{ "episodeId": "SLP601", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "liquid_with_tankred_hase": { "name": "Liquid? With Tankred Hase", "role": "guest", "tag": "LIQUID?" } }, "segments": [ { "speaker": "stephan", "time": "00:11", "start": 11.11, "text": "Hi everyone, welcome back to Stephan Livera podcast brought to you by Bold, the best place to buy and save Bitcoin over at getbold.io, that's for the American listeners. Now joining me today is Tankred. Tankred, I've known in the, you know, he's been around in the space for a while, he's worked at Lightning Labs, he was, had a, had a stint at Swan. Bitcoin, now, doing a few different things and recently came out with a wallet called StashPay. And, yeah, so first of all, welcome to the show," }, { "speaker": "liquid_with_tankred_hase", "time": "00:38", "start": 37.67, "text": "Tankred." }, { "speaker": "stephan", "time": "00:42", "start": 41.76, "text": "Right, so let's just kind of chat overall about where you think things are in terms of Bitcoin, Lightning, Liquid development, just, any sort of initial, thoughts on where things are today? Sure." }, { "speaker": "liquid_with_tankred_hase", "time": "00:55", "start": 54.68, "text": "I think, I think we're actually in a really exciting place. I think for the longest time, when, when we, when we started, Lightning Labs, like, I started there January twenty, eighteen, was, we were still on testnet, we were feeding chickens on POYO feed. Like, not much was going on, there was not much activity. The, the basic user experience hasn't been, hasn't been solved at that time, and this is before like Breeze and, and, you know, Strike and all these other great user experiences that we have now. And I think, I think we're in a really good place, not only in terms of the, the UX which is getting better and better, obviously we still have a lot of, problems that we need to solve. But also what, what really excites me these days, are things like liquidity. We're getting a lot of-- there's a lot of experimentation going on, especially now with Liquid, and, before that, obviously LSPs and, like now, Fedamins as well. So we have like different ways to share UTXOs, some of them have different trade-offs around trust, security and privacy. But generally, I'm really excited. I think, I don't, I can't remember a time where we had as many, Options, for the, the medium of exchange, part of Bitcoin." }, { "speaker": "stephan", "time": "02:08", "start": 128.24, "text": "The other question that to me often comes up is, is there enough of a market to support medium of exchange products yet? I'm curious what you think." }, { "speaker": "liquid_with_tankred_hase", "time": "02:17", "start": 136.67, "text": "Yeah, that's, that's really interesting. I've been thinking about a lot this too, thinking about this a lot too, and obviously we're still in the monetization phase of Bitcoin, we're still very early, this thing is still being understood by the, the vast majority of, of basically the, the global population. Some numbers that are always being thrown around, and I'm very s-skeptical of, of any of these numbers, is like, I guess we're at a few hundred million users, holding Bitcoin. I don't know if that's true, but I think, I think it's safe to say we're at the, we're at the very beginning of this thing monetizing, of it being understood as money, and obviously, we all know the different, you know, parts of it, stored value, medium of exchange, unit of account. I think we're still ways away from Think in sats already, like, I think if you go to El Salvador, go to Bitcoin Beach, you'll have a lot more people having made that mental shift. But like in general, like when you're doing, like as I, I've been doing, I've been receiving payment in Bitcoin, for my coaching business, I, I was like intentionally going through that pain because I knew that the tools weren't really there yet, the, the invoicing, the accounting, and, and also the, the connection with the wallets, like all that is still very early. But I went through it nonetheless, 'cause I wanted to like learn what are the pain points and because I do believe, and I really, fundamentally agree with Roy here, like Bitcoin is peer-to-peer money, right? You know, it's great if we can store, value in it and we can save for the long term, that's really important, especially now with, with really high inflation rates, basically all across the world. But, I think it, it would be more valuable for the world if we could just transact in it, and I think Technical problems to solve, a lot of user experience, problems to solve. So yeah, but I think we're really early, and I think what really gives me optimism is, is those like small Bitcoin hubs like, you know, El Sante in, in El Salvador. Then there's, Bitcoin Jungle in Costa Rica. There's Madeira, which, I've been to, several times now. You're seeing lots, lots of, not lots, like you, let's say, a, a handful of businesses, you know, on the island Bitcoin, like we went to a pharmacy when I was there in Madeira, like we could pay with Lightning and Bitcoin, on chain and Lightning. So yeah, obviously there's still, like, if you're, if you're talking to the, the kind of on the ground, let's say the local staff who has to then, you know, figure out, get out that app or, or, receive payment, some of those people are still like struggling, but in general, like, the tools are getting better and better. So I think we're still, like Because it has the most, yeah, it can have the, the, the most positive effects around privacy, especially like, you know, the, like basically having cash in a private digital form, and I think that really excites me. That's why, I guess, I've always been drawn to, to Bitcoin, because I just came in from like the privacy side." }, { "speaker": "stephan", "time": "05:20", "start": 320.23, "text": "So you mentioned some, let's say, technical issues around people being able to earn and spend Bitcoin today. What do you see as the big issues that- That are yet to be solved. Is it, you know, the accounting hurdle? Is it the capital gains tax thing? Is it more of a technical hurdle? Is it, you know, LSP fees? What, what would you say are the big You know, the big offline receive, what would you say are the big ones for you?" }, { "speaker": "liquid_with_tankred_hase", "time": "05:46", "start": 346.02, "text": "Obviously, depending on which jurisdiction you're in, capital gains is a huge, point of friction. Like if you're in the US, obviously, theoretically, you know, when we're at a Bitcoin conference and we're, we're buying, you know, like a, like a, like a drink, a coffee or something, with, with Lightning, like theoretically you would have to, like, you know, document that. Here in Portugal, we have a similar, rule Once anything, after that is, is basically has zero capital gains tax. So if you, like, if you have, let's say