Rebuilding the World’s Financial System with Bitcoin | Obi Nwosu

29:48And the idea came about that we can provide them tools. They have the need for privacy and a real valid need for privacy because if their privacy is lost, they can be arrested, tortured, and killed. Or their family and friends can be. So they have the need and they are very very strong communities with very high trust so it was a perfect fit and then finally there are disempowered communities around the world and a a large percentage of those happen to be in africa and then combine that with my historical you know my family was from nigeria or is from nigeria my my wife now is from kenya you see that the number of disempowered communities there is, they're all over the world, but it's larger than many other parts.

30:39And so therefore, the opportunity to uplift them by giving them the superpower of having disposable income, having savings. Having some savings is the beginning of everything. You can't have a house without savings. You can't have a car. And then with the car, you can then go off and earn more money and so on and so forth. You can't even think about the future. You just have to think about today. And that requires you to do that en masse. I think Bitcoin is the most asymmetric opportunity to en masse give people who are currently living hand-to-mouth the opportunity to have savings. And once you give them opportunity, even though in terms of revenue, the other projects that are much more globally focused that benefit people around the world will generate more money.

31:26But in terms of impact and value to the world, I think uplifting vast swathes of people out of poverty, if we can help towards that, I'm not saying we're going to solve that, but we can help towards that in any tiny way, that's priceless. The other thing that is really interesting, and this is maybe not so obvious, but this is for all three of those groups, is that even though they don't necessarily make the most money, they are by far the most challenging to help and service. Why is that? Because they have real privacy needs. It's not just, I want privacy philosophically. I want privacy or I die or I get tortured.

32:11or I have mobile phones that are not the latest and greatest$2 ,000 iPhone, but they're like really$50 just about called smartphones, which are way slower than what you expect. I have one of those, and even now, it's actually quite a medium range phone, and it's just super frustrating to use. You have that just to test that the software actually works. Just to test that it works and have the experience. And that's a big thing I want more people to start thinking about, going from aware. Well, first of all, there's a lack of awareness of how outside of people's personal bubbles. The next phase is to have awareness.

32:55And I think there are a lot of you and others are working to get awareness. But the real phase, and this is something I have to work on every day, is to get experience. experience understanding it, not just going somewhere, but living that life for a period of time. And trust me, if you tried to live it for a week, you'd probably run away screaming. It'll feel like being in the worst sort of gulag prison compared to the life of the average Westerner. So that's one of the reasons why I have that mobile phone. But for us at Fedi, because we're dealing with these communities, people who are under the Okoforotan regimes, people who have being ravaged by environmental disaster or people who are at the end of the socioeconomic scale.

33:47You have to deal with spotty, bad internet. You have to deal with really underpowered devices. You have to deal with real security concerns. and you have to deal with sometimes literacy levels are lower in these countries issues with eyesight all these things because you know cataracts and so on and undiagnosed

34:16eyesight issues and all of the sort of stuff that other people don't have to think about and as a result the app that you end up building is like this sort of battle it's this honey badger type app effectively because honey badges are formed in the furnace of challenge um and what often you can see if you don't have that is you have lots of apps that are interesting and they show interesting ideas but they're not they're not really commercially or or operationally viable they're always sort of um science projects yeah and what we've got here is and it's still again Again, we've got years of just like taking the iPhone or Android or iOS.

34:58It's years of development to get it to be what we want. And you'll probably never achieve it. They've been working out for two decades. But it is and it's still a long list of things we're going to do. But it's just this battle-hardened device. So now when you take it to a larger audience, it's going to be way more polished and way more able to handle scenarios that other apps can't. Perfect example is WhatsApp. WhatsApp is an incredibly popular app, and it just works almost everywhere. Why? Because they put a lot of effort getting it to work in the global self. So, spotty internet, it just works because a big part of the market had that.

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36:57That's B-I-T-K-E-Y dot world and use the code WBD. This episode is brought to you by Anchor Watch. The thing that keeps me up at night is the idea of a critical error with my Bitcoin cold storage. And this is where AnchorWatch comes in. With AnchorWatch, your Bitcoin is insured with your own A-plus rated Lloyds of London insurance policy and all Bitcoin is held in their time-locked multi-sig vaults. So you have the peace of mind knowing your Bitcoin is insured while not giving up custody. So whether you're worried about inheritance planning, wrench attacks, natural disasters or just your own silly mistakes, you're protected by AnchorWatch.

37:32Rates for fully insured custody start as low as 0.55 % and are available for individual and commercial customers located in the US. Speak to AnchorWatch for a quote and for more details about your security options and coverage. Visit anchorwatch.com today. That is anchorwatch.com. It's funny because I've never really thought about that challenge in app development. So the thing that came to mind is my probably favorite lightning wallet, the one that I use all the time is Phoenix, but that's useless to people in the global south who don't have enough money because the first thing you have to do is lock money up for liquidity.

38:03That's instantly not interesting to the people. I mean, and again, when you say the global self, we're making a broad. There's a middle class, there's a working class, and there's an upper class in all countries. Even in America, who says that it doesn't have a class system, there's still a class system. It becomes college, which college you went to, or who you worked for, and so on. But it's an alternative. So this is the case. The issue is just the percentages. And so in somewhere like Africa, the wealthy class would, by Western standards, be considered incredibly wealthy. Yeah. They have servants, and they have drivers, and multiple cars, and redundant power supplies, and a lot of things that the average wealthy person in the West would not have.

38:55Yeah. And they can huge... Yeah. And so when we're talking about this, we're talking about the people in the lower middle class to the working class area. And it's just a larger percentage. But the same problem will exist in the United States as well, but just for a smaller percentage. So we're more talking globally, but for the people who are disempowered. Yes, totally. So when it comes to Bitcoin in this kind of store of value phase, if it doesn't manage to get to be a real usable medium exchange. Do you see that as failure for Bitcoin, as freedom money? So I think that, yes, it would be. And it would be failure in the long run.

39:44It will seem like it's not failure. And it can seem like it's not failure for a long period of time. Because people who have Bitcoin are getting rich while it's still not being freedom money. They're getting rich, but they don't realize what they are giving up. Yeah. If you give up the ability to transact privately, then effectively, Bitcoin goes from being one of the most empowering freedom technologies in the world to being actually a tool for mass surveillance on a level that we have never seen. And in fact, it would actually be worse than the current state of affairs. Current state affairs, you still have cash, and governments are trying to get rid of cash, but you still have cash to some degree.

40:33You have disjointed systems, et cetera. It's not great, but it is the current system. Bitcoin has the option for being free to money, where you have a scenario where you are able to transact privately. You may not want to. You may want to hold it, but you have that ability. If that goes and every transaction is surveilled and tracked, then literally that is uh panopticon yeah um and you're just australian almost you will know panoptic a bit of history lesson there was um in london there's a place called millbank and um it's it's right next to the house of parliament um and it's famous because it's got these very yellow these very red bricks sorry those bricks were all built from a prison and it was it was knocked down and the bricks were used to make the Milbank estate afterwards, or many of the bricks were, and that's why it's got its unique color.

41:26But the Milbank estate was actually, I think it was Benfen who made it. It was the world's first panopticon. It's a prison where all of the prisoners can be seen from a central point and they could see every single person. So if you live in Milbank, you are living in what was previously. You're already in the Panopticon. The prisoners of Milbank. And then off from the River Thames, you have this mooring point for the ships that would take people to the new world, to Australia from there. So that would be the, wherever you were, you know, you're a ne 'er-do-well, you know, good for nothing. You're from around, well, that's defined by the state, from around the United United Kingdom, you would be sent to Milbank as your last port of call.

42:13And then the prisons of Milgang would be sent to the long multi-week, multi-month journey to Australia. By the time they get to Australia, they've got scurvy, they're really depressed, they're whining, complaining. And so people would see these people arrive and he goes, here come those new whinging prisoners of Milbank. Prisoners of Milgang is poms. I did not know it was Milbank. I thought it was Her Majesty. I thought it was like Prisoners of Her Majesty. I didn't know it was Prisoners of Milbank. Prisoner of Milbank, yeah. Yeah. There's a history lesson. I did not know that. Well, anyway, it could be Prisoners of Majesty, but I think it's Prisoner of Milbank.

42:48That was the one I had. I used to live in the Milbank estate. Yeah, right. But yeah. So getting back to the, so you were talking there about this potential panopticon. And I understand what you're saying with Bitcoin. The other potential panopticon that we go into is like this CBDC world. And I know they tried that in Nigeria. Maybe you can fill me in on what actually happened there. Because I think there was a lot of pushback, right? I think there's been, I mean, there was a lot of pushback. There were demonstrations. People were, and it was also related to demonstrations around police brutality.

