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

Fiatjaf is one of the most prolific developers in Bitcoin and Lightning. But despite contributing to lots of Lightning open source projects (including LNBits, Zeus, lntxbot, Alby), he is best known for creating and promoting Nostr: Nodes and Other Stuff Transmitted through Relays. Also, Fiatjaf reached a point where he resents the Lightning network to the point where he believes it should be abandoned entirely and replaced by Drivechains (as described by BIP300).

In some ways, Fiatjaf’s views appear to be contradictory to ongoing Nostr projects and narratives: Lightning zapping (a way for users to tip each other for posting good content, as introduced by Damus developer William Casarin) is currently one of the most popular activities among Nostr users who believe they can use this as a vehicle to support content creators. Also, the Nostr creative doesn’t agree with the ostrich logos and the use of the color purple to represent the project’s identity. Though Fiatjaf remains adamant that Nostr is a tool which protects free speech from censorship, such is the power of open source projects: anyone can build on top of them.

It should also be noted that Fiatjaf is not against the idea of zapping to send tips: he is, however, no longer convinced that the Lightning network is the optimal way to send small bitcoin transactions among users. He would rather see sidechains get built for such use cases, for the simple reason that the underlying technology offers a better user experience with virtually no chances of making participants deal with trusted custodians and potentially lose their funds. After being one of the most prolific Lightning network developers, Fiatjaf believes it’s time to abandon this second layer to focus on more secure approaches to scaling (Drivechains, Spacechains).

For the reasons presented above, this interview with Fiatjaf was particularly interesting. First of all, it was fascinating to see how the father of Nostr doesn’t agree with everything that the builders are doing – and that’s fine, as the network of relays don’t belong to him and he created everything with censorship resistance in mind. Secondly, I found it endearing to discover a Drivechains proponent who promotes the trust-minimized sidechain technology with an energy that matches Paul Sztorc’s. And thirdly, it was fun to learn about Fiatjaf’s ongoing projects: a decentralized alternative to GitHub and Wikistr (a Wikipedia version which enables multiple points of view to be told about the same person, event, or phenomenon).

Season 15 of the Bitcoin Takeover podcast is sponsored by Wasabi Wallet, Crytosteel, Satochip, and IVPN!

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Time stamps:

Nostr Bitcoin and Lightning (00:00:47) Fiatjaf’s creation Nostr, association with Bitcoin, and differing opinions on its development and use.

Creation of Nostr (00:01:55) Discussion on the initial idea of Nostr as a social media platform and its expansion into other functionalities.

Decentralization and Blue Sky (00:07:31) Comparison between Nostr and Blue Sky, and the importance of decentralization in media protocols.

Peter Todd’s Criticism (00:09:33) Fiatjaf’s response to Peter Todd’s criticism and the misunderstanding of Nostr’s decentralization.

Nostr’s Popularity and Lightning Criticism (00:15:31) The influence of Jack Dorsey on Nostr’s growth and the controversial opinion on Lightning’s limitations.

The Future of Bitcoin and Lightning (00:20:43) Fiatjaf’s skepticism about Lightning as the future of Bitcoin, deferring to Anton as a reliable source for insights.

Stock redemption issues (00:22:08) Discussion on the problems of redeeming stocks, including fees and protocol limitations.

Challenges of running nodes (00:23:21) Exploration of the challenges and limitations of running Lightning nodes for normal users and the evolution of the uncle Jim model.

Issues with small transactions (00:26:11) Examination of the impracticality of sending very small transactions in the Lightning network due to fees and protocol limitations.

Difficulties of being a custodian (00:29:21) Discussion on the challenges and limitations of being a custodian in the Lightning network, including personal experiences.

Complexities of Lightning protocol (00:34:18) Exploration of the complex features and potential bugs in the Lightning protocol, as well as the challenges of routing and receiving payments.

Struggles of managing a routing node (00:36:40) Personal experiences and challenges faced while managing a routing node in the Lightning network.

Drivechains for scaling Bitcoin (00:39:29) Discussion on the potential of drivechains as a solution for scaling Bitcoin, including technical and consensus considerations.

