undetected when it's custom is expected. I'm flirty with my terminal, AV won't get rejected.
Leveled up like Mario, many stories like a mansion. Coins pay me menero, I don't need an introduction.
Dr. Wi-Fi, I inject IVs. No KYC, no IVs, I just crack APs. Starbucks, Kroner, Mickey D's.
Shit, I burn her land when I say my Wi-Fi is free. No identity, I could say I play a part.
I switch the game, like packets on a frame. Hoodie on my head in some comfy black jeans.
Laying hometown, but I got wide access dreams. More than basic, my style fucking drastic.
Like an in-it script, I'm everlasting. I'm ever running and no, I don't get tired.
On tracks, I'm a train. On the web, I make a sales raise.
What up Angelantes? I'm very happy to be here with one of my favorite figures in the entire
crypto space, the CEO of Edge Wallet, Paul Pui. Paul, how are you doing today, sir?
Doing well. Thanks for having me, Rafael. It's been a while and so I'm glad to
finally make contact and be able to share latest insights in the crypto space.
So we are going to have a summit, a virtual summit that anyone can attend. It's at tcbsummit.com
and the subtitle of this summit, of this virtual summit coming up September 12,
Friday, September 12 will be What Matters Most in Crypto. And so
when I first thought about What Matters Most in Crypto, obviously we all think about,
you know, technical analysis about the markets and how they're going, but when you really get
down to What Matters Most in Crypto, the first thing that came to mind is like Edge Wallet.
And it's the truth because it's, in my opinion, one of my favorite wallets is,
it's the wallet I recommend people from the jump. I have no affiliate partnerships with Edge.
I keep the way I interact with the commercial side of the space clean
because that's how I want to keep my mind as objective as possible.
And What Matters Most in Crypto is your privacy and your security. And Edge Wallet has really
taken a step beyond the normal interface to give you that security. Today I want to talk
to Paul about the rest mode that the Edge Wallet now features. And I also want to talk about
the privacy embedded within the options given within the Edge. There's an Edge exchange.
Edge is an exchange as well. It has swapping features within it between cryptos. And I want to talk
about the privacy and security features of that as well. How are you doing, Paul?
Doing great. Yeah, this is great. A long time coming to be able to go into these kind of
details that the nuanced details that make for great discussions as opposed to just kind of
what's the whiz bang, you know, latest shiny object in the crypto space. So thanks for having
me on this and having this discussion. You know, something that really
gets me thinking a lot about what you guys have done in Edge is the fact that you guys
start off as accountants and emphasizing an accountants aspect to the wallet infrastructure
where people can plug and play their balances into a spreadsheet like QuickBooks,
straight from the Edge Wallet. I thought that was, how about we start there?
Give us a little background as to why that was the beginning of Edge and why that is at
the forefront of everything that you guys do. Yeah, that was the functionality of what I
said at the very 1.0 release of our initial app, Airbits, which I think back in 2014 when we met
and at the time our original app was Airbits and already had that functionality.
And so the functionality is such that when you send or receive a transaction from somebody,
you know, this is a digital payment method. We should be able to digitally save data
as to what that transaction was for. Are we able to tag the transaction? Hey, that was from
Raphael or, hey, I bought some coffee. You know, the legendary Don't Buy Coffee with Bitcoin
narrative that the Maxis like to say. But you know, you want to be able to know what this money was for.
Cash, it's digital cash. Cash, it's a pain in the ass, right? Once you give out a $5 bill,
it's like, what the hell, where did the money go? Where did my stash go? But because we're in a
digital world, it should be relatively easy to have the same tools in front of you that
can track the transactions. And so you could not have to figure it out later and remind
yourself, but right in the moment, right when you create that transaction or receive it,
you can tag it. But we cared a lot about privacy. So we didn't want to just fold in like what you'd
see with like QuickBooks Online and, you know, Quicken and all of the other financial tools
which aggregate all that data into a central custodian. And so they can figure out how
people are spending money and sell that data. Instead, we wanted to use full encryption
of that information and backup and synchronization between your devices like it is a cloud app.
But with the privacy that the crypto community cares about. And so that is one of the core
fundamental features and edge. You know, when you send money, there's like three different things
you can tag in the transaction. One is who is the person that you sent money to or received
money from? And you can select it from your contact list. And funny thing is a lot of people
go away, you're asking for access to my contact list. You know, in the app it has to say,
you know, would you like to give us access? You don't have to. But if you do, nobody
sees the contact list, but you, right, it's the app on your phone, not the cloud, not Edge,
not me, not my co-founders, not any of our staff that can see your contact list. It's just to,
you know, auto complete the tagging of your transactions. And then you could mark
a category, right? Is it income, income from, you know, selling something? Or is it expense,
travel, expense, food and dining, that kind of stuff? Or is it a swap? Is it an exchange
from one asset to another? You could tag that as the category. And then you have a general notes
field where you just type notes about the transaction and all that searchable as well.
So you're like, hmm, when did I send funds over to RawFail? Type in a RawFail. Boom, there it is.
Oh, that's how much I sent them. And here's the transaction ID. And I can send it over to you.
So all that is metadata of a transaction. And it's all encrypted, all private and
synchronized. So it gives you that feel of a cloud financial app without being the
surveillance cloud financial app that a lot of people are used to. And so that is the accounting.
Now, why did we get there? Because I used to do some accounting, right? I've worked in small business
and did accounting for a restaurant, not really accounting, bookkeeping, you know, as a general
manager. And so when you start doing those things, you start appreciating being able to just know
where your money went. You know, and so I used that inspiration and put it right into our app
because I wanted to do it. And so to this day, Edge uses Edge itself for all of our crypto
transactions. And therefore, we can tag the transactions and know how we spent our money
and categorize it into our P&L and, you know, balance sheet appropriately.
Awesome. That's pretty cool. And so,
so you not only created a crypto wallet, you created also a swapping service within it.
Let's talk about that, this swapping service within it. I know you guys are
start off as a wallet, then you now are really emphasizing, no, we're more than that.
We're like an ecosystem. Let's talk about that. What does this ecosystem offer the user?
So, I guess less of an ecosystem. Ecosystem is pretty general term. And one of the things that
I guess I've kind of disagreed with the industry on is that wallets or, you know,
self custody apps, because sometimes a fully custodial service calls them self a wallet.
And they're basically a crypto bank. But, you know, a self custody app like Edge
should have its focus and be good at a specific task. You know, that's what they always say to
to startups, right? It's like, have some focus, have an MVP, and be good at the thing that you
want to be good at. And so, our original app AirBits was very focused on payments.
That was what it was really good at. But unfortunately, in the crypto world,
you know, especially Bitcoin, payments just didn't become a thing, not in time for us to be
a sustainable company. So, we pivoted. It will be. No, absolutely, it will be.
And I'm very excited for that. Now in the way people expect.
And maybe by the time when it happens, you know, maybe maybe AirBits comes back, right,
as a payments app. But we pivoted to building an exchange focused app because we noticed that a
lot of people were still speculating on crypto with some payments, but speculating on crypto
and they were using centralized services to do that because they had all the features that
they wanted. Easy onboarding with just a regular account, no key management, ability
to buy and sell from bank account credit card and as well ability to convert crypto to and from,
you know, dollars, other fiat to crypto and as well to different cryptos, right, crypto to crypto,
Bitcoin, ETH, Monero, you name it. And so, we wanted to bring that experience that people had
in a centralized exchange into the self-custody world where you own your own funds,
you control your own money, and you have a higher level, a much higher level of privacy.
And so, that's kind of what we define ourselves as. You can call it a trading wallet, an exchange
wallet, you know, or, you know, self-custody exchange, many different ways to phrase it. We've
even debated internally what should we call ourselves, like what is the product. But in the
end, yeah, a lot of people know this as a wallet, but it has a very rich exchange functionality,
right? And we connect to over a dozen different back end either exchange partners or decentralized
exchanges to give you that user experience you would get with a fully centralized custodian.
So, what do you think of, you know, given how rich the EDGE ecosystem is,
I can't help but to ask you, it would make sense to me that someone could use the EDGE wallet as
a point of sale system for their business because it's like someone has a mom and pop shop
and they want to take crypto as payment, just hey, tell them, hey, just download the EDGE
wallet because it has accounting features within it to, you know, track and trace the, you know,
where funds come in, everything ready to go to put into QuickBooks for them. So,
what is your thought about using the EDGE wallet as a point of sale?
You know, I'm going to be honest, I'm sure Tim will hate that I'll say this, but it works.
It's not ideal, right? The user experience isn't ideal from a point of sale point of view.
And a point of sale is one thing I have been pitching to have somebody build a point of sale
that really hits all the marks for like the past several years. I'm trying to almost recruit
people interested to create another startup around building a very like high caliber open source
fiat and crypto plug-in module friendly point of sale. EDGE is not that right now.