saved, over the course of one year, and then you can basically use that to, to spend, and then you don't have to think about it so much, you still have to kind of document, and the, the tooling still needs to be there, but like the, the mental burden isn't as much because you don't have to think about it. And then obviously the, the other extreme is places like El Salvador, And, and you don't even-- there's like not even a time limit, it's just always, tax-free to, to spend. That, for sure, I think is a huge mental barrier for people because, especially in the US, a lot of people are-- when I listen to people talk about Bitcoin in the US, they, they talk a lot about it more of like an asset, like, especially, you know, Michael Saylor is very, known for this, and I think a lot of it has to do because of that capital gains friction. And if it We'd be talking a lot about it more like, like pe-people, if you talk to El Salvador, they probably, see it less of an asset, they see it more as, as, you know, money. It's, it's just money. And so that's definitely like, on, on the mental side, and then obviously on the technical side, yeah. a lot of people are using custodial wallets because traditionally, there has been the liquidity challenge, on the lightning side, that if you, you know, if you have a, a non-custodial, a self-custodial, lightning wallet on your phone, you have multiple challenges there. if you're using one, like, like Phoenix or, or, or any of these, which, by the way, I all, I love all these wallets, I use them myself. I, I think I have like, Just to stay up to date with what people are doing, but like the, the, the, the big friction there is obviously liquidity, right? And also offline receive. When I, let's, let's say, Phoenix has kind of solved the offline receive in part, like so you- The app is able to receive a payment with a push notification, but still if the, if the phone actually doesn't have an internet connection, that still doesn't work. So on the offline receive part, there's still, there's still work that needs to be done on the protocol layer. And, you know, people like, Microlo has brought a great proposal with, with asynchronous payments, which I, I believe is making, LDK is making great progress on that. and, but in general, like, that would require Bolt twelve and, and PTLCs and, and several other things, where if we're realistic, like the timeline for that to be broadly deployed is, is still a bit out, so- That kind of leaves obviously the liquidity problem for these LSP based wallets is if I don't yet have a channel open to my phone between the LSP and me, I need to, pay for an unchain transaction. And this is, this is what I basically, bumped into when I was, using, Bitcoin to receive payments for my coaching business. clients, like I would, I would send them an invoice with Zapright. I love Zapright, by the way. obviously I would have to copy and paste the on-chain address, and then they, they could pay me because, to get paid asynchronously with this, especially with this invoicing user experience flow, on-chain works the easiest, and also interestingly enough, because Lightning LSP-based wallets have this, on-chain fee when you open a channel, but also every time you receive, if you're like a, a user that has, is very heavy on the receiving end, like a, let's say Most small businesses like myself, I like when I send the invoice, I tend to be more on the, the receiving side. So I will every time I receive a payment, if I had used like Phoenix or, or Zeus or any of these LSP-based wallets, I would have to pay for not only the about one percent, Fee that the, the, the LSP charges me for, for routing, but also, and liquidity, but also the on-chain transaction to splice in, so basically to, to add capacity to the Lightning channel between my phone and the LSP. So This is where I basically said, \"What's, what problem are these apps really solving if we have to pay the on-chain transaction fee anyway every time we receive?\" You know? Like, what-- Like, I, I get it, like there's technical constraints, but like if we actually then use these tools, I, I personally ended up going back to on-chain be-- obviously because of the liquidity, The liquidity fee being, like, the one percent, being added on top of the, the on-chain transaction fee, but also the async, payment, the asynchronous offline receive part of it. So yeah, and then we can, we can talk about, Liquid SDK and, and, and StashPay and all these things later, but those are basically the fundamental, barriers and pieces of friction right now that I see on the technical side. Yeah." }, { "speaker": "stephan", "time": "11:16", "start": 675.85, "text": "So let's just walk that through just to make sure everyone can follow along. So as you were saying, as an example, if you use Phoenix today, typically there's a one percent inbound fee if you don't already have capacity in the channel on your side. And so basically what's happening there is they are either opening a channel to you or doing a splice transaction, which means you're going on chain Larger. Now you're paying a fee for that, both the on-chain fee and obviously the liquidity fee that you're paying to Async in that example, but you'd probably pay similar with Zeus and others. And so I guess what you're getting at there is this idea that You know, let's say you're receiving a payment for your services, if you didn't already have enough capacity, and especially if the payer doesn't already have it in Lightning, then They might be paying you on chain, but then you're also having to take an, like a, a splicing fee and an on-chain fee at that point as well, because maybe it's, especially if there's, you know, a lot of, spam in the chain and all of a sudden, spam in the mempool per se that, you know, it's costing a lot to hit the chain. And so I guess that's kind of one thing. Now, arguably, now I'm curious to get your view on this, because maybe that's like a- A startup problem, you know? Like once both parties have kind of built up enough of a lightning balance and they're just kind of spending and receiving and they're staying in lightning, they're not having to hit the chain, then maybe that's not as much of a problem. But for now, because most people aren't on Lightning and Lightning native right now, because even now, a lot of Bitcoin people, they might keep their larger balances on chain, which is fair enough, they might not, they might not wanna keep, you know, larger amounts in Lightning wallets or in hot wallets, but, I guess That's how I'm seeing that issue, right? That it might be, you know, maybe longer term, once lots of people are on Lightning with a decent balance, you know, on both sides, the payer and the receiver, then maybe it's not as much of an issue. But I guess to, to your point as well, it also matters if you are, let's say, a net payer or a net