{ "episodeId": "SLP635", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "dan_o_prey": { "name": "Dan O'Prey", "role": "guest", "tag": "DAN" }, "danny_stagg": { "name": "Danny Stagg", "role": "guest", "tag": "DANNY" } }, "segments": [ { "speaker": "stephan", "time": "00:11", "start": 11.21, "text": "Hi everyone, and welcome back to Stephan Livera podcast, brought to you by Bold. For American listeners, go to getbold.io, and you can buy Bitcoin there, and you can sell Bitcoin there, and you can find various services there. Now, joining me today on the show, we're gonna be talking about Lightning, and Lightning payments, and Lightning adoption. So joining me today, Danny Stagg from Bold. Fries and Dan O'Prey, co-founder of 1A1Z. So, Dan and Danny, welcome to the show." }, { "speaker": "dan_o_prey", "time": "00:38", "start": 37.97, "text": "Thank you very much for having us." }, { "speaker": "stephan", "time": "00:40", "start": 39.59, "text": "Thanks for having us. Great. So, look, let's just, I mean, start-- give us a bit of a background on the report. We don't need to go super deep, but just, you know, what was the-- why, why'd you guys write this report?" }, { "speaker": "dan_o_prey", "time": "00:51", "start": 50.97, "text": "You want me to kick it off, Dan?" }, { "speaker": "danny_stagg", "time": "00:52", "start": 52.41, "text": "Go for it, Danny." }, { "speaker": "dan_o_prey", "time": "00:54", "start": 53.5, "text": "Awesome. So- Long and short of it, media narrative, I think, for quite a long time has been Bitcoin, is digital gold, and the, the medium of exchange narrative has kind of suffered. There's been various attempts over the last, decade or so, but the prevailing narrative, especially right, you know, over the last couple of months, has been digital gold. And one of the things we set out to do is see what's the state of Bitcoin as a medium of exchange. and from there, the kind of report I kind of moved out and we were able to learn about what's happening in various places globally to basically answer the question that Bitcoin isn't just digital gold. It's, an everyday working currency." }, { "speaker": "danny_stagg", "time": "01:39", "start": 98.73, "text": "Yeah." }, { "speaker": "stephan", "time": "01:39", "start": 98.99, "text": "And then Dan, from your perspective?" }, { "speaker": "danny_stagg", "time": "01:42", "start": 101.58, "text": "Yeah, I mean, personally, I got interested in Bitcoin for peer-to-peer electronic cash and, and decoupling money from the state. So I think, like many Bitcoiners over the last sort of year or so, being a bit frustrated with the, you know, the ETFs, spot ETFs in the US have been great for inflows and for the price of Bitcoin, and of course, for, you know, attention, but being a little bit frustrated with the pigeonholing of Bitcoin old weight number go up technology, when it really is being used today as a medium of exchange, as money, or as a settlement rail, across, you know, cross border remittances. So excited to return to, to Satoshi's original vision and, and actually get people using Bitcoin again." }, { "speaker": "stephan", "time": "02:24", "start": 144.0, "text": "Interesting. So look, I, I'm gonna slightly disagree a little bit, but we'll get to that later. I think there are, I, I mean, I, I won't, let's say bury the lead. My- My view is, obviously, I'm very much in favor of Lightning. I, you know, I love using Lightning myself. I just think there's gotta be kind of a saturation point that we have to kinda hit first in terms of, you know, store of value adoption. So my view, and I'm not being, let's say, descripti-- Sorry, I'm not being prescriptive. I think I'm just being descriptive in the way I describe that. I'm not trying to say you must only huddle. I'm saying I think more people will find a reason to," }, { "speaker": "stephan", "time": "03:05", "start": 185.49, "text": "In some way, before we start to really see a lot of actual peer-to-peer payments of it. But let's, let's talk about this. So I think one of the questions you guys answer in your report is this question of, you know, is Bitcoin just digital gold? So do you guys wanna spell out your view, why is Bitcoin not just digital gold from your perspective?" }, { "speaker": "danny_stagg", "time": "03:24", "start": 203.62, "text": "Sure. Yeah, and, and, yeah, Stephan, yeah, it was good to have some disagreement and make things a little bit more interesting. So, yeah, I mean, I think, you know, as we noted in the report, like the actual end-to-end Bitcoin payments as a pure play currency, right, as a medium exchange or, you know, let alone a unit of account, is still early and it's still happening and, and cases and growing, but it's still early in that space. I think the, the area that I'm most excited about" }, { "speaker": "danny_stagg", "time": "03:52", "start": 232.3, "text": "is value, side of things is using Bitcoin as a underlying settlement rail for other currencies temporarily and Lightning enabling that, so companies like, you know, Lightspark and, and IBCs and then people building on top of that, we have a case study on Osmo, a remittance company and Safaricom. But users may not even know in those cases that they're using Bitcoin and, and, you know, to many, you know, that may not sound like a good thing, but really what it's doing is delivering a- You know, value to the end user of sending fiat currency from one country and receiving it in another country, and that's forcing the infrastructure to be built out for Lightning at scale, that can then be leveraged for Bitcoin to Bitcoin payments in the future once, more people have Bitcoin, more people own Bitcoin, as you say. so I don't see as this like binary between no one using Bitcoin has money at all or everyone using it, and this sort of, you know, crossing the chasm point of which comes first, merchants or consumers? humors, and the sort of chicken and egg piece, I think there is an intermediary piece there where you can go beyond just buy and hold to use as an abstracted away sort of protocol or settlement layer, and then people can actually just send Bitcoin and others can receive fiat as the next step, along that before we get to the, the fully hyperbitcoinized, Bitcoin to Bitcoin" }, { "speaker": "stephan", "time": "05:17", "start": 316.96, "text": "Yeah." }, { "speaker": "dan_o_prey", "time": "05:17", "start": 317.3, "text": "Danny," }, { "speaker": "stephan", "time": "05:18", "start": 317.58, "text": "anything to add there?" }, { "speaker": "dan_o_prey", "time": "05:18", "start": 318.4, "text": "Yeah, I, I kind of think underneath it, it's what you say, it's nuanced. I don't think, I don't think it's black and white either, and I think what the report hopefully does is it kicks off a conversation on why we see Bitcoin as a currency, why we see it as a medium of exchange, and why we see it as both, right? Roy wrote a fantastic piece, on the false dichotomy of, of, Bitcoin, and I think- I think the report proves that too, but I think what the report gets at