Now, EDGE can be a part of that. Like our infrastructure, our SDK can be part of that point
of sale, but I've been a merchant in a physical exchange environment. And what I know about
point of sales is that they're very, sometimes they're very specific to the industry,
meaning is it a restaurant, is it a gym, is it a nightclub, blah, blah, blah, blah,
or is it on the web? And you do need a much more custom-made UI for point of sale.
No, so for EDGE, it might take a few taps just to get to the QR code to show someone to receive
money. Because if you notice, you ever use the centralized exchange at Crackin' or Coinbase?
How hard is it to get to a QR code to deposit money? It's a bunch of taps, right? Because
that's not what you generally do in exchange. You deposit once and then you trade, right,
back and forth, back and forth. You link your bank once and then you go back and forth,
back and forth. It's not a send out of the exchange, send into the exchange, send out,
send in. And so you can't do everything really well. You have to focus on what you do. So EDGE
is focused on making it easy to obviously buy, sell, and trade. There are some hidden features
in EDGE, and maybe we can cover those little hidden features that make it easy to spend and
receive, right? But they're not obvious. So from the viewpoint of a point of sale,
it can't work. And there are some people that use EDGE as a point of sale. I want to
porkfest a bunch of people using EDGE. It works great from that point of view of like,
I just need to receive money. But a point of sale typically now, if you look at the big
behemoths that are point of sale products like the squares and the clovers, they have a full
like inventory management menu system. You know, it tallies all the items that you know,
it's like tap, okay, I want a coffee, then I want a muffin, blah, blah, all right, steak and egg.
So boom, there's your total adds tax. And it also does the payment processing,
or that be crypto dollars or whatnot. And so that complete experience is a point of sale.
And so that's what I really want to see in our industry is a crypto and fiat friendly point of
sale that can overtake the squares and the clovers and be open source. So it's relatively free to
use and expandable. So we can add whatever payment methods in whatever country you're at.
And so that's what I'd say is a longer term thing. But for now, crypto isn't in a lot of
point of sale. So people just have to use a separate app. And in that sense, yeah,
edge from a mom and pop can work great. Yeah, I mean, you're very professional,
because I come from the days that we were trying to pitch wallet dot dad's to.
Yeah. So like, you know, I'm living in Wonderland right now. I'm like, where am I?
You know, it's beautiful. The crypto ecosystem is so beautiful now. It's like, it's so
accessible, you know, so it's much more accessible. We're still have a long ways to go.
It became accessible in ways I wouldn't have expected. And it's still inexpressible,
accessible from the viewpoint of the stuff that I actually don't care too much about,
meaning like using your Scott trade and E trade account to go and buy ETFs, right?
Like that's pretty accessible, but that's barely crypto to me. And so that isn't
what I was expecting to be at in 10 years after, 11 years after I got involved.
Same here. But it was still not very accessible from the viewpoint of I can't just walk down
a street and use crypto at any, you know, Tom Dick and Harry merchant, you know,
or for most things, even online, I can't. It's gotten a little bit more with like
gift cards and things like that refill. And, you know, even some services like XMR Bazaar,
I've actually found an amazing vendor on XMR Bazaar hats off to Doug Tumen
for putting that project together. I found an amazing vendor for
tallow potato chips here in San Diego. And they take, and they take Manero,
they're big fans of Manero, Manero QR code right on their website.
And they deliver it right into our office. And so we have a bunch of them in our snack bar here.
And so a little bit more, but I was expecting, you know, it would be
maybe at least as popular as the discover card as a payment method, you know,
which I can nobody uses anymore. Yeah, we're all, we're all on the same page in that regard.
It got hijacked, but I know I was hoping that some crypto would have taken its place to get that kind
of adoption, you know, but not that within the hijacked world of that take took over,
you know, if you like, if you see something like a digital currency group,
I don't mean to talk bad about it. Did you ever take funding from them?
No. Okay, good. Okay. Okay. Digital currency group is pretty much
an arm of mastercard. So like, and they fund a lot of the crypto space. If not,
if you go to crunchbase.com and you just follow the money as to like,
who these crypto entities took their money from, you're like, Oh, okay. Well, it's like,
obviously they don't, they don't want to compete with the fiat. Exactly. It's obvious.
Look at like, in a lot of the news outlets and crypto
are owned by them. So coin desk owned by a digital currency group, you have,
no, no, sorry. Used to be, I think they got sold. They got sold, I believe it's owned by
the founders fund. The founders fund has an off branch, which I think is called bullish
ventures and bullish ventures bought out coin desk. So it's Peter Thiel
that runs, that essentially runs coin desk now. So like, everywhere you look at crypto now,
yeah, obviously this is co-opted, running technology to the establishment that they
have to kind of like, Whoa, what's going on there crypto kids? Slow your roll. So,
I mean, we're in a good place where they have to like, take an active, they have to embrace
crypto. They're no longer fighting it or denying it. But we have to definitely emphasize
these P2P technologies that are native to crypto that they kind of want us to forget,
which I find funny, right? Because like, they'll never be able to create
P2P technology that we native Bitcoiners and crypto enthusiasts know it's possible.
Don't you find that funny that like? It's funny, but it actually makes,
it makes sense though. If you think about it, they're like, Oh yeah,
sure, we're pro crypto, we're pro crypto, and we can get the big headlines,
but they're going to be pro one aspect of crypto, right? Just that one sliver aspect
and not mention anything about anything else like from the payments point of view,
the privacy point of view, the encryption, you know, like they don't talk
Monero as being like, Oh, groundbreaking, great technology because they don't want us
paying with it because that is the true disruptive nature. Once you're paying with it,
you now achieve that true accessibility. You also achieve privacy. If you use a privacy
protocol like a Monero or a pirate chain, Zcash, and so they don't want us using those pieces
because of the most disruptive pieces of them all. Using it as an investment,
yeah, it's just like any other stock. Sure, go ahead, you know, get an ETF and
or invest in strategy. That's not going to disrupt the world. It's not going to change
the world the way I think Bitcoin was originally invented to do. But it makes,
it makes the narrative, it completes the narrative. Yeah, that quote unquote pro crypto,
you know, granted, it's better than being completely anti crypto, right? That's worse
where it's like, we don't want payments. We want you to own it. We don't, you know, it
should be illegal, blah, blah, blah, shut down any company that tries to promote it.
It's better than that. But I think people should make sure they're aware
that it's not the complete picture and still fight for the complete picture of everything
crypto can bring. You know, what I see in the horizon coming is the banksters that are
hijacking Bitcoin, that are trying to hijack Bitcoin and all of crypto, they are going to push
carbon credits, for example, tyrannical initiatives as if it were crypto
developments or crypto innovation. And I don't know if you've seen this, but like
MasterCard is now pushing the agenda on carbon credits, where carbon credits will be tracking you
on your MasterCard. This is a pilot that they've already put out and it's something that
it's on its way. And then I see entities within the Bitcoin BTC ecosystem embracing MasterCard.
It's like, okay, I see what's going on here. The syllogism,
you know, gives me the conclusion that they're going to push tyrannical initiatives
through MasterCard, for example, and they're going to call it BTC innovation. What are your thoughts
on that? No, I saw this coming for a while where, you know, are we transacting Bitcoin?
Are we using Bitcoin? If someone swipes a card and it moves a Bitcoin balance
from one account to another, you know, just like I can have a debit card and that
what if that debit card held a Bitcoin balance? And when you go to your point of sale, it actually
gives you a Bitcoin amount, you know, in sats, because that's kind of cool, right? So it's in sats
and then you swipe your card and you're like, I paid with Bitcoin. But did you? Did you actually
use the peer-to-peer network? Absolutely not. Right? This is, it's exactly the same
payment rails with all the same fundamental limitations, right? The same censorship
that our payments have had for decades. And all you did is search and replace USD for BTC,
right? That you gained nothing from that. Well, one would argue, well, that means I can hold
Bitcoin now. I don't have to like convert it to dollars and the merchant is receiving Bitcoin.
And that is the number go up play. It's the hottest the investment play,
but it's not a payment rail. It doesn't circumvent a lot of the restrictions in payments
that have existed over the over the many decades that we've had digital payments.
And so, yeah, I don't think it's, it's not transformative the way I think Satoshi really
envisioned. So it's a step in the, in a direction, it's a slightly better direction,
you know, and I could see, you know, Mastercard really, really making big waves within the
Bitcoin community of saying, yeah, you can now pay with Bitcoin via Mastercard.
But I think people are forgetting the, you know, what the end goal really was there.
You know, the good news is, is that our technology being peer to peer
will always be superior to whatever they have to offer the market.