receiver, because if you're a net receiver Or you're kind of receiving a lot more than what you're paying out, you're gonna have to be continually paying a channel fee or a splicing fee or on-chain fees, and if chain fees are rising, you know, over time, then that can also be an issue, won't it? Wouldn't that also become an issue?" }, { "speaker": "liquid_with_tankred_hase", "time": "13:38", "start": 817.99, "text": "100%. I mean, you touched on a lot of good points there. The, the one is obviously, yeah, I can, I can kind of like, buy, inbound liquidity, like basically to kind of speculate on my I can do that with Phoenix, I can do that with, with other wallets. but that also has a cost, right? Because, the, the, the LSP then has to allocate more capital to my channel, which obviously, you know, there's, there's a cost to that. that capital could be allocated somewhere else, so I would have to pay a fee, which means I basically then have to consider, okay What's gonna be my revenue this year? It might fluctuate because, you know, the business environment might change, so I may either overestimate my, my inbound liquidity or, or underestimate. So I tend to like in practice ha-have not done that. I basically have said, \"You know what? Right now, especially the, the unchained fees are still low enough so that you don't really have to care as much.\" But I'm, I'm definitely, I'm, I'm looking ahead. I, I just, I think, I do believe like Bitcoin will become global money and we, we will have a large part of the population wanting to, to use it that way, and I believe on-chain fees will just not be feasible for the regular person. So the way that I think about it is like The, I like that, Johan at Lightning Labs, he had this saying, \"The chain is lava,\" and I love that, 'cause like, you know, it's like kids, kids, try to avoid the floor, and they say the floor is lava. And that's kind of how I try to think about it, is like, how can we avoid the chain as much as possible? Like, what can we do as engineers and also as, like, as designers and as, as like, people building products to avoid that for users as much as possible? like a hundred percent self-sovereign solutions are awesome. It's great that they exist, and I think it's really important that they exist, and they, they will always have to exist because there's gonna be certain environments where you just- You have work in really tight constraints where you can't really trust as much, but then there's environments where you actually, you, you might be able to, to, you know, leverage trust. And, I think this is where, where solutions like Fedamint come in, where you're leveraging local trust, almost like local capital. Those, like, if you have really good relationships in your surroundings, like family and friends, that is like, that has value, and there's, there's incentives there, that basically allow you to then leverage that to- To share, UTXO costs. So I, I think, I think this, and obviously, Liquid is, is another one that's kind of like this global federation. But I personally believe, or I suspect, that we will, as we onboard more and more people, right now we're in the very luxurious position where we don't have to care, but the moment we do have to care, we're, we're going to be forced to make trade-offs. And especially as, as like, let's say you're a small business, you're a digital nomad, you Countries, it's really unclear, okay, what's your jurisdiction, where's your business based, and you might not yet have like a, a fixed, you know, you, you might have like a, an LLC somewhere that you operate through to limit your liability, but you might not really have, get a bank account in that jurisdiction yet because, like for instance, in the US, it's, it's difficult to get a US bank account even if you have a US entity if you're not a US citizen, which, the US is great to do business in because it But if you, you're not a citizen, it's, it's, it's very difficult because the banks will look at you and say, \"Well, you know what? To us, you're basically a compliance risk. It's not worth us to, to like, take on that, that, you know, additional overhead.\" Just basically as a, as a, as someone who, who ha-- like operates in an international environment, oftentimes you're forced to use fintechs like TransferWise and Revolut, and, that obviously, obviously comes with trade-offs So I think as we kind of move into like a high fee environment, and that's kind of the, the assumption I'm operating under that, like, I believe we will reach that and, and, and I think, we're not that far off, then we're gonna be-- Some people will start using Fedimits, right? they will set up these, like, there's already a few, around the world which are kind of-- It's still early, but I think- We'll see more communities like just spin up a local community bank, or there's gonna be, people that say, \"You know what? I'm a, I'm a digital nomad. I don't really have, like close ties to any certain community, but I might be fine to, to, to, you know, trust the liquid, network with, with my spending money for my business, right? Because if, if, if I can basically compress, my fees by leveraging these trust layers, that means I can basically lower my- my, my cost burden" }, { "speaker": "stephan", "time": "18:40", "start": 1120.02, "text": "for my business at the end of the day. Back to the show in a moment. This show brought to you by CoinKite dot com, the creators of the best Bitcoin hardware security devices such as the Coldcard Mark IV and the new Coldcard Q. Now, we use Bitcoin hardware security devices to keep our keys offline, our private keys offline. Now, the way these work is you can do that setup, write down your twelve or twenty-four words on those, the seed word cards, and keep that secure. 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For listeners in the US, Bold lets you secure your financial future with complete peace of mind. mind by integrating a low fee Bitcoin only brokerage with next gen multisig vaults. With Bold, you can smash buy Bitcoin or set a DCA plan for only zero point nine nine percent fees and seamlessly deposit the Bitcoin direct to your Bold Vault. The Bold Vault is a two or three collaborative multisig where you hold two keys and Bold holds one as a redundant backup protecting against loss or theft. You can use Trezor, Ledger or cold card hardware wallets to spin up a Bold Vault in just a few minutes and the Bold Vault is the only collaborative custody Vault available with zero monthly fees. They're also offering zero fees on your first ten thousand dollars of Bitcoin buys and twenty five dollars of free Bitcoin when you buy a hundred dollars of Bitcoin or more. Try Bold today and upgrade your stacking experience over at getbold dot io. Yeah, so let me, add to that. I think what we, I mean, the elephant in the room as well, we should just say, look, I think