{
  "episodeId": "SLP85",
  "speakers": {
    "stephan": {
      "name": "Stephan Livera",
      "role": "host",
      "tag": "STEPHAN"
    },
    "sergej_kotliar": {
      "name": "Sergej Kotliar",
      "role": "guest",
      "tag": "SERGEJ"
    }
  },
  "segments": [
    {
      "speaker": "stephan",
      "time": "00:08",
      "start": 8.39,
      "text": "Hi and welcome to the Stephan Livera podcast focused on Bitcoin and Austrian economics. Today my guest is Sergej Kotliar. But first, let me introduce the podcast sponsors. Kraken are the best Bitcoin exchange. They have a very deep focus on security, they have consistently acted ethically in the space over the years, and they are one of the longest standing Bitcoin Exchanges, they are consistently rated the best with a high quality platform, they offer some of the best liquidity in the industry, they've got high trading volume and low fees. Don't forget Kraken have twenty four seven support, they are also popular with institutions and businesses, they also offer the highest available API rate limits, there is a Kraken OTC desk, Kraken offer five fiat currencies and they also offer margin and futures trading. So to learn more and sign up, go to the Kraken link in the show notes. Check out Unchained. Unchain Capital, their Bitcoin financial services company offering a two of three keys multi-signature vault product. This can be handy for an individual or for an institution trying to store bitcoins in a more secure way and help protect against the proverbial five dollar wrench attack and distribute the keys. I've set up a vault with Unchain, found it super simple and easy. If you create an Unchain vault, you also get three free months of access to SafedenaMoosa's Bitcoin Standard Research Bulletin, a fantastic resource. Unchain also offers Bitcoin collateralized loans, allowing you to get USD Liquidity without selling your bitcoins, meaning you don't trigger a capital gains event. So if you're interested to learn more and sign up, go to the Unchain Capital link in the show notes. Look into Bloom Audio, they're a high quality audio store run by one of my long time listeners, Andrew DeMarco. They sell headphones, DACs, amps, and digital audio players. I got a pair of Audio Technica ATH-M70x, which are just really fantastic for when I'm doing the editing for this podcast. So make sure you check them out at the website. Website is bloomaudio dot com. Sergey is a repeat guest of the podcast, having first appeared on SLP twenty-five. He is the CEO of Bitrefill, and this interview was recorded at Bitcoin two thousand and nineteen conference in San Francisco recently. In this conversation, we talk about how Sergey's views contrast with the store of value first narrative and how there's a need to build the Bitcoin circular economy in advance. Sergey also offers some commentary on the Bitcoin fee market that I think you'll find interesting, and finally We get a quick update from Sergey on what Bitrefill are doing. So, onto the interview. Sergey, thanks for rejoining me on the show. Thanks for having me again. It's, fantastic to be here. We are, just for the listeners, we are recording this one live here, or not live, but at Bitcoin two thousand and nineteen in San Francisco. So, Sergey, maybe you just wanna tell us a little bit about what, what's the vibe here? What's your, what's your sense of it?"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "02:53",
      "start": 172.6,
      "text": "Oh, man, the vibe, the vibe is good. Years. It's, it's very similar to how the vibe was, like in fourteen, fifteen, you know, lots, lots of eccentric and weird stuff and bitcoiners being bitcoiners and not, not pretending to be something else and, it's, it's, it's a very for us, by us event. We have Snowden, we have Lynn Albright, it's, it's talking outside about, about, free Ross and, and so on. It's, feels, it's a great vibe and, you know"
    },
    {
      "speaker": "stephan",
      "time": "03:31",
      "start": 210.74,
      "text": "It could not have been timed better. I mean, we've got this crazy pump going. I think as we record this right now, it's something like thirteen thousand USD, having been only, you know, nine thousand just recently. So, so look, I think the other thing I was, we're keen to discuss today is- Some of this discussion about store of value first versus the, the old school narrative of merchant adoption, right? Now I think there's different, pieces to pick apart here because a bit of the context here is in two thousand and thirteen, a lot of Bitcoiners were all about basically yelling at a company to get them to accept Bitcoin, but then in practice, not many people would actually pay with Bitcoin. Right. Now that's kind of the-- Maybe that's become like the caricature of merchant adoption. Now, some of my more recent p- Broadcast episodes with, say, Vijay and Dan Helt, I think particularly with Vijay, we spoke about this idea that some of those people back in twenty thirteen, they were putting the cart before the horse. But I think the other aspect that, you know, you and you and your team at Bitrefill are really big on is kind of driving certain adoption, but not in the same way. Do you wanna, do you wanna go from there?"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "04:37",
      "start": 277.29,
      "text": "Yeah, sure, sure. I think, I mean, to be honest, I don't like the merchant adoption word, right? It's I also don't like the payment rails word, that was the headline of, of my panel yesterday. Whatever, this is, yeah, well, things are labeled as, as maybe less important. I think that like beating on, on that dead horse isn't the most constructive thing right now, because the, that horse, is dead in a lot of ways. I, I sometimes go on saying, yeah, merchant adoption, that's us, like, and a couple of other companies, but, but I, I do think that it's very easy a-and I'm in ninety-eight and a half percent in, in agreement with, with all the guys that have been on your pod, including Vijay and, and Dan and so on. But there's still this thing gnawing inside of me which, which keeps coming up in that it's a store of value first, and what does that mean? Like, does that mean that we should just ignore everything else and just live with, like, what, how does the scenario play out? Like, how do those guys imagine it happening, that we just buy Bitcoin on exchanges and we sit around and we wait for the magical hyperbitcoinization, and then after we start building apps for people to, to have a circular economy? Like, that thing is, first of all, I think, I, I think the whole, step Otherwise, approach is, is, is wrong in itself. Like I, for me, like there's obviously the, the Nick Sabo article, shelling out, which is a bit of a resource, but also the, the early Satoshi quotes, you know? And then there's this, this, and I dug this up, in advance here from my old notes when I was learning about Bitcoin four, five years ago, I dug up, the quotes from Satoshi about like why Bitcoin has value, and there is this classic, he talks about There's this classic, it might make sense to get some in case it, catches on, right? We know this by heart, like, and, what does that mean? It means that people get bitcoins in case it catches on as, as money, right? So it is about the speculative aspect of get Bitcoin in order for it later to become money. And there's the other quote which I actually like more, it's a little bit longer. This, as a thought ex-experiment, imagine there was a base metal as scarce as gold, but, with Boring, and not useful for anything, but, transportable over a communication channel, right? And that, that, that is what makes Bitcoin special, and he, he goes on with like, if it somehow, for some reason, acquired any value at all, then, it would be very useful because you could transfer it over the internet, right? And maybe it would get the initial value circularly, just as suggested, that people will, will, will, will- Get it in case it catches on, and then it will be valuable, and then it will be useful. And because it is useful, it becomes valuable, and because it is valuable, it becomes useful, right? And so I think a lot of the times lately, and maybe this is a reaction to the whole, merchant adoption and the Bitcoin Cash narratives, that say that it's only a medium of exchange, is that people forget that these two things is, is two coins of, two sides of the same coin, you know? And, the one But the other leads to the one, it's the yin and the yang, and, and saying that, only the one side of that is, is the important part, I think is, is wrong, I think it's, misses the point in a lot of ways."