Whatever they offer the market will always have a centralized player, which is themselves that
which they intrinsically have to is in their nature to position themselves
as the eavesdropper between Alice and Bob. And so, but we are well, the beautiful thing
here is, is that we will always have the ability to create superior technology because
we embrace the P2P infrastructure that Satoshi gave us fully. So that's, that to me is good news
knowing that they can never and will never be able to co-op that environment that's
native to the blockchain infrastructure itself. They can make you, they can move it away from
the blockchain, which is like what they did with BTC, move the emphasis of networking and
transacting away from the Bitcoin blockchain back to the banks. That's what they did at BTC,
but they will never be able to actually compete at the level of
finality, throughput, efficiency that the blockchain native environment gives you. So
no, and especially privacy. Yeah. And I think now it's our job to co-op them now.
Right. So they co-op Bitcoin. Now it's our job to co-op the financial system
on payments. And I think one of the, I keep saying this big missing pieces is an open source,
very accessible point of sale that really sweeps the rug from underneath, like I said,
the squares and the clovers and the micros payment systems of the world. Because now you
can just inject crypto into that merchant barely needs to deal with the difference whenever
your consumer pays. And now we actually create a fully censorship resistant ecosystem. That's
the ecosystem I think that we're in need of. And the pieces can come together. It's totally doable,
just there haven't been enough people to focus on just that because all of the excitement is in,
well, let's just hold this thing and then make a company that it was worth a bunch of money
because we just hold Bitcoin. Yeah. I think, I think, I think maybe you and I can drive this
initiative. And I have a group of devs on standby that could help that are passionate about this
technology. So yeah, let's talk about it. Yeah. And just if you guys want to be on top of this,
maybe DM me or DM Papui, at a respective public accounts. And, you know, if you want to be
part of this initiative, because this is something that I could get behind as well and support you
in this endeavor, I think is also very necessary. Speaking of necessary, you guys created a duress
mode, which I'm like, well, wait a minute, how does it work and what's going on? And that's
really what piqued my interest to have this conversation with you. Yeah. Because
for Bitcoin OGs like myself, this is our duress mode. And so
tell us about it. What is it? What made you come to this realization that it was needed and
how does it work on edge? Got it. So duress mode, some people don't even know what the word
duress means, which, you know, duress means you're under duress, meaning you're kind of in a high
forced environment where someone's forcing you to do something, right? That's your under duress.
And my first encounter with a duress anything was a security alarm I had at home years back.
And as well at a workplace that I was at where, you know, if you enter the building,
the alarm starts beeping, beep, beep, beep, beep. You have like one minute to enter the pin,
right, to disengage the alarm. And many of those systems have a duress pin or a duress
mode where you can enter an alternate pin and it disengages the alarm. But it actually
notifies authorities, right? So if you're, you have a gun to your head saying, Hey,
turn off the alarm because I'm just trying to rob you at home. You enter that and cops show up.
So whether or not you want them to show up or not is a side matter. Just know that's how
the security systems work. And for a long time, we've asked ourselves, Hey, we would like to
put something into into edge similar to that. And obviously, some of the more recent past
couple of years, issues in our industry with people getting physically threatened,
because they own crypto has been a rise. We said, Okay, we're going to let's just do this.
Like, let's finally make this happen. It was quite a bit of engineering to get it to work.
But what it effectively is is similar to that, that alarm, right, where there's a
separate pin that you can enter to kind of unlock the alarm. There's a separate pin
you can enter an edge to unlock your wallets and unlock your account.
And what it does is it basically unlocks a sub account, you go into settings and edge and you
say, I want to turn on the rest mode, you pick a different pin and boom, good. Now you go and
log in with that other pin. That pin will open up a sub account that initially will just be empty.
It'll just have a few wallets, you know, a Bitcoin, ether or whatnot, but they'll be empty.
Those wallets, though, in the sub account will now start to show up in your main account as
well. And you can use them for just like a little rinky dink spending, put a couple hundred dollars
in there, buy some tallow potato chips from fat chips, you know, on XMR Bazaar, right, do your
just normal day to spending, go to pork fest and I fricking buy anything you possibly want over
pork fest, you know, and some maybe like Monerotopia and a Kopolko, go buy some cab rides with
Monerot, all right, I remember that's what we had to use. But now you have this small set of wallets
that show up under your duress account, that sub account. So on a normal basis, you can just use
your regular pin, weird little Apple thing here, you can use your regular pin to log into your
primary edge account, which has the bulk of your funds. But if you're ever under duress
and someone's forcing, hey, give me the pin to your phone, or the pin to unlock edge or they want,
just force you to unlock edge, you can enter the duress pin. That duress pin will only show that
subset of accounts that you use for your little rinky dink spending. You know, and you don't have
to enter your duress pin on a regular because those small sub wallets also show up in your main
account. And if you remember with edge, every wall is a separate set of keys,
all right, it's not one key that to rule them all. And so what the app is doing is it's creating a
separate set of keys for your duress account, but then also making those keys accessible to your
regular account for your normal day to day spending. At its heart, that's basically it.
It's, you know, it's a duress pin. It's a separate pin that logs into a separate account
that can have just a smaller set of funds. And so, you know, a thief can take those funds,
but at least believe that, hey, okay, they're done and not affect the vast majority of your funds.
So, I mean, the edge wallet has a lot of features, obviously, like this is,
it's very comprehensive. For the interface of, I understand you can download
Edge into an M1, M2, Mac.
Now, you heard that. Yeah.
Yeah. So how are you guys working on a desktop client that is more suitable?
Or native. We would love to. It's definitely, it's always on our roadmap and always gets
pushed aside by other things that necessarily occur primarily because a lot of blockchains
are very, I don't call it, let me say it nicely, dynamic. I mean, they change and we have to update
the app to keep up to date with a lot of different blockchains. And that has taken up a vast majority
of our time such that it's hard for us to go and really hunker down and get that desktop app out.
But know that it is a noted priority that we would really, really want to get out there.
And in the meantime, yes, you're right. If you have an up-to-date Apple MacBook
or Mac Mini or whatever from probably 2021 and on, you could likely put Edge on it, right?
You can go to the Mac App Store and choose iPhone apps and install Edge. And I actually use it
on my MacBook pretty regularly. I give hats off to Apple. We made no effort to make it work
in any special way on a desktop, but it works very fluidly. You can do the two-finger scroll
up and down and whatnot. It feels very fluid to keep. There's no keyboard popping up in your way
because it's not really a phone. They did a great job with the kind of this simulation of an iPhone on
a desktop to the point where if we could just get that on everything, like on the Linux and
Windows and, you know, it's already on Mac or all the other Macs, we'd be pretty happy
that that would be a great starting point. But unfortunately, it's only on those a subset
of Macintoshes, but it works great. Give it a try. Let us know what you think.
Awesome. Yeah, actually, I have it downloaded. I have to give it a go on the computer. So
I understand that there is a feature within the Edge wallet that allows you to disable
any exchange that requires KYCAML. We're at the TCV summit on September 12th. We're definitely
going to go through everything regarding the Edge wallet. And we're going to go,
he's going to show us exactly where to disable that. But if you could just keep, please give
us a quick rundown on where to disable KYC exchanges. And is there something that
you guys are making more apparent for the user? Yeah, so a little reminder on these
quote-unquote KYC exchanges. So Edge supports both. This is for the sake of conversion of one
crypto to another, right? So there's two kinds of exchange operations in Edge. One is a fiat on
an off-ramp. This is like two and from bank account credit card. And then another is crypto
to crypto. And those are two notably different interfaces in Edge. When you want to go crypto
to crypto, we by and large very highly want people to be KYC free. But unfortunately, that option is
not going to support every single asset in the world, right? Not every single crypto. So we've
incorporated, I think, gosh, now maybe 15 to 18 different exchanges inside of Edge for crypto
to crypto swaps. Many of them, about seven or eight of them, are still C5, meaning they're
centralized companies. Now, many of them they do not want to do KYC. We talk to every single one
of them. They definitely don't want to, but because they are centralized companies and they
have to adhere to AML laws, depending on the transaction and its source and destination address
and is it a no-fac address or the funds a few hops away from a potential malicious actor,
they occasionally will have to do KYC on a transaction. It's a very small subset of
the transactions that actually go through our system that would get KYC, but it does happen.
It's happened to me, right? And so it can happen. And it's kind of like a frustrating,
annoying thing when it does happen. And so with that, we've really focused all our effort
into incorporating decentralized exchanges. So decentralized exchanges to none of them
will KYC because they're a protocol, right? They can't KYC, right? They can't freeze your
funds. Some of them may refund though. They may auto refund if they determine that a transaction
comes from some illicit funds. This is known on ChainFlip. I don't know why my computer showed
you the random memes here. I've got like the gestures enabled, I think. Let me turn those off.
