{ "episodeId": "SLP708", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "nate": { "name": "Nate", "role": "guest", "tag": "NATE" } }, "segments": [ { "speaker": "stephan", "time": "00:00", "start": 0.26, "text": "It's like you're telling me that I can accept a payment that's instant, no chargebacks, anywhere in the world, for like no fees and almost nobody knows about it? You're scamming me. There's no way that's real. I feel like there's that sort of mental block in that we are leapfrogging the system so hard with this tech that it just short circuits, and for good reason, like I don't blame them. It does sound nuts. But the tech is here, like we have it, it works great, but I just feel like there's like this, if something's too good to be true, it usually is, right? And here we have an instance where it's like breaking down that wall of like, no, it's real, and it works really good." }, { "speaker": "nate", "time": "00:39", "start": 39.0, "text": "Hi everyone and welcome back to Stephan Livera podcast. Today we're gonna be talking about the Lightning Network, where it's at today, here in, December 2025. And rejoining me on the show today is Nate. you may know him online under his, name as, Beef or Bacon. Nate, Nate works at Voltage, doing things like, you know, Lightning stuff, customer support, and also kind of handling the Lightning, uptime and payments and things like this. So, and I know, and Nate, you are a big, Believer in the Lightning Network compared to, a lot of other people out there who are maybe more bearish. So, we're gonna hear more of a bullish, a bulls view on Lightning Network. So welcome back to the show. let's, yeah, let's hear some of your, bullish takes on the Lightning Network." }, { "speaker": "stephan", "time": "01:26", "start": 85.76, "text": "Yeah, awesome, Stefan, thanks for having me, inviting me again. I'm a little bit congested, so just anyone listening, if I sound nasally, that's why. I'm not always nasally. But, gosh, yeah, we're almo- it's almost twenty twenty-six. The Lightning Network's been around for almost, gosh, not quite ten years. We're getting there though. Yeah. Was it mainnet" }, { "speaker": "nate", "time": "01:48", "start": 108.13, "text": "in twenty eighteen, so that makes it about, what's that, seven, seven or eight years, yeah?" }, { "speaker": "stephan", "time": "01:53", "start": 112.9, "text": "Still feels like a long time, but not, at the same time, not really. so Yeah, I mean, there's so much to talk about, so it's a very general like beat on that. but I will say that, anyone who wants to use the Lightning Network, whether to receive payments, send payments, all over the world instantly, it still works really, really well, and the tooling has only gotten better, over the years, for For whatever you wanna do with it, set, you know, most people wanna receive Bitcoin or send Bitcoin. I think that's like obviously the primary use case of the Lightning Network, and I think for that it works really, really well. but we can definitely dive in on that. Let's talk a little bit about" }, { "speaker": "nate", "time": "02:38", "start": 158.46, "text": "like things like payment success rates, the size of the payments, the The fees, the costs, let's talk a little bit about some of those. do you have any thoughts on payment success rates and the improvement in that over time, or, you know, or just kind of has it flatlined or is it getting better? What's your thought there?" }, { "speaker": "stephan", "time": "02:54", "start": 174.3, "text": "In the grand scope of the public Lightning Network ecosystem, the," }, { "speaker": "stephan", "time": "03:03", "start": 182.89, "text": "The capa-- the total capacity of Bitcoin deployed hasn't really changed much over the last few years, but what you've noticed over time is the payment success rate does go up. we've done, studies with, the data that we've accumulated at Voltage and published with Fidelity, that kind of go through this, it's really hard to- You kind of have to compartmentalize different scenarios. For example, different hops, right? The more hops that you have, that your payment has to go through the network, the, the chance of it succeeding goes down. But that also involves the size of the payment as well. So we've done, certain studies over that, which I can link to you later if you wanna put in the show notes or something, and we've- We've pretty much determined that over time, things are getting more efficient, like that's my point. So the same amount of Bitcoin is deployed, but success rate is going up. when the Lightning Network first came out, Bitcoin was ten thousand dollars or, or lower even, and it was really easy for like people Back then, who can, can open five million sat channels and open twenty of them, you know, why not, right? and so over time, that starting a node and trying to-- we can get into that, but what I'm kind of saying is that like really kind of like building out a node as price goes up, payment success goes up, but the ability to have an impact on deploying Bitcoin into the Lightning Network kind of goes down. Because it takes a lot longer for someone to probably stack five million sats than it used to, and that's kind of always been my default channel size is five million sats. So that's kind of interesting, yeah. Saying that." }, { "speaker": "nate", "time": "04:54", "start": 293.98, "text": "now on the- as like on the size of the Lightning Network, this is a kind of a common thing where people say, \"Uh, okay, like it's only, let's say about, last I checked, it's about four or five thousand coins.\" let me just double-check again. Yeah, we can. But, the what I've seen is this pattern where recently we saw actually there was, there was some cases where the capacity was coming down, but the-- and the number of nodes are going down, but they were more reliable. And then what we've actually seen more recently is" }, { "speaker": "nate", "time": "05:28", "start": 327.56, "text": "just looking at some dashboards, I can see it's five thousand seven hundred and twenty BTC in public Lightning channels, right? But again, that's the stock, that's not the flow. So that's the other thing where people, I guess, the common conception, if you talk to, let's say, crypto people, not necessarily Bitcoiners, they, they might have a view of, \"Oh, yeah, Lightning is this thing that exists, but maybe not that many people are really using it.\" But actually, under the hood, there actually are a lot of people using Lightning and there Of this view of how there's almost this weird dichotomy of the public perception of Lightning versus the practitioners' per- per-perception of Lightning." }, { "speaker": "stephan", "time": "06:07", "start": 366.67, "text": "Yeah, if, if you don't have a decent grasp on how the Lightning network sort of works, you would probably see that five thousand capacity and think that that is kind of like the total amount that could be used, but in reality, that five thousand Bitcoin is being sloshed around all over the place multiple times. So the v-- and, and we can't see that as part of the Lightning Network because it is a peer-to-peer network that isn't published to a blockchain. It's only between the peers that are actually transacting. So It's really hard to get an accurate view of liquidity flow through the network and volume through the network. we've had, entities that run large nodes like River sort of extrapolate their own activity to the wider network to sort of give an estimate of the kind of volume that Lightning Network might have, but at the end of the day, it's basically Impossible. And that's, and it's kind of hard too, because we get those questions at Voltage during sales calls, you know, what's the volume of this? How is it growing? And a lot of this stuff is just kind of unknown. which on one side from like a, from like a marketing standpoint is really hard, but from a usability and like cypherpunk standpoint, that's really cool. Right. The privacy aspect of it is interesting. Yeah. Exactly. and then the other part was" }, { "speaker": "stephan", "time": "07:34", "start": 453.52, "text": "The, what you have to remember is when someone deploys Bitcoin into a Lightning channel for the purpose of Maybe connecting other people's payments through the network, like hopping through. if there isn't any activity there or they can't figure out how to do it, then you're kind of just sitting on dead capital at that point. So you have to-- most of the Lightning Network is Hot, as they say, every Lightning transaction requires on, under the hood, an on-chain, transaction to be signed, and that requires the keys to kinda be there to be, especially if a Lightning channel is really moving payments around, it constantly has to update what's essentially a signed Bitcoin transaction, just not broadcasted, right? That's how you unilaterally exit the channel. so that kinda requires the keys to be hot, so people might think, \"Okay, I've deployed this much Bitcoin on there.\" I've, and it's not really moving for whatever reason. so I have two options. Either close the channel, put my funds back in cold storage, or I close the channel and try to redeploy to a different peer and see if that'll work. And I wanna say that what I'm talking about right now isn't really someone who's making or receiving payments as much, it's someone that kinda like wants to be a hub on the network and route payments for others. any user doesn't really need to care about moving payments for others if they route a payment Payment, great, you know, that's a little bonus, you might get a little routing fee on that, and we could talk about that too. but I just want to say that, that sort of efficiency is kind of happening, we've seen that over the last few years where at the beginning a ton of Bitcoin was deployed and then maybe forty percent got closed down over the last couple years, and that isn't because it's failing, it's just the network doesn't need it right now. And what, what's really cool about the Lightning Network is that the incentives," }, { "speaker": "stephan", "time": "09:27", "start": 566.64, "text": "Like if we saw over time, because the fees that are charged, for a payment are public also, that's a public gossip thing in the Lightning Network, so we could track fee rates. If fee rates are going up over time, but Bitcoin capacity of the light network isn't going up, then that signals that there's more demand that, Then the network can really handle. And so if we see that, then that should trigger more liquidity inflow into the light network for people that do wanna harvest that yield, quote unquote, as Amboss likes to say, because it's like, oh, if I deploy five million sats into it, I can get A higher percentage because the light network is being used so much now. so I think that there's certain canaries in the coal mine, I think, on that also, that over time we'll probably see" }, { "speaker": "nate", "time": "10:20", "start": 619.63, "text": "If we just kind of look only at what you have seen in, in your experience as an operator on the Lightning Network, are you seeing a secular uptrend in Lightning volume? Does that align? Reason I'm asking this is, as an example, I did an interview recently with LQWD's CEO, Sean, and he was saying, \"Yeah, they've seen a secular increase, but maybe during the bull season of Bitcoin price, you get kind of a spike there.