S16 E31: Andrew Camilleri ”Kukks” on Ark, BTCPay Server & Open Source Bitcoin Software

0:49Vlad CosteaHey, hello there and welcome to the Bitcoin Takeover Podcast. This is Season 16, Episode 31. We are live with Andrew Camilleri "Kukks" and this episode is sponsored by SideShift, Citrea, Bitcoin.com News, Edge Wallet, LayerTwo Labs, NoOnes.com and Hodling.ch. It's really good to have you Andrew because you're one of my favorite open source developers in the space. You've been around for a long time. You've contributed to BTCPay Server since February of 2018, when funnily enough you actually proposed to add Ethereum to BTCPay and Nicolas Dorier was sort of neutral.

1:28He was like, okay, if you want to do that, just do all the legwork. Make it work by yourself. I don't think that ever happened. But you're also a hero in the Monero community, I think. And also Litecoin and Zcash, I think. You did some integrations.

1:46No.

1:47Andrew CamilleriNo. Well, maybe. I don't know. Well, first off, happy to be here. Okay, let's start off with all the shitcoinery that I have to deal with now. But basically, in the beginning, I was nowhere close to being like a full-on Bitcoiner. I was just getting into the crypto space, like learning around, messing around, finally figuring out how things work. And I wanted to build a Bitcoin business. So I'm like, okay, I need to find rails for my business. Okay, what do I need to integrate? And I had a partner who basically said, okay, here's a list of all the coins we need to integrate.

2:27I'm like, really? The library I wanted to use only had Bitcoin. Do I really have to do all this? Yeah, you have to, if you want business. I'm like, okay. So I started in there, and I started looking at how to do it. And obviously, the biggest thing that would enable a bunch of the shitcoins at that point in time was Ethereum. So that was something I had to try and focus on how to do at some point. And eventually, it never led anywhere. And I completely lost interest in my business venture.

2:54And also, I kind of realized in my own way that I really was only interested in Bitcoin. I kind of distanced myself from all the other stuff. Not that I'm against a lot of the projects like Monero or whatever. I'm not going to come over and basically shout at you for using these kind of tools. But I'm only a Bitcoin person at this point. I only use Bitcoin. I only build on Bitcoin. Having said that, yeah, in BTCPay, I did do some initial integrations with Monero. And what else did I do?

3:31I think mostly Monero. Basically, I was just trying to figure out the code, like making it more dynamic, more flexible, more abstract so I can build better over the years. And Monero was basically the stepping stone I needed to get the infrastructure fleshed out for the plugin system that is now available in BTCPay. But yeah, a lot of Monero people are very happy with the plugin. I constantly get random praise on it, even though I haven't touched it in a while. But loads of people are working on that in a separate external plugin that's no longer in BTCPay.

4:07Everyone's happy. I'm glad. It seems like they're building everything independently just the way it should be. And nobody is shouting at them for building a plugin on BTCPay. I think it's the best of both worlds. Freedom of choice and stuff, so.

4:23Vlad CosteaYou don't have to be so tense on this show, because this is where we acknowledge that Bitcoin is not perfect and needs to change a little bit just to fit some use cases or do stuff more efficiently. And also, we're not against the fact that other networks exist to complete what Bitcoin is not doing. So don't be afraid to name the shitcoins and acknowledge that they're doing something out there for a market that Bitcoin does not make happy.

4:55Andrew CamilleriI mean, it's true. I mean, I'm glad that they actually do do stuff and try out stuff. I wish we could bring some of the properties back to Bitcoin, but I think most people, myself included, have kind of given up on the idea that we'll ever get any real change in Bitcoin and that we have to work with what we have and just try to do our best on top of it.

5:16Vlad CosteaWell, that's a bit pessimistic, especially since you're working on Ark nowadays. And Ark is very futuristic. It starts from I think Burak started Ark and that was the first guy to interview him, by the way, when he came out with Ark. He was trying to fix Lightning. He was trying to build a much better user experience for a wallet. And then he started to ask himself some questions that eventually led him to designing a different protocol altogether. And I do think in its initial phase, Ark required CTV and it was assuming that we're going to get that.

5:53It seems like the conversation is still going about that one. I'm not sure if it's going to happen, but it would be very useful if it did. Right now, Ark in its current phase, which I think is called V2 or something, is designed to work. It's not called V2?

6:10Andrew CamilleriNo. No. That's one problem with Ark that we have is that it's been two or three years now since the initial concept came around and everything has been completely changed since the beginning. There's no need for any covenants for it now. All the designs and the initial concepts are completely different. You don't need sender and receiver to be online at the same time. There's a lot less. Even the motivation for what we're building is different. It's not a Lightning killer. It's not replacing Lightning. It's not a payment infrastructure.

6:48At least not the one I'm working on. It's not exclusively for payments. I don't mean to be pessimistic, but Ark is basically our solution for experiencing so much pessimism on Bitcoin itself. We've managed to make a miracle happen out of all the stagnation. This is one thing that's really uplifting me this year. Before this, I was getting very dark-pilled about Bitcoin. In general, building on Bitcoin, all the infrastructure was getting unrealistically stuck for me, and Ark really opened up a whole new world for me.

7:37Vlad CosteaWow, sounds like a cult. Anyway, what is Ark? Can you please describe it in plain terms? Maybe people haven't listened to my Burak interview a couple of years ago, and maybe that interview is not relevant anymore anyway, because so much about it has changed.

7:55Andrew CamilleriThe easiest way to describe Ark is that we make everything virtual. In Bitcoin, you have UTXOs. In Ark, you have virtual UTXOs. In Bitcoin, you have the mempool. In Ark, you have the virtual mempool. Instead of blocks, you have batches. What happens here is you essentially come together with a bunch of other people, and you create a batch. A batch is basically a Bitcoin output, a real on-chain Bitcoin output, where it has a virtual transaction tree. You create pre-signed transactions, basically fully signed, where every single participant is co-signing it, locking it all together and making it unspendable by any unilateral party.

8:48From that, you end up with the VTXOs. VTXOs are essentially just Bitcoin outputs, Bitcoin UTXOs, which are virtual. They haven't hit the chain. They don't intend to hit the chain. But if it's needed, they can actually become converted one-to-one as a UTXO.

9:09Vlad CosteaInteresting. It's basically like this ledger system on top of Bitcoin's blockchain, which keeps track of UTXOs. If I'm not mistaken, something that I think about a lot is the dust problem in Bitcoin and the fact that you have a lot of UTXOs that become uneconomical if the fees rise. And I suppose Ark can be a solution for that.

9:33Andrew CamilleriI mean, the idea behind Ark is, like, we like to frame it as an advanced transaction batching solution, you know, and for most of Bitcoin's existence, there's been transaction batching, like exchanges use it to process a bunch of withdrawals at the same time into one transaction. With Ark, you can do multiple transactions, but all stemming from the single Bitcoin output itself. So we can even basically optimize beyond just the Bitcoin main chain transaction format. We can basically grab one output and stem out a series of transactions, a series of virtual transactions.

10:13So, for example, if you have a VTXO, you can create an Ark transaction, which creates new VTXOs out of it. So you can do payments off-chain in the same format you expect from normal Bitcoin. So you do a Bitcoin script, you create a Bitcoin address, you send money to the Bitcoin address using a Bitcoin transaction, and you have to sign it with your key to create a signature. Same experience as you would expect from using Bitcoin on-chain, except these transactions will never hit the chain.

10:45So at least optimistically will never hit the chain.

10:50Vlad CosteaThat's interesting. So for the longest time, and that means like eight years, we have been told that Lightning is the one scaling solution and the only one way we're going to make payments happen with Bitcoin. And we should not use on-chain and we should move everything on to Lightning. What's the point of Ark if Lightning is this beautiful scaling and payment solution?

11:15Andrew CamilleriWell, I mean, you know how Lightning is, right? It's really great when it works. And for the most part, if you're a big business, you can make it work. I'm sure you can find somebody to help you manage it. But it comes with so much complexity. You have this channel concept which users always struggle with. Integrating a Lightning node into your app or wallet is like almost a nightmare or unfeasible for the most part, especially if you're on a mobile device.

11:45There's so much complexity there. And with Ark, it's kind of like you just grab the same UX as you do with on-chain. So you have a private key, you sign transactions, you spend your VTXOs and create new VTXOs. You get back change. So I would say the experience is different. With Lightning, I mean, the cool thing with Lightning is that you can actually have really instant settlements to almost an unbounded capacity if you can achieve the right flow, the right state and the right configuration with your channels.

12:21But yes, unfortunately, it's not that straightforward. There's no free lunch when you move things to a different layer. And that's the drawback of Lightning. Having said that, I mean, there's no reason why using Ark and Lightning together is not a thing. It's completely possible. We're actually having a Boltz partnership and getting that going to basically they do HTLC swaps. That's their whole business model. HTLC swaps between Lightning and other chains. And since Ark is just a Bitcoin script, normal Bitcoin script, we can actually execute HTLCs on Ark and be interoperable with Lightning.

13:06Vlad CosteaRight. But for the people who swear by Lightning and they say, well, it works. Look at me, I'm using Wallet of Satoshi. I'm going to El Zonte, Bitcoin Beach. I'm making payments everywhere. I'm going to conferences. The merchants seem to accept it. They live within this bubble and they think Lightning is perfect. And what would you tell to these people? Why is it that Lightning is not perfect? And why do you think that they need to use Ark?

13:32Andrew CamilleriI mean, the reality is that basically everyone is using custodial wallets. At least consumers are using custodial wallets. Like if you're a business, you probably have a good experience if you know how to handle things. But as a consumer, you have to like at least you won't be running your own Lightning node. You can see the emergence now of basically everyone using a Liquid wallet with with Boltz swaps on top. And that's kind of a cheat code, right? You're basically skipping the Lightning nodes because of the infeasibility in your device.

14:05And I mean, yeah, I feel like if you're using a custodial wallet, it's not really the point I'm going after. I don't care that much about it. There are use cases, right? People don't care enough about custodial, non-custodial. Basically the same people are buying Bitcoin treasuries all the time. So it's like that crowd of people, maybe they're not very interested in the overall mission that we're working towards. But also, like I said, payments is not the end goal for us. It's only a small subsection of what we want to achieve with Ark.

14:41We want to bring back people to Bitcoin, like make it usable again beyond just sending and receiving. I think the narrative with Lightning was like, yes, it's a payment network, therefore you send and receive, nothing else. Like, I don't think that's interesting enough for what Ark does. You do need use cases that are native to Bitcoin. For example, escrow, like, what happened to escrow in Bitcoin? It almost completely disappeared at this point. That's a huge shame. Everyone's doing it somewhere else. And the only reason it disappeared is not because we didn't have the capabilities for it.

15:16Escrow is very simple in general. The most basic form is two of three multisig. But people just don't do it anymore because they're scared that if they run their entire business on it, overnight the fees will spike and your entire customer base will have to disappear. So now we can actually do two of three multisig escrows on Ark again with no fee burden. And they are instant.

15:44Vlad CosteaYou said something very interesting that you're making Bitcoin usable again. And I guess this triggers a lot of people who will point to the empty mempool and say, wait a minute, it's very useful right now. I can pay one sat per vbyte for my transactions. I can even pay 0.1 sat per vbyte for my inscriptions, which apparently is possible nowadays. What do you mean Bitcoin is not useful?

16:09Andrew CamilleriIt is useful. It's just not usable for, like, if you're a business, it's great. Like, I started my business now, I'm doing everything on Bitcoin, one sat per byte, awesome. And then all of a sudden, like next week, the fees spike to 500 sat per byte because some degen is doing something crazy. And like, okay, do I tell my customers like, okay, show up again tomorrow. That's like, that's not a business move. Like that's, that's completely amateur hour, you know? And that's where, that's the target we want to go to.

16:40Like, you know, it's like, don't worry about the fee burden. If you do it off chain, you will actually be able to execute your contracts reliably for your customers.

16:51Vlad CosteaWhat about the miners though? Who's going to pay them? Because if we move all the economic activity on the second layer, which does not pay the miners, then how is mining going to be profitable?

17:04Andrew CamilleriWell, I mean, that's really up to them. Maybe they should stop making so much equipment and spiking the hash rate so much. But actually joking aside, I think, I think it's actually like in Bitcoin, there's many use cases. It doesn't always have to be off chain as well. Like if you're doing something huge, does it really need to be off chain? Like you may as well, you know, opt for the best security model of being directly on Bitcoin with nothing else. Like if you're transferring a couple of million dollars or Euro worth of Bitcoin, just do it on chain.

17:36Like don't struggle with Lightning or anything else. And those are the transactions that should be driving things forward as well. Ark has, I would say it's quite a minimal footprint. Contrary to all the research, the footprint for Ark is not something that has to happen like every X amount of time. In our Ark implementation, we're working on basically a dynamic settlement system, basically based on user demands, user demand and policy. So if there's demand, we will basically commit to creating an on-chain transaction that creates new VTXOs based on that.

18:22What else is there? And yeah, I mean, it's also like there's very minimal amount of footprint. I don't think we're going to be the ones paying the miners, to be honest. It's like one Bitcoin transaction with one input, one output almost, or a couple more inputs, depending on how much or how you're funding it. And the output handles everything inside it. And I think at this point we can basically assume that our benchmark is around, I don't know, we're probably going to do like 200 VTXOs per on-chain output.

18:57Something like that at least, just to play it safe, but we could probably do a lot more so. Yeah, I don't know who's going to fund the miners. Won't be us.

19:09Vlad CosteaWell, one of the show sponsors is LayerTwo Labs, and their idea is that they're going to create this network of drivechains that are paying fees directly to the SHA-256 miners. And instead of explaining how it works, because you can already go to layertwolabs.com and download the software and try it, but I'm curious if you looked into it and what you think about drivechains.

19:36Andrew CamilleriI don't know. I'm not that interested in it, to be honest. It requires Bitcoin to kind of change. I'm not very optimistic on people changing Bitcoin. As you know, it doesn't seem like something that would easily work. There's already been so many years of drama for him with the drivechain approach. And I don't know, it feels to me, it's kind of like, okay, I want to build a platform, right? I'm going to build a platform that has sidechains, drivechains, multiple chains basically running. It's like, okay, so users have to switch between all these chains and they have to swap between them, I guess, to actually move their money around.

20:16It's kind of like a super fragmented environment. It's like, okay, how do you achieve scale with this in terms of users? Okay, you're going to have, let's say you start with 100 users on the Zcash drivechain, and 50 of them have to drop out to another side chain to do something else.

20:37Zcash needs scale to actually function really well, right? At least scale in terms of user demand. So it's kind of like, okay, so every time you move out, the whole pool gets smaller, right? I find it kind of, I don't know, undesirable. It doesn't really stick to me. I mean, props to him for spending so long on it and sticking with it, but it just doesn't appeal to me.

21:02Vlad CosteaWell, you don't like the concept or you don't like the fact that it requires another soft fork, which is less likely to happen than something that you build without permission?

21:13Andrew CamilleriI think a bit of both. I would say both. I find the concept a bit ugly, I guess. It requires a lot of fragmentation for users.

21:25Vlad CosteaBut you can argue that Liquid. And what's the other one? Stacks and Lightning. Yeah, Blockstack, whatever. Lightning. Rootstock, yeah. All of these are already creating fragmentation. And then you also have the ZK roll-ups. And I'm actually curious what you think about Citrea or Alpen, because these can actually increase the demand for block space. They're inscribing zero knowledge proofs in the Bitcoin blockchain. And they're creating these roll-ups which give you the same user experience, much like Ark, and also extended financial services like borrowing against your BTC or whatever.