So some of them actually will where the miners, the validators of a decentralized
exchange will actually have a black list of addresses and if transactions from those
addresses come through, they just pop them right back. They just send them right back.
The DEXs that we have integrated to my knowledge do not do that. So we have Thor Chain and Maya
Protocol are the two big cross-chain DEXs that we have integrated. As well, we have DEX aggregators,
Rango Protocol, Leify are two big ones that we've integrated, SwapKit as well.
They can do not just cross-chain like bridging from Ethereum over to Solana,
but it can also swap within a chain different tokens on that chain. I think Pepe to Trump,
whatever. It can do a lot of that. All of that is through pure decentralized exchanges,
decentralized bridges so that you don't have a central party that could freeze the funds and
ask for KYC. What Edge does right now is it finds you the best price. So if a DEX can give you a
better price, that's what shows up. If a C5 provider gives you a better price, that's what's going to
show up. You can always change it though. So one little tip and edge is when you get your quote,
there's a little button that shows you what the provider is and you can tap on that provider
and it'll list all the other ones that could execute that swap. It'll show which ones are
centralized exchange, which ones are decentralized exchange, and it'll show you the price
difference between them all. So for those of you that would like a decentralized exchange,
but you don't want to limit yourself because at times the price difference can be pretty notable,
a few percent. This is a great option. So for every single swap, you can tap, you can look at
all of the different options and it'll show this is a decentralized, this is not.
You can say, oh, that price isn't too different. It's only like maybe 25 basis points.
I'll choose the decentralized exchange even if it's not as good of a deal. So that is one
way to answer. It's one way that you can choose a DEX, hopefully answering your question. That's
one of the ways. Another way is to prefer decentralized exchanges and that you can go
into the settings of the app and say, I prefer decentralized. Right now it's best price, right?
But you can choose I prefer decentralized. What that means is regardless of the rate that you get,
if a decentralized exchange can execute your swap, that's what's going to get chosen,
but you'll still see all the other options if you tap on that little button on the quote screen.
Then you can see all the other options. You'll always surface a decentralized exchange. That's
what I have chosen in my account, right? I'm always using a decentralized exchange.
By default, for always, it's the default. It's always be decentralized exchange.
For the primary quote to always be a decentralized exchange.
The primary quote. The primary quote, but you can always tap
the little button on the quote screen and see all the quotes. That way you're not restricted.
If ever you're like, okay, that's a primary quote, but maybe I want to see if there's any
better prices and how much better they are, even if they happen to be a C-fi centralized
provider, you can do that. That's what I call the second way is to prefer decentralized.
The third way is you can really turn off all of the C-fi providers. It shows you in
our settings. You go settings and you go to exchange settings. It'll show everything,
all the decentralized exchanges, all the C-fi exchanges, and I'll have a little check,
a little toggle switch on the right side. You can toggle whatever one's off that you don't
want to use. Then you will not see any quotes from them no matter what. That's up to everyone
to choose. Or you can turn off some C-fi providers. If you're like, I heard this
one's pretty good, but this one's not, then I'm going to turn off some providers.
If I feel like I don't want to take the risk of those providers so they might KYC me.
And so any of them might, that's the thing is, any of them might, but some may have higher odds
than others. And you can research which ones you think are better or worse than others and turn
off the ones you don't want to use. You just won't see the quote at all. So those are the
different levels of being able to set your preferences from the viewpoint of
decentralized versus centralized exchange. Is it necessarily true that centralized
exchange that requires KYC is actually cheaper? No. People have that misconception that they think
will give me a cheaper rate, right? Not, right? Correct? Absolutely not. And especially not true
because a lot of centralized exchanges are actually getting their liquidity from a decentralized
exchange. So when you go to an exchange and you request a quote, you don't realize that
they're just getting some money. They're actually executing that swap using a decentralized
exchange, but they're taking a cut on top of that in addition to it. And so going directly to the
X is going to end up becoming cheaper. So that's always my assumption because people kept telling
me, well, I would get a better rate going through KYC and I'm loving it. You might. No. If anything,
a decentralized exchange wouldn't, I don't think it would ever, a well-constructed
KYC, a well-constructed decentralized exchange should function as a blockchain.
Yes, it does. Exactly. And they do exactly function as a blockchain.
There's no overhead of like paying, you know, lights and bills, right?
You're paying for the validators though, right? So a decentralized exchange doesn't need validators
and you have to stake and you have to reward them. So it's, there's still notable cost,
but the biggest thing that actually impacts the rate you're going to get is the liquidity.
So it's a real question. How much liquidity does Coinbase and Krakenav, if you want to go
from dollars to USDC, I'm sorry, dollars such as USDC to Bitcoin or Monero. And then you have to look at,
well, what's that equivalent liquidity look like on Thor chain or Maya protocol?
And so the, the liquidity question is really, that's one of the biggest determining factors in
how good of a price you're going to get, right? And there's some subtle technologies there that
can improve or make it worse in the dex world. But in general, the more money that's sitting
there liquid ready to go, the better price you're going to have than if there's barely any money
sitting on the exchange. And that's true for both CFI, you know, centralized versus or and decentralized.
That's awesome. What is geeking you out most in crypto right now?
You know, interestingly enough, there's two things that I'm more geeking out on.
One is the privacy protocols like Xano. I'm excited about confidential layer finally launching.
And I'm geeking out about the potential of, you know, as much as I hate the dollar,
I know it's a gateway, like I know that stablecoins are gateway drug into real crypto.
And I'm excited and looking at all the different options of how we can get a true decentralized,
not USTC, not Tether, you know, and people hate me for saying it's not even FUSD, right?
Because that's the centralized stablecoin. But a true decentralized stablecoin off one of the
programmatic block chains, EVM block chains and even the Bitcoin layer twos, right? And getting
that script, right? If that, if that can be bridged, it could if we can do it there.
And then bridging that into a privacy blockchain like Xano, right? And then getting that
transactable, both in a cheap and a fully private way. That's one of the things that I'm like,
I don't call it geeking out, but just very excited about, right? Because that really hasn't existed
before. And with that existing, you can onboard the people that, you know, especially in like
developing countries that aren't really too keen on the volatility of crypto,
but are very big on the payments aspect of crypto, which is why Tether is so popular,
you know, around the world is that it was, it was at one point cheap on the Tron blockchain,
and it allowed developing countries access to a better, more stable currency than what they
natively had. But now be able to do that with with a full level of privacy. That excites me.
So that's that's one thing that, you know, I'm definitely excited about. And then as well,
you know, being able to pause, I'm glad we're editing this thing.
We have a TV in this room and someone just suddenly started streaming Spotify to it.
One second. The world is too connected. Yeah, I think someone just suddenly
clicked the wrong button on our, we have a little iPhone DJ iPhone to play music in
the office. And I think someone clicked the output to go to this TV and suddenly just started
blaring. Okay, TV off. Anyway, happy. It's like you guys have a really cool environment there at
your headquarters. No, it's a fun spot. Yeah, definitely come by and visit. We'd love to have
you. Yeah, I think we'll come visit. When is your next little, I know you guys have like
conferences almost every month, like like meet up. Yeah, there's meetups. Yeah. Next one
slated for the last Tuesday of August, but hasn't been posted. We're just getting confirmation.
I don't want to leak who's supposed to come out because if it doesn't work out,
it has to get pushed another month, people like Paul. But yeah, we have an exciting guest coming
by close to the end of this month. So hope to get that out. Hopefully this week get it
pushed out. But yeah, we've got other months available as well. So if ever you're in town,
let us know. I'd love to have you. But getting back to kind of the stuff that I'm excited
about. So yeah, one, the privacy for the stablecoins coming off a lot of the programmatic chains
because you can bridge that now with confidential layer. And the two, I'm actually very curious
of what happens to Bitcoin BTC with advent of its layer twos, right? Bitcoin by itself was kind
of co-opted. It's layer one, lightning network, total co-opted, totally centralized, doesn't
work. But does it actually have potential through its layer twos, both for privacy and for
programmability in a way that is peer-to-peer, right? Like pure peer-to-peer, not dealing with
like, oh, just put it into like liquid, you know, just federated or lightning network,
which is going to, which is gravitating towards being totally centralized. And can we use that
even for, even if it's not BTC for payments, but BTC to back a stablecoin that then gets
bridged over onto Zano. And then we transact with a private Bitcoin. And so it opens up some
interesting possibilities that I think are like, you know, I've been very critical of Bitcoin for years.