\" Is that aligning with what you see? Like it's just, it's just been a secular increase over time, but with these bull jumps? Right." }, { "speaker": "stephan", "time": "10:54", "start": 654.07, "text": "yeah, so I, I guess just to lay the foundation in there, I'm sort of the main manager for the main voltage routing node. I could prob-- we could probably do more, but my goal on that is to really keep it as efficient as possible, so like maintaining really high centrality and payment success rate without deploying as much Bitcoin is, is absolutely necessary, you know? so, that node kind of plugs into all of our enterprise clients, so our enterprise clients run a node because we're non-custodial, and- They usually have a channel with our main node, and then we kind of like route payments to and from their node. and so to answer your question, I- I think the answer is yes, but I haven't really done much study on that. Like, I kinda go into our node and I kinda see how traffic is moving, but at the same time, actually. Off the top of my head, we've probably routed more payments this year than any other year, actually. I just haven't quantified that or done any sort of report on it, but that might be a fun thing to do, Actually, 'cause I do have that data, I just need to run it through a, I don't know, a vibe-coded chart or something and get it done. So maybe it is happening like that." }, { "speaker": "nate", "time": "12:08", "start": 727.99, "text": "it's interesting because we have seen some different public stats come out, like I think, Miles earlier this year from, you know, Cash App and Square came out and gave a number. You know, and was saying like this, this amount of yield, you know, and so, and then even the LQWD guys are saying there's this amount of yield. Of course, as you said, it matters on how many coins, how many BTC you have put into your channel. And of course, it matters the direction, it matters the centrality, like you said, because I guess the general idea, how I'm understanding it is You wanna be in the direction of the flow, right? Because if people are routing through you in order to route a payment to, whether that's an exchange or a merchant or whatever, then you're the one collecting routing fees and, you know, you are be-- becoming like a more central node, right?" }, { "speaker": "stephan", "time": "12:54", "start": 774.02, "text": "A good analogy for like, if this goes over people's head, and it's not perfect, but imagine if nodes were cities, okay? But you could get to any other city in the world instantly, but it still requires a highway. Alright, so if, so if I'm running Houston, okay," }, { "speaker": "stephan", "time": "13:16", "start": 796.22, "text": "and I, I, I want to have a highway to Dallas, okay, but I also want to have a highway to College Station and these small state-- small towns around Tech, I mean, but, but it could be anywhere in the world, Tokyo, whatever. But the idea is that Being able to also link in with these smaller nodes on the network, that's kind of where the real traffic is. It's not about slingshotting Bitfinex to Binance, like it's not, because they have direct channels with each other anyway. It, it's really trying to form, trying to plug gaps in, in a lot of ways. And there's, God, the tooling to be able to do that now is so much better, like, The Lightning Labs tool, the Terminal Web interface now, they have a totally revamped auto-channel system that actually goes through your nodes, channels, your centrality, your history of routing, and then actually chooses a peer that's actually not bad. if you turn on auto channels, so you kinda like deploy on-chain Bitcoin into your Lightning nodes on-chain, wallet if you're running LND, and then you say, \"Hey, I want five million,\" yeah, so you put thirty million Sats on it, and just say, \"I want, I have a budget of thirty million Sats, I want five million sat channels,\" and it'll kind of-- it won't all be instant, it'll, it'll spend a day or two to kinda like see how your node is performing, and then it'll kinda open one or And then kind of wait a little bit, and then open one or two. It's really smart, and I talked to, Destruct over there at, and, and Mike, and everybody at Lightning Labs a lot about it, and sort of helped them test it. And there's still a lot of ways to go, but the tooling is, is amazing. Like it used to be, I would have a Python script, and I would try to run centrality scripts against my node to try to find out which is a good peer to open channels to, and I feel like that's" }, { "speaker": "nate", "time": "15:07", "start": 906.71, "text": "Gotcha. Which is cool. Yeah. So, yeah, interesting that you, point it, you, you're, I guess it's the analogy of highways and roads and, trying to make sure You have a good view of the network or a good, routing to the rest of the network so that payments can come through your node. Right. It's like" }, { "speaker": "stephan", "time": "15:24", "start": 924.13, "text": "a college station doesn't have a road to Dallas, but Houston does. You know, I'm charging a toll now to drive through my town to get to, to College Station, right? So- Yeah. If you know what I mean. Yeah." }, { "speaker": "nate", "time": "15:37", "start": 937.34, "text": "And so- in terms of like the yield conversation, like routing fees and things, let's talk a little bit about that. Now, as I understand, in Lightning, you can open a channel and there, there can be like a base fee and also like a PPM fee, like a variable fee. So can you talk to us a little bit about your thinking there? How do you set those fee rates? Do you try to say, okay, this route is obviously very in high demand, I can afford to, I can raise my fee there, or do you manually manage it or not really?" }, { "speaker": "stephan", "time": "16:10", "start": 970.08, "text": "So, I used to manually manage it a lot, and I actually kind of like talking about this because fees, in my opinion, isn't really about the yield as much, but it's about targeting flow of liquidity and trying to keep things moving where they need to be. So to kind of simplify that a little bit, I run a node that has two hundred channels, but at the end of the day, I really only care about having high payment success to maybe fifteen to twenty of them for our enterprise customers, which are usually the exchanges. And because exchanges have high directional inbound demand, if I set my fees too low on that, other nodes on the network can craft a route to like kind of jam liquidity, my liquidity out that channel back into theirs, and then they can charge a higher fee on it and sort of siphon it, take advantage of my charity so to speak, so that they can capitalize on it. So that's why if you go to Amboss dot space and look at some of these exchange nodes, you will see that the average fee rate of channels connected to them are generally higher than sort of a, just kind of a goofy named node that might have like fifty channels or something. it's just because of the demand. So I char-- so my general baseline on a lot of those is around two thousand ppm, and what that means is that For every million sats routed through, I get two thousand. Parts per million is what the ppm is. And that's cool, but the idea really is that I wanna make sure that my liquidity, if it-- I wanna make sure that When that liquidity moves, it's actually an economic movement and not somebody trying to manipulate my channels somewhere else. Gotcha. I hope that kinda makes sense a little bit." }, { "speaker": "nate", "time": "18:00", "start": 1080.15, "text": "Yeah, and I, and the way I've heard this explained is kind of like you almost have to like set the right fee that you're not getting exploited per se. Like it needs to, you need to set it at the right level that people aren't just sort of- Trying to make free" }, { "speaker": "stephan", "time": "18:14", "start": 1094.4, "text": "yield" }, { "speaker": "nate", "time": "18:15", "start": 1094.76, "text": "out of" }, { "speaker": "stephan", "time": "18:15", "start": 1095.0, "text": "you. I guarantee people are running scripts out there that are monitoring all of Bitfinex's channels, for example, and as soon as they detect a channel with a hundred sat or a hundred p p m or something, they're now trying to pay through that out, out the other end back to their node so that they can charge a higher fee on it. Interesting. Yeah, and" }, { "speaker": "nate", "time": "18:35", "start": 1115.23, "text": "so just so as I understand how that works is in Lightning, the, it's source routed payments, meaning when you have your node, you can construct the route, and so the idea is your lightning node is kind of having a view of the net-- of the lightning network and saying, \"Hey, oh, look at the fee here, I'm gonna try to specifically construct my route through this way to kind of do that,\" and that's how they're able to do that, because it's not just kind of like a central provider, obviously each of these nodes is able to try to route through the channels that it knows about." }, { "speaker": "stephan", "time": "19:10", "start": 1149.54, "text": "And, and again, I wanna reiterate, anyone that's like, \"Well, Lightning Network's too complicated, you guys are talking about this complicated stuff,\" this is why, like, this is all like under the hood, like we're mechanics right now talking about how an engine works, you don't need that in order to drive. So I just wanna like point that out real quick, like this is anyone who's doing that. but, but yeah, so that is the main purpose for fees when my goal isn't necessarily yield, but I'll talk on that here in a second Like, like payments, really. everyone else, so, also Lightning Labs has auto fees, which is really cool. every couple days, it'll either increase or decrease your fee rate based on the activity and, ratio of outbound to inbound you have as well. And they listened to