The War on Bitcoin Privacy | Calle

31:31um so i think i think the the end goal is to uh introduce a kyc a kyc door through which everyone needs to go in order to access the internet because you know this all ties back to the beginning of the story is the internet is the biggest innovation in human history it is the most important thing that we need to protect. We're just at the beginning. The graph is just starting here. And we have hopefully thousands more years to go as humans. Everything will be online and digital. That's clear. Everyone, even the boomers, got that at this point. And they're noticing that they're losing control. People are talking to each other, spreading information about their governments, leaking information, and holding people accountable.

32:26There is misinformation and fake news going on. They're talking about things that they shouldn't be talking about. So the political system is losing control about what people say and think and do. And more and more, it becomes stronger and stronger with every day because everything gets more digitized and more online. So now they're trying to put a door there where you need to go and you need to swipe your credit card before you can get into that door. And that's not how the internet was designed in the first place. So we need to put all our efforts into protecting that and hopefully helping people to circumvent these tools.

33:11I hear now that politicians in the UK are fighting even VPN use. It's like, for the good of the children, please don't use a VPN. But I do think that's one of the most interesting things that came out of this, from the day that this online safety act was put in place, VPN usage went up like crazy in the UK. It was the top of all the app stores. And I just wonder if it's one of those things where things have to get bad enough for people to see kind of behind the veil and make change. Well, very good question. And I don't know if I'm optimistic about it. So we've just briefly talked about this you know we are we are we're um we're governed by boomers old people they are let's say like 50 plus they don't know what the internet can be most of them don't know they're like the the you know they're they're at the iphone level like yeah they've never you know done anything interesting with their computers most of them i'm not saying like everyone so there is an older population that just doesn't get it and it's too late to tell them and again like there are many ogs and very very cool very old you know super important old people that also help and fight this fight i'm just saying how it is and i don't think that you can you know you can really educate that part of the population about what the internet will be for the rest of humanity going forward they're kind of stuck in this you know you have 20 channels on on your tv and information is filtered through this this the ministry of truth and and i never say anything edgy i never did anything edgy you know those are people often people will say you know uh i have nothing to hide i've nothing i've done nothing wrong on the other spectrum uh you have the younger generation let's call them gen z um that really don't know what it felt like to be free on the internet you have like people with no 16 years old 18 years old 14 years old they're growing up now and they're they're growing up in a world where the internet already has to go through that door they need to go to that door so they don't know what it could be there's a there's a thin sliver of a population of let's call them like plus minus millennials that are that grew up with an internet that was like wild west complete freedom no identities just no logins yeah no logins you know just irc chat rooms anonymous people you just talk about your interests and you don't present yourself it's not about like look at me but it's look at this interesting thing and anything goes file sharing sharing of information the age of wikileaks you know we're going to revolutionize the way that the planet works because we can now finally communicate we're going to grow together as humanity because now we have this internet that is like this this web of neural web, the global neural web that is going to put us together.

36:36There's this idealism from that time affected only a small part of the population that is still around today. And those are the people that care the most. Do you think the birth of social media was like the death of the free and open internet? That's a good question. So the birth of social media, for anyone who has been around before social media remembers this very vividly i'm pretty sure is when when profile pictures started to pop up when people put their faces online and then put their first name and last name there whether they were single everyone else was like what the hell like why would you say who you are to everyone it's just you know and then people started put their vacation photos online and just dump everything without thinking twice about the consequences of that.

37:25I mean, you know, there is also an interesting development there that people don't do that anymore. The people starting to understand like it's kind of idiotic to just overshare. Yeah. And could get you in trouble to overshare. So you're kind of selectively sharing what's good or not. So, but yeah, the rise of social media was inevitable in the sense that the normies needed to join at some point, right? The internet should be in the hands of everyone. So, of course, it's going to get normalized. And, but what couldn't have been predicted maybe is that the social media platforms are going to dominate the internet and going to be the biggest companies in human history or be extremely profitable and control web standards, fight web standards, and, you know, build these silos that people think that that's the internet.

38:21There are many countries out there where people think that the internet is Facebook. That's all they have. And where you get free data if you want to access Facebook, but everything else is paid, you know, which is also against net neutrality principles where everything should be treated the same because bits and bytes are just bits and bytes, right? So I think, yes, social media definitely put us into a place where we rely on a small number of large corporations that have a lot of control over our lives. That's why it's so important to advocate for systems like NOSTER where we're trying to bootstrap social connections outside of the control of individual companies.

39:10And it's just because there is too much risk to put all your communication, all your social online life into the hands of a single company or a small number of companies. And yeah, so they have accumulated so much power that at the end of the day, once the draconian laws come into play, like the Online Safety Act, it becomes trivial to control those companies politically and then affect billions of people at this point, which we're seeing now. So I want to move on to the financial privacy side of it. We did a first show on what you're building at Cashew. I think it was about two years ago now.