Criticism of drivechains (00:42:12) Examination of criticisms and concerns regarding drivechains, including the potential increase in human politics and voting processes.

BIP 301 and voting concerns (00:43:24) Discussion on the automatic voting process and concerns about adding politics and complexity to the Bitcoin network.

Focusing on Future Bitcoiners (00:47:04) Discussion about the need to focus on future Bitcoin users and the challenges of building for the future.

BitVM and Roll-Ups (00:53:14) Discussion about the BitVM project and roll-up systems, including skepticism and concerns about its overhyped nature.

State of Soft Forks (00:59:22) Conversation about the absence of soft forks and the emergence of workarounds in the Bitcoin space.

Liquid and Decentralization (01:02:48) Debate about the nature of Liquid as a blockchain and the concerns about its decentralization and reliance on geopolitics for security.

The vilification of miners (01:04:31) Discussion on the narrative shift in Bitcoin, from miners activating changes to users activating with full nodes.

Miners’ role in soft fork activation (01:05:46) Insight into the role of miners in activating soft forks and their non-evil nature.

Criticism of drivechains (01:06:22) Debate on the potential centralization and adoption challenges of drivechains.

Value pegs and sidechain criticisms (01:08:17) Concerns about the value pegs of bitcoins on sidechains and potential market fluctuations.

Arguments against miner theft from sidechains (01:09:30) Debunking the idea of miners stealing from successful sidechains and its impact on Bitcoin’s value.

Mining centralization and drivechains (01:11:52) Discussion on the potential impact of drivechains on mining centralization.

Miner-extracted value (MEV) and its relevance (01:15:18) Exploration of miner-extracted value (MEV) and its applicability in the Bitcoin context.

Accidental hard fork and network cooperation (01:17:13) Analysis of an accidental hard fork event and the network’s unified decision to continue mining on the same chain.

LayerTwo Labs and Drivechain adoption (01:18:26) Debate on the adoption and potential strategies of LayerTwo Labs for Drivechain activation.

Challenges of running Bitcoin nodes (01:21:02) Challenges and concerns regarding the difficulty of running Bitcoin nodes and UTXO set management.

Advertisement break and sponsor presentations (01:23:06) Introduction and promotion of SatoChip and IVPN as sponsors of the podcast episode.

Audience question about OPW (01:26:13) Discussion about the potential return of OPW, a fork of SBW, as per an audience question.

Forked project and challenges (01:26:23) Fiatjaf discusses forking a project, dealing with challenges, and discontinuing the use of Lightning.

Misconceptions about demotion of Lightning (01:27:42) Fiatjaf clarifies his stance on Lightning and addresses misconceptions about demoting the protocol.

Interest in Nostr (01:28:49) Fiatjaf discusses the interest in Nostr from outside the Bitcoin community and the challenges of adoption.

Forecaster and competition (01:31:43) Fiatjaf compares Nostr and Forecaster, addressing concerns about competition and fragmentation of the user base.

Content creation and Nostr (01:34:30) Fiatjaf discusses the potential for content creators to make a living through Nostr and the value of content.

Nostr tools and library (01:36:27) Fiatjaf explains the Nostr tools library and the purpose of Window.js in the context of Nostr.

Zaps and Nostr (01:42:45) Fiatjaf discusses the concept of zaps and its relevance within the Nostr ecosystem.

Nostr’s development and pronunciation (01:46:36) Vlad and Fiatjaf discuss the development of Nostr and the pronunciation of its name.

Audio quality and conclusion (01:47:27) Vlad and Fiatjaf address audio quality issues and tries to conclude the interview.

The development of Nostr (01:48:14) Fiatjaf discusses the various tools and projects he is working on, including Nostr-related developments.

Interest in Wikistr (01:49:12) Fiatjaf expresses interest in Wikistr, highlighting the potential for multiple perspectives and decentralized code collaboration.

Challenges with GitHub and Nostr (01:51:42) Discussion on the limitations of GitHub and the potential for Nostr to provide a decentralized alternative for open-source code collaboration.