me thankfully and added a feature on that where you could sort of set a fee floor. So if there's no activity at all, it won't go down below that, yeah. to zero, like it used to just go to zero. It's like, I don't want it to go to zero, I want to set it at five hundred as like the floor. So they added that, which is pretty cool. so m-most of our default channels are-- and this is all public info, it probably started around two thousand, and then they'll gradually kind of like go down through the lightning la-the, the lightning terminal auto fee system until it kind of hits a, hits a point where, where things are happening. So the folks that, are optimizing for yield, Trying to get as much, fee-- there's two ways, but the, the baseline is they're trying to get, the highest fee possible to route to an in-demand destination. That's the easiest way to do it, or like really capitalize on it. You're still going to sort of make fees through other channels and stuff, but really focusing on the big players, like your Krakens and your Bitfinexes and your Binance's. That's always worked for, for me over the years. but we've, we've entered this stage now where if you've got a high quality node, which is easy to measure, through the terminal, lightning terminal ranking system and centrality scores and things like that, The more high quality node you have, now you can charge a premium for liquidity to other nodes on the network. The Ambo's Magma is probably the most popular, marketplace for that now, which is also becoming more automated. hopefully soon the LSP, the Lightning Service for the, lightning, Yeah, the Lightning Service Provider. Yeah, yeah, the, the LSP spec, is constantly being worked on, and that uses, sort of a zero-conf, system and model and voice system to do like this just in time inbound liquidity, so hopefully you could essentially generate an invoice. When the invoice is paid, it'll detect if you need inbound liquidity, and if you do, it'll snag one from a service provider, they'll charge a fee, and the payment will then go through, which is cool, That's been working, people have been working on that for a long time, but it's really hard in open source world, in open spec world, where you wanna build something that sort of everyone can use. So the, That, so the work on that is ongoing. They have a Telegram group, I'm kind of peeking in there from time to time. So the, the point on there is you could sell liquidity. Yeah. And while we're, while we're, while I'll, yeah, while we're on that, which according to Amboss is one to four percent. APR generally. So, yeah." }, { "speaker": "nate", "time": "22:48", "start": 1367.52, "text": "Gotcha. Okay. Yeah, interesting. And I guess, that number that Miles put out on y- his yield number, at Cash App or from Block, the company behind Cash App, I think he announced nine point seven percent yield. But I can tell you that, yeah. That, that is Cash App, who are obviously Yeah. They're also an exchange, they're, you know, they're a provider, so obviously they're gonna get a lot of volume just by nature of that. Right. The" }, { "speaker": "stephan", "time": "23:13", "start": 1393.05, "text": "thing is, if you're using your node to run a business where you're doing more send outs than receives, so like if you're sending out more, then your channels are going into the inbound Like, which means that your channel's, the majority of your channel size is actually owned by your peer, okay? But you can Capitalize on that by then deploying a channel to a sync node, usually Loop, and I'm pretty sure Cash App is doing Loop, and Loop is a submarine swap service, so a lot of people would use that, and you could get up to five or six thousand ppm on that. So if you're running a business where you're spending a lot, and then you open, say you have a, a Bitcoin of inbound liquidity, you can now open up a Bitcoin channel to Loop And all that inbound on all those channels now will get replenished and get shot through the loop channel, and then you'll get the fee. Because people will be routing through you, yeah. And I'm pretty sure that's kind of how Block does it." }, { "speaker": "nate", "time": "24:12", "start": 1452.41, "text": "Gotcha, yeah. and then when it comes to things, 'cause there's, I guess there's two main forms of this, I guess, quote unquote, yield. One sense is, yeah, the, the, the routing fee yield, but there's also the sense of Selling or buying inbound channels, right? So in the case of if you are a service provider, you may be selling a channel to people and just taking an upfront fee for that. Now, what's your thought on that? I know that has kind of shifted and evolved a little over the years too. I, I" }, { "speaker": "stephan", "time": "24:39", "start": 1478.94, "text": "think it's actually great. it depends still on what kind of user you are. If you're running a node and you're bootstrapping a node and you need inbound, there are-- and, and you kind of do need inbound, and again, inbound is just when you have your peer having capital allocated to the channel. It's kind of like a mirror, your outbound is their inbound, your inbound is their outbound. I think that if you need in-- if you really need to receive payments going to somewhere like, Magma, which-- if you go to any, if I, if I tell you, Stefan, say like, \"I wanna get Nate a birthday present, right? \"And you know my node's public key, you could put my public key into Amboss and gift a channel now. Right. And then they would open the channel to your node. Yeah. They would go into the am-- the find the best deal and then, and then do it automatically. It used to be you'd have to like sift through like, like eBay or something and kind of buy it, but now it's like, it's just becoming better. And I do that sometimes for our peers, our enterprise clients, and even on the Voltage It's like, I- we need some inbound, I'll buy a ten dollar channel, which is like six million sats or something, which isn't bad. and, and then, And then that's just going through the folks that are running good Lightning nodes that are hooked up to the Magma system, that are getting paid for that now. And Amboss Rails does that too, you can- You know, we've, we've had, we've talked to Jesse a million times about that, but I could go on and on about how that's such a really good service. but my personal opinion though is if you kind of wanna take the next step And run a lightning node, just open channels and start buying stuff, 'cause that's how you get inbound also. Right. Because you'll automatically get the inbound for you. Go to Bitrefill, go to your local Square-enabled Bitcoin shop and- And pay, and pay with your node. But also" }, { "speaker": "nate", "time": "26:37", "start": 1597.04, "text": "protect your channels with, sufficiently high fees that you don't get, your liquidity doesn't get drained by, if you've got, too low fees, right?" }, { "speaker": "stephan", "time": "26:45", "start": 1605.09, "text": "Yeah, yeah, that's actually a good point. Like, if you don't care about rounding at all and you don't want your liquidity really touched, but you still want the channels to be public because you wanna receive maybe at some point, then just increase them to the moon, like, That's okay, it, it just might annoy your peer a little bit, because your peer would think, \"Why do I have a channel with this guy if he doesn't want us--" }, { "speaker": "nate", "time": "27:05", "start": 1624.93, "text": "doesn't actually have a reasonable fee, right?\" Right. But I mean, you can sort of keep them like, you know, high enough that people aren't just gonna abuse your fee, abuse your channel, kind of thing." }, { "speaker": "stephan", "time": "27:17", "start": 1636.79, "text": "and now we have auto-fees, like I said, so that's not a science you really have to learn it." }, { "speaker": "nate", "time": "27:21", "start": 1641.24, "text": "Right, right. And so that's probably- this is probably an interesting question or maybe triggering, but, you know, back in the earlier days when, you know, big cashers were angry about Lightning and stuff, that one of the big arguments, now obviously I think the big cashers were wrong overall, to be clear, but a common argument they made was, \"Oh, the Lightning network is gonna become this hub and spoke model thing, and it's just gonna be super centralized in that way.\" Is there a kernel of truth in that? because it wasn't, the way Lightning evolved wasn't quite the vision of families and Uncle Jim node, you know, operators all in their homes. It seems to be more about, let's say, professional Lightning node operators and services. what are your thoughts there?" }, { "speaker": "stephan", "time": "28:08", "start": 1687.67, "text": "So, I guess there's two angles there that I've heard. So my first initial sort of question to that question is, why does that matter? And I can steelman two reasons why that matters. One is if, if it's millions or billions, hopefully someday, of people using the Lightning Network In a small way, and there's only ten nodes out there that are relaying it around. There's, there are two issues with that. One is if one of those nodes goes away, does payment success go down? I would say no on that because there's always gonna be a rush to fill liquidity gaps if the If the fee incentives are there. And the other is privacy. So if there's ten, we'll just say ten, I mean, this is like worst case scenario. If there are ten large nodes out there, all have channels with each other, and then all have channels mostly with the small folks on the edges, right? The chance of them colluding and kind of-- because, okay, so if I route a payment, I only know where it came from and where it's going, but I don't know if-- but I only know one hop. I don't know if, you know, the incoming hop and the outgoing hop. That's right. I don't know if we're like the previous hop, I don't know if that's the origin or if they're routing it also, and I don't know if the hop I'm forwarding it to, if that's the end destination or if they're forwarding it along. But if, if I can, if I know what the big nodes are and say, \"Hey, I routed this payment, did you forward that to anyone else also, or did, did it end with you?\" They say, \"Oh, no, we forwarded to this one.\" And then they can, maybe if it ends at a smaller node down that chain, they can say, \"Okay, we could, we think that it might be this node that received the payment.