43:24They were closely aligned things. But it was a tried. Adoption for it has been basically non-existent. And we've seen it around the world. So, but I think the mistake people make is they think that governments will just try once and stop and go, OK, well, it's a fair call, let's stop. No, they'll just try more subtle words. They will go and say, well, let's just, people are, for some reason, psychologically, do not like CBCs, but they're comfortable with stable coins. So let's just let them use stable coins and make sure that we're regulating the stable coins to the same level that we would regulate CBDCs.

44:07And that works for a period of time. That might work for a very long period of time. But if that does, then again, you're now living in a panopticon. You do not have monetary freedom. And we're also doing a similar thing with AI. We are giving the level of information that we're sharing with AI. This scares me. Yeah, but it's the same with what you spend and what you think. Both technologies are examples of technologies that can be freedom technologies. Because you can have the ability to have everybody to have super intelligence in their pockets or on their face with glasses in future, leveling everybody up everywhere so that they take the best actions for their health, their family, their education could be an incredibly freeing technology.

44:53Having the ability to freely hold and transact privately money could be a money that's hard money that doesn't inflate. Again, it's incredibly powerful. But if you lose privacy on either of those, that's the difference between it being this tool for mass oppression and disempowerment or a tool for empowerment. And it will be very much like, because these organizations think in decades, it'll be like the boiling of the frog. You put the frog in the water, and it'll be a slow process, and it'll seem fine until it's too late. And this is how people accept regimes that end up becoming incredibly oppressive.

45:37They happen a little bit, a little bit, a little bit. And every single small step seems small and is accepted until you have no choice and you realize that you were part of the problem by not stopping it at every step. It's gradual. So I think we will eventually, if we, and again, there might be an ability for subgroups of people to maintain freedom because they, and it might be that it could be a subset of people around the world choose to go this sort of Bitcoin path and use it as a medium of exchange and make sure they are able to transact privately. and they effectively have this Noah's Ark-like scenario.

46:21And they'll be living amongst the other people who don't have that same level of freedom. But what I hope is that that group is as big as it possibly can be because you're really literally talking about the difference between night and day here between freedom and oppression. If you had to put like a probability on which path we actually go down, whether it's oppression or freedom, where do you think we're falling at the moment? 100 % of both. So it'll just be people who can live their free life amongst the oppressed. Yeah, because I mean, now you've got people like Balaji giving it names and labels like network states and so on.

46:57But I just think it's common sense that right now we have our communities and tribes. And more and more because of the internet, the tribes are not, the change now from the past is not that tribes stop existing, but they've stopped becoming geographic in nature. And they're more philosophical in nature. So we're both part of the Bitcoin cult. Well, we're part of the privileged set of Bitcoin, even with Bitcoin. The privileged set of Bitcoin is who are able to travel freely. And I've experienced that now. My wife's passport is Kenyan, and it's just incredibly difficult and expensive now to travel, whereas before it was without a thought.

47:38But as such, I'm able to experience Bitcoin communities from around the world. And cultures are very different, but we have this instant connection because we have a similar philosophy around, and it goes beyond money. And so I would say that we're part of the same community. Even if I've never met the person before, I can immediately find things to talk about and compare. And they'll be saying - more in common with a random Bitcoin or Argentina than I do my neighbor. Yeah. And it will be the same for footballers, for people who are into football or people who are into pottery or whatever it may be, or anime.

48:14I'm a big fan of anime. Again, I went to an anime expo. You're such a nerd. Of course, yeah. We did the whole thing. The whole cosplay thing. It was a lot of fun. I love it. But in Japan. But again, a lot of people couldn't even speak. Well, not couldn't even. They were in Japan. Of course, I shouldn't expect to speak English. But they couldn't speak English. and I couldn't, my Japanese is very rusty, non-existent, i.e. But we had a lot of in connection. There was the guy in the taxi driving us over, and we were just saying names of anime periodicals that we read. And that was all he's, he couldn't say much more in English, but we still could share good, good, bad, bad, and so on and so forth.

48:55It's almost like the end of monoculture in a lot of ways. Yeah, it's this multi-faceted set of cultures that are, and every time you join a different WhatsApp group or Telegram people or Signal group or FEDI community, you're part of a different non-geographically bound but philosophically bound community. And some of those communities will have philosophies around healthy living, around low time preference, around the need to have the importance of privacy. and they will exist it's a guarantee the question is is that are those communities in total one percent of the population of the planet or 99 of the population of the planet and and that's the question and and i think at this point so if you ask that question um i think at the moment the majority of the planet will will be um in the disempowered without realizing it um um oppressed, no privacy part of the world.

50:05And I find myself as well without realizing it. And I'm someone who's very focused on trying to lead a private life to the extent that I can. And I'm openly using things like Gemini and ChatGPT. I do the same thing. Giving very sensitive information away. And I think, well, but for me, if someone made a tool that was in the same order of magnitude as useful, I would switch. What other percentage of people would switch for that? That's the question right now. I think maybe 5%, 10 % would. I'm hoping we can get that to 30%, 40%, 50%, 60%. And I think you're right there. The tools just need to be as good or close to as good as the chat GPTs of the world.

50:46For the 5 % to 10 % who understand the importance of maintaining privacy or having the ability to have a private life. I do think that is showing potential of getting better. I think the stuff that Open Secrets are doing with Maple AI, that's very cool. And Proton have just released their private AI. I don't know if you've seen that. I started playing around with it. I only saw it yesterday. But hopefully, there's signs of improvement there. No, yeah. There's improvement. But again, as I said, it's only going to affect the people who care enough. And caring more comes from culture. and so and culture is passed along through community yeah so again we saw this in japan kids there hardly ever act up are very polite um very quiet when they finish they clean up their table after them and then you go next door to china to hong kong and kids are like shouting and screaming and so on and again these are generalizations but it's it's it's differences This is in culture.

51:53And so if there's a culture, and this is where education is actually greater and greater understanding of why the importance ultimately to get that from 10 % to 60%, 70 % are thousands, hundreds of thousands of educators around the world by their own actions demonstrating what happens if you take an attitude of trying to look after your body, trying to look after your mind trying to question information and don't blindly follow it trying to take a low time preference to things and not try to rush we have to make a million tomorrow but um and rush out poor quality um altcoin like software but try to maintain the low time preference step-by-step approach um the more we have maintain that then the people that will see us will start to ape that behavior.

52:48Kids behave the behavior of their parents. If their parents are low-time preference, then their kids are going to be low-time preference. And that's a hiding towards disaster. That's one of the things I'm very bullish on. Bitcoiners love to see other Bitcoiners having kids. I think the next generation of Bitcoiners is going to be strong. But I agree, we need to lean into and push the Bitcoin culture as much as we possibly can. We should talk about Fedi, because we've barely spoken about it yet. It's come up a couple of times. But it's been, I don't know, two, three years since you were on the show when we did the demonstration.

53:20There'll be people who didn't listen to that show who have come along since then. Do you want to just start by giving an explanation of what FEDI and FEDI Mint are? Yeah. So let's start with FEDI because actually there are two separate things. The names are very similar, but they're very separate. So FEDI is both a company, a company called FEDI, and it's a technology. It's an app. You should think about this as like this super wallet. So it's chat, money, and more. We call them mini-apps all in one place. So from one app, I can, not directly from the app, but using these mini-apps, I can augment the capability of the app to be able to accept payments or act like a point of sale or ask an AI questions or whatever I may want to do, all powered by Bitcoin and eCash.

54:15The second thing I can do in the most core is it's a wallet. So I can hold money and value with it. I can spend. I can see my balance. And I can hold value both in Bitcoin and I can have Bitcoin back to USD as well. So it can be Bitcoin and USD, but it's still behind the scenes. It's all Bitcoin. How do you do that, by the way? Is that like stable channels or something that you're doing? It's like stable channels. We built it before stable channels. It's been around for the first version of it was two and a half years ago. And so we had two and a half years worth of development of that. But effectively, it does something like stable channels.

54:56It's just a market maker taking the other side of the trade, essentially. Exactly. We have people who want the value of their Bitcoin stabilized USD, called them stability seekers. They want the price to be stable to something that they want, something like USD. And then you have stability providers who provide additional Bitcoin to effectively cover the scenario where the value of Bitcoin goes down to a certain extent. The default is 50%. So as long as Bitcoin's price doesn't go down 50 % in 10 minutes, which is unlikely, then you're covered. But they then take the upside. But if it goes up, they take the upside.

55:31And historically, over the last year or so of running it they've taken upside but the other people have got what they wanted if i'm living if i'm if i'm if this is my don't have disposable income and i receive um some aid from a from an aid agency and i've received twenty dollars worth of bitcoin i don't want that twenty dollars to become sixteen uh it'd be nice if it's 24 but i'm more concerned about the downside because i need 20 to live So what I would do is I would stabilize it to$20, and I now have$20. Eight times out of 10 over the last year, that meant that the people who've done the other side, they're up.