is that that medium of exchange, that currency, those rails, however you're using Bitcoin, is far more than just digital gold. And I think, I think you're still right, there's still many more people to, to kind of on board with it being a, it's a fantastic store of value, we all know that as a no-brainer. But I think that bigger story of what we're seeing, the kind of undercurrents and what's been built, maybe six or ten years ago, the infrastructure wasn't there to do the things that you can now do with Bitcoin. So we're very much at the start of this kind of trajectory, which I think is super exciting." }, { "speaker": "danny_stagg", "time": "06:23", "start": 382.89, "text": "And I'd say also, even if you don't think it's there yet, if you do think it could get there one day, you know, it's potentially dangerous or concerning for people to pigeonhole Bitcoin in their mind as just this one thing that you buy through an ETF or you buy and put in cold storage forever, because we'll likely never get there if, if that's the, the start and end of people's perceptions of Bitcoin." }, { "speaker": "stephan", "time": "06:47", "start": 407.13, "text": "Yeah. So I think I kind of, I mostly agree that there is-- and I like the report that in that it shows people, wait a second, you might have thought there weren't that many people using Lightning, but actually look how many people who can use Lightning. So I think that's certainly something novel, something new, but I think- the part where I'm sort of not as-- I think it's, I think it's just gonna naturally happen on its own, right? Like even if all this, you know, yes, we might criticize, a lot of the new, let's say, new coiners who are coming in and maybe they just go buy, you know, or, they go buy the ETF or they go buy the Bitcoin treasury companies and so on, and they're not getting real Bitcoin. Of course, we want, you know, not your keys, not your coins, we want as many" }, { "speaker": "stephan", "time": "07:35", "start": 454.62, "text": "That, that is fundamentally the process of getting adoption, right? That, that, you know, so we've got this kind of store of value happening at one side, but we've also got this medium of exchange, a-as in direct method of payment aspect, which is growing also. And then I think to the point you mentioned earlier, Dan, that, there's also this kind of in-the-background use case, right? So I think over the years, people have had these debates, right, about hodling versus spending, and they're kind of set against each other in a way, and" }, { "speaker": "stephan", "time": "08:04", "start": 484.44, "text": "In the earlier years, people spoke about remittance, right? They said, or, or rebittance, I guess it was kind of rebranded. and so that's maybe another angle that can be used, but of course, that kind of also plays in with stablecoins. But let's, I want to bring it back to a, a really interesting number, six hundred and fifty million. So can you tell us a little bit about that number? What is it? What's the significance of this number?" }, { "speaker": "dan_o_prey", "time": "08:29", "start": 509.41, "text": "So the, the, the number is the amount of people that can access the Lightning network today, and it's great to see, and I think it's indicative of what Lightning can do or what Lightning's achieved and where it's at. I think it's a A kind of, well, we call it a kind of ground-up adoption of it. But this is happening in a world in which there's still people that today that critique Lightning as potentially failing, period, right? and I think that's just not necessarily true. So if you look at some of the, the, the applications that have integrated Lightning, even in, in the last year, you look at a company like Coinbase, you look at, New Bank, and, and those are huge organizations that can reach Far more people around the, around the globe. And so I think what we're trying to get out here is say to folks, kind of what I just alluded to before, the infrastructure's in place to do the things that we want to do that potentially weren't there before, and that's- Kind of where we go with the report." }, { "speaker": "stephan", "time": "09:32", "start": 571.55, "text": "Yeah, I see. And so I guess just to spell this out for listeners, maybe if you are, let's say, an intelligent layman, but you're not sort of savvy with how Lightning has developed, I think it's fair to say, in the early years of Lightning, when Lightning first went on the main net in twenty eighteen and sort of twenty nineteen, in those early years, it required a lot more technical chops to take Lightning payment, right? Because you had to think about inbound liquidity, you had to have an always online server, there was no" }, { "speaker": "stephan", "time": "10:00", "start": 599.68, "text": "thing that you can pay to, that, I mean, there was KiSand, but it just, there weren't as many easy ways to do this, whereas now I think we've reached a, a certain level of maturity that now You don't necessarily have to be a lightning technical genius to be able to accept lightning payments, and I think that's probably an important point just for people to understand the difference, right? If we compare twenty eighteen, the early days of mainnet lightning, to now early twenty twenty-five. So, do you guys want to explain a little bit on some of the shifts you have seen over that time in lightning?" }, { "speaker": "dan_o_prey", "time": "10:34", "start": 633.92, "text": "Yeah, I, I wanted to just say one of the things you mentioned there is, and we write, we do actually mention this in the report too, is that the kind of false promise of what Lightning was and what Lightning can do early on as well. There's some things, that potentially went to market Maybe pitched it in a way that, that didn't live up to the promises that it had, right? and as you mentioned, it's matured now, the, the tools are there, obviously, you know, it breathes, self-custodial, Self custody at scale, basically, which is, which is awesome, right? The, the user experience is night and day. so I kind of see this maturation as really Solid base from what we can build on." }, { "speaker": "danny_stagg", "time": "11:20", "start": 679.54, "text": "Yeah, I think as, as you mentioned, yeah, that usability, the channel management, liquidity management, a lot of that has been a lot more automated and a lot more easier for end users, but especially for businesses, with the amount of companies and the amount of investments that, that's gone into companies building tooling, for these businesses, there's a variety of different options. in the report, we have a sort of snapshot overview of, of some of the main players. It's not comprehensive, but some of the main players and, Sure, different buckets. And if you look through like Lightning as a service and hosting providers, liquidity providers, you know, the tooling there, it makes it super simple for businesses that don't want to manage their own node but could still retain your keys, or they could outsource