\" So what are the implications of that, then, is the question. So if-- and then, I mean, this is like a whole thought process, right? And I think there's a lot of nuance that's lost on Twitter 'cause someone like me who doesn't have a blue check, I can't write a, a whole story on, on there. So like, I usually don't, talk about this kind of stuff too much, even though I hear these things. If there's a KYC component anywhere in there, the worst thing that could possibly happen is for a KYC entity To be able to have high probability of knowing what your node's public key is, because now it knows all of your public information. So then the question is, what can it do with that? And it's not It's not too much, they can't, I mean, there's some things there, but they can't see any payments that you're making after that. They could sort of send fake payments through your node, which is called probing, to kind of look at channel balances and maybe have an idea But, but the, but then my thought goes to like, but why?" }, { "speaker": "stephan", "time": "31:06", "start": 1866.19, "text": "like, is it just to kind of like map the network, or are they targeting you to think that you're doing something? and then, and then that's where it gets kind of muddy, and then that's where the kind of the debate really kind of kicks in at that point. so, so I don't think that we're gonna go that way, but it's possible. It's possible." }, { "speaker": "nate", "time": "31:28", "start": 1887.57, "text": "Yeah, I guess another angle might be, well, see if it becomes really centralized and lightning nodes, you know, it becomes like a whitelist system where they only peer with other, let's say, white listed or KYC like entities who know each other's lightning node pub key, and then therefore the kind of the dream of decentralization is lost at that point. Is maybe that's the stalemate. Well," }, { "speaker": "stephan", "time": "31:50", "start": 1910.48, "text": "we have-- we already sort of see that. If you start a lightning node and try to open a channel to Bitfinex, they'll probably, it'll probably fail. And the-- and that's because a lot of these entities do have these, because The regulatory environment on this is so gray right now, so, sometimes these highly regulated exchanges and institutions, they don't want channels from You know, rando, rando lightning node guy with a Tor only, endpoint. yeah." }, { "speaker": "nate", "time": "32:24", "start": 1944.08, "text": "Well, I guess that, that's the criticism would be, you know, I guess the hypothetical would be the world, but I think it's also fair to say we can't judge things by-- There's like a word when you criticize something based on it not being perfect, and it's like, well, hang on, the world we're in today isn't already not perfect. We're already dealing with a lot of that issue, around. You know, when you try to send a fiat wire today, right? Like people are dealing with all this stuff around compliance, KYC, et cetera." }, { "speaker": "stephan", "time": "32:50", "start": 1969.97, "text": "I, I think that if it all goes into sort of a whitelist Weightless slash blacklist sort of thing. The Lightning Network is still an open protocol that is, has very similar properties to Bitcoin. I can still start a Lightning node, I can still open a channel with your node, I can still- I could still connect through the network, and a lot, a lot of the funny thing is, and I, I mentioned the Bitfinex node, but any of these nodes that have a whitelist system, all of their public channel peers are public, you can go to Amboss and look at them. Maybe you can open up a channel to one of them, maybe their peer, maybe they only care about like one degree of separation, and now you could connect to those other guys instead, and now you can make the payment to Bitfinex. They only-- maybe, maybe they only care about that one degree But you could still like connect into these if you want to, w-along with other, other people. Right. If I'm going to the same block, so it's kind of like you," }, { "speaker": "nate", "time": "33:47", "start": 2027.27, "text": "you pay a little more in fees, but you kind of go one, one, one or two extra halts, and then you can get it, you can make the payment." }, { "speaker": "stephan", "time": "33:54", "start": 2033.54, "text": "Sure. So I don't think, I think that if it does go like full consortium mafia, lightning node mafia, where, you know, whatever. That's still not stopping us from opening up channels with each other and ignoring them completely. We only really need them if we want to pay them. We don't, I don't think we need them to really route at all. Because I think the incentives will kick in if they blacklist too much and other nodes will pop up." }, { "speaker": "nate", "time": "34:23", "start": 2063.28, "text": "Yeah, and it still has that same kind of, even from a censoring point of view You still have this question of, well, who sets the whitelist and blacklist, and do people all agree or disagree, right? Because even from like a fiat AML and sanctions perspective, you know, the USA will have different sanctions to what the EU sanctions to what Russia or China or some other country. So even then, it's kind of like people will just, you know, your Lightning node will just find a route that works and just make the payment that it needs to." }, { "speaker": "stephan", "time": "34:53", "start": 2093.34, "text": "And, and, and that's what keeps me so engaged with this technology. Over so many years is the fact that, I-- Let's talk about the, the Square Terminal real quick, the Cash App block Square Terminal that just so every single merchant, at least in the US, and I think maybe in another country, I don't remember, but you can turn on the ability to accept Bitcoin payments. At, for temporarily at zero fees, meaning you don't have to pay whatever it is, thirty cents plus three percent or whatever it is per transaction if somebody pays in Bitcoin, and you can receive it as dollars or as Bitcoin if you turn it on. I have gone through my town and I have hunted down Square Terminal people and I have been very, very chill about it, be like, \"Oh, hey, Square has this payment method, now you can turn it on on your backend and you don't have to pay the thirty cents plus three percent or whatever it is if somebody pays that way and you still get dollars on the other end.\" And they're like, \"Oh, cool, that sounds great.\" But the thing is, Cash App also has the map that kinda shows you when they turn it on. The, I mean, again, this might just be me, but I am one for four right now. And so it's really, I don't, I think there's a, and I've encountered this with just like normal people talking to Bitcoin over the years, it sounds too good to be true." }, { "speaker": "nate", "time": "36:24", "start": 2184.45, "text": "Yeah, that's- Are you- Yeah, that's Bitcoin in general." }, { "speaker": "stephan", "time": "36:27", "start": 2187.19, "text": "It" }, { "speaker": "nate", "time": "36:27", "start": 2187.29, "text": "sounds like it's too good to be true. You're telling me" }, { "speaker": "stephan", "time": "36:29", "start": 2189.09, "text": "that I can accept a payment that's instant, no chargebacks, anywhere in the world, for like no fees and almost nobody knows about it? You're scamming me, dude. There's no way that's real. I feel like there's that sort of mental block in that we are leapfrogging the system so hard with this tech that it just short circuits, and for good reason, like I don't blame 'em. It does sound nuts, but the tech is here, like we have it, it works great. But I just feel like there's like this, like, okay, this, if something's too good to be true, it usually is, right? And here we have an instance where it's like breaking down that wall of like, no, it's real, and it works really good. But, it's, it's hard. I mean, which kind of blows my mind 'cause if I ran a coffee shop, that's like the worst, because your, your, your average purchase is probably five to twenty dollars And you just get wrecked on these fees from, from all this stuff. And it's like, we got a solution for you guys, and, and," }, { "speaker": "nate", "time": "37:34", "start": 2254.38, "text": "yeah. I, I don't know, let's just like, like, and, and it is temporary, like, I'm sure they'll eventually have to put in some kind of fee to make it sustainable, but nevertheless, I think, you know, great work from the team, the guys at Block and Jack Dorsey and the guys who are pushing this. Yeah, the option is there, and I" }, { "speaker": "stephan", "time": "37:48", "start": 2268.37, "text": "think that's what's always" }, { "speaker": "nate", "time": "37:50", "start": 2269.95, "text": "important, And then the other big, big one is-- This episode is brought to you by CoinKite, the makers of my favorite Bitcoin hardware wallet, the Coldcard Q. Now, some people think self-custody is too hard, but it's really about taking responsibility for your Bitcoin wealth and understanding that self-custody gives you a true feeling of liberty. The Coldcard Q has a full keyboard and big screen. It's got two secure elements and a true air gap, allowing you to go fully air-gapped using QR codes from seed generation to transaction signing. You can power the device using three triple-A Easily use it with Sparrow Wallet for PC or Nunchok on mobile, and you can dial it into the right level of security and complexity that you choose. If you want a simple setup, just use twelve words and single signature. If you want passphrase, s-- easy. If you want to add multi-sig or co-signing features, you've got those too. So go to coinkite dot com, use code livera to get ten percent off on your cold card or other devices, and level up your self custody today. In South Africa, right? So Karel from Money Badger" }, { "speaker": "nate", "time": "38:55", "start": 2335.27, "text": "In South America, which is incredible. And so I think these are really cool, you know, so I, I understand people have different areas that they're interested in, right? Like people, some people are into like the treasury company stuff, some people are into like store of value and stuff, and other people are more into like, \"Yeah, let's earn and spend Bitcoin, let's, like, let's drive that side of it, of things more.