56:09But if it's gone down, they lose. And they're more sophisticated on the other side. They can hedge that risk and so on. They could do lots of things. But fundamentally, from a user's point of view, I see a Bitcoin balance. I see a USD balance, and I can switch between the two. But I'm not actually using any stable coin in the background. I'm not actually using any bank. I'm still just using it's backed by Bitcoin that's held on the Bitcoin network. So we do that and it's all in a simple package. And then finally, we have chat as well, because we very, very early on discovered that integrating money with communication works really, really well.

56:47So from within chat, initially you could have conversations and you could also send money. you could send eCash, you could instant message money effectively. But since then, we've added more and more to that. So now you can, within chat, you have all the features that we have, well, not all, but many of the features now you expect from a modern day chat app. So you can set up groups and subgroups. You can do replies to people. You can add attachments and videos and documents because people want to be able to do this. But we can also now do two big new things. We can set up what we call multi-spend groups.

57:26So within chat, you can just take a group that you've set up in chat, but you can convert that into a multi-spend group. So everybody in that chat is able to deposit money to the conversation, to the thread, and it's now collectively owned by that chat group. And then a subset of people, let's think of it almost like the administrators. We have the concept of a group administrator, like in any other instant message. We also have a concept of a group voter. And if you're identified as a voter, then you are able to vote on the expenditure of any of the money that was sent to that group. That's cool.

58:04Yeah. And it can be up to 21 voters, and you can set the ratio. It might be any one of the 21, or 15 of the 21, or three of nine, or two of three, or whatever. And so you set up five, five, 10 different groups, and one could be called picnic and budget, and, or another group could be college tuition or whatever. Lads weekend away. Lads weekend away, and then people, and all the people who are going get added to that group, and maybe two or three of the responsible people who don't get drunk from the lads become the voters, and you make it two or three. And then people just send their money, and in the conversation, you could be chatting, but you also can be seeing messages, system messages saying this person has now added this much in and you can vote and expend on that.

58:52So that's multi-spend, but it's all a chat conversation because we're seeing that UX is becoming really intuitive. And then the last one as well is, and I think this is where it comes on to Fediment, is something we call a federation setup service. And that is a service to make it incredibly easy. It's just a chat conversation to set up a full federation. Oh, that's cool. And that's the big one. So we're making it a, and you talk to what we call the G-bot, which is the Guardian bot. And it's this AI that you talk to and you just say, I want to set up a federation. Here are the terms. You agree.

59:32And it will locate. That will have to have a whole conversation on because that's a real big feature. And that's part of what I told you, the second thing that we're working on, which is to make it incredibly easy for people to set up and run federations so that we see this future where there are thousands of thousands of federations or each one are private custody services, effectively. Because we don't want five or six or ten. We have maybe 50, 60, 100 right now. But we want there to be 100 ,000. And for that to be happening, it has to be something that people can do while they're just walking to their car should be very, very easy to set up and very robust and work reliably.

1:00:16And that's something we've worked on. So that's Feddy. Because when you were on the show previously, we went through how you set up a federation. And it was nowhere near as intuitive as that, as just being able to have a chat conversation. I definitely want to show you how that's coming up. Should we have a look? I want to see. And just quickly, before I do that, you asked about Feddy Mint. Yeah. Oh, yeah. Let's do that. So Fedimint, for the money side of things, we use a protocol called Fedimint. It was invented by my co-founder five years ago now. And it is the most robust e-cash custodial mechanism.

1:00:56It allows you to hold value, spend, and transact. But the key thing is no single person is in charge of the money held in it. And so it means that this is technically we say that means it's federated. You think like multi-sig is if you have a multi-sig custody of Bitcoin, that's federated as well. But that's what it allows you to do. And then when you all the money that's added in to the system, it was sent to the Fediment Federation. It causes the issuance of e-cash, which is sent back to the person who issued, who provided the Bitcoin. And that e-cash can be transacted in lieu of the Bitcoin.

1:01:43But the transactions with e-cash have incredible levels of privacy. And when you want to withdraw, you don't have to rely on one person to respond. It's a federation of people will respond as well. So behind the scenes with Fedi, all of the different federations that are set up are all running these federated Fedimint services. But from a user point of view, they just look like a wallet. And you can be a member of one, you can be a member of two, you can be a member of 20. So when, like, obviously the other eCash protocol that's gained some traction is Cashew. Did a show with Cali recently. He's great.

1:02:21And I think these are both amazing products. Like, there's trade-offs to each, and they're both going to exist. But with Cashew, there's obviously just one person in charge of the Mint. So the risk there is that that person who's running the Mint rugs everyone and takes the Bitcoin. Yeah, that's the small risk. I mean, that's the small risk. Lots of people in Bitcoin focus on that, but that's not the real risk of any one of these services, ARK or Spark or Cashew or Liquid. The big risk is that the person messes up and loses their keys or their machine blows up. They don't have a proper backup.

1:03:00If you think about it, how often do people forget their password versus how often do they get hacked by the North Korean hacker? It's a thousand times more likely. And we've even seen it. And we worked with communities around the world. And we have guardians who are the most trusted people in the community is the most reliable, most technically capable, and they're federations. And still, someone after a few months forgets their password. And they can't remember it. And they can't remember where they saw it. And that happens for those. Luckily, because it's a federation, you can still, the federation is impaired because it's not fully, someone's machine is no longer working.

1:03:42But you can still withdraw. But if it was only one, you lose your money. That is the 99 % risk. that you should worry about that. What is my protection against just mistakes? Because mistakes are way more common, which is why, for example, I think it's another thing that we have to think about as Bitcoiners, and we should come about this at the end, is the insistence that we should try to get everybody to self-custody. I think we're doing Bitcoin a disservice by focusing on that. Oh, that's spicy. But we're coming around there, yeah. I'm making a note because I definitely want to talk about that.

1:04:22And that's just come from hard-earned experience for the last, I don't know, 14 years now in this space. Anyway, we'll come back to that. Yeah, I'm definitely going to come back to that. But you, like, so understand the risk there of cashew is that it's a single mint operator. With Fetty Mint, there's multiple. Yes. So it protects you against the risk of someone being, just making a mistake. Mistake proof. There's still, again, I agree that this is a small risk, but the risk is that there's collusion between the people running the federation and they run off with the Bitcoin. Yeah, and another thing about the service that we are just announcing now, effectively, which is the federation setup service, is that we think of a way to, I don't want to be hyperbolic, but massively reduce that risk as well.

1:05:12Okay, that's interesting. Can you talk about how you reduce that risk? Yeah. So what happens is to set up a federation, historically, a number of people need to come together. We call them guardians. And let's say you find four people. It could be seven. It could be 10. But let's just say it's four people. They come together and they decide, OK, we're going to set up a federation. They then set up the federation. They all download the Fedimint software. It's downloaded. Yeah, I'm just looking. Sorry, it's about to sting you. You're getting shoot by flies. Yeah, it looked like a mosquito, but they all come together.

1:05:56And they run the Fedimint software. They enter each other's credentials. They share them around in a chat conversation. And it's not me. And the Fedimint server coordinates, and the federation is set up. And as long as their machines are running and connected to the internet, it continues to run. If one goes offline or the person makes a mistake or forgets their keys, which is the 99 % risk, just remember that, we're good. Still, you can still use this system. But for them to collude, they have to know each other fundamentally, and they can collude. So with Fedimint, because we have this system where we have both money and chat all in one place, we have the ability to allow people within chat and actually mods.

1:06:52So you can have a mini app, which is the Fedimint setup service mini app. You can say, I want to set up Fedimint. you enter, you confirm that you want to set it up and it will, you pass it your Freddie Mint identity which is actually a NOSTA NPUB because we automatically create you a NOSTA identity for your ID and in fact whenever you open a mini app we can automatically log you in by a NOSTA again without you having to do anything so it'll know who you are and it will be able to start a conversation with you in chat in the same app with gbot gbot will contact you saying okay we know that you want to set up let's start the conversation um that conversation is our chat is using matrix which is something that's tested by the german military it's security tested and so on if a better technology white noise comes up and and it becomes bulletproof and reliable enough in X years, we'll switch.

1:07:55But right now, Matrix is the best open standard for encrypted chat that we've seen. So you're now having this chat conversation, which you know is encrypted and private. And you start answering some questions. And I can show you on a video. But you start answering some questions. and it's like explaining that we're going to help you set up a federation you're good with that we explain um do you want to um it's it um it's going to be hosted on on some hosting service are you okay that with this is what we give you the cost of that it's incredibly inexpensive because you're going to have to pay for uh four different servers your server and the other guardian servers as well and even at that it's like 20 a month or 21 a month which is really cheap for four servers um we then ask you other questions do you want to charge fees for your federation because some people charge many people don't charge but um we've now enabled people if they want to to charge a small percentage on back of transactions to cover the costs of running the infrastructure and it becomes a profit center not cost center and many other questions do you Do you want to recurring pay?