39:53So a lot's changed, and it was really in its infancy then compared to where it is today. Do you want to start by talking about what eCash is and what you're building at Cashew? Yes. So let's start with a bit of history. So this system that we're working on is called Chomian eCash. And Chomian eCash is named after the inventor of this, David Chom. And David Chom is one of the OG cryptography professors who's done so much for the fact, you know, that we have private communications today and he's working on private voting. And he also invented the concept of digital cash. So e-cash was invented in a famous paper, Blind Signatures, in 1982 by David Chaum, where he described for the first time how to make a digital money that works online but is untraceable.

40:46So it has the same properties as physical cash, but digital. So e-cash, electronic cash. and um the the he was way too early for the world no one was online yet the internet still takes like 15 years to propagate to to and even then people weren't spending money on the internet like they are today no no there were no websites to spend money on the internet on but he he was extremely visionary extremely visionary and he's also you know he's famous for saying things like that privacy is a necessity for a free society. So he knew in the 80s that we're going to live in the world that we live today.

41:26He knew that everything will be digital at some point and everything will touch the internet. So we need to work on a way to make private transactions possible on the internet. Otherwise, the internet cannot work because you're not going to register for every single service that you're going to use, right? So that's kind of funny. Yes, we are. Yes, we are. So he came up with this idea and it's called Chominy Cash. And it was 30 years before Bitcoin. And he started a research revolution in which thousands and thousands of researchers after his invention tried to improve on it. And that's the quest for digital cash, by the way.

42:05So it starts with him. And people have been working for decades for how to improve the system. because there was one big flaw in his idea, which is you need the banking system in order to make it work. So his idea was, so I'll briefly explain what it is, is you go to a bank, your bank Chase account, and then, you know, imagine you go to an ATM and you withdraw physical cash, right? So it's subtract from bank account, you get physical cash and then you go around and spend it. Instead of doing that with physical cash, you do it with electronic cash. You log into your bank account, you press a button, you download e-cash that's stored on your device and then you walk around the internet and you spend it.

42:44And then the receiver gets the e-cash and then they can go back to the bank and then say, like, look, here's e-cash. Can I have it back on my bank account? So that's how he envisioned it. So maybe the naive part of that was thinking that banks would give up that kind of financial surveillance. Well, interestingly, the world was different back then. So the banks loved this idea. This was the most revolutionary financial technology on the block back then. and literally everyone wanted a piece of it. Wasn't it even in Windows 95? They were very close to putting it into there. They had like the history of it is crazy.

43:21So you had like the big banks, they wanted this. Like they said, this is crazy. We want this. Everything is going to be online. Let's put eCache into our systems. So there were already, DigiCache is the company by David Chum that had these talks. And then even Microsoft, that might have been one of the biggest potential deals, said that like, this is great. let's put this into windows 95 maybe 98 uh i don't quite remember let's put it like as a standard default wallet into every installation and um well you would ask like why didn't it happen and the reasons for that is kind of like business related when you look back it's like david shawm did some mistakes and the negotiations were really bad and he changed the terms after saying yes and and so on, blah, blah, blah, blah, blah.

44:07And none of this happened. So all these big banks, this Credit Suisse, and you had like MasterCard, and you had like Bank of America, and like big, big, big banks, we said like, we want this. And then everyone was awaiting it to happen. This is mid 90s, beginning 90s. And then nothing happened. Like none of them really implemented this. And then there's silence. And then 95, 96, 98, we had credit cards, You get things like PayPal pop up and those kind of completely different, like there's no notion of privacy in the systems that came after it and then conquered the internet. But I think what's more interesting than the business perspective here is the research perspective that this caused.

44:55So 98, when you started working on this, people started, like the cypherpunks are getting started and they noticed that this is amazing. We need digital money for the internet. This is privacy preserving. Now let's make it decentralized. Now let's take away the trust part that we still require towards the banks. And then there is like 25 years of research. And what they're all trying is kind of like improve e-cash, try to like get rid of the trust here and improve the properties there. And you see all these papers coming out. These are like wide eyes, B money and things like that. Yes, so they all built on this whole story that starts with David Chong until Satoshi Nakamoto, 2008, 2009, where he released the white paper, the first code.

45:48And with the finally a solution to the electronic cash problem, which is finally a way that is sustainable, that works, that doesn't require any third parties or intermediaries where we can transact with electronic cash. a peer-to-peer electronic cash the title of the bitcoin white paper is where we can transact with electronic cash without the need for the banks and the way that he did it is first of all he decentralized it so he came up with a way to decentralize it he came up with a way to with a similar way to how he decentralized he also managed to you know to limit the the issuance of it 21 million bitcoin and um and and back it with physical energies to protect it from the outside.

46:35Right. So fantastic. And, and that's, that's kind of the conclusion of this quest, which was finally found. And so at this point, we're very different from original Charmin eCash. There is no bank involved, but there is also no like tokens that you share and so on. This is a blockchain system. Like that's invented the idea of blockchains. You can imagine this, like in the physical, in the ether, there is some kind of like this, this, this blockchain thing and then when you want to make a payment you just like say hey blockchain i want to send money to danny and then something happens here and then it pops up on your site so uh then we started looking into bitcoin and bitcoin was this revolution and the big trade-off with bitcoin is that it isn't inherently private yes that's that's one of the one of the trade-offs of bitcoin is is it's not inherently private although you know to be fair some some of the altcoins that came after also found ways to make it more private uh also accepting other trade-offs right that we don't want to accept in bitcoin the auditability especially the auditability right so there's a there's a trade-off between privacy and auditability and bitcoin went full-on auditability no privacy in that sense that um all the transactions can be traced in the blockchain but you don't need an account with the bank so you just like a random number right so you don't need an ID.