    },
    {
      "speaker": "stephan",
      "time": "08:10",
      "start": 489.65,
      "text": "Excellent. And so what you guys are doing with Bitrefill is really interesting because it allows people to- Use some of their bitcoins as the value is rising, and I think that's also another important component of the thesis that, of the what I'm gonna term the, quote unquote, hardcore hodler, right? The hardcore hodler might think of it like, \"Hey, I'm just gonna stash my bitcoins because...\" There are privacy, security, and taxation implications of spending my bitcoins now, and if, you know, we're all bullish on Bitcoin, and, you know, you pick a number, we think five, ten, fifteen million per Bitcoin might be reasonable if, if we're right. So in that view, if I thought, \"Oh, this thing's gonna be worth ten million,\" why would I spend it now? I think that,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "08:57",
      "start": 537.39,
      "text": "I think that f- question is unfairly phrased. i- and, it, first of all, why would I spend it now? There's very different people in Bitcoin, and there's different people who have different approaches and views to it. There's a bunch of people that live entirely in the Bitcoin economy, they have their income in Bitcoin, and when your income is in, in Bitcoin, you're, you're gonna be spending Bitcoin to, to live, right? And, whereas somebody who says that, I Somebody who's saying that they have their income in fiat, and, you know, I'm, I'm, I wouldn't accept that, the person who, who, has his income in fiat is a, is a better hodler than the one whose income is in Bitcoin, right? Yeah. And so- I think that if you look, I mean, very, very simply, the amount of bitcoins is, is fixed. So if you ignore mining, which is negligible, every time that somebody buys Bitcoin, somebody else sells Bitcoin, right? So there's a lot of selling of bitcoins going around. Yeah. and, and it, it is a good thing we're, we're still discovering the price and value and so on. And I think that if you're going to, if you're going to be sell, selling your bitcoins, it's, it's, instead of, selling it on a centralized KYC exchange, is to, to buy something from, from a Bitcoin company, from a service, from somebody, because you're First of all, the, the privacy stuff is better, right? when you buy stuff with Bitcoin, you don't need to, to dock yourself as much as you need to do with, when you're selling on an exchange. So privacy stuff is, is infinitely better, and you're helping Build, build the economy of Bitcoin and, and building, like I, I tend to think of Bitcoin as a, as a country in a lot of ways, like a, a country in the sky, right? And, and if you're contributing to creating, the economy of that country, I think it's very useful. I think we, we need that because the alternative is that we, we're entirely dependent on the exchanges, and, I think, I think Vijay did a, did a g- Great point in explaining all of the, sort of weaknesses of that setup, you know, that we're, for-- Well, you know, we're, we, we need to docs ourselves at, at every step, of the way. There's, absolutely no privacy anywhere, and, in such a world, like these exchanges could go away. Like, you know, what if there is, you know, G20 consensus and a new FATF guideline that says that all Bitcoin exchange companies, are, now official-- officially declared"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "11:34",
      "start": 694.1,
      "text": "And what, what do we have left in that scenario? And people say that it's unlikely to happen, but I don't know if it is such an, so unlikely if, if Bitcoin ends up threatening, you know, the, the fiat currencies of the world, like, yeah It is possible, like, that, that we end up in a world with, with hostile regulators. And what, what does Bitcoin look like then? You know, it has to move underground, and it has to be, be, peer to peer. and we, we will need to build that economy, in the Bitcoin country, like, on the, on the side of the regular, system. And I think if we can start doing that right away, and it is already happening, like, it's not like I'm proposing It exists, yeah, it exists, and then there's the, in the marijuana industry in the US, for example, is a, is a good example. There's, there's a lot of stuff that is already going on, in, in the Bitcoin world, that isn't sort of speculative cases, and I think that it's, it's important for us to, to acknowledge that that part of the Bitcoin world is actually very important."
    },
    {
      "speaker": "stephan",
      "time": "12:43",
      "start": 762.59,
      "text": "Fantastic points, Sergey. I really like your highlighting there that there are certain dependencies at the moment on certain more centralized, companies right now, and what Bitcoin will need to be is able to surpass those if necessary, and it may well come to pass that, you know, that sort of scenario where FATF regulations or some other kind of financial surveillance laws come into play. I think another point that might be great for you to expand on is this idea that not everyone is like us, right? And again, you and I, we live on Bitcoin Twitter, and, you know, we sort of-- we, you and I have access to credit cards and the standard fin- banking environment. others, such as Francis Puglia, has spoken about how, a lot of the sex workers and stuff would use Bitcoin as part of backpage and so on. And so I think there's a few examples there that we do have to remember that while, you know, you Many listeners of my podcast are in a scenario where we probably do have access to standard fiat rails. That is not representative of Bitcoin."
    },
    {
      "speaker": "sergej_kotliar",
      "time": "13:51",
      "start": 830.68,
      "text": "I think there is no representative of Bitcoin."
    },
    {
      "speaker": "stephan",
      "time": "13:52",
      "start": 832.32,
      "text": "Like, I think,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "13:54",
      "start": 833.83,
      "text": "I think the Twitter gang, we, we, we sometimes, get stuck in the illusion that we are representative of Bitcoin. We're not. You know, like if you-- There's a lot of stuff that if you, if you want like un-unpopular views of things, like, what Bit- Bit- Bitcoin Twitter thinks. But like Bitcoin Twitter, the Bitcoin Twitter doesn't know that like the vast majority of transactions on Bitcoin happen between exchanges and they're tired, right? they, they don't talk about that so much. They don't talk about that the vast majority of the non-custodial wallets is blockchain info, like, and that's, that is probably bigger than all the other wallets together, you know? And, and you don't get that impression on Bitcoin Twitter, right? And so, so Bitcoin Twitter in a lot of ways is, I mean, look, it's a great conversation, like, we of the broader, broader Bitcoin community. And this is why, like, I sometimes jokingly like, offer to people to, like, come in for an internship at Bitrefill. Like, you'll, you'll see a lot of Bitcoiners that are very different from the ones that you see on Twitter. there's, there's a lot of different people with a lot of different use case in a lot of different countries, and, you know, many don't even speak English. So And they, by definition, don't participate in the, in the, the Twitter conversation that happens mostly in, in, in English, right? So there's so many different people out there doing so many different things, and I think it's, it's one of the beautiful things of Bitcoin, like we shouldn't stop our conversations on Twitter, and I think they're great, but we need to also remember that it is, it's like in, in the conference, like some people go to the conferences, but most Bitcoiners, they don't go to the conferences, they, they don't identify themselves It's, you know, it's something that they do, like a, a thing."