1:09:14Do you want to so on and so forth? But it's just a series of yes, no questions, which take, I don't know, one minute to fill in. It's like six questions. Once that's done, we have separately spent a number of several months, actually, approaching year now, finding a number of very, very reliable, very trustworthy, hardcore values aligned Bitcoiners in the Bitcoin space. We call them other guardians, OGs. And they are very, very private and honest, but we know that they are dedicated to providing and they're very values aligned with providing this service. It's sort of people, if you knew where they were, you'd be like, yeah, I really would love them to be a fellow Guardian.

1:10:04And so they have set up a, they've also got a set up on their own servers that they're responsible for. And it's set up in such a way that they can, they have their own G-Bots running. And they can, the G-Bot system can then contact others and automatically choose a subset of three of those randomly, and show them to the person who wants to set up this federation. You call that person the lead guardian, the person who's activating it. In future, we're going to have the ability for you to see different guardians by their pseudonyms. And you can decide based on how many federations they've set up.

1:10:51You might want one with less. You might want one with more. They can also have like a reputation. Yeah. And we're going to make, we have a, We will be put forward a NIT proposal, so it will be all done through NOSTA. In the same way, you could have Bitcoin mints for rating mints in general. This is to rate guardians, effectively. It's a guardian-specific one. Like looking at things like uptime and - Yeah, and uptime and responsiveness and so on and so forth and rating by other people, et cetera, et cetera. How long they've been around all these different metrics and so on. But right now, we just randomly choose out of these.

1:11:24And then once that's done, the different bots negotiate with each other. And then they do all the backwards and forwards that we demonstrated a couple of years ago of passing the credentials around and so on. All you see is a little bit of an hourglass for about five, six seconds, where it says negotiating, setting up, finding, locating the other guardians. Because that's always a challenge for someone when they set up a federation. OK, I need to find three other people I can trust. Well, we've got a set of really, really, really, really trustworthy, reliable people. And that set will grow over time as well, because it's a profit center.

1:11:57They earn a few dollars a month for each one that they run. And so if they're supporting many, that's a revenue earner for them. And it sets up a federation. Because of the fact that all the communication is handled automatically by software, none of the guardians actually know. They know that they're now a guardian for a new federation, but they don't know who any of the other people are. Because each time they set up a new federation, they always assign themselves a new random name for each one. So you cannot - So it takes out the collusion risk. You don't know the people. You don't have the - and there's no ability to communicate with the others other than through the protocol of just running the software.

1:12:37There's no way to - You could be in the same group as someone you are guarding with, but you won't know. you won't know. And so you would have to have some way to find out that you're a guardian. But the only way to do that would be you have to go to some public forum somewhere and say, hey, I'm a guardian and so on. I'd love to rug everyone. Who else is? Yeah. But then you have to out yourself for saying you want to do that to be able to do it. There's no other way because you don't know who the other guardians are. And therefore, Therefore, there's no ability to collude because it's all integrated and coordinated through the G-Bot.

1:13:14RAOUL PAL, That's very cool. Is there a potential scenario where you could actually have AI running the Federmans? RICK BOWENER, This has come up a number of times. Yes, it is possible. The question is who's running. There's still an element of who's running the AI. So I was thinking you could give it like a very strict - Because effectively, we're getting close to that. Because effectively, the setting up and coordinating of it is all handled by the G-Bots. Yeah. And if they had a very sick - Even on voting, the OGs effectively can decide on this type of issue and this type of issue, just automatically, they can delegate the action to the G-Bot.

1:13:56They don't actually need to interface with the admin interface if they don't want to. So they can just give it instructions. In general, if these messages are going out or this sub or sub going out, you can say yes on my behalf, for example. So the G-Bot is not an AI, but it is effectively your executive assistant for each guardian, as effectively as this bot, which is doing the heavy lifting of the setup running and maintenance upgrading, all that sort of stuff. Because essentially, if the risk of collusion is you put it at 1%, if this takes it down to 0.001%, that's obviously a huge improvement.

1:14:40But it doesn't remove the risk of losing credentials to access them in. Is that correct? No, it doesn't remove that. But you have to also remember, though, if you lose the credentials, as long as the machine's still running, you're still fine. Because if you stop the machine, then the credentials go out of memory. And then to restart it, you have to add the credentials. So you'd have to lose your credentials and the machine will have to crash, which is why a lot of people use hosting services because they're more reliable. They have five lines up time and so on, et cetera. So you'd have to lose the credentials and the machine will have to turn off and on.

1:15:20And it will have to happen to a number of people, not just to one. Yeah. I just wonder if you somehow gave an AI a very strict remit of what it can and what it can't do if you take that risk down to literally zero? I think getting AIs to run it could be interesting, but I don't think you ever get things down to zero. Because the reality is that you're still... There's still an element of trust. Yeah, the software is being run by someone on some computer somewhere. Yeah. Yeah. Unless you had the ability to have a fully AGI autonomous AI, which was able to buy and pay for its own internet, move its software from the original computers that it was launched onto other computers.

1:16:08Give it three years, we'll be there. Maybe give it three months of the way it's going. But then in which case, it will be transparent for us. They will sign up as one or more of the OGs, and they will also sign up as one of the users and just - Just do things. And just do things. And we wouldn't need to do any particular programming to make that happen because they could use the existing. As long as they can operate with a computer and control the screen and keyboard and mouse, then if a human can do it. They'll do everything. If a human can do it, they'll be able to do it. So I think, but then the question is, what happens if the AI is collude?

1:16:50Because your assumption is the AI is are trustworthy and they won't collude. And I think that assumption comes from the idea of this being AI, not AGI. And if you gave like an AI follows rules, an AGI might not follow rules. I mean, that might be wrong, but that would be my answer. Yeah. But we've also seen AIs, they can follow rules, but if you don't detail the rules correctly, there's still a risk of unintended consequences. So you have to, the assumption is that it's an AI and the person who prompted it, prompted it perfectly without without ever putting an unintended error. Are you still pretty deep in the AI rabbit hole?

1:17:31I know you were really following it closely. I follow it closely,

1:17:37but yeah, I'm now just following it and looking with interest and wonder like everybody else. But it's one of these things where I've realized that it's like a singularity in the sense that once we have AGI, it's really hard to intuit what will happen after that point. And I'm somebody who normally thinks hundreds of years, dozens of years into the future. And I find it quite cathartic, quite humbling. That you can't anymore. You can't anymore. You can't. So it's better to just focus on what you can do right now. Yeah. I was talking to Rob. And hope that it ends up well, but also realizing that it learns from us.

1:18:30So again, what we can do to instill cultural elements as Bitcoiners into the general cycle of the world and the data stream that it's learning from could move the needle in what we end up with. Do we end up with this thing being very short time horizon and very selfish and so on? You probably don't want your AGI to be like that. Absolutely not. But you want it to be more holistic in thinking and understanding the benefit of having variety and optionality in the world and thinking in long terms and win-win scenarios. And then we've got a really good future ahead of us. You were saying you were talking to - I was talking to Rod on the show about this.

1:19:11And like I would say, I'd be terrified to be a 14-year-old right now. Because you've gone through the very traditional schooling up until now. And you're going into a world that who knows what it'll look like in five years' time when you're actually going out into the world and doing things. It's, I think, so much is going to change very quickly. Yeah. But let's show me. I think, though, if you're just born now, it's great. Well, that's exactly what I said to you. It's like, just born, because after 20 years, it's going to be settled. And it's probably all the sort of the messiness is probably the next 10 years.

1:19:40Yeah. And then after that, it's all, well, either it doesn't matter. We're all dead. Or it's Nirvana. Yeah. Right. Let's go through these videos. So which ones do you want to show me? So, I mean, there's so many things we've done. But you wanted to talk, let's talk about the thing that we just discussed last, which was the OG supported federations. So what you're seeing happening here is you basically said, I wanted to set up a federation. with a mini app you clicked you've added your and it would have started up a chat with you with we call it gbot and you're just you're going to your chat session and you'll see that you've got a chat session with gbot and it would say welcome we're going to help you set up a federation here are the terms you accept agree um and then you say do you want six months or 12 months in terms of payment you select.

1:20:37And then it will send you a Bitcoin Lightning invoice. And then you go off. So this is now being sent. And in the background, you go into any Lightning-enabled wallet, including Fedi. But it doesn't have to be because you may not have a Fedi account then. And the payment is received in the background. And it carries on. And then it just asks you a couple more questions. It starts creating your, it deploys and sets up in the cloud a federation for you. And then it's now set up. And again, that only took a few seconds. And now it asks you, well, what things in your particular flavor, what do you want to, what name do you want to give the federation?

1:21:25You type in the name in the chat. It's just a chat conversation. version, what percentage of commission do you want to take for transactions for running the federation? 0%, 0.05%, 0.1 % are the options at the moment, and you just select. A couple of it, do you want recurring payments or not? So that because it's now a federation, you may just want to have it automatically run. Yeah. And then once you've done that, it says, OK, I'm setting up the federation in progress. Now, what's really interesting here is in the background, this bot is communicating to the bots of all the other OGs who are just running as well.