22:11Andrew CamilleriYeah, I mean, the main thing that draws me to Ark is basically that even a non-cryptographer kind of person like me, I'm just an engineer kind of guy that knows enough about Bitcoin to make it function, is able to understand Ark and be able to build it. I don't need to do, we don't do any zero knowledge proofs, none of that crazy magic, which intimidates a lot of people, myself included. And I feel like that's the killer feature of Ark, like the simplicity of its primitives.

22:43So with ZK roll-ups, like, okay, they look kind of cool, actually, but it's kind of scary to me. Like, I don't know, I prefer like the simplicity that you can get out of what we achieved, for example. But of course, I'm a bit biased there. What else is there? I don't know. Liquid, I mean, you can see basically how it ended up at this point, like very little demand. The only thing that is really giving it traction is basically the Boltz swaps at this point. And I mean, we're basically going to enable the same experience, but I would say without the federation.

23:23So I don't know, I'm not that worried about there. The fragmentation doesn't seem real because there hasn't been enough to scale outwards by or at least into these different realms in Bitcoin.

23:38Vlad CosteaYeah, Well, I spoke with Talip, who works for Citrea, and he told me that basically if you have three ZK roll-ups on Bitcoin operating at scale at the same time, you're going to have to conduct another scaling debate, because they're easily going to fill the entire block space. And they're also being built without permission. And to me, it's interesting that they figured out of something which was pretty hacky to get these ordinal inscriptions through, they were able to build something which is much more interesting and might be useful.

24:11But once again, I think you're presenting a very interesting critique, which is that they come from Ethereum, right? Roll-ups were first created on Ethereum. And as exciting as they might be, they also go sort of against the common culture of the average Bitcoiner, who are not used to this kind of stuff and are skeptical to more avant-garde cryptography. And this can be both great because it onboards people from Ethereum onto Bitcoin, which I think is sort of the holy grail of Bitcoin maximalism. But it's also difficult to cope for the average Bitcoiner who believes that the user experience that Satoshi has left to us plus Lightning is everything we'll ever have.

25:02Andrew CamilleriI don't really care that it came from Ethereum. If there's anything good to come out of it, that's fair game, right? But I do find all this crazy cryptography way over my head. And therefore, I try to dismiss it to the point where, OK, if I dismiss it, how many others are going to dismiss it at the same time? And how are you going to build something that people actually want to safely use? If you get just the core primitives of Bitcoin, the most advanced cryptography we have in Ark is MuSig2.

25:34That's crazy. You can build a whole second layer with just the most advanced feature being just that. I think it's quite a marvel at least. It's also like onboarding devs to the experience of building the Ark at least internally is quite easy, quite straightforward.

25:53Vlad CosteaBut once again, I guess we're going back to one of the first couple of questions. Do you believe MuSig2, which is a multisig standard, can supplement or make up for all the features that CTV would provide to Bitcoin?

26:08Andrew CamilleriI mean, in the case of Ark, yeah, I mean, we're doing pretty good. That's why I'm kind of opting out from this whole signaling ceremony of CTV and CSFS. I've been a proponent for it for years, way back in 21, 22. But at this point, it's like five years have passed. Why bother keep going at it? People get tired of hearing the same thing over and over. You can just do things, just build something, you know? And that's what we're doing at Ark Labs. And I mean, the benchmarks and the testing from our end has been like we're very happy with what we have without covenants.

26:55Even just so you know, it's like Ark Labs, before I joined, they built a whole feature complete Ark that uses the Liquid covenants, like all the advanced introspection opcodes available there just to prototype and see what the best, what they can do there. And at this point, I'm not impressed. What we can do now is more than enough at least to get started.

27:20Vlad CosteaBut once again, if you did have CTV, do you think that Ark would be more powerful?

27:28Andrew CamilleriYou can do optimizations. You can do some features here and there that become better. Yes, you can reduce some interactivity. But I'd say we have plenty of mitigations to the CTV mitigations at least. So we found workarounds for most of the issues or friction that people were scared of with Ark without covenants, to the point where we're not even entering the discussion and fighting about soft forks now. We're just going to ship it and actually show people that we can actually build great things. If people ship CTV, we'll be the first people to dive right in and use the opcode in everything we do.

28:12Vlad CosteaI do remember last year that the conversation around OP_CAT was a lot more serious. And it seemed to be like the way to go for a while. Even Andrew Poelstra, who is the chief scientist of Blockstream, was advocating for it. And at one point, I think the killer use case for OP_CAT on Bitcoin is to have STARKs, which are a type of zero-knowledge proofs. And the StarkWare people were unhappy with the lack of seriousness involved in the conversation. And some of their scientists came up with the ColliderScript paper, which basically proved that you can already do stuff like OP_CAT on Bitcoin right now to be able to bring these ZK-STARKs, but at the same time it's super expensive.

28:58So the trade-off is that you're going to end up creating something which is not efficient and is very cost-intensive, but not impossible. And the question that I want to ask you from this is, by using MuSig2 and Tapscript and everything else in Ark, do you believe it's more maybe resource-intensive or blockspace-intensive or costly than doing it with CTV?

29:27Andrew CamilleriBlockchain-intensive, probably not. There's more processing for users that create this batch together. That's completely true. But we've kind of abstracted that away and we're quite happy. Like we built an entire progressive web app, you know, like just runs in the browser with no dependencies, like at least no backends or anything. And we're able to join rounds with hundreds of people with no issue. Like we don't experience any interactivity bottlenecks just yet. With regards to the OP_CATs, yeah, I mean, to be honest, that conversation got very sour with the Taproot Wizards.

30:06Like, you know, having people jumping around on stage and looking like clowns does not really make you look very serious. So you can thank those guys if this conversation went sour. What can I say? It's like non-serious people make topics unserious. So, and yeah, like using OP_CAT only for STARKs and whatever else is insane. Like the amount of the expenses of the, like the amount of bytes you would use to do everything would be insane. Like, I don't even know if you can make it on a normal Bitcoin block.

30:48And ColliderScript, I don't know, I thought that was a bit of a fun toy. It's like, is this ever going to be a realistic, pragmatic solution to doing anything? Like, I know you can say, oh, you can do anything on Bitcoin already, but it's like, not really, you know, it's like, what? I think they did a test and it was going to be like $16 million to execute one covenant. I'm like, okay, what, did you actually want to prove something or are you just having fun here?

31:16Like, it felt like a bunch of nerds having fun with research.

31:23Vlad CosteaWell, yeah, but it's still good research and it still proves that you can do stuff without any upgrade, but in a less efficient way. And maybe that we should consider adding some upgrades just to make it easier for these people to bring liquidity and action to Bitcoin. Because at the end of the day, the conversation comes back to whether or not you're a Bitcoin maximalist and how you define that. There's the flavor of Bitcoin maximalism that believes that Bitcoin is already perfect and everything that you want to bring to this network is a scam and therefore you should stay away.

32:02But there's also the camp that is concerned about the security budget, is concerned about the fact that other networks like Tron are getting more users. And we do want to have this on Bitcoin. We do want people to pay with BTC. We want BTC to be the settlement currency for other transactions around the world. But the question is, how do we make this happen in a cost-effective, efficient and secure and preferably also private way? These are some of the qualities that are lacking right now.

32:38Andrew CamilleriYeah. I mean, cost-efficient and secure and private is like a Holy grail, right? It's like almost unachievable on Bitcoin for at least by all means that are available. I don't think it's coming to Bitcoin with all of those properties anytime soon. I mean, we can play around and do advanced privacy techniques or you can be efficient. You can kind of do both, but I don't think you go far. Like in WabiSabi coinjoins, you can do good stuff. You can achieve pretty good anonymity at least.

33:14But then you have to do some very hardcore interactive stuff to achieve cost efficiency as well. And that's actually what led me to getting Ark built. I was working on a WabiSabi coinjoin protocol payment protocol. And the idea was basically like in BTCPay, I added a coinjoin plugin at one point, right? I added a coinjoin plugin, which integrated with the WabiSabi from zkSNACKs. I also added a coordinator directly in BTCPay where you click a button and it just starts it, which is what led to basically Kruw getting bootstrapped initially.

33:53Now he's moved on to running a whole dedicated stack, but initially he just clicked a button and just got started. But anyway, yeah, I was working on a payment protocol on top of WabiSabi. And the idea was right now we have great payment batching, right? Every exchange does it. Like I was saying before exchanges do it, they batch a bunch of outputs paying customers. Great. But that means for every withdrawal you do, there's one output every single time. With WabiSabi, you can kind of do with very heavy interactivity, by the way, you can kind of do a batching for merchants into one output.

34:32So imagine you're an exchange and people are sending to the exchange deposits. If everyone is using WabiSabi coinjoin, the exchange could end up with one Bitcoin output. But it would be basically a combination of like 500 deposits in one go. And you could kind of do that. And I was like looking around, I'm like, okay. And I built a proof of concept and I was happy. But then I'm like, okay, this is very interactive. How do you, how do you make it asynchronous? Like I can't have all these senders and the receivers all being online within a very short time period every single time.

35:09That's where basically I ran into Ark, which was essentially like the basic on-chain primitive is just what I was describing. A multi-party protocol where people come together and they create a batch output, which from it become a tree that creates VTXOs, which is what I wanted. And Ark basically is just another layer on top. So you have the basic on-chain primitive, and then you have these VTXOs outwards and people can send them asynchronously without every single sender and receiver that ever existed having to come online within a certain time period to settle everything.

35:47I don't know what the original question was. I kind of sidetracked here, but yeah.

35:55Vlad CosteaNo, it's all good. We were talking about privacy a bit, and that's how you came with this story about how you integrated coinjoins into BTCPay. And I want to ask you more about that, but let me plug a couple of sponsors. What do you do, unfortunately, if someone wants to pay in stablecoins? And that's a problem that many of us working in the industry are running into, because unfortunately this is becoming more popular around the world and there are parts of the world that operate on USDT or USDC.

36:31But the good news is that you don't have to set up something for that specifically, and there are easy ways to swap it for BTC, especially in a bull market when it's a bad idea to hold stablecoins. Not financial advice. But one very good way is SideShift, which is this swapping service where you go, basically you paste your Bitcoin address and then send to someone else the USDT address that they're going to be using for paying you. And you don't have to do anything, you just wait for the BTC to come to your address, and that's pretty much it.

37:07They have good liquidity, they have pretty low fees, and also if you sign up you can get some token that's going to reduce the fees. And also they have the Trump coin and a bunch of other shitcoins that you can gamble on if you're into that. I'm not going to judge you. So check out SideShift.ai, and if you want a much simpler experience it's also integrated into Edge Wallet, which I found very convenient at a conference where someone wanted to send me Dash, and I was like, I never had a Dash wallet.

37:38But it's actually integrated in Edge Wallet, it has a lot of these altcoins, and you can also swap directly from Edge Wallet into BTC. You don't really have to hold that for a long time, you just swap it at your convenience, at the rate that you like, with the service that you like. SideShift is also integrated into that, and I think it's pretty cool because it has this feature and you can basically accept all the coins that people want to send to you and swap them into BTC instantly.

38:09So check it out, Edge Wallet has this feature. Thank you guys for sponsoring the show, and now Mr. Kukks I gotta ask you about privacy and the fact that in a very interesting way Ark looks a bit like TumbleBit, which was the product launched by nopara73, the creator of Wasabi Wallet, before he was working on Wasabi Wallet.

38:33Andrew CamilleriYeah, actually TumbleBit was with Nicolas and nopara73, I think it was a wallet called Breeze Wallet, before the current Breez. But yeah, they actually built the whole thing and they never actually launched it because nobody wanted to run the coordinator, and that was what in 2016 or something, so it's kind of crazy to think about. But I think, I don't remember exactly how it worked, but it had the same concept of people joining together to create a round, and in this round people are able to send money across it, but then they have to come back together to settle it.

39:19I guess it had too much interactivity for the... For the most optimal experience, let's say that. And it was also before SegWit, so it had like some crazy cryptography with RSA puzzle pieces. I forgot how it was that it worked, but it was quite an achievement actually, like the way it worked. Very interesting.

39:42Vlad CosteaYeah, but do you believe that Ark is similar in this way? Or is it superior in others?

39:52Andrew CamilleriI would say it's way superior. So the initial iterations of Ark were functioning very similar to TumbleBit. They needed everyone to come back online to settle everything. It had a huge footprint, the initial Ark at least, because every transaction had... Every off-chain transfers had to happen in batches that were always on-chain. Now we don't have that. You basically... The only on-chain footprint now you have in Ark is to basically get onboarded into the Ark, where you end up with VTXOs, and then you can transact these off-chain.

40:27And then when you're ready to settle, you create... You join another batch. But only... Everything in between is unbounded, right? The only thing that is keeping you from staying off-chain forever is the VTXO expiry. And that will basically require you to join a batch at some point before the expiry.

40:49Vlad CosteaYeah, that's something very delicate with the Ark design, which I never really understood, because you have like a two-week time to claim your VTXOs. Or else they're going to be sent to the source or something like that?

41:03Andrew CamilleriYeah, it's an arbitrary number, expiry. Basically, the Ark operator determines that timeframe. The reasoning behind it is because when batches are being created, usually it's the operator that fronts the funding for them. And users get onboarded into the Ark with the existing liquidity. Now, there is an exception to this rule, and that's basically users can join the Ark with the UTXO and basically collaboratively fund their own section of the batch for the batch output. But for the most part, it's going to be people already in the Ark that are trying to refresh their VTXOs so that they can get their expiry renewed, or people getting onboarded by doing an HTLC swap.

41:57It's a much better experience that way, at least in the UTXO way to do it. And I would say that the expiry is kind of a way for the operator to say, hey, okay, I gave you money. I need to get my money back at some point, right? So at least try to refresh it so I can get the outputs kind of cleared back into the pool of the funding pool that we have so that we can fund the next batches. Having said that, a lot of people were FUDing Ark because of liquidity constraints, but that was before we had this whole off-chain execution we had now.

42:38Now it's basically execute as much as you want there. When you're ready, you can basically join the next batch. And yeah, that's only when the liquidity is required. And we anticipate most people to actually want to stay off-chain for the most part. There's a couple of reasons why you would want to become part of the new batch. And one of them is the expiry. The other is your unilateral exit is cheaper when you're close to a batch, when you're part of a new batch. And three, you don't have this trust assumption that we call pre-confirmation.

43:22Pre-confirmation is basically if you have off-chain execution, pre-confirmation means anybody of the prior owners of the VTXOs may collude with the operator to double spend your coin, your VTXO. But when you use swap into a new batch and you get a fresh VTXO, you completely get rid of that trust assumption. You go back to basically unilateral Bitcoin finality kind of level of trust.

43:56Vlad CosteaRight. So you mentioned something about operators. And if I recall correctly, Ark requires these ASPs, which are Ark service providers. And I have to ask you, who are these operators and how do you become one?

44:14Andrew CamilleriSo the way we envision it is that there won't be that many. We're not looking to create a network. Ark is not meant, at least the way we're, it's not like a Lightning where you have a payment network where everyone needs to run a Lightning node and you form channels and you form basically a routing network. In Ark, we kind of lean into this centralized approach. Like we know that Lightning has basically become a hub and spoke model because that's the most efficient way, like capital is more efficient when it's centralized.