    },
    {
      "speaker": "stephan",
      "time": "15:38",
      "start": 938.41,
      "text": "Yeah. So I think another thing with that is right now, obviously, if you're a publicly known Bitcoiner, it's, you know, you're, you're, you're out there, right? But There will be, and should be, many pseudonymous bitcoiners, and if anything, there's probably something that we can do as kind of like, kind of publicly known bitcoiners and advocates, is that we can try and encourage people to maintain their pseudonymity. Rather than, you know, in the future where if, let's say, the government starts to crack down on Bitcoin, chances are, well, they might come and audit a publicly known Bitcoin address. For example? Yeah. of"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "16:16",
      "start": 975.91,
      "text": "course. And it's, it's something that I've, I've been very reluctant to, for myself, and then, and then I guess I, I kind of had to like, bite the bullet on that one and realize that, okay, I am the CEO of a Bitcoin company, I kind of need to be somewhat,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "16:33",
      "start": 993.0,
      "text": "But I, I do think, that, if we're, if we're-- The ID thing is a great yardstick for, you know, for what is like inside of the Bitcoin economy. Like, inside of the Bitcoin economy, things don't require ID, right? and, I think that, all of the different things that are in that category, of things that don't require an ID, that don't require approval from, from the government, that's the interesting stuff, and that's something that we should,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "17:02",
      "start": 1022.42,
      "text": "Is where the resilience of, of the Bitcoin country comes from, is the strength of its economy that we have, you know, inside of it, and, and that is where we can, we can protect, these, these principles that we-- and the values that we have, because it's like We talk about running a full node and running the full node behind Tor, you know, and doing, coinjoins with Wasabi to maintain your privacy, and those are all great things, but okay, but if every transaction that you do with Bitcoin is on a centralized exchange, that is tied to your i-identification, then, then what's the point of all the other stuff, right? and, that's what, what, what I'm sort of, what I'm, working towards and I'm trying to like inc- And any experimentation that, that leads to that, like what are ways for, you know, if we talk on ramps and off ramps, what are ways for people to acquire Bitcoin, without, requiring ID, and this is why I keep talking about earning, because that is something that you could theoretically do, That wouldn't, you know, be a act of money transmission or something if somebody gets, gets paid for microtasks. There's other ways as well. And what the ways are for people to, to sell their bitcoins without, without, exposing themselves and their, their identity and buying stuff is a great thing for that Yeah. And it also helps encourage the other thing, because if you're buying stuff from, from a Bitcoin company, you know, that Bitcoin company will then have some bitcoins, maybe they will pay some of their staff in Bitcoin, in, in some expense, and then somebody else acquired bitcoins without buying stuff, and so on, and like that's how we, how we build this economy. I know Peter McCormack talks, about how he started, you know, invoicing some of his, sponsors and, of, of his podcast, and maybe do this as"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "18:53",
      "start": 1132.79,
      "text": "In quotes, has, has some bitcoins and suddenly it can choose to pay certain suppliers in bitcoin and gradually you become, become comfortable with your company holding many, multiple currencies. You have your fiat coins, you have your bitcoins, and the bitcoins, like over time they go up more than they go down, so it's, it's not that bad to hold them, unless you're super, like, need to sell at a particular time and sensitive to the volatility and so on. Yeah, and, and then gradually that leads to, to people being able to take- Salary in Bitcoin, and for them to be able to do that, there needs to be places that they, where they can spend the bitcoins, right? And then, that's how, how we get the circle, and I think we, we need that circle for, for Bitcoin to be strong."
    },
    {
      "speaker": "stephan",
      "time": "19:37",
      "start": 1176.94,
      "text": "Fantastic point, Sergej. I think it really is in line with even what Saftein speaks about when he talks about this idea of a smooth upgrade scenario, right? So, there are different views of kind of how Bitcoin might come about, right? There's kind of the hyperbitcoinization like now kind of thing, and that's sort of not realistic, right? It's not gonna happen like that. Probably the more likely scenario is over time, people just upgrade to this new money, and I think you're right to point out that it is good to get- People used to the idea of taking payment in Bitcoin, taking salary in Bitcoin, that-- those are definitely valuable, things to try and do. I, I'm wondering then also, what's your view around the potential accounting and tax kind of difficulties that can come with that? Like, let's say you've got fiat income, but then, you know, you decide, okay, I'm gonna take Bitcoin, now I've got to start doing calculating capital gains for those of us, you know, who, who, who, who, if they do choose to do that, to take payment in Bitcoin, then they've got to start considering these things too. Well, I think"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "20:41",
      "start": 1241.25,
      "text": "that, it's, it's, it's a good point. I think it's a little bit an unfair point as well, because, w-what's, again, what's the alternative? Like if, i-if it's the case that the government mandates that we pay tax on, on the, value changes of our bitcoins, then the solution is that we shouldn't be doing Bitcoin at all. Well, in that case, you know, then, then they have us in checkmate before we even started, right? So I think that, yeah, sure, there is a certain, you-- today the choice is either, either you, you go through the hassle or you do a minor violation of the law, right? And, and in either case, I think that, yeah, it, it ends up Like the way you change a law, is, when, when, when society sees that, that everybody does a thing or half of the society does a thing, then that thing is probably not going to be legal for very long. Like un-unless, unless the government, exposes themselves as being, you know, dystopian and, what do you call it? overreaching. so, you know, it's like the piracy thing, where, you know, if every sixteen-year-old is, is downloading music, you're not gonna put every sixteen-year-old society into prison, and eventually when you go after sixteen-year-olds and send them, send them huge fines, you end up, kind of, losing the, the war for the hearts and minds of people, and so, and either way, like even, either if people, submit- Long lists, you know, like, like traders do, you know, who have to do capital gains and do, day trading and have millions of transactions in a year, like, I have a I have a friend, that, that, that does that for a living, and he, he does a principle of like filing his tax returns on paper, and he prints out, each trade that he does, and it's like, ends up being like forty, fifty, sheets of paper every year, of transaction, he sends them in, and he's like, \"Good luck, guys. Yeah, here's, here, here it is. Like, I did my part.\" And, and, and that also helps illustrate the sort of, Bitcoin purchase, and I know that in the US, there's, the Coin Center and some others are working on, establishing like a minimum amount, below which, transactions with Bitcoin don't require capital gains, and I think that, eventually it will change, and it will change because either people violate that law or because people follow the law, and either way illustrates how unreasonable those laws are. And yes, it is a bit of an inconvenience, like there's a lot of stuff Bitcoin, it's an inconvenience, in a lot of ways, but that inconvenience is the cost that we get for a bunch of other benefits. You know, we get a lot of benefits, I, I don't need to tell the listeners of this podcast, what the benefits of Bitcoin are, right? And so they come at certain cost, and sometimes things are a little bit inconvenient, and, and I don't think we should-- like, I'm not even trying to moralize either way, like, I'm not saying that people should be necessarily spending their coins if, This is Bitcoin, like you do whatever you want. But I think that it's, we shouldn't moralize any individual to do any particular thing in a, in a direction, but it's always good to, to help along, things that Yeah, the build, the, the Bitcoin country and the economy of the Bitcoin country."
