Furthermore, season 15 of the Bitcoin Takeover podcast features episodes that were recorded in Argentina (during Labitconf 2023) and Switzerland (after a series of meetups in Neuchatel and Zurich). Sure, a large majority still consists of remote calls, but there’s a significant boost in interviews that were recorded in person. You will also notice an increase in production cost and value.

The plan for season 15 is to feature 21 unique episodes which cover some of the most ground-breaking, avant-garde, and overall exciting innovations in Bitcoin. From increased access to goods and services that you can purchase with BTC, all the way to sidechains, decentralized finance (DeFi) on layer 2s, sovereign rollups, Turing-complete virtual machines (BitVM), and advancements in privacy and self-custody.

As for the sponsors, you will find familiar names that have heroically supported the show through the bear market (Wasabi Wallet, Cryptosteel), as well as newcomers that are very keen on the Bitcoin Takeover (Satodime and IVPN). They were all selected according to two important criteria:

1. Do I like the product/service enough to recommend it even in the absence of a sponsorship deal?
2. Are they actual fans of the show who listen to the episodes and care about the quality of the content?

For Wasabi wallet, you already know the drill: download the wallet for free, then make your bitcoins more private in large rounds of mega CoinJoins with 150+ other participants. For amounts lower than 0.01 BTC and remixes, you pay no coordination fee.

In the case of Cryptosteel, you gotta secure that precious password, BIP39 seedphrase, Nostr private key, or Bitcoin Core passphrase in a way that’s resistant to fire, floods, physical shocks, and earthquakes. Fine European stainless steel is much more durable than paper… and you can’t go wrong with the OGs who invented metal backups for Bitcoin back in 2013. Use promo code BTCTKVR to get a 10% discount on your Cryptosteel purchase!

Satodime is also extremely useful for gifting bitcoins or making transactions in person, without leaving a permanent record on the public blockchain. This open source smart card device can effectively turn your bitcoin into a bearer asset that you can take with you anywhere. Tap the card to your mobile phone, take advantage of the EAL6+ secure element and make sure that the key slot remains green – once it turns red, it means that someone else removed the seal to claim the coins. Buy your Satodime with a special 5% discount by using promo code BTCTKVR at checkout!

IVPN is one of the best VPN services out here: it has been around for 2 decades, it’s ran by bitcoiners who accept BTC payments on-chain or via Lightning using BTCPay Server, and it doesn’t require any personal data for registration (no e-mail, no phone number, no credit card). To sign up, you only need to generate a random account code for which you must make an on-chain or Lightning payment.

Once you top up your subscription, you can surf the web with great privacy. IVPN is also keen on transparency – with open source code that’s regularly audited. If you don’t mind revealing one of your burner e-mail addresses and want to give it a try, write a message to trial@ivpn.net and you’ll get a 30-day trial code. Once the trial is over and you want to pay, make sure you generate a new IVPN account!

The guests from season 15 of the Bitcoin Takeover Podcast: Developers, Innovators & Pioneers!

In total, season 15 of the Bitcoin Takeover podcast will have 21 episodes:

• 10 episodes that get published in December 2023, just before Christmas. The idea is to celebrate the 5th anniversary of the show with a throwback which pays tribute to the first season launching scheme: when all the episodes got released on the same day. thus enabling binge watching. This is also a nice Christmas gift for the regular listeners, who have been around and supported Bitcoin Takeover through the years.
• 11 episodes that get published on a weekly schedule, starting from the first week of January. The idea isn’t only to emulate the season 1 model, but to improve it in every possible way. So bing watchers/listeners get to enjoy a Christmas gift, then return to the regular schedule for the next 11 weeks.

Now let’s talk about the guests from season 15 of the Bitcoin Takeover podcast!

S15 E1: Max Hillebrand & Lawrence “Lando” Rothbardian on Privacy, Free Markets & The Parallel Economy (link)

S15 E2: Sergi Delgado on Becoming a Bitcoin Core Developer at Chaincode Labs (link)

S15 E3: Hernan Marino on Bitcoin in Argentina (link)

S15 E4: Alexis Roussel on Nym & Privacy (link)

S15 E5: Edan Yago on Rootstock, Sovryn & Bitcoin DeFi (link)

S15 E6: Super Testnet, John Light & Alexei Zamyatin on BitVM, Rollups & New Cryptography Research (link)

S15 E7: Sergio Demian Lerner on Rootstock, Satoshi’s Coins & The Future of Sidechains (link)

S15 E8: Ryan Condron on Bitcoin Mining, Hashrate Markets & Lumerin (link)

S15 E9: Kevin Loaec on Liana Wallet, Bitcoin Fees & Hardware Wallets (link)

S15 E10: Tuur Demeester on How to Analyze the Bitcoin Market (link)

S15 E11: Satoshi Sound on Bitcoin & Friends Cartoon Reboot (link)

S15 E12: Agustin Kassis on La Crypta, Lawallet & Bitcoin in Argentina (link)

S15 E13: Robin Linus on BitVM & Permissionless Bitcoin Development (link)

S15 E14: Nicolas Dorier on BTCPay Server (link)

S15 E15: Aaron van Wirdum on Bitcoin’s Genesis Book (link)

S15 E16: Paul Sztorc Talks Bitcoin Scaling, But Can’t Say “Drivechains” (link)

S15 E17: Andrew Poelstra on Covenants (OP_CAT vs OP_CTV) (link)

S15 E18: Orkun Kilic on Citrea, the First ZK Rollups on Bitcoin (link)

S15 E19: Alexei Zamyatin on Build on Bitcoin and Layer 2s (link)

S15 E20: Bastien & Baudoin on Satochip, Satodime, Seedkeeper & Self-Custody (link)

S15 E21: Fiatjaf on Nostr, Drivechains & Why Lightning Sucks (link)

S12 E22: Erik Voskuil on Libbitcoin & Bitcoin Culture (link)

S15 E23: TBA

Subscribe to the Bitcoin Takeover podcast on YouTube, Spotify & Apple Podcasts!

Simple Proof, Rafael Cordon’s start-up, is a company that deals with irrefutable truth to counter forgeries. Not campaign promises, not institutional bias and commissions that investigate voting ballots. In the fall of 2023, amidst allegations of election fraud, Rafael Cordon used OpenTimestamps to prove that the tally sheets were submitted at correct times and therefore allegations of submitting votes outside of the allocated time were false.

OpenTimestamps has been around for about a decade now. Created by former Bitcoin Core developer and applied cryptography consultant Peter Todd, it makes use of the Bitcoin blockchain to prove that certain pieces of information existed at a certain point in time. Timestamps are basically small amounts of data which get embedded in the blockchain through a transaction, and then the information gets verified against this ledger of immutable truth.

Most famously, Peter Todd used OpenTimestamps in May 2017 to “carbon date” the entire Internet Archive (better known to users as the Wayback Machine, which currently features more than 1 billion files) in only one Bitcoin transaction. The protocol has previously been used for preventing intellectual property theft, or to present irrefutable evidence to courts.

However, Rafael Cordon’s Simple Proof took it to the next level by securing more than 125.000 documents related to the presidential elections in Guatemala – then even released a 17-minute documentary titled “Immutable Democracy” to explain the process (directed by Javier Borrayo).

For the reasons presented, I was thrilled to have Rafael Cordon on the show in order to ask him questions about Simple Proof, OpenTimestamps, and what the future reserves for these cool Bitcoin projects. Since ordinal inscriptions are the peak of the popularity, I thought it was interesting to focus on a non-monetary use case that is less divisive among bitcoiners.

▶ Play video Watch on YouTube

Rafael Cordon’s Simple Proof: Upholding the Integrity of Digital Information in Guatemala’s 2023 Elections

Rafael Cordon introduced me to Simple Proof’s mission: to uphold the integrity of digital information using the Bitcoin blockchain for timestamping. He shared their recent collaboration with the Guatemalan government to create an immutable backup of digital records of vote tally sheets. This innovative approach protects against misinformation and document alteration, ensuring the integrity of the election process.

OpenTimestamps: A Protocol for Truth

The concept of timestamping on the Bitcoin blockchain was created by Peter Todd through the protocol called OpenTimestamps. Rafael explained how OpenTimestamps allows anyone to timestamp documents on the Bitcoin blockchain by generating a Merkle tree to store the root hash. Simple Proof worked closely with Peter Todd, who advised them on using Open Timestamps for their system.

Ensuring Fair Elections with Bitcoin’s Blockchain

Our conversation delved into the use of Open Timestamps to ensure fair elections. Rafael shared how Simple Proof showed the Guatemalan government the value of generating an immutable record of election information. He clarified that Simple Proof does not count votes but timestamps the information, allowing individual citizens to verify the existence of the tally sheets used for data entry.

The Power of Transparency and Certainty

We discussed the importance of transparency and certainty in elections and how blockchain-based timestamping can provide a secure and unalterable record of when digital information was created. Rafael emphasized that this technology can be applied not only to elections but also to other areas such as intellectual property, the justice system, and digital evidence.

The Challenges and Future of Timestamping

We also touched on the challenges posed by advancements in AI technology, which can generate fake information that is difficult to distinguish from genuine content. Rafael Cordon suggested that a combination of timestamping, PGP, and digital signatures can help certify the truth and combat misinformation. Looking ahead, Simple Proof’s roadmap includes incorporating PGP and digital signatures into their solution.

Bitcoin and Blockchain Technology in the Public Sector

Our conversation revolved around the potential uses of Bitcoin and blockchain technology in the public sector. Rafael highlighted how approaching Bitcoin as an unalterable source of truth or information can help open doors for its adoption in government. He emphasized the importance of using Bitcoin to safeguard digital information, particularly in the public sector.

NFTs, Open Timestamps, and Digital Art

The discussion then shifted to the concept of NFTs and their use in proving the authenticity and ownership of digital art. Rafael explained that while NFTs have the additional property of transferring ownership, Simple Proof’s focus is on upholding the integrity of public information.

The Impact of Regulatory Clarity on Bitcoin Adoption

Rafael Cordon and I discussed the importance of regulatory clarity and transparency in the adoption of Bitcoin by large corporations. Rafael challenged anyone to find a compliance department in a non-cryptocurrency company that supports Bitcoin, highlighting the general skepticism and preference for government-approved assets.

The Power of Democracy and Transparency

We discussed the importance of being able to remove leaders from power through democratic processes. Rafael agreed, stating that their project aims to provide more guardrails for transparency in the democratic process.

Online Voting: A Boomer Story

I shared my initial enthusiasm for online voting, believing it could transform our democracy into a direct democracy. However, after conducting research for my bachelor thesis in 2014, I quickly realized the drawbacks of this idea.

Exploring New Developments in the Bitcoin Space

I mentioned my interest in exploring various projects related to Bitcoin, such as the Liana wallet, which allows users to lock their coins for multiple years. Rafael shared his Twitter handle, @rafa_cordon, for anyone who wants to reach out to him.