44:46So in Ark we're like, okay, what if we go into this direction and just lean into it? What can we achieve? And what we ended up with is basically, we provide the liquidity to this giant thing. Users don't have to worry about channels or onboarding configuration or friction. And basically everything inside this Ark is cheap and efficient. So we don't see many people operating them. I think it might be, you need serious operators. It's not like just something you run a command and it's like ready to go.

45:23The whole point of Ark is that the infrastructure, the backend is quite complicated, but as a user or a wallet developer, it's like almost nothing there. Like we shift, we take away all your pain and we just put it on ourselves. So, I mean, we, I won't say that there's going to be two operators. I think there might be maybe five to 10 overall, but most likely it's going to be a small number.

45:51Vlad CosteaOnce again, how do you become an operator? What do you have to do and how much liquidity do you have to put into the system?

45:59Andrew CamilleriYou can be an operator by basically, like we have all our backend code open source. Everything is MIT licensed. You just have to be able to run it, manage it yourself in a proper way, in a serious way. Liquidity, I mean, will depend on how much users you get. The more users, then the more liquidity you need. But if they onboard themselves in there, maybe they will come with their own liquidity for the initial liquidity. So, I mean, really depends. I can't give a number, but it's not like every single payment in every single Ark transaction is going to cost liquidity to the server.

46:39It's more about how often do you do these batches and that's where liquidity has to come in. So, if you have 10 people joining a batch and they have one Bitcoin each, that batch is going to be 10 Bitcoin in liquidity. But that's an unrealistic number, obviously, because, I mean, like one Bitcoin in liquidity for every single user there might not actually be a thing. So, I don't know. I don't have the numbers up front for me. I would say for a serious business, they would be able to operate this without too much concern.

47:20But not for consumers. It's not going to be like, oh, I'm running this in my local community on my Raspberry Pi. Please don't do that kind of thing.

47:31Vlad CosteaIt's not a Fedimint, guys. It's an Ark. By the way, what are the differences between these systems? Because for a while, the Fedimints, the ecash mints, they were presented as both a scaling and privacy solution. And I think there's a bit of an overlap in terms of goals with Ark.

47:52Andrew CamilleriYeah, I guess. But I don't know. If I wanted a... So, I find ecash cool. Like, you know, WabiSabi is basically built on ecash. I find it really interesting, very fun, very cool. However, if I wanted to use a federation model, I would just go to Liquid. And it seems like most people don't want to use liquid. So, I find the traction for Fedi a bit, I don't know, non-existent, maybe. I don't know. I don't find it that cool. The tech is cool, but I don't find it appealing for me to try and build on it.

48:33Privacy, yeah. I mean, it's ecash. You get some pretty good privacy with ecash if you have scale inside the Fedimint, right? If you have five users, then I'm okay. You can probably tell who is who. What else is there? Yeah, I mean, in terms of Ark, privacy is basically... Like, initially it was pitched like a privacy thing. It's not really that anymore. We're more general purpose. Virtual mempool means virtual transactions means UTXO style means normal Bitcoin. And we can't automatically add confidential transactions. All the transactions inside the Ark have to be real, mineable Bitcoin transactions.

49:21We can't just hack around and add crazy stuff. What would be cool, like the entire team at Ark Labs is very experienced with Liquid. They spent a lot of years building over there, doing all sorts of crazy experiments. But yeah, we can't just magically add confidential transactions to it.

49:41Vlad CosteaRight, so what is the mechanism in place which prevents these operators from stealing money from their users?

49:50Andrew CamilleriYeah, so basically I mentioned the MuSig2. The batch output is basically a giant MuSig2. Like every single person that has a VTXO inside a batch is co-signing the output. So if you have 100 VTXOs, it's 101 of 101, basically. The operator is one of the co-signers there. And then the tree is basically grabbing that output and creating more pre-signed transactions. And basically you say 50 of 50 here, 50 of 50 here, and you keep breaking it up until it becomes one VTXO each.

50:30So that's what prevents the operator from just saying, oh, this batch output looks very juicy. I'm just gonna take it. Obviously, after the expiry, that is a fair game for the operator to take, to sweep. But there are mechanisms in place so that you can grab your VTXOs which are about to expire and swap them for one in a new batch. When you create a new batch, you basically swap your old VTXO for a new one in the batch. And that is how you avoid getting swept.

51:03Again, we're expecting Ark to be run by operators, meaning they might sweep the batch output and you haven't managed to refresh it. They will just give you your claim back to the Bitcoin in a new batch when you're back around. So basically it's like a graceful degradation.

51:31Vlad CosteaOkay, so what would you tell to people who are thinking about HODLing but they also want to use Ark? Should they pay attention all the time to the expiry date for these VTXOs or is there an automated process in place which can help them basically sleep at night very well for a few years?

51:52Andrew CamilleriI mean, if you're HODLing, use on-chain. There's no second best there. You should definitely HODL on-chain. But if you have funds on Ark, we've basically done so much research around what we can do and methods on how to refresh without the pain of you being super scared. So for example, if you have a web wallet or mobile wallet, you can get these push notifications. In the browser, we have this thing called web service workers which can do basically background stuff. And mobile devices, there's these things called push notifications or silent push notifications that can activate your phone just enough so you can do the process.

52:39We also have a new upcoming system called the delegator system where it allows you to basically delegate refreshing or basically swapping your existing VTXO for a new one without your active participation at all times. So basically you tell them, I have this VTXO. Here's this config. You give them some fancy Bitcoin transaction with some tricks and they are able to give you a new VTXO later on in time before the expiry without ever giving them full custody of your coin. So we have plenty of options. That's why we're also like this is one of the main things that people tell us about CTV that we need.

53:25But I think we figured out a very practical, pragmatic solution for at least for this particular concern that people might have.

53:36Vlad CosteaWhat about payments though? How long does it take for a transaction to be settled and be considered final within the Ark ecosystem?

53:45Andrew CamilleriSo you can do payments in the same way of Bitcoin. So you generate an address and you send money to that address which creates a transaction and then you broadcast the transaction. You submit the transaction to the operator and the operator tells everyone about it. Now this is basically instant. You don't have this concept of confirmations. However, the new VTXO is in this pre-confirmation state which is basically the operator can collude with the sender to double spend it. So you can keep doing this over and over and over and they are always instant.

54:23You will get the feedback loop instantly to the other wallets. You don't have to worry about that. But if you want real Bitcoin finality, you have to join the next batch and swap your pre-confirmed VTXOs for new VTXOs which are part of the batch. And these VTXOs have no pre-confirmation. They're basically, we call them Bitcoin finality because nobody can take them from you.

54:52Vlad CosteaOkay, that's interesting. But you still did not mention the time. Does it take a few seconds or would you say that you need a more conservative measurement?

55:03Andrew CamilleriSo if you want to, for Bitcoin finality level or just a normal transfer, like if you just do, oh I'm sending money to Vlad's address, you will get the money in your wallet basically showing like spendable instantly.

55:18It's not exactly the same but pre-conf is very similar to zero-conf except that it's not it's not actively possible to just double spend. You have to get the whole operator to collude with you which is kind of dumb for an operator because your entire business model relies on not doing that.

55:44Vlad CosteaI guess you need Peter Todd to come bring RBF to that. Make zero-conf not economical anymore.

55:52Andrew CamilleriYeah, that would suck but we have mitigations as well. We also felt like this pre-confirmation thing can be a bit better. It's the same trust assumption that people have been talking about with statechains for a long time and one mitigation for that that we feel is quite good is to troll our co-signer. Ark transactions by the way require the Ark operator to co-sign every single transaction inside the Ark and this is what prevents basically users from going wild and just double spending everyone. Anyway going back to that the Arkade co-signer is we put this in a trusted enclave which is basically a special piece of combination of software and hardware which basically says software running in here can't be touched by the outside or nobody from the outside can actually see what the software is kind of executing.

56:56You can't just tamper with it easily and we're going to use this basically as a way to say okay hey I know you have a pre-conf but at least our signer is in this special environment that we can't just touch or steal the key from and basically double spend everyone. The cool thing with these environments is that they actually provide a public attestation, basically a signature stating that the software running in here is a specific version of the software and it hasn't been touched or tampered with.

57:29So people can verify that the software is the version that we publish online in the open source variant which is not malicious and we can't go in and just tamper with everything and basically make it do non-kosher stuff.

57:49Vlad CosteaIs it possible for governments to meddle with the Ark and basically compromise the operators of the network in a way that is detrimental to the user?

58:06Andrew CamilleriI guess they could try to shut it down, I guess, but that's why we have the unilateral exit, right? So, I mean, that's our weakest point is centralization. That's for that's a given, right? So, like the only way to make something efficient and give you something that's even worthwhile is by leaning into centralization. However, I mean, we do have a bunch of research in-house for figuring out how to kind of scale down to zero. What that means is basically, okay how much of the infrastructure do we have to run ourselves long term? Like, can we make people run this themselves? And then they basically connect to it and form like a hive mind inside one operator.

58:53And that's something that we're like more of a long-term goal, obviously, like first we want to ship out, show people what's possible, get people hooked, and then go for the crazy stuff. But yes, we have to we have to be mindful of attacks by large entities, regulatory entities. That's why we have to basically, be it's a business, right? So whatever we do, we have to make sure we don't break any laws, I guess.

59:25Vlad CosteaI want to ask you more about the user experience of ark and what it's gonna be like and what the wallets are gonna be like. But before that, let me plug the last few sponsors of this episode. So we also have Bitcoin.com News, which I'm sure you remember, Andrew at this point that there was a time when Bitcoin.com was telling people to buy BCH. And now if you go to the website, you'll notice that their logo is orange. And a lot has changed in the meantime, like it's not the same website. I'm the person who reached out to them and said, hey, I see that you guys have finally understood how the market works and acknowledged that you lost the block size wars. I've had their CEO on the show also and he acknowledged that they sort of lost and Bitcoin is not exactly what they thought it would be.

1:00:15But anyway, they have pretty good news coverage. They cover countries about which you don't hear all the time in Western media in the space so I also saw some news about gold in there I saw some news about India about China and lots of countries that don't exist on Bitcoin Magazine which is maybe too Trump-centric nowadays so if you want to get a more diverse kind of news about Bitcoin check out Bitcoin.com News, which admittedly has become much better over the last couple of years and there's also NoOnes.com which is a peer-to-peer marketplace. It's basically designed for the purpose of onboarding the global South. And the CEO of this project is Ray Youssef who was formerly known for Paxful and making that happen.

1:01:07He's very hardcore in terms of traveling to Africa and building schools and trying to make this peer-to-peer economy work. And if you want to provide some liquidity to this peer-to-peer market. You can join their spot exchange or their peer-to-peer exchange or even sell gift cards which other citizens of the world will buy from you and sell at a premium to others and so on. It's a pretty interesting process and you can be part of this process of empowering the global economy so check out NoOnes.com. They even have a debit card for spending your coins if you're into that. I'm personally not but whatever floats your boat.

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1:02:29They also have a coin recovery service in case you lose some of the words in your seed phrase or maybe that you forget your passphrase and they can try to help you to recover. Check them out. It's Hodling.ch. And thank you for sitting through my ads and thank you to all the sponsors for making this possible. Now, Andrew, I gotta ask you, how is Ark gonna look like from the user's point of view? And which wallets are gonna integrate it? Because that's another big, I guess, roadblock towards adoption.

1:03:05Andrew CamilleriI mean, the best wallets that integrate Ark you won't even know it's running there, to be honest. Like, at least the initial ones, they're all kind of focusing on like, like the payment rail. So it's like, oh, we've wanted to get Lightning on on our wallet for years, but we couldn't make it work because it was too complicated or the the tricks we've tried weren't good enough, or we don't want to trust this specific trust model. I think Ark will be very easily to fit into that model. Like like you won't even notice, like sending and receiving will be like BOLT11 right? So it's like, okay, it's a Lightning invoice. So like, okay, it's just working there. And no channel. No channel management. You generate a normal a Bitcoin seed phrase or you use a private key with it.

1:03:53That's the most obvious angle that people are looking at integrating Ark for. With Boltz because those guys are killing it with being the LSP that powers this whole thing at this point. Then you've got basically building inside Ark itself. So the experience is very similar to on-chain you generate an address. People send money to the address a transaction appears and your balance gets updated and now you have a new coin to spend. Like we're not doing anything crazy like your balances are there. If you have coins which are expiring, the wallet will automatically manage it in the background. And the the real magic here is basically we're doing everything behind the scenes in the SDKs we're shipping to developers, meaning like you don't have to build magical stuff, complex stuff yourself.

1:04:45We're shipping as much as we can so that you don't have to worry about it. So when you integrate, you just say, get balance, get address, send money, you know, that kind of stuff.

1:04:56Vlad CosteaAbout an hour ago you mentioned that there's gonna be a possibility to use the Lightning network on top of Ark or vice versa would you be able to use Ark on top of Lightning?

1:05:11Andrew CamilleriI mean, you don't use on top, you use it in conjunction basically, I would say that. To be fair, in Prague, Vincenzo actually did a proof of concept showing basically, what we're calling a bridge node, where he has a Lightning node that can speak both normal Lightning channels, but also Lightning channels which are funded on VTXOs. So he basically created like a Lightning channel inside the Ark that is able to route, receive and send to the giant Lightning network, but the channels are virtual, like completely off-chain. So it's like, you know, the channel factory dream that everybody has been waiting for in Lightning for the last what, six, seven years, it is already kind of possible on top of Ark. So that's a that's a more advanced way of how to look at it, but I envision like the Boltz swap to be the the main way to to to see this execute, at least with Lightning interoperability.

1:06:19Vlad CosteaAre there any of these popular Lightning wallets like Phoenix or Blixt or Breez planning to integrate Ark when it comes out do you have the sort of partnership in place?

1:06:32Andrew CamilleriWe have some, I think we have a decent number of design partners or wallets waiting. Everyone seems to want to, is in a wait and see kind of way. It's like okay let's let's wait till it's on mainnet because, you know, like the past two, or three years, there's been like a hundred layer twos popping out and none of them get closer to actually shipping on the mainnet with whatever they promise. So we're basically waiting to to give them the mainnet instance. They will get to experience it themselves. We've actually done demos to people with with a private mainnet instance we have with Lightning sending, Lightning interoperability, so that's it's definitely there. Very close. And we do have design partners, wallet design partners, but I I won't show them just yet.

1:07:22I'll give them some time to do their own fancy announcements.

1:07:27Vlad CosteaYeah, I sort of pushed you in the corner here, asked you for information which is maybe above your pay grade, you're just working on developing applications for Ark. And I want to ask you about something which is called Arkade OS because you put that in your description, you call yourself the executor of Arkade OS. What is that?

1:07:48Andrew CamilleriYeah so yeah, so I am basically the CTO of Ark Labs now. So I guess that's what executor might be I haven't really mentioned it out loud publicly too much. So maybe that's the reasoning there. But Arkade OS is our product, basically. It's our Ark instance that we're gonna be operating ourselves. It's actually not just an Ark instance. We've been calling it the Ark superset for a number of reasons. Basically, we've been working very hard to ship the primitives for Ark, narrow it down to the concept that are needed to execute what the what Ark should be doing.