a lot of people will just use custodial, right? Not saying we like that, but that's just kind of the reality, right? So even if you think about, let's say Lightspark, they've, they've been doing deals with large, you know, banks and providers in like, I think they did one with Mexico, with a Mexican company who has like ten million users, they did one with a company out One element, but then yeah, you've got FedMeant, and then you have, let's say, people who might use a liquid kind of model, and then of course, people who can afford it, they can just use the chain or use Lightning natively, right? Which obviously that's great, we want more people to do that, but we know realistically the number of people who can realistically, you-- be their own lightning bank, let's say, is probably, you know, ten to fifty million or ten to a hundred million, something in that range, and really," }, { "speaker": "stephan", "time": "21:54", "start": 1314.14, "text": "You know, it's gonna get congested, right? For now, it's whatever, like at last I checked, it's like three sat of e byte. But you know, the next round of spam could happen or, you know, there could be a, a big round of adoption, and then that's when we're gonna be thrown back into this situation. I think in years gone by, maybe there was like- I would sense more, I'm gonna say like purity testing around like, \"Oh, you've gotta be non-custodial and you should never take any trade-offs, no KYC, no altcoins, no liquid, no anything, just do, you know, Bitcoin or Lightning.\" But I think what's gonna happen is there'll be a bunch of people who just literally, one, can't afford it, or the UX isn't easy enough, and for that reason, they're gonna choose something with a trade-off, whether that's custodial, whether it's liquid, whether it's FedMeant, whether it's, you know, w-w-with, whether it's something, one of these trade-offs, and so I think that's just the, the likely evolution that we're gonna-- that the industry is gonna go down." }, { "speaker": "liquid_with_tankred_hase", "time": "22:51", "start": 1370.55, "text": "Yeah, a hundred percent. And I think that's, Per se, if you're, if you're using an exchange, obviously that will have a custodial lightning, you know, integration, which is great, 'cause then you can withdraw to your self-custody lightning wallet or, or your, your, your Fedamend or your, your Liquid, wallet, wh-whatever your basically trust trade-off is that you're making, we, we need to have both the custodial, on and off ramps as well as the, the kind of more self-sovereign options. but I think at the end I do see Bitcoin as money, and I think in order for it to be really that, that appear to be money, it, it does need to be-- there doesn't, there do need to be several options for us to not have to go through a KYC entity, right? otherwise you, you, you just have another middleman there." }, { "speaker": "stephan", "time": "23:43", "start": 1423.38, "text": "Yeah, I see. So the way I'm thinking of it then is, yes, as, as you, as we rightly point out, that there are lots of exchanges today that have recently turned on Lightning, right? So whether it's Coinbase and Binance and, you know, Kraken and Bitfinex and all these other exchanges who obviously will prov- will, they will give you a KYC custodial Lightning, you know, account If you're willing to accept different trust trade-offs, let's say with the Liquid Federation and the, you know, the eleven or fifteen functionaries or whatever, you know, maybe that's a different trade-off, or maybe if you're going with FedMeant, okay, now you're trusting the guardians and the lightning gateway of that FedMeant, but maybe you can spread some of that around. So I think there's sort of these different pathways that you can go depending on what trade-off you're gonna take. And so- I think that will bring up the challenge of how do you, you know, quickly teach people these things, right? Or is it just a matter of, you know, because, you know, if I'm thinking about, what Peter Mc Cormack would say, he was talking about this book saying, \"Don't make me think,\" right? Like if you think from a design and a user experience perspective, look, the everyday, of course, people like you and I, listeners of this podcast, we're probably more, you know, hardcore Bitcoin ideological about it, but the average person" }, { "speaker": "stephan", "time": "25:01", "start": 1500.9, "text": "That just works, to use the Apple sort of saying, so what does that look like? What does just works look like for us in Bitcoin and Lightning and Liquid?" }, { "speaker": "liquid_with_tankred_hase", "time": "25:11", "start": 1510.85, "text": "And, and yeah, that's great that you brought that up. What, what you see with products like Apple, that where it kind of just works, these are heavily opinionated products. So there's a team, and, a set of very technical people which understand, like basically the, let's say the, the hardcore Bitcoiners, they understand all the technical- nuances, they understand all the trade-offs, but then they decide for this particular, let's say, user population, they say there's this archetype of user that we're gonna target, and we're gonna try to d-design it as broad as possible to get as many people into that group, and then we're gonna make really tough trade-offs and really tough decisions. And this is where I think a great product comes out, like, you know, the, the iPhone in the beginning, it didn't have buttons, and every Blackberry user said, \"You know,\" I don't have any buttons here, but like it turned out that was a trade-off that was really powerful 'cause it enabled all these different user interfaces to be on this piece of glass, right? Whereas like that, that difficult trade-off hadn't been made before, and by making that trade-off, they basically opened up this completely new kind of paradigm. And And that's how I see, all these different solutions. Like there's, there's companies like Fedi, they're, they're building an awesome product. Like I'm, I'm a huge fan also of the Fedimint protocol. And I think it's, it's a real, like one of the biggest, I think user experience challenges that I see there is, like, like you say, it should just work. Well, if I open up the app, I don't know, there's no federation, right? There's no federation connected. So how do I start spending and" }, { "speaker": "liquid_with_tankred_hase", "time": "26:49", "start": 1608.99, "text": "The, the, the Breeze SDK with the, with the Liquid Federation is really interesting because the, the trade-off is there, obviously, there's a little bit more tr- you're just like making a different trade-off, but you have, which is a very difficult thing to accept for a lot of Bitcoiners. I, in the, in the recent days, I've gotten a lot of pushback from people, who reached out to me privately and like voiced their concerns and, and I, I