This is what I think is its last hope to be competitive long-term. And if this doesn't
work out, then yeah, I think it's really headed for notable trouble long-term. But this is
one to keep an eye out on, both as someone that really champions a lot of its competitors,
right? Like I championed a lot of the competitors, you know, like when Bitcoin cashed it forked,
I'm like, okay, well, this is actually a more viable payment method. Monero is a notable
competitor because it has significantly higher privacy. And then all the chains that are
much more programmable are competitors. And if you think about it, the market cap or the,
not the market cap, but the percentage of the market cap of Bitcoin plummeted when
Ethereum came out, it was the first real competitor of functionality to Bitcoin. And that's where we
went from like 90% of the market cap to like 50, 40%. Now we're serving around 60. That was right
when Ethereum became like a notable currency in the sea of alt coins that were just fork, you
know, like they're like Litecoin, Dogecoin, Monzacoin, blah, blah, blah, like all the coins
was like copy paste Bitcoin and change it. Ethereum was one of the first ones that actually, okay,
let's actually make something different in you. And so this is kind of the first time not the first,
I mean, Bitcoin's had was at root stock, but they're a little behind on their tech,
even though they are Ethereum based. This is like the first time a good amount of backing is
really trying to create more functionality to Bitcoin that a lot of us have been wanting to
see. And so keep my eye on that and see what really comes out of that, especially from the privacy
realm, because there has been talk of like a privacy layer two on Bitcoin. So those are the two
things I think I'm geeking out on since that's how you phrased the question. I personally think
Ethereum was a step back, to be completely honest, because the UTXO model is superior to the
account based model, in all aspects. So to me, Ethereum was almost like a side up to justify
the hijacking of Bitcoin. You want to have fun podcast? Let's debate that. Let's debate that.
Huge, because that makes fun for fun podcast, right? Can all just agree in an echo chamber.
So Ethereum has huge, huge hurdles. Like its architecture has, I will not, I will definitely
not argue that there are some major hurdles in the account based architecture, especially scaling it,
right? Huge hurdles of scaling. Centralized eye of Sauron. This was developed by the banking
system, actually, the account based model to keep it, so that's why all of the nodes share a
global state. You can't scale in parallel horizontally with the account based model.
And so Satoshi broke the mold by giving us the UTXO model. We can scale
unboundedly, horizontally. The programmability of Bitcoin, in my opinion, is more a threat to
the establishment than P2P currency aspect of Bitcoin. I think the P2P aspect of Bitcoin
and jump starts and maintains and creates a capitalist meritocracy for Bitcoin's computational
power. But Bitcoin's computational power, in my opinion, is more robust on chain than anything
the account based world could ever give you, even including Solana. And I think that, well,
I know that the, if you study who's actually, who are the brains behind the Layer 2 initiatives
within BTC, they're all big blockers. And this all started when the lightning network,
you very well said, could not scale, could not contain, could not really, you said the
lightning network, you called the... A trend towards centralization.
A trend towards centralization. A trend of funds, not nodes. Correct.
So that's even worse. So I know most blockchains trend towards centralization of the nodes and
the miners. That's just kind of natural. But this is, but the lightning network
trends towards centralizing actual holding of funds. And that is the risk. It's not
just centralization of nodes. And that's a big one. Like the liquidity problem is pretty large.
The moment that kind of became very obvious in the market and the selling of the
lightning network to VCs and the market became almost obsolete. It is obsolete because of what
you just said and the routing problem and the hub and spoke dynamic within and all these
issues that the lightning network has within it. Immediately, Bitcoin developers started turning
to other aspects of Bitcoin. And they started looking for, they started now saying things that
the most forbidden character in crypto history had been saying, Craig Wright, that Bitcoin is a
Turing complete machine. And from that moment on, they started, I have screenshots where they're
sharing and learning from Craig Wright about the Turing complete nature of Bitcoin.
And here you have now the building out by SuperTestnet and Robin Linus of BitVM.
This programmable nature of Bitcoin was highly influenced by S-Script,
Jawe Lu and his team and the people behind him. Little do people realize that Jawe Lu
really learned a lot about Bitcoin. It's not most about Bitcoin from Craig Wright himself.
So you have all of these big blockers now influencing BTC. You have guys like Jawe Lu,
now being the head of strategy for StarkNet, which is a layer two. So you have the guys
from Unisats, which are also BSV native guys, running Fractal, the Fractal layer two. So you
really see is a movement of people that have gone from a version of Bitcoin BSV that has been suppressed.
But now that the market demands for there to be innovation in BTC, they saw an opportunity to
move their efforts into BTC and make money by selling layer twos. But they all deep down know
that these layer twos are only a step to an on-chain programmable Bitcoin.
And this is why the core devs in BTC are, they read this movement in anticipation and they are
engaging in what they call the great script restoration, which is to restore the op codes
that they themselves took away from BTC. And yet in other words, what I read into that is that
they're getting ready to scale BTC if BTC is ever threatened by another Bitcoin. And the problem
here is that BTC is like they would be going against their own base. And that's what we've
started seeing with infighting within the Bitcoin community. We're the Maxis that are now the Maxi
A's and the Maxi B's and the Maxi C's that are disagreeing on things. And I predict this a while
back, whether or not it leads to another hard fork we'll see. But at the end of the day,
I want to, you know, maybe this gets a bit more technical for this discussion. But you know,
he had mentioned, I think Ethereum was the step in the wrong direction or backwards.
But the programmability of EVMs, Ethereum's, even Solanas that are not EVM, but are the global
state that you're referring to. While it has the disadvantage of scaling, it is harder to scale.
I will not say it's impossible to scale because there's some darn really sharp engineers looking
at solving that problem. And there's some blockchains that appear to have solved
that problem. It does give you the vision of true financial Legos. That's kind of one of the
memes and narratives of Ethereum is that you have these financial building blocks
and one building block can be used in another building block, can be used in another building
block. Case in point example, you can create a stablecoin using a smart contract. That stablecoin
can get deposited in a completely different smart contract to go and earn yield from someone
borrowing that stablecoin. And your deposit into that smart contract and the yield that you
earn can then be tokenized with an LP token that can then get deposited in another smart contract.
The financial building blocks, those Lego pieces working together from independent contracts
that don't have to know that each other exists, that's possible because of the global state of
an EVM or similar type of protocol. And that's not possible with UTXO. So the UTXO has this
great ability to scale. I don't doubt that at all. I give credit where credit's due.
You know what I mean? Nothing's perfect. And so I give credit to UTXO because it can scale
much better because you don't have to have a global state. I just know about this UTXO. I just
have to know if that thing is spent or not. And you could subdivide the work of a network to say,
hey, you deal with these UTXOs and you don't have to care about anything else. You deal with
those UTXOs. You could shard UTXOs much more easily, much harder to shard global state.
But the power of that global state is tremendous from the viewpoint of replacing
a lot of the financial institutions that exist today. I think the block-fies and the Celsiuses
that were centralized and offered the exact products I was just talking about, right? Being
able to earn yield on your crypto, on your dollar, and be able to take out loans on your
crypto, on your dollar, ability to create a stable coin that gets sent back and forth
full programmatically and have all of them work together. That's what you really get
from that global state. And that's powerful because it takes away the power from the
centralized custodians that offer, try to offer those exact products, but do it fully centralized.
KYC, sorry, you're not rich enough to join our club type of products. DeFi makes it possible.
So I've always nerd and dorked out about DeFi. But granted, it has its shortcomings,
i.e. some aspects of scale, for sure. But man, the things that you can bring in addition
to payments, because payments is one piece of the puzzle, I think it's one of the most
important pieces of the puzzle. But it's the foundation of what I call the financial
stack. Just like there's a technology stack. Whenever people build apps and products,
there's a technology, well, there's a financial stack. At the bottom is the money,
next is payments. And then there's everything else on top of that. Payments is a fundamental
important piece of that financial stack. But you need things above that because
that's how the world operates. So we don't just simply hold money and send and receive it.
We also have financial agreements between each other. And that's what DeFi is. And you need
pretty strong programmability to be able to really impart good quality DeFi. And that's what
programmable, fully programmable blockchains that have that global state kind of give you.
Well, Paul, I agree with you. And because of what we saw with Ethereum, Bitcoin,
Bitcoiners started asking these same questions. And they came to the realization that Satoshi gave
us the mechanism to actually have that and the scalability at the same time. The thing with
Bitcoin is that it's so mammoth that Bitcoiners just have to agree on what protocols that run
on top of Bitcoin to use to have interoperable applications and tools. So that mindset,
the mindset of how Ethereum was built in a way that was interoperable, that mindset has carried
into Bitcoin building itself. So I honestly don't see that as an advantage in the Ethereum ecosystem.
If anything, what I see really happening is that Ethereum forces you, forces the entire community
because they do share a global state. It forces the community, the account-based model to marry
a single, a specific protocol stack. Whereas Bitcoin, since it allows you to, since there's,
you don't share a global state, there is more options. And within that optionality,
you have to, within that optionality, now it's up to the community to decide
what token protocols they prefer over others. So the biggest issue that we had in Bitcoin history
was that we had so many options when we had BSV, when we had in BSV. That was honestly
the biggest issue because there's so many infinite possibilities that everyone and their mama had
their own token protocol. Whereas in Ethereum, it was really easy for that community to say,
you know what, we're going to do ERC-20. And we're going to really develop the stack for ERC-20.