1:08:34We've actually have a paper a light paper right now white paper later on this year that will be published that formalizes Ark what it what how it works what the process is who the all the all the basic all the nice and juicy details of how to build Ark and what it does. But Ark Arkade is our superset in that we grab all the trust assumptions that we thought could be better, and we we expanded on it to not fully mitigate, but make it more acceptable to people, more more more usable. So for example, I mentioned earlier that we have the trusted execution environment where we throw the the signer inside it, where we can't basically take the key out of it and just basically go wild.

1:09:22That's one piece of it. That's one piece of the puzzle where we make the experience a bit more bearable to people to to experience a pre-confirmation state. We don't water it down. We don't oversell it. We're not going to say that this is now instant settlement or magic settlement. We still call it pre-confirmation where we're not going to be deceiving people with these things. Most of the team is like proper Bitcoiners at this point that have been through a lot of madness. So we know what that's like. But anyway, apart from that, since we feel like the pre-confirmation state is pretty good, what if we could do more magic inside these Ark transactions in our virtual mempool. What if our cosigner did more than just cosign?

1:10:08And that's where Arkade Script comes in. Arkade Script is basically our secondary Bitcoin script interpreter, but we added all the opcodes to it. And what we're doing is the Ark transactions are still just normal Bitcoin transactions. Same signature requirements, same Bitcoin script. But on top of it, we augment it with with a with a detached Arkade Script that is committed inside the the the Tapscript spending paths through a through a tweak hash to the cosigner. It's a bit too nitty-gritty too much small details. But basically, we commit to an Arkade Script which has full-on introspection opcodes.

1:10:57So basically, you can inspect every output. You can inspect that the output is a specific type of script. You can inspect the inputs, the amounts, the values, the scripts, the tweak verification. We add arithmetic 64-bit opcodes, streaming functions. We add everything, basically. Everything you think of that you would need to do crazy crazy stuff. The idea behind it is like, we want people to come back to Bitcoin, like, we we know the mempool is empty. And I mean, the reasoning behind it is that most people ran away when they saw crazy fees and drama, like what six, seven, eight years ago, and they never look back.

1:11:44So it's on us to basically try and make it make the environment more enticing, bring bringing them what they expect in a modern contracting language and that's Arkade Script basically all the opcodes but off-chain.

1:12:02Vlad CosteaInteresting it sounds a lot like what Super Testnet was telling me about BitVM back in 2023 or something so it is a virtual machine right.

1:12:13Andrew CamilleriI mean I wouldn't call it a virtual machine. It's like we have a Bitcoin script interpreter, right, to to cosign our transactions. We just added a new one on top with with all the extra opcodes available with some extra security checks, obviously, and stuff like that. We threw them in the trusted execution environment and we verified that the state is correct. And what this does is is inside Ark when you're when you have a VTXO, you can actually do full-on covenant contracts. So you can do liquidity pools, privacy pools, whatever crazy non-interactive swaps. Those are very interesting, for example.

1:12:59You can do all the things inside the Ark at least with the Arkade Script.

1:13:07Vlad CosteaOkay, so given the fact that you have all of these tools, What do you think is a super underrated use case, which you hope is gonna get a lot of traction and bring people back to Bitcoin? Because I think Ark gets promoted as this improvement over the Lightning network for payments, but it can do so much more.

1:13:27Andrew CamilleriYeah, like I I really hate that framing, to be honest, because like, like, okay, we're we're fixing, we're making payments easier on in Bitcoin, but it's kind of like, it's for the same crowd over and over. Like how's that gonna work? Like like okay the next the same thousand people now have a better experience. It's like big whoop. Like well, we need to get the next hundred thousand million people back to Bitcoin. Like, well, like, most people were you know very happy. But like I as many to so many I talked to so many people talking about like they missed their escrows. Like people used to conduct escrows all the time doing basically P2P exchanges, for example, even just taking out a loan with somebody, that kind of stuff.

1:14:14Like that's one of my my go-to at least, explainers to people of what you can do on Ark mostly because you don't even need Arkade Script for that. It's like such a simple primitive that it already exists on, Bitcoin, that can already exist, and you can do with what they're with whatever there is now. And yet, it's so minimally used today. And with Arkade Script we we like to talk we've done a lot of crazy stuff on Liquid. Like me, myself, and some of the Vulpem Ventures people, which have now become Ark Labs we we have a paper called Synthetic Assets on Liquid. The the concept behind it is basically.

1:15:00Bitcoin is great collateral. People love to hold Bitcoin. What if you use that Bitcoin to atomically lock it in a covenant and mint an asset that is pegged to a real world asset? For example, a stablecoin. At least that is a stablecoin that you can verify through through through through the covenant that is backed by over collateralized Bitcoin. And when you have the stablecoin, you can always go back to the to the UTXO covenant and unlock your your your Bitcoin back out as you burn the the assets with with with atomically with the stable with with the covenant.

1:15:47So that's my favorite one. Another one is non-interactive swaps. You basically have some Bitcoin and you want to sell. You you post it as a, you create a covenant script, basically, where you you lock up your Bitcoin in there, and any and you say what your price is, anyone can come over and basically, when you're offline, claim claim it for in exchange for for for the assets token, basically. So if you have, you do need some kind of asset protocol on top as well. So for example, if you have a Euro stablecoin, you would you would basically do a non-interactive swap where the the person that holds holds the Bitcoin is offline, asleep somewhere and somebody can just come and atomically claim that for in exchange for for the asset they were requesting.

1:16:37Yeah, I know I know you're quite an anti-stablecoin but I think in in a world where in a world where you can actually verify that the stablecoin is, like personally, I really like stablecoins that are without bank accounts attached to them without crazy mumbo jumbo secretive cults managing the whole thing.

1:17:01Vlad CosteaWell, sure. I wouldn't say I'm anti-stablecoin I just prefer free market money, you know? Like I would rather hold Zcash or Monero or something else which is actually reflective of the demand that exists on the market and does something which I find interesting for my personal use cases as opposed to just saying well I'm gonna use digital dollars which once again can be useful in some situations my girlfriend is from Iran the only way she can receive money across borders in a situation where her parents are outside of the mainstream banking system is to use Tether and I I do get this that a lot of the world has discovered a very useful situation in sending USDT.

1:17:49It's just that it's disappointing. It feels like we sort of lost the battle.

1:17:57Andrew CamilleriI mean, I get it, but it's also because there are no good tools to to do everything else. And people are very, their their framing is still too like USD to fiat currencies. So, I mean, if you can actually get both sides of the trade here to be backed by Bitcoin. So one of them is actually Bitcoin and the other one is fiat that is backed by Bitcoin with no central authority managing it with a bank account. I think that's a pretty good deal to have.

1:18:29Vlad CosteaI was gonna ask you this because you spent and you're still spending a lot of time on BTCPay which is a very beautiful payments processor. It's the one that Tesla has picked for their integration of Bitcoin payments in 2021. It's the one that's picked by a lot of services which are not even related to Bitcoin. I remember there was a flight service at one point that had a BTCPay integration. So you could pay for your... Yeah, CheapAir. There was also. What's it called? Anyway, I'm gonna remember later. My point is that you have all of these. Oh, yeah, it was a VPN service, the Nym one. NymVPN was accepting Bitcoin on Lightning and on-chain using BTCPay and it's really amazing to see how this piece of software which initially was a response to BitPay adding KYC ended up getting so much traction and was maintained for so many years and is still maybe the benchmark... Okay, we are back.

1:19:35I have to apologize. There was a power outage in my building, I guess. I'm not sure if it also happened with the neighbors. It just took a few seconds, but then I had to wait for the internet to come back. Before this issue, I asked Andrew about the lack of payments and the fact that it might be frustrating to a degree to build BTCPay Server, to expect Bitcoin to become the medium of exchange and then wake up in a world where even Donald Trump tells you never spend your Bitcoin.

1:20:10Andrew CamilleriI mean, I don't see it that way at least with with BTCPay is kind of like for the for for the crowd we have, I think we do really well. Like the amount of volume through that is crazy. Even though we don't know the actual numbers, like when people come up to us and report, like basically. Like they give it tell us, oh, there's a bug. I was like, okay, can you give us some info? And they're like, yeah, I'm transacting like millions of dollars every month through this. And it's like, okay, wow, crazy. Like we had no clue you were doing so much volume. You never even post anything in the chat or support or anything. It's just this random DM. So, I I wouldn't gauge the the general market, the general Bitcoin space for for success rates.

1:20:57I think success has been very much accomplished, I would say. It's more about the mainstream adoption we saw, and and like by 2017, 2016, back then it was crazy, right? Like everyone was adding Bitcoin online, like all the stores were doing it. I really wish we could go back to that. But I feel like the only way we can get that back is gonna be like a huge monumental change in in how we frame things. It can't just be like oh number go up, I don't think people care enough for that. And when you say number go up, they just go buy a stock now instead. Like that's really really not what I want to incentivize. Like that's actually the worst right now. Getting people back into the grassroots movement of of why we do Bitcoin, how we do Bitcoin, is so important.

1:21:47And I think we're losing that. But I think that's the that's the only way we can succeed the medium of exchange. Like we try our best, but it's gonna take something monumental. And that's a huge part of why I'm doing Ark Labs. Like, BTCPay Server will be incredibly successful beyond beyond Bitcoiners for for mainstream once we get back to users, get back people to believe the Bitcoin vision of transacting and doing everything of all the financial instruments on Bitcoin today.

1:22:23Vlad CosteaWhat do you think sort of killed adoption in Bitcoin? Was it regulations or was it just speculation and the fact that people realize, well, I can just hold on to this asset and it's gonna go up in terms of U.S. dollars and why would I ever bother to spend it?

1:22:44Andrew CamilleriI think all the drama from the from the fork wars was was horrible. People were like, fuck this. Like why should I be in this? Like this is just a mad bunch of mad people just fighting over over and over. That was one thing. Also, the fee burden that came suddenly like scared the shit out of people, it's like, okay, I can't operate my business on this. I can't tell my users to do this. Like, like actually you saw a big shift of people telling, oh, just use Litecoin. Like, like I'm not really a big fan of Litecoin to be honest, because it's kind of like, like, okay, it's like, do I really want to have like an intermediary as asset to, to do transfers with? This like, yeah it feels kind of weird to me. So I think it's, it's a combination of those two.

1:23:29Regulatory did not help at all, although for the most part regulatory burden is mostly on centralized custodians that offer payment processing. So like if you do a BTCPay Server you don't really run into that, at least it never affected us. But yeah, I don't know, loads of combinations today that kind of kind of prevent it from being medium of exchange. We need a good framing that is fit for for for the purpose. Like right now, we just don't have to... This whole treasury company thing is just madness, honestly, to me. And it just pollutes, taints the whole space, makes us look like, I don't know, weird corporate bankers instead of what we really wanted to do.

1:24:20Vlad CosteaYeah, in regards to what you said about Litecoin, what's ironic right now is that for 18 months in a row, it is the most used currency for payments on BitPay. And there are also some use cases for it on the internet like you can find websites that accept it, it has a network effect. It's just that there are very few holders and that's why the price doesn't really go up. But in some ways, it is exactly what the Bitcoin Cash people wanted. Plus it has the I'm not sure you looked into it, the Mimblewimble extension block, which is a soft fork that adds privacy and extra scaling.

1:24:59Andrew CamilleriYeah, somebody built a plugin for BTCPay with Mimblewimble Litecoin, I think. Yeah, I think it's there. I don't know if they maintained it or not, but I think they did it. I don't know, I find it kind of I find it kind of weird because you've got Litecoin and then you've got the extension blocks on top of it and it's like, how big is the anonymity pool there really, because it's also like, if you're using Mimblewimble for privacy, right, how many people are swapping in and out of the Mimblewimble extension blocks. And all those swaps are the weakest link for for everything privacy related. Like you could have the most black box privacy preserving tool in the world, but if you're just swapping in and out from it to your normal Bitcoin wallet or wallet or whatever else you use, like that's going to be the weak link.

1:25:48Like Chainalysis has dedicated departments just for swap detection.

1:25:56Vlad CosteaOh, sure. But I can argue it's a bit better than a coinjoin.

1:26:01Andrew CamilleriTechnologically wise, yes, better than a coinjoin. But I mean, coinjoins, look at look at Kruw nowadays running the WabiSabi stuff like those coinjoins are crazy big. Like I would say, like, if you want privacy, you can just do that. And the added bonus is you can do a direct Bitcoin payment on it within inside it, like you can batch your payments directly inside the coinjoin even on Wasabi Wallet, I think.

1:26:28Vlad CosteaNo, it's cool because you have this large anonymity pool, but at the same time, you can't hide the amounts. I think that's the biggest weakness. You can see how much is being sent with every transaction, and you can make some guesses from that. On something like MWEB at least you hide the amounts that are being sent within that layer. Of course, I mean, if you put one Litecoin in and you take one Litecoin out, it's sort of obvious that it must have been the same person or a crazy large amount. But for small amounts, I think it works pretty well if you're hiding in that crowd.

1:27:05Andrew CamilleriI don't know. I mean, with with the amounts in Wasabi in in at least with WabiSabi V2, it's been kind of pretty good, I would say, because people just stay in the pool. Like they stay in the coinjoin. They keep remixing over and over and over. And like if you had one Bitcoin and you went in, you did a payment and then you left a Bitcoin in there, it will decompose and reconsolidate and decompose again. Eventually, your your amounts don't really. As long as you stay in there, right? As long as you stay in there, your your amounts don't matter too much. Like I had it, I had the coinjoin plugin had some very advanced features in it in BTCPay at least where you could even tell it so that when your UTXO set becomes certain size, like let's say you have 50 coins, start consolidating it down slowly, but only if the fee market is at this specific market rate.

1:28:04So it had like smart logic to handle that. Basically payments in the store, Like, when people paid you in, they would automatically join the next ones and basically join the pool. If you wanted to do a refund to somebody, you would schedule it and add it in the next coinjoin as a batch payment outwards. Like there's a lot you can do, even with just basic Bitcoin. It's just people try to take the easy way out. Like it's not that these technologies aren't superior in terms of what the what you can do with them, it's just they're not Bitcoin. So I try to focus only on what Bitcoin, on what you can do on Bitcoin today, even if it's like 100x pain, and maybe it's not, you know, as efficient as you would like it to be, or the amount of complexity you can take a bit of time to to get around.

1:28:55I still think it's a worthwhile venture. You can still achieve pretty good, sufficient privacy, anonymity and and cost and scalability on on Bitcoin today.

1:29:08Vlad CosteaWell, yeah, but my point of view is that you have open source technology, which is a hundred percent with compatible with Bitcoin. And it's basically off the shelf. You just take it and you soft fork it into Bitcoin. And it's been tested for a long time. Nobody was able to find any issues with it. If you think you're smarter than the people who tried it, then you can basically try to break it and there's a bounty for it. The bounty being basically the entire liquidity that's inside of this layer.

1:30:04To complete the project as a protocol, as the money layer, as something that should be useful for as many people as possible and also provide fungibility which is a fundamental feature of money.

1:30:21Andrew CamilleriI agree. I'm just not very optimistic with getting anything into Bitcoin, like to the point where I'm like, I just opt out from the conversation. Like I I'm I'm just focusing on what I can do an impact on. So BTCPay Server was great because I didn't need to change anything and there was still so much to showcase. Like you don't... For example, BTCPay is like the ultimate showcase of saying, you don't need a centralized payment processor. We literally have like this whole decentralized money and you still go to a custodian payment processor. Like, come on. Like, come on. It's like the most simplistic thing you can build for Bitcoin. You just have to make it you know 99% 99% of the work is basically making the UX smooth as hell, making it feel like you paid for it, but you never did.

