S14 E2: Nicholas Gregory & Ray Youssef on Civ Kit & P2P Marketplaces

Individually, Nicholas Gregory and Ray Youssef are known in the Bitcoin space for creating MercuryWallet (a Statechain Bitcoin wallet that does CoinSwaps) and Paxful (a peer to peer platform for buying and selling bitcoin). But by virtue of working together and also co-opting Antoine Riard, they created Civ Kit: an open source project which empowers anyone around the world to create their own peer to peer marketplace on top of Nostr, using bitcoin on the Lightning Network and a new stablecoin system for payments.

Civ Kit is being designed to be instant, permissionless, censorship resistant, and as private as the merchants desire (so that everyone selectively reveals information about themselves). As Ray Youssef puts it, Civ Kit is a tool which increases the velocity of honest money and fights against financial apartheid. It’s a project which he believes is best suited for the “vibrant young youth” of the global south.

On the other hand, Nicholas Gregory (who makes his 3rd appearance on the show) takes on the technical challenges. As one of the co-authors of the Civ Kit whitepaper and the bona fide architect of the project, he thinks less about the mission and more about how it can be accomplished in the most elegant way. Which is why he and his team are building Civ Kit on top of Nostr to take advantage of the selective, distributed and censorship-resistant relaying system.

S14 E2 of the Bitcoin Takeover podcast begins with a history lesson about previous attempts to build such marketplaces and why the likes of OpenBazaar failed. The conversation swiftly switches towards technical topics such as zero knowledge rollups and reputation systems, as well as the importance of compensating those who introduce liquidity and customers into the network. Nicholas Gregory, a Statechain fan and advocate, even suggests that Bitcoin may need the ANYPREVOUT (BIP 118) soft fork in order to overcome some of the challenges that second layers face.

The first version of Civ Kit is planned to get released sometime in November 2023. The most interesting part about the project is that it doesn’t aim to become a service and has no monetization scheme outside of receiving donations from happy users. Instead, Civ Kit provides tools for anyone to set up their own uncensorable online store. As Ray Youssef states, the project competes directly with Ethereum – for users, liquidity, and stablecoin supremacy.

Ultimately, Civ Kit marks the most remarkable effort towards building a peer to peer market for Bitcoin since the early days of OpenBazaar and Silk Road. However, its focus isn’t to allow existing users to buy and sell items. Advocate and co-founder makes a clear distinction between the “corpse” of the west and the bourgeoning global south – and he clearly focuses on attracting the latter. If successful, the project will onboard millions of people who need to use Bitcoin and Lightning because otherwise they have no other means to become part of the global economy.

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Building a peer-to-peer marketplace on top of Bitcoin’s Lightning Network [00:00:47] Introduction to the interview with Nicholas Gregory and Ray about their project, Civ Kit, which is a peer-to-peer marketplace built on top of Bitcoin’s Lightning Network.

The research behind Civ Kit [00:02:29] Discussion of the research behind Civ Kit, including references from Mike Hearn and the work of Antoine Riard.

The importance of creating a peer-to-peer marketplace for money [00:07:39] Ray discusses the importance of creating a peer-to-peer marketplace for money, particularly in terms of financial apartheid and the need for a marketplace that solves real problems for people.

The need for an open marketplace for money [00:09:28] Ray discusses the importance of creating an open marketplace for money on Bitcoin’s Lightning Network to solve financial apartheid.

Components of Civ Kit [00:12:02] Ray explains the three massive components required to build Civ Kit: a marketplace, a system of accounts, and a system of peer-to-peer dispute resolution.

Competing with Ethereum and designing the kernel of civilization [00:15:34] Ray discusses how Civ Kit is competing with Ethereum and designing the kernel of civilization for an operating system for money.

Building a peer-to-peer marketplace [00:18:04] Discussion on the three components needed for a peer-to-peer marketplace and the goal of Civ Kit to provide tools for anyone to start their own marketplace.

Web of stakes market ranking paradigm [00:24:56] Explanation of the web of stakes market ranking paradigm, which is a reputation algorithm for financial trustworthiness, similar to Google’s page rank.

The loyalty of Team Hachiko [00:23:40] Explanation of the significance of the Akita Inu dog on the Civ Kit homepage and the loyalty of Team Hachiko to finish the job started by Satoshi Nakamoto.

Building Civ Kit [00:26:27] Nicholas Gregory talks about the development of Civ Kit, including the use of Bitcoin’s network as a reputation system and the upcoming release of a Civ Kit node and lightning node.

Why Nostr? [00:28:05] The interviewers ask why Civ Kit was built on top of Nostr, and Nicholas Gregory explains how Nostr’s concept of relays allows for broadcasting information, which is necessary for an order book.

The Future of Civ Kit [00:32:10] Ray discusses the potential use cases for Civ Kit, including a marketplace for money and a provably fair exchange, and expresses his desire to build multiple applications on top of the protocol.

Civ Kit’s Open Source Project [00:35:06] Ray explains how Civ Kit will be an open-source project, and they will be giving away open-source progressive web apps for the front-end user experience.