My conversation with Rafael Cordon was enlightening, shedding light on the potential of Bitcoin’s blockchain technology in upholding the integrity of digital information. I encourage everyone to check out the documentary at film.simpleproof.com to learn more about their work.

Listen to Rafael Cordon on Apple Podcasts, Spotify, YouTube & more!

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While listening to Rafael Cordon, use these time stamps:

The use case of Bitcoin in Guatemalan elections (00:01:12) Rafael Cordon discusses the use of Bitcoin in the Guatemalan elections to prevent fraud and uphold the integrity of digital information.

Introduction to OpenTimeStamps and its protocol (00:03:39) Rafael explains the OpenTimeStamps protocol created by Peter Todd, which enables anyone to timestamp documents on the Bitcoin blockchain and store a hash using a Merkle tree.

Simple Proof’s integration with the Guatemalan election system (00:08:47) Rafael describes how Simple Proof integrates with the preliminary result transmission system in the Guatemalan elections to timestamp the vote tally sheets on the Bitcoin blockchain, providing a way to verify the authenticity of the documents.

Bitcoin and tampering with voting information (00:12:37) The discussion revolves around how Bitcoin can be used to prove the authenticity of voting information and debunk claims of tampering.

Timestamping in elections and its benefits (00:14:00) The conversation focuses on the benefits of using timestamping in elections, including cost savings, transparency, and the ability to reorganize elections if needed.

Other potential uses of timestamping (00:15:19) Rafael Cordon and Vlad discuss the potential applications of timestamping beyond elections, such as intellectual property, the justice system, and digital evidence.

Government Adoption of Bitcoin and Cloud Technologies (00:23:33) Rafael Cordon explains how governments initially resisted adopting Bitcoin and cloud technologies, but later realized the benefits of using them for unalterable information and data storage.

Using Bitcoin to Safeguard Digital Information (00:24:55) Rafael Cordon suggests that using Bitcoin as a means to safeguard digital information can lead to a broader adoption of Bitcoin as a form of money.

NFTs and Open Timestamps for Provenance (00:26:31) We debate the use of NFTs and open timestamps to prove the authenticity and provenance of digital assets, such as artwork, and the potential for tracking the number of creations by famous artists.

The response to the article about Bitcoin’s use in elections in Guatemala (00:35:36) Vlad and Rafael discuss the response from the Bitcoin community after an article was published detailing Bitcoin’s role in the elections in Guatemala.

Carlino’s ambitious ideas for Bitcoin adoption in Central America (00:37:19) Vlad and Rafael Cordon talk about Carlino’s vision of using Bitcoin to bring together Central American countries under a unified currency.

The Bitcoin scene in Guatemala and grassroots adoption (00:42:39) Rafael describes the Bitcoin community in Guatemala, which includes startups addressing remittance use cases and the Bitcoin Lake experiment in Lake Atitlán. The speakers also express their preference for grassroots adoption over government imposition.

The clarity of regulations for large corporations (00:47:11) Discussion on the importance of legal interpretation and regulatory clarity for large corporations in adopting new technologies like Bitcoin.

Startups and their flexibility with regulations (00:48:11) Exploration of how startups have more room to maneuver and take risks due to the absence of specific laws regulating new technologies.

The impact of regulatory clarity on large corporations (00:49:37) The significance of regulatory clarity in encouraging large corporations to adopt new technologies, with the example of El Salvador’s legal recognition of Bitcoin.

The Utopian Vision of Online Voting (00:59:10) Vlad Costea describes his initial enthusiasm for online voting and the belief that it would transform a broken representative democracy into a utopian direct democracy.

Underutilized Technology and Consultancy Services (01:00:29) Vlad and Rafael Cordon discuss the underutilization of open timestamps technology and how people can contact Simple Proof for consultancy services.

The Power of OpenTimestamps (01:01:23) Vlad and Rafael highlight the significance of open timestamps and its potential consequences when used correctly.

Instead of making use of a reputation system, Vexl takes a bolder approach which might be inspired by Facebook Marketplace: you are able to see the mutual friends who know the seller (or, to the very least, have his/her number in their phonebook), so that you can do a little bit of background check before agreeing to meet.

Interestingly, Vexl has no monetization model and doesn’t plan to collect any type of fees from users. The project as a whole is a gift from SatoshiLabs to the Bitcoin community – for profits, they already have Trezor, Invity, and Tropic Square.

Nonetheless, there are still some privacy concerns to express in regards to sharing your phone number. Thankfully, the number and identity are both encrypted by the Vexl app to prevent the developers from storing any information about the users. Interactions between them are completely voluntary and based on their willingness to reveal their phonebook. In some countries, disposable SIM cards are easy to acquire – thus making it even easier to get a new identity only for buying bitcoin.

▶ Play video Watch on YouTube

Introducing Vexl: The “Tinder for Bitcoiners”

Lea, the loudest member of the SatoshiLabs family, introduced Vexl as a “Tinder for Bitcoiners.” This innovative app allows users to connect with people within their social circle or their contacts’ contacts, making Bitcoin trading easier and safer than ever before. Unlike Tinder, however, Vexl does not collect or store user data, ensuring privacy and security for its users.

What Makes Vexl Stand Out?

There are other peer-to-peer exchanges in the market, but what makes Vexl special? According to Lea, Vexl addresses three major drawbacks of other platforms: the global order book, reputation model, and usability.

Other platforms connect users globally, making it difficult to verify the counterparty of a trade. Their reputation models are synthetic and easily manipulated, and usability is often a concern, with some platforms requiring lengthy tutorials. Vexl, on the other hand, brings users’ real-world reputation into the digital platform, making it easier and safer to trade Bitcoin.

How Does Vexl Work?

Vexl works as a marketplace for Bitcoin trades. Users can post or find offers on the marketplace, and while the offers are anonymized, users can see how many common contacts they have with the other party. This gives them an idea of their social circle, similar to how Facebook or Instagram connections can provide insights into someone’s background.

Once a user requests an offer and the other party accepts, they are taken to an end-to-end encrypted chat where they can reveal their identities. This mimics real-world interactions, where users can verify the credibility of the counterparty through common friends.

Vexl: More Than Just an Exchange

Vexl is not just an exchange, but also a social network. Using phone numbers as identifiers, Vexl can match users with contacts and contacts of contacts, even if they are not on the app. This approach is similar to Facebook Marketplace, where users can see how many friends they have in common with a seller and refer to them for credibility.

Vexl’s Open-Source Code and Future Plans

Lea explained that Vexl is an open-source app that is available on GitHub. It is truly open source, with no fees or data collection, and there are no plans to monetize it. Initially launched in the Czech and Slovak markets, Vexl is now available globally, with the exception of the USA. The app has gained traction in markets such as Germany, Austria, Switzerland, the UK, and Italy.

The team is constantly working on improving usability and adding new features, such as a trade calculator and a map feature for finding offers nearby. They also plan to rewrite the backend to make it more performant. Lea clarified that Vexl only supports buying and selling Bitcoin and has no control over what is being sold or bought on the platform. However, they are considering adding categories for goods and services in the future.

The Importance of Peer-to-Peer Transactions

Lea emphasized the importance of peer-to-peer transactions and the freedom it brings without worrying about personal data being stored or linked to your identity. She expressed her sadness at the normalization of giving personal data to third-party institutions and the lack of control individuals have over their own information. She believes that Bitcoin was intended to be a peer-to-peer currency, and Vexl is helping to realize that vision.

In conclusion, my conversation with Lea Petrasova was enlightening and inspiring. Vexl is not just a Bitcoin trading app, but a tool for financial sovereignty. It’s a reminder of the power of peer-to-peer transactions and the importance of maintaining control over our personal data. As Lea said, when you buy Bitcoin without KYC (Know Your Customer), you avoid the complexities and risks associated with centralized exchanges. So, why not give Vexl a try and experience the freedom of buying bitcoin peer-to-peer… as Satoshi intended?

Listen to Lea Petrasova talk about Vexl on Spotify, Apple Podcasts & YouTube!

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Vexl: Introduction and Purpose (00:01:51) Lea Petrasova introduces Vexl as a mobile app that allows users to buy and sell Bitcoin peer-to-peer without going through a centralized exchange or even benevolent third party.

Vexl: Comparison to Tinder (00:02:48) Lea explains that Vexl can be compared to Tinder, but users can only connect with people within their social circle, making it safer than meeting someone randomly.

Vexl: Drawbacks of Other Peer-to-Peer Exchanges (00:04:04) Lea discusses the three major drawbacks of other peer-to-peer exchanges: global order book, reputation model, and usability.

Real-world reputation in the app (00:12:17) Lea explains how Vexl brings users’ real-world reputation into the app, allowing them to see common contacts and social circles when buying or selling Bitcoin.

Using phone numbers as identifiers (00:15:27) Lea discusses why Vexl uses phone numbers as identifiers, highlighting their widespread usage and the ability to match users with contacts and contacts of contacts.

Vexl’s monetization model (00:16:54) Lea Petrasova explains that Vexl is a free, open-source project and a gift from Satoshi Labs to the community, with no plans for monetization or collecting fees from Bitcoin peer-to-peer trades.

No fees, no data collection, and open-source(00:24:15)

Lea Petrasova explains the absence of fees and data collection in Vexl, as well as its open-source nature.

Expansion of Vexl to other markets and the gradual scaling process (00:25:45) Lea discusses the expansion of Vexl to other markets, such as Germany, Austria, Switzerland, the UK, and Italy, and the gradual scaling process observed in these territories.

Usability improvements and new features planned for Vexl (00:26:59) Lea Petrasova highlights the focus on improving usability and adding new features to Vexl, such as a trade calculator and better map functionality.

Vexl and Chill (00:36:47) Lea discusses how buying bitcoin through Vexl eliminates the complexities and concerns associated with centralized exchanges.

The Origin of Vexl (00:38:15) Lea explains that the term “vexl” dates back to communist Europe and refers to proxy merchants who exchanged foreign currencies.

The Importance of Peer-to-Peer and No KYC (00:43:40) Lea emphasizes the need for peer-to-peer transactions without KYC requirements to maintain the financial sovereignty and intended purpose of Bitcoin.

The concept of Firefish is simple: it’s a platform that connects people interested in taking fiat money loans against their bitcoin with people or institutions that may want to speculate on bad debt payers to buy more bitcoin on the cheap. Firefish treats bitcoin as an asset which becomes subject of agreements between parties and encourages people to never sell their bitcoin.

When I visited Martin and Igor at their office in Prague, they were enthusiastic and driven to create a superior service. After all, they paid Slovakian superstar Martin Habovštiak to take care of the coding and also made sure they’re covered from a legal point of view.

Now Firefish is looking to expand in a multitude of territories and markets, with the intention to make it simple for anyone to use their bitcoin as a collateral for a non-taxable fiat loan. At the time of recording this interview, Firefish was still in beta. But as soon as the code receives all the audits and battle testing, market players are expected to take their swings and take part on either side of the lending deal.