1:31:09And the same with Ark. It's kind of like, I wish we could do crazy things on Bitcoin. Although we can't do it on Bitcoin, let's build a virtual layer where we can execute all this crazy visions that we have for Bitcoin, at least showcase the people that if there if there is something you can do in between, you can do it there. And maybe this is one path to getting people to actually do more, to getting people warmed up to do a soft fork in Bitcoin, showcase all the crazy things you can do in a second layer and hopefully it can move down. But you can't do that when your second layer requires crazy covenants or any kind of soft fork in in general at this point to to to enable it to to a pragmatic and acceptable trust model.

1:31:57Vlad CosteaWell, that's the interesting part because these covenants are not that crazy. I mean, the amount of changes that are being brought by CTV is very small compared to SegWit or even Taproot.

1:32:08Andrew CamilleriYeah, I agree. I completely agree. Like they're very small changes or at least very well understood. I mean, there's no no change is small in the eyes of Bitcoin at this point, I guess. But well what can I say, like, it's not my call, whatever rough consensus means, I guess.

1:32:27Vlad CosteaIt's I don't know what it means. I don't think there are too many people out there who spoke with as many frustrated developers as I have. I've heard all the points of view on this show. And there are so many guys just waiting for this one upgrade to go through so that they can get to work. And they've been going to conferences, they've been doing all of these hackathons and dev days and whatever, and they showed what can be done, they tried to promote it, but then they realized that the average user doesn't care. Because the only tangible and well understood use case for Bitcoin is number go up. And that's what that's why when Michael Saylor speaks on stage you get basically all the seats occupied and also people standing just to listen to it and then you get someone super smart who is Building a layer two or is trying to bring something to Bitcoin like let's say a good example is Jeremy Rubin, right?

1:33:26At one point he was considered to be this troll who's trying to destroy Bitcoin or some state agent or whatever and on the I guess on a long enough term, it was proven that he was sort of right and His proposal was pretty conservative compared to others and most devs today can agree that CTV is the best compromise for allowing Bitcoin to have for example coinjoins without a coordinator or non-interactive Lightning or more powerful Ark or better L2s in general, like it's useful for this purpose. But at the same time, the average user slash node runner slash LARPer on Twitter slash not user will not understand the nuance involved in this.

1:34:17And they will be like, yeah, it's not useful for myself. Probably I will never use that because all I want to do is just keep my BTC in cold storage.

1:34:27Andrew CamilleriSo I mean, if you're building a business that relies on a soft fork, you're not gonna make it, like like doesn't matter how much money you have or how many things you sponsor or show, like I don't think you're gonna make it. That's the worst way to build a business. Like like I don't know I don't know how to make it easy for you, to like, there's nothing you can do that will make your life easier by going banking on this kind of on this business plan, let's say that. I think I think what happened with Jeremy was he kind of pushed it a bit too fast, you know, like, like in 21, like, momentum was building up, people getting kind of warm to it, but it was so close to Taproot. And people are like, we just did this, like, you really want to do it again.

1:35:13And then it's like, I think there was like some activation client kind of pushed pretty fast and people are like, no, fuck this. And that's what happened there is like, people like, fuck this guy. He must be doing something with ulterior motives and, you know, shoved him aside. And okay, now people are rediscovering it again because they've they've basically got the trauma out of the way in their life and they can focus on it again. But I mean I think I think there were bad moves made. And I mean it's always a there's always consequences to to how you how you execute your business plan, right? So being cautious and being patient is very important. But also not banking on some very on something outside of your control is is you know the right it's not the right way to do that.

1:36:02And yeah, I mean, you can definitely build crazy, great second layers, even with something some with simplistic soft forks. But I don't think CTV enables the magic that people are expecting it to. Like people have been getting kind of frustrated, and then they they start overselling. That's the biggest problem that you'll see. Same thing happened with Taproot. People oversold Taproot that's like yeah this crazy, privacy preserving, ultimate scaling tool. It takes a long time before something good comes out of it. Like you saw it with SegWit, we saw it with Taproot now. SegWit took, what, like six years before it actually hit like a decent percentage of usage. Taproot is the same. Like Taproot really enables a lot of cool stuff.

1:36:49Like Ark is basically a child of Taproot. We need tap we need the tap trees, we need the MuSig2 stuff, we need all that stuff to to enable Ark and we're very grateful for it. But look how long Ark took to be formulated and to be polished off into something that is you know great and definitely acceptable by today's standards of a layer two. It took, what's seven years? I I forgot how long when when we activated Taproot six years, five years, I forgot. So it always takes a huge amount of time. You can't just push a specific agenda and just say, yeah, this will do it. This will definitely be this time. It's different. This one will actually not be oversold and will give us all the things we want.

1:37:33Vlad CosteaI agree with you, but you have to also be optimistic to some degree and hope that you're gonna take baby steps towards making this project complete because Bitcoin is software, right and software is never ever finished. There's always I guess there's always a need that people are going to have even if you do add extended smart contracting and you also have scalability figured out and you also have privacy figured out there's still going to be something small that needs to be upgraded in the software and it's unfortunate that I think we only ended up here because we figured out that Bitcoin is the goose that lays golden eggs and nobody wants to kill it. They're like, well if something bad happens and we're not careful enough, then maybe the number will not go up anymore. I don't think it's anything more than this. We sort of gave up over the years on payment... and we're back.

1:38:32I really apologize for this I guess it's part of the inconvenience of doing a live stream with your podcast. There was another power outage in my building. I don't know what's happening it's the first time when this happens and I guess this is a sign that I should be investing in a good UPS for my devices. Anyway, we're talking about Bitcoin payments and I don't recall exactly what the question was but I think it's a very painful topic because I looked at a video from like 14 years ago when the first Trezor hardware wallet was launched. And there were these testimonials from people involved in Bitcoin. And Gavin Andresen for example, was saying it's very useful for people to spend their Bitcoin because it's such a wonderful payments technology or something like this.

1:39:24And you don't get people talking about Bitcoin the same way nowadays, even though we do have ways to spend it.

1:39:31Andrew CamilleriTo figure out a good way to do it. That's that's like, payments has to be, and again, like we lost touch right with things. I think I think we have a way forward with with solutions like Ark. I I think Breez did a great job basically pushing the nodeless Lightning support for wallet developers. I think you can see a lot of people actually finally getting back to getting back to like trying to integrate, integrate Bitcoin into their solutions because they have a pragmatic approach to things. It all has to take, it all takes time, it takes a lot of time to get back to something usable. Also, I I'm honestly scared of like businesses, like how to how they will get on board and into Bitcoin.

1:40:20Like, before it used to be like this cool new thing, like maybe I can get a new user or two, but nowadays, it's like, I I I don't think that's a good enough pitch, like unless you're actually giving people a discount to use Bitcoin on your store. I don't think people are gonna find it enticing enough to say, oh yeah, okay this Bitcoin actually gives me a discount, or this Bitcoin actually gives me something that I need right now? Like, credit cards are so widespread, it's like, you don't get much you don't get a better experience. So why should I use Bitcoin? And you know, you can't really sell this whole freedom perspective to everyone. Only a subset of people actually care.

1:41:07I live in Denmark and it's basically like, like there's literally no Bitcoiners here. That's like, I mean, okay, there are, you know, a small echo chamber of Bitcoin just literally no businesses accepting Bitcoin here at this point, because they they just don't need it. Like, they've been a cashless society for, I guess, over a decade by now, and they they don't see that friction that people saw in the past. I think they also have good terms with their credit cards, payment providers, so they don't have to bitch about that either. So like, okay, what's the next thing what how can we get them on Bitcoin and what is the what is the selling point. I think we have to frame it better. I think we have to give them something more than just payments.

1:41:53Vlad CosteaI think there's also a case to be made for the fact that when Bitcoin got launched, the experience for online payments was pretty bad. And the fees for cards were pretty high. So what Bitcoin was providing was a much faster way to settle transactions, even if you had to wait for a one block confirmation and also low fees at the time.

1:42:19Andrew CamilleriYeah, that's completely different now for sure. I think it's completely inverted. I think most credit cards I think in the U.S. at least, I think they give you cash back when you spend with them. So it's like, how do you how does Bitcoin compete to that? And you can't really compete on that with Bitcoin you can only like you can only sell them the vision like why do you want Bitcoin? It's because fuck the banks. Yeah, that's that's the OG way of saying it. But we can't say that anymore because the banks are basically Bitcoiners at this point. Oh, so what's left? Like how do you tell people this is freedom money? It's like, yeah, America freedom. Yeah, it's like not really. It's like there's more to it. Like I don't want to spend my afternoon teaching you about freedom and censorship resistance and all these things.

1:43:10I'm like, you know, I have better shit to do in my life. So I I have no clue how to how to frame things nowadays to to onboard new Bitcoiners. In fact, I gave up trying to onboard new Bitcoiners a long time ago. I'm hoping people can can find the right way, the right mindset to do it. The only thing I can do is build tools to offer a nicer experience to offer them a novel way, novel way of how to use Bitcoin.

1:43:38Vlad CosteaYeah, but once again, we shouldn't give up and we should not assume, like other people do, that Bitcoin has already won and say, well, it's inevitable. It's the best money that ever existed and therefore it's going to win. We should not take that for granted. Like if you were in, I was about to say Nashville, but that was last year. If you were in Vegas, like a couple of years, not years, a couple of weeks ago, you would see that they talk about stablecoins a lot. And now it's sort of this new hype word stablecoins. We're gonna get that. We're gonna make a stablecoin. I read today that Trump like the Trump fund whatever with their World Liberty Financial. They want to launch their own stablecoin and it's almost like this race for creating a substitute for a CBDC, I think, which appears to be more tame and more fun because it's created by private parties but it's still a scaling layer for the U.S. dollar and it's still something which doesn't really serve the mission of Bitcoin which was to send money without permission without censorship and with a certain degree of fungibility which means that someone observing the transaction will not necessarily know what's happening I think this was like the OG way of looking at Bitcoin right now people just gamble on it mostly.

1:45:03Andrew CamilleriI mean yeah all these stablecoins coming from the U.S. is kind of weird honestly like everyone's trying to launch their own thing they're all kind of I I don't know what what they're trying to achieve like basically Tether already took over the world it's like at least it's not owned by an American as well at least that's the best thing going for Tether I think like at least it's not owned by another American trying to do something with super regulatory and seeing, like dystopian. Like it's quite a scary thing to think about. Like more of these U.S. companies that are launching these things, they I don't think it's an optimistic take on on what we want to achieve in Bitcoin.

1:45:49That said, I'm still I'm still into but into stablecoins. It's just how these stablecoins are launched. Are they any different than what the the non-American one is doing? Or can can there be something a bit better than that? Like don't link it to a bank account. Don't base your entire stablecoin on your own corporate bank account. Like, come on, like we're supposed to be doing something with Bitcoin. Use Bitcoin for your for your stablecoin. At least tie this this fiat to to something more tangible, right? Like we keep talking about Bitcoin is super collateral. Use it like that. At least the stablecoin will, to me, it's like using that stablecoin is like you're being long Bitcoin all the time.

1:46:36Vlad CosteaI do get that some people want to take loans against their BTC and not pay taxes and not go through the normal financial institutions. But at the same time, like I hear people saying, well, I have some stablecoins but I'm also a Bitcoin bull. I'm like, I thought you were a hundred percent into Bitcoin or something. I think also another use case is just trading when you see volatility and you don't want to get on centralized exchanges or whatever. You just swap BTC for USDT or something like this. Yeah. And you wait for the next movement. This can be another use case.

1:47:16Andrew CamilleriI mean, if you're if you're using stablecoins as an investment vehicle, I think you're kind of weird unless you're in you know in like some South American country where your local currency is like complete shit. Okay, maybe maybe that's a good place for your USDT, but if you're you know a normal Western person living in society with full access to financial products and you're investing in USDT, then I think you're very weird. It's like, what's the game there? It's like an extra, an extra layer in your custodian chain. Like, but what?

1:47:57Vlad CosteaWell, I know some people who buy USDT when it depegs. So for example, they buy it for 0.95 cents and they sell it for one dollar when it comes back.

1:48:07Andrew CamilleriI mean, okay, that's like arbitrage trade, but I mean the amount of volume you need to make that worthwhile is crazy, you know, it's not like any, you know, it's like, I'm not gonna buy a thousand dollars of USDT to to make like, what, a couple cents in profits.

1:48:26Vlad CosteaWell, that's like five dollars. It's still something. Okay. I'm not sure if it covers the transaction fees on Tron, but yeah, it's something.

1:48:34Andrew CamilleriExactly. It's like it's like why like like do something better with your time. Go literally play a gambling game like maybe that's more productive at least some business is making money off you.

1:48:49Vlad CosteaSomething that I really wanted to ask you about is this collaboration with Taproot Assets that Ark has been doing and whether or not we're gonna see basically altcoins getting built or meme coins or tokens and stuff getting built on top of Ark. And what's the competitive advantage over doing that on Lightning or Liquid or something else out there?

1:49:14Andrew CamilleriSo, to clarify, the Taproot Assets stuff we did is mostly a proof of concept. It's not directly in there and we haven't initiated work on the on the actual feature. And we just wanted to prove that it is possible and that Ark has basically all the primitives you need and is completely flexible to add stuff along the way. That said, yes, we will have some form of asset support inside the Ark, in Arkade, sorry. The concept behind it is not because of degeneracy, but also, but mainly because of of this concept of a control token. So, in Liquid, we made a lot of use for for tokens in Liquid as a way to not have some kind of artistic NFT or any of that, but more as a way to to be able to own or collaboratively own contracts that you have on chain. So, for example, let's say I have a let's say I have a non-interactive swap that is basically saying, I would like to exchange one Bitcoin for I don't know 100,000 USDT. Instead of having to basically say, oh, I'd like to sell this contract to somebody, I'd like to give this Bitcoin to somebody else. But if it's like partially filled or any kind of magical component to it or the status of it requires a bit more like maybe there's a time lock on it and you can't take it out or something.

1:50:55What you can do is when you create this contract, you atomically mint a control token. And by owning this control token, you basically have ownership of the contract. So, if you have a non-interactive swap and this control token is basically an ownership, you don't have to have your public key attached to this to the swap contract. You just have this control token that replaces your your your your contract ownership title. And the cool thing here is, okay, what if I just want to do a secondary market and just give my sell my control token to somebody else, and then they get ownership of the of the non-interactive swap offer that I have going.

1:51:40And I mean like that's one of our one of our more interesting ways of how we want to use assets inside of Ark Arkade basically with Arkade Script. And but obviously, when you're doing non-interactive swaps you do need a counterparty asset to some degree. So that's also something that needs to be added in there, regardless of what we do now. But yeah, not Taproot Assets-specific. We're still still exploring on which which direction we want to go there.

1:52:18Vlad CosteaLet me ask you something. The first time you got into Bitcoin, how did you envision basically today? Did you think we're all gonna hold our own keys, run our nodes and basically build this parallel economy? Or did you expect this to get to this level of institutional adoption and basically repeating the same mistakes of 2008 but using Bitcoin technology?