think I was trying to explain like, like for the average user that, or let's say You're in Venezuela, you, you don't have the option to have a bank account or, or set up a federation maybe even, because there's, there might, might not be the conditions for that. You basically don't really, might not really have the option to, to wanna use a bank because you have very high inflation and you have a lot of corruption. So if your option is to use a liquid based wallet or- Like, or don't have an option at all, you will probably make, be very willing to make that trade-off. And I think there's a lot of small businesses and freelancers worldwide in these situations which would be just, just so grateful and like happy to use something if, if they even have-- as, this isn't, or like, an option at all, which obviously makes very difficult trade-offs. And I," }, { "speaker": "stephan", "time": "28:02", "start": 1681.52, "text": "I mean, I can share something even there, right? I think For all the, let's say, in the, in our little Bitcoin echo chamber, it's all about only Bitcoin, only non-custodial, and kind of people kind of fight each other about how pure they can be and how hardcore they can be. But I would say the reality on the ground, you know, if you look at random OTC peer-to-peer trader guys in different places around the world, whether that's in Dubai, whether that's in Turkey or in Lebanon or South America, a lot of these guys are just using, let's say, Binance as their quote-unquote neob Use the custodial KYC exchange as their app that, quote unquote, just works, to use the saying, right? Now we're seeing people who are trying something, so as an example, Aqua is trying to use, be like a liquid based thing that kind of has lightning swaps in, it swaps in and out with Bolts and so on and kind of auto swapping. We have your new one which is DashPay. So I guess we're starting to see Options that are, quote unquote, just works with some different trade-offs to just, you know, a, a typical trader who's just using Binance or some typical, you know, centralized KYC." }, { "speaker": "liquid_with_tankred_hase", "time": "29:12", "start": 1751.74, "text": "Yeah, for sure. I mean, yeah, most, most people don't care. most people don't understand the difference so that they're able to care. But yeah, again, like, I love that all these options exist, like, like Aqua, like Fedamend, like, because at the end of the day, they all speak the same base, basic Protocol is just Lightning, which bridges all these different solutions. So, and I think that's huge that we've, we've, we basically have global consensus around what are the rails between all these different, like it's Lightning, it's just like by, by network effect, it already is," }, { "speaker": "stephan", "time": "29:47", "start": 1787.22, "text": "kind of settled. Yeah. this show brought to you by Mempool.Space, the world's leading Bitcoin visualizer, and now they've got an accelerator program. So if you have a transaction that you sent at a fee that was too low to get confirmed Confirmed. Now you can fix this at, with the Mempool Accelerator. The way it works, you can go and search your transaction, scroll down, click Accelerator, and you don't need an account. You can pay with Lightning, and then it'll show you it's now in the process of being accelerated, and then after a few minutes, it's confirmed. And so this is a great way to help you out if you are stuck, and this can happen where maybe your wallet doesn't have RBF or CPFP, or it might help you in situations where it's impractical to go and different locations. And thirdly, even in some Lightning scenarios, perhaps a forced close, you might not be able to use RBF, and so in this case, the MemPool Accelerator can help you out. So keep it in mind, and you can find out more over at mempool.space/slash-accelerator. And now back to the show. So one question I have for you though, then when it comes to using Liquid, because obviously the, let's say the main- Skepticism might be, look, you can't use a blockchain to scale blockchains, right? Like, Liquid is eventually gonna run out of chain space, or they're gonna have to theoretically raise the liquid block size, or they're gonna have to try and do something like Lightning on top of Liquid, they're gonna have to try to use other things, like, because, you know, Liquid will eventually hit limits too, right? And in that scenario, let's say hypothetically, there's a lot of people using Bitcoin," }, { "speaker": "stephan", "time": "31:19", "start": 1879.28, "text": "the chain, you know, is, you know, the Is it also fair to say, look, if a lot of people using these liquid swap wallets, like let's say StashPay or Aqua or others out there, could Liquid get congested too, and could the fees there also make it? You know, could that also price out a lot of" }, { "speaker": "liquid_with_tankred_hase", "time": "31:36", "start": 1896.2, "text": "the- That's great that you bring it up. I've actually been thinking about the same thing because it's kind of hilarious if you think about it. wouldn't it be funny if, if Liquid kind of became the big, big blocker haven? That like, where like we, we scale, we scale, basically, Bitcoin on the payment side with a, with kind of a, a side chain that is able to increase the, the block size as adoption and usage grows, and then that will allow us to kind of keep The base chain is super secure and decentralized. I don't think that's, I don't think that's, a bad decision. I mean, obviously you have the expected functionality there. But I mean, but we should" }, { "speaker": "stephan", "time": "32:15", "start": 1934.6, "text": "point out though, like from a capacity perspective, yes, Liquid has different trade-offs, right? It's no mining, one minute block times, it has slightly smaller blocks, but obviously Bitcoin has ten minute block times, so I think it kind of works out to kind of a similar transaction capacity, right? It, like, when you're talking about Compared to Liquid, let's say. So what happens when Liquid blocks fill up? Well," }, { "speaker": "liquid_with_tankred_hase", "time": "32:38", "start": 1958.38, "text": "I, I suspect we'll see a block size increase. I think it's as, as simple as that. Because what's so interesting is like we, like we'll see that the Bitcoin base chain, obviously will have these spikes, you know, like after the halving, there was, was it Ruins or some other experiment? And there's always like some, something going on on the base chain that will-- that we just can't control or like, but it's almost like Liquid on top Almost like a buffer. And obviously the Lightning Network, it's, as a whole also like people that are already on, on Lightning, aren't as affected, by those, by those fee spikes, unless obviously they're using an LSP wallet or-- But let's say you're, you're already, you already have funds in a fed