    },
    {
      "speaker": "stephan",
      "time": "24:13",
      "start": 1453.38,
      "text": "Yeah, the Bitcoin nation. I think great points there as well, Sergej. A couple of things that came out for me were, first of all The capital gains question for small transactions, it's likely also that, obviously it will vary based on your country, but it's likely that if you're just doing like little kind of coffee level, kind of ten dollar, whatever transactions, in reality, that isn't going to be material enough that the tax office is gonna come chase you for-- Because in reality, the enforcement cost for them to come and chase everyone and audit every person who's just doing like little five dollar transactions here and there, so long as it's not massive, they're probably not going to To really crack"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "24:53",
      "start": 1493.27,
      "text": "down on that. And then the tax people, like, there are humans there, you know, that, that work with this. Eventually they're gonna realize, like, why am I, chasing down, somebody, like, you know, some kid who earned some bitcoins with their lemonade stand and then went and bought, bought some, some iTunes, games or whatever. Like, why, why, why are you going after them? This isn't, this isn't the criminals that we're looking for, you know? This isn't regulated yet, and eventually I think it will all-- usually these things tend to land in, in a reasonable territory. It just takes a little bit of time, because it's new and different."
    },
    {
      "speaker": "stephan",
      "time": "25:33",
      "start": 1532.89,
      "text": "Fantastic. And also the other component, I'm thinking back to the Nakamoto Institute, the, Bitcoins Shroud of Subtlety and Allure. And in that article from the Nakamoto Institute, they're talking about this idea that, you know, it's a principal-agent problem, and actually people in the government are themselves people who might wanna hold bitcoins and their own family and the same kind of question as well. Like if you're a politician and your son, or, you know, your son has Bitcoin, are you now gonna start like cracking down and making it illegal for your Probably not. So I think that's also another, aspect to consider. So this question then of, well, as well of, fiat income versus Bitcoin income, do you have any reflections there on what it'll take for more people to start earning in Bitcoin?"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "26:21",
      "start": 1580.8,
      "text": "I mean, that, that's a billion dollar question right here. and if I, if I had a clear answer to it, I would, I'm, I'm chipping away at it. I can't say that we've solved it entirely yet, but I think that I think the demand is there, already. Like, yeah, I, I truly think that there is a good billion or two, people in the world that would gladly work for Bitcoin, and that they already understand Bitcoin enough to know that it is money, right? And that's, that's the interesting part. Like, all the technical stuff is like, you know, it's secondary. You get the Bitcoin is some type of internet Money and you can buy stuff with it, and, and for a lot of people, yeah, in a lot of parts of the world, you know, it, it would be a great source of, source of income. We just need to figure out, and, and, and crack like how exactly, this, What the things are that people are going to be, getting paid for, and, and how? I think that the, the gig economy, is, is close to that. it still, hasn't gotten to that yet, but m- also maybe that's because much of the current gig economy kind of arose pre-Bitcoin, like Airbnb and, and Uber and that kind of things. But I think that the, the coming such services, very well, could, could be built around Bitcoin because- It's, in a lot of ways, it's easier, like you can, if you have just one currency, you don't need to have a whole department like these companies do that handle payments and payouts and, and in all the two hundred countries of the world. you can just, start with Bitcoin and, and, and you work from there, and I guess Yeah, I don't wanna spend a lot of time about Facebook, but they're kind of like realizing that stuff as well, that, yeah, a lot of stuff would be, yeah, would be easier, if, if there is one intermediary, currency that, that is like- Good enough for a lot of people, and then you can, from there you can obviously do i-improvements and specializations for, for more important countries and so on. So yeah, I think Getting people to earn coins is, yeah, I think that's, that's the big, big question here. We, we have people in emerging countries that, that would gladly, you know, work for, you know, ten bucks a day or something, with Bitcoin. And you also have like young people, kids that are, usually, always looking to, to make a buck, and gladly would do work in, y-y-all over the world, and that are, often, unbanked, And so on and, and would be a great, great Bitcoin economy. The problem with the kids is that, yeah, and the kids would gladly pay other kids for stuff. They already kind of do a little bit, but the question is whether the kids get the money in the first place, right? And that's the question is like, what, what is going to be, the inflow of money, that, that flows money into the like kids using Bitcoin, economy and how is that gonna look and, and so on and, Yeah, yeah, that's, something that I try to look out for in a lot of ways."
    },
    {
      "speaker": "stephan",
      "time": "29:27",
      "start": 1766.69,
      "text": "So also, as you touch on, sometimes the difficulty is how does one get bitcoins, especially for the first time? And I think I'm now reminded here of some conversation with Matt O'Dell where he's saying, you know, everyone should be trying to be the best Bitcoin guy for their friends, right? And this idea of, you know, web of trust, right? Because you can have, say, the BISKS and the Hoddle Hodlles and the Aztecos To acquire Bitcoin, but another way might be through, you know, let's say if the government were to start even shutting those down, then you, you would have to fall back to more web of trust, more friends and family. Do you wanna touch on that theme?"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "30:05",
      "start": 1804.9,
      "text": "Yeah, yeah, I, I strongly agree with that and like, there's been, and many Bitcoiners ask like, \"What, what should I do to help Bitcoin? Like, what, what, what is a good Bitcoiner and what does, what does he do?\" And I, I You know, a, a, a, a Bitcoin broker dealer in their, in their, you know, in, in their social group, you know, the one that, hey, somebody needs to buy some bitcoins, alright, I'll, I'll sell them to him. Even though I'm not looking to sell some bitcoins, but whatever, I'll, I'll, I'll do it, right? And, and just because that way we can establish this, we, we can get away from, from being entirely dependent on the exchanges and we can, can establish"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "30:53",
      "start": 1852.51,
      "text": "For, for exchanging coins and, and so on. So, I think that that's something that, we should, think about and probably needs more, more apps and stuff as well to, to help people be, be a human, Bitcoin ATM in the neighborhood as well. Like that's something that's, yeah, that's very important. I think that Like, if you ask me like about the most important Bitcoin companies, in, in the history of Bitcoin, I would probably say Local Bitcoins as, as one of the most important ones, and, lately they've been getting stricter because they're getting pressure from the government, right? And so, we need to go even further on the, on the peer-to-peer, peer-to-peeriness of things, and the next step is things like, Huddle, Huddle and Bisc and, and so on, but the next step from that is, is"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "31:43",
      "start": 1903.32,
      "text": "Guy, like I can, I can go to him when I need to, to, to trade some bitcoins and I think that's kind of already how this happens in, in, countries like, you know, where, hyperinflation and so on, when there's, when, when there- Emerges this, this great Bitcoin economy. Is that you need someone that you can trust that will be your, your Bitcoin guy, and that kind of thing is a lot harder to, to shut down, like that is peer to peer in that sense as well, and, and I think that we should be trying to peer to peer as much stuff as possible."