Firefish: A Non-Custodial Platform for Bitcoin Loans

Firefish is a non-custodial platform that allows users to use their Bitcoin as collateral to get a fiat cash loan. It’s a marketplace that connects borrowers and investors, with loan transactions happening directly between the parties involved. The fiat transactions are settled through standard bank transfers, but Firefish is also working on additional channels for transactions.

This unique setup allows users to take fiat without selling their Bitcoin and without paying capital gains tax. The loan is paid to a specific person or institution, and the borrower repays the loan directly to the lender. The Bitcoin is locked in a smart contract on the Bitcoin network, ensuring its security.

Firefish: More Than Just a Loan Platform

While speculation is one use case for Firefish, the platform also caters to users who want to buy more Bitcoin or invest. The platform also includes a “zombie apocalypse transaction” that allows users to recover their Bitcoin in the event of a catastrophic event.

Firefish also uses oracles in the system, currently implemented by the Firefish team. They are considering implementing Discreet Log Contracts (DLC) to improve the payment workflows. Firefish’s technology replicates the functionality of covenants, allowing for specific conditions to be set for spending the escrowed Bitcoin.

Who is Firefish For?

Firefish is designed for bitcoiners who can benefit from the erosion of fiat currency purchasing power. It also allows traditional finance institutions to interact and fund Bitcoin-backed loans without needing to hold any cryptographic materials.

Firefish takes legal compliance seriously. Their loan agreements have been carefully crafted with the help of legal experts. They are a software provider and do not touch fiat or Bitcoin directly. While they acknowledge the possibility of being banned in certain jurisdictions, they believe their setup is legally compliant, especially in the European Union.

Dispute Resolution and KYC Requirements

Firefish has a resolution procedure in place to investigate and resolve any disputes between the borrower and lender in a fiat transaction. This procedure ensures that the money is properly accounted for.

Currently, Firefish does not require Know Your Customer (KYC) requirements as they are providing the software for free. However, as the platform evolves into a commercial product, they may need to implement KYC measures to comply with regulations. They are considering implementing stablecoins as an option in the future to offer more privacy and less overhead in terms of KYC.

The Story Behind the Name

The name Firefish doesn’t have a deeper meaning. It’s random, and while we joked about the possibility of changing it, Martin and Igor decided to stick with Firefish.

Join the Firefish Beta

Martin and Igor invite listeners to sign up for their beta and help improve the platform. They are building a missing piece of bitcoin infrastructure and encourage users to join their Discord channel for support and updates. They have the ambition to expand globally and serve users from around the world.

Listen to Martin and Igor talk about Firefish on Apple Podcasts, Spotify, YouTube & more!

▶ Play video Watch on YouTube

On the other hand, Calle finds himself in a slightly different situation: back in September 2022, probably while I was sitting with him at a table in a Riga bar during Baltic Honeybadger, he came up with Cashu. Essentially, Cashu is Chaumian ecash for custodial Lightning wallets. So even if your funds are held by someone else, you can still get a large degree of privacy against your custodian.

Lisa and Calle are an unlikely pairing: they have different personalities and focus on projects that don’t have too much in common. However, this interview has been a lot of fun. So much fun that we took a break after the first hour, went upstairs to get a few more drinks at the Paralelni Polis cafe, and then came back to record for another hour!

The Importance of Privacy in the Bitcoin Community

Our conversation kicked off with a discussion about the importance of privacy in the Bitcoin community. We were all present at the HCPP event, which featured a variety of talks and presentations – including one by Richard Stallman on the importance of free software. We briefly debated on the difference between open source and free software. The topic would become a recurring theme throughout our discussion.

“Bitcoin doesn’t need e-cash to work, but bitcoin improves e-cash.”

Calle, 2023

Free Software vs. Open Source

We delved deeper into the concept of free software and open source. Calle pointed out that being open source is only one aspect of being free software, and there are four criteria for it. We also talked about Richard Stallman and his long-standing involvement in the free software movement, which started in the 90s. Lisa reflected on the state of software development and how it may feel for someone like Stallman who has been fighting for free software for so long. We all agreed that Stallman’s appearance at the conference was an opportunity for him to share his message with the audience, who are the ones that will carry it forward in the future.

The Global Reach of the Internet and Bitcoin

Our conversation then shifted to the global reach of the internet and how it affects the distribution of apps and services. We acknowledged that simply shipping an app does not guarantee it will reach every market and distribution center in the world. We highlighted the unique positioning of companies like IBEX Mercado and Brink Galloy in South America, which have found success by catering to specific locational factors and adopting Bitcoin.

The Advantages and Disadvantages of Open Sourcing Software

We also discussed the advantages and disadvantages of open sourcing software. While closed source software may protect a company’s competitive advantage, it also limits the potential for growth and innovation within the global ecosystem. We expressed both excitement and concern about the current state of the Lightning Network, acknowledging the need for more exploration and funding for its development.

Running Lightning Nodes at Home

One of the key topics we discussed was the importance of running nodes and services at home as part of the Bitcoin project. Calle expressed excitement about the idea of people running their own nodes and servers at home, comparing it to the early vision of the free software movement where individuals would operate their own web and mail servers. However, Lisa pointed out that running a Lightning node at home may not fulfill all the needs of a daily Lightning wallet, as Lightning works better with a lot of channels and capacity.

“As bitcoiners, we don’t appreciate how much our participation in the privacy space is important for both bitcoin and the builders and hackers in this space.”

Lisa Neigut, 2023

The Success of Umbrel and Other Not Really Open Source Software

We also discussed the success of a software called Umbrel, which we believe is due to its commercial license that doesn’t allow forking and commercial deployment. While Umbrel is not our favorite software, it has a user-friendly interface similar to Apple’s. We also mentioned other alternatives like RaspiBlitz, My Node, Nodl, and Start9 Embassy OS.

Calle Explains the Potential of E-Cash

Towards the end of our discussion, we touched on the potential of Chaumian e-cash and its impact on privacy and financial systems. Calle emphasized how e-cash is scalable, cheap, and fast, making it an excellent tool for improving privacy. It eliminates the need for user databases and transaction tracking, making it less complex to run services.

The Concept of the “Supra Cycle”

We ended our discussion on a lighter note, discussing the concept of the Supra Cycle – which involves getting a Toyota Supra and a girlfriend as a symbol of success and independence. We joked about the Supra being “the pleb’s Lambo”: 90% of a Lamborghini experience at a fraction of the price.

The Future of Bitcoin, according to Lisa Neigut and Calle

My discussion with Lisa Neigut and Calle was insightful and thought-provoking. We delved into various aspects of Bitcoin, from privacy to free software, and how we can scale it. Our opinion is that Bitcoin has a bright future, and we look forward to seeing how it evolves. Lisa also invites all listeners to join her at the upcoming Bitcoin++ events, while Calle encourages you to try Cashu.

Listen to Lisa Neigut and Calle talk about scaling Bitcoin and free open source software on Apple Podcasts, Spotify & YouTube!

▶ Play video Watch on YouTube

Time stamps:

00:01:20 – Introduction to Base58 & Cashu

00:02:42 – Base58 and the Bitcoin++ conferences

00:06:58 – Richard Stallman and the Free Software Movement

00:10:45 – What is free software?

00:14:06 – What is open source software and why is it limited in certain Bitcoin projects?

00:19:20 – Exploration of the benefits of having smaller entities running systems rather than relying on one large company, and the potential for reaching untapped markets.

00:20:31 – Bitcoin’s global adoption (IBEX, Brink)

00:21:12 – Open Source vs Closed Source Software

00:25:15 – Concentration of Lightning Network Nodes

00:30:09 – The Home Node and Lightning’s Scalability Issues

00:33:30 – Bitcoin as the Catalyst for Self-Sovereignty

00:38:34 – The Importance of Umbrel in the Self-Sovereignty Movement

00:39:21 – The success of closed-source software

00:40:19 – RaspiBlitz, MyNode, Nodl, Start9 Labs Embassy OS vs Umbrel

00:41:22 – Discussion on the need for free software

00:48:50 – The bootstrap process of the Lightning Network

00:49:44 – Ark and VC money

00:50:38 – Centralization concerns with ARK

00:57:58 – Ark vs Drivechains

00:59:12 – Sidechains and extension blocks

01:01:27 – Ark & CTV are educational

01:08:54 – A short history of ecash

01:10:24 – Ecash enables privacy + scalability

01:11:34 – How Cashu works on Lightning

01:19:13 – Scaling Bitcoin with Cashu

01:20:14 – Blind Signature Scheme and Privacy in eCash

01:21:58 – The Supra Cycle & girlfriends

01:29:45 – Will HODLing BTC make you rich?

01:30:13 – Why hard money matters

01:32:38 – Bitcoin adoption needs payments for increasing demand

01:40:30 – The role of miners in Bitcoin

01:41:34 – Bitcoin follows incentives, not virtue

01:43:11 – How do we measure Bitcoin’s success?

01:54:13 – Bitcoin’s fee market

01:57:10 – Can Bitcoin succeed without high fees?

01:59:15 – Should we wait until the problems actually become urgent?

02:00:10 – Scaling Bitcoin with Lightning Network

02:01:16 – Optimism for Future Bitcoin Developments

02:02:15 – Importance of Research and Multiple Proposals

Last year, Labitconf was all about the football world championship – which the Argentinian team coincidentally won. However, earning the gold trophy among all nations of the world didn’t also bring prosperity to the country. According to published statistics, the inflation rate in Argentina is higher than 100% – and is soaring dangerously towards 200%. In less than one year, the inflation in the country nearly doubled and the economic consequences are also manifested in the social and political realm.

I’ve contacted Rodolfo because I really wanted to talk about Labitconf. But it’s hard to ignore the context of the presidential elections: where classical liberal candidate Javier Milei is taking on the establishment, represented by current finance minister Sergio Massa. Milei follows the teachings of Hayek and favors a world where currencies compete on a free market – and is therefore in favor of bitcoin.

However, as Rodolfo Andragnes made it clear during this interview, allowing bitcoin to exist does not equal the enactment of a legal tender law (as was the case in El Salvador). While legal tender laws impose the use of a currency “from above” and ask every merchant in the country to accept it for payments, a free market allows everyone to use any kind of money they prefer. Also, it seems like Argentina is heading towards dollarization – the only question is related to the environment in which the US dollar is going to exist. Will it be monopolistic, or will the market be open for bitcoin too?

In the last part of the interview, Rodolfo Andragnes offers some practical advice to foreigners who are about to come to Buenos Aires. First and foremost, they should be aware that there’s a Taylor Swift concert which takes place at the same time – and therefore most hotels are overbooked. Secondly, USD to Argentine peso exchange rates are terrible at the airport and much better on the free market. And thirdly, more than 200 speakers will make presentations related to the topic of “revolution” across multiple stages: it’s impossible to see everything, and every participant much choose their own experience (with no option to later watch recordings).