You know, actually, Ethereum being account-based didn't make ERC-20 an easy standard because
Ethereum has the same problem. ERC-20 is just a way of writing a contract. There is no token
baked into Ethereum. People probably don't realize this, but Ethereum in no way, shape,
or form knows anything about tokens. There is no token standard on Ethereum. The users
and the developers of Ethereum created one and rallied around it. And why did they do that though?
Why did they do that? The reason why they rallied around a standard is because
by rallying around that standard, the standard token can then get used in other
contracts that are not for tokens. And this is the inherent problem with the UTXO model,
is if I create a token in the UTXO model and it's a fully programmable token,
it cannot be used in someone else's contract.
Yes, you can.
To my understanding, you cannot. So, this is part of what we need to do a little bit of the
research. If I create a token that is a stable coin that balances, that is held stable
by like a MakerDAO equivalent, right? You deposit some Bitcoin, BSV or whatever,
and then it mints a stable coin. That and the programmability of that stable coin of how you
can then go back into the contract and then redeem the funds, that wouldn't be usable on a
completely separate contract that someone else builds. That interoperability between the two
is global state, right? That is global state. And that is what you don't get in the UTXO
model is two completely separate programs being able to talk to each other, because UTXOs can
only talk to their previous UTXO, their previous UTXO, their previous UTXO. They can't go and
cross over between each other and without them being effectively kind of like the same owner,
right? The problem that we had in Bitcoin in developing an understanding of Bitcoin
programmability is that because we had the Bitcoin Civil War, a lot of the habits of thought that are
particularly small blocker have carried over into even BSV development, where there is a necessity
to still consider the need for having to create protocols that have to index the
entire blockchain. But you don't really need that. And right now, there are modern protocols
on BSV that completely do away with the need to having to index and run through the entire
blockchain, because you don't have a global state. Actually, I'm going to have to send you two
examples of a token protocols on BSV that don't need for you to index the entire blockchain anymore.
And this is actually a very new revolution here, because even up to recent history,
the bad habits of the way small blockers were thinking carried over into BSV,
where when we had ordinals on BTC, BSV developers felt the need to create one set ordinals,
which yes, you can program everything into one set. However, you're still dealing with the whole
indexing thing. So even the architecture of one set ordinals was still small blocker in design.
Right. You don't need to index the entire blockchain. You can just engage the blockchain.
And I think one of them, I can't think of the two names right now off top of my head,
but I'm going to find you those two token protocols and send them to you,
so you can investigate them. And I really think that's
that is testament of how much more there is to learn about Bitcoin, that just now
people in BTC have begun to discover that Bitcoin is programmable to begin with.
It's very programmable. But how the UTXO model engages within that programmability is something
that a lot of the world is still just now beginning to discover. And I'm going to send you these two
let's call them MVPs of what I'm demonstrating, what I'm referring to, so that you can see for yourself.
Yeah, I'll definitely take a look at them. And I've never argued that the UTXO model
isn't programmable. And I think it's more programmable than I originally realized back
in like 2014, 2015. Same here. And I came to realization, yes, you can make it tour and
complete as well. But the extent of my study shows that tour and complete programmable does
not mean that you can have programs that can talk to each other. Those are two very different
things. It's kind of like, I think of the UTXO model as having a powerful computer
on your desk, that can actually go ahead and create these programs. I think of the global
state as having multiple computers connected to the internet that can actually talk to each other.
Where my program and my computer can talk to your program and your computer can talk to another
program and someone else's computer. They're not siloed. And so tour and complete doesn't
mean that these programs can talk to each other. It just means that you have if,
then, else state within yourself and you can jump and conditionalize your execution.
But the ability to take the output of that program and send it over to a completely different
program elsewhere that someone else is executing, that's the piece that the global state gets you.
At a heavy cost, though, I don't argue that heavy cost of scale. But capability,
but the capabilities are the ones that I would argue. I'm open to being challenged on that.
There's going to be great things you can build. There's still great things you can build. I think
that if you can build it on a UTXO model, definitely go for it. It's harder. It's for sure harder,
but it's possible. But can you build something that is true interoperable between different
smart contracts that are launched independently that don't know anything about each other?
I'm going to show you a demo that just came out yesterday of the MetaNet, which is Bitcoin
as an internet on BSV. It just came out. I'm going to show it to you.
It's a supercomputer. It's already functioning, dude. It's the MetaNet highway. I'm going to send
you the demo that was just put out yesterday. And I want you to give me your honest feedback,
please. We'll do. That's all we give each other, right?
I'm very excited about this stuff, man. Let me tell you, if there's something that geeks me out,
is this conversation and my realization that because I was caught up fighting this
civil war on what I consider really dumb aspects of Bitcoin, the really simplistic stuff,
should we scale on change? Should we not? Kept us from learning more about what Satoshi
gave us. What he gave us is jaw-dropping, man. I'm going to send you that demo that came out
yesterday. I'm also going to send you another demo, which is another demo that actually just
came out as well yesterday, which is on how to make sure that your phone communication
is always P2P, because they tell me Telegram, they tell me what's app is encrypted,
but how do I know there's not a backdoor and Zuckerberg is not listening to my conversation?
It's like if you have a phone on a scalable Bitcoin that wallet-to-wallet phone call,
I can cryptographically have encryption running on chain as well to protect our privacy
and communication, but that point-to-point interaction from wallet-to-wallet without having to
assures me that there's not an eavesdropper. I'm going to send you that as well,
which is something badass, man. Okay, I'm open to hear. I'm sending you four things,
the two wallet, pardon me, the two token protocols that show you that you don't have to
index anymore, like that's just ridiculous. And the other thing I'm going to send you
is the demo of the MetaNet, which is the internet, the Bitcoin as an internet,
and also send you how P2P confirmation in communication is now possible. So I'm going to
show you, send those four things to you when we're done with this call.
I will check it out and let you know what I think.
And if I'm wrong, call me out, please. I do not want to live in ignorance or
an error. Please call me out. Same here as well. Cool, cool, cool, cool.
So, yeah, so that's where I'm at. So you're also geeking out about stablecoins. And I want to ask
you about your idea of this stablecoin that you have in mind. Going back to that conversation,
you mentioned that you want a stablecoin that originates in a scalable blockchain,
but how is that stablecoin pegged? I mean, I
feel like stablecoins seem a little bit like not as trustworthy to me as something backed by
something real, like a bank or even US treasuries, if you want to go status, right?
I mean, yeah, I mean, if you think a bank and US treasuries are real, then sure.
But so if you want privacy in stablecoin transactions, and I mean full, like,
Monero-level privacy, not the kind of privacy a bank gives you where they don't tell your buddy
your balance, but they know it and they know all your transactions, that to me is bank-level
privacy. If you want real Monero-level privacy in a stablecoin, you will need a stablecoin
that is fully algorithmic. I just don't see another way because if there is a counterparty,
I always ask this question, right? If you go and create a stablecoin and you yourself hold
the collateral, whether that's dollars, treasuries, gold, you know, I know there's people trying to
create a gold stablecoin, and then you mint this thing and then it is bridged over into Zano
and somehow deemed used for illicit purposes. And, you know, illicit is very subjective,
right? When US things is illicit, other countries like that's our day-to-day ops,
but whatever they de-malicit, do not expect that you'll get a knock on your door saying,
we would like to freeze those funds that are backing your stablecoin because they've been used to,
you know, fund a poor family in Iran, right? I think you're almost certainly going to get
the knock on the door, right? Or at least you definitely better think, you better expect to
and be in a jurisdiction that you hope the big boys can't go after, right? And I would not use
that stablecoin on a privacy chain because if it got, if the funds got frozen on the bridge,
right, confidential error, right, then my stablecoin tanks in value, right? So,
just because, you know, they don't like the privacy side, doesn't mean that they can't
just simply freeze the transparent side because it's really the transparent coins
that are backing the privacy coins that are backing the privacy coins, right? That's how a
bridge works. It gets locked on one side, minted on another. And so, I sure as hell wouldn't trust
a coin that has a, that's on a privacy layer and it's collateralized by a central entity.
So, hence, we need an algorithmic coin. Now, a lot of people have like this knee-jerk like,
oh, shit, not an algorithmic coin. We know we've been through Terra Luna, right? And
everyone's got PTSD from Terra Luna. Everyone but Jeff Berwick.
Yeah, because he bought it like $0.00, like absolute, caught the knife. Damn that guy.
Hats off to him. Genius, genius. Yeah. Even he realized that everything in, even,
even something going to zero can bounce off to zero. So. That was genius anyway.