it fully. so there's a variety of different options for businesses to make it super easy, for them to accept, or add, Lightning payments. Yeah." }, { "speaker": "stephan", "time": "12:11", "start": 731.47, "text": "Yeah. And just for the audio listeners, I'll quickly read out a few. So Coinbase, a hundred and Binance two hundred million plus, OKX fifty million plus, Cash App fifty-seven million plus, New, I presume that's New Bank, a hundred million plus, Kraken thirteen million, you know, and some of the earlier, like Bitfinex is pretty early, they had three million plus, but they were one of the first to do it, so there's a lot of people who can access Lightning. Now, I guess the The caveat would be, a lot of these people might, you know, they might have an app on their phone accessing Lightning, but they may never have actually used that, right? It might be sort of, you know, it's just that it's kind of a setting for them, it might as well be a setting that they've never actually gone and tapped. What do you guys think about that?" }, { "speaker": "dan_o_prey", "time": "12:54", "start": 774.13, "text": "Yeah, I think, I think, and we don't allude to, you know, we're not alluding that every single one of these six hundred and fifty million of crit- doing it right now, that's just not true, right? But what we're saying is the fact that they can access this technology is the cool part. Now, how do we get them on there? And there are hurdles, there's still hurdles today. UX can always improve. That's one thing that, we, we, we mention is that improving Integrating into mainstream applications, where Bitcoin is a part of your experience, and those kind of things will help, and obviously regulation. You know, there are some countries, well, the, the biggest blocker or one of the biggest blockers is capital gains tax, that's a huge blocker To a medium of exchange because it adds a, a mental and, and cost hurdle, from you easily exchanging. But as the premise goes, is that this is the foundation, right? The foundation's there and the fact that you can reach those people, today With Lightning, it's pretty impressive." }, { "speaker": "danny_stagg", "time": "14:05", "start": 844.83, "text": "Yeah, I think at, at first, the usage that, you know, is most reported is exchange to exchange, right? It's still driven, driven by that, that trading users, particularly amongst the, the names and the, the large scale, you know, centralized exchanges that you mentioned, moving funds between those exchanges or on and off exchanges for the purposes of trading, is, is the primary driver, and that's gonna get people familiar with Lightning, it's gonna get them to understand the benefits and get them to understand that they have- Have it available in a wallet that's already funded that they already, you know, already have. From there, they can then, you know, start to look at, you know, intraprop P2P or payments or remittances, beyond that. So I think the, the, the store of value and trading use case will, will actually help drive awareness and real usage of Lightning that can then be, be leveraged beyond that, as a, as a payment mechanism." }, { "speaker": "stephan", "time": "14:58", "start": 897.9, "text": "Yeah. And actually, one other thing that, has come up a Is peer-to-peer, right? Because that's one angle where a critic, now I'm a supporter of lightning, but a critic could say, \"Hey, you guys sold this as peer-to-peer, but actually, doesn't it look a bit more like bank-to-bank? What do you guys think about that?\"" }, { "speaker": "danny_stagg", "time": "15:16", "start": 915.97, "text": "It's both, right? Users have options, if you want to outsource everything and just use a fully, you know, centralized exchange and use lightning through that, you know, that's fine if that's what's for you. if you wanna hold your own keys" }, { "speaker": "danny_stagg", "time": "15:32", "start": 931.5, "text": "If you want to do it all yourself, you know, the options are there too, and, you know, obviously Breeze, companies like Breeze have made that super easy for end users, to, to do. So there is the full spectrum, you know, the numbers that we report on in the report are the numbers of users, most largely, well, I think exclusively at, at centralized exchanges, just 'cause the numbers out there are a little bit trickier to get for, you know, anonymous channels and self-hosted, you know, wallets But, you know, that, that tooling has come a long way as well." }, { "speaker": "dan_o_prey", "time": "16:02", "start": 962.5, "text": "Yeah, it's the, it's the nuance, right? That's, that's, that's, that's it, and you can do it. That's the thing. It's that, it's not a, it's not an impossibility now. You can do it if you wish to do it. And I think over time, and it goes to that next level of adoption is bringing those experiences into mainstream applications. I'm gonna use another Roy blog, but, you know, more, more apps with Lightning, not more Lightning apps, and I think that's, that's kind of the, the thing that I will see kick us off, and then the same thing will happen, right? And people will find peer-to-peer And they'll find self custody and they kind of go down that, that path. So it's, it's kind of just a great platform, and the fact that we have so many people that have access is frankly wild, but also, again, how encouraging is that for the future?" }, { "speaker": "stephan", "time": "16:54", "start": 1014.18, "text": "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. Now, you can use this device to interact with the Bitcoin network using software such as Sparrow Wallet, Electrum, or Bep20 Desktop or Nunchuck, as a few examples. Now, you have a range of security features that you can use with these devices, such as passphrases. You can use SeedX or or M- My favorite is multi-signature. Now, if you're starting in a basic way, just start with the device and the USB-C cable, plug it directly to the computer and use it that way, and then later improve your setup. But I believe these devices are great at helping secure your coins, especially as you start to migrate up into multi-signature security. But don't be disheartened or don't be, scared away. They are accessible, and I think you actually do learn about Bitcoin in the process. So to get yours, go to coinkite dot com, use code Livera to get a discount on your cold card. This episode brought to you by Galloy. They are building banking software for the Bitcoin age. So if you are with a bank, a fintech, or a startup looking to offer some kind of Bitcoin product, whether that is a Bitcoin collateralized loan, deposit accounts, or payments, Galloy can help you. Their latest product is called LANA. It is a loans management platform, and you can use this to come to market quickly and offer a loans or Bitcoin collateralized lending product for your customers. Now, Galloy have a lot of experience in the space. They started with Blink Wallet in twenty twenty, and they've since grown this to become a community favorite over time, and