“Bitcoin is here to promote freedom, transparency, and property. It’s not necessarily embraced by governments, companies, or new regulations. It’s a revolution we need to defend.” – Rodolfo Andragnes, 2023

The Evolution of Labitconf

Rodolfo Andragnes shared the challenges of organizing the event for over ten years and the changes they have made in 2023. This includes a larger team and seven stages for attendees to choose from. He emphasized the importance of attending the conference to experience the vibe and spirit of the event.

The tickets are currently priced at $100, and approximately 200 speakers have been confirmed two weeks before the event. The focus this year is on economic and regulatory discussions, given Argentina’s hyperinflationary situation which is at play in the upcoming presidential elections. Rodolfo mentioned that they have decided to keep Labitconf in Argentina for the next few years to promote Bitcoin in the local scene.

The Potential Impact of a Libertarian President (Javier Milei) on Bitcoin

Rodolfo Andragnes discussed the potential impact of a libertarian president in Argentina on the use of cryptocurrencies. He explained that while it is unlikely that Bitcoin will become a legal tender in the country, the focus should be on allowing free trade and contracts with private money.

Currently, there is no specific regulation regarding Bitcoin in Argentina, but it has been gaining popularity – with around 10-12 million Argentinians having some involvement with cryptocurrencies. Rodolfo believes that the example set by Argentina, if it adopts a free market approach to private digital money, could influence other Latin American countries to do the same.

Bitcoin as a Free and Independent Currency

We also discussed the concept of Bitcoin as a free and independent currency, unaffected by government regulations. Rodolfo emphasized that the Bitcoin community does not care about government involvement and only focuses on the freedom and decentralization that Bitcoin offers.

The Previous Year’s Labitconf Event and Expectations for This Year

In 2022, Labitconf had over 10,000 attendees and exceeded expectations. This year, they expect similar numbers, especially with the emerging bull market. The theme of the 2023 event is “revolution,” highlighting the need to defend Bitcoin’s principles and promote freedom and transparency.

Inviting Presidential Candidates to Speak at the Conference

Due to the timing of the event being close to the presidential elections, it may be challenging to get presidential candidates on stage. However, Javier Milei is invited to speak. Other political figures from Latin America, including well-known economist and presidential candidate from Peru Hernando de Soto, have confirmed their participation.

The High Inflation Rate in Argentina

We briefly discussed the high inflation rate in Argentina, with Rodolfo mentioning it is around 180%. He explained that due to this phenomenon, prices of products change daily. This makes it difficult to determine if something is cheap or expensive.

Practical Advice on Booking Hotels and Exchanging Money

Rodolfo advised against booking hotels online and suggested paying in cash in pesos at the venue to take advantage of the official exchange rate. He also recommended exchanging dollars for pesos in the black (as in free) market to get a better value.

Connecting with Local Argentinian Communities

Rodolfo mentioned the Telegram group “Bitcoin Argentina” and the Facebook group of the same name as places to connect with locals and get advice on trading prices. Before your trip to Labitconf, you can make some friends who might be useful once you land in Buenos Aires.

The Potential Impact of Bitcoin in Argentina

Rodolfo Andragnes believes that Argentina is a good place to go and understand the potential impact of Bitcoin, especially considering factors such as possible presidential changes and the likely closure of the central bank (if Milei wins and keeps his word).

The Bitcoin Takeover Magazine

Rodolfo expressed his appreciation for the concept and design of the Bitcoin Takeover magazine. He mentioned receiving a previous edition and expressed interest in the new edition called “Breaking FUD,” which aims to address misconceptions about Bitcoin.

The Legality of Bitcoin in Bolivia

Rodolfo explained that Bitcoin is currently banned in Bolivia, but he believes that forbidding something does not necessarily prevent its use or discussion among individuals.

The Lineup of Speakers at the Upcoming Labitconf Event

Rodolfo mentioned that the CEO Xapo is attending (though Wences Casares won’t make it) and there are many other notable speakers including Álvaro D. María, Elizabeth Stark, John Light, and the president of Liberland.

The Bilingual of the Event

The event consists of both English and Spanish content, with around 40% of it being in English. The main focus of the event is discussions on topics like inflation, economy, and monetization, with a particular emphasis on Argentina as an example for the world.

Staying Updated with the Latest Announcements

Rodolfo suggests following the event on Twitter and Instagram, as well as checking the event’s website for updates on the agenda and speaker information.

Listen to Rodolfo Andragnes talk about Labitconf 2023 and the Argentinian Presidential Elections on Apple Podcasts, Spotify & YouTube!

If you use big tech platforms, then please leave every type of feedback that’s available (likes, comments, upvotes, shares) and also subscribe. It helps the project grow and will also help others discover the content with greater ease.

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Time stamps:

Introductions [00:01:11] Welcoming Rodolfo Andragnes to the Bitcoin Takeover podcast, mentioning the upcoming Labitconf event in Buenos Aires, Argentina.

Organizing Labitconf [00:02:05] Rodolfo Andragnes discusses the challenges of organizing the Labitconf event and the changes made for this year’s edition.

Javier Milei’s impact on Bitcoin adoption [00:11:57] Discussion about the potential impact of the upcoming presidential elections in Argentina on the local bitcoin scene.

Legal Tender and Free Currency [00:12:29] We discuss the concept of legal tender, the importance of having free currency, and the potential impact of a libertarian president.

Current Legal Status of Bitcoin in Argentina [00:14:33] While there is no active regulation regarding Bitcoin in Argentina, some regulations interact with crypto assets and there are taxes on capital gains.

Bitcoin as Legal Tender and its Impact [00:17:47] Rodolfo Andragnes explains the unrealistic expectation of Bitcoin becoming a legal tender in Argentina and the potential influence of Argentina’s policies on other Latin American countries.

Bitcoin as Legal Tender [00:25:47] Discussion about the pros and cons of countries adopting bitcoin as legal tender.

El Salvador’s Implementation [00:26:22] Differentiating between El Salvador’s implementation of bitcoin as legal tender and the concept of legal tendering bitcoin in every country.

Revolution and Defending Bitcoin [00:34:51] Exploring the concept of revolution and the need to defend bitcoin’s principles and philosophy.

The impact of inflation on daily prices [00:36:47] Rodolfo explains how inflation affects the prices of products on a daily basis and the challenges of comparing prices.

Safety concerns in Buenos Aires [00:39:18] Exploration of whether Buenos Aires is less safe than previous years and the prevalence of crime in certain areas.

Practical advice for attending the conference [00:42:34] Tips on booking hotels, exchanging money, and navigating the Argentinian black market for better exchange rates.

Bitcoin in Argentina [00:49:26] Discussion on the impact of Bitcoin in an inflationary country like Argentina and why it is a good place to understand the potential impact in other countries.

Bitcoin Takeover Magazine [00:53:33] Conversation about the Bitcoin Takeover magazine, its design, and its relevance to the event.

Breaking FUD [00:55:26] Introduction to the Breaking FUD project, which aims to address and debunk the top ten biggest misconceptions about Bitcoin.

Topics being discussed at Labitconf 2023 [01:03:15] Rodolfo Andragnes discusses the main topics of discussion at Labitconf: inflation, economy, and monetization.

According to Philipp Hoenisch, 10101’s synthetic stablecoins are not entirely trustless. But they are trust-minimized and resistant to arbitrary government regulations and censorship. Unlike something like Tether (USDT) or USDC, there is no central issuer, there is no KYC for redeeming, there is no bank, the fees are lower, and there is no custody of funds.

In an era when such projects tend to get threatened by regulators and governments, it’s useful to have alternatives which require a lesser degree of trust.

Philipp also explained that 10101 represents the binary representation of 21 million bitcoins, symbolizing their core value of creating self-custodial solutions with no counterparty risk. Their journey began with building derivatives on Bitcoin, but they soon realized the potential of creating a synthetic stablecoin without a token issuer. This synthetic stablecoin represents the value of a stablecoin in US dollar terms, but it is not an actual token that is sent around.

10101: Achieving Stability in a Volatile Market with USDP

The stability of this synthetic stablecoin is achieved through a short position against the Bitcoin-USD exchange rate. Users lock up Bitcoin in a contract, and if the price of Bitcoin increases, they lose parts of their Bitcoin but remain stable in US dollar terms. The stability is maintained without the need for a trusted third party or stablecoin issuer.

An oracle is used to ensure the contract is executed at the defined terms. The oracle attests to the Bitcoin price at regular intervals, and its trustworthiness can be verified as it is open source.

Trust in Decentralized Finance

My conversation with Philipp Hoenisch delved into the concept of trust in decentralized finance (DeFi) and how it applies to Bitcoin and stablecoins. Philipp acknowledged that while nothing is completely trustless, Bitcoin is designed to minimize trust and offers a good level of trust for those who don’t want to rely on third parties like Tether. However, he noted that stability is not guaranteed in Bitcoin, as the value of holdings can be affected by exchange rate fluctuations.

Addressing Liquidity and 10101’s Potential of Stablecoins

We also discussed the issue of liquidity, with Philipp acknowledging that it is a significant challenge that needs to be addressed. He explained that 10101 initially started as a side project focused on trading, leveraging the liquidity of Bitcoin and its derivatives. The stablecoin aspect emerged later, targeting users who want stability in USD terms while transacting on Bitcoin and Lightning. Philipp sees potential in this approach for third-world countries where people want censorship resistance but also want to mitigate exchange rate risks.

The Impact of Taproot Assets on the Bitcoin Ecosystem

Our conversation revolved around the use of Taproot Assets and their impact on the Bitcoin ecosystem. Taproot Assets allow for the issuance of tokens on the Bitcoin network, but raise questions about trust in the token issuer. The advantage of using Taproot Assets is that they provide a decentralized alternative to traditional token issuers like Tether. However, there is a risk involved if the token issuer disappears, as the tokens may become worthless.

The Role of HODLing in Bitcoin’s Security

We also touched on the concept of HODLing and its impact on Bitcoin’s security. I argued that HODLing, or holding onto bitcoin without using it for transactions, can be problematic as it relies on others who do transact to pay the miners. As the block subsidy decreases over time, there will be a need for more transactions to sustain the network’s security. However, Philipp countered by stating that HODLing is not a significant issue as eventually, HODLers will need to use their Bitcoin for spending or other purposes.

The Potential of 10101 Stablecoins from a Trader’s Perspective

Philipp discussed the potential traction that 10101 can gain from a trader’s perspective. He mentioned that trading is a common use case and highlighted BitMEX as an example. BitMEX initially started as a Bitcoin-only exchange, settling trades in Bitcoin. While they now offer other coins, Bitcoin settled futures and options remain the largest part of their exchange. However, Philipp Hoenisch pointed out that traders have to accept counterparty risk, which is becoming a growing concern. He believes that there is a demand for a more counterparty risk-free trading solution, and 10101 could be that solution.

