, coffee doesn't get, doesn't get cold. So, we are, we are, we are relying on that, we are part of the federation," }, { "speaker": "kilian_from_boltz_exchange", "time": "48:09", "start": 2889.08, "text": "Would, were to be changed, you know, we, we would have a say in this, and we don't want it to be changed because it enables all these use cases like you ex-described with Aqua. so that, that's one positive thing about, about, about Liquid, that you have this design, like the freedom of the design space, you know? and Serokomp is, is a major building block." }, { "speaker": "stephan", "time": "48:27", "start": 2907.39, "text": "I see, yeah. and so while we're talking a little bit about some of this, I think It'll be interesting to see, whether there are more integrations with other services and wallets, right? Because, as we've been having, you know, as we've been saying in this conversation, it's often not that the- Let's call it retail end user is the one using Boltz. Oftentimes it's built into a service or it's built into some kind of, you know, there's like a service provider or a professional level person who is actually the one using Boltz or kind of more actively doing it while the end user is just kind of, it's happening in the background without him needing to know." }, { "speaker": "kilian_from_boltz_exchange", "time": "49:04", "start": 2943.86, "text": "Yeah. integration, well, for end users, we have a couple of more integrations going on, and namely, I wanna mention the, the great work that Bolt Bitcoin is, is putting into, into the inte-integration with Boltz. so they're building, let's call them libraries or a software framework, for others, others to build on and, to, to enable more Agua-style wallets in the future in a very robust and in a very, you know, production-grade way. That's what they're currently, currently working on. Shout out to And, Aqua and a couple of-- we actually have been contacted, by a couple of more wallets, which want to integrate the exact same model, to use this library, right? So they're all, you know, counting on Polkadot to, to do their job. with regards to professional services, I think the best- Use case to mention is maybe merchants, that's something we, we have two integrations going on right now, namely, Septrite and PTC PayServer. So as a merchant, you, can choose, or right now, if you wanna accept Lightning, you basically have to have a Lightning node, or you need to use some custodial service, you know, like, I don't know, or host it on Voltage, and which is all, it's all maintenance, right? So if you won't wanna avoid all of that, definitely don't wanna get into the liquidity maintenance rebalancing game, but still wanna accept Lightning, we ac-- we'll actually offer, a way to do so, and that" }, { "speaker": "kilian_from_boltz_exchange", "time": "50:31", "start": 3030.57, "text": "is" }, { "speaker": "kilian_from_boltz_exchange", "time": "50:35", "start": 3035.33, "text": "And then swapping the amount that the user pays into, for example, a liquid wallet, non-custodial, right? So that, that wallet can actually be a cold wallet, right? So that's, that's, an additional professional use case that we wanna enable, first on ZapRight because it's, it's, it's pretty easy, we already have a swap client ready for that, for BTC Pay, eventually as well, we'll, we, we are currently working on integrating a swap" }, { "speaker": "stephan", "time": "50:59", "start": 3058.6, "text": "client into BTC Pay. Gotcha." }, { "speaker": "kilian_from_boltz_exchange", "time": "51:04", "start": 3063.87, "text": "And would Yeah, yeah. plug-in, wouldn't need extra development, it's only C# and we're not very familiar with that, so, we'll use an existing, an existing client that we have and plug it into, an internal API of BTC Pay. but it will be, in, in, yeah, you could say it's like a plugin, yes." }, { "speaker": "stephan", "time": "51:22", "start": 3082.18, "text": "Yeah, interesting. And so, I mean, that's another thing where, you know, those of us who are, who want Bitcoin adoption, we want more people to use Bitcoin and be able not everybody is a technical wizard who can figure everything out and do it all themselves. They need these services and apps that make it possible for them, or otherwise they're gonna end up going custodial or they're gonna end up yeah, not using Bitcoin at all, not accepting Bitcoin. And so, you know, I think it's a, it's a challenging thing because in some ways, I can understand, you know, there's the purest view of like, \"Oh, \" Liquid isn't Bitcoin and it has different trust model trade-offs, or, are people being honest about what is the right way to explain this, and explain the, the trust model of that? but at the same time, you have to think most people today are using credit cards and fiat and, you know, PayPal, they're not even using Bitcoin at all, they're not even offering the option for people to use Bitcoin at all, and so- It has to be tempered against that also of like, how, you know, realistically, how do you move the ball forward to get more people actually using Bitcoin? Of course, we want as many people to, you know, not your keys, not your coins, and have their hardware wallets and their multisig and all of that, but, in terms of You know, being able to have service providers who can offer a Bitcoin option for people, I think that's, that's where something like this is important" }, { "speaker": "kilian_from_boltz_exchange", "time": "52:55", "start": 3175.34, "text": "I won't actually call all builders out there, you know, we are just one, one part of the builder community that is building on Bitcoin, especially in Lightning. Be more pragmatic, right? So that's, that's a little bit like, don't, don't be that, like, hook on definitions and, and be that hard on, on, on, on being, like you said, like having the purest solution possible, because the purest solution possible right now is just not in the reach of the regular users, mostly, right? And that's mainly because of fees or because of complexity" }, { "speaker": "kilian_from_boltz_exchange", "time": "53:25", "start": 