1:22:07And they could be like having a cup of coffee and so on. They're bots running. And it says, OK, I've randomly selected randomly six free. And do you want to be and then they get alerted because it's chats. they get alerted as a chat notification they click in and he goes someone wants to set up a federation and has asked you to be one of the guardians are you okay to be the guardian and you can say yes or no if you say no it'll go and find someone else until enough but if you say yes it will it will move on to the next one it will say okay i've got one i found three others and then all of them will separately provision a new fed like will set up a new hosted um Fediment Federation, start it up, run it, and then they will all coordinate with each other to set up a forage while you're all having a cup of coffee.

1:22:54And you won't have enough time for a cup of coffee because the whole process takes about 20 seconds. From the point of you just saying how it fees, it's gone off, found your other guardians who are all trusted people from the Bitcoin space. Each one of you has gone off and set up one server each running purposely just for this federation and then they've coordinated each other and um and they and they form a federation so this whole process here um continues on and i think on the last screen this is where it's like coordinating finalizing and there that's it it's done and what you've ended up with here is the invite code you can take that paste that into your into your feddy and you've got a new federation setup and then you can share that with everybody and from your point you're seeing updates of what's going on but basically you have to give it a name you have to agree to the terms you have to um and you have to say you know how much fees you want to charge and whether you want recurring payments and stuff like that um in future also whether you want to make it public or private because by default you make it private it's just for you and your family and friends but you may want it some of the federations want to be public because they want to allow people from around the world, especially if they're charging fees now, then they might want to open it to a larger set of people because they effectively become a mini private custodian effectively.

1:24:19And that's the whole process, but it's all running. It's all federated. In future, we will probably add bits where you can go off and choose who the guardians are. Also, on top of this, once it's set up, you can go back to G-Bot if you want to change the description of your federation or so on. You can go into the admin interface if you want, or you can just say to Gbot, change the description to this, and it will go off and do that. Or whatever you want to do, you can do it all by a chat, because we find that the chat interface is very magical. It's just the future of UX moving to being just chat.

1:24:56So that's a huge improvement. It's a huge improvement. And we're still going to go a long way further. But with this, we're going to be aggressively going and getting multiple people setting up federations. Even with the other thing we've been doing as well within the app is integrating a lot more of NOSTA. So we only recently allowed people to start rating their experience of using a federation, which uses, there's a nip that allows you to see ratings of different mints. Bitcoin Mints and Cashy Mints. And within like a week, we became like number one, two, and five are all Feddy Mints in terms of reviews, because there's a lot of people using these, but we just haven't spent a lot of time publicizing actual usage.

1:25:46So you can go to bitcoinmints.com and you can see that the reviews for that are growing and usage is increasing as well. So now that we have this tool, and now that we've had two years of battle testing in the hardest environments, the next phase is really pushing to get as many people setting up federations everywhere. So anybody who wants to set up a federation in any country can now do it. And here's the other thing. Behind the scenes, there's even more to this because not only is the federation set up, you need to connect to the Lightning Network. And anybody who's tried to connect up to a Lightning Network and to do it properly, realize it's really difficult to have a reliable connection to the internet.

1:26:30So even if the federation is fine, the Lightning, if it's not good, it's still a bad experience. So whenever you set up a federation, it also immediately provisions you with liquidity for Lightning connectivity as well. And that's also set up for you as well. So you have connections to the Lightning Network. And also, if you want to have stable - Who locks up that liquidity? So we are locking up the liquidity, but we effectively become a mini LSP, effectively. And we can earn lightning routing fees on that. You don't have to use us, but if you want it to just be a click, then it's with us. But you can always, after the fact, change it and add in, go and see admin and change to it.

1:27:12Everything can be changed. you can you know in future you'll be able to migrate a guardian and you can run it run it separately on um a on different infrastructure you can host it at home fedi means now being updated so you can operate fedi mints from start nine soon umbrella and you can replace any of the elements but if you just want to be able to click in a chat and have a robust setup with good lightning connectivity and with stable balance as well where we provide stable balance so you can decide do i want to offer my users not just bitcoin balance but a stable balance it's just a click and then we set it all up and provision into your federation the bitcoin liquidity needed to set that all up all with just say yes or no and then it's done that is very cool so um so yeah we're excited about that.

1:28:02It's just launched. Well, we've actually been working with communities for this since the beginning of August. Just testing? No, no. Real users. We've been testing for several months, but we have actual real users paying paying monthly fees for it since the beginning of August. And that's ramping up. There's a long waiting list of communities we're working with. But going into late October, early November, we want to then just open it up so anybody will see it in the app store. Not the app store, the mini app catalog. You'll be able to just select, set up a federation, anybody anywhere in the world.

1:28:53and one minute later, you can have a federation that's federated by people who are in multiple jurisdictions in multiple countries who have been invested to be very reliable people. They're all anonymous as well and they all don't know each other. So they have no ability to collude and they have no way to contact each other without publicly saying and outing themselves at which pace we would know and they've outed themselves and that would prevent them. So we're excited about it. That is exciting. Is there anything else in here? We talked about a lot of this, I think. This is - Yeah. So let's see.

1:29:24You should close it here. Is it a different tab? Or is it - No, it's - If you go - Yeah. So the other thing we talked about, I think one thing, one key thing that we've had, but now we've spruced up the interface because we think it's going to be really important coming forward, is social backup and recovery. and this is a very very quick feature but really powerful um if you want to um if you want to back up your keys a lot of people talk about self-custody but then they take their keys and give it to a friend or family in which case it's no longer self-custody it's federated custody because you and your friend or family have the same have access to the bitcoin um and you're and we're now having to trust him.

1:30:15So it's become federated custody. But people do it in an ad hoc way. What we have here is, and we allow you to do the 12 words and back up if you want to. But instead, you can take your keys and give it to, you can take your keys and give it to the Federation. And it's split into parts and backed up and recovered. And so we have the recovery. It's a very quick process. You click, you save, Betty. and you save and it saves it and done the backup without ever having to save the 12 words you're able to back up your keys but what's very interesting is though um just go here oh yeah what's interesting is then the recovery um the process is this is so again you have the ability to you're returning you've you've just bought a new phone after losing your own in a boating accident.

1:31:13And you can go off and do the whole 12 words, or you can say, I want to go to social recovery. And you now find that file that was created as part of the original backup. And then, here's the key thing, you go to each one of the guardians. So let's say there's three or four guardians. One might have said, you know, I don't know you. I'm going to reject it. Another one says, yes, as long as you've got the majority to say, yes, then it will immediately recover your keys. But none of the guardians ever knew your full key. They only had it encrypted. Even if they collude with each other, they can't recover your key.

1:31:50And also remember, they can't collude with each other because they have no way to communicate with each other. The G-Bot prevents them from communicating with each other anyway. So that's, again, a feature that's only possible because you have a community of guardians. and yet we've I've already and I've mentioned the stable balance and I'll just that's probably the last one because there's so many features I already discussed multi-spend but yeah but on the stable balance you have the ability to see your Bitcoin balance but if and all federations that are set up with OG can have stable balance you can also have a stable balance as well and And that stable balance behind the scenes is effectively using an idea similar to stable channels where you're entering the amount that you want to be stabilized.

1:32:43You confirm, and then it says you're depositing this not from the outside world into USD, but from Bitcoin to USD. You agree, and once agreed, within 10 minutes, it's locked in because contracts happen every 10 minutes. it's locked into Bitcoin. So if you go to your balance, you'll see that it says still zero, but 10 minutes pending. And then a few moments later, you have$10 in. And so it's a way to convert in and out of USD and have the stability if you want it. That's very cool. Damn, there's some big upgrades, Obi. There's some big upgrades. We've been very busy. All these features, actually, many of them have been around for well over a year, some of them over two.

1:33:29but taking something from an idea to being a polished thing that works in all edge cases on sloppy internet and and old devices that is 95 of the work showing a demonstration in a like that in a five minute video a five second video is is one percent of the work 99 of the work is actually making it so it works every day everywhere yeah and it doesn't work every day everywhere but it works almost every day, almost everywhere. And that's now we think we're ready to share this with the world. And so we're going to be a little bit more noisy, but more in the focus on just allowing people to set this up really easily and be everywhere.

1:34:10And whoever wants to have their own private custody, managed privately by communities for the benefit of communities, which, and I think that was the point I said we wanted to cover, they can do that. Because I think private custody is what we as Bitcoiners should be focusing on. Not self-custody at the expense of private custody. I mean, that is the point that I want to finish on. Because earlier you said you don't think as Bitcoins we should be pushing people to self-custody. I want your take on that. Because Alex Leishman runs River, unbelievable Bitcoiner, done very, very cool things. And he would, I think, I've not heard your take yet, but be in the same camp as you where he does not think everyone should be self-custody in Bitcoin.