The Vulnerabilities of Exchanges and the Need for Decentralized Solutions

Our conversation then shifted to the topic of exchanges and their vulnerabilities. Philipp mentioned the unfortunate incidents of Mt. Gox and FTX, emphasizing that similar situations may happen again, whether intentionally, by mistake, or due to regulatory actions. He believes that decentralized and trustless solutions will become more desirable as attacks on exchanges increase.

The Future of 10101 and the Integration of Taproot Assets and DLCs

When asked about the possibility of regulation for 10101, Philipp explained that there is some centralization involved in the form of an oracle that coordinates activity due to technical limitations. However, he hopes to decentralize the system in the future or have others run their own coordinators.

Building on Bitcoin vs Ethereum

Philipp and I also discussed the risks and challenges of building on Bitcoin compared to Ethereum. I argued that building on Bitcoin is more difficult and time-consuming, but also less risky due to its decentralized and robust infrastructure. Philipp added that building with Ethereum’s JavaScript Solidity contract is easier – but not necessarily secure. We both agreed that the challenge lies in gaining traction and getting people to use the platform.

The Role of 10101 in the Trading World

I asked Philipp if 10101 was built for personal use, to which he responded that it was primarily built for traders. He explained that the goal of 10101 is to eliminate counterparty risk in trading and support the decentralized peer-to-peer movement for small traders.

Comparing the Synthetic USD Stablecoin (USDP) by 10101 with Other Stablecoins (USDT, USDC)

We then delved into a comparison between 10101’s synthetic USD stablecoin (USDP) and other stablecoins like Tether and USDC. Philipp highlighted the advantages of USDP, such as the self-custodial nature and the low fees. We also discussed the role of KYC (Know Your Customer) requirements in different stablecoin systems.

The Power of Community Engagement

Our conversation concluded with a heartwarming interaction with a listener who has been actively participating in the chat. This Brazilian developer expressed his love for 10101 and his willingness to contribute to its adoption. It was a testament to the power of community engagement and how the Bitcoin Takeover podcast makes a significant impact in the space.

In conclusion, our conversation with Philipp Hoenisch was a deep dive into the world of stablecoins, the potential of the Lightning Network, and the future of decentralized finance. It was a testament to the innovative spirit of the Bitcoin community and the potential of projects like 10101 to revolutionize the way we transact and trade.

Listen to Philipp Hoenisch on Spotify, Apple Podcasts & YouTube!

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The creation of 10101 (Ten Ten One) [00:00:22]
Philipp explains the concept and purpose behind 10101, a project focused on building derivative stablecoins on Bitcoin.

The development of a synthetic stablecoin [00:03:28]
Philipp discusses the concept of a synthetic stablecoin, which represents the value of a stablecoin without being an actual token.

The role of the oracle in the synthetic stablecoin [00:06:13]
Philipp explains the function of the oracle in the synthetic stablecoin, which ensures the execution of the contract at defined terms.

The trust level and risk in Bitcoin [00:12:00]
Discussion about the trust level and risk involved in using Bitcoin and stablecoins, and how it depends on individual preferences.

Generating synthetic BTC tokens [00:13:47]
Exploring the possibility of creating synthetic BTC tokens based on different price curves, and the need for an oracle and counterparty.

Liquidity challenge and target users [00:15:14]
Addressing the liquidity challenge of the project and discussing the target users, including those in third-world countries who want stability in USD terms while transacting on Bitcoin.

Taproot Assets and their advantages [00:24:39]
Discussion on Taproot Assets and their advantages for creating tokens on Bitcoin, including the question of trust in the token issuer.

Competing protocols for stablecoins on Bitcoin [00:25:55]
Exploration of different protocols, such as RGB and Taproot Assets, and their potential to create superior projects for stablecoins on Bitcoin.

Bitcoin’s cultural issue and rejection of alternative tokens [00:28:45]
Analysis of Bitcoin’s cultural issue and resistance to welcoming other tokens, as well as the potential use and adoption of Taproot Assets compared to Liquid.

Bitcoin as a Common Use Case [00:36:29]
Discussion on the traction of Bitcoin trading and the counterparty risk involved.

Regulatory Challenges and Decentralization [00:39:35]
Exploring the potential regulation of 10101 and the possibility of decentralization.

Synthetic Stablecoin and Risk Management [00:44:19]
Explanation of the pegging mechanism and risk management strategies for the 10101 stablecoin.

The bull market plan [00:48:43]
Discussion about buying a Supra, institutions having weak hands, and dumping on them during a bull market.

Attending conferences and networking [00:50:24]
Conversation about attending BTCPrague and Baltic HoneyBadger conferences, giving technical talks, and the value of networking at conferences.

Using stablecoins on Lightning Network [00:54:17]
Exploration of using stablecoins for payments, orange peeling, and onboarding people to Bitcoin and Lightning Network.

Building on Bitcoin is Hard [01:00:35]
Discussion on the technical challenges and time-consuming nature of building on the Bitcoin blockchain compared to Ethereum.

Introducing 10101 [01:02:27]
Philipp talks about the motivation behind creating 10101 and the goal of eliminating counterparty risk for traders on exchanges.

Comparing Stablecoins [01:04:01]
Comparison between different stablecoin projects, including USDT, USDC, Brink, and 10101’s USDP, in terms of trust, custody, fees, and KYC requirements.

Why Bitcoin Takeover podcast matters [01:12:41]
Vlad talks about his role and the purpose of the podcast, which is to connect people and promote interesting Bitcoin projects.

Philipp’s Support for the Project [01:12:52]
Vlad expresses his enthusiasm for the project and mentions a Brazilian coder who says he can help with development.

Thanking Philipp and Wishing Him Luck [01:13:50]
Vlad thanks Philipp for his support and wishes him luck with the project.

I had the honor to interview Mr. Zimmermann on September 26th 2023, during the Proof of Work Summit which took place in Prague. Thanks to Bob Summerwill of the ETC Cooperative, who organized the conference, I was able to spend a little more time with Phil Zimmermann and have a brief private conversation which made this interview happen.

Since the recording took place after the main stage presentation by the PGP creator, I took on the challenge to ask him questions on topics that were not addressed during the keynote speech. Therefore, we spoke about open source cryptography projects, his views on Bitcoin, his friendship with Hal Finney, cypherpunk culture, telephony, privacy, and national security.

Phil Zimmermann: The Independent Cypherpunk Who Created PGP

When asked about his involvement in the cypherpunk scene in the 1990s, Phil explained that he was more ideologically independent, as well as geographically separated from the cypherpunks in Silicon Valley. While he didn’t fully align with their libertarian and anarchist ideas at the core of the movement, he agreed with their policy interests. He mostly remained silent and focused on writing code, only speaking publicly after a criminal investigation began – during which he famously advocated for strong cryptography and paved the way for other projects to emerge.

The Open-Source Nature of Phil Zimmermann’s Work

While Phil Zimmermann’s work is open-source, his primary motivation was to get extensive peer review for his encryption software. He wanted to ensure that strong encryption software was thoroughly examined and benefited from the expertise of others.

Hal Finney and the Birth of PGP V2 with Trust Model

Phil hired Hal Finney to work on PGP. Admittedly, Hal had been working on PGP for a couple of years before joining the project as an employee. Due to time constraints and financial difficulties, Phil had to release the first version of PGP without the trust model implemented. Hal’s help allowed them to release version two, which completed the shortcomings of the original.

Hal’s Interest in Digital Currency

Hal was interested in creating a digital currency native to the internet. He was working on proof of work, which solves the double spending problem. Phil acknowledged that he never had any ideas about creating cryptocurrencies himself, as his focus was on privacy technologies.

The Interest in Secure Telephony of Phil Zimmermann

Phil Zimmermann wanted to develop secure telephony before encrypted e-mail, but the necessary technologies weren’t available at the time. He eventually worked on secure telephony when the SIP protocol and broadband became more prevalent.

Phil’s Thoughts on Improving Bitcoin

When asked about his thoughts on improving Bitcoin, Phil pointed out to the carbon footprint aspect. He mentioned that he has been working on ideas, but they are not yet ready for publishing.

Cryptography Projects Phil Zimmermann Admires

Phil acknowledged the cleverness of Bitcoin but stated that his focus has been on personal communication protocols for privacy and end-to-end encryption in email and telephony. He expressed his respect for David Chaum’s brilliant protocols but noted that Chaum’s ideas faced challenges due to aggressive patenting.

In conclusion, my conversation with Phil Zimmermann was a deep dive into the world of cypherpunks, the birth of PGP, and the evolution of Bitcoin. Stay tuned for more insightful episodes on the Bitcoin Takeover Podcast!

Listen to Phil Zimmermann on Apple Podcasts, Spotify & YouTube!

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This episode is sponsored by Wasabi wallet, Cryptosteel, Satodime, and ShopInBit.

Time stamps:

The cypherpunk movement in the 1990s [00:02:47] Discussion about Phil Zimmermann’s involvement with the cypherpunk scene and his ideological alignment with their policies.

The motivation behind making PGP open source [00:07:30] Exploration of Phil Zimmermann’s reasons for making PGP open source, including the desire for extensive peer review and the benefits of strong encryption software.

The impact of PGP on the development of cryptography protocols [00:10:47] Phil Zimmermann discusses how the publication of PGP, including its source code, taught many people how to do public key cryptography in software and contributed to the emergence of various protocols.

Hal Finney and Tom Hanks [00:13:11] Discussion about the potential casting of Tom Hanks to play Hal Finney in a movie.

Hal Finney’s Role in PGP Development [00:13:36] Exploration of Hal Finney’s contribution to the development of PGP and the trust model implementation.

Proof of Work and Penny Black Project [00:14:20] Explanation of proof of work and its use in solving the double spending problem and reducing email spam through the Penny Black project.

17:48 – Did Phil Zimmermann ever think about inventing Bitcoin? 

19:13 – Silent Phone

 20:40 – Encryption is fast 

22:45– When did Phil Zimmermann hear about Bitcoin for the first time? 

24:07 – Is Phil Zimmermann proud of enabling Bitcoin? 

24:44 – Phil Zimmermann’s disappointment about Bitcoin

Improving Bitcoin and Carbon Footprint [00:26:39] Discussion on ideas for improving Bitcoin, particularly in relation to reducing its carbon footprint.

David Chaum’s Ideas and Patents [00:29:47] Conversation about David Chaum’s ideas and patents, and their impact on the acceptance and development of electronic cash, including Bitcoin.

End-to-End Encryption and National Security [00:32:49] Exploration of the importance of end-to-end encryption for preserving democracy and national security, particularly in the context of networks controlled by potentially adversarial entities like China.