so they have a lot of experience making things work in a secure, reliable, and scalable way. So if you need assistance coming to market quickly with a Bitcoin banking product such as lending or deposits or payments, talk to the team at Galloy. You can email them, the email is biz at galloy dot io, or go to the website galloy dot io. And now, Back to the show. Yeah. I wanna talk, I wanna touch onto mindsets of adoption and, I guess, different groups here. So I'm gonna, I'm gonna put it into two camps here, right? There's kind of the non-bitcoin, quote-unquote, crypto world or shitcoin world, and then there's, let's say, fiat companies, right? That have nothing to do with crypto, and they ha-- they, some of them are now actually adopting Lightning. And so I'm curious to get your take on maybe what were some of the hurdles for them? Like" }, { "speaker": "stephan", "time": "19:39", "start": 1178.89, "text": "were more interested in the kind of lending and DeGen and this kind of, these kinds of uses, or maybe they fell in love with like this kind of copy-paste, a static address sort of user experience, and so Lightning was kind of like this alien thing for them for some time. And now we're starting to see some of those, let's say, crypto wallets and multi-crypto wallets actually start to bring-- Okay, yeah, actually we do need to bring in Lightning support. So maybe that's one thing we've seen there. And then on the fiat side," }, { "speaker": "stephan", "time": "20:08", "start": 1207.71, "text": "it's that, And easier. So I'm curious, y-y, if you guys have any takes on that, any thoughts on, what it took to drive some of that adoption, where we are there on those fronts?" }, { "speaker": "danny_stagg", "time": "20:20", "start": 1219.88, "text": "Yeah, I mean, maybe just to start with, I'm still constantly surprised by how few people are actually aware of Lightning still, particularly in the crypto world, right? We, we still get the questions of Bitcoin can only do seven transactions a second, right? Like everyone is still sort of stuck in this, this old pre-Lightning 2015 era, under- Understanding of what Bitcoin is and what it can do, and then when they compare that to the throughput of, you know, Solana or Optimism or, you know, pick your favorite centralized, you know, fake blockchain, then, then it looks unfavorable. But then when you mention, you know, Lightning actually enables Bitcoin payments at the same scale or larger, can horizontally scale much more significantly than these centralized chains, people are, you know, still a lot of people haven't heard of it yet, which is, is quite shocking and, you know, also another good role of the report is just to keep hammering home that, you know, these layers do exist and Bitcoin is, you know, has evolved, maybe not as quickly as, as other chains, but for a good reason, and making people aware of that, particularly businesses, right? I think, you know, they still have stuck in those perceptions. Other or chain slash coin slash companies, slash foundations, slash common enterprises. You know, they have marketing teams, they have business development teams, they have ecosystem development teams that are giving funding to, these different companies to support their chains, right? Bitcoin and Lightning has none of that. we as the community are, are functioning as that. and so making sure that businesses, you know, hear about and are up to date with what Bitcoin is and what- Lightning can do, versus, you know, alternatives, is, is really, really critical as awareness is still, you know, one of the, the, the biggest hurdles Yeah." }, { "speaker": "dan_o_prey", "time": "22:12", "start": 1332.2, "text": "To add on that, awareness that is on the money, and so there are folk, folks are looking for these options, they, they know the interest in Bitcoin, and so if we look at, say, use crypto, applications, mostly folks there are using Bitcoin, or think of Bitcoin for trading, or they're using crypto for trading, and so those folks want to access this two trillion dollar market, and they're just unaware of the, the tooling that's available. Available. And so like Dan said, one of the, the points of the report is to show folks, with that ecosystem graphic, yes, it's a snapshot, and yes, there's so many more businesses that we can include, but there is so many options, there are so-- sorry, there are so many options for folks to, to use tools and, and integrate Lightning, and then you s-- what you actually see, is not necessarily folks, anti-Bitcoin or any of the kind of ideology stuff, it's just, they're just unaware of how they can connect to Right? And then when it comes to, to those in the, so the fiat world, right? Interested, but there, there's so much noise out there, it's very hard to cut through, and we are up against a lot of investment and a lot of vested interest, and this use, using, let's use media as a good example, if you think about the outlets of which you report on Bitcoin, they're very limited, and that's whilst, you know, people can- You know, dump on the fact they don't like the media. The media is still a great reach for many folks, and if we can't reach those folks, they're not aware of us, and therefore we kind of operate Here and then those who lead the narrative, get to, get to decide what, what, what people talk about. So awareness is, is clearly a huge hurdle. I don't think that's all into hurdle now, and I, I think it's showing people the utility, the benefits and the reach, right? And that's again a point of why we wanna talk about the huge amount of people that can access this technology, yeah, is because Folks know that people want it, and there's no, you know, Bitcoin Inc. marketing CEO who's coming in and dictating this. This is ground-up adoption, and that's why the folks have integrated it at different companies is because the users want it. So If we can, we can solve that awareness issue," }, { "speaker": "stephan", "time": "24:41", "start": 1481.27, "text": "yeah." }, { "speaker": "dan_o_prey", "time": "24:42", "start": 1482.08, "text": "The sky's the limit." }, { "speaker": "stephan", "time": "24:43", "start": 1483.3, "text": "Yeah, you touched on this awareness piece, and I think it's very important because, I guess we're just living in this world now where there's just so many competing demands on people's attention. Typical, let's say younger people nowadays are kind of, they're sitting there scrolling on their feed, whether that's Instagram or TikTok or X or whatever, and I guess it's about sort of punching through and breaking through because ultimately We want, you know, I think all of us at least, and probably most listeners, want more people to use Bitcoin, right? We want more people, whether you are hodling or spending and earning Bitcoin, I want you to, you know, we want you to, we want more people to use it. And in a sense, all these network effects are competing with each other, right? Like there's, there's the fiat system, network effects, and kind of off of