1:34:57He said this publicly a few times. Why do you think? Is it the technical hurdles to self-custody safely or is it to do with this private custody?

1:35:10So, just as background, I've been trying to get people to self-custody for 12 years now. I mean, Bitcoin a bit longer than that, but running an exchange, right from the beginning, I've been trying to get people to self-custody. I self-custody.

1:35:34And before I lost all my Bitcoin in a boating accident, I self-custody. And that's part of the problem, that you can lose your Bitcoin in a boating accident. RAOUL PAL, The problem when you come to Bali, isn't it? RAOUL PAL, You can lose your Bitcoin in a boating accident. And so if you can do it, and I've stated it before, but I think it's important. There are three key caveats. You have to be wealthy enough to self-custody because it's more expensive than to do otherwise. So it just is more expensive. If I want to store money on what I was at Toshi, it's basically free. If I want to store money in hardware, if I want to do it correctly, it's expensive.

1:36:15If I want to do it badly so I lose the money, then it's pretty cheap. See, this is why they're a sponsor of the show, so this always sounds like a show when you talk about a sponsor. But this is why I think BitKey is really interesting. Because, like, sure, there's a cost to get a BitKey. Well, then it's the cost straight away. For sure. But I think you can do it relatively cheaply in a pretty redundant way, especially if you're technically not super inclined. Because it's essentially multisig managed for you. You don't need to worry about seed words. Yeah, I mean, it is. My only concern about that, that it's so I distinction I, and by the way, I think Big Key is a great product for where the world is today.

1:36:51But, and it's better than many of the other options out there, but it's still the areas that we have to think about. So let me, if I show you the philosophy and then you can see, then it'd be sort of clear why there's still some way to go with Bitki, from my point of view. First of all, so there's three things. You have to be wealthy enough. And it might seem it's only 50 quid, but about to see Alex Glastine from HRF, you have to check your financial privilege. Because many people, 50 quid is more than two months salary. So for you, it's nothing. But for many, many people out there, it is something.

1:37:31So that's one. You're excluding all those people. And you might be, well, they're poor enough that they have fun staying poor they don't deserve it because just by virtual being not poor not wealthy enough one the second thing is you have to be technically capable enough and because it's only 12 words it's easy easy to store but again check your technical acumen privilege because uh there are many people who will find it very difficult to secure 12 words and find it just they just will we i i've and and this took me a while to see but after doing it again and and again with people and people forgetting 12 words again again and again after being told and after carefully storing it you realize that actually it's not an easy task for many people to do so it doesn't matter how fancy and simple to use your horror what is the 12 words just by itself is not an easy thing to do i i oversaw um training sessions in el salvador by ibex micado and it's one of the people who are grading people where they trained these college students i mean secondary school children's and teenagers supposed to be the most tech savvy on how to back up and recover 12 words and we did a final exam and still after going through the training i'll say 10 to 20 percent got it wrong on the backup and recovery of 12 words and that's teenagers who are the most technically advanced and were trained in a literally an academy for this so there's a big percent of people who just find that technically complicated and it just is what it is there's no commentary on them.

1:39:02It's just that's not the way they're wired. So that's the second risk. And the third is it's just scary. It's taking risk. The history of business and commerce is people are willing to buy convenience and sell their risk or give away risk or reduce their risk for money. Almost all commerce is things that make my life easier and I'm paying for it, or things that reduce my risk and I pay for it. And we spent hundreds of years inventing concepts like banks because people want to give away the, they want to. This is what the consumer wants. If you actually look at the consumer, they want to give away the risk of custody to someone else.

1:39:54And they're willing to pay for it. They want to give away the risk of, and the complexity of custody to someone else, and they're willing to pay for it. And why? Because, and this was something that really hit home for me when I was running the Bitcoin exchange I ran in the UK for nearly a decade, where one of the people I was trying to get to self-custody for a long time said, look, I understand the need to self-custody, but I trust you more than I trust myself. And because now, the other side of the coin, though, no pun intended, is... Just on that, that could be them miscalculating risk. Because you were a private business in the UK.

1:40:37They don't know the risk profile that you were taking. Obviously, you ran a good business, and maybe there wasn't very much risk there at all. But they have no way of accurately calculating the risk of leaving Bitcoin with you. It doesn't matter whether they are able to accurately calculate the risk or not. Their perception is, and the perception of most people, is that it's safer to hold their money in a bank than to hold their money underneath their pillow in the house. That's the general perception of most people. And that was a perception 10 years ago, 50 years ago, 100 years ago. People have that general perception.

1:41:12Is that accurate or not? We can discuss it that the cows come home, but it doesn't really matter. What matters is what motivates their action. And their action, people are voting. They're holding their money. They're going the opposite direction. Right now, they're holding not only are they holding it on a Coinbase or a Cash App or a Strike or so on. They're going further. They're holding on ETFs. And they're going further. They're actually giving up titles to their Bitcoin. They're not even buying a Bitcoin. They're holding things like strategy, which have some relation to Bitcoin. So they're going way up the curve.

1:41:49Their actions are telling you what they're doing. And you see that happening in the global self as well. So we don't need to debate. We can look at this is what users are asking for. Why is the question? Because they perceive the risk and they want to, and risk is something that people are willing to and want to reduce in their life. And so there's a risk around custody. And the risk is if I make a mistake, I go from 100 % ownership of my money to zero instantly. Now there's another risk. And Bitcoin and the internet and social media have increased in the social awareness of the average person.

1:42:29And this is the really new, new thing. The risk of slowly having your money debased over time. If you went back 10, 20 years ago. People weren't talking about this. No, did not talk about it, didn't understand it. 10 years ago, a few crazies, I understood that, five and a bit more. Now, and even governments didn't understand this, really. They thought, well, our money's bad, but the US dollar's good. And now you're seeing, as of a few months ago, a month ago, the amount of gold being held by nation states has overtaken the amount of U.S. treasuries being held for the first time since 1996. So that means governments are moving to their government-level hard money.

1:43:10Problem is you need tanks and bank vaults and so on to custody that. Governments can do that. The average person can't. But the average person is obviously going to go to Bitcoin. And why? Because we're all understanding the zeitgeist has moved, the Overton windows moved, and people are all understanding that there is this risk around inflation, which is the risk, a different risk, the risk of slowly using two, five, 10, 20 % of your money every year. But that's a different risk, which now that people understand for the first time, they want to reduce that risk as well. But what you're telling them is you've got a choice.

1:43:47Either take this risk of losing 5%, 10 % of your money every year, or you must self-custody, in which case, you must take the other risk of losing 100 % overnight from a mistake. And anything in the middle is not a good option. Therefore, it's the same as taking, and I'm educating it's the same as taking the 10%, 20 % risk. Now, let's put it into a different technology. Instead of the technology of moving value, the technology of moving humans. Transportation. Yeah. Now, there is mass corporate-owned, government-owned transportation, equivalent to mass corporate-owned, government-owned custody, which is trains and buses.

1:44:32And then there is true self-determined transportation, which would be not just the ownership of a car, but it would be the repair, the building and repair and fixing of the car yourself, not relying on any third party. So that is true self-ownership of transportation. Then you can have community ownership where you own the car, but when you need to fix something or service something, you don't do it yourself. You use your local mechanic. If you were to translate the self-constant mindset to Bitcoin, you'll say that form of holding a car is no different to using trains and buses. And if you're not fixing it yourself and running yourself, it's bullshit and it's basically you're relying on a third party.

1:45:26Therefore, it is basically the same. So you might as well do the other thing. There is no difference If you had that mindset Do you how many people on the road do you think could be driving right now? Very few very few It will always remain It will always remain a niche because it's way more expensive Actually, it's mate. I will not trust my car to go at 80 miles an hour if I fix it myself The average person won't trust that do you know I do think there's something else in that though Like if if we did have to do this and we had to fix our own cars You would learn to fix your own car and you know you'll be dead most likely because you'll be going 80 miles an hour, we all come off and you will die.

1:46:01Because, I mean, maybe it won't, but your perception is that's, for many people, the perception is that that will be a big, big risk for me. I'm not handy. I don't feel comfortable repairing my own car because if I get it wrong, I die. So that perception of risk will make me go off and stick to using buses. If you're telling me that this other one isn't a real option, which is, by the way, the biggest market for transportation. Most people believe that they have private ownership of a car, but they use their community of insurance companies and mechanics to make it viable. And they've outsourced that.

1:46:38But they don't conceptually, and they're not lambasted for saying that doesn't really count as private ownership of a car. See, I... And I think we'll never get to a point where that niche of people who fix and repair themselves will ever be anything more than a niche. It should be allowed to exist. And it's great that it exists. but it will not be the norm for most people. And there will never be a point that it's a norm. And no one's stopping you from doing it, but people just don't want it because it's risky, expensive, and it's technically complex. See, I would never lambast anyone for using something like Fediment to hold their Bitcoin.