Full transcript:

Ad Twins (00:00:00) – You’re listening to the Bitcoin Takeover podcast, the Bitcoin podcast for OGs and intermediaries. Make sure you subscribe, leave a comment and like this episode. Also read the new BTCTKVR magazine. This episode is sponsored by Wasabi Wallet, Cryptosteel, ShopInBit and Satodime. Thank you for listening!

Vlad Costea (00:01:12) – Hello there and welcome to the Bitcoin Takeover podcast. I am Vlad and today I’m doing a very special interview here at the Proof of Work Summit in Prague. And I’m sitting next to Phil Zimmermann, who is a legendary cypherpunk who fought the privacy wars in the 1990s to make it safe for projects like Bitcoin to exist. And there is a lot to Phil Zimmermann.

You can look up his name. It’s a double N, and there is a specific page on his website which mentions that you should always write it with a double N, and it seems like people get that wrong many times. And also something that you should know during this intro is that he hired Hal Finney. I think he was the first employee who worked at PGP.

Vlad Costea (00:01:58) – Yeah. And you’ve had him as an employee for a long time. (Yeah.) And I think before that he was a video game developer. And then you got him to work on PGP, which is pretty good privacy technology to encrypt emails. And Satoshi Nakamoto used PGP. And I think, if it wasn’t for PGP, Bitcoin couldn’t exist for two reasons. First of all, there was that privacy wars situation which made it safe for someone like Satoshi to emerge. Secondly, because he used PGP. So I’m I’m awestruck and I’m going to stop talking. Sorry I even choked. It’s good to have you sir.

Phil Zimmermann (00:02:40) – Yeah it’s my pleasure.

Vlad Costea (00:02:43) – Keep the microphone a bit closer to your mouth.

Phil Zimmermann (00:02:45) – All right.

Vlad Costea (00:02:47) – So what was it like in the 1990s with the cypherpunk scene? Do you feel like you are part of that whole movement that was on the cover of Wired magazine with Eric Hughes and all of that? Or were you just an independent researcher?

Phil Zimmermann (00:02:59) – I was more independent. I lived in Boulder, Colorado at the time, and they were in Silicon Valley.

Phil Zimmermann (00:03:05) – And so I was geographically separated when I was working on PGP. At first I was working alone, and so there was a lot of separation between them. Also, my ideology was not quite as aligned with libertarian thought.

I’m not a libertarian. I’m not an anarchist. I’m, you know, I’m a moderate. And I was just… I like writing the software. At the time, I was a software engineer and more of an applied cryptographer, not a theoretician.

But, you know, I did agree with the cypherpunks on a lot of things from a policy perspective. I thought that, you know, their policy interests were aligned with my own, largely except for the libertarian and anarchy part.

Vlad Costea (00:04:09) – Yeah, I read part of the Cyphernomicom by Timothy May, and I found it a bit extreme at parts. But at the same time, I liked the whole spirit of the movement. It was uncompromising. I think that’s the word that describes it best.

Phil Zimmermann (00:04:23) – Yeah. I found Tim May’s polemics were quite extreme, and that’s part of why I didn’t feel as aligned as, you know… I was not fully aligned with their with the cypherpunk sentiments. And maybe, maybe I was putting too much reading, too much from one guy. But, you know, I didn’t feel the same way.

Vlad Costea (00:04:49) – But you were on the mailing list, right?

Phil Zimmermann (00:04:52) – That’s an interesting question. I think I was, I’m not sure. Probably it’s been 30 years. So yeah.

Vlad Costea (00:05:00) – I understand. Where I was getting with this is that nowadays we tend to argue a lot on social media and whatever, and I was curious if there were ideological debates or arguments on mailing lists back in the day.

Phil Zimmermann (00:05:12) – I didn’t get into any arguments. I was mostly silent. I just wrote code. I let other people make the arguments. I mean, after after the criminal investigation got underway, I started speaking publicly. And so I did make a lot of arguments there. There, I was trying to make the case for why we needed strong cryptography.

Phil Zimmermann (00:05:39) – We had to get away from the World War Two attitude of trying to control this technology. The information age had arrived. It was time for us to embrace it as part of the the complexities of an information society.

Vlad Costea (00:05:56) – When you published online, was it under the MIT license, which is open source?

Phil Zimmermann (00:06:03) – Well, I think the first version of PGP published under the GNU General Public License.

Vlad Costea (00:06:09) – Because I know you did publish it at MIT. So I, made this connection, which I guess was wrong.

Phil Zimmermann (00:06:16) – Well, later on, I started having more cooperation with MIT because they, MIT press published the book… the two books, The PGP User’s Guide and the PGP Source Code Book. Also they put PGP on their website site, and that was convenient for me. They were showing their solidarity by sort of implicitly saying to the feds: look, you know, if publishing this on the internet is a crime, then you should arrest MIT also. So I appreciated that vote of solidarity. And they gave me an email address.

Vlad Costea (00:07:03) – I’m not going to mention it, but I think you still use some of that. Anyway… where I was getting with this is that basically I’m not aware of open source software that was being published and was getting popular before PGP. Linux came out later. Internet browsers like Firefox came out way later. It’s very hard for me to think of open source software before PGP.

Phil Zimmermann (00:07:30) – That’s true. But I think that, well, my motivation for making open source was not the usual reasons why people make their software open source. I agreed with the idea of open source.

I thought it was a great idea. You know, I was philosophically aligned with open source, but it wasn’t my primary motivation for making PGP open source. Rather, I wanted PGP to get a lot of peer review.

And I thought that the best way to achieve that was to make it open source. So I was more interested in the goals of having strong encryption software be extensively peer reviewed and benefiting from that. So, you know, open source was a way of achieving that.

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Vlad Costea (00:09:10) – That was a good reason, but I guess that also got you into trouble. Because open source means that anyone can read, can copy, can modify, can reverse engineer what’s happening there to replicate, distribute, maybe sell if they want.

Phil Zimmermann (00:09:27) – Well I didn’t want them to sell it. I, you know, I wanted to… if anybody’s going to sell it, I’d rather it be me.

Phil Zimmermann (00:09:33) – But I wasn’t trying to sell it. I was giving it away. And so, you know, later on, I met someone who was a senior cryptographer at NSA who had retired, and he told me… Robert Morris, you might remember that there was a internet worm. One of the early internet worms was Robert Morris junior, his son. But Robert Morris Senior was this most senior cryptographer at NSA.

And I met him many years later after he retired. And he told me that that one of the things that worried the NSA about the publication of PGP was that it included source code and that the the guys at NSA looked at this, and their biggest concern was that this would teach a lot of people how to do good key management and good software development for, you know, public key cryptography.

They were afraid of it metastasizing. And it did. And, you know, a lot of people looked at it and learned from it and developed their own applications. And, you know, we saw the emergence of a lot of protocols.

Phil Zimmermann (00:10:47) – Now, I don’t want to take credit for all those protocols. I’m just saying that PGP helped teach a lot of people how to how to do public key cryptography in software.

Vlad Costea (00:11:01) – Speaking of public keys, it was one of the first systems of which I’m aware, which had this structure with a public key and the private key. And the public key was for identification to prove that it was you who sent that message, and you would sign the message with the private key. And that was enough of a proof for the other person to know that, first of all, yes, it was encrypted. But there was also this layer of identification to know that it was you who sent the message. I think that’s really cool. And Bitcoin developers still use that to this day.

Phil Zimmermann (00:11:35) – Yeah, well, I didn’t invent that idea. That part came with the invention of public key cryptography. I just applied it. I’m not a I’m not a real cryptographer. I’m an applied cryptographer.

Phil Zimmermann (00:11:51) – I’m not a theoretician. So at that time, I was just interested in writing software that would implement these ideas. And actually, I haven’t written any software for many years. My life was taken over by the political and legal travails of PGP, and I got away from writing code myself. Instead, I had volunteers work on it for me.

Vlad Costea (00:12:18) – Which is, I guess, even better because there is only so much work you can do yourself, right? But others can keep the project alive in perpetuity.

Phil Zimmermann (00:12:27) – That’s right. And one of those volunteers was Hal Finney, so. It was great. I loved working with Hal. He was he was a a great guy and a kind and generous soul. You know, Halw was how was an absolute genius. And what we see often happens with geniuses is that they pay for their genius with social maladroitness. You know, they sometimes lack emotional maturity. But that never happened to Hal. Hal did have good emotional maturity, and he was a generous, kind person.

Phil Zimmermann (00:13:11) – And so if they ever wanted to make a movie about Hal, they’d have to have Tom Hanks play him.

Vlad Costea (00:13:18) – Do you think you would have liked Tom Hanks to play in his biopic?

Phil Zimmermann (00:13:24) – Well, I think they’re of comparable age, but as the years go by, Tom Hanks keeps getting older and Hal doesn’t because he died many years ago.

Vlad Costea (00:13:36) – Yeah, it’s certainly interesting that he was the first person you hired. And why was that? Was he such a special coder or was he just the most enthusiastic?

Phil Zimmermann (00:13:44) – Well, Hal had been working on PGP for a couple of years before that, almost since I published version one. He immediately volunteered to help, and it helped us get to version two. In version one, I didn’t have the trust model implemented yet because I ran out of time. I missed five mortgage payments writing it, and I was about to lose the house, and so I had to release it without the trust model. I knew what the trust model had to be. I knew how it should work, but I didn’t have time to write it.

Phil Zimmermann (00:14:20) – So version two came out 15 months after version one, and that did have the trust model largely similar to the way it is today. And Hal worked on that. Hal worked on implementing that.

Vlad Costea (00:14:36) – Hal was also very passionate about creating something like Bitcoin. He had reusable proof of work (RPOW) that was published in 2004. He was friends with Nick Szabo, who did his Bit gold experiment, which never came to fruition. Did he ever talk about internet money and creating a currency that’s native to the internet?

Phil Zimmermann (00:14:57) – Well, I knew that he was working on proof of work. And, you know, that solves the double spending problem. So that’s a very clever. That’s a very clever idea. Proof of work had already existed for solving other problems. I mean, one of the earlier problems that it that it was proposed as a solution was spam. Microsoft had a project called Penny Black, named after the first postage stamp that happened, I don’t know, centuries ago in England. But the Penny Black project used proof of work to try to reduce how much spam you get.

Phil Zimmermann (00:15:43) – So you would send somebody an e-mail and your mail server would talk to their mail server and give it a… the recipient’s mail server would give a cryptographic puzzle to solve to the sender’s mail server, and then it would have to solve that puzzle which involves finding a hash preimage. And then it would send the email along with the solution, and it would the recipient would mail server would check that solution, and if it was correct, it would deliver the email.

And so that was a clever idea, except that that was before e-mail spam really took off with bot networks where you had, you know, thousands of PCs participating in the spamming. And so even if that would increase the workload for a spammer, if he distributes it amongst thousands of PCs, he could overcome this. So that may be why Penny Black never became a widely deployed solution. But anyway, that was one use of proof of work, and later proof of work was used to solve the double spending problem along with the blockchain construct.