    },
    {
      "speaker": "stephan",
      "time": "32:18",
      "start": 1938.12,
      "text": "I think to some extent that, I mean, great points as well, and I think to some extent that already exists in certain communities as well. So from my knowledge, even amongst poker players, for example, they will use these sorts of networks amongst themselves and say, \"Hey, I'm traveling overseas, I don't wanna carry cash, obviously, I can, you know, take Bitcoin over and try to exchange on the other side and get, pick up fiat money that way and use that to enter the poker tournament or play poker cash games or whatever.\""
    },
    {
      "speaker": "sergej_kotliar",
      "time": "32:46",
      "start": 1965.87,
      "text": "And that kind of stuff To like international remittances as well. I have a buddy who's, who's from Nigeria, but works in, in, in Europe and explains how, you know, he's, he's trying to send money to, to his mother, but there's capital controls and, transferring money to, at least this was, a couple years ago, transferring money to Nigeria was costly and transferring out was impossible, and they would do a switcheroo where he had another buddy who was in Nigeria but was trying to pay for, for his daughter studying in the, in the UK, and they just did a switcheroo. I pay for your daughter's college, you pay for my mom in, in, in the home country, right? And, and Bitcoin is a great tool for that sort of thing because there's this, the coincidence of wants, like you need to find someone who wants the same thing, who wants the opposite thing. Yes. Right? the equivalent opposite thing. And, and with Bitcoin, you, you don't need to do that. You just need to find Why it is money is that it is the intermediary, for these, these, different ones."
    },
    {
      "speaker": "stephan",
      "time": "33:55",
      "start": 2035.16,
      "text": "Excellent. look, I think we've just about done that topic. I'm also interested to discuss some of the reflections that, I know you have around Transaction fees of Bitcoin, right? So I know you've recently on Twitter you've spoken about how some of the actually the volume of transactions is coming inter-exchange, so from exchange to another. And that is perhaps counterintuitive to many people, but why do, why do you think that is?"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "34:25",
      "start": 2064.61,
      "text": "Why, why transactions go between exchanges? Yeah, as opposed to"
    },
    {
      "speaker": "stephan",
      "time": "34:28",
      "start": 2067.94,
      "text": "between-- Yeah. Yeah."
    },
    {
      "speaker": "sergej_kotliar",
      "time": "34:29",
      "start": 2068.62,
      "text": "So, I mean, if you, and I guess this, this is a leftover habit from 2017, where we had to look at the mempool a lot at Bitrue, it became a bit of a strange hobby. Yeah. And when you look at it a lot, you'll notice that when- When Bitcoin goes up, yeah, the, the mempool clogs up. Like right now, for example, it is, Wednesday and the Bitcoin crossed, overnight, it crossed thirteen thousand. And, and so the peop- Bitcoin's going up. And if you look at the mempool, it's full of transactions and trans- transactions fees are high. Yeah. Now, you might think that most of it is, people that are like, \"Hey, I'm buying some coins on Coinbase and I'm putting them"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "35:13",
      "start": 2113.33,
      "text": "Well, but like the vast majority of it is people sending from one exchange to another exchange. You know, there's people who are, who are, who are trading across different exchanges, and when Bitcoin price goes up, it's usually some exchange where somebody's buying a lot of coins, and the price goes up there, and people want, want to outrun each other, getting their coins to that exchange, right? And each block is only one, one virtual megabyte, of transactions, so whoever gets there first gets to sell first. At, at a good price. So there's a race to get the coins in, to the exchange, where at the moment there is bigger demand. And so people are try to out race each other, and that's why you see the mempuls spike up so much. You don't see the equivalent when Bitcoin is going down, right? When, when Bitcoin is going down, there's nothing in the mempool, it's calm, because probably the hectic activity is, is going on the fiat side, where people are, sending coins to whichever exchange where you can"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "36:13",
      "start": 2173.43,
      "text": "On the publicly visible, mempool. And so I think that, like to, to step back a little bit from that, and I think the question of like transaction fee stability over- Over time and, and the whole question of whether or not transaction fees will pay for the security of Bitcoin, right? That, that is the question, and, and a lot of people, lately, go out and say that, \"Oh, now that we see that transaction fees are going up a little bit, that this is an indication that the system is working,\" right? And, and I'm not as sure about that. Yeah, be-- simply because a lot of this traffic that we see now, is, because at the current moment there's no better way of, of sending coins between ex-- between exchanges, but once we have Lightning and Liquid and things like that, then suddenly a lot of that traffic is gonna disappear. and so we-- it's, it's not- Not valid to extrapolate, and average that out, and or, and say that, oh, on average there is this much transaction fees, especially when the mempool clears out periodically and the transaction fees always drop to zero, every weekend, for the past year it has happened, so And so it's not fair to say that, oh, on average transaction fees are not zero. Yeah, it's, it's, it's true, yeah, but it's misleading, and, we- I think that's a big, a big question, like the, the big question at hand for whether or not transaction fees will, will work as a, as a way of securing, of paying for mining and, and, and for securing of the network. for that to happen, you need to have a sort of never-ending mempool, because if, if, the, the mempool periodically clears out and there isn't another block, block reward, or insignificant block reward, then you might end up with, a scenario where, you know, somebody's transaction fee in the previous block is, is bigger than the entire next block, and then it makes more sense, you know, to just mine on the old block and stuff like that, and, and if we end up in that scenario Then, like, probably Bitcoin is gonna still work, but it's gonna be a little bit more Mad Max, where, where, block reworks happen, frequently, like right now they don't almost never happen. but in such a scenario, they could happen quite a bit, and then people will need to adapt to that, and, and, and to deal with that in different ways. And at, at that point, if somebody proposes, you know, an alternative Bitcoin that, that gets raised, agreed, get- Gets rid of the MedMax and has some, has some inflation instead, maybe some people will, will, will go for that. and this is all like super speculative and like very far into the future, and I, I don't think that there's any reason to, sort of to panic about this stuff, because Bitcoin is fine, it's working fine, and most likely this isn't going to be an issue. I'm just saying that, we don't know that for sure. And we don't, what we sh- would want to be seeing is a mempool that never empties out, even with low fees, but that is relatively constant. And we're just not seeing that. Like we're seeing that the mempool spikes up for different things, like we discussed just before, when, when transaction, when the Bitcoin price goes up and people want to arb, sometimes it spikes up for other reasons, when, when an exchange gets hacked, the hacker It's gonna send a lot of transactions and it's gonna clog up the mempool. There's a lot of scenarios in which the mempool clogs up, but my point is that every time it does, it creates pressure, and this pressure causes people to optimize their stuff, which reduces, the demand for mempool. Some people will maybe move some of their activity to some other coin or some other solution, of one way or another to Lightning or Liquid or another coin or whatever, and then the demand goes down. And the, and the, and when the demand That means that, yeah, eventually the mempool clears out to zero again. And so we're, we're not seeing the, as much as I think some people would have wanted in the development of a sort of, f-nice and flat and even, mempool. It's, it's still super spiky. And if something that we should extrapolate is that, that it's-- it is currently spiky, we all want it to be not spiky. But, but the reality right now is that it is spiky and there is a good argument for why it would continue to be spiky for this reason, and that demand comes at uneven times. And, yeah, like that's my, I guess, one of the sort of things that, that I think about a little bit because it's one of those things that the whole fee market idea is, is a good idea, but we, we don't- We don't fully know that yet,"
    },
    {
      "speaker": "stephan",
      "time": "41:26",
      "start": 2485.62,
      "text": "right? Yeah. So my reflection on that is, actually let me just quickly clarify some of that just for any of the listeners who might not be following fully along. So, what, Sergey, what you're getting at there is that- Right now, Bitcoin, okay, so the mempool is essentially the, all the transactions that have not yet been mined into a block. Right. And essentially what happens is if enough people are pushing all their transactions in, it means you're- Your transaction is just kind of sitting in that mempool and you're kind of waiting for it to clear. Now, the way to make sure your block gets, your TX gets chosen by the miner is to give it a fee, to give a miner fee. To"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "42:05",
      "start": 2524.54,
      "text": "outbid the other guys."