that, there's, you know, the PayPals of the world and so on, and you have sort And so I think that's been a big part of our challenge is getting more people to understand that, yes, these things are now getting to a level where it's not that hard, you don't have to be a technical genius, it's like, it's available on simple apps. I think another interesting one that I'm curious if you guys have a thought on this is around the swap service, so things like- Especially in like crypto world, there's a lot of people who wanna swap between maybe stablecoin and Bitcoin or other things. What's your view on that? Is it that, you know, Bitcoin and Lightning, up until recently hasn't been as integrated into these swap servers or just not as prominent into some of these swap services?" }, { "speaker": "danny_stagg", "time": "26:16", "start": 1575.71, "text": "Yeah, I think, well, I mean, just to touch, you know, as you say, sort of swapping between Bitcoin and stable coins, you know, something that will make that a lot simpler and more atomic, is the recent announcement out of Plan B in El Salvador of Tether coming to, to Taproot assets and, and hence to Lightning as well. So actually having, you know, the world's largest stablecoin by far, coming to, to Lightning will be a bridge between the fiat world and the network effects of that, which, you know, we can't deny is Particularly, you know, Latin America, where they want dollarized exposure and they want to use, you know, Tron 'cause it's fast and cheap and free, and now Lightning and Tether will have a, an alternative for that that's based on Bitcoin and actually decentralized. So that will help, you know, bridge those worlds and bring new users with that new use case over to Lightning and ultimately to Bitcoin too. and to your point, I think it'll make it easier to create, you know, atomic swaps between, stable coins and Bitcoin. I think probably, Could be wrong on this, but probably the main approach to that is through using Liquid today, where Lightning's also compatible with Liquid, the, the Bitcoin side chain which has stable coins and other assets being issuable on them. but yeah, the, the DeFi Dex trading use case hasn't really come to Bitcoin yet, have sort of, you know, mixed feelings on that being, you know, being a Bitcoin maximalist and not really believing in anything worth swapping it for, but stable coins, I think are, are- Yeah, probably the only or, or at least the obvious for now, you know, tokens that, that will, be required to provide liquidity between the two and, and Tether coming to Lightning should, I believe, help with that" }, { "speaker": "dan_o_prey", "time": "27:59", "start": 1678.52, "text": "I haven't got much to add on that. I think Dan actually did a great roundup of that, but I, I would say that what you do see is that Lightning is this common language that's gonna tie together these various sub-networks, et cetera, and, and I think the development, that we'll see over the next couple of years because people that want to build on Bitcoin, is only net good for Bitcoin. So the more-- this awareness piece comes from building products, it comes from building things that people want and you know, let the market decide." }, { "speaker": "stephan", "time": "28:34", "start": 1713.85, "text": "Yeah. I'm also curious if you guys have any take on what were some of the drivers of getting more Lightning adoption, I'm, you know, I, it might be fair to say that the spam, well, it depends on people's view, but I, I think it was spam in twenty twenty-three with all the retartinals or ordinals and inscriptions and BLC twenty and whatever. That kind of drove a lot of fees on main chain Bitcoin, and arguably that might have been part of the impetus for some of the large, players in the industry, the Binance's and the Coinbase's of the world, to implement Lightning. I'm curious if you see it that way or was it a tooling thing, was it just, you know, it just took time? What, what's your view?" }, { "speaker": "dan_o_prey", "time": "29:16", "start": 1756.37, "text": "I'm gonna say all, all of, all of the above, right? So if there's people that come from necessity, so they have a serious issue for their users when your users are complaining about fees. That's, you know, for some folks, it's a, a huge thing. So they're trying to find a, a way to get around that. Lightning obviously helps. So I think that's one, one part of it. I do think there has to be a belief as well, and I think there is a belief in the technology. And I, I, I know that's a bit of a fluffy answer, but I think you need folks that believe in the path and where you're going, right? And I think a lot of those who, who integrate, or have integrated Lightning have done so with the belief in it. yeah. Like they don't, they don't" }, { "speaker": "stephan", "time": "30:04", "start": 1803.73, "text": "believe it's, they don't believe it's going away, right Team when it was so early and small, and maybe now, you know, the last year or two, it's been way more clear that, hey, it's, it sort of seems more clear, Lightning's here to stay." }, { "speaker": "danny_stagg", "time": "30:17", "start": 1816.58, "text": "Exactly. Yeah, I think the, the Lightning are, is dead, people are starting to sound like the Bitcoin is dead, people, and, you know, we draw some parallels to early Bitcoin on-chain payments and, you know, failed experiment, we're done, you know, Bitcoin's not for payments, no one's gonna buy coffee in Bitcoin, right? And, and Danny touched on that, right, overhype around it, and, you know, I think we got a little bit carried away with where the state of it was, and it still does have, you know, some further scaling pieces to do and, to get, you know, fully global, you know, Visa level scale, but, you know, it is a lot more mature today. And so just because, you know, there were challenges in the early days in, you know, nineteen and twenty around Lightning or with Bitcoin payments in fourteen, fifteen, doesn't mean that, As here, as you say, it, it's gonna stay, it's not gonna die, it's only getting better, there's still a lot more investment coming in, a lot more, you know, merchants adding it, a lot more businesses, a lot more, interesting use cases, right? Like, you know, small ones, but, you know, Nosta, I'm sure a lot of listeners are, are familiar with the decentralized, social media application and the ability to zap and send micro-payments, the ability to stream payments, the ability to split payments, aren't possible with the current fiat system and the cost of, of debit cards for each of those different things. So starting to see more and more applications, you know, picking those up and, you know, Lightning's only as dead as the usage, and the usage is, is increasing, not, not decreasing as we should expect" }, { "speaker": "dan_o_prey", "time": "31:56", "start": 1916.22, "text": "I was, I was gonna add here as well. I think there's a kind of cultural talking point in general, and it's not just limited to Bitcoin, is there? I