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Vlad Costea (00:17:48) – I asked you about Hal Finney potentially thinking about creating a digital currency, which is native to the internet, but did you ever have that idea or did you have a concept for this? I know in the 90s it was a big thing. People were thinking how to send each other money for servers and remailers and stuff like that without using banks.

Phil Zimmermann (00:18:08) – I never, had any ideas about doing cryptocurrencies. That wasn’t my focus. I was just focused on privacy technologies.

Phil Zimmermann (00:18:19) – My biggest interest after PGP was secure telephony. And in fact, I wanted to do secure telephony first, before e-mail. But it was too early. The enabling technologies weren’t there yet.

Nobody had broadband, for example, and the SIP protocol wasn’t invented yet, so I had to wait. I did try to do it in 1995 with PGP phone, but it was a decade too early.

So a decade later, when the SIP protocol helped with the signaling part of the call, and then there was RTP to handle the media. Then it was time… and lots of people were getting broadband around that time. So then it was time to put my attention back on secure telephony.

Vlad Costea (00:19:13) – I also have to ask you about this, because today you showed me there is an application in the App Store and Google Play which uses cryptography similar to Signal’s, but has some interesting features of its own. It’s a messaging app that’s encrypted. Can you tell me more about that?

Phil Zimmermann (00:19:29) – That’s Silent Phone from Silent Circle, and it’s a it’s a really nice, secure telephony project that solves the man in the middle problem in a unique way.

Phil Zimmermann (00:19:46) – It’s tailor made for… it’s an encryption protocol that’s tailor made for telephony. Signal is a protocol used for text messaging. And you can use Signal to transport a session key that you feed into telephony. But my protocol ZRTP is designed specifically for telephony. And I do use the Signal protocol for text messaging. So the app actually does both text messaging and attachments, and telephony.

Vlad Costea (00:20:24) – So by telephony you also mean video calls and stuff.

Phil Zimmermann (00:20:28) – Yeah. Yeah. Voice and video.

Vlad Costea (00:20:31) – So everything is encrypted with your application.

Phil Zimmermann (00:20:33) – Yeah. End to end.

Vlad Costea (00:20:33) – And does it cause any kind of lag or is it fluid?

Phil Zimmermann (00:20:40) – No. It doesn’t take much time for the encryption. You know, voice compression takes more computing than the encryption.

Vlad Costea (00:20:48) – I didn’t know that.

Phil Zimmermann (00:20:50) – Yeah. I mean, you know, nobody would use encryption if it was too slow. I mean, for example, disk encryption has to be fast. Nobody would use it otherwise because the disk is a very high speed IO device.

Vlad Costea (00:21:10) – When you tell me about encryption, I think about stuff like Tor, which usually slows down your connection. (It does. Yeah.) Or Nym. I spoke with the guys from Nym last year, and they told me that when they do a video call, there’s like a few seconds of delay.

Phil Zimmermann (00:21:24) – Yeah. You know, video calls are not a place where you want to have that kind of latency. You know, when you’re doing e-mail, you can go through intermediaries. You know, there’s protocols for that. There’s mixing of e-mails.

You know, there’s onion routing of e-mails. And nobody cares if that takes extra time because it’s e-mail. Web browsers, they have to be faster. And so people will tolerate a little bit of delay for web browsing, but not much.

But for telephony, for having a voice or video conversation, there’s no tolerance for latency. People hate latency when it comes to telephony. I mean, if you have some latency in there, you can actually get people to fight.

Phil Zimmermann (00:22:25) – Because you keep stepping on each other’s lines and it sounds like you’re interrupting the other person. You’re not trying to interrupt them, but you think they stopped talking. They paused. So you start talking and oops, now they’re talking. But they talked earlier, but you didn’t get it in time. So yeah, people hate that.

Vlad Costea (00:22:45) – Since this is a Bitcoin podcast, I have to return to the main topic which is Bitcoin. (Yeah.) And I have to ask you, when was the first time when you read or heard about Bitcoin and what did you think about it?

Phil Zimmermann (00:22:58) – Oh I don’t remember what time that was. I heard about it pretty early in the process when it first came out. But I wasn’t that interested in it at the time. I was focusing on telephony.

Vlad Costea (00:23:15) – So you are not interested means that you didn’t care much to look into it or something.

Phil Zimmermann (00:23:20) – I figured I’d get to it later. That was at a time when I was really focused on secure telephony.

Vlad Costea (00:23:30) – I remember Adam Back saying that for many years Bitcoin was like the holy grail. Not necessarily Bitcoin, but solving the double spending problem.

Phil Zimmermann (00:23:40) – That was a very difficult problem to solve. You know, nobody had produced an adequate solution until Bitcoin came along.

Vlad Costea (00:23:48) – But you were not quite interested in the topic.

Phil Zimmermann (00:23:52) – No, I only had a limited you know, there’s only so many hours in a day. And I was devoting my attention on privacy of personal communication. And that was, you know, that’s where I was putting my effort.

Vlad Costea (00:24:07) – But when you think about the fact that your legal battles led to the creation of Bitcoin indirectly… are you proud of the fact that this type of money can exist today because you were willing to fight back in the 90s?

Phil Zimmermann (00:24:23) – Yeah, I… You know, look: I was interested. I found bitcoin to be interesting and a really positive idea when I first heard about it. But I find that today, as the years have gone by, so many years have passed and there’s been an evolution of the environment around Bitcoin.

Phil Zimmermann (00:24:44) – And I’m kind of disappointed to see that there’s so much criminality, not so much Bitcoin exactly. But I mean Bitcoin itself attracts a lot of criminality. But more importantly, there’s thousands of cryptocurrencies.

And there there’s an awful lot of fraud in pump and dump. And that’s that’s disappointing. And the the ransomware which is mostly Bitcoin… that’s disappointing. And then there’s the carbon footprint. You know, that’s that’s kind of alarming. So those things worry me about Bitcoin.

And so, even though conceptually in the abstract I thought it was a great idea, it would have been a better outcome if it could have gotten this far without those things. So I wish I could see some engineering effort putting put into trying to develop countermeasures to those problems.

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Vlad Costea (00:26:39) – This was going to be my next question based on our conversation earlier, because you know quite a bit about Bitcoin, given your understanding of applied cryptography, you have a greater depth of understanding some aspects of it. And I was curious if you have any ideas how to improve it or how you would design it differently.

Phil Zimmermann (00:27:00) – Well, I am interested in… I mean, the carbon footprint part is something that interests me a lot. And I’ve been trying to develop some ideas, but my ideas aren’t good enough yet.

Phil Zimmermann (00:27:15) – I’d like to talk to other people about it, so. I need to improve the ideas before. They’re not ready for publishing. You know, they have to be debugged.

Vlad Costea (00:27:30) – Is there any cryptography project that you look at and you think that you wish you built that, or you think you could have done it better?

Phil Zimmermann (00:27:39) – Well, you know, I focused on different areas. I think Bitcoin is very clever protocol. And I have a lot of respect, enormous respect for the guy who invented it.

Vlad Costea (00:27:56) – You know who it is?

Phil Zimmermann (00:27:58) – I wouldn’t care to speculate as to who it might be. But I do have a lot of respect for him, and… that’s not where I put my attention. I put my attention on personal communication protocols, to have privacy, end to end encryption – both for email and for telephony. I would like to do more, but I don’t think I’m going to be doing it in cryptocurrency.

Vlad Costea (00:28:31) – I think David Chaum came up with the Xx Network… Elixxir or something.

Vlad Costea (00:28:36) – That’s what it used to be called. And he tried to do messaging, which is end to end encrypted and also doesn’t leak metadata. Did you have time to look into that?

Phil Zimmermann (00:28:48) – I haven’t looked at that. I find that everything that Chaum does is extremely brilliant, and so I have a lot of respect for his intelligence and his ability to design really interesting protocols. However, I also note that David Chaum likes to patent his ideas, and that makes it difficult for those ideas to gain market acceptance.

And so, I mean, his ideas like blind signatures and… you know, his sort of his ecash ideas that preceded Bitcoin were clever ideas, but they never got much traction because they were encumbered so much with patents. Now those patents have expired, but so much time has passed that other approaches to electronic cash have overtaken them. So like Bitcoin, for example.

Vlad Costea (00:29:47) – Are you suggesting that Bitcoin could have been invented much sooner if David Chaum did not patent ecash?

Phil Zimmermann (00:29:54) – No, no, no. What I’m saying is that David Chaum’s ideas didn’t get very far in the marketplace because they were encumbered by patents. He likes to patent a lot of things.

Phil Zimmermann (00:30:08) – And as brilliant as his ideas are, I think that there would be more acceptance of his ideas if they were not aggressively patented.

Vlad Costea (00:30:19) – I’ve heard you talk about Shamir secret sharing today, and it’s a pretty smart scheme for sharing secrets, basically. And it’s also used for Bitcoin private keys to split your key into multiple shards. Do you think that’s a good approach?

Phil Zimmermann (00:30:35) – I do, because, I mean, when you think about all the the sort of terrible tragedy of people losing their Bitcoin wallets, you know, they forgot their, their keys or they forgot their passphrase or something for their Bitcoin wallet. And, and so people have lost a lot of money, you know, remember that there’s the story of that guy I think in the UK that had lost millions of dollars in a landfill because it was a disk drive.

He was getting pretty desperate. I mean, it’s a terrible tragedy. So having some way to take a key for a Bitcoin wallet and split it into shares and then giving those shares to your friends to help you recover them, it’s a good way to do it. You know, that would cut down on the misery that people have to endure when they lose their Bitcoin keys.

Vlad Costea (00:31:32) – What’s next for you? What do you work on and what do you plan to still do? You travel around the world giving talks about what it was like to fight for privacy back in the 90s, and you also warn people that end to end encryption might be not necessarily ended, but compromised.

Phil Zimmermann (00:31:51) – Yeah, we are facing government pushback on end to end encryption for the past few years, and we have to push back and make sure that they don’t take that away. My concern is that democracies around the world are have been sliding into autocracies. And if that happens, we need to have people have access to end to end encryption so that they can resist the loss of democracies into autocracies.

They need to be able to push back and organize politically. If that happens. And they can’t do that if they don’t have end to end encryption. The other concern that I have about end to end encryption is that we often find ourselves trying to communicate through networks that are controlled by China. You know, Huawei has built a lot of 5G infrastructure in Europe in particular, but in other parts of the world as well.

Phil Zimmermann (00:32:49) – And the European democracies are starting to realize that they need to take a step back from 5G infrastructure from Huawei. But it’s going to take them a while to roll that back. In the meantime, you know, there’s too much European network traffic that’s going across a network controlled by a potential enemy, and that’s a bad national security risk for a lot of the Western democracies in Europe.

And so we need to have end to end encryption as the as the safe, safest countermeasure to that. What we really need to do is to get rid of the Huawei infrastructure here. But short of that, or while we’re waiting for that to happen, we should have end to end encryption for national security reasons.