3205.4, "text": "And see, for example, Liquid as, you know, explain the trade-offs, make, make sure users are aware, and there should be much more education out there to, for everyone to be aware of what the trade-offs are. But it's ready, it's production grade ready system that you should use. It's there for you to use if it enables a much better UX for most of your users, right? Not for all use cases, but for those where it does offer a better UX, use it. You know, that's, that's basically the, the approach that we are taking, at Boltz." }, { "speaker": "stephan", "time": "53:54", "start": 3234.42, "text": "Yeah. So, I mean, for me, I wouldn't call Liquid a layer two, but I'm okay with, you know, people using it. Like if they want to use it, you know, it's choose your trust model, right? but I think the real challenge for us as well is that Let's be honest, right? Like people like you and me and listeners of this show, we tend to care about these things. The average user isn't gonna read a readme, the average user isn't gonna like, they're just gonna kind of click through, they're just gonna go next, next, next, next. Let me just use whatever, and then deal with something if there's a problem that comes up later, okay, now let me figure it out. And to some extent, I can't blame them, right? People are naturally lazy, they'll do the minimum possible, they'll use At the same time, you know, people should just use, use what works, use, use the trust model, and understand that most people today are using fiat and not even having a Bitcoin option. So, you know, I think it's important to have a certain level of pragmatism, as you said, So, I think those are kind of the key questions and key points I wanted to touch on. Any, closing thoughts from your side?" }, { "speaker": "kilian_from_boltz_exchange", "time": "55:02", "start": 3302.37, "text": "yeah, layer two, I mean, I, I'm happy to find a, find a different definition, for, for the other layers we are at adding right now. I think Francis came up with a different term, I forgot right now what, what, what, what he did. by that definition, Lightning is the only layer two we, we have right now. We need more layer twos of The unilateral exit, I totally, totally agree on that. but apart from that, a bit like the vision of Bitcoin scaling in layers, in my opinion, it's, it's coming to fruition right now, right? It's happening, and that's, that's really, really great to see. It's being, the different layers are being used for different things. let's use them. Yeah. Actually, one other" }, { "speaker": "stephan", "time": "55:43", "start": 3343.29, "text": "question, just while we're here, and I think this will be interesting as well, is around just fee dynamics, right? Because I This, the spam from last year was what really drove a lot more usage of, swaps, and that's what spurred you on to actually go and use Liquid, even if, even if I don't have a personal account, you know? Yeah. So, do you wanna just spell out a little bit of your thoughts there on operating in a high fee environment? Can you just spell out some of the, aspects there, because I think you'll have something interesting to say there?" }, { "speaker": "kilian_from_boltz_exchange", "time": "56:13", "start": 3373.35, "text": "Yeah, it, it broke everything, so that's, that's, that's how I could summarize it. So for us, it was incredibly difficult, especially can refer back to the fee hike we, we saw in May 2023. that fee hike was extremely special in the sense that, that it just continued hiking, it never came down, it wasn't like this, you know, going up and down, it was just one direction up for Basically is you put a transaction in the mempool and it just never, it never gets mined, and you bump the fee, it never gets mined, you bump the fee again, it never gets mined, and you put in more capital and more capital and more, in our case, swaps going on, more transactions in the mempool, that was- That serious that we actually had to, shut down operations for like two days until the mempool, you know, did calm down and we got more of our, of our transactions mined, because in the end, what happened in simple terms is all of our capital was in the mempool. that isn't only an issue for us, that's an issue for any, any, any service provider, and I think, I think that, that can happen again. So if you move your, some crucial parts, at least as a backup plan, use it as a backup plan to a different layer that you have all the technology and everything ready to be able to continue operations without relying, you know, too much on the main chain. That'd be great, you know, that's, that's where we're, where we want to be, where we want to be going, and I think, professional businesses are becoming aware of that issue and they are, they're searching for solutions. So, And there you have the layers to go. So basically, make your pick, yeah, yeah, and as," }, { "speaker": "stephan", "time": "57:46", "start": 3466.43, "text": "and as you said, I think that's what spurred, a lot more use and, i-arguably spurred your use of Liquid or to, support Liquid also. And that was what drove a lot of users who are now saying, \"Hey, yeah, actually, it's not gonna be keeping my life savings or a large business balance on Liquid, but maybe it's just an intermediary, let's call it like a staging area. Maybe that's an area where people Use that trade-off while, you know, having open eyes about exactly what liquid is. It's not the same as Bitcoin, but it can be useful. and so let's leave it there. Listeners, check out the, show notes. I'll put the, links there, but it's basically Boltz with a Z dot exchange. And Kilian, thank you for joining me today." }, { "speaker": "kilian_from_boltz_exchange", "time": "58:29", "start": 3508.61, "text": "Thank you for having me. That was correct." }, { "speaker": "stephan", "time": "58:31", "start": 3511.13, "text": "And finally, I hope you enjoyed the show. Get the show notes at stephanlivera dot com. Thumbs up if you liked it. That's it from me. Thanks, and I'll see you in the citadels." } ] }