think most folks expect something tomorrow, right? And it's here, and it's done, and off we go, and it didn't work, and let's move on. and if you did that with technologies that, are foundational to how we exist right now, we're in three different locations talking at once, we wouldn't have got anywhere, right? and I think that's the," }, { "speaker": "dan_o_prey", "time": "32:27", "start": 1946.74, "text": "It's, it's kind of just get doing its own path and it's getting there. And yeah, some things aren't gonna work, and they're gonna be things in which, things that will work long term may, you know, stumble and trip. and I think this kind of cultural like, \"Oh, that's it, it's done,\" you know, just to be honest, just for a tweet so you can get a bit of engagement from it, it's a bit boring. and, you know, this'll be adults, like, we want Bitcoin in the hands of Do it, let's get building. and I, I'm kind of a little bit over the, the kind of, you know, the, the hot take tweets 'cause it doesn't, doesn't really do anything, you know, the fact is we're getting Bitcoin in the hands of people." }, { "speaker": "stephan", "time": "33:11", "start": 1990.8, "text": "The lead sponsor of this show is Bold, the best place to buy, sell, and save Bitcoin. For listeners in the US, Bold lets you secure your financial future with complete peace of 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 0.99% fees and seamlessly deposit the Bitcoin direct to your Bold Vault. The Bold Vault is a 2-of-3 collaborative multisig where you hold two keys and Bold holds one. They're 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. And now back to the show. And so let's talk a little bit about some of the big improvements that we've seen. I think it would be good if you guys can spell out some of the improvements you've seen, you know, recently in terms of whether that's Lightning on the technical side or kind of at the product level, what kinds of things have helped move that needle to make it more accessible?" }, { "speaker": "dan_o_prey", "time": "34:26", "start": 2066.13, "text": "I'm gonna say, we touched on UX and UX is, is improving all the time, right? And there are, there are different, applications and businesses that do so. I'm gonna use Breeze as an example, right? Last year, we released a new implementation of our SDK, the nodeless, implementation. I, I personally think it's one of the, the best Lightning UX's out there. It's great. if you haven't used it, try any of the apps that have integrated it, like Yopaki. Awesome experience, and I, I, I think it's those things that, that move forward, paired with the large integrations, because that awareness is invaluable. So, it's quite simple for me, is that we keep building." }, { "speaker": "stephan", "time": "35:06", "start": 2106.3, "text": "Yeah. So just to spell out for listeners, this is the, using Liquid, so basically the merchant can set up a shop more easily without, because historically they might have had to think about Lightning channels, opening, closing, rebalancing, resizing the channel, and all, all these other elements to it. Whereas what this nodeless implementation is doing is it presents a lightning invoice to the end user, that end user can pay it with a, you know, standard lightning wallet or app, and then it's paid with lightning, but actually in the background, it's kind of Bolt, Bolt, dot, exchange is doing a swap, and that merchant or your user in this case is receiving L BTC, and they can then later use that L BTC to kind of flip that back into Bitcoin or into fiat if they need it for their bills and so on, just so people understand what What's happening there?" }, { "speaker": "dan_o_prey", "time": "35:55", "start": 2155.49, "text": "Yeah, and, and, to use another example of, a company that I think's doing some interesting things is Money Badger, the guys that, helped Pick and Pay with their integration in South Africa. So- One of the issues that a lot of merchants have is that they have a point of sale, so a, a point of sale," }, { "speaker": "stephan", "time": "36:14", "start": 2173.84, "text": "like a terminal, yeah," }, { "speaker": "dan_o_prey", "time": "36:15", "start": 2174.64, "text": "machine, like a terminal, and They're specifically built for the fiat world, right? and so I, I'm gonna kind of abbreviate a lot of this. You can go on their website and learn about it, but the long and short of it is you use your phone to pay with Bitcoin, on the back end it sorts it out and goes to Money Badger and Those, pick and pay, basically, who are on the, the checkout, don't have to worry about it. So what you're doing is you're making that experience far easier for merchants to accept Bitcoin In existing POS, systems, which is, I think is really cool. And so, again, it all goes down to the user experience for me. The more we improve that, the more we make it more seamless and compete with the fact is right now, I just get my card out and tap it and off I go. That, that's what we're up against. That's the kind of experience, regardless of whether what's happening on the back end, which we talk about in the report, the, the thing is that we have to appear" }, { "speaker": "stephan", "time": "37:19", "start": 2238.77, "text": "To match or improve on that experience. Right. VCs talk about, you know, needing 10x better UX, right? Sorry, go on, Dan." }, { "speaker": "danny_stagg", "time": "37:24", "start": 2244.13, "text": "Well, just gonna mention on the, yeah, the 10x UX you mentioned, Stephan, earlier, the, you know, lightning addresses, and I think, you know, sending, making Bitcoin, sending Bitcoin is easier sending an email. Like, we've only just scratched the surface there on, on how that can be, you know, super convenient, global, borderless, interoperable. And then, you know Universal money addresses, which make, you know, sending fiat currencies and Bitcoin through, you know, a Lightning address, based system, super simple as well. So, as that gets rolled out, you know, across some of these major exchanges, major peer-to-peer apps, the ability to just, you know, send, Bitcoin or send, you know, I send dol-dollars, you receive Bitcoin, and it's just super seamless regardless of which app or, or, you know, exchange or broker we're using, I think that Early days and really just, you know, that's gonna be huge in terms of money movement meets email." }, { "speaker": "stephan", "time": "38:23", "start": 2302.77, "text": "Yeah, I think things like, apps that have like a contact list built into them or, yeah, the, these might be really, you know, convenient over time that hopefully if Lightning can get built into them. The other point I was gonna bring up actually is how, in the pick and pay example that you mentioned, Danny, I believe they have shared some of the stats on how much, what percent of the payments were Bitcoin and Lightning and what, were other things. And they've actually shown a much larger Bitcoin and Lightning percentage than, let's say, a Bitrefill as an example, which I found curious. I'm curious if you have any thought on why that is or is it just, you know, it just is the more natural fit in that Well," }, { "speaker": "dan_o_prey", "time": "39:06", "start": 2346.41, "text": "I think so market-wise, there, there are things, obviously South Africa, Luno and etcetera, and, and Bitcoin adoption is actually quite strong, in South Africa. I think that the reason that, that folks pay with, with Bitcoin is A, the, the, the value appreciated, and B, it's a, it's a great experience. It's the Bitcoin" }, { "speaker": "stephan", "time": "39:26", "start": 2365.9, "text": "wealth effect." }, { "speaker": "dan_o_prey", "time": "39:26", "start": 2366.5, "text": "Yeah, yeah. And so, and so folks don't see it necessarily as I can't let go of that, they're just saying, \"Oh, okay, I'm gonna benefit on that because it affects my life today, right?