fund and/or in liquid You're kind of buffered, you're protected from those fees spikes on the main chain, so you kind of keep your payment activity there. But yeah, like the-- I, I'm not so, I, I guess the reason I'm not so worried about these trust trade-offs in, in practice is, Because the, the majority of the value will still be held in, in on-chain multisig, wallets, right? like that, if you have, or if you're, like, I don't know, all these companies now, like, that are holding Bitcoin, the number's obviously growing. If you have a certain amount and you need a certain level of security, you're definitely not gonna hold that on Liquid, right? or, or on, on Ethereum, you're, you're gonna have, multisig solution with geographic redundancy, with multi With all the things that you would want for, for, like a high value, right? so at the end of the day, i-- Security is about economics. there's no one size fits all. It's about like, w-what is the value of the assets that you're trying to protect? what's the attack surface, and how do we just, how to basically play with those trade-offs?" }, { "speaker": "stephan", "time": "34:28", "start": 2068.42, "text": "Yeah. yeah, I think that's it. I think it will just come down to people will just have to intelligently, choose" }, { "speaker": "stephan", "time": "34:39", "start": 2078.96, "text": "Apple kind of opinionated philosophy, I think it will come down to builders, developers, entrepreneurs in the space, and investors in the space who are investing in these companies, and from a Bitcoin startup equity perspective, they will have to be opinionated. They will have to say, \"Look, this wallet or this app is for this particular use, and, you know, for other users, other user types, look, sorry, maybe someone else can serve you, but this is for this particular use, and, yeah, there's certain trade-offs you take for that, but so be it, you know, Yeah, there's no, there's no free lunch. There's no perfect, in this world, you kinda have to choose a trade-off that you're comfortable with. So let's talk then a bit about StashPay and just understand a bit about some of the trade-offs here. As I understand, you're using Breeze SDK, the Liquid version of that. Can you explain a bit about that? What it looks like, how it works, et cetera." }, { "speaker": "liquid_with_tankred_hase", "time": "35:29", "start": 2128.89, "text": "Sure. So, I'm obviously still very early. I just announced it, I've been like the last two years, when, I think when we met, we, we were both at Swan, and, back then I was already basically, I was tasked to kind of figure out how to integrate a Lightning wallet into the Swan app, and, back then I was playing with LDK and, figuring out how to make, like a, an e- a really easy to use experience While I was doing that, I was like, \"Yeah, LDK is getting better and better. \" And back then also like, obviously Greenlight came out with, with Breeze SDK. So we had these two great options, and they, they were both getting better. The developer experience was getting better, the integration of like liquidity providers and, and all this stuff. Now we have LDK node, which is like an even, even easier to kind of integrate solution. But the, the problem still remained, it like, even though these are getting easier and easier, the, the, the Keybase solutions is, and I experienced this firsthand trying to use these in my business, is with the receive, capacity and, and those, and having to pay an on-chain fee basically every time you receive a, a monthly invoice. So I was, I was, in the last two years basically working as a, as a coach. So, I, I went through this phase where I, I, I had received coaching and, and had gotten into personal development, and then I did a, I did a coaching, a training. So, and then I was thinking Just wanting to work with Bitcoin founders. So the last two years, I've been, it, it started off as like a side hustle, like a, just a, a thing I did for, for fun, but I noticed over time, I, I really enjoyed it, I got better at it, and then I was, I was focusing on that, for a while. And because I was basically just focusing, working with Bitcoin founders who are like comfortable with Bitcoin, obviously it was super easy to just ask for payment in Bitcoin, right? and I think this is a very" }, { "speaker": "liquid_with_tankred_hase", "time": "37:27", "start": 2247.06, "text": "For only Bitcoiners. And I think, I think, it's, it was a super, it was a super unique position I was in, and then I asked myself, \"Well, now that I have this unique position, what can I learn from it?\" And when I thought, \"Well, I can just challenge myself to just...\" Just be basically purely on Bitcoin. My, my, I had, I did have a, a transfer wise, a wise account for my business, but I didn't really use it because no one was paying me in dollars, so I had to do all the accounting in Bitcoin, I had to do the invoicing And then obviously when you, at the end of the year, you have to declare taxes, and like, there's, there's a bunch of steps where you, you have, have friction in your, your using, basically off-the-shelf, wallets that, you know, may be more or less, technical. I, I was integrating all these different parts, and I noticed I was able to pull it off, but I think the average person couldn't have pulled off what I did because the, if, if, if we, like we said, we, most people expect a solution that just works, right? And you can't expect them to jump through all these hoops to make it work. And so I, so I just looked at, okay, like how, like what would I need for, for the average person to actually do what I did? And, and then I basically said, well, why And this is how I, I, like the, the, the personal journey towards StashPay was there, was like, I was basically then looking for, for the longest time for like a solution, like a technical solution, to make it work, and when the, when the Liquid, Breeze SDK came out, I was like, that's it. Because what, what that really solved was the liquidity piece. Instead of having to pay one on-chain transaction every time I receive an invoice, which is basically like, like after the having that was like a hundred dollars for an on-chain transaction, right? And then obviously, a one percent fee for the liquidity. So that's, that's quite a bit that would basically cut into my, my profits. With the Breeze SDK, basically they have a fee of, twenty-five basis points, so a quarter of base- Basically the, the, the LSP based, lightning wallets, and you don't have the on-chain fee because, you basically have the liquid, on-chain fee. So the, the li-the, the lightning to liquid swaps, they do, they do two, they have two claim and lockup, so that, the, the, these swaps have two liquid on-chain, fees, and these are very low because they're like twelve and seventeen, sats or something. So in total, it's, it's forty sats, to that swap on