47:57You don't need to talk to anyone. You just start your Bitcoin node and you're immediately part of the system and you're making it stronger by starting your Bitcoin node. So it's an amazing thing. It started a whole revolution. And so that's one trade-off is the privacy. And the other one is speed. So Bitcoin is slow by design and it is slow because we want to keep it decentralized and easy to verify and easy to participate so there's again another trade-off is a super fast system and how many people can participate right a super fast system requires very big servers so then your bitcoin node is not like this uh like a hundred dollar machine that you can run in your in your bedroom that protects the bitcoin system uh whereas like when you go full retard like uh solana is like we don't care about decentralization like we're just there's three nodes super fast but there's only like three nodes controlled by a single company like i don't know but but like a handful of people and no one can reproduce it or replicate the system and like they want that like whatever like have fun so um it's it's not really private and it's not really fast and those are very conscious decisions that are necessary to make bitcoin successful that satoshi chose um very consciously.

49:19So, okay. 82, 2008, and then 10 years of Bitcoin, 15 years of Bitcoin, we're building the Lightning Network, we're trying to scale it and so on and so forth. And then, but very early in the history of Bitcoin, already 2010, I think, there were already people theorizing about now that we have a parallel financial system, can't we implement the ideas of David Charm on top of that parallel financial system, on top of Bitcoin, right? So in the beginning, we needed to build this on the banks and all the problems with making deals and the bank says no, and then it doesn't happen. Let's scratch all that.

50:09We have a system that cannot be stopped. Let's build a Chomian eCash banks on top of that. And Hal Finney himself, the first Bitcoin contributor, the first person who was positive towards Satoshi Nakamoto, by the way, everyone else said it's not going to work. And he was the first one that said like, amazing. He came, he even proposed this very early on that we could build like Chomian banks on top of Bitcoin, right? So, and then he saw like the vision of his Bitcoin world before you know we have now also other ways of thinking about scaling that weren't present back then but he already envisioned that so 15 years later then a couple of projects in bitcoin started to pop up that actually wanted to implement this idea and i want to know that two of them are fediment and cashew i work on cashew it's a charming e-cash system so what this allows you to do is to basically build a community bank on top of Bitcoin without having to ask anyone to do it.

51:08You just plug it into your computer. The Bitcoin protocol is underneath it and you can run the software on top and then issue e-cash tokens that are backed by the Bitcoin that people can deposit or not. So replace the entire bank account thing with Bitcoin and then issue digital e-cash to the users. they can now trade online on the internet for example and so what this gives us today de facto is mainly two things is one of one is that it greatly increases the privacy of custodial solutions right now so this is a trust-based system still you still need to trust the issuer of the e-cash that they don't debase the e-cash um but it but accepting that is uh makes you allows you to increase the privacy of that system like many many folds so it's like almost perfect privacy e-cash is known to be like the best in class in terms of privacy and the reason for that is like many cryptographic reasons as well but like you can imagine the fact that i have now a a bearer eCash token that is like cash in my digital wallet.

52:21And to pay you, I don't have to now call the Bitcoin blockchain and say, hey, Bitcoin blockchain, can you send any money? I can just take it out from my phone and just hand it over to you. Like you can scan it with a QR code. We can do tap to pay or something like that. So the money flows peer to peer from me to you and doesn't even really touch the internet. And you can do offline payments with this. One side can be offline. So to complete the entire flow is you need to, the receiver, needs to reissue the token once with the mint we call this this this uh this object the the issuer we call it the mint uh you need to reissue the token once otherwise i could double spend it with someone else so this is super cool because first of all the transaction is kind of it doesn't require the internet the the payment itself is happens only between the two of us you need internet to verify and then reissue.

53:14So I cannot double spend the coin that I just gave you. But we can also reverse the roles. You could be offline as a receiver and I could be online as the sender. And what I can do is I can lock the eCash token so I can construct the token so that only you can spend it. So you can look at it and say like, this is a token that only I can spend. You don't need to be online for that. So with eCash, we can build a system where one of the two parties can be offline and we can still make a transaction work. Make it work means not double spend the token. And this is like very common for a merchant situation where you have a merchant, the merchant is, for example, online, they have a payment terminal point of sale that's connected to the internet.

53:58And then I, as a customer can come with my eCash wallet that is like backed by Bitcoin. And I can just like do tap and it goes instantly goes from my phone into the POS system. the POS is internet and can say like, this is verified, everything is done. So I can be offline as a payer. It gives me amazing privacy for the payer and like instant confirmation. So I think one of the things that's probably most misunderstood about eCash is the fact that there is a central issue. So you're not in total control of your own funds. But maybe you could explain how you should use that to make that as little of an issue as possible.