\" and I think, again, it's all, all nuance, right? It's not, it's not like black or white, but like, I think what you see it picking up as And improving UX, a-and people wanna pay with Bitcoin, and it's, it looks as though it's going pretty well there, which is cool." }, { "speaker": "stephan", "time": "39:56", "start": 2395.5, "text": "I guess looking forward, Lightning adoption, what, what do you see as the big hurdles or things to be overcome or, you know, factors? Is it social and culture? Is it economic? Is it technical? What, what are you seeing there?" }, { "speaker": "dan_o_prey", "time": "40:11", "start": 2410.91, "text": "I think that the, the game changer is integrating into mainstream applications, and that's gonna come from awareness, bet-better UX. I, I see it as the Ms of this world, the Xs of this world, I know they're probably gonna go down a Visa, route, but they shouldn't. the- Bringing directly peer-to-peer Bitcoin payments into these applications where it's integrated into the user experience. You know, billions of people use WhatsApp, imagine just sending some Sats on WhatsApp, the click of a button. That, that's where I see The real hockey stick kind of, movement to, to get there, we need to get the developers building with Bitcoin and, and making sure they know the tools are there. And again, it kind of all links to awareness as well. Awareness is such a, a, a big factor. we have a lot of, loud voices, within our ecosystem, which is great, but I think we could do a better job on using our, our voices better, because I think what we sometimes do is get a bit of a- An echo chamber, and we need to really branch out of that echo chamber and talk to these, you know, folks in different, verticals so you can speak to the folks in crypto, those in fintech, and not make it about ideology, just show it the tools and show the tech. If you wanna get into the ideology stuff, cool, get into that later, but like show them the utilities for them now, and then we'll get there. And I, I, I feel really confident in this because I think what the report's showing is, it's in the hands of It's up to us to get that to resonate and get those builders building the tools that we need." }, { "speaker": "stephan", "time": "41:50", "start": 2510.36, "text": "Yeah, and I think a lot of people might not be clear on just how much easier it is to implement Lightning now, right? Like, if you could just explain a little bit on the SDK side. Actually, how long does it take for an engineer to implement Breeze SDK, like just for people to understand that? Because I think that's a point that maybe not a lot of people get yet." }, { "speaker": "dan_o_prey", "time": "42:10", "start": 2529.91, "text": "Yeah, it's just a couple, a couple lines of code. So with the, the, with Breeze, it's, it's free, it's open source, and you can plug and play in, in, in any time. It's not hard. The whole point is an end-to-end solution. You job, drop in a couple of, lines of code and kind of off you go. you know, obviously companies wanna then build, the experience and design it and all of those things, but, but on the like technical side? Very, very simple. There's some folks, I think Carlos at Yapaki was talking about how simple it was on Stacker News the other week, and we have like tutorials. I think in twenty-one minutes, we showed how you could implement it into an app. So, and, and this isn't hyperbole either, this is, this is it, and that's what we're trying to say about how easy these tools are to use today. yeah. And the fact it's free, it's open source, you can audit it and have a little look at it all. It's kind of, a bit of a no-brainer. so hopefully, or what we're seeing is, is more folks implementing now, and especially with nodeless as well, like That experience for the end user or someone who's maybe unfamiliar with Bitcoin or even Lightning, they don't need to worry about channel management, they don't have to worry about setup fees. You just Off you go. So from both sides, devs, it's super, super easy. You can go to Breeze dot technology, and, and check out what implementation works for you. you can go on GitHub, you can go and check the repos yourself. it's- It's, it's super, super simple to do today, which is, which is awesome." }, { "speaker": "stephan", "time": "43:46", "start": 2625.99, "text": "Yeah. And Dan, anything to add from your side?" }, { "speaker": "danny_stagg", "time": "43:50", "start": 2630.05, "text": "and, and in terms of how easy it is to adopt, yeah," }, { "speaker": "stephan", "time": "43:53", "start": 2632.84, "text": "and, and also just, what it's gonna take for more adoption, right? Like, do you think it's a social thing, is it an economic thing, a technical thing? What do you think?" }, { "speaker": "danny_stagg", "time": "44:00", "start": 2640.4, "text": "Yeah, I mean, I think I touched on this earlier with, with, you know, the next step for me being, you know, less Bitcoiner but more fiat to fiat, as a starting point, and again, just sort of making that sort of seamless on and off ramps, maybe completely abstracted away from the user, maybe completely abstracted away from like the actual businesses that are providing these services to users to start with, right? But that, you know? Make fiat cheaper and faster isn't, not the goal here, you know, there still will be fees involved with, you know, conversion between, different currencies, for the payments, for the, you know, remittances, and then Bitcoin can then be introduced as or alongside as a cheaper, you know, alternative to that if you want to use Bitcoin directly, or if you're just a Bitcoiner, you can, you know, if you're already sold, just use Bitcoin directly. So I, I see that as a driver of, of business adoption, and then I The Trojan horse stepping stone of pushing out the infrastructure across companies where users don't need to know or care what they're using under the hood, in the same way most users don't know they're using TCP/IP right now, but over time, the benefits of just using Bitcoin and having the ability to use Bitcoin in a more circular economy, will, will win out on cost and, and speed Yeah." }, { "speaker": "stephan", "time": "45:20", "start": 2720.33, "text": "and do you mind spelling out what you think the cost would be versus, let's say, credit card or typical fiat payment rails?" }, { "speaker": "dan_o_prey", "time": "45:28", "start": 2728.5, "text": "Yeah, I mean, so if you're looking at, if you're looking at, merchants, let's use merchants as, as an example, three and a half percent that you're getting charged in your pain to take payments. And, Jeff Booth Mentioned something recently, on a podcast where he said like, \"The fact that you pay to take payments in the future, i-it's just not gonna be a thing.