\" yeah. I think the medium" }, { "speaker": "stephan", "time": "39:17", "start": 2357.11, "text": "of exchange part of Bitcoin is so important and" }, { "speaker": "stephan", "time": "39:24", "start": 2364.01, "text": "and I think it's easy as a-- for, for, for someone who, who's agrees with me on that, the medium of exchange component is really important. I think that Over time, when you s- All right, I'll, I'll put this simply. I don't think when you go to a bar and like trying to get them to accept Bitcoin is the way to go, and I've said this multiple times and I still believe it. I think it has to be merchant driven, not customer driven. The merchant has to want it for whatever reason, whether it's lower fees, stuff like that." }, { "speaker": "nate", "time": "39:58", "start": 2398.03, "text": "Sometimes, you know what? And here's the other thing, it could just be personal relationships, right? Like, it might be the coffee shop you go to every day, and you know the guy, and he knows you, and there's kind of a relationship built up over time, and then, then if you pitch, then he might be a bit more inclined to be like, \"Yeah, alright, I, I know Nate, I like" }, { "speaker": "stephan", "time": "40:18", "start": 2417.61, "text": "To just like really extrapolate on that a little bit more is, I'm very bullish on Bitcoiners either accumulating businesses from these business owners that are retiring and their kids don't want their businesses anymore, and then implementing a Bitcoin standard, whether it's a Bitcoin treasury on their backend or accepting Bitcoins straight up as Bitcoin price goes up. and our, and our wealth goes up. I, I think that's a really exciting idea personally. You know, when people say Bitcoin treasury company, in my head it's like, \"Oh, if I ran a car wash or whatever, whatever, right? Just some porta potty business, like whatever. \" And I put a portion of my profits into Bitcoin, I'm a Bitcoin treasury company. I'm not a publicly traded Bitcoin treasury company, but that is really, really important because now you can- Pay your employees more than the competitors or give them bonuses if it's like a good year. and, I don't know, that, that idea is, is really interesting, to me. So Little tangent there." }, { "speaker": "nate", "time": "41:23", "start": 2483.4, "text": "Yeah, so I mean, we'll see what happens with that, and, I, I am bullish on both kind, whether it's an operational company doing Bitcoin treasury or it's, they wanna do the financial engineering. Of course, there are caveats around that, not all of them will succeed. let's talk a little bit about, yeah, back to the Lightning tech stack, There are different implementations of Lightning, as you mentioned, there's different tech that people are using now, whether it's like the Amboss stuff or other, Lightning, you know, Lightning Labs, Products and services. Talk to us a little bit about that. maybe just start with the different Lightning implementations. You wanna just start with that? Like I know the big, obviously the well-known ones, LND or Lightning, LDK and Phoenix, Async or Declare, I think their implementation is called. So if you wanna talk to us a little bit about" }, { "speaker": "stephan", "time": "42:15", "start": 2535.05, "text": "those. Sure. So there are multiple implementations of Lightning. it's still the big four, which I'll talk about. but it's important to know that the, they all interoperate based on what's called the Bolt spec, the basis of Lightning technology. You have to, you have the-- which are sort of the rules for interoperability when you're building a node software. So if you're running a core Lightning node, which is built open source by Blockstream, and I'm running a Lightning Labs LND node, we can still open a channel, we can still make payments, then it's, it's all good. Over time, there has- That's been weird little interoperability quirks, but that's not to say because they want to create their own separate lightning network that's not interoperable. It's just, it's new tech, it's beta. And these things happen. LND by Lightning Labs, the Lightning Network daemon, is by far the biggest and most popular because I think that they focus, they, they, Lightning Labs just leaves their focus, focuses on their Lightning stuff. And they want to make it as easy as possible. They've built great user interfaces and innovative technology like Lightning Node Connect, which makes it really easy and would be my recommendation for anybody who's interested, in starting an actual Lightning node. If you're a little bit more technical though, and you want to use Lightning in a very specific way, I think Core Lightning is really good, because they have a plug-in sort of, you create different plug-ins and download plug-ins to kinda mold the node the way you wanna be, like if you really wanna focus on, accounting or, or something like that, you can download all these plug-ins. I haven't really played with that too much though, but I do know that's one of its fundamental features. and then there's LDK, which is the, the Lightning, oh, Spiral one, yeah. The Spiral, yeah, the, the, the, the development kit. Sorry, yeah, the Lightning development kit. And this is like for the hardcore technical folks that actually wanna build their own implementation of- For the Lightning, build their own software, build their own Lightning node software, and it's, it's just a library of components, so instead of getting all the little Lego pieces, you get Some of the Lego pieces already put together so you could kinda like build it easier, so that's kinda what LDK is for. And then Phoenix, by Asunc and Claire, I don't know what to call them anymore, but Phoenix is sort of like the end product now, which is strictly focused on making payments. And they have a very robust liquidity under the hood system, which is really cool, where, I mean, it's really cool because it's self custody, you still have to pay for the, for the inbound liquidity on there, but, which is always gonna be a thing on self custody, I'm afraid. but the, but the liquidity is kind of automatic. so for sending and receiving, it's really cool. So you can run, the Phoenix app on your phone, which is what it's built for, or the daemon itself on, on a server and just have access to that liquidity on as like a lightning node" }, { "speaker": "nate", "time": "45:39", "start": 2739.14, "text": "Excellent. Yeah, so, if you were, you know, setting up today, do you have any kind of typical recommendations based on the different kind of user? So let's say, I guess probably three, I can think of three just off the top of my head. One would be like just kind of everyday typical hodler or DCA pleb, right? And then maybe a small business merchant, and then larger professional level Lightning infrastructure provider, LSP. So do you wanna just talk Focus through some of the different types of users and what you might recommend for them. Excuse me." }, { "speaker": "stephan", "time": "46:13", "start": 2773.44, "text": "Yeah, I think that if you are a Bitcoiner, you're kind of, you kind of wanna try out making payments. I'm always, always gonna recommend self-custodial options, like I'm always gonna recommend you hold your own keys. And so I will recommend Phoenix or the Zeus, Zeus LN, integrated node, so on, which is a mobile applica- That can actually deploy, deploy a lightweight LND node on your phone, that's what Zeus uses, and then Phoenix has, has their own implementation, which is pretty cool, Just the, the innovation on the Phoenix app is, is unparalleled when it comes to just the mobile experience. Under the hood, you have things like splicing, which allows you to add or remove liquidity from a channel without closing the channel, which to my knowledge, Phoenix is the only tool to be able to do that. So those are the, my two highest recommended ones. I'm sure there are others out there. I'm sorry if I don't, mention those. however, I just, I love Phoenix and I think Phoenix is, is doing great. Zeus as well." }, { "speaker": "nate", "time": "47:24", "start": 2844.07, "text": "Okay, so now the small business or just typical merchant who wants to take Lightning payments?" }, { "speaker": "stephan", "time": "47:30", "start": 2849.75, "text": "Yeah, so, for brick and mortar and if you want to like maintain that self-custodial aspect, I would say, I would say take advantage of AI if you're not technical and have it walk you through how to install Start 9 OS on an old laptop or something, and then you can have BTC Pay server, Lightning, all hooked up together, like I, I, I have saved so much time this year when I get an error on Linux and I just paste that error into the AI and say, \"Tell me what this is saying and how I can fix it.\" It's like, \"Oh yeah, you're missing a dependency, run this command.\" And then it's fixed, right? Where before I couldn't, like, it was like, \"Awful.\" so take advantage of that. really, I used to say, \"Yeah, learn Linux basic commands and stuff,\" but now I, I feel like you can ask the Tool something, something general, never give it your personal info, right, is my recommendation. And then if it spits something back at you, you can then ask them, \"Hey, I'm new at this, explain what you mean by that so I can learn about it, if you want to.\" And it can, you can learn as you go, with, which is kinda like holding your hand. And so you can install Ubuntu if you wanna go crazy on Linux or start nine and, and run BTC Pay server, which which is what I would say. Now, if you don't wanna run your own node but you do wanna accept Bitcoin, go to Square. Square is the way to go for sure, on that. Gotcha. Yeah." }, { "speaker": "nate", "time": "49:01", "start": 2940.64, "text": "Any thoughts on, For a larger pro level or just kind of like-- although I guess this may be a different question because, like, this is by this level, you're like talking to-- about professionals here, so it's a bit-- it's maybe it's a different, you know, kettle of fish, but let's say you're doing a larger, you know, infrastructure thing, LSP exchange, what kind of tools, do you see being very useful for them?" }, { "speaker": "stephan", "time": "49:26", "start": 2965.83, "text": "If, if you're, if you're very technical, you might wanna learn LDK, that, that is what Spiral, uses, I'm, I'm pretty sure, in Block. but outside of that, Again, this is just my personal, you know, experience 'cause I, I haven't used everything, but I, I, I, I'm a huge fan of Lightning Labs, I'm a huge fan of LND, and I think that It is really good for beginners, but it's also really advanced if you want it to be advanced as well. the, the programmability on it is really good, the way that they use the- The, there's an authentication system attached to it so you can connect it to web apps and, and things like that if you want to do that. there's tons of documentation on that, the education is out there, you just kind of have to look for it. and And, if there's one ding I'll give Lightning Labs, is that they come out with so much cool stuff, but they don't market it. Really? Like, you have to like log in one day and be like, \"Oh, they just added this.\" And it's like, \"Wow, that's really cool.