1:52:46Andrew CamilleriWell, when I first got into Bitcoin, it was kind of I don't know like, not a lot of people built like custodian tools, it was like very straightforward, you just build, you just download the wallet and you like even Bitcoin Core, I remember, you just download it, wait two or three hours, you're synced and now you can start going at it, you know? Everyone used escrows. So even when you had to do a business with, you had to do a sale or something, you would basically lock your money in an escrow with somebody and you basically confirm with the other party and or you refund it out. Like everything was kind of built in a you know in a true non-custodial fashion like from the get-go because that's what people wanted to do. And that was this the obvious approach for Bitcoin stuff.

1:53:34It's kind of sad we moved away from that. And now it's like, oh, you're getting a service from this. Okay, just just send the money to this. Now you have a balance on the website. And basically, it's just a custodial balance that they can rug you whenever they want. It's very sad, at least with that. I didn't I never expected institutional adoption. I think that was like a bit wild to be to me to be honest. I don't know. I mean, I was the first time I got Bitcoin was from an exchange that was selling like Second Life Lindens or something. So very, very different era, I guess.

1:54:15Vlad CosteaOh, were you into Second Life?

1:54:18Andrew CamilleriI was not into Second Life, but there was one exchange in Malta and they were basically like, they used to be like a Second Life exchange, like you could buy and sell stuff from Second Life on it, but then they added Bitcoin in like 2011 or 12. And it was like, okay, why not? It's like, if if these guys take my money and run, I can find their office and burn it down or something.

1:54:46Vlad CosteaYeah, some people got into Bitcoin because of World of Warcraft. It was an easy transition for them.

1:54:53Andrew CamilleriI I think some of my earliest experiences with with Bitcoin were I used to write bots as a teenager for a game called RuneScape. I used to write like a bunch of scripts and I would sell them online but I had like back then there was no how was it I was you basically had to create like I used to create like throwaway PayPal accounts because I was too young to get verified on the PayPal account so I would just get an account and you can get like up to a certain amount of balance on it without getting verified, and I basically just collected those over and over. But then on the marketplace where I used to sell my scripts, they added like a Bitcoin escrow and people were selling like RuneScape gold and stuff for, for, for Bitcoin.

1:55:42And that was, that was interesting. I don't think I ever did that though.

1:55:47Vlad CosteaYeah, there were markets for swapping World of Warcraft gold for Bitcoin also.

1:55:53Andrew CamilleriYeah, yeah I would imagine. It was, it was quite big back then because it was always so hard. People were the majority of people, the majority of escrows were being done with like Western Union and it was like super scammy and a lot of fees. As soon as they found a different way, they just jumped on top of it.

1:56:13Vlad CosteaAnd it sort of makes sense, right? For these video gamers to use something, which is very nerdy and requires their computer to run some software. Yeah. And it's like same time, I just similar I see that today most video gamers hate Bitcoin, maybe because of the GPU mining situation, which is owed to Bitcoin maybe for three or four years until ASICs came around.

1:56:40Andrew CamilleriYeah, I mean, you you should blame Ethereum for that one, I think, because they're the ones that really had GPU mining for the longest. But yeah, it's also like, you know, Bitcoin is digital money. So it's kind of like people are used to playing games with digital money in them. So it's like, they they easily make the connection. I think that's like one of the best ways to get into Bitcoin because it's like, oh, yeah. Playing RuneScape, I have gold there. Oh, money on the internet. Fair enough. I can I can make this work. And from a technical perspective, it's like, oh, wait, I can I can actually control the entire flow of my of my money using Bitcoin. Like that that's like the crazy thing in your head, it's like, wait wait wait, I can do all this crazy shit.

1:57:26I don't need to go apply for a license, I don't need to be 18 to actually create a website that sells and buys Bitcoin and automate everything you know without you know without the basically you know being writing contracts. It was I think it's a big it's a big change for people. I mean, I wasn't 18 when I was doing, but I can imagine like the change in how people could perceive it. Like if you're if you're that young and been blocked away from PayPal or any kind of spending, I mean nowadays nowadays, I can see that kids have credit cards in their pocket, even at the age of like 12. So I guess it doesn't matter that much, but growing up with no credit card, it was like crazy. You know, I would basically send cash in in envelopes across Europe and it was like praying that my money would get sent.

1:58:18Vlad CosteaI mean, you can still do that. I think VPNs like Mullvad they accept cash payments via post, which is pretty fun.

1:58:29Andrew CamilleriIt's just, you know, it's like how much do you trust your postman kind of thing. If they. If they hold it up in the light and you haven't put like a foil or something, you can see that there's cash in it, or you can feel the bump if you send too much cash. Bitcoin is like the perfect perfect choice for there.

1:58:50Vlad CosteaYeah, it's the perfect choice for a lot of stuff. It's just that for some reason, we lost the narrative were. And now we deal with this very fiat mindset, which people say is a Bitcoin standard mindset, which is actually just speculating and building derivatives on top of it and taking loans to buy more of it and then borrowing fiat money against it and basically some people call this a speculative attack on Bitcoin but I think on the long term it's just increasing the demand for fiat because you're not using Bitcoin anymore for payments and you're just playing fiat games where there can be an unlimited supply of money. And that works for as long as someone else wants it.

1:59:39Andrew CamilleriYeah, I I completely agree. Like like I have no no idea of how to fix it though. Like it is basically all the big players kind of jumped into it. To be fair, the next bear market will probably recalibrate a lot of people's mental model. So maybe I'm looking forward to that one.

2:00:00Vlad CosteaOh, so you don't believe in the super cycle which is this theory that we're never going back to anything below a hundred thousand dollars or something. And we're yeah it's up only, right? Yeah, this time it's different.

2:00:15Andrew CamilleriYeah, I mean, last cycle, it was like, yeah, we're definitely hitting 100k. And everyone was like, if this doesn't happen, everything is gonna blow up. And I'm. Like, are you sure? I don't think it's gonna hit 100k. And surely enough we never got even close to that and this time what are they saying I I lost track of what the numbers are supposedly like a million 500 yeah a million yeah so yeah yeah good for you good luck don't sell your house and wife yeah yeah I don't know what to tell people about that like.

2:00:49Vlad CosteaWe're not giving financial advice here we're just giving freedom advice and that's pretty much it. Because we see Bitcoin as this freedom technology and there are some use cases for it. And there are some use cases which are bad for it, and we're trying to fix. Yeah,

2:01:08Andrew CamilleriYeah, don't sell your wife for for Bitcoin at the top.

2:01:13Vlad CosteaDid you say life or wife wife. Well, there are some guys who are into that but the joke about Bitcoin is that Bitcoin is wife changing technology okay.

2:01:27Andrew CamilleriNah nah I love my wife I don't want to change her that's.

2:01:34Vlad CosteaGood I I don't have anything else to add here but that that's really great but yeah but do you feel like so I've had this conversation with Peter Rizun in the previous episode and he was the chief scientist of Bitcoin Unlimited and he was a bit confused about what happened and what led to the division but currently he feels like this whole hard fork and separation of communities was a big mistake which could be avoided and do you think that if the big blockers never split from the chain we would have had a much better Bitcoin today or do you think it's better that they started their own experiment?

2:02:22Andrew CamilleriI don't know I'm a bit split with that one actually to be fair like I I listened to the episode as well I'm I don't know, like Bitcoin Cash came before the SegWit2x, and the SegWit2x is the one that tragically failed. So if Bitcoin Cash didn't split up, would they have pushed for SegWit2x and died with that ship? Or or what? Like I don't know. To be fair, I appreciate a lot of the research that came out of Bitcoin Cash. Like I don't agree with big blocks. Like I don't think that's the right approach to to scaling Bitcoin. But they have some very interesting, like they activated a buttload of covenant stuff in Bitcoin Cash. And like they have this CashScript I don't know if you've seen it, but it's kind of like it's kind of like the Solidity, but for Bitcoin Cash, I find that kind of interesting as well.

2:03:16We're actually building an Arkade compiler, which lets you write something, you know, very high level and compiles down to Arkade Script and Bitcoin script so that people can actually you know develop contracts without too much pain for Bitcoin. So we're definitely drawing inspiration from some of the CashScript stuff yeah, I don't know. I maybe if they didn't fork off, maybe they wouldn't have had the chance to actually experiment with all these things. So, but in the end, they've definitely not been reaping a lot of benefits out of it. So maybe it would have been better for them to just stick around, even if they hated the small blockers.

2:03:59Vlad CosteaI think also the WabiSabi paper was influenced by CashFusion which is a privacy protocol on Bitcoin Cash.

2:04:07Andrew CamilleriYeah, yeah, it was influenced by that and a couple of others. But yeah, definitely, definitely influenced by that. I think they had a couple of research club calls with the CashFusion developers, so yeah definitely.

2:04:24Vlad CosteaNow this is why I'm not so toxic about it anymore, like maybe five years ago it was fun to make, to poke fun of these people and say well you guys are losing and blah blah blah, But what they built is actually pretty remarkable, and it's proof that with the limits of the Bitcoin design, you can do a lot. And it's just that they were able to agree much faster on adding forks as opposed to the BTC side, maybe because their number didn't go up, and they're always trying to find new bullish narratives and use cases for their chain. But they were able to push the limits of what's possible with Bitcoin, and I think there is value on this research.

2:05:08Andrew CamilleriI think I think I think they've been a bit desperate, let's say, that to to get some traction. So they definitely didn't feel the the big need to play it safe with what they launched so I mean I don't think it would they would have had the same experience even if they stayed on normal Bitcoin. Like the actual Bitcoin, because, you know, things there did not go south, all the miners stuck around, the proof of work keeps growing up, price goes up. But as soon as you start trying to change something, there's a huge resistance. Mostly I think most of it is also like, kind of coming from stemming from this division that came with with the BCash and and SegWit2x drama.

2:05:58Like, if that never happened, maybe, maybe it wouldn't have been this bad today.

2:06:05Vlad CosteaI think about this a lot nowadays. But then again, when you have people like Craig Wright who are destructive and when you think about it, he never reached his publicly expressed goals, but he did cause a lot of damage everywhere. Like everything he touched, it burned down. He made a lot of open source developers give up. He divided communities. He made people hate each other for no reason. He started lawsuits and it's just a huge mess.

2:06:36Andrew CamilleriYeah, it's a time waster for everyone involved I have no clue what the point of it all was at this point.

2:06:44Vlad CosteaWell, it's obvious because the development was stalled across I guess the whole Bitcoin design like the entire industry has suffered from it and maybe it this is the nation state attack that we have been talking about and wondering when it's gonna happen. Maybe it's under this shape and form. I don't know.

2:07:08Andrew CamilleriI don't think so.

2:07:09I don't think so. I think a nation state attack is way worse. Like I I honestly believe like these kind of treasury companies are some form of nation-state attack or they could be the easiest way to. They're like giant honeypots in the worst territory in the world for for holding Bitcoin. Like you know. It's like the the president decides, oh, yeah, we want to make a real treasury company. Like they did this Bitcoin reserve thing, but it's kind of like, sounds like a joke to me the way they planned it. Like yeah, they decided to really do it. And they just basically just knock on each of these companies door and just take their money. They have the full power to do it. And it's like, why not? Now the government owns, what, two three percent of all the Bitcoin in the world, maybe even more, I guess.

2:07:58Like, come on, like like like, that's the easiest attack in the world too, because it has no cryptographic decentralized protection, it's just good old law enforcement.

2:08:12Vlad CosteaAnd at the same time, I think it's naive of us to assume that they're gonna respect the 21 million limit. Like there is no force in this world that's gonna stop them from creating paper Bitcoin and selling it and finding investors who are interested in it and also creating a narrative around it and saying well it's the institutional way it's the one that's backed by the U.S. government or whatever and when it's all said and done and maybe we get another bear market and the situation where people want to withdraw, from that they're gonna get burned.

2:08:51Andrew CamilleriI mean, it's it's what you always expect, right? The Trusted third parties are security holes. It's like the easiest thing in the world.

2:08:58Vlad CosteaI haven't heard that in such a long time, trust me. I haven't heard anyone saying that trusted third parties are security holes. It was such a powerful meme in like 2017, 2018. Everyone was saying it. Not your keys, not your coins also. And then all of a sudden we just switched to well, if it's a small amount, it's fine that it's custodial. And then it was just baby steps from here. And my conspiracy theory about Lightning is that basically it was so the reason why so many VCs jumped on it was that they basically got Bitcoiners accustomed to the idea of using custodians. Because before that nobody wanted to use a custodian. But with Lightning, they're like, ah it's ten dollars I'm just gonna pay for coffee with this.

2:09:43It's fine. Even if I get rugged it doesn't matter. It's a small amount and from there people became more domesticated or more accustomed to the idea of custodians and now we have ETFs we have much more complex ways to have custody in Bitcoin I.

2:10:00Andrew CamilleriMean, there was always there was always Grayscale right in the U.S, before the ETFs. I think I think what happened, it's it's basically that. Yeah I don't know if Lightning is the real cause of it, or it's just people getting a bit lazier. You know, it's like the more mainstream the the crowd gets, the less intense, you know, the less intense the crowd becomes. So what are they gonna do is like like, they don't have the same passion in them of saying, yeah, fuck the banks, fuck the system. Like that's not their goal. It's like, I don't know, my my my cousin told me I should I should put some money into Bitcoin. It's like, okay, I got it on Revolut. Like, no, no, no, take it on.

2:10:47It's like it's like like, and then they show you the one, it's like, it's not even Bitcoin, it's like Bitcoin Cash. I'm like, no, no, no. It's like, like, what am I gonna do? Like, I I I, you know, I don't have it in me. Like, my values are still intact, I hope. So I'm just fighting to stay uncorrupted with myself at this point.

2:11:10Vlad CosteaI have a similar story with a cousin who bought eCash which is not the Chaumian ecash on Lightning. It's XEC which is a fork of Bitcoin Cash. I was like, why? Of all the stuff you could buy. Why why did you choose that? And she's like, well, if it goes to a dollar, I'm gonna be a millionaire. And what can you say to that? What can you say to that? You can explain to them how market cap works. You can tell them, well, I don't think this is gonna go to one dollar, but it's like their lottery ticket. Right.

2:11:39Andrew CamilleriSo yeah, it's the same with, in, it was in, in, what was that in Istanbul, remember in 2022 basically when I think it was during the bull market or something like that and basically every time you go to any place they're like in Turkey and you go to pay at the restaurant and you tell them you want to accept Bitcoin we'll tip you it's like Shiba Inu, Shiba Inu I'm like why it's just yeah Shiba Inu to the moon I'm like okay I'm like okay I I like I have no words for you. So you're like, fuck it, fuck it. No money for these people.

2:12:20Vlad CosteaOh, that's one of the situations where you can use SideShift just to plug one of my sponsors.

2:12:26Andrew CamilleriI I love SideShift. Like I've worked with those guys a lot with BTCPay and we did a lot of cool stuff, but Shiba Inu is not one of their use cases. It's listed there.

2:12:38Vlad CosteaSo it can be, I don't know. I'm not judging here. If they want Shiba Inu, like I I've seen the member of a church in Romania, like some sort of cult or whatever he became viral on YouTube because he went to the microphone and said my brothers and sisters it's time for us to all buy Shiba Inu no explanation provided he was like let's all do this it's a good idea we're gonna get rich I.