the liquid side chain and through the, the fee that you're paying for the liquidity side is one quarter of a percent. So it's, it's so much cheaper, to receive with this architecture. And I thought, well, now I just have to figure out, now that basically I have the liquidity side and the fee side kind of figured out, how do I, how do I use, integrate this with an invoicing tool that allows me to not only, you know, obviously generate the, the invoice, on the Fly such that when I send the, the payment, invoice to my customer, they open the email, they click the link, and then they're, they see like a QR code that they can just pay. Like that, that requires a whole, like, that's a, that's workflow that I'm not involved with, you know? I'm not standing there with the person showing them my wallet. That's something that needs to happen in the background asynchronously. And then I was thinking, like, okay, well, like, what, how's, how's this, solved and how Where, yeah, like the Breeze team has been just doing an amazing job, you know, building this LNURL, lightning address solution, which also integrates with mobile notifications. Such that when the client then pays me, over Lightning, what happens is, the, let's say, w-w-what would happen, with ZapRight in this case, the, the ZapRight backend would integrate with, with the Lightning address, side of it, such that, the, the client could on the fly, you know, fetch that Bolt 11 invoice. And, and it would fetch it basically, through the, through the Bolt's exchange, swap server. And the, the way that it would work is then when the, the client then pays that, off, like whenever I might be asleep or whatever, the, basically the, the customer that wants to pay me pays that Lightning invoice In order for my mobile wallet to trustlessly accept that swap, it does need to release the, the pre-image to, for in order for the, the, the, yeah, the payment to settle. So there is actually a point where the, the mobile notification wakes up my phone, it releases the pre-image, and then the, the payment is settled. And so basically you have a whole workflow where I still have custody of my key, like I'm owning the key on my device, but the, there is a workflow that allows that asynchronous payment receipt So that whole, that whole part, it just got released, the, by the Breeze SDK, they, I think they released it yesterday or the day before with, zero dot three dot o, which is like, like a massive lift. So, kudos to the team, Breeze, like that, awesome work. And basically now it's my job to integrate this And also integrate that with, with Zapright and to create kind of a seamless user experience for any small business that basically, you know, expects that just work solution. And that's kind of, that's kind of what I'm working towards." }, { "speaker": "stephan", "time": "42:59", "start": 2579.29, "text": "I see, yeah. And so how would this compare to, say, using BTC Pay Server? Right now, that's something I've, I've run a BTC Pay Server for years, and it offers a similar kind of thing where you can run a payment request and you can receive, you know, Lightning, and it will have a persistent- Instant website that the person paying you can go to and click and they can scan it and pay it. So do you wanna just contrast that? Is it just that you think this would be easier and more of a quote-unquote just works solution than, let's say, setting up a BTC Pay?" }, { "speaker": "liquid_with_tankred_hase", "time": "43:30", "start": 2609.51, "text": "I love BTC Pay. the way that I understand it and that I've, I've tried it, the problem I saw is like it, it feels very merchant focused, right? So not necessarily like freelancer focused. So it didn't really, it didn't really meet my needs When it came to like invoicing and accounting, from like the freelancer side, I think that's where Zapright really does a great job on focusing. If you, if you listen to John's story, basically he was a freelancer at the time and he was also just scratching his own itch, right? That's how Zapright started. So yeah, like it's very freelancer focused. That's why I, I like Zapright and I think, it just makes sense, to integrate there first. So yeah, that, that versus the, the BTC Pay server side, but BTC Yet solve the, like having that easy mobile experience. They obviously just announced their BTC Pay app, which is, is, is gonna be built on LDK So you will have a similar kind of experience on the merchant side, where the merchant also has a mobile wallet, where they, they have, they hold the key, and they're able to receive payments. And that, yeah, that, that's great. I think it's, it's great that we have these multiple solutions. And, yeah, they'll, they'll have different trade-offs and different, I guess, yeah. And I guess to be fair," }, { "speaker": "stephan", "time": "44:48", "start": 2687.67, "text": "you will be kind of back to that same LSP chain fee problem if you are, let's say, receiving a lot more than you spend Or you haven't already set up your channels, or you don't wanna manually run the channels, which again breaks the just works kind of idea. So it will be interesting to see whether some of the liquid solution, liquid based apps, wallets, and solutions just offer a different trade-off there that, maybe, you know, if you're taking larger payments, you know, maybe a few thousand dollars instead of paying one percent of that or whatever. You know, can you take a cheaper fee by using Liquid, but with the trade-off of holding some of your balance, your spending balance, in LBTC as an example, and then potentially there might be a pathway in the future for people who wanna use, you know, stablecoins like Tether and so on, or fiat coins, that, you know, they could use Liquid swapping things to, to have, stablecoins as well, and then maybe, 'cause as an example, maybe the person paying you wants to pay with a stablecoin, but you want- You want to keep Bitcoin, so then you can kind of have swaps in the background that swap it all into what you want." }, { "speaker": "liquid_with_tankred_hase", "time": "45:54", "start": 2754.0, "text": "Yeah, absolutely. I mean, you touched on a point there with the BTC Pay app that it still has the LSP, thing with the liquidity and the, the on-chain fee for every payment. I believe that will be the, the biggest challenge there as well. I honestly think using the Breeze SDK for, for that could also be a great solution. I mean, I'd also love to integrate BTC Pay with Stash Pay, to basically have Have it connected," }, { "speaker": "stephan", "time": "46:20", "start": 2780.04, "text": "and then you can like download your accounting and tax information out of it." }, { "speaker": "liquid_with_tankred_hase", "time": "46:26", "start": 2785.52, "text": "Yeah, yeah. I think the way that this how I see StashBay like, it, I want it to be like this hub where you can connect