54:33And then also last time we spoke, these things like multi-nut payments weren't a thing. So maybe you can go through some of that. so yeah we've built quite a lot so the way you have to think about this is that you know there is not a single mint the big mint that everyone uses and we all need to trust that one mint with our with with the bitcoin that we give and then hope that the e-cash that we get is actually backed no it's like a completely open source system and it's just code that you can download and run yourself and you can run this for your local group of bitcoiners like 20 people if you want.

55:09You can run a Mint for them. And what people are doing is like for their village or for their physical Bitcoin meetup community, that there's like one technical guy and that technical guy runs the Mint and the friends around the guy can use the Mint to make Lightning payments, to have like a custodial wallet with the guy, like an Uncle Jim system where they can make make lightning payments. So it's enough to have one guy who's technical to help like 100 people around that guy to have like a perfectly private and offline payment system that they can use. But what we're also seeing is that this is not only for physical communities, but also like digital communities, basically, if you want.

55:59So there are websites that have like some kind of a payment system inside. And they would usually, like, you go to a website and it says, like, you know, charge your account. Then you send some Bitcoin over. Then it says, like, you have now 20 ,000 Satoshis on that website. And then you do, you press some buttons, you watch a video or something, and that's, like, subtracts from your account, right? You can replace this system also with a Charmin Mint. So instead of, like, charging your account and then showing it, like, up there where the balance is fully controlled on the web service database.

56:34What the web server can do is just run a mint and give you e-cache. And then you have the e-cache. You have it. And then you use the website. By interacting with the website, you pay back the website for the services that you use. For example, video streaming. What we're seeing right now is for AI use, this is really popular, where people are building like chatbots, like AI chatbots that everyone knows, where you can pay Bitcoin to charge your balance. You don't really have, like you don't charge your balance, you get eCash for it. And then as you chat with the chatbot, you pay for the service with the eCash.

57:08And why is this cool? It's cool for several reasons, but like the most important part is that you don't need an account or you don't need to register to be able to use it. There is no email address or telephone number required to be able to use the system. You just, you know, send Bitcoin, get eCash, use eCash. That's it. And let's pay it back. So it's super easy to onboard users. And at the same time, the privacy of using it is like best in class privacy. Just by default, it's like the best privacy that you can get. For the chatbot use case, it means that you as a person, you as an email address, you as an account identifier, you cannot be connected to the payments that you do for the chat interaction.

57:52So no one really knows who's the person now entering this text there. So we have use cases where people build wallets with this. And we have use cases where people just build web experiences with it. And the nice thing is there are many mains out there that are run by individuals, by companies, by web services and so on that you can choose from. And you can, because it's a protocol, Cashew is a protocol. It's not an app. It's not a company. It's just a bunch of code with specifications. That means there are many different people who have built the mints and the wallets. So it's kind of the first that you can choose which wallet you want to use.

58:37And you can choose the custodian that you want to use. And you're not bound to that wallet or to the custodian. So you can choose from like 15 different wallets, the one that you like most. And then in that wallet, you can have like 10 different mints where you have like 2 ,000 Satoshis in this mint, 5 ,000 Satoshis in that mint, and so on and so forth. And then just keep using it like a normal Lightning wallet. So it doesn't lock you in. You can choose the software. If you don't like the software, you can just say, I don't want this anymore. Move to the other one and just keep using the same protocol with a different app made by someone completely different.

59:12And you can also move your funds around between the different mints. depending on let's say i trust this guy more because this is like a regulated company and like i'm okay with leaving a hundred bucks on that on that uh account no it's not an account but getting from that mint and like uh maybe two thousand sets only from this rando that i found on the internet that whose mint i used so um and this most of it is abstracted away so i was gonna say for anyone listening to this it's not as complicated as it sounds like all of this is abstracted away. And the first time I ever received eCash was from you on the last show we did a couple of years ago.

59:47And it was almost like the first time you send or receive a Bitcoin transaction. The fact that it's like, holy shit, it's a mind blowing thing. People should try it out. Yeah, you should try it out. So you can download, you can go to cash without space. You'll find a few wallets there. And then you can like discover mints using Nostra and you'll find them and you can try, you know, you try them out. The experience is very different from using a normal Bitcoin wallet because like the ecash itself is like bearer you can copy paste it like you can take the message like you can take the ecash and i can i think last time i sent it to you over signal or telegram or something and it looks like a piece of string text that is like you can imagine it as a piece of paper money basically that you can send over the internet and the other person receives it and um because it's a bearer asset the ecash itself is a bearer token uh we can build experiences with it that are not possible with like OG normal Bitcoin, which is, for example, tap to pay, which I'm very excited about because the fiat system is like really, you know, putting it out there.

1:00:52But the UX of tap to pay is amazing. The UX of like, that's the most bearish thing that I can think of. You go to, you know, you go on a hike in Guatemala in the mountains and there's like a little hut and it sells you like a Coke. and in the middle of nowhere you take out your iphone you do this beep and it takes half a second and the payment clears it's just amazing really the the level that the the bar that they set very high and it's very high and we as an open source community working around bitcoin we should also try to replicate you know the same ease of use and the same intuition for payments so um with cashew we're really trying to rebuild also these experiences for the bitcoin space because we care about how bitcoin works and how easy it should be to use bitcoin in my mind like the prototypical user i always think about is the mango selling old lady in the brazilian beach where the internet is bad right that's like it i want to build software for her i i want her to have the best privacy and the best experience and the fastest transaction possible.