\" Which is how I found, like, it's like, \"Oh, you guys added the fee floor thing to auto fees.\" Like that wasn't announced, it just kinda happened, and that was kind of a cool thing, for example. which is kind of cool 'cause Bitcoin's the same way, and that's kind of what drawed me to Bitcoin, like there's no marketing agency or anything comin' after, you know, tryin' to get you to sell some Bitcoins just Bitcoin. so any thoughts on," }, { "speaker": "nate", "time": "50:57", "start": 3057.45, "text": "the new L2s? You know, the new kid on the block, you've got, Ark and Spark, and maybe some renewed interest in Liquid, some of the eCash style systems like Fedi or Fedi Mint, which is, one example, and then the, Chalmian, sorry, Cashu, which is the single mint. now, all of them-- now, to be clear, all of them have different trade-offs, different, you know, they, they may proponents of them will make criticisms of Lightning, so probably most notably the inbound liquidity requirement of Lightning, right? That is a fair, you know, and I think everyone accepts that, that's a challenge, especially if you are trying to build something for end users, and especially if they want to onboard with a very low amount, like a small, like their first transaction might only be a few hundred sat, people aren't gonna set up a channel just for that. That's where the kind of, you know, some of these other, systems might- Be more suitable in some ways, a-and in others they may be more like a liveness requirement, or in other cases it's like the practicality of doing it on mobile. So How are you seeing this in terms of the comparisons with, just straight Lightning? Yeah, so," }, { "speaker": "stephan", "time": "52:11", "start": 3131.33, "text": "I guess my take is Any innovation is, is good. if there's a, if the trade-offs make sense for cer- make sense for certain segments of users, awesome. I could totally see how eCash is awesome. I could totally see how it's not awesome, right? If the mint owner shuts down the mint, then all your money goes bye. you know, but it's very private, you can do very small amounts, and stuff like that, which is cool. So if you're not worried about losing a small amount, it could be fine. And my, my main take on this though is I've, if any of these are to really take off, they, the vast majority, I mean, pretty much all of them that I can think of still needs the Lightning Network to get in and out of their respective systems." }, { "speaker": "nate", "time": "53:05", "start": 3184.7, "text": "Correct." }, { "speaker": "stephan", "time": "53:06", "start": 3186.17, "text": "so if the Lightning Network might not be the, the peer-to-peer network or the payment network, but it might be the settlement network for bigger players someday? It's really hard to tell because it's so early and we're still in this stage where we can, we're, we can still make payments on it. but the idea- I think," }, { "speaker": "nate", "time": "53:29", "start": 3209.4, "text": "as, as you said, they all connect through Lightning, at least today. maybe small exception with Liquid, because people can do like just Bitcoin peg in, but that's a bit of a slightly different case because, in terms of their use- Yeah, it has" }, { "speaker": "stephan", "time": "53:42", "start": 3222.23, "text": "some use case, also. I'm sure people use Liquid for, for, privacy reasons maybe, maybe to do stuff like that. Yeah. And some--" }, { "speaker": "nate", "time": "53:52", "start": 3232.43, "text": "And there's kind of the tokenized equity and debt stuff on there as well, and, yeah, like some of the liquid-based wallets like Aqua and Bull, Bull Bitcoin Wallet, yeah, they are doing it, yeah." }, { "speaker": "stephan", "time": "54:06", "start": 3245.78, "text": "I, I do wanna, if you, if, if we've got a few minutes still, yeah, sure, to touch on, the, so our ARC, for example, I'm not an expert on ARC, but I do know ARC and is very similar to Lightning in that It works, but it could be so much better with further, expandability of the on-chain opcodes. Yeah. And I really wish that we could be talking, this is just a little bit of a rant, you know, this core versus naughts thing is absolutely ridiculous. Haha." }, { "speaker": "nate", "time": "54:46", "start": 3286.18, "text": "But if anything now, the, the noise there has kind of come down a bit. Now people are talking about quantum, that's like the new hot narrative now. That's" }, { "speaker": "stephan", "time": "54:52", "start": 3292.28, "text": "ridiculous. All of this stuff has marketing pushes and narrative pushes behind it, which is why I-- that, that's like my, one of my big red flags kind of. And right when we were talking about Ellen Hantz and, and the script restoration and stuff that people are still talking about on the Op Tech newsletter, merch is still talking about it, Reardon is still talking about it, but- It just kinda like fell off a cliff, and I'm just, I scratch my head when I think people are talking about using Bitcoin as money. Lightning does work, but it could be so much better. It could be so much better. We can have multiple parties owning the same channel. We could have the ability for the peers to actually be synchronous in their- In their, in their, commit transactions and not need to have these penalty mechanisms. Right, like L and symmetry and stuff. Yeah, exactly, that's exactly what I'm referring to." }, { "speaker": "stephan", "time": "55:58", "start": 3357.68, "text": "So much, I don't know, it was just like, \"This is what we need,\" and a lot of folks were like, \"No, Lightning works just fine.\" It's like, \"It does work, but why not make it better?\" And the funny thing is And I think this is what a lot of people don't realize is that CTV, for example, check, type, verify, doesn't- This is gonna- When I realized that these new ideas, these new operational codes, are built to actually create more limits in the programmability of Bitcoin, it doesn't expand functionality, it does, but it does it by adding more restrictive options, right? Because they take like an" }, { "speaker": "nate", "time": "56:42", "start": 3402.24, "text": "unused, I think, OpSuccess code and then, yeah, that becomes, you know, yeah. So and then they restrain in certain ways. Yeah. But of course, there's the devil in the detail. People think it's like, \"Oh, it's gonna get--\" They'll argue about like this particular trade-off or does it enable MOV or this kind of, you know, there's different aspects to it. And then, and then it kind of goes" }, { "speaker": "stephan", "time": "56:58", "start": 3417.74, "text": "above my head, but like when I talk to Reardon, you know, Brandon" }, { "speaker": "stephan", "time": "57:04", "start": 3423.64, "text": "And, and just talk to him and just, he just tells me what they kind of like can, can, can do for us as to enhance the medium of exchange component of it. I'm just like, yeah, it, it makes, it, it makes a lot of sense. so I, I just wanted to point that out, and that's kind of what, like, just trying to wrap my head around like the knots thing and that, it's like, I don't know. Anyway, I hope those that are listening kind of understand my point of view. Yeah. Look, I thought it's worth, I'm in" }, { "speaker": "nate", "time": "57:30", "start": 3450.39, "text": "favor of some form of covenant, like if it's a, Ellen Hands or, m-maybe in the future people, like, I know there are people talking about other ideas like Template Hash and things like that, but I guess it's just like You know, I don't wanna, I don't wanna do what the Nots people were doing, which was like, or to be more clear, RDTs, people and the BIP one ten or whatever this other one, like, 'cause they're trying to ram it through without the consensus, you know? They're trying to ram it through and try to tell people, \"Well, maybe we can do this as a minority group anyway.\" It's like, \"Nah, like, you gotta, you know, you need to bring everyone on this journey.\" and" }, { "speaker": "stephan", "time": "58:07", "start": 3487.41, "text": "so the" }, { "speaker": "stephan", "time": "58:11", "start": 3491.27, "text": "At the same time, I wish, I wish we could just be more serious about just actually making Bitcoin as, as, as, as good as it can be. Now, that's not to say it's not good already, it's totally great already. but I don't know. My position is, if it can be better, let's make it better, without breaking anything, obviously." }, { "speaker": "nate", "time": "58:32", "start": 3512.48, "text": "Yeah, and I think, well, well, I'm still hopeful, let's say, I'm still hopeful and, that we'll eventually get- Something like LN Hands or maybe if people want, if, if like the current, you know, flavor of the month is all the quantum stuff, maybe it's like BIP three sixty plus like One or two other pieces that allow people to use this covenant tech to make their coins quantum resistant, maybe that's the thing. Right. but that said, even the quantum thing, there are people that-- there's a lot of different views there, 'cause there are some people who think, \"Nah, that's like not happening ever,\" or some people more like, \"Maybe the realistic thing is more like somewhere twenty to thirty years away,\" and then you've got like the full-on panickers who are like, \"Oh my gosh, it's gonna happen in like one year or two" }, { "speaker": "stephan", "time": "59:21", "start": 3560.65, "text": "I don't know, maybe, maybe I'm too trusting, but over the years meeting all of these giga-chad-brained protocol developers and stuff, they've been talking about this stuff for years. Just because Joe Schmo on X doesn't see the conversation happening doesn't mean it's not happening. It's happened ad nauseum. It's like insane how much, like, quantum's been talked about, vaults and CTV's been talked about. It's, it's, it's crazy, and not just talked about, actually coded up and like kind of ready to go, honestly, and just sitting there, which is You know, if, if I could, if I could get- Yeah, but I think even there, there were some of the core developers" }, { "speaker": "nate", "time": "01:00:03", "start": 3603.44, "text": "who were reviewing some of those proposals and I think they found like one or two little dings against it, and I think there's a new one called TemplateHash. But the thing is, there's always like some new one, so then it's like, even if you're like full time in this space, it's like hard to keep track of everything going on. So, but what I can do- But I can't do-" }, { "speaker": "stephan", "time": "01:00:20", "start": 3620.89, "text": "But what I can do is when I see them, is shake them, their hand, and say, \"Thank you.