Vlad Costea (00:33:45) – Now. I guess it’s sort of like a Trojan horse to some nations, because it came as a cheap alternative to whatever else was…

Phil Zimmermann (00:33:52) – Well, the Chinese gear was cheaper and of higher quality. I mean, the European vendors had more expensive and not as good equipment. However, the Chinese gear, you know, is under the control of the Chinese military and Chinese intelligence agencies.

Phil Zimmermann (00:34:10) – So no matter how good they are or how cheap they are, it’s not a good idea to deploy that and then depend on that for your your whole country’s network infrastructure.

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Vlad Costea (00:35:12) – So, Mr. Zimmermann, how can people follow your work and keep up with what you’re doing and maybe send you an email or whatever?

Phil Zimmermann (00:35:21) – Well, you’ll find my contact information on my website.

Phil Zimmermann (00:35:24) – Phil Zimmermann.com: You have to be careful how you spell that. Zimmermann should have two Ns because there’s another guy named Phil Zimmerman. He’s got a website. It’s Phil Zimmerman.com with one N. And so if you go to my website, you can find my email address and contact information.

Vlad Costea (00:35:44) – Thank you very much for your time. I have a lot of respect for your work and best of luck with everything.

Phil Zimmermann (00:35:51) – It’s my pleasure.

Ad Twins (00:35:56) – Thank you for listening. Make sure you subscribe, leave a comment and like this episode.

Previously, Ben Arc has appeared on the Bitcoin Takeover podcast twice: in S8 E9 when he spoke about his Bowser hardware wallet, and in S9 E6 when he told the story of anarchism and its left-wing roots. This time around, the conversation was more focused on LNBits’ evolution into a plugin behemoth that covers pretty much every Lightning Network use case, as well as the immense potential that Nostr has as a relaying system.

Though Ben describes himself as a left-wing anarchist, he is an old school cypherpunk who’s always curious about new tech and finds neat ways to repurpose electronics to run Lightning-related applications. If you take a look at the LNBits shop, you will find many of his creations – ranging from a pocket-sized Point of Sale device and inexpensive hardware wallets to arcade grabber machines and dispensers. Everything is affordable, general-purpose, and built with a DIY mindset that almost tells you to not buy the final product and built it yourself instead.

More recently, Ben Arc is interested in decentralized marketplaces. He coded DiagonAlley as a censorship-resistant software that enables commerce, and is also interested in doing something like LocalBitcoins on top of Nostr: a peer to peer exchange which matches bitcoin buyers and sellers in a way that can’t be stopped. Ben’s interests don’t stop here: he believes that the Lightning Network is truly revolutionary and microtransactions have the power to change lots of industries – including webcam modelling and sex toys.

On the topic of CBDCs (Central Bank Digital Currencies), Ben Arc isn’t as gloomy as long as there is some interesting privacy technology that’s embedded to anonymize the average purchase. Despite being unhappy about the potential to censor transactions and shut down accounts due to an unprecedented degree of centralized control, he appears curious to see how new privacy protocols can create a Chaumian mint-like interaction between merchants and their clients.

Throughout the interview, which was recorded at Mallorca Blockchain Days 2023, Ben Arc is adamant on presenting this clear message: the potential of Nostr’s relaying system is unimaginably huge and not yet exploited as much as it could. In the coming years, as the project matures, we will definitely see more developments.

Listen to Ben Arc on Spotify, Apple Podcasts & YouTube!

Ideally, you should avoid these big tech platforms and use something that doesn’t require registration and doesn’t track you. This is why you have the option to use this free player, which you can open with the Tor browser so your IP address doesn’t get logged even by my hosting server. On top of the regular features from Spotify, you can also download the episode for offline listening on any device that can play mp3 files (including your old iPod Nano and Microsoft Zune).

But if you do use these big tech services, you can help the show a lot by subscribing and leaving feedback. It only takes a few seconds of your time to perform these actions and they make a huge difference in terms of discoverability. Next time someone searches for interviews with Ben Arc, this particular one will become a lot easier to find thanks to your contribution. On Apple Podcasts, you can also leave a written review – which helps a lot and empowers you to leave feedback.

▶ Play video Watch on YouTube

The birth of Nostr [00:01:31] Ben Arc discusses the origins of Nostr and how Fiatjaf came up with the name. He also mentions why the project has potential.

Exploring music sharing on Nostr [00:03:12] Ben Arc expresses interest in building a music sharing platform on Nostr and discusses the modularity of NIPs.

Expanding the use of Nostr [00:07:19] Ben Arc talks about the potential applications of Nostr beyond Twitter, including decentralized social networks and platforms like LocalBitcoins.

The power of realness [00:10:14] Discussion on how people who speak authentically and outrageously, like Donald Trump, gain extra power on social media platforms.

The future of bitcoin privacy [00:11:02] Promotion of Wasabi Wallet as the most advanced and widely used bitcoin privacy wallet.

The development of Nostr [00:11:58] Exploration of the origins of Nostr as an extension for LN Bits and its potential for trustless commerce.

[00:19:49] Ben Arc explains how the switch project can be used in different machines and devices, such as slap machines, vending machines, lights, coffee machines, and beer taps.

[00:21:18] “Exploring incentivization in video streaming”. Vlad mentions recent TikTok videos where users get paid in tokens for reacting to emojis, and Ben Arc talks about their own experience with incentivizing donations through physical devices on the Bitcoin Group show.

[00:21:46] “Potential applications of technology in the sex industry” Ben expresses interest in developing camming solutions with Bitcoin for the sex industry, highlighting the field’s potential for using Bitcoin and the need for more outreach and development in that area.

The wallet account system [00:29:32] Discussion about the need for a wallet account system with its own API keys and the convenience of having all functionalities in one place.

The process of building and discovering new ideas [00:30:33] Exploration of the importance of hands-on building and experimentation in generating new ideas and solving problems.

Monetizing through premium extensions [00:33:32] Explanation of the potential monetization strategy for LNBits through premium extensions and the example of WordPress.com’s approach.

The cover and distribution of the BTCTKVR magazine [00:39:07] Vlad discusses the various covers and the distribution process of the BTCTKVR magazine, ensuring it feels special for events.

Subscription service for Bitcoin Takeover [00:40:46] Ben Arc suggests the idea of a subscription service for Bitcoin Takeover, where subscribers receive the newest copy of the magazine periodically.

Grassroots adoption and institutional involvement [00:42:41] Vlad talks about the potential impact of grassroots adoption on the market and the role of institutions in buying and selling Bitcoin.

The development of central bank digital currencies (CBDCs) [00:48:42] Discussion on how countries are developing their own CBDCs and the potential competition between them.

The value of open-mindedness and ideological debates [00:49:46] The importance of keeping an open mind, engaging in self-contradiction, and the value of Bitcoin’s ideology.

The control and privacy aspects of CBDCs [00:50:09] Exploration of the concerns regarding the control and privacy features of CBDCs compared to the current banking system.

In Bitcoin, there are two way to pay a higher fee to speed up a transaction:

1. RBF (Replace by Fee) – where the sender pays a higher fee to have the transaction included much sooner in a block
2. CPFP (Child Pays for Parent) – where the receiver pays a higher fee to receive a block confirmation much sooner

Technically speaking, RBF makes sense for users who make mistakes in terms of estimation or destination. Philosophically speaking, RBF introduces the idea that the bitcoin doesn’t change ownership until the first confirmation of the transaction. While altcoins such as Bitcoin Cash and Litecoin embrace “zero conf” as a way to get used in commerce (and therefore assume that the funds belong to the receiver as soon as they have been broadcast), Bitcoin takes a more conservative approach which takes human error into account – before you get the first confirmation in a block, you can still send the funds to a different address (and make up for it by paying more in fees).

While RBF entails a degree of optionality where users choose for themselves if they want to benefit from the fee-boosting feature, Full RBF introduces a rule where every Bitcoin client uses RBF by default. It’s a big deal because the behavior of the entirety of network participants gets shaped by this new paradigm of ownership. However, merchants that accept on-chain Bitcoin payments can no longer support 0-conf benefits, as they take the risk of getting defrauded.

Former Bitcoin Core developer and Open Timestamps creator Peter Todd is the architect of Replace by Fee and also the biggest advocate of Full RBF as a paradigm. Yet some businesses are unhappy that their practice to transact without waiting for on-chain confirmations is no longer safe. Sergej Kotliar, CEO of Bitrefill, decided to represent that side of the debate in this recording: he defends the users’ optionality for features such as RBF, as his company could still accept to deliver gift cards in exchange for unconfirmed transactions that did not enable RBF.

This debate has been planned since December 2022, but could only happen in May 2023 during the second annual edition of Paralelni Polis’ Pizza Day event. It gets pretty intense, as both participants have had a history of exchanging passive-aggressive tweets at each other and they never really had the chance to talk about the issues face to face. So I feel really grateful that I could make this debate happen, as it helped both sides better understand each other. In the end, Full RBF received more support because it aligns with Bitcoin’s philosophy of ownership and sovereignty. But when you listen to this debate, it’s pretty hard to guess which side shall emerge victorious.

Listen to the Full RBF debate between Peter Todd and Sergej Kotliar on Spotify, Apple Podcasts & YouTube!

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The Full RBF Debate [00:01:59] Peter Todd and Sergej Kotliar present their opposing views on RBF.

Understanding Full RBF [00:03:00] Sergej explains the concept of full RBF and its impact on transaction replaceability and user experience.

Reliability and Usefulness of RBF [00:06:26] Peter Todd counters Sergej’s arguments, discussing the reliability and usefulness of full RBF in real-world scenarios.

Full RBF and multiparty transactions [00:11:27] Discussion on the trade-offs of full RBF for multiparty transactions and the impact on transactions like Wasabi’s CoinJoins.

Benefits and inconveniences of on-chain payments [00:14:15] Debate on the trade-offs of using zero conf and the advantages and disadvantages of on-chain payments.

The use of RBF for power users [00:19:35] Discussion on the usefulness of RBF for power users, programmatic transactions, and multi-party scenarios.

[00:21:16] Discussion on the frequency of using RBF (Replace-By-Fee) in transactions and assumptions about exchange users.

[00:23:06] The unpredictability of the bitcoin mempool and blocks, in relation to the need to bump fees.

[00:26:37] Debate on the usage of zero-conf (zero confirmation) transactions and examples of merchants accepting them.

[00:30:00] Discussion on the percentage of blockchain space used by low fees and the impact on usage.

[00:30:59] Importance of rough consensus and the difficulty of making changes in the Bitcoin network.

[00:38:48] Discussion about the reliability of zero-conf transactions and the real-world data supporting its usage. [00:39:13] Debate on the risk involved in accepting zero-conf transactions and the potential vulnerabilities.

[00:45:14] Plans for a potential continuation of the discussion on the topic of zero-conf transactions in a future episode.