1:02:03And I think we'll get there. So it's one of the tools that we have in our tool belt. So when we last did that show, the Cashew Wallet was new. I remember you putting a tweet out, which was like, I've just built this. It's full of bugs, but have a play. And now I still use the Cashew Wallet. I've used Macadamia as well. That's very good. What's the state of Cashew now? Is it to the point where it's really solid? Anyone can trust it with like a decent, obviously it's not something you're going to put a lot of money in, but like a decent amount of money. Yeah. So the amount, so I think in terms of software quality, cryptography, how well we, how much effort we've put into it at this point, I can really say like it's a solid system and I trust it.

1:02:49And it's open and verifiable. So you can just like, you can look at it if you're competent, You can read the code and you can look at it yourself. And if you don't trust the app, if you don't trust the app that someone else made, you can just make your own app. There's specifications. They're written in English language. And you can read those documents that describe exactly how Cache works. And you can build your own app. That's why there are like 15 different wallets. So in terms of software, I think, yes, we're like really solid at this point. It's super fast. It's super reliable. It just works.

1:03:22and it doesn't require you to know any of the things that I just said. It just works. In terms of trust, what it means to put money into it, I would always advise people to just do it with microscopic amounts, just small amounts. I treat it, I'm a developer in that space, I treat it like my physical wallet. I wouldn't put hundreds and hundreds of dollars into my physical wallet and run around because you could lose it. You could forget it in a bar and someone could steal it. So the way that you make that trade-off with physical cash, I make the same kind of trade-off with eCash. So I keep, I don't know, a dozen bucks, 20 bucks, maybe a hundred with different mints.

1:04:12And I try to separate it. If one of them tries to rug me, well, then I might lose like 20 bucks or so, which obviously sucks but you know it's a calculated risk that i took have any of them yet I don't know of any Mint that has rugged so far. No, no one has rugged so far, as far as I know. Also, even knock on wood, there haven't been any major technical issues either. So I'm not aware of things going super bad for anyone. There might be a bug here and there with the wallet, but that's isolated issues. But no one has rugged. And I hope that continues. But obviously, it's not in my control. I don't run these systems.

1:04:58It's just people can do with it what they want. So I want to ask you a question that's a little bit awkward. And I'm nervous to ask it because I don't want to wish anything into the world. But when we've seen such a crackdown in privacy developers in Bitcoin, are you nervous at all? It does affect me. Yes, because I'm a normal person. I care a lot. I care about the people in this space and I care about Bitcoin and I care about the safety of the people and what it does to the psyche of a developer. I'm not alone. I'm in touch with many developers out there. We're trying to be a union of developers that also care about each other and each other's safety.

1:05:46so i'm not the only one who's like affected by the things happening around us because we all believe that we're doing the right thing we're doing a moral thing and we're not you know we're not trying to do anything bad we're literally just trying to improve the world and we're thinking about the most vulnerable and those who need it the most and at the same time you see you see that governments even contradict their own suggestions on how to operate, right? So we've seen Wasabi Wallet, I'm sorry, not Wasabi Wallet, Samurai Wallet and Tornado Cash as two prime examples that where the developers and the operators of these systems were heavily sanctioned and now also are threatened with jail time for operating non-custodial systems where everyone like with FinCEN guidance basically.

1:06:49Yeah. Well, FinCEN said they couldn't register with them even if they wanted to. Government guidance that says, you know, these are the rules, play by these rules, everything will be okay. And then you start building and then some, you know, you know, due to unforeseen, you know, this is how do you even calculate that risk? And so the, I think the most stressful part is just not knowing what the rules are. And when you don't know what the rules are, it can really affect your productivity. and i mean obviously also like mental health and and psyche and some people are more stress resistant than others but especially the the way that we can move forward to build to build our way out of the old system it requires like a lot of energy and mission driven like focus and lots of people cannot handle that you know the fact that we just don't know so i think it's more important than ever to show support to your local neighborhood hacker to support them and to you know just be vocal about what your ideals are and and and especially show them that they're not alone i know we're not alone we have like a big system of individuals and organizations that really care and that that are also like that can protect uh you legally so i would advise for anyone who feels like this and i again i know that there are people out there who feel like this to just reach out to others and just talk about you know the situation that you're in and often it really helps a lot but then again uh do not lose focus we you know we're just one individual in a largest process and the goal is more important than the localized like little failures and the successes The goal is much, much, much bigger than that.

1:09:13And as long as we just keep moving into the right direction, I hope we'll be okay. Yeah, well, I think it's amazing what you're doing. I think you definitely are building tools that humanity needs. So I'm very glad you're staying in your building because I would understand why you might walk away from a project like this at the moment. So I think it's very cool. But what's next? I know you've been working on BitChat. Yeah, I've been also working on BitChat. So I like freedom tech. I like cypherpunk tech. And for me, that means shaping the internet in a way that I want the internet to be and fulfilling the cypherpunk vision of the internet.