Building a Peer-to-Peer Marketplace [00:36:02] Ray explains how anyone can set up their own marketplace without running any code, and they can get started right away without any marketing budget.

The Importance of KYC Verification [00:40:15] Ray talks about the importance of KYC verification and how it ties in with the truth oracle marketplace, which is a big part of Civ Kit.

Privacy and Compliance in Marketplace [00:42:40] Discussion on the importance of user choice in privacy and compliance in a peer-to-peer marketplace.

Statechains and Lightning Network [00:48:04] Explanation of how Statechains can be used as a scaling layer for Lightning Network and become interoperable with Lightning channels on the base layer.

Challenges of Upgrading Bitcoin [00:49:36] Discussion on the conservatism of upgrading Bitcoin and the need for well-tested changes to avoid breaking the chain.

Statechains upgrade [00:50:13] Discussion on the potential integration of Statechains on Lightning Network and the challenges it presents.

Arbitrary data on Bitcoin blockchain [00:51:01] Debate on the possibility of adding arbitrary data to the Bitcoin blockchain and its impact on the efficiency of the system.

Importance of reputation system [00:53:28] Importance of reputation system in creating open and free markets for money, and the need for a global reputation based on trading in a marketplace.

Stablecoin on Bitcoin [00:58:35] Ray and Nicholas discuss the need for a stablecoin on Bitcoin and the different approaches being taken by various projects.

Ray’s Narration Skills [01:00:11] Vlad and the chat comment on Ray’s voice and suggest he should narrate audio books. Ray agrees and even offers to read from the Bitcoin Takeover magazine.

Vlad’s Bitcoin Story [01:04:36] Ray narrates Vlad’s personal story of how he initially dismissed Bitcoin as a stupid idea, but later realized its importance when faced with the limitations of traditional banking systems.

The Proxy Solution [01:07:51] Ray reads about how Vlad used a proxy to obtain a SIM card and cheaper subway tickets while studying abroad.

Civ Kit Launch Timeline [01:09:32] Nicholas explains that the first code drop for Civ Kit will be backend infrastructure, with a potential launch date of end of September or October.

Creating Corridors of Relief [01:13:42] Ray discusses the potential impact of Civ Kit in creating corridors of relief for people in countries like Venezuela, Lebanon, and Russia, and how it can help against financial apartheid.

The Importance of Honest Money [01:16:33] Ray discusses the importance of honest money and how it can lead to prosperity, using the example of colonial script in the 13 colonies.

The Fight Against Financial Apartheid [01:19:39] Ray talks about the fight against the forces of darkness and financial apartheid, and the urgency of creating a peer-to-peer marketplace like Civ Kit.

Challenges with Gift Card Trading [01:21:50] Ray discusses the challenges with gift card trading, including fraud and dispute resolution, and how Siv Kit can make it easier to trade gift cards.

Fraud in Peer-to-Peer Trading [01:24:51] Ray shares a story about a gift card trade between two Nigerian men, one of whom was actually Chinese pretending to be Nigerian to avoid fraud accusations. He explains the need for a peer-to-peer marketplace that solves the problem of dispute resolution.

Peer-to-Peer Dispute Resolution [01:27:19] Ray discusses the need for a peer-to-peer dispute resolution system that can be used for large transactions like real estate deals. He explains how the system would work and how it could create a new industry for peer-to-peer moderators.

Monetizing Content with Civ Kit [01:32:44] Ray and the host discuss the problem of content creators not being compensated for their work and how Civ Kit could potentially help them monetize their content. They discuss the example of political YouTubers who have been negatively impacted by YouTube’s policies.

Building a referral program [01:33:33] Ray suggests a referral program to help grow marketplaces and compensate those who introduce liquidity and customers.

Designing a magazine cover [01:35:05] Ray and the host discuss designing a magazine cover for the Bitcoin Takeover project.

Creating a peer-to-peer marketplace [01:40:01] Ray and Nicholas discuss the importance of creating a peer-to-peer marketplace that solves real problems for people, particularly in terms of financial apartheid and the need for a peer-to-peer marketplace for money.

November Launch [01:42:06] Ray and Nicholas discuss the upcoming launch of Siv Kit in November, including their plans for the first trade and the ease of building on the platform.

Competing with Bitrefill [01:45:33] The hosts discuss how Civ Kit will compete with services like Bitrefill and the potential benefits of integrating their infrastructure into the platform.

No Fees for Civ Kit Protocol [01:49:06] The hosts explain that the Civ Kit protocol takes no cut from transactions and that marketplace masters can set their own fees. They also provide information on how to follow the project’s development and contribute.

Real problems for people [01:51:50] The importance of creating a marketplace that solves real problems for people, particularly in terms of financial apartheid and the need for a peer-to-peer marketplace for money.

Issues with Paxful [01:55:21] Discussion of the drama surrounding Paxful, including the co-founder’s behavior, the need to pay customers out of Ray’s own pocket, and the potential risks of using American companies for financial transactions.