    },
    {
      "speaker": "stephan",
      "time": "42:06",
      "start": 2525.64,
      "text": "Yeah. And so what that does is it causes this whole everyone's trying to outbid each other. And so just for the listeners who are maybe a little bit more on the newbie or intermediate level, you might not be familiar, but essentially, fee estimation is a very difficult problem. It's like just, it's Around this, i-ideas such as putting in a low fee at, at the start and then later bumping that fee up if you don't, if your transaction doesn't confirm. But Sergey, what you're getting at there is also that over time We, we, you're trying to say that we can't necessarily extrapolate the fee, that the fees will, that there will be a fee market and it'll be sort of a constant rise. a few things related to that are this idea of the block reward, which is comprised of two components, the transaction fees, the part that we voluntarily put onto it, and then there is the block subsidy, which is the, amount that's going down every four years, right? And so one of the questions then is also around how If you think of it like over time, that block subsidy is coming down, more of Bitcoin's security, so to speak, is being paid for by the TX fee, the transaction fee. And what you're getting at there is that if the subsidy goes down to such a point, and say, not now, but like fifteen, twenty years from now, most of that will be trans-transaction fee dependent. And in that scenario, we might have this kind of Mad Max world of like, you know, potentially, again, speculative, that some blocks might have many, many more fees in them and- Now that might incentivize different behavior from the miners, such as re-organizing, which might make it more difficult where they might try to reorganize the chain to kind of select different, transaction, to put, to include it into their block, because, hey, that's a good, they've put a good TX fee on it, I wanna include that in my block. Right. Right. so yeah, so I think that's probably a, you know, a fair summary of, what you're saying. A couple of things I was just thinking"
    },
    {
      "speaker": "stephan",
      "time": "44:04",
      "start": 2643.6,
      "text": "As, you know, we see these spikes happen, and one of these days it sort of spikes and it just never-- the amount that you must pay for your TX fee doesn't actually come back to zero. So let's say, you know, here and there people can get away, you can sort of get away with like a one sat per byte or even, you know, say five or ten sat per byte right now, kind of when it's low. When it's spiking, you might be paying a hundred or whatever. But let's say for argument's sake, over time as- More transactions go on, you know, people do more transactions in Bitcoin, maybe it would sort of spike up and then settle back at say, you know, whatever thirty sats a byte. Right. And maybe over time we would sort of see it there at thirty sats and then maybe we'd have another spike and then it would kind of settle back again. this is what, this is"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "44:49",
      "start": 2688.57,
      "text": "what we're hoping for. I mean, this is, this is the best case scenario, and, I, I still think it'll be, it is likely to happen, but we're seeing right now is that, with, with the crazy spikes, it always clears out. Even the whole hellish, time in, in twenty, twenty seventeen, when transaction fees were, were crazy, it cleared out. Yeah, right? and people thought it would, it wouldn't ever clear out. I said, no, it will, it, it will. because of this, dynamic that when it is, is super high, it forces the optimization, and the optimization removes demand, and so, eventually, with lower And, the mempool drops to nothing, and, and, and that's kind of that, and it's dependent on people with, like, with transactions that are That they're, they're okay with wait, waiting for infinitely long, which is also, I'm not so sure about, if we'll, we'll, we'll, we'll get there. Like, I, I, I hope we do, I think we do, right? I'm, yeah, I'm, I'm not sounding the alarms, I'm, in, in any way, and none of this stuff is gonna happen suddenly, you know, the halvings happen every four years and only, only, factor of two, every time with the, w-when the, subsidy is, is reduced by half so right now it's twelve and a half bitcoins and, next year sometime, it's gonna be six point twenty-five bitcoins and then it's gonna be three point one to five bitcoins and so on. So there's plenty of time to think about that stuff and to figure it out, and probably or maybe there will be other, either social or even forked in rules or something to, to help even this, this, this out, because what we do want is, obviously a very nice and smooth and steady demand for, for transactions, but As we discussed, like there's a lot of reasons why it doesn't look like that so far, and, and I think that it is reasonable to, to think that the way things are is how the things are going to be, unless you envision something to change, right? And that's, and that's what we're discussing here. Right."