1:09:54So we've just talked a lot about Bitcoin, money, eCash, and how that, you know, the role that plays. But communication is a big part. communication and you know things like signal for example or tor or matrix those are projects driving it forward so um recently i've been involved in a project called bitchat bitchat is a project started by jack dorsey no other one than jack dorsey who uh i mean i had nothing to do with that he just came up with a he vibe coded it he vibe coded a project that is a messenger that runs on your on your iphone initially only on the iphone that's what he built that connects to uh to your peers over bluetooth so you can chat over bluetooth but the most interesting part is that it builds a mesh so it's a mesh network what does it mean you can imagine it like a network like a yeah like a network of individual phones that all can like that can transport the messages between them so the message between me and uh you um like if there are people between us they can transport that message from me to you so that means like bluetooth it's a bluetooth mesh messenger and bluetooth has a fairly limited range um in in terms of proximity it can be like a couple dozen meters or sometimes even more but it's certainly not gonna be you know uh hundreds of kilometers It's not getting across the city.

1:11:23No. But if you have a mesh that is large enough, there is at least a chance that you can reach your destination through multiple hops through that mesh. And lots of network systems work that way. Even the normal internet that you use is a protocol that is routed. So when I send a message from my computer to your computer, it doesn't go like, beep, single hop, but goes through several routers who all help me to reach you. So you can imagine this a bit similar, but hyper-localized. So BitChat allows you to chat with those people in your proximity. And wherever you go, it doesn't require an email address or sign up.

1:12:03You can just start it up, then you see who's around you and who's reachable. And you can just start chatting with them. It's funny because I didn't get in on the test flight of this app. I got it when it was on main release, only a few days ago. And I've been looking at it and I've not had a single connection until you walked in the door. see yeah it's running on my phone and yeah it's constantly like if you leave it running it constantly looks for other bitchat users and you can just start chatting with them and um so he put out that ios app and i thought it's like fantastic it's amazing it's like exactly it's up my alley and and uh i'm an android user so i took it and i also like i heavily love vibe coding a lot so uh i took his ios app and try and translated it into an android app that looks and feels the same and published that so now we're kind of working on two different apps he's building the ios app i'm building the android app and they're compatible with each other so they can talk to each other and uh we're at a conference here in riga and um today the we had the developer conference the pre-conference btc plus plus and it was super fun and very useful at that conference so basically what we like lots of people had that app running and you can just walk you can watch a talk and you can take out bit chat and you see like 25 people are online right now and you can just talk about what you're seeing you can you know or uh say like what's the wi-fi password and like people sending me the wi-fi password over bit chat because you can use it while you're offline.

1:13:35It's just it relies on Bluetooth, which is completely different from the other internet apps that you have on your phone. So it's cool because it's a parallel system again. It doesn't require internet. It doesn't require registration. And it doesn't require anyone's permission. So you can just like, we don't need a SIM card that we would have to buy and register. Or we don't need a router that would need like a cable internet connection it's just peer-to-peer pure magic being you know hopping from one phone to another what's like the best use case for a mesh network because even if you're in a pretty highly densely populated city you still have like there's so for example the building i live in like i could imagine a mesh network working in that building but if i want to message the building over the street like it's probably not going to reach that far so like what is the ideal use case for a mesh now so um like with any network there is a network effect that means like the it gets more useful the more people use it yeah right so i mean that's also true for any messenger but here in this case it's like literally true for the infrastructure itself so the more people have it running the more people you can reach in principle funny because i also use it like in in apartments talking to to neighbors and work kind of it worked really well so let's say if they're like we don't know how well it scales yet the the largest meshes are still kind of small but potentially like what are use cases for it is especially in cases where the internet doesn't work this can really shine so and there are many cases where the internet doesn't work especially when people concentrate so this could be a sports stadium could be a festival could be a conference but it could also be a disaster situation where i don't know maybe an EMP has turned off the internet or some natural disaster has taken down the cell network or something, where you still want to be able to communicate to your neighborhood, for example.

1:15:32In those cases, an app like BitChat can be the last digital communication that you have. So obviously, we're not building yet for the disaster use case. So it's still an early development, and we need to test it and make sure that it scales to larger meshes and see how reliable it is to reach people. But it's looking pretty good so far. So we're just going to keep improving it. And I think since this hasn't really, there are other mesh projects that we can mention, like MeshTastic or LoRa, the technology. There's FireChat that is like previous work that has done something similar. So maybe one interesting example here is FireChat, which was important in the Hong Kong protest in 2019.

1:16:21Oh, that's cool. Yes, where the Chinese regime monitored the internet of protesters or also can play around with the internet, turn it off to basically make it harder to voice your political opinion and organize on the streets. People started using FireChat back then to send each other messages. Like, it's safe here now, now we're going here. So anything where the communication requires you to talk to lots of people around you, and you don't want to go over the internet, this is super useful. That's very cool. And so as this scales, is it the kind of thing that you could use as a mesh network that's also connected to the internet when you're not in one of those disaster scenarios?