2:13:05Andrew CamilleriReject this framing for for SideShift just so you know like no like in Btc is pretty good okay because at least you enable it in your store, and you what happens is on your checkout page, when you generate an invoice, you you're generating Bitcoin address, but you show the SideShift UI, and they basically take basically you know do the whole shield in front of you, and they take all the shitcoins, and you get to receive your Bitcoin. But yeah, I mean, I don't know, like do people actively go there to buy these tokens like as a speculative thing? I I guess they do. Is it's just so obscure to me that people would do that.

2:13:57Vlad CosteaAbout Istanbul, I have another story, which I'm not sure if you remember. There was this blind guy who was playing the drum and singing the one was part of the cat meme. It was a big meme in 2021 and somehow they brought him he's from Istanbul and they brought him to the conference and I will never forget the fact that people have been tipping him Bitcoin that evening for the concert and He went on microphone and he said, you know, I like Bitcoin, but I love the Turkish lira. And as far as I can understand, at the end of the night, he swapped everything that he received in Bitcoin for the Turkish lira and just went on with his business. So since that day, every time I see on the news that the Turkish lira is losing value against the dollar, I'm like, oh, man, we gave Bitcoin to that guy.

2:14:51Look at what happened. Well, I wonder what he's doing.

2:14:56Andrew CamilleriI mean, I guess he can look at the price and just... Is he actually blind?

2:15:05Vlad CosteaI don't remember. Yeah, maybe.

2:15:07Andrew CamilleriWell, he can feel his money disappearing, I guess. I don't know. Yeah, I guess it's it's it's a good mental model for people to experience being offered something recommending something for them they flat out rejecting the concept and then getting wrecked. Maybe it's good, maybe that's the only way. Like, Gigi once told me something that kind of stuck with me. The best path to Bitcoin is through maximum pain. Like no matter what you do, like if you don't get wrecked, you don't get the that feeling of not trying to do something stupid.

2:15:52Vlad CosteaWell, yes and no. Once again, we should not take it for granted that Bitcoin has already won.

2:15:57Andrew CamilleriLike I'm not saying that. I'm not saying that. But I'm just saying, like getting wrecked is it's a good experience to solidify your your your passion. Is you either double down and you you kind of protect your your goods based on the good recommendation you had before, or you just back out you know and you go back to your Turkish lira and losing value every month.

2:16:25Vlad CosteaAt the same time, I don't blame these people because they did not think about it as saving. They just wanted to spend something that night. And it wasn't that much money. I think he made like 100 euro in donations. Maybe for Turkey, it's a lot of money.

2:16:42Andrew CamilleriYeah, I think I think he got a decent amount of money. Actually, I remember that.

2:16:48Vlad CosteaAnyway. It's one of these Bitcoin stories where, you know, for a fact, what really happened and you you have the hindsight of the whole situation. You can look at it back and see, ah, bad decision.

2:17:03Andrew CamilleriYeah, yeah. But it's always that kind of story as well. There's so many people that do the same thing. It's just, it is what it is. But I I think it probably stuck in his head, like that he got so much Bitcoin, and then he sold it for Lira. And then basically, why I don't know, maybe he's down a couple of hundred percent at this point.

2:17:27Vlad CosteaI think a lot more because the Turkish lira devaluated against the U.S. dollar and Bitcoin appreciated against the U.S. dollar. So yeah, it's actually going both ways. Yeah. I was gonna ask you, when do you think Ark is launching?

2:17:50Andrew CamilleriI would say very soon. Like, I won't give an exact date, But we are basically launching a mainnet instance for partners, basically people who who are have been excited and have been messaging us furiously to to get started. And well it's coming very soon. We essentially have most of the all the features are there that we want. Or just it's just a matter of making sure everything is the right level of of security for us and just doubling down on everything. Very soon, I I I won't say more than that.

2:18:35Like I think all the pieces are there, so there's nothing blocking us.

2:18:42Vlad CosteaFrom my perspective, in which I interviewed a lot of people from different projects, seems like 2025 is going to be a big year with a lot of launches. Ark apparently is very close to launch, Citrea is very close to launch, Alpen Labs is very close to launch, and Paul Sztorc also believes he can get 50 or more of miners to run his client to activate BIP 300, so seems like there's a lot happening in spite of all the pessimism that we might be ossified.

2:19:15Andrew CamilleriYeah, I mean, that's the thing, you can just do things, you know, don't wait for permission, just do it. I am curious though, are the is Alpen Labs and Citrea both based on on BitVM?

2:19:29Vlad CosteaWell, that's what they say, but they also build something which is similar to your design with the multisig. In the absence of CTV, which they required, they managed to get a different setup in place.

2:19:44Andrew CamilleriYeah, but I there's a difference here, where ours is basically a covenant emulation where there's a basically all the users of the of the current batch are kind of preventing collusion by their own inclusion. Yeah that's kind of rhyming that's kind of nice I'll keep that one whereas I think they might have some kind of federated model if I remember, I can't remember exactly, but without.

2:20:12Vlad CosteaCTV, that's what I guess they're gonna have.

2:20:17Andrew CamilleriSo I mean, that's a very different model, I guess, until they ship a BitVM functional variant.

2:20:25Vlad CosteaI think I saw something about a new version of BitVM that was presented and it's much more efficient in terms of costs. But still, CTV is the one that's gonna enable the trustless bridges and everything else that they require.

2:20:42Andrew CamilleriYeah, I mean, for us, one of our killer thing is that we're without we don't have any bridges, like we're not doing a separate blockchain. No, no, like none of that stuff. We're literally like everything you have in in the off-chain is a VTXO which can become a UTXO like without swapping to a different network, without having to use you know different different blockchains or anything like that. Like you can actually go one to one and everything is just one layer above, like proper a real layer on Bitcoin. And I I I don't know. I I'm obviously biased here, but I think we have a very good chance of hitting the markets in a in a very favorable fashion.

2:21:31Vlad CosteaLet me ask you a question which I have been asking since 2020, I think, in the context of Lightning. What happens if you build it? It's really good and wonderful and perfect and exactly what you want, but the users are not coming. What's the backup plan?

2:21:48Andrew CamilleriThe backup plan is trying to find what they want to come to to make them come. I mean, we we see plenty of interest from all the developers, but ultimately, we need products. We need people, businesses to build new products, novel products or products that have existed before and have disappeared. Like, like I mean, the oldest, most successful business on Bitcoin was like SatoshiDice back then. So let's bring back SatoshiDice like, why not? We can even make it a bit better with like a trustless bet instead of having it. I think SatoshiDice was actually trusted. But we can do we already have like a proof of concept of like being able to do a coin flip that is trustless on Bitcoin.

2:22:34And we have it on Ark as well like for a prototype. But I mean, when we're not looking to build every single new novel use case ourselves, like we invite people to come and collaborate with us, ask us what they can what they can can't do and let us build something great together. You know we're obviously doing our best to give you the best tooling you need, but you can't do it without other people.

2:23:02Vlad CosteaYeah, that's very important to bring the builders and also create something that users want. And I think that, for example, something like Polymarket came out of nowhere and gave people something that they wanted to have, which is to bet on events. And we have been speaking about prediction markets in the Bitcoin context for a decade, but then it happened on Ethereum, I think. And it's sort of unfortunate.

2:23:33Andrew CamilleriYeah, it's disappointing, but it is what it is. I don't think it was very straightforward to do on Bitcoin. So now I think.

2:23:43Vlad CosteaAll these use cases and yeah, not just try to copy because I remember for example in Liquid there was Raretoshi Which was a clone of OpenSea and they were trying to do NFTs on the Liquid network, which I think was fun I tried it for a while in 2021 and then Adam Back was tweeting saying NFTs are a scam you can they're horrible. And he was basically FUDing the use case on his own chain, which ended up dying off over the next few months. And I think that's another problem that I want to address the cultural one, where Bitcoiners are so accustomed to the orthodox ways of using Bitcoin that they reject anything else that is built on Bitcoin as being scammy, or maybe not pure enough.

2:24:40Andrew CamilleriI mean, like, like also what I said about BTCPay Server, like freedom of choice is the only way forward with these things. It's like, I'm not here to gatekeep people just give everyone the tools and it's like, like, people are people are very reactive to what you do on chain. It's like, oh no. The NFT scam and it's like oh no, what do we do? How do we fix it? You can't really fix it there. And the main problem, the main the main side effect of these NFTs is that they clog up the mempool, the fees go up too much, people can't transact, although your Lightning channels crash and burn. It's like, okay, so I mean, what can we do here? You can't block them. It doesn't work. Like I don't. And I intentionally usually stay out of like all this filter discussion stuff.

2:25:30Like I don't I don't have any mind to intervene there, but the only way to remedy the situation is to give them a space where it doesn't fuck up everyone else's experience. Like I mean, I was one of the people that was pissed off like these freaking NFT people. That's making me spend you know a buttload of money to send my transactions on chain, like, what do I do? Now like damn, it's like, I didn't get to build my second layer yet. So now it's like, okay, now we have the second layer. Like if you need to do your BRC-20 stuff, like it's still, Ark is still VTXOs so it's still Bitcoin script. Just execute them off chain, remove the fee burden from other people. People, other people won't be, completely triggered by your degeneracy and like you you do you, right, it's like like there's literally no reason for people to be pissed off if you're not bothering them.

2:26:29The only issue is that when you do it on chain you are bothering them to some degree, even if they have, even if they do have their right to to do whatever they want on chain if they the fees.

2:26:42Vlad CosteaYeah, I think Nicolas Dorier was a lot more vocal on this issue in the sense that he he was for freedom of transactions and he never told anyone well you shouldn't do this on Bitcoin. Maybe also because Nicolas not too many people know this, but in 2014 or something he wrote a book called Programming Blockchain in C and he was presenting, he had an entire chapter about colored coins which were a very early version of ordinal inscriptions and NFTs and whatever.

2:27:18Andrew CamilleriYeah, I remember that one too. I mean, he was I forgot what he was doing. I think he was trying to build a product with colored coins for something specific. But that was a long time ago. Yeah, I mean, you don't have to be against it, right? It's just you can be annoyed at it. You know, like, Oh, no, I can't send my transaction now I have to wait till these guys are done minting their weird pixelated dicks or whatever that was, you know, it's like, okay, it just feels silly like the financial institutions get to halt their business because of somebody printing some weird stuff. You know, minting some weird stuff on the chain. But at the same time, it's like, it's like, it's your own problem.

2:28:06Just figure out another way to handle this. Like people will do non-stop regardless of what what how you feel.

2:28:12Vlad CosteaBut you can always outbid them which is the free market solution.

2:28:17Andrew CamilleriYeah it's just you know they're paying like 500 bucks for fees to to mint I'm not gonna pay 600 bucks like what the fuck like okay I guess I'll buy groceries tomorrow then.

2:28:29Vlad CosteaYeah makes sense but then again if they find block space this valuable yeah.

2:28:39Andrew CamilleriYeah for sure like like they they like if they find it that valuable and I don't they win that's that's a free market so it's kind of hard to argue against that but at the same time you can still be annoyed about it.

2:28:53Vlad CosteaYeah at this point I don't think I would be against doubling or even quadrupling the block size in Bitcoin. I don't think it would have that much of an impact in terms of decentralization and it would help a lot of people open their own Lightning channels and basically use Bitcoin in a non-custodial way at a lower cost because the number of users went up but the capacity of the network is still the same and the consequence wasn't that people were onboarded with Lightning as the narrative says. The consequence is that more users went to other networks. And that's why Tron is so successful with USDT. That's why we have a lot of Solana users like this could all be prevented if Bitcoin scaled better.

2:29:43Yeah, USDT was also on Bitcoin before it went to Ethereum.

2:29:47Andrew CamilleriYeah, I mean, it's very unfortunate the way things went out over the years. But I don't know, we just have to do something that brings them all back, right? I mean, It's not like Tron is doing A good job at enticing them to stay there with their crazy fees. So, like, we just need to find something that's actually better and show them that it's actually better. And not just some showboaty way of telling them, yeah, look, Bitcoin number go up. Like That won't work. Like, if these people aren't here already for the number go up, they're not gonna come for that. We just have to give them the use cases they want and do the one the Bitcoin way.

2:30:29Vlad CosteaRight What's your bullish prediction for the Bitcoin price and also for let's say the first year of Ark on the mainnet?

2:30:42Andrew CamilleriBitcoin price for for when? This year?

2:30:47Vlad CosteaLet's say this year.

2:30:50Andrew CamilleriOkay I hate this. I'll say 200k max absolute Max.

2:31:02Vlad CosteaThat's very conservative.

2:31:05Andrew CamilleriAbsolute Max. And for Ark, I think, well, I'll play it cautious. First year, we'll probably have we'll probably have a decent amount of wallets trying, testing out the waters, experimenting. We'll probably have some fine tuning to do for sure. I think I think there will be plenty of demands. And even as we roll out, like we're starting off with with the basic ark features and then rolling rolling out the Arkade features in phases. But even with just the basic ones of being able to do proper payments again, being able to do Lightning interoperability, being able to do escrows, being able to do and basically any kind of swapping service outwards.

2:31:59I think I think we'll hit a nice sweet spot for existing wallets and potentially existing Bitcoin businesses that have been stuck with on-chain only methods.

2:32:14Vlad CosteaI think we should also bring back companies that used to accept Bitcoin payments like Expedia, Dell, what else was there? Microsoft for a while and Steam. I don't think Microsoft is coming back because they're sort of woke and Bill Gates hates Bitcoin. But who knows, maybe Steam because that was pretty big for a while. And nowadays, if you want to spend your Bitcoin on these services, you have to buy gift cards. And that's that's a nice workaround, but it's not the ideal way of doing it.

2:32:52Andrew CamilleriYeah, I'm not very bullish on getting these big enterprise people back. Like it takes so much. It takes so much to convince them, right? Since it's it's like I don't know how how that would work. Like it's not like, oh yeah, I can't go to them and say, yeah, just use BTCPay Server. They're gonna look at me like huh or where's my software software agreement like I need I need service I need enterprisey things. I need proper accounting and lawyers and stuff and business plans and stuff. And I'm like yeah, just run the code. Like okay, like I don't think it's gonna be my job to do that. Like I can't I definitely can't execute on that. On the other hand, it it would be great if some of these big giant treasury companies actually use their giant levers and actually start talking to some of these companies, they have they have the money, they have the the exposure.

2:33:51Why not just try and push push some people to accept Bitcoin? Like it's not gonna hurt you, I think. Like those were Those would be the right people to push this Bitcoin into businesses again, because they have they have their reputation.

2:34:09Vlad CosteaIt would be funny to see Shopify or whatever integrate Ark.

2:34:14Andrew CamilleriI mean, with BTCPay Server, it's not that hard. We already have support for Shopify and BTCPay. And I'm building a Shopify BTCPay Ark plugin as well. So they'll be there. And then by default, it's just, you know, everywhere.

2:34:30Vlad CosteaYeah, because a lot of businesses and a lot of internet entrepreneurs, they just use Shopify. It's very easy to set up and if they had more options to also accept Bitcoin in a way that doesn't create any friction or any extra effort for from their side, I don't see why this would not happen.

2:34:52Andrew CamilleriYeah, I mean Shopify is very hard to integrate with especially when you're trying to do Bitcoin the right way. It's like they have so many things in there so that if you charge any money or you're trying to collect money on behalf of your orders, you're supposed to pay Shopify or do some deal with them or contract. But in our case, we're like doing everything non-custodially the funds kind of bypass all of Shopify's things. So it's like super extra hassle on our end to make it execute the right way. And the experience obviously gets a bit disappointing sometimes, but I think I think the team at BTCPay has figured out a very good way to inject it in there make it look professional professional enough to people that you would use it painlessly.