The global south versus the west [01:57:20] The importance of choosing carefully between the “corpse” of the west and the “vibrant young youth” of the global south, particularly in terms of building a better financial system and using Bitcoin.

The importance of Civ Kit [02:02:46] Ray discusses the importance of Civ Kit in solving real problems for people, particularly in terms of financial apartheid and the need for a peer-to-peer marketplace for money.

Closing remarks [02:07:10] Nicholas Gregory gives his closing remarks, thanking the host for having them on the show and discussing the hype around Civ Kit’s technology.

The battle on the financial front [02:08:09] Ray talks about the importance of the financial front in the battle against the small casts of dominant men who have always ruled the world, and how Civ Kit is a part of that fight.

Financial Apartheid and the Genesis of Fiat [02:09:10] Ray talks about the history of financial apartheid and how it all started 2000 years ago with the creation of fiat.

The Importance of Believing in Humanity [02:11:13] Ray emphasizes the importance of believing in the strength and beauty of humanity and rejecting the mechanistic harmonic system that has been painted around us.

Conclusion and Future Plans [02:15:50] The speakers conclude the interview by discussing the future plans for Civ Kit and expressing their excitement for the project.

Memorable quotes from the Civ Kit interview:

Ray Youssef, 00:07:39, “These people need to be able to use money…this is the biggest problem in the world.”

Ray Youssef, 00:10:20, “I believe it’s 100% Bitcoin is not complete until we have an unstoppable free marketplace for the world on there so Bitcoin can reach into the real world besides just with electricity and mining. It can actually use all the existing value in the world and all the energy too and actually like touch everyone for real right now instead of us just nerds. So this is how we get Bitcoin outdoor: the youth of Africa approved it, Paxful had 13 million users and was all bootstrapped by word of mouth. 96% of the signups happened by word of mouth and that’s because people need Bitcoin. There’s necessity here, and once you take the time and educate people about it (which I did early on and continue to do), it starts to create this effect like you’re almost getting into a hockey stick now when people realize “hey, peer to peer: this is the way to actually transact everything but especially money.”

Vlad, 00:19:48, “there are a lot of nerds like myself who do care about self custody and sovereignty and all of these principles because they are the reason why we got into bitcoin in the first place.”

Ray Youssef, 00:32:10, “building a marketplace for money is number one.”

Ray Youssef, 00:41:27, “they’ve been invisible for so long they’re just like yeah, gimme whatever I need now. They don’t want get their eyeballs scanned or anything like that, but they want to be you know have an id, they want to have a reputation, they wanna be able to take out a line of credit. They’ve got nothing to hide, you know. All these Africans are kind of like goodie two shoes, you know. Just very nice people that just wanna do business, and we have to make sure we really cater with them above all.”

Ray Youssef, 00:43:00, “we’re trying to do the right thing here, we have to factor in all these things in guys. And until I have my own aircraft carrier, I’m picking that fight with Uncle Sam. You feel?”

Ray Youssef, 00:53:56, “Reputation is critically important right? It’s so important because from people’s reputation you can start creating money markets, you can start having money flow from the West, to the Global South…it’s a huge win-win.”

Ray Youssef, 01:13:42, “this system will come into the rescue, that’s the whole point. That’s why it’s so powerful, that’s why this is the solution against financial apartheid right? Because when it starves certain cells and organs of blood, this thing will come in and relieve the blood and where blood gets trapped in certain places it’ll come in and redirect that flow to where it’s needed. It’s the people making decisions, it’s peer to peer, it’s not the same entities that have been corrupted and responsible for maintaining this system. We cannot count on them.”

Ray Youssef, 01:19:39, “We’re talking about a fight against the forces of darkness. Okay, maybe I’ll stop right there. You guys can take it away man. It might get too dramatic right now, you know, but this is really what we’re doing, right?”

Ray Youssef, 01:27:19, “it’s like an impossible problem, so the only way to do it is to take the entire dispute moderation process and make it into its own peer-to-peer marketplace.”

Ray Youssef, 01:39:11, “I want everyone to eat at the same table if it’s possible. And it really is once humanity has an unstoppable free market. That’s when everything changes.”

Ray Youssef, 01:57:20, “Don’t trust any western company with money, especially not American.”

Ray Youssef, 02:02:46, “They don’t need your financial aid or this or that, or any of your charity or pity. Just show these brothers and sisters how to make some money with their energy and that’s it .They will do the rest like they’ve proven already, that’s all we need to do.”

Ray Youssef, 02:11:58, “We have the tools, let’s go directly at it. We’ve got the numbers as well, we just have to execute over these seven years and actually believe that, when we are successful in this leg of the mission, a truth the world that we’ve always dreamed of is actually gonna be possible. One where our children can grow up in a place where prosperity is the default. If you believe that in your mind, your subconscious will allow you to succeed. This is so important, this is so important cause if you don’t believe that, if you think if you buy into this mechanistic harmonic, you know, system that they painted around us and you believe in this animalistic interpretation of humanity, you’re gonna give, you’re gonna find a way to lose and they know that. Which is why the way we think is not in accidents. Reject all that, humans are awesome.”