1:47:12But many people do. But at the same time, I would never put all my money into a Fediment because I don't know that these tools have been proven out yet to handle larger amounts of money. But people will. and people do every day. But this is the difference. Because we've been building it over two, three, four years and we've tested it and battled hard on it, there are people who are storing millions of dollars in these things. That's the difference because it's not like a project where people are working on. It's being worked on in very, very difficult environments. And this is not just hyperbole.

1:47:45People are storing millions of dollars on these things right now and they're relying on it and they're holding all of their wealth or big percentage right now because the alternative will be to, for them, not self-custody. The alternative would be to hold it all with a corporate custody. And that's also trusting a third party that you don't know. And look at the history of corporate custody. Many have lost all, if you ask corporate custody, why would you trust Kraken or Coinbase? When Mt. Gox was just as trustworthy at the time, Quadriga CX was incredibly trustworthy at the time. The history of very trustworthy sites at the time, and then lost everything, but the users thought they were trustworthy, is very, very long.

1:48:26I don't want to like... But people put all of the largest of their wealth in those right now. So a few things. I don't think that Quadriga or Mt. Gox were as trusted as things like Coinbase and Kraken today. I still don't think people should trust them. But I do, like, maybe it's because I'm a Bitcoiner. Like, I would feel way more uncomfortable having a large amount of my money in a Fediment at this point. And like, maybe my perception will change over time. I don't know. than me self-custodying that Bitcoin. Yeah, no, of course you would. If there's like three, the three things you went through are like cost, technical ability, and risk.

1:49:00Risk. Like I think those three things are being vastly improved upon. Like cost, I think you can kind of ignore cost in a lot of ways because if you do have the money, then cost isn't a prohibitive thing. So like I understand maybe people who have$50 of Bitcoin, they're not going to go out and buy a hardware wallet. But I think for$50 of Bitcoin, you don't really need a hardware wallet. But if you have like multiple thousands, like maybe it's worth paying attention to. And then when it comes down to like, what was the second one? Technical ability. I think things like BitKey are doing a really good job.

1:49:26Like cold cards are amazing and people should use them and people should learn about them and you should continue to learn on this trajectory. But like as an entry point, BitKey takes away so much of that headache in the sense that it's just a fingerprint. It's on your app. It's really easy to set up. You don't need to worry about seed words. And then on the risk side, like if you want to go further out, and again, you have to have a certain amount of money to do this. But if you want to use something like Anchor Watch, where you have insured collaborative custody, that then removes risk. Because even if you and Anchor Watch fuck up some magical way, or there's a wrench attack and you need to send Bitcoin to someone, so you authorize a transaction, you are then backed by the Lloyds of London insurance.

1:50:05So I think these tools are being built out. And I think FedyMint will be one of these tools. No, no. These tools are being built up. If you look at those tools, all those tools are available to people with a certain amount of wealth. and as the tools get better, the wealth levels have to increase. So yes, they will exist, but they will not get down to the price where an anchor watch is available to a billion people in the global South. It's just not going to happen. And you also said$50, but$50 excludes billions of people. I mean, I think he's more expensive than that. Yeah, but it excludes billions of people, straight out$50.

1:50:39So you're saying these things, but you're talking from a position of being the minority. So for the minority, and that's what I said, the minority will only always be the minority who's able to self-custody purely for monetary reasons, technical reasons, and risk reasons. It will always be the minority. Those things won't get down to the point where 8 billion people will be able to have insurance with Anchor Watch and will be able to afford a hardware wallet. It's just, maybe we can get to half a billion. And that's great. And I have no problem with if we get to there. But the reality is we will not get to the other 7.5 billion.

1:51:23Then we'll have to have some sort of collaborative shared custody model. That shared custody model to share the costs. And also it shares the technical complexity because more technical people within that group of people can take on the technical burden. Maybe for compensation for capital. and then finally it shares the risks because the risk can be shared around as well and that is that is going to be the situation for most people now we have a choice are those people going to do that using public or governmental public um custody which which puts them at the risk of the other risk that they become aware of which is inflation um capture etc or are they going to use private custody.

1:52:07And that's my point. I'm not going, the market for people who want to fix the kit car market for Bitcoin, that market will always exist. I used to actually have a kit car before and I liked fixing and tinkering around with cars back in the day when I had a car addiction. So that market will always exist and it should be allowed to exist. But if the kit car market dictated the world market for cars, then we would all be either using kit cars, and probably twice as many be using kit cars. And then everyone else would be using public transportation. And it wouldn't be normal cars. And what I'm saying is, but we don't live in that world.

1:52:54And so in our world, the kit car market is still healthy, and it's still going strong. but the majority of people are driving cars or motorbikes. Yeah. And they are getting them serviced by third parties. And they still see it as private custody because it's still owned in a private way or amongst a private set of people versus corporate custody. And the risk here is, and this comes back to your original question, I don't know, but in a scenario where the control of money starts being weakened, money starts being weakened, And more and more people are talking about the risk that at some point, corporates will be impelled or compelled to close access to money.

1:53:37And then the question is, would something like a Bitkey still be able to operate in that environment? If the device, because they could be asked to add functionality to that device, for example. The third key is owned by a corporate institution. So they could be compelled to do something as well. But they couldn't do anything with your Bitcoin, like with that single key. But it could stop operating, and that could be very painful for people who have no place to move it to. If no updates could happen for the software, if the hardware could be remotely bricked, et cetera, if the service that provides the third key had to be taken offline, then where are you?

1:54:18Well, the third key doesn't matter. If they could remotely break the device, I mean, I wholeheartedly believe that that will not be a function. I mean, well, it needs to have software updates. They could stop, at the very least. Why does it need to have software updates? Because software, because all systems have bugs. Yeah, but what I'm saying is, like, in this, like, disaster scenario where they crack down on block and say you have to do something, like, you can - I don't think you - it could continue to operate. And that's what's good about it. You can get your Bitcoin off it. Potentially, yes.

1:54:46You should be able to get your Bitcoin off it if you haven't taken too long. But as a corporate entity that's public, not private, it can be attacked. And that's the point. The line should be between public corporate and private. So, for example, if even these layer two solutions, if those layer two solutions are backed by large public corporates and they're the ones running infrastructure, that still becomes a risk because they're public corporates as opposed to private. So the line should be private custody, held privately with privacy built in, as opposed to held publicly without any privacy by public corporates.

1:55:30Because in that scenario, it's public corporate, it has to, it can be, to maintain the ability to have money that you have self-determination from, you need two things. You need it to be decentralized and you need it to be private. You need to have privacy. you need a two. If I have privacy, but it's not decentralized, okay, I don't know what you're doing, but I can just turn you off. And if I have no privacy, but I have decentralization, I can't turn you off, but I know exactly what you're doing. So if you do something I don't like, I can still... So you need the two. And a public or a corporation cannot offer privacy.

1:56:09They cannot offer privacy. So therefore, it fails in the initial objective of getting to medium of exchange. But the thing that I struggle with is this kind of like pushing the idea of self-custody being in any way a negative thing. I like the idea of this all being a progression. I've never said that. Then you're misunderstanding. Okay. Well, I take that back. But like, I like the idea of this being a progression where it's so a little bit like what Mutiny did, where if you had a small amount of Bitcoin in the Mutiny wallet, rip, it was Fetty Mint. And then as it got more, you could sweep that into like a lightning balance.

1:56:40And I think that kind of thing is nice where it can go from Fetty Mint to self-custody to then maybe you buy a hardware wallet, maybe upgrade your hardware security and do multi-sig, and then maybe you want to trust someone like Anchor Watch. I don't know. But I don't think it has to be one or the other. And I agree that having money anywhere that is not a Coinbase-type corporate exchange, I think that is going to be a step in the right direction. I just think there's going to be, oh, it's not like a one-size-fits-all. It's just going to be a thing, almost like a category. Yeah, and I 100 % agree with everything you've said there.

1:57:11And if anything I've said suggests I think otherwise, then need to correct that. And it's good. The fact that you have that view suggests that you've got that impression for what I've said. And that's not the case. It's definitely not an eye of all. And as I said, we could have a world with half a billion people using it. Doesn't sound like it's a bad thing. And also I said that just like with cars, I used to tinker with kit cars. I self-custody myself. So why would I do that? if I think it's a net bad thing. I don't. But I'm also just being realistic. And I don't, and I, and again, for the people who want to go through the progression and have built up enough wealth for it to make sense and are comfortable with the risk of losing their Bitcoin and that they feel that they are, that they are just mentally and emotionally and just their personality is, they are considered and careful people.

1:58:09because many people in the world are not careful people. But if they determine that they are a careful person who measures twice, cuts once, and that sort of person, and they also determine that they're technically comfortable enough to upgrade software and so on, and if necessary, move over to open source software in the worst case, and if also it makes monetary sense to them, they should definitely do it. I'm just saying that that will always be a minority of people. Yeah. Unless wholesale people change to be all very reliable, very considered people. They all change to be not messy and so on.