2:35:45I don't know, yeah, it's true, a lot of people just opt for Shopify, it's the easiest thing. We used to push a lot to for people to just just install WooCommerce and WordPress themselves, but most people just opt for the easiest and convenience based options. And I think half the world runs on Shopify at this point.

2:36:08Vlad CosteaFor a while, like four or five years, there was this BTCPay Server day after conferences like Baltic Honeybadger BTC Prague. And I was wondering if there's anything exciting that you think people should look into regarding BTCPay.

2:36:28Andrew CamilleriShould look into? I mean, now the the main focus has been around getting the plugin system really there. Like we We've seen basically a huge amount of people coming up and just building plugins for BTCPay third party, so that's you know don't don't rely on us to build everything for you. Now you can actually just do it yourself or hire people to do it, and you can build your business around that too and integrate there. That's really cool. Also, the BTCPay app is now close to, to it has been tested a bit in Prague. Has still has a a bit of way to go, but it's in active testing. So people want to give it a give it a go, maybe message the team over at the BTCPay Server chat and see how that goes.

2:37:19Yeah, there's there's quite a lot of stuff. Like I would say the plugin system is the most bullish at this point, like loads of things getting built on there that would have never otherwise made it inside BTCPay like for example, there is there is a Zcash plugin by somebody, and there is a Litecoin, Mimblewimble coin and there is a Monero plugin. I don't know what else there is, but we don't we don't care because they're external.

2:37:47Vlad CosteaTo me, this way presenting BTCPay as something like WordPress where you add plugins, sounds a lot like what LNbits has been doing. And I was curious if you can explain to me what are the main differences between BTCPay and LNbits.

2:38:06Andrew CamilleriI think they're very different beasts. LNbits is more for I think BTCPay focuses more on like the the full-on payment experience, like we lean into payment gateway kind of feel you know with refunds, payment methods, scheduling, managing stuff, invoicing reports, that kind of stuff. I haven't looked at the LNbits in around the year, I guess, so I haven't seen them after the V1 release, and I I see I think they've changed a lot of stuff in there. But I think LNbits is great for like very very hardcore prototyping and coming up with very fast ideas building on it.

2:38:51Like I know that they do a lot of tinkering with hardware. That comes out really cool. But I do think you can also use it for payment processing and stuff like that. I don't know. They do have a plugin system. It's true. But I haven't looked deeper than that. I like the team with LNbits so they're good people. They Sometimes they get jealous that they can ship so many things so fast.

2:39:19Vlad CosteaYeah, they're very enthusiastic and they have a team of people who just build stuff and a very active Telegram chat if you spend any time at all reading. Yeah You're gonna see that they they have a lot of people and I think they had the right kind of approach just letting people build stuff that's interesting. As a plugin.

2:39:41Andrew CamilleriYeah, it's the right approach. You have to do it. At some point, you hit a bottleneck, both in review time, but also in bureaucracy.

2:39:51Vlad CosteaI remember when you were on stage announcing the WabiSabi integration in BTCPay and there was the Samourai guy in the audience. And he asked, you when are you going to add Samourai too. Because he likes the Whirlpool much more than WabiSabi. And your response was that whenever that gets coded into C and is presented in a way that can be integrated with much ease, so it's not like a huge headache for the team.

2:40:23Yeah, pretty much.

2:40:25Andrew CamilleriLike, just build the plugin, like, you can do it. Like I did with the WabiSabi thing and the WabiSabi is incredibly more complex, I would say. So, I mean, I'm pretty sure you can do it with with the Whirlpool clients.

2:40:42Vlad CosteaThere's a question from the audience from Christian. He wants to know if you are coming to the Mallorca conference next month.

2:40:50Andrew CamilleriNo, sorry, I'm gonna be I'm gonna be in Malta for all of July, so no.

2:40:59Vlad CosteaThere's also Krev23 who has been commenting all through our conversation and he has this nihilistic approach of saying just use Doge okay because it's 9 000 times easier and the fees are tiny and you don't have to go through all of this complex stuff like Ark.

2:41:21Andrew CamilleriOkay good luck with that.

2:41:23Vlad CosteaYeah yeah then I I think you can buy merchandise from the Tesla store with Doge.

2:41:30Andrew CamilleriYeah, they they use BTCPay underneath and Doge is supported through BTCPay, ironically. It's just, yeah, I don't know, like, really, you want to use Doge as the medium of exchange. So it's like, are you sure? Like I was, you know, I and that's coming from me, I have my original Dogecoin NASCAR shirt from 2014. So it's just, it's, it's, please don't use it as money. It's literally a joke, like, come on.

2:42:02Vlad CosteaHe says it has worked every time he has used it as money because it settles in seconds.

2:42:08Andrew CamilleriYeah, and I don't think you know what settles mean in Doge, anyway.

2:42:18Vlad CosteaMaybe zero-conf is just good enough.

2:42:22Andrew CamilleriWith Doge, you probably need like, I don't know, a couple thousands of of confirmations to actually hit like a real confirmation.

2:42:29Vlad CosteaWell, to have the same security as you get in Bitcoin with a one block confirmation. I think that's what you mean. Yeah. Well, whatever floats your boat, Krev23, I'm not gonna preach right now. Now he says zero-conf is the way we are supposed to be spending Bitcoin all the time. Well, thanks, Peter Todd. We have RBF now. That's no longer the case. And it's also by default in Core. Yeah, so even if you do want to zero-conf it's no longer available in the latest version of the software.

2:43:14Andrew CamilleriYeah, that ship has sailed. I mean, whatever I mean, if I remember correctly, actually before this whole RBF thing, BlueWallet had added a feature in their in their UI, where if you send an on-chain transaction, It would always be RBF on and you can click a cancel button on there. So I mean, it was always there. It's just now it's a lot easier.

2:43:41Vlad CosteaWell cancel is just a fancy way of double spending your transaction to send it to another address from your wallet.

2:43:47Andrew CamilleriYeah, yeah but they they labeled it really nicely like cancel.

2:43:51Vlad CosteaSo you have to pay a very big fee for that.

2:43:57Andrew CamilleriDepends. If you paid one sat per byte just go to two sat per byte or something. And if you if your store is only accepting zero conf well, then you get your shit for free.

2:44:14Vlad CosteaYeah it's. That's a bit unfortunate because Bitcoin was supposed to work in a different way, but we're working around it right now.

2:44:26Andrew CamilleriIt was a big issue as well in BTCPay because everyone wanted that instant dopamine hit on their store. So everyone was trying to set it to zero conf all the time, like by default to it just accept it. And we're like, if you do that, you're gonna get robbed over and over and over. And people just don't grok it until they actually get robbed. So we had to adjust the settings and hide it a bit more at some point.

2:44:51Vlad CosteaI guess most users are not technical enough to successfully do a double spend or they.

2:44:59Andrew CamilleriJust need the One guy to buy the most expensive item on your store a couple of times. Like you just need that one person.

2:45:08Vlad CosteaYeah. But once again, if you buy something very expensive, there's no way it can get delivered without identification of sorts. I don't know. Like you're gonna buy a Lambo or something. There, there's gonna be a name attached to it.

2:45:25Andrew CamilleriYeah. John Doe. I don't know. I mean, sure.

2:45:30Vlad CosteaThe Lambo, you can deliver it and actually record the process or whatever.

2:45:35Andrew CamilleriI mean, it's true, but I mean, imagine a small, medium store that sells you the most expensive item in their store, which might be thousand two thousand three thousand dollars whatever. And if you're anticipating all your users to be buying, I don't know, two five thousand five dollar items, a ten dollar items, whatever, and all of a sudden somebody shows up and buys the most expensive item, your store is not configured for that by default. So to them, it's like, oh, yeah, this is just a normal transaction flow. So you do it and you receive the money, you see the money, the guy runs out with the thing and, boom, cancels. That that's actually also like the killer feature of Lightning instant settlement, like real instant settlement.

2:46:23Because when you send the money, it's just, it's done like finalized, you know, which you don't get with, which you don't get with on-chain. And Ark is somewhere in between there, right? Like, you, you get that instant execution, but you're in a pre-confirmation state, where, okay, pragmatically, you're not going to get double spent. But there is always that risk profile that you have to keep in the back of your head, not so much with the Arkade stuff because we try our best to mitigate that, but we we always make sure to call pre-confirmed and not settled because we don't want to lie to our users. Every every single statechain approach has this has this has this pre-confirmation state.

2:47:13With Ark we have something really nice on top of the statechain which basically converts your pre-confirmation into Bitcoin finality. Normal statechains don't do that. So that's also one of our one of the more exciting features of Ark at least.

2:47:32Vlad CosteaIs there anything exciting about Ark that I didn't ask you about, but maybe you want to mention?

2:47:40Andrew CamilleriGood question, like I think I talked about almost everything. I mean, one thing we want to do in the future, And this is kind of like still in the research phase, but basically, we'd like to right now we have to front our liquidity ourselves for the Ark operator. What if we open it up into an open market so others can come in and provide their own liquidity in exchange for a fee? Yeah, we can kind of bring like liquidity, not yield basically to people providing liquidity. But it requires a decent amount of a decent amount of research to execute this in a secure and trust-minimized environment.

2:48:30I think that would be a very cool way to to showcase to people that you can actually use your money as well in Bitcoin, even just basically powering up the infrastructure yourself with your own money. There's that. What else was there? Basically also, like being able to, like, Arkade is basically grabbing Ark and splitting up into small pieces. And every small piece right now is intended to be run by the operator. But we eventually want to break up these small pieces and have other people run them as well and form the hive mind. I think I mentioned this kind of for you at some briefly at some point. And the idea behind it is we want to scale to zero, like if we have to disappear eventually, maybe the whole system can still operate in the future.

2:49:18But again, research phase, long-term vision, not sure.

2:49:25Vlad CosteaIs there any way for people listening right now to test Ark today?

2:49:32Andrew CamilleriAnd we have a progressive web app actually for Mutinynet that you can try out. Let me find the URL, actually I'll send it over here. Of course, it's it's a a reference wallet that we build and we often break it with changes because we test things on it to see what sticks. But basically it's a Mutinynet you can try it out today. No no Lightning interop it's purely an Ark reference wallet. And we we just want to make it clear, we do intend to break it occasionally.

2:50:24I'll send it to you somewhere. Did you get it?

2:50:29Vlad CosteaYeah, it's loading and it's giving me this, what you call it, epileptic seizure. It's mutinynet dot arkade with a K, dot money. Yeah, and there's a bar that's loading, it's halfway through right now and it's flashing my screen. Black and white.

2:50:47Andrew CamilleriWell, okay, that's not right, I guess.

2:50:50Vlad CosteaMaybe I'm using the wrong browser, which is Firefox.

2:50:54Andrew CamilleriYeah you gotta quit the Firefox.

2:50:59Vlad CosteaI love the Firefox. It's open source. It's pretty fast. Doesn't take as much RAM as Chrome.

2:51:09Andrew CamilleriYeah, but they break it so often. I don't know how many times I've had to lose all my extensions on on Firefox. And then I used to have Firefox on my phone as well, and then they they wiped all my extensions there and then it stopped syncing. And I'm like screw it at some point you give up and this comes from a person that has used Firefox since like version 1.5 or something so.

2:51:38Vlad CosteaI remember when I read about it in a computer magazine and I downloaded I think it was version 1.1 or something. And ever since I've been hooked because it was so much better than Internet Explorer 6 or 7 which whichever one of them was popular at the time. And it felt so fresh and clean. It was basically the evolution of the Mozilla browser. I'm not sure if anyone remembers that.

2:52:06Andrew CamilleriYeah, yeah. They kept those two going for a while together, too.

2:52:13Vlad CosteaYeah, there were basically different versions, different branding, different logos. And it was also the Mozilla email client, which became Thunderbird.

2:52:24Andrew CamilleriYeah, I remember that one, too.

2:52:27Vlad CosteaExciting times, but at the same time, it's sort of sad that Google has managed to control so much of the market.

2:52:36Andrew CamilleriYeah, I mean, it always goes like that. I don't think he can win. Right, it was it was this as soon as Chrome came to be like you could easily see why it would win.

2:52:49Vlad CosteaWhy is that?

2:52:51Andrew CamilleriIt was just so much sleeker, so much better memory management. Everything was just better on it. Now, I mean, it's quite heavy, but in the beginning, it was a game changer. Everything just worked. I think they also had like. I'm not sure they had it in the beginning, like the account synchronization. I think they wasn't there in the beginning. But yeah, they they just kept going. Like Mozilla got stagnated and Internet Explorer was Internet Explorer, so of course.

2:53:26Vlad CosteaI I think part of the reason is just logging in with your Google account and not having to basically create an account with a password for every website. You could just click a button and you're registering to the website with your Google account, with your Gmail.

2:53:44Andrew CamilleriYeah, that's true. That's true. It was just sleeker. It's the same with Gmail, like as soon as Gmail launched, like they just took over. Like when you compare it to the other email providers back then, which was I think Hotmail and Yahoo, it was just way better. Even though the UI was like nothing, there was like nothing there. I think that was the selling point.

2:54:09Vlad CosteaNo, the selling point was that you had one gigabyte of storage.

2:54:13Andrew CamilleriAnd oh yes, it had it had the timer as well. So every every minute or second it would go up a little bit as well.

2:54:23Vlad CosteaIt was amazing because on Yahoo you had like 20 megabytes and MSN was also something along these limits. Yeah, you had to pay for the extra space and then Google was like, okay, here's one gigabyte. It's more than Yahoo can give you for paid service. So enjoy.

2:54:42Andrew CamilleriYeah, it's true. I remember that. I mean, I I was very amazed by that. I remember having Gmail beta, and it was like, okay.

2:54:51Vlad CosteaOh, you had to receive an invitation from someone to join.

2:54:54Andrew CamilleriYeah, exactly.

2:54:57Vlad CosteaIt wasn't something that you just registered to it. Yeah.

2:55:00Yeah. Yeah. What year was this? 2004 or something?

2:55:07Andrew CamilleriLet me check. I can probably see my Gmail. What what year that was?

2:55:12Vlad CosteaNot Wait, you can see how old your Gmail address is?

2:55:16Andrew CamilleriI think I never delete anything, so I'm sure I have my my ancient spam from back then.

2:55:24Vlad CosteaSo you just sort from the oldest to the newest? You can do that?

2:55:29Andrew CamilleriNo. They don't let you okay never mind I'm not I'm not going through this my my email account has like 50 000 emails so this would take me a while.

2:55:41Vlad CosteaDid you have someone email you about Bitcoin early on to tell you about it I've actually ran through all of my email addresses to see if there was one friend or someone who told me hey Bitcoin is cool why don't you look into it.

2:55:56Andrew CamilleriI don't know. Good question. I don't think I have anything like that.

2:56:01Vlad CosteaYeah, me neither. I couldn't find anything. And it's so disappointing. But at the same time I discovered it myself, so.

2:56:11Andrew CamilleriI have so much spam about Bitcoin now that it takes me a while to just to leave this year.

2:56:19Vlad CosteaNever mind. Do you think the internet is gonna become more exciting once we make Bitcoin payments scale and make them stupid cheap like I remember Libra was being presented as such when it came out in 2019 or something and the pitch was great they were saying if you can do this with a message and say hi how are you doing and you can send