But anyway, so most, I was in the room as he was doing it. I'm like, I was almost in shock,
like, because I'm inexperienced compared to him when it comes to investing in trading.
He knows.
But what a master class he gave us, man. Anyway, so for everyone else that still has PTSD
and lost millions and whatnot, they're like, no, the Alago stable coins don't work. But
what they don't realize, you got to look at all the different Alago stable coins
and all of them have different pros and cons. And Terra Luna had one gigantic
con, which is it's fully backed by a coin that had no other purpose,
right? A coin that had no, had no a general adoption. I mean, no money has value just
because a couple of people believe it has value. And so what, where they see that value,
it becomes the question, do they see the value because, oh, it's like the digital
gold, oh, because I can pay for things with, oh, because it's the gas for programmability.
Luna had almost none of that. It has value because it's what backed a stable coin.
And that's not what gives it value. That's what you do with it when it has value, right?
When something actually has value, then you can back a stable coin with it.
It doesn't have value because it backs a stable coin. That's the exact opposite, right?
And so that was the intrinsic flaw with Luna is you had no utility in this coin first
before you then go and back something else. And, and lover hate Bitcoin,
there's enough people that love it to give it some value that could back a stable coin.
And to some degree, even ETH has that. And so backing a stable coin with more stable assets.
And then, of course, having significant over collateralization to make sure there's well
more than what the coin would historically drop to, drop in volatility is kind of the
necessary piece of the puzzle that we haven't really had or we have had, but people
aren't aware of them. So there are stable coins like money on chain DOC
that have been around for years since I think 7 2017 on root stock.
And at least last I checked, I haven't checked in a few months, but it's held its peg.
And it's backed by not just Bitcoin, but a few different financial primitives and incentives
that motivate people to keep that thing backed and keep that thing pegged.
And these are the things that I want to see bridged over because there's no central party
that can freeze the funds, right? It's a pure smart contract.
And admittedly, if it's just the stable coin, you're not trying to do
Lego building blocks with it, right? It could be on Bitcoin script, right? It easily could be
because it's just that. I only argue that the global state, if you want to make it
Lego building blocks, but if you just want to bridge it into Xano, and Xano has no
programmability either, right? It's just for payments, but super private.
The source of that, that Algo stable coin, I'm still researching and looking at the
different options and also discovering what has existed and that I just wasn't even aware of
because everyone's just jerking off on USDC thinking that's like the end all be all,
which I'm hoping it's just the beginning and it has its own end because we get to the real
stable coins. The real stable coins. Yeah, there's definitely an opportunity there for a lot of
people. Yeah, who's going to build it? Or who has? I just have things in my mind right now
that I don't know if I should, if I can or should talk about because they may be private to some
people. I'll leave it to you then to decide on that one. Right, it's just, no, I think I'm
not going to talk about it, but there are definitely a lot of endeavors out there
focusing on trying to figure out what you're figuring out. And yeah, it's just,
so you would see it, what would the peg be? What would be the asset that would you say
Bitcoin, BTC would be the asset to algorithmically peg a proper stable coin? That would be like
ultimate asset. I won't call it ultimate. It's what I call the best one right now.
The best one right now, yes. And it's been probably for the next five-ish years.
And of course, if a protocol is fully programmable and dynamic and has
probably governance tokens that can vote on what does back the coin, that can change over time.
The thing that actually backs the coin can slowly morph. Much like dye,
originally it was backed by ETH, had some aspects of maker token backing it, but it morphed,
unfortunately in the wrong direction, right, where now it's backed by USDC, or at least partially
backed by USDC. So in that same sense, like BTC is a pretty good option to back a coin today.
That might not be the same in the future, but the contract, the chain that does the
minting of this algorithmic stable coin can morph over time and use a basket of assets
that have achieved relative stability to be able to back this dollar base coin.
The creator of the maker DAO, he wrote about these things in his blog. He
at delete shitcoin. Oh, you actually talked about at shitcoin. No, no, no, no. His ticker symbol,
his handle on Twitter was at delete shitcoin. I got it. Yeah. He's the creator of the maker
DAO and of the DAO. So he actually, I would say he's the father of the stable coin.
I would call him the father of DeFi as well. He said very controversial things that
and yeah, he was suicide. Yeah, he's suicide. Yeah, something happened. We don't know exactly
what it is, but what the media says is one thing what really happened. Who knows? Yeah.
Yeah. So, but he wrote about these things and so yeah, maybe I don't know, have you looked into
what he said about these things because he really like almost like he said a lot of what you're
saying right now. I haven't you're saying right now. I haven't read his sayings, but I think
if you run in the circles of the people that care about an algo stable coin,
they care about it for the same reasons that I do. So I think it's, we have, we share some
commonality there. The people that are trying to get an alternative to USDC that achieves what
USDC can't. I know what Tether can't or we're kind of in a bit of an echo chamber,
we're echoing a lot of the same narratives, right? That's the only way to be truly censorship
resistant, how to prevent frozen funds, how to achieve a level of privacy as well
that you can't get with USDC. And so that is what I'm, I don't know if I'm calling
geeking out about, but I'm excited about and also just really, really, really want to see
happen. I just really want to see that happen. And I'm open to the different mechanisms
by which it evolves, whether it be like I said, a Bitcoin script or an EVM chain or a Bitcoin
layer two, and whether or not that goes to Zano or I've heard of other protocols, Alio,
which is a full smart contract privacy chain. You could bridge to that, but
I just want to see, I just want to see that happen. I, you know, to get an
actual privacy stable coin well adopted. Let me ask you my last questions here.
Is Tether too big to fail?
I think nothing's quote unquote too big to fail, especially in the world of crypto.
So banks are too big to fail because there was no other alternative and so therefore
governments would bail them out. But now that there are alternatives, I think
none of the financial institutions are too big to fail because you can only
bail out so much when there is an exit path. So if there's no exit path from
like the dollar, right, then the government can print as much as it wants.
When there's an exit path from the dollar and people can both hold and pay in a different
option, the ability to print the dollar to bail out the banks starts to become very limited
because now you hyper deflate because people aren't dependent. Sure, go print that
shit. I don't care for it, right? That is what we disable that capability
of the feds and the government by exiting out to other currencies.
So yeah, no, but they're not too big to fail. They were because the system made it so.
Crypto makes it where no, I'm sorry, you are no longer too big to fail.
That's awesome. What a great insight. I've never thought about it that way. I've never
come to that logical realization that you just shared with us and I really want to thank
you for that. Wow, that's awesome, dude. Thank you for asking. You should write an essay
about that. I wish I wrote more. I'm terrible at writing, but I know I should write a bit more.
Are there any other actors in the space that share that opinion that you just expressed?
Sure. So clearly. I'm sure I've heard it from someone. I think I'm one of those. I have no
original ideas. I just listen to some people and go, that makes good sense. I like that one.
So I'm sure I'm not crediting someone to what I just said, much like AI doesn't credit what
it learns from other people. I'm probably doing the same thing. My actual intelligence is
failing in that regard, but I'm almost certain I've heard this talked about multiple times from
other sources. So I'm not going to take full credit for it. I have one more question if you're
willing to take it. If you have time, one more. Sure. Let's do it. AI with blockchain.
I think it's going to bring about the dystopian world that we all fear in Hollywood and sci-fi,
but it's one of those you just can't fight it. It's like that.
I don't have a good analogy for it, but you can't fight it. You can't ignore it. You can't
pretend it doesn't exist. Just like most technologies, if you don't learn to live
with it, you will just be left behind. It doesn't mean you have to like it.
And so I use it pretty extensively. I even pay for it. A lot of people don't pay for AI services,
and I see how... I'm not going to say it makes our team more efficient. I'm not going to say that
because it doesn't. It helps your team keep up with how everyone else is accomplishing and
leveling up their productivity. The world is leveling up their quote-unquote productivity,
and so you've got to use it to just stay on par. It's not saving you any time. It doesn't save me
any time because it's stuff that we have to do in order to stay competitive. Just like it's hard
to use a cell phone and not have a smartphone now if you want to stay competitive in the
business world. There's no option. If we never had smartphones, you could stay competitive for
that one. So it's intersection with blockchain. I think they're too diametrically opposed technologies.