    },
    {
      "speaker": "stephan",
      "time": "47:13",
      "start": 2833.42,
      "text": "And I think for me, I would say the thing that's changing is continued adoption, right? More and more people are using Bitcoin. and I suppose one other angle that might, we might think about is- What factors are there that might smoothen the, fees rather than having big spikes? And a quick example, I think Pierre Rochard has been big on that train last few months, he's saying, \"Hey guys, get your lightning nodes going, put, open your channels now while the fees are low, so that then when the fees are high, you can transact using lightning.\" And that's a cool example because in some ways that is a factor, like on its own, that at least helps smooth out the fee spikes. Yeah, maybe a little"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "47:50",
      "start": 2870.0,
      "text": "bit, but that transaction then removes a bunch of other transactions, right? so, and it is an efficiency, an optimization. And so when we do the optimization, then we remove, the demand for the regular on-chain, and so it, it's, that's what, what I mean is that, yeah, I agree with the, that it is good advice and you should do that, and you should even, you know, consolidate your, your, your little, Outputs, yeah, I guess,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "48:23",
      "start": 2902.62,
      "text": "maybe your listeners know that, like, you, you don't have a balance in Bitcoin, you have these little coins, called, called the unspent, transaction outputs, in your wallet, and you can have a bunch of them for, for different times that you receive bitcoins, and it is a good idea to, you know, merge them together, you know, like, like forging your coins into, into a bigger coin, when the fees are low, so that when, when the fees are high, A bit cheaper for you to spend it. so all this stuff is, is good and, and we want to be seeing more of that and we are seeing more and more of that, but we're not yet Yeah, I think like one thing that I'm keeping an eye out for is like, will it happen that transaction fees don't drop to once at the minimum, like the hardcoded number of once Satoshi provides? For over a month. When that happens, then we can start collecting data on this stuff, right? but we're nowhere near, that happening, for, for, for something like a month. and so we, we don't have that, that data yet. So we're, we're just sort of guessing. And there's, you know, there's obviously a lot of reasons for why people would want to do Bitcoin transactions and A lot of use cases that are, you, you-- we can think are good and that we think are bad or useful and not and whatever, yeah. So there, there, there will always be transactions, right? it's just the question of how, for me at least, what I'm thinking about this, whether or not the optimization improvements, how they will move, and how the demand growth will move, and that's the things that we need to check. And we need to have a world where demand grows. Nice and slowly, and optimization does also grow nice and slowly, but slower than demand. Yeah. But just, but just right. Like it needs to be Goldilocks. It can't be too much, optimization, but can't be too little optimization either, 'cause then we get, we're gonna have twenty seventeen again, right? So you need to have just the right amount. And those things, that, that, that is like what we're, you know, they, they, they need to be in line. And I think, I think it will be, I think this is like part of, it's an almost, maybe even like a religious belief of sorts, that like a lot of stuff in Bitcoin sorts itself out, in strange, strange ways, that when there is something that is super important, there is some type of, coordination of, of, of resources, like, you know, like, like an Ujiaboard moving across the table is that, like the, the, the market and the, and the Bitcoin world like moves towards that direction and, and there is- There is the fees and so on that, that push that as well. So, we'll see. Like I, I, I still think it will, it will be alright. Yeah. but, yeah, I would, I would be more relaxed about it if, if we had, a continuous steady, steady mempool already. Right."
    },
    {
      "speaker": "stephan",
      "time": "51:17",
      "start": 3076.84,
      "text": "I, I suppose, Maybe that's just, just the same way that the price is necessarily going to move in hype cycles, and the price isn't gonna move up in a steady way, it may be the sim-same sort of thing. We're gonna see more twenty seventeen like backlogs, and then someone will try to find a way to optimize, right? And that might mean using Lightning, using Liquid, taking transactions off the blockchain, or using it more like a settlement, you know, function or layer as opposed to everything on the blockchain."
    },
    {
      "speaker": "sergej_kotliar",
      "time": "51:43",
      "start": 3102.78,
      "text": "And maybe it is, I think there is a bigger correlation than people think The volatili- the volatility of the price and the volatility of, demand for transactions, in, in, in, in the block space. And, I guess if the volatility of one goes down, the volatility of the other should go down, and we, I think we- We all kind of want the volatility to go down, as well, like, I think at least that it would be a lot easier for everybody if, if Bitcoin was just growing, at a, at a slow but steady pace, yeah, forever and ever, if there wasn't these spikes, right? And I don't know if we're gonna get that, but"
    },
    {
      "speaker": "stephan",
      "time": "52:21",
      "start": 3141.4,
      "text": "we have to be cognizant that it, that it will dev- that it may well not do that, and we have to just, you know, be ready for that."
    },
    {
      "speaker": "sergej_kotliar",
      "time": "52:27",
      "start": 3147.3,
      "text": "Right. Exactly."
    },
    {
      "speaker": "stephan",
      "time": "52:29",
      "start": 3148.51,
      "text": "Yeah. And I think it's-- there's also that concept of Jevons' paradox, and I think to some extent we're touching on that. It's that idea that as more- More is available, you use more, right? So Andreas has used this example as well, where let's say you get more faster internet, well, now you're gonna download more on your phone, you're gonna use more, you're gonna start doing HD video, not just like two forty p video. Same kind of idea. So if people find ways to kind of do it more efficiently, now we can pack more in spending less, well, then people will do that, right? They'll use their lightning channels, they'll use Liquid, and they'll do all this, and they can kind of get"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "53:09",
      "start": 3188.7,
      "text": "I agree, it'll be interesting to see, how, how that evolves now that Lightning is getting, getting more and more adopted and, and some of this stuff can start, start begin to happening."
    },
    {
      "speaker": "stephan",
      "time": "53:20",
      "start": 3200.21,
      "text": "Excellent. Alright, looks, I think that's just about it, but let's, let's have a quick update on what's happening with Bitrefill and, you know, tell us a little bit about what's going on there. yeah, well, I mean, we're,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "53:33",
      "start": 3213.42,
      "text": "we're growing at a really good pace when, when Bitcoin goes up, more and more people wanna buy stuff with their coins, you know, so it, it helps, you know, we, we grew well last year as well when Bitcoin was going down, but"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "53:50",
      "start": 3229.81,
      "text": "So we're, we're working on the gift card side on, on adding more and more countries, so that people can, can live on, on Bitcoin in the same way that, we currently have in the US and UK and so on, to have that in, in most of the countries in the world and going, you know, for the biggest countries that we can, right now. We're also doing a lot of, Lightning stuff, we're, yesterday, announced another, feature in our Thor group of, utility functions, for people who want to be using Lightning. so the first one was, a tool to open channels, to get incoming capacity so that you can receive coins on the Lightning network even before you have any coins on the Lightning network. and, then we had a th-th-th turbo, which is a turbo channels, which is a way to, to open channels that are instantly spendable, so that you can right away, you don't need to wait for it to confirm before you can go out and start shopping. so we did that, and then now, yesterday we, we announced a product called Thor Recharge, which, lets people, recharge their Lightning Channels, like, same like you would recharge your phone card, and with refill and so on, you can now re-recharge and refill, your, your lightning channel and pay with on-chain bitcoins or with any of our payment methods on, on our site, including the off-chain, payments that we have. Yeah. So we announced that, and we also now, released an API, for all of the, Thor stuff so that wallets and exchanges, who want to use this stuff, can easily integrate it into their services. so we're, we're, we're still, you know, testing it, testing out the API stuff, so we're, we're looking for feedback, on, what, what should be improved and so on, but, we've had a very, a lot of demand. there companies out there that are actively looking at, into Lightning, both wallets and exchanges are, are looking and thinking how they should be doing it. I think, I think a lot of them are, are maybe a little bit more scared than they need to be, of, of Lightning. It's not that scary. You can just look, look at us. We, we, we're a small team, but we seem to be, Coping with it all right, yeah. But if we can expose some of our, the things that we've built to these companies and help, hold their hands, and we're, we're happy to do that so that, we can get the Lightning Network, spinning and, you know, the circular economy and so on, the circular economy going, getting, getting, going, yeah."