1:17:06Yes. Yes. So we're already working on this. There are already, you know, BitChat has this already, for the ios app has this already integrated which uh which we can where we can connect meshes individual meshes basically through noser so there's another freedom technology like noser where you can just talk to a public key basically so uh the way it's implemented right now is that we two meet uh in a physical space i see your phone like your public key you see mine and then we can favorite each other's so to make sure that we're actually the person that you know that you're talking to. And then when we spread, we go apart, and there is no Bluetooth connection between us anymore, then we can default back to Noster, basically, and then use the Noster network to talk to each other.

1:17:57So it's not taking a social graph from Noster, it's just using the public-private keypad. So the base is like, yes, the basis for it is your bit chat identity. And Noster is just used as a communication layer in case the Bluetooth range is out of range. I see. That's very cool. And so I want to know about you vibe coding this app because I've never written a single line of code. Oh, you should. So that's where I'm at with this. But when you take the iOS app that Jack developed, is it literally as easy as putting that through AI and being like, make this the same, but for Android? Kind of, yeah.

1:18:31Kind of, yes and no. I mean, it definitely helps if you know what you're doing and what the machine is doing. Because right now, the AI tools are in this... First of all, they're amazing. So I should be super encouraging to anyone listening here is to try it out because coding itself gives you the feeling of agency. It is the closest thing to magic in the current world that you can get to is making electrons do what you want them to do, right? Trust me, Kelly. I know how much you love this. I remember when you came to Bedford for cheat code on the second day when everyone went to the football, everyone's hanging out, drinking beers, You were in the clubhouse coding.

1:19:15Yeah, I mean, I wasn't alone. So two years ago, maybe two years ago, this required expert-level knowledge. You couldn't do anything. As a beginner, just to get to a point where you can do anything interesting required so much effort. And it's still worth the effort. You should still learn how to really code if you really want to walk that path. but sometimes you just want to make a website sometimes you just want to make a game sometimes like maybe you're a designer and you need a website or you have just like a crazy idea and you want to see it live and see like play around with it the tools today are good enough for a person who doesn't know like almost nothing about coding to get an agent and try something and and and let it build an app that you like and then you can just like once it starts to build like a framework around and shows, look, let's say you say, let's build a marketplace where I can put, like, where I can sell objects for my neighborhood or something like that.

1:20:21And it will make a website for you where you can, like, list objects and then communicate with those who are interested in buying them, for example, right? So it will be able to do that at this point. You can do that without knowing a single line how to code. For a project as complex as BitChat, that's like more on the complicated side, you can get away, like you can do 95%, 90 % of the work without even looking at the code. But at some point, things are, at this point, at least the AIs aren't there yet, that they still need someone to hold their hands. so as a coder who's been coding for a very long time just without ais and you know knows i'm kind of know what i'm doing um it becomes like you you you change your role from being a developer into a project manager where you you're talking to the ai as if it's a programmer and you can even larp a project like we're working on this project and it's supposed to be great and like i want it to be super stable and easy to use.

1:21:30And it should, you know, it has these requirements. And then you say like, make a detailed plan of how you would approach this. And you can just generate a very detailed plan, like in a project that you would do in a software startup, for example, where it says like, step one, build like the framework of the app. Step two, build the interface. Step three, talk to Bluetooth. Step four, find others. Step five, implement DMs. step six implement nosa so step by step by step by step you can spell out what the project should be and you can take this long plan give it back to a give it back to the next day so what you do is like you're managing multiple ais doing it you can choose one is better at planning the other one is better at implementing and so on like you you gain more experience in doing that but yeah generally speaking as a software developer i think like at this point like almost everyone understands if you're not in this game right now then i mean i hope you'll have a job in five years because it's the the most ironic part about the the uh evolution of ai right now is that we thought it would replace the boring jobs yeah everybody was it was always meant to be the blue collar workers that would get replaced yeah yeah it's a good good news uh your job has just gotten more important than before the plumber is not getting replaced yes i and i'm very happy for the plumber on the contrary software developers around the world are kind of like you know are in a high alert mode right now i hope most of them are is that if you are not on top of your game and using ai to increase your own productivity by like 10x then you know you're falling behind you're falling behind and um the question for a company in in a couple years will be like do i need 20 people to build this app who don't use AI or do I need three of them who use AI?

1:23:23And that's already happening. So yeah, you better get started if you haven't yet. I really need to improve my website. What AI tool do you use to do this? There are many to choose from. My favorite one is a goose from Block. That's a fully open source interface. That's like a chat window on your computer. and then the good the nice thing about it is that it can talk to any lm provider that you want so you can get a subscription with grog or gpt or entropic and you put your api keys in there and then it's it's an agent so it's not just a text chat box like you know from chat gpt where it can like ask a question get a response but it's an agent and that means that it can do things so it can it can change things on your computer it can write files on your computer it can execute commands on your computer so you're kind of giving it control over your computer and that's how it can just like generate an entire website for you with a single command at this point they are so good that you can say build me a educational bitcoin website for activists from asia and explain how multisig and coin joins work.