multiple apps, depending on what your small business needs are, maybe you're a freelancer, maybe you're a merchant. I would love to talk-- Basically, the way that I approach this, the, the MVP will basically serving this my own needs as a freelancer, but then I expect customers to, to, to come up to me and say, \" I want this feature, and this is how I wanna build the product, super customer focused. If, if a merchant comes to me and says, \"Hey, my coffee shop, Madara, wants to use your app because we wanna save fees,\" I'm like, \"Great,\" a-and then I have a new customer, right? So this is how I wanna grow the product." }, { "speaker": "stephan", "time": "47:04", "start": 2823.95, "text": "Yeah. Yeah. So in a nutshell, the app is going to let the payer see a Lightning invoice on their side that they can pay with a standard Lightning wallet or Apple. Stash or whatever, and then on your, on the receiver side with DashPay, the idea is that they will receive that balance into LBTC, and in the background you're using BOLTs dot exchange and things like that, swaps to kind of give you that functionality, but then the idea is you have a wallet that you can use to, you know, take payments from your customers with potentially lower fees than, with an LSP Lightning wallet." }, { "speaker": "liquid_with_tankred_hase", "time": "47:43", "start": 2862.71, "text": "Exactly, and that's the, that's the key piece, the lower fees. You're obviously taking that trust trade off with the LBTC. holding that in liquid, but the cool thing is we can really, we can really leverage the economic density of Lightning here. So the merchant, let's say, th-they can receive payments all day long Or the freelancer can re-receive a certain number of invoices, and then when they've hit a, a, a value, a threshold value that they might wanna like secure in a multisig wallet, they basically, let's say after a day's work, the merchant, just sends it off to their, their cold storage wallet, or, or basically they, they pay their staff, right? And then whatever profits they have, so the free cash flow, they just rake it into the multisig. And this is how I see it, this is how I see it really creating Because, yeah, you, you could basically compress those fees, by using that trust layer, but then when you're ready to, to basically, stack your, your savings, you, you do wanna put those more on a secure layer." }, { "speaker": "stephan", "time": "48:44", "start": 2923.91, "text": "Right, and so the idea is this would be like a staging area or like a little receiving area, spending wallet thing, but once you've built up a bigger balance, you might flush that, flush that out into your hardware wallet or your multisig and, you know, more advanced security setups. But this is just to sort of get you started easily and quickly with a low fee sort of option, and so with certain trade-offs, as you said, being opinionated about, okay, take the liquid trade-off of trusting LBTC, obviously. You have to trust that you can peg it out, but there are swap providers for that, and, you know, people might be comfortable with that and maybe they, they would rather that than KYC with a custodial exchange. Maybe that's, maybe that's the trade-off they wanna take. So we'll see where things go there. So just kind of broad, broader lightning development, where things are going, what are you most excited about from a lightning perspective? Like earlier you were touching on asynchronous payments, maybe further bolt twelve adoption Lightning address, these kinds of things, or human-readable names, which was the, I believe another Macarello idea that, the Phoenix and Async team put into their wallet as well. What do you see as the, you know, the next big things for Lightning?" }, { "speaker": "liquid_with_tankred_hase", "time": "49:58", "start": 2997.8, "text": "I'm definitely super excited about broader bolt twelve adoption. I think we still have a lot of work to do, integrating these. Obviously, like the Breeze Liquid SDK doesn't yet support bolt twelve. It'd be awesome if it did, right? we have We have LDK supports it, Asics, Phoenix obviously supports it, but we need like broad exchange adoption of it, right? If, If let's say, I know that, I think, Strike just announced that they're able to, to pay a Bolt twelve invoice, and that's awesome because now, like, basically people can stack sets into their Bolt, Bolt twelve offers, right? Like that's, I think we still have, like, that's, that's gonna be kind of a, a consistent effort in order to, to keep pushing that, in the ecosystem. I think that's, that's a huge win, and I think that's underestimated what a huge win that is to have receiver privacy in Lightning. having the sender privacy is great because the, the client paying, is basically has very good privacy, and that's, that's, that's a great property of Lightning, but also having the, the person being paid have, better- Privacy is, is, I think, is gonna be a huge win just on the, just on the protocol layer. And then I think asynchronous payments is, is gonna be later down the line, it's gonna allow, it's gonna allow basically the end-to-end payment experience, with, with full self-sovereignty, with these LSP-based wallets. I haven't given up, like, I wanna emphasize that I haven't like given up on the LSP-based approach. I think it's valuable, it exists, it has a lot of, different trust- And security trade-offs than these kind of, let's say, UTXO sharing models. So that's why I think it's super important that we get to that end-to-end experience with asynchronous payments with offline receive. Block 12 is obviously gonna be an important milestone on that journey. And once we have that, I think, yeah, we, we really have private digital cash, you know? And I think, like, that's a great baseline." }, { "speaker": "stephan", "time": "52:06", "start": 3126.31, "text": "Yeah, and I think at that point A lot of the criticisms of yesteryear of, \"Oh, Bitcoin has high fees or it's slow,\" a lot of those criticisms will be sort of vanquished in a way, at least at a more technical level, using Lightning and, more, advanced, techniques. Now, it took a few years to kind of, for those things to be built out, but they are coming, so it's an interesting, point. I think you do raise an interesting point as well about the contrast of LSP-based model of Lightning versus, let's say, Liquid swaps model of, lightning that, you know, StashPay, Aqua, and others are going to, well, are using, and so it'll be interesting to see where that, where that all shakes out over time. So I think it's a good spot to finish up here. I will link in the show notes, so listeners can find Tankred on X, and also I'll put the link in the show notes. Tankred, thanks for joining me today." }, { "speaker": "liquid_with_tankred_hase", "time": "53:00", "start": 3180.33, "text": "Thanks so much, thanks for having me." } ] }