Sure, there's some intersection, especially like the traders in the world. They're using AI to
figure out signals and whatnot and when should you buy, when should you sell. Sure, that's not
really a marriage of the technologies per se, but I think of... I've said this even before,
ChatGBT existed. I look at Bitcoin crypto as very libertarian anarchist technology,
and I think of AI as very communist technology. It's very centralizing. Any aspects of peer-to-peer
AI is like orders of magnitude worse in capability than fully centralized behemoth AI that's owned
by the three to four biggest companies in the world. It also wants to aggregate data just like China
and its communist regime that has surveillance everywhere, surveillance state everywhere. That's
what AI is. It wants to surveil and gather as much data as it possibly can. That's how it gets
bigger and smarter. That's how it knows us and how to co-opt us. And so they're completely
diametrically opposed technologies. As anyone listen to this, you could probably tell I'm not
the biggest AI fan, but I do use it and I know I need to. Otherwise, I'll wither and so I'll use
it to try to build the freedom tech. So I'll use the tech that I'm not a big fan of if it helps
me build the tech that I think the world absolutely needs. And that's the crypto world.
What if Satoshi really gave us a market-driven AI?
But I don't know what that means in nuanced, precise terms. And so whatever Satoshi brings,
market-driven, what does that mean to be market-driven? The market pays for it,
the market distributes it. It's peer-to-peer, sure. But the heart of the matter of the
core fundamental issue with AI is it is incredibly, incredibly CPU power-hungry and centralizing.
Unlike Bitcoin and crypto, where you have a node that could be here and node over there,
node around the world, and boom, you're more decentralized and it's more resilient
and more hardened and sometimes even more scalable because you have more contributors
to the network around the world. AI is the opposite. If I have a GPU sitting here in my office and you
have a GPU sitting in your office and your home and someone else in China and blah, blah, blah,
those GPUs have a fraction of the combined power because they're distributed and more
decentralized and peer-to-peer than if we just stuck those GPUs into a closet owned by
Microsoft. The locality need of AI, meaning AI is most powerful when the power is local to itself.
They're all in the same closet. Exponentially increases the power of the ability to train models
and to infer models. You can do it when it's distributed, but that ability just plummets.
It just takes a nosedive. It's just not cost effective. That's why there's these giant data
centers, the size of the building I'm in that is full of GPUs. You're not going to be able to
market drive the ownership of that. Own parts of that such that it's not co-opted. No,
it's going to be one big company that owns that to give you the most powerful AI that
gives you the fastest response that knows most about the world so that when you chat with
your chatbot, it can do the deep research kind of things. That's going to go to the biggest companies
in the world. There's nothing that peer-to-peer is going to do to really change the power of the
centralization of AI. Are you familiar with what Erbit attempted and also are you familiar with
21E8? I'm familiar with and attempted. I'm familiar with it. I've researched it. I've read
multiple pages on it. I still have no clue what the hell it is. It sounds like the pipe dream
thing that you pitch to VCs that don't have a clue and therefore you sound smart enough for
them to put money into it, which they did. 21E8, I have heard of obviously it's alluded to 21 million
but I don't know precisely how it intersects with AI.
So it is the constant search for the computer that we can use in clusters to create a
decentralized computational data market to compete against these behemoths.
I guess you got a few different buzzwords there. Cluster, decentralized, data market.
So what it is is at the best computer to give us that right now is the Mac mini.
Because the Mac mini- It's powerful, it's small.
It's small and you can build, aggregate as many Mac minis as possible and in other words,
it scales in parallel like Bitcoin and you can run SHA256 through it, SHA256 computations
and also any language model. So the big Mac mini is almost capable right now of running
deep seek for example. So capable of running deep seek is one thing. Being able to
train deep seek is another. So if you're running deep seek, you're running a model that was trained
by someone with a building full of computers and GPUs and so running is inferring. So an
inference is different from training. Training is the foundation and baseline of AI.
Because you get to you as the person that owns the equipment that trains the model,
get to choose what goes in. That's how we get the control and the censorship
and how AI then becomes how do you call it biased in its response. It's like you've taken
the little child out of the womb and you're the one that's training it. After it's trained,
sure you can go in and ask it questions. But this thing's already trained. It kind of
knows who it is. It has its informational bias already. And that's the control and the
co-opting of AI is at the training level. There's attempts at at least
controlling and distributing the inference. That's what like Venice AI is doing,
Eric's projects. But that still doesn't take care of the training piece.
Right. So for us, like big blockers, we see micropayments as the means by which we train
on-chain an AI. Like training an AI on-chain? Training? So training Mac
Minis won't hold a candle because they don't have the GPU power to train.
I'll send you an article on this on the market drivers through micropayments
that could lead into the training of AI when data is processed on-chain. And the scalability for a
decentralized competitive market of data is possible when we use infrastructure that is readily
accessible to anyone. The Mac Mini is something affordable to anyone. I have a bunch here and
we love them. We've got like half a dozen of them here. Yeah, so many servers are great, but
they're great for a specific use for training AI. So I'm going to I'm going to send you an
interview that I did with Mark Wilcox on this on this topic. And I'm also going to send you
an article on the on the micropayment aspect on-chain that could be used in the future
for training AI. All right, we'll take a look. Cool, cool. Yeah, dude, I look into, I'm really
out. Fair enough, someone's got to be. Yeah, but you know, it's almost like, you know, I have a
friend who was the founder of Brave New Books. Do you remember Brave New Books? Oh man, love that
place over in Austin. Yeah, so. Well, Harley, yeah, their original owner I think before they
gave up to Kat, Kat Bleich. So I was having a conversation with him and he said, Raph, in the
early days, bit coiners would dream. And that really hit home. I'm like, you're right, bit coiners
were dreamers because we had an open, unbounded protocol with all these op codes that
really gave us the ability to even dream with Bitcoin as a supercomputer
with a market driven supercomputer. And so that dream's still alive. A lot of us have
kept that going. And that's kind of like where my mind is constantly is in dreaming with Bitcoin,
dreaming with what is possible with Bitcoin. Mark Wilcox, him and everyone around that world of
2018 have really pushed the agenda in this whole area of what they call their buzzword a
computational data market. And I'll send you my interview with him. I'll send you some other
interviews with him that are pretty intense, where he really goes into it. I highly recommend
everyone to actually I'll put those interviews in the description below. I highly recommend
that everyone like become acquainted with this because Mark Wilcox was himself a consultant
for open AI. Before it went like rogue and Elon. So yeah, so we are, I think there's hope. I think
there's hope in terms of, you know, how you say that AI is communist. I think there's hope
in that I think that Bitcoin could be used as the engine where we have a free market
trained AI. A true free market trained AI. It would be a great and great piece to get to. So I won't
say I'm hopeful, but I want to champion any efforts that look like could circumvent the concern that I
have of AI in general. So glad to know that there's people trying. I'll say that much. I
definitely am glad to know. That's awesome to hear. I'm going to send you the presentation
on the MetaNet that was just launched yesterday. Bitcoin as an internet. P2P finality in routing
communication, assuring yourself that there is no eavesdropper in encrypted communication
like a phone call. I'll send you that presentation. I also was dropped yesterday. I'm going to send
you stuff on 2018. And I'm going to show you two token protocols that are modern Bitcoin
token protocols. State of the art where you don't need to index the entire blockchain
and where you have that programmability across chain with these protocols.
Yeah. So okay. So actually I'll put that all in the description below.
All right. Yes, please. That way everyone else can click on it. We can all chat about it
together. Let's do it. Let's do it because I honestly think that the hijacking of Bitcoin
was bigger than many even think. It was not just in my opinion about like
taking away the fullness of P2P digital currency. I think that the hijacking of Bitcoin was
deeper in that the hijacking of Bitcoin wanted to make us forget Bitcoin's computational power.
And that's what we're rediscovering. And that's now even the adversaries of the original
thinkers of these ideas like Craig Wright, his adversaries are now in agreement with him
where you see in BTC the great initiatives for the great script restoration where you see
the entirety of the infrastructure for BTC layer twos revolving around a Bitcoin
virtual machine they're calling it, which is based on the work of
if you get down to it, Craig Wright and Escript, which now Escript is like the guru
ask anybody about Jawe Lu in the BTC circles and that's all you'll ever do. Yeah. So like
he's the guy that's giving seminars to all of these BTC devs and he was someone who was a
pupil of Craig Wright. So it is what it is. The fact the truth is out there. So
thank you so much for your time. Oh, thank you. Appreciate it. Really appreciate it.
And I look forward to hearing your presentation on Edge
in detail on our at our TCV summit. What matters most in crypto, which will be
happening Friday, September 12. Sweet 2025. So I see you there's over half done.
Not damn cool. Cool. All right. Well, Raphael, pleasure as always. Thanks so much.
We'll see you over at the TCV summit as well. Everyone else. Thank you guys. Peace, love and energy.
Now we are dealing with a possible world war. Some will say we are already in a world war.
My condolences and prayers go out to everyone suffering under tyranny. It really sucks. I'm
really sorry. But it seems as if people are starting to wake up regarding crypto more and more
each day. And so it's in the description right here to read where we give our secret
sauce and what we teach our subscribers because things are just that bad. You know,
everyone needs this information. People need to know about sound cryptocurrencies that are
actually private by default and to know how to properly use crypto.