Best way to use Nostr (01:53:10) Fiatjaf recommends specific web clients and desktop applications for using Nostr, sharing his preferences and insights.

Conclusion and well-wishes (01:55:19) Vlad concludes the interview, expressing gratitude and well-wishes for Fiatjaf and Nostr’s future.

Fiatjaf, Nostr and the Quest for Decentralized Social Media

My journey with Nostr began back in May 2021 when Ben Arc introduced me to this innovative platform. Initially conceived as a social media network, Nostr quickly evolved into something much more. Fiat Jaf and I reminisced about the early days, discussing the browser client Branle and the loss of my private keys — a common plight among early adopters of tech with uncertain future.

Nostr, which stands for “nodes and other stuff transmitted through relays,” was born out of a time when censorship seemed to be on the rise. Fiatjaf (who prefers to refer to himself as an anarchist rather than a libertarian), along with Ben Arc (his self-proclaimed left-wing anarchist coding partner) set out to create a platform that was immune to the whims of centralized control. The idea started out from a LNBits extension which ended up receiving an autonomous release.

The Lightning Network: A Path Paved with Challenges

Our conversation took a technical turn as we tackled the Lightning Network’s limitations. Fiatjaf shared his concerns about the network’s ability to handle small transactions and the financial disincentives for running a routing node. I chimed in with my own experiences, highlighting the technical hurdles and the lack of rewards for maintaining the network’s infrastructure.

We also touched on the complexities of implementing new features without introducing bugs, a constant battle for developers in the space.

Drivechains: A Glimmer of Hope for Scaling Bitcoin?

The topic of Drivechains sparked a lively debate. Fiatjaf described them as a more effective way to scale Bitcoin compared to the Lightning Network, despite the potential for increased human politics. I raised some popular concerns about BIP300 just for the sake of playing the devil’s advocate – only to discover that Fiatjaf has already made up his mind about his favorite scaling proposal.

The Battle Against “Shitcoins” and the Future of Commerce

Fiatjaf didn’t hold back his frustration with the proliferation of shitcoins cluttering the market. He emphasized the need for solutions like Drivechains to keep Bitcoin at the forefront of the financial revolution. After the guest suggested that Bitcoin must be built with the future users in mind, I pointed out to the delicate balance between catering to current users and preparing for a vaguely defined and distant moment.

Antoine Riard, a prolific Lightning network developer who raised concerns about the Lightning network’s flawed security assumptions back in October 2023 (and immediately quit the project due to realizing that the issue needs a base layer patch), was Fiatjaf’s preferred example to highlight why Bitcoin’s most popular layer two has failed and deserves to get abandoned for more pragmatic designs.

Sidechains, Miners, and the Evolution of Bitcoin

Fiatjaf and I also delved into the role of miners, the activation of soft forks, and the potential of sidechains. Fiatjaf expressed skepticism that adding multiple pegged sidechains after activating BIP300 would affect sovereign full node operators – as they can optionally validate whichever chain they want and no other rule about the base layer gets changed. He argued that some of the concerns are blown out of proportion.

Nostr’s Evolution and Zaps

Fiatjaf is not a fan of zaps – at least not through the Lightning network. Based on his experience as a developer of LNBits, Zeus, Alby, and lntxbot, he advises other Nostr contributors to discontinue support for Lightning and focus on censorship resistance. His biggest concern is that users rely too much on custodial wallets, send small BTC amounts to each other that make no sense in the context of a peg-out due to the existing dust limit, and cause some Lightning nodes to crash.

Therefore, Fiatjaf’s recommendation is to forget about Lightning network entirely and focus on better tech which enables much better self-custody primitives and scales better for microtransactions.

The Future of Code Collaboration and the Vision of Nostr

As our conversation wound down, Fiatjaf shared his excitement about Wikistr: a Wikipedia client for Nostr that promises a more democratic approach to information, in which multiple articles featuring opposing points of view are allowed and encouraged. He also discussed his vision for replacing centralized platforms like GitHub with decentralized tools, allowing for a more collaborative and open-source environment.