1:24:40So that could be a prompt. I'm pretty sure with that prompt, you could one-shot a website that looks pretty good. That's insane. It's fucking cool to see. I'm so impressed with everything you've done, Kelly. You're the most prolific dev in Bitcoin right now. Can we close with one big question? So I did a show with Odell maybe three or four months ago now. And the whole thing was on, is Bitcoin still freedom money? And with taking into account everything we've gone through today, do you think Bitcoin is still freedom money? I absolutely do think that Bitcoin is freedom money. And the nice thing about Bitcoin is that it does not depend so much on the interpretation of what Bitcoin is.

1:25:25Bitcoin is just is. It has the properties that it has, and those don't change with the bull market and the bear market, or the suits coming in, or the suits selling their stash again, or tornado cash and being indicted or not. So Bitcoin is a constant. so and because it has it still has the same properties that it had when satoshi invented it which is it is decentralized it is uncontrollable is unstoppable and it's verifiable and it's fair and everyone can have access to it without permission those things haven't changed however i want to say that bitcoin also depends on the people who use it so as long as there are enough people who uphold these ideals i think we're in a safe place um but you know even for those who are just interested in the monetary value that bitcoin brings them in the investment case and just you know the number going up um i think you know even that number go up story depends on the basis of these properties that i said like when if bitcoin becomes just like a investment account that where you never make use of the properties which is like permissionless use of it where if all the bitcoin in the world would be held at the banks and the only interaction that people have with bitcoin is from an account where you don't control the bitcoin then it will lose all of its interesting properties.

1:27:13Even the 21 million cap is not worth anything if the underlying principles and the underlying properties are not met. So the Bitcoin, I think, you know, the white paper says it. It's peer-to-peer electronic cash. It's made for payments and it's made for individuals that use it at their own free will. so we we we cannot lose that mission from like we cannot lose sight of that mission and all the stories that we tell about bitcoin on top of it all rely on on this luckily it's one of the most resilient and most stable most like most badass systems ever created in the history of the world so i'm not worried at all but it depends on people listening to this that you know that understand what the value proposition is to drive this forward because you know no one is working on it except us it's not improving if we don't improve it it's not reaching more people if we don't spread than the message so like we cannot we cannot depend on the people who are just interested in the financial aspect of it.

1:28:31That's not what makes Bitcoin great. And 21 million of something that is useless is not worth anything, right? 21 million of something that has these properties, that is worth something, right? So even if you're only interested in a financial use case, then you should think about how you can support the basis of that investment. So So support developers, support open source development, support all the foundations and organizations that support this open source movement, because those are the people that keep it alive and that give it the purpose that it has. So we can just go forward for another hundred and another thousand years.

1:29:15Maybe a more interesting way of framing that question is, what percentage of Bitcoin users do you think will use Bitcoin as freedom money? That's a good question. I think right now, probably most people who are interfacing with Bitcoin are using it in a way where they do not control the Bitcoin itself. So most people have Bitcoin on an exchange account. But also the number of people who don't have an exchange account is increasing. So I don't know the number, but as long as there is a healthy number of people that just, you know, keep running the nodes and keep verifying the network and like give us hash rate to secure it, then as long as that is given, then everyone who uses Bitcoin in a way that doesn't support its principles still has the option to fall back.

1:30:14So that's the most important part for me. I'm not saying, you know, I'm not moralizing that you're using Bitcoin wrong and you're using Bitcoin right. Just use Bitcoin. Even the wrong way of using Bitcoin is already great. But we as developers and the community and educators, we need to remind people that, you know, and make sure that also the institutions and organizations who manage Bitcoin for others respect these principles, is that they can withdraw their Bitcoin from an exchange account. You can put it in your cold storage. And that also, I mean, it has many technical dimensions. We need to scale Bitcoin.

1:30:53We need to be able to provide faster transactions and cheaper transactions for the increasing number of people using Bitcoin. So the most important part is that there is always an exit from the permission system into the permissionless world. and yeah so I think there's a significant number of people that make use of that and you know I'm not too worried that we're in a bad place well Kali man this has been amazing I think as Bitcoiners we're very lucky to have you so thank you for giving me the time man thank you Danny oh actually before we go first of all everyone should go try out eCash try out Noster but where do you want to send anyone where can they find out more about you and Cashew and everything you're doing oh you can go to cashew.space you'll find a lot of information if you're a user you can find applications that you want to use if you're a developer then you'll find ways to contribute you can find me on nostran on twitter but you know you'll find me that's not the interesting part um i'll just say like whatever if you're i want to talk to the software developers if you're a software developer you're working in a company and you feel like your your job is shit it doesn't give you fulfillment and you're like you're always thinking of how could i change the situation i'm in the bitcoin space literally needs you like we need more people working on bitcoin and improving bitcoin so please consider it open source is now viable we never had a system where the system can fund itself from the inside so join bitcoin and contribute to bitcoin put some effort into improving bitcoin and i can assure you you will have like you will have the the most amazing experience because like the open source world is just is there and it was waiting for your contribution.

1:32:34So please join us. Work on Cashew. If you're not interested in Cashew, just like on the broader Bitcoin ecosystem, join us. And if you talk to me directly, I'll hold your hand and show you around. So whatever we can do to increase the number of developers and the support that we get, I'll do my best to help with that. Let's go. All right. Thank you, Kali. Appreciate you, man. Appreciate you too.

1:33:05Thank you.