    },
    {
      "speaker": "stephan",
      "time": "56:38",
      "start": 3397.79,
      "text": "Yeah, I like what you guys are doing with, Bitrefill and the Lightning stuff. Really great job in terms of helping, you know, build uses for, you"
    },
    {
      "speaker": "stephan",
      "time": "56:50",
      "start": 3409.88,
      "text": "That you're doing is really, it's like you're building some of the Lightning infrastructure, right? Yeah. So Lightning wallets who might want to offer that as a service to their own wallet customers, they can start using channels from, you know, from Bitrefill, and they can start using some of these services like the recharge and, you know, the incoming channels to help give their customers, you know, a, a nicer and smoother Lightning experience. So it's kind of like you're, in some sense, productizing and, helping turn it into a business in a way that helps make"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "57:20",
      "start": 3439.98,
      "text": "and, I mean, it's still experimental, whether or not, you know, how, how big of business this is going to be in terms of, of actual numbers, but, I mean, so far the, the results we're seeing is, are encouraging. And, now it's just how can we grow this factor of thousand or million and so on. And, that's, that's the interesting stuff. And, you know, I think it's, it's hard to predict how exactly, the Lightning Network is going to evolve and so on and, where, which uses are, are going to be b-big and when and so on. but, yeah, I think just by being in there and participating and, and digging at these things, we're, we're in a good position to sort of, to, to be there, when, when it starts really taking off in a big way."
    },
    {
      "speaker": "stephan",
      "time": "58:12",
      "start": 3492.47,
      "text": "Fascinating. Another point I actually find really fascinating about Lightning Network is similar to what Nick Bhatia is talking about with time value of, time value of Bitcoin and the idea of, Lightning Network reference rate and this idea of, because an, a UTXO, let's say I open a channel to you, Sergej, I, I'm, we're locking that UTXO into a, into a multi-signature output and w- You know, in that time, it's kind of locked in that sense, so it's not free for me to, you know, use, to spend that UTXO in some sense. No, I don't like the locked word."
    },
    {
      "speaker": "sergej_kotliar",
      "time": "58:42",
      "start": 3521.56,
      "text": "it's, it's not fair. it's, it's there because, it's, it's locked between you and me, but if you and me want to spend it, we can. Right. You know, yeah, yeah. So it isn't, it isn't more locked than any other Bitcoin output out there,"
    },
    {
      "speaker": "stephan",
      "time": "59:03",
      "start": 3542.87,
      "text": "Over time, that, we're going to see potentially the-- because you know how Nick Bhatia talks about the interest rate, right? And my view, again, speculation, but my view is that we will see more meaningful kind of interest income or rate income coming from things rather than like the routing fee income, we might see more of that come from things like in-- like I'm giving you a channel, yeah, because again, you're locking up some of your, maybe, maybe locking up, I understand what you're saying with like it's not- Not locked up, but I'm saying in the sense of locking up your capital,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "59:36",
      "start": 3576.15,
      "text": "yes."
    },
    {
      "speaker": "stephan",
      "time": "59:37",
      "start": 3576.53,
      "text": "Right? And you're using up some of your capital in order to give somebody that channel, but you're earning money for that. So that's, I think that's a really, you know, fascinating thing that like this is like a new way to kind of e-evolve"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "59:48",
      "start": 3588.3,
      "text": "the economy."
    },
    {
      "speaker": "stephan",
      "time": "59:49",
      "start": 3589.22,
      "text": "and we don't, we don't"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "59:50",
      "start": 3590.0,
      "text": "even know like what category of thing is this, like what kind of a service is, is this? Like, is this, this hasn't ever existed before,"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "01:00:00",
      "start": 3600.39,
      "text": "right you know, I think, and we try at Bitrefill and I try to encourage that we should charge for things, mainly because so that you know that something is useful if people are willing to, to pay for it, and, so that you don't set the wrong expectations that this thing is going to be free forever because we can't open channels with everybody for free because we have, we don't have infinite bitcoins, and so on. but I also like recognize that there's a lot of other incentives at play, in- Yeah, with all of this stuff with, and the routing and so on, is that in a lot of cases, there's like when you're dealing, when a company is dealing with a end user, which is often the case, here, there's other incentives, you know, like a company maybe wants the end user to be coming back, and then maybe they will subsidize, this channel and say that, hey, this is gonna be a cost of doing business, with this customer, and we're gonna take that cost, for example. And, and not charge the customer the routing fee, you know. And so I think we're also going to see more, yeah, more like uneven competition in that regard, where some will choose to, to offer something for free, because they're selling something else, and some will try to charge for things and, and, and different combinations of that and like, you know, Quite look forward to that. I mean, you remember when there was a time where people used to pay for their email, right? Yeah. And it is, it is reasonable, especially now when you get like many gigabytes of inbox and it just, yeah. Breaks your-- It is reasonable to pay for it, but Google decided that, you know what, we're gonna offer it for free and just show you ads instead. And you know, it's gonna pay with privacy. Yeah. Right. Right. But okay, let's not go into another whole can of worms. We're not Different models and different ways for people to, to collect benefit, from these things that are not necessarily directly measurable, in money, as well. So, yeah, we'll see, like we'll see how, how the routing market, develops if it becomes very profitable or not. Yeah, this far, I, I'd say that, the routing revenues have been relatively small, for everybody involved, but Yeah, we'll see."
    },
    {
      "speaker": "stephan",
      "time": "01:02:24",
      "start": 3744.7,
      "text": "Yeah, it may, it may well change. And, I like the idea of, the market test. You're putting things to the market test to see, do people truly value this. So, excellent. So look, I think before we let you go, Sergej, just make sure you tell the listeners where they can, follow you and where they can find Bitrefill."
    },
    {
      "speaker": "sergej_kotliar",
      "time": "01:02:39",
      "start": 3759.68,
      "text": "Right, so yeah, we can follow Bitrifil on bitrifil dot com, and the Bitrifil app, on Twitter, we're at Bitrifil. if you wanna follow me, I'm, on Twitter at at zigamon, z i g g a m o n. Yeah, long story about the nickname. if you misspell it, I think Twitter will, will help. So yeah."
    },
    {
      "speaker": "stephan",
      "time": "01:03:01",
      "start": 3781.39,
      "text": "Alright, well look, that's, I think that's pretty much it. So"
    },
    {
      "speaker": "sergej_kotliar",
      "time": "01:03:07",
      "start": 3787.31,
      "text": "thank you, I think it's"
    },
    {
      "speaker": "stephan",
      "time": "01:03:09",
      "start": 3789.92,
      "text": "So let me know what you guys thought of that. Do you believe in the idea of store of value first? Are you a hardcore hodler who earns fiat and preferentially spends fiat in order to keep stacking sats, or are you more of a Bitcoin native, earning Bitcoin and therefore spending Bitcoin out of necessity? Let me know your thoughts. A few reminders if you wanna support the show also, so share it with your friends, check out the sponsors, Kraken and Unchained Capital, the links are in the show notes, show notes are on my website stephanelivera.com, and you can Subscription links there. Rate and review the podcast. You can contact me on Twitter or email stephanelivera at pm dot me. Thanks guys, and I'll speak to you soon."
    }
  ]
}