\" It's open source work, it's not very thankful, in my opinion, and it's, it's like, and people like, I mean, I don't wanna name names, but folks like Rusty Russell. His passion for this stuff is insane, and like, I respect that dude so much. Just as an example, I think a lot of them also have that passion, where they just kinda love, they just love the work, and, and I, I'm- Yeah. I'm a fanboy for" }, { "speaker": "nate", "time": "01:00:50", "start": 3650.03, "text": "the devs, I guess. Yeah, some dev slop. Yes. But, that's right. But, while we're here, let's talk a little bit about that. So, I know you also, had, you are- Let's say there are some Bitcoin myths, right? What are some of the cringey Bitcoin myths in your view that, you know, think-- Well, what's, what are your, issues that you take with some of the online conversations about Bitcoin?" }, { "speaker": "stephan", "time": "01:01:13", "start": 3673.57, "text": "Excuse" }, { "speaker": "nate", "time": "01:01:15", "start": 3675.83, "text": "me." }, { "speaker": "stephan", "time": "01:01:17", "start": 3677.69, "text": "I can only, what, I remember that post, I only remember one, and that's the bitcoins for everyone one. which as, as a semantic jerk sometimes kind of rubs me the wrong way because Bitcoin is for everyone sounds very prescriptive. It sounds like I'm opening the door for you, and now I'm pushing you through it. Where if I say Bitcoin is for anyone, I open the door and anyone can walk through it. It's now, it's now a choice. And I know that's a semantic thing, I just think that's funny, where it's like, \"Bitcoin is for everyone.\" It's like, \"No, I'm, I don't think-- I don't know. Is it really though?\"" }, { "speaker": "stephan", "time": "01:01:54", "start": 3714.07, "text": "so I think, as the saying goes, everyone," }, { "speaker": "nate", "time": "01:01:56", "start": 3716.82, "text": "you know, you get Bitcoin at the price you deserve, and there's a lot of people who unfortunately don't understand the value of Bitcoin, like the true-- Yes, of course, there's the dollar value, but what we mean is more like the value to society, the moral, the ethical, the practical a-aspects of it, that we all see and we think this is like the best thing, and we wish more people would get into it. And," }, { "speaker": "stephan", "time": "01:02:19", "start": 3739.91, "text": "I mean, I get no engagement on X since Elon took over, but the, I, I think people need to stop worrying about how much their Bitcoin is worth and start worrying about how much Bitcoin they have, because it, it, it's actually incredible when- You take twenty-one million, you know, if you have one Bitcoin, only one, only theoretically, only twenty-one million people on the planet can ever have one Bitcoin, which is like point two five percent or something. it's so insanely low. And I don't know, I don't know, six, seven, eight years ago, would people this worried about number go up as much? I, I don't, I, I don't, it's hard for me to remember. I don't think so. I feel like it's so- The most important thing now, to so, to so many people. And I mean," }, { "speaker": "nate", "time": "01:03:11", "start": 3791.06, "text": "I'll take the opposite side a little bit. I'll say NGU matters, like it is very important for this system to grow, and I'm not worried, to be honest. but I just think what we-- sometimes we get into this thing where people sort of virtue signal against NGU when actually NGU is a big part of the adoption story. And remember, NGU is what is gonna bring the overall freedom aspects, like, for example, if we- You get more people coming into Bitcoin, then the value of your coins goes up, you are getting richer as a fa-as a matter of that. And whatever you want to achieve in life, obviously having better, you know, higher, greater purchasing power, it helps you there. Now, I- But, yeah, but I also understand there is an element of, like, yeah, there's an element of you want to make sure the network stays decentralized and secure and all of these components of it too. And I, so I think it's, it's sort of understanding the value of all those things. But, yeah, I, I un- I unashamedly say NGU really, really matters. It is very important. I don't diminish it. but I say that as someone who is happy to earn and spend Bitcoin, right? I'm not saying only" }, { "speaker": "stephan", "time": "01:04:17", "start": 3857.93, "text": "huddle" }, { "speaker": "stephan", "time": "01:04:23", "start": 3863.28, "text": "Think of the person who got and started learning about Bitcoin in the summer of 2017. They were stacking during that run up to 19K or whatever it was. They were probably excited, but at the same time probably like, \"Man, I wish I had more.\" And then 2018 came, where it fluctuated between 6,000 and 8,000 that whole time. There are people out there that are probably super stoked for that and stacked 2018 super hard. That is the sort of excitement I think that really builds. builds the wealth and builds the conviction is, is realizing that Bitcoin, the Bitcoin protocol, the Bitcoin network, it doesn't recognize the label of fiat value at all. It just is. That's something that we place on it. And I, I think that's important because dollar go down, number go down, is not gonna hurt the protocol. We've got the difficulty adjustment, we've got all this stuff. Yeah, yes and no. Like I," }, { "speaker": "nate", "time": "01:05:28", "start": 3928.73, "text": "there's to a, to a point, like there's a certain level, but I'm not, again, like I'm not worried, right? Because for me, it's adoption, right? It's just about getting adoption, and as we get more adoption, the price is necessarily going to go up, right? Just 'cause there's more people enter, right? But it is literally a network, right? It is, you know, the Bitcoin network and the Lightning network are literally networks that are growing in their, you know, network effect, and so Sure. You know, makes the, makes the system kind of work. Absolutely. Because let's be honest, if Bitcoin had, you know, not gone up, would this many people have come? Would this many people be here? Probably not, right? Or definitely not. So I think it's, I think it's, it's a balance of understanding NGU is important, but also, yeah, focusing on decentralization, keeping the network secure, obviously, as we all, all of us Maxi say, hey, not your keys, not your coins, all these things that we say" }, { "speaker": "nate", "time": "01:06:26", "start": 3986.29, "text": "Let's say the pattern is typically this, right? Like at least historically, you get this big run up, a bunch of people get wrecked on the drawdown after, you know, it crashes, and then, then they start researching and learning a bit more about what they actually bought. And so it's funnily enough, it's sometimes it's the bear cycles of those dips that people actually take the time to pick up a book, re-listen to some podcasts, you know, watch some online conversations about Bitcoin. And learn from that. So, you know, it's just a process. Now, I, I don't know, I mean, this current dip we're in, whatever, whether it's a dip or a bear market or whatever, it was weird, right? It was a weird" }, { "speaker": "stephan", "time": "01:06:59", "start": 4019.66, "text": "year." }, { "speaker": "nate", "time": "01:07:01", "start": 4021.23, "text": "I, I" }, { "speaker": "stephan", "time": "01:07:01", "start": 4021.33, "text": "personally hope the four-year cycle is broken. Like, let's just forget about it. It's- I don't think it is, but, I'm" }, { "speaker": "nate", "time": "01:07:07", "start": 4027.05, "text": "curious, what do you, do you have any- Hopes or predictions for next year?" }, { "speaker": "stephan", "time": "01:07:13", "start": 4033.14, "text": "I don't. I, I, I have nothing. I couldn't tell ya. Well, doesn't have to be price, but even just like Bitcoin or network Lightning. Oh, I, I think," }, { "speaker": "nate", "time": "01:07:24", "start": 4044.76, "text": "It's a good question. Do you believe Lightning adoption will increase next year?" }, { "speaker": "stephan", "time": "01:07:28", "start": 4048.76, "text": "Yes, I was, I was gonna say I would definitely, I think that the trend will continue for that. I think, I think the developers working on the medium of, of exchange stuff are doing really good work. A lot of it is a little bit slower than I would hope. You know, the, the BOLT-12 invoice standard is still not as widespread, things like that. however, LND does have blinded invoices now, so you can hide your public key, which is really cool if you want to. So like that sort of tech, I'm really, excited about. At Voltage, we are, you, if, if you go to conferences and stuff, you really don't see Voltage too much anymore at Bitcoin conferences, and the reason why is generally because we are expanding towards industries that really could use an instant settlement network and don't know that we exist, a lot of the financial, conferences, fintech conferences, and even, even these like i-gaming conferences and stuff that are out there, you know, we're kind of tackling that now, and we're actually onboarding, a lot of enterprises onto Lightning for, minimal viable product, MVP, stuff, trials, you know, demos, things like that, but we also have a great sales team and are, and they're also getting signed on, but we don't really talk about it too much. and a lot of that is actually because some of our customers, they're like, \"We don't want anyone to know that we're doing this.