1:58:50They all change to be all apt enough to be able to spend$50 without thinking about it. And they all change to be technically competent. And I just don't think that's a realistic answer. There will always be a number of people who will never make it, the majority to that Nirvana state. That's fair. That's the point I'm trying to say. I agree with, I actually agree with everything you're saying, I think. I just think, I do think it's important to push people to self-custody. I think doing it in a careful, measured way is always going to be the right decision there. And maybe that starts with Fettyman, maybe it moves on.

1:59:22But one of the things that I do have a slight... I think that's a big skepticism about is the idea of pushing people to multi-sig too soon. Because I think multi-sig is great. I use multi-sig. But like DIY multi-sig is adding complexity and risk to people that I don't know if they fully acknowledge how much additional complexity there is in that. I think single-sig hardware wallets are still, for the vast majority of people, probably the way to custody Bitcoin. You're talking about personal custody. And I mean, very specifically, like DIY multi-sig. Yeah, I think for personal custody, DIY multi-sig can be done wrong because it's technically complex, as I said.

2:00:10And, but to your point before, I do think that suggesting that it's a good end state if you can do it, which is self-custody, is a great way to go. But then if you take that logically further, you should say then the best end state should be self-custody with multisig. Yeah. That is the best end state. But just like you have an uncomfortable, because you've just hit your, what you're basically saying is, I've hit my technical wall, and therefore now I feel uncomfortable to go further. This isn't like, I'm not necessarily talking about me specifically here. I'm talking about... But what is the fear?

2:00:57The fear is that people will make mistakes and lose their money. Yeah. But the same thing will happen in self-custody. But people, it's the same line. You've just, you've just created, you've just drawn a line at a different place saying, this is good enough, but further, because you can go further again. It's DIY multi-sig using your own hardware, using your own hardware, where you've taken the parts and built your own machines yourself and don't use hardware wallets because how do I trust them? That could be another line. Or it could be, I only use machines that are older than 15 years old before Bitcoin was invented and I build my, you can take it even further.

2:01:31Yeah. So, but I'm just thinking. No, that's what I mean. I am agreeing with you there that I do think it's very easy to jump into a very technical setup that like if push came to shove and you needed to recover that bitcoin like are you going to be technically competent competent enough to do it um and i think for the majority of you that that line is not self-custody the the technical setup is just the beginning of self custody even a bit key you're at the point where it's beyond most people that's that's i guess my point but but yes you're right multi-sig um of the niche of the of the minority of people who can comfortably self self custody and by the way that's a much smaller set than the people who are self-custody this is the thing this is what i mean by pushing too much right now i would say from my experience from talking to people in coin floor and looking at it more recently i would say the majority again i can't know this for sure my gut thing is that the majority of people who are self-custody single sig with hardware wallets should not be self-custody because they're not doing it safely and they are a huge risk of losing their money we need to do because because they were pushed because they wouldn't know but they were pushed too early to self-custody before they were actually ready and they just got the thing and and they were given a one one tutorial they've now got a hardware wallet and their private key is their 12 words is they they they don't test it regularly they don't they their private key are they checking that the backup is being compromised regularly um are they doing um are they doing any of this stuff i can guarantee you the majority of people aren't doing the things they need to maintain sanity yeah with a car it's like having a car because i like to put it into things like um cars because people can have a intuitive understanding of this imagine you had a car that you never did an amot you never checked it yearly after 10 20 years you then use it what do you think is the chance that it's going to break down or have a crash and put you and your family in danger very high how many people do you think now with with um self-custody how many people do you think are regularly every three months checking their wallets to make sure the transactions still work and the SSD card on their hardware wallet hasn't been corrupted and their backups haven't been waterlogged because they've kept it under the sink.

2:03:55How many people are doing that? Yeah, very few. So that means they're not yet responsible enough right now to custody. And by being forced and convinced to do it now, you've put them at risk. If you haven't done it properly, my father used to say, if it's worth doing a job, it's worth doing it properly. Just giving people a quick training and then not following through and checking on them every day afterwards when it's storing all of their wealth value is doing them a disservice. So we are not, so most people are not self-custaining properly right now. My camera has overheated in Bali. So we're down to two.

2:04:29But interestingly, I was talking to Checkmate about this this morning. The number of people - You were talking to a mate from Czech Republic? No, he's actually called Checkmate. I know. It's a terrible joke. Terrible joke. But we were talking about like number of people that actually hold self-custody Bitcoin. And he sent me a chart that he puts out, which is the number is just under 25 million in like individual addresses that hold more than$100 of Bitcoin. And like, obviously we know that between me and you, we've probably got 100 addresses. Like, so the actual number of people self-custody in Bitcoin might be like less than 2 million, 3 million.

2:05:09I really don't think that number is very high. And I would say out of those, probably 80 % aren't doing it properly and securely. So they're putting their value at risk. We've seen it with people, the number of people. I just came from Hong Kong, Bitcoin Asia. And it was actually a surprise for me because last year, it was basically an altcoin casino. This year, it was actually a Bitcoin conference. That was very big change. But still, the vast majority of them are still, the number of people who are just like, here's my mobile phone with all of my, you know, with like$100 ,000 worth of Bitcoin on it.

2:05:44Don't do that. But this is what, this was the norm. So this is what most people are doing. This is what most people are doing because they've been told to self-custody without being told properly. It's like teaching people to drive a car without giving them driving lessons. So you're doing it. That's what I mean by, yes, we should aim for it. But aiming for it isn't just throwing as many people, here's a car and getting people in. That ends in disaster. It's you have to then do it properly. If it's worth doing a job, it's worth doing it properly. And when you realize that what it needs to really train someone to properly do it, and then test them regularly to make sure, because you're talking about holding all your value, then you realize it's going to always be a niche.

2:06:23Yeah. Public service announcement, don't keep$100 ,000 on a phone. And go and watch Bitcoin sessions videos. Yeah, but that doesn't stop people doing it. Saying that, you now need to go off and train them and check. And you can be committed to do that and run courses and check back in them for every year. I mean, personal responsibility at some point, though. Yeah, and that's not good. I don't like that. I've trained you, told you to do something, and then when you go and crash, you go, that is personal responsibility. Yeah, but I mean, it's your money. You go and look after it properly. Okay, so you're a kid.

2:06:51You'll just say, here, just be careful with knives, and that's it. But then they cut themselves. Oh, personal responsibility. No, it's different, because as a kid, like we're talking about adults here. No, no, but that's the way there's a difference. I think that everybody's a kid when it comes to something they don't know. If it comes to driving or flying a plane, and I'm a kid, I don't know it. I need to be able to fly a plane. I need to be trained. And if I'm told by the teacher, and so I go to a pilot school, and if the pilot school just says, just get in the plane, it's really important to do, and then I crash, then I didn't have the tools to know.

2:07:27If the experts are telling me that that's what I should have done, and then I crash, the expert should take some responsibility then. Well, yeah, I mean, I - You would be arrested as a pilot trainer if that's the way you taught people. It comes down to messaging, maybe. It's like, people should learn to do this thing. I'm not saying you should go and set up a hardware wallet, put all your money on it, and like, as in from scratch today, do that. But like, go learn about it. Get comfortable with it. Put some money in. Like, back up your wallet. Go through all the steps you need to go through. Know that you can actually do it properly.

2:07:58and then when you're comfortable, you should be putting your money. But is that how most people are taught? Do you think that's how most people learn how to use a hardware wallet? Or there's someone who's really busy, they call a friend, he goes, use Trezor, use Ledger, use BitQui and yeah, yeah, yeah, just to go off and do it and you should do it and that's it. They're not really taught when this is something that you're effectively becoming your own bank, you're becoming your own Coinbase, you're becoming your own JP Morgan and the education is some friend hurriedly tells you in a second, oh, yeah, yeah, go off and do it.

2:08:31Yeah. And that's putting them at risk. And it's not intentional. No, it's not intentional. But that's the end result. Most people are not, having been someone who's helped people custody millions of dollars, over a billion dollars of Bitcoin over the last 12 years, most people have no idea how to do it really properly. Yeah. Well, that's an issue. Maybe we need to do more podcasts. More podcasts, more education, and serious education. I love what people like BTC Sessions are doing, where they have these universities. Because if you really want to do it, you pay money. Because to do it properly is not just something you do quickly over a phone.

2:09:14You have to be trained to do this. Just like you have to be trained to fly a plane or drive a car. No, I think the stuff BTC Sessions does is great. Yeah, and others are doing that. Of course. Great stuff, yeah. But we've run out of cameras. It's getting too hot in here. We'll leave it there for now, Obi. But I appreciate this. The pool and reflex oil juice. I'm going to get in that pool right now. Then go for a massage. But I appreciate you, man. That was a lot of fun. Thanks very much. Thank you. See ya.

2:09:54Thank you.