\" So right now, if you suddenly wanted to, if you wanted to go fully self-custodial You kind, you kind of can, and you're, you're looking at fractions of, of, of, of, of, the cost, like it's, it's exponentially cheaper. Right now, if you-- what you're seeing as a consumer as well, it's another hid-- like hidden tax on anything you buy. Three and a half percent, you know, we write in the report that you get all these lovely rewards with your credit cards if, if you're still paying in fiat. Well, that's just basically what the merchant's paying the processor. We can eliminate all of those costs, and it's just gonna be More value, more value in your pocket means more value out in the world. So, I, it's gonna be so much cheaper that, that it's, it, the idea of paying for a processor, i-it's kind of gone." }, { "speaker": "danny_stagg", "time": "46:46", "start": 2805.72, "text": "Yeah. And there's a lot of other benefits to the merchants as well in terms of the lack of chargebacks, like we touch on, on one of the charities that actually, you know, loses money when someone donates five dollars and then, you know, charges it back and they end up having to pay fees. and, and actually just instant access to the liquidity and surety of finality that, that the funds that are donated or paid are, are available for immediate use and aren't gonna be, you know, clawed back later. So the administrative overhead and the certainty and the- Ability to then use that capital rather than waiting thirty, sixty, ninety days for the, the funds to actually settle and be available, is a huge game changer on the merchant side as well, not just the, the benefits to consumers." }, { "speaker": "stephan", "time": "47:29", "start": 2848.91, "text": "Yeah. and I guess- As I understand on Lightning today, typical routing payments, I mean, just rough, it might be zero point four percent or something like that, zero point three percent maybe, it just kinda depends on what you end up paying, but it might be something in that range, and so that obviously is much cheaper than most of the fiat payment rails that you would otherwise be using, and so that, that hopefully gives people some loose idea Yeah, but obviously it's, it's a bit of a variable question here." }, { "speaker": "dan_o_prey", "time": "48:05", "start": 2885.13, "text": "Yeah, I mean, if you look at remittances, you could use remittances, another example we br-we bring up like Bitnob, as one example in the report, and so there's other factors that come into it. So we talk about these percentages of costs which can be exorbitant depending on the route that you're, that you need to move money. But actually, there's another thing that you forget, which is that to send that money, therefore, you have to accumulate A higher value to send to make it affordable. So now with Lightning, say you're in Nigeria and you wanna send money to the US, you can send that ten dollar remittance without worrying, whereas traditionally that is just impossible. and my background, I, I used to work for a remittance company, I know, I know we're trying to make things cheaper. and when you look at it, you sit there and you go, it's just moving digits on a computer, it shouldn't cost that much. And imagine that value going back into the, the pockets of people that need it. And then, as another benefit, is the reach that you can get. So these fiat rails and the bureaucracy and all All of that, right now, we can send money wherever you want, and we all know this, and, and it's kind of, you know, second nature, but to some folks where you're like, you can send it anywhere in the world, like Done, it's there. that's just a not an experience that happens unless you're privileged, right? And so I'm privileged being British, I live in the US, I send money between the two, it's very, very good experience. But if you're trying to send it to a, a country where bureaucracy kind of reigns supreme Just not happening. So there's so many other added benefits to, or costs, time, all of those things. So, it's just won't." }, { "speaker": "stephan", "time": "49:50", "start": 2990.23, "text": "Yeah. Okay, well, great. I think those are kind of the key points that were, that'd be good to hear. Any final point, any last takeaway that you want, listeners to take away?" }, { "speaker": "dan_o_prey", "time": "50:02", "start": 3002.34, "text": "Bitcoin isn't just digital gold, it's an everyday currency. I, I think that's it. I, I want folks to see what I believe Bitcoin should be and will be and is today. I'm not interested in the kind of, if Bitcoin isn't used as a medium of exchange, I'm kind of like, cool, that's really not what I personally am interested in. I, I firmly see it as a currency. I see it as something that Unlocks an economy that can only kind of be paralleled to the internet, that's the only comparison. and so if anyone was, you know, like, what, what, what do you think from the whole report? What do I want someone to take away? Wouldn't take away that Bitcoin's more than just digital gold." }, { "speaker": "danny_stagg", "time": "50:51", "start": 3050.99, "text": "Yeah, Dan. Yeah, I'd say if you, if, you know, if you haven't used, or if you've never heard of Lightning before, firstly go try a Lightning wallet, I'm sure most on, in this audience have, but if you haven" }, { "speaker": "danny_stagg", "time": "51:03", "start": 3062.76, "text": "Shocked at, at how, you know, how much things have changed. Go try, you know, download Breeze, go make a Lightning payment, it's actually, you know, super simple today. and then, you know, if you are a holder and you, you do just believe the store of value and you don't wanna spend your Bitcoin 'cause you think it's gonna go up, you know, there's, there's, you know, there's always more fiat, you know, that you can, you can use instead of spending your fiat, go spend some Bitcoin" }, { "speaker": "danny_stagg", "time": "51:33", "start": 3092.72, "text": "Bitcoin payments today and, and see for yourself, because I think most people will be very pleasantly surprised at, how far the ecosystem and the infrastructure has come." }, { "speaker": "stephan", "time": "51:42", "start": 3102.23, "text": "Excellent. Well, I'll put all the links in the show notes. So Dan and Danny, thanks for joining me today." }, { "speaker": "danny_stagg", "time": "51:47", "start": 3107.22, "text": "Thank you so much, Javier." } ] }