\" Right." }, { "speaker": "nate", "time": "01:08:59", "start": 4139.86, "text": "Yeah." }, { "speaker": "stephan", "time": "01:09:00", "start": 4140.54, "text": "because of competition or, or things like that. Right." }, { "speaker": "nate", "time": "01:09:04", "start": 4144.38, "text": "Or they prefer just a quiet trial without making a big song and dance about it. Yeah, but also A lot of" }, { "speaker": "stephan", "time": "01:09:10", "start": 4150.31, "text": "them have gone live this year, like this is the best year we've had of Voltage, actually. and even though you don't really hear about it too much anymore. So, we've-- one of our, I, I just want to mention real quick, like one of our like core products right now is actually a nodeless credit backed, Voltage, Lightning Payments API. So you simply top up your credit and you tap into the API and you can facilitate sends and receives on the Lightning Network through our infrastructure just based on credit, which is really cool because that's not a money transmitter at that point. so we've got products like that too for enterprises. So if you're curious about that, anyone listening in, Voltage Cloud, is the website on that. But, so yeah, so we're, we're trying to innovate on, on, on, Not so much now getting Lightning in the hands of just anyone in the neighborhood sort of, but entities that already have thousands of users, let's get that entity plugged in so now all of their users have access. Now that's not like the sovereign cypherpunk way to do it, but that's the way to kind of get this Exposure out there to users, and hopefully everyone makes, makes money from that, so, so Volt is still around, we're still, still really cooking, and I think expanding to these other parts, other sectors and industries in the world that- Might not realize that there is this better payment method available that, is out there, is, is actually doing really, really well." }, { "speaker": "nate", "time": "01:10:47", "start": 4247.81, "text": "Yeah. Lower fees, less friction. I mean, there's a lot of reasons that people should be learning about Lightning and using Lightning Obviously, the obvious example is like the three percent credit card fees, but even just like the friction of doing, like, fiat wires, that's a massive friction. Think about like, you have to like write out, okay, what's the ultimate beneficial owner, what's their address, what's their SWIFT code or IBAN, what's their account thing, what's the reason for this transfer, and if you get even one detail wrong, boom, your payment is, declined or whatever, and it's like off in the ether and you don't even know where it is. With Lightning," }, { "speaker": "nate", "time": "01:11:24", "start": 4284.88, "text": "Anywhere in the world, pay it." }, { "speaker": "stephan", "time": "01:11:26", "start": 4286.48, "text": "One of the most magical experiences for Lightning for me was that when I was at the Atlanta Bitcoin conference maybe three or four years ago, and someone brought in the, one of their, Lightning powered Bitcoin, beer tabs, beer taps, right? Yeah. And instead of paying for the beer, I put the cup under there, I took a photo of the QR and I posted it on Twitter, and five seconds later, out comes the beer, like a random had paid it. Yeah, yeah. And it's just like, this is the coolest thing. You can't do that with any other tech. It's, it's-- I mean, at least I don't-- I mean, maybe you could, but the, the point is Nobody, I don't know who did that. I don't know, I don't know what happened." }, { "speaker": "nate", "time": "01:12:03", "start": 4323.31, "text": "Yeah. I guess one final topic, I know you were touching on this earlier, but privacy in Lightning, right? So this is another thing that- It's maybe been a little bit of a criticism that, okay, as the payer, you can generally, you can make reasonably pri-private payment, but I think now the new thing people are talking about is receiver privacy. And you were touching on this with blinded paths a little bit, but can you talk to us a little bit about privacy as a receiver or a merchant in Lightning?" }, { "speaker": "stephan", "time": "01:12:31", "start": 4351.89, "text": "So the standard, what's called BOLT eleven invoice, which is, you know, just a string of letters, numbers, L N B C, it usually starts with You can take that string and decode it. You can decode the final destination public key, you can decode the amount and, and a few other, things out of that. So, what that is saying is, if I give a party to pay me my invoice, they could go toss that into a decoder really fast and see that the final destination, is a public key, and then they could go look up that public key and see how many channels I have, that are public, what my capacity is. They could say, \"Wow, he's got ten Bitcoin on his node. He must be a rich guy.\" It's almost like doxing, through on-chain when you make a fifty dollar on-chain payment. Of a UTXO that was like a million dollars, I could look back and be like, \"Oh, you probably have a lot of money.\" Because they can look at" }, { "speaker": "nate", "time": "01:13:27", "start": 4407.08, "text": "what is the channel out point and be like, \"Oh, what's the size of that UTXO? What's, how many satoshis in that?\"" }, { "speaker": "stephan", "time": "01:13:32", "start": 4412.33, "text": "Right? Yeah, that too. Yep. Yeah, good. Yeah, that's true. they could do that. they-- the funny thing is about the lightning channels themselves is the public information isn't who, what, isn't what the ratio of Who owns the channel? It's just the total capacity. So if you and I have a ten million sat channel with each other, that's public, but the public doesn't know that you have nine million of it and I have one million of it. They could know that if they do some sophisticated probing and all this stuff, it is kind of possible. So, yeah, Lightning Network privacy is really nuanced and really strange. if you open up a channel from a UTXO that you just bought from an exchange They might be able to deduce based on timestamps and things like that that you open up a Lightning channel that, that your public key is whatever because they could look it up on Amboss or whatever they can there. so But the good news is, if, if that is really important that you kind of like stay away from being, any third party knowing your public key There's, there are still tools out there that you can learn and use. I mean, I'm just gonna throw it out there, we have Jam and JoinMarket is still out there. Ashigaru, which is the successor to the samurai system, is out there. You can start, you could still do Payjoin is out there, you could still do Coinjoin and I'm not a lawyer, but I don't think it's illegal to do coin joins, still." }, { "speaker": "stephan", "time": "01:15:17", "start": 4517.88, "text": "now, that's a whole other rabbit hole that I, that I probably don't wanna get into right now is the coin join stuff. But the idea is that if you are trying to run a node and you're using UTXOs, you're using Bitcoin, on-chain Bitcoin. That has touched a KYC exchange, then you should probably assume that they will also have an idea what your lightning node is if they want to. If you just want to make lightning payments though you can still load that up into phoenix. Phoenix is actually like kind of a cool privacy lightning node anyway because everybody has channels to the same peer and none of it's really public, right? It's all to that big asoc node with thousands of channels. So That might be better than running your own sort of lightning node. Now you still get your own pub key and stuff on the, on the Phoenix, don't get me wrong on that. but it's kind of, it's" }, { "speaker": "nate", "time": "01:16:14", "start": 4574.87, "text": "In some ways, it's less clear to tell who, who is the owner of that channel, would say. Right. Yeah. Yeah. Right. Interesting. I guess the point you're getting at is that it's kind of a nuanced answer on whether the privacy inside of Lightning, probably fair to say your payments in Lightning can be private because they're not on chain, but it's kind of again a nuanced thing because like it matters how you're connected to the internet, which way you use to make that payment," }, { "speaker": "stephan", "time": "01:16:40", "start": 4600.67, "text": "and so on. Yeah. The question is, who are you trying to be private for? I guess is, is, is important. but the LND does have blinded paths now, which it basically creates a dummy public key at the trade-off of having a invoice about four times bigger than the standard invoice as far as data goes. Which is kind of annoying, I hopefully that shrinks at some point. but, but, but that's, that, that's there and that works. so yeah, so it really depends on who you're trying to be private from, but just like Bitcoin on chain, your real name is never associated with anything or anything like that. If you're running a Lightning node that's using your home- IP, WAN address, that's probably the worst thing you could do for privacy. So thankfully, most of the \"note in the box\" stuff is Tor only, and you can't really footgun yourself too hard on that one. But if you install LND on a, on a computer yourself and you don't configure that, then your IP address will be attached to that public key forever, 'cause that's like a historical thing, even if you change it later. So there are footguns. I won't say that there aren't footguns, there definitely are, on that. Yeah. Interesting." }, { "speaker": "nate", "time": "01:17:52", "start": 4672.64, "text": "Okay. so, yeah, okay, so I guess there's a few, things we, you know, we've talked about a lot of stuff today. but essentially, you know, Lightning is here, it's growing, it's usable, it's useful. it's maybe not always-- the growth in the Lightning isn't always so public. so that's probably one of the things that's like a, a mismatch between, like, say, let's say, the public perception of Lightning versus the actual view that real- Practitioners on the ground are able to see, but it seems to still be growing and, you know, it's maybe it's not exactly fulfilling all the same wishes that many of us thought in like twenty eighteen and nineteen, but, I think it's come a long way, so it's interesting to see, any last, closing thought, any final comment you wanna make? and where can people find you online?" }, { "speaker": "stephan", "time": "01:18:43", "start": 4723.36, "text": "Sure, I, I will say those of you that maybe started to run a Lightning node five years ago and thought it was too hard and kind of like gave up and thought, still think Lightning was cool, give it another shot. Try these new, try the Lightning Terminal tools, try, try, try the new stuff that's come out because it's, things have actually, I've been, been improving, and I know you, you probably don't hear about it too much, but i-it's true. So it's definitely worth diving back in. And, like I said, using AI to determine what errors you're getting and fixing them is like, is amazing. it's so much, it's just, it's just amazing. Last thing I'll say is, for no KYC exchanges using Lightning, RoboSats is awesome. Look into RoboSats. RoboSats is an amazing tool. And then, If you haven't signed the petition to get Keone and Bill out of jail, go to keoneandbill dot org. or sorry, it's billandkeone dot org. B I L L and K E O N N E dot org. They're the samurai devs that really did nothing wrong and it's completely ridiculous. and I guess, and I guess that's it from- For me, yeah, I just wanted to shout out RoboCats and stuff too. Excellent." }, { "speaker": "nate", "time": "01:19:59", "start": 4799.11, "text": "Okay. Well, yeah, links will be in the show notes. Listeners, if you enjoyed it, make sure to share it with your friends and family. and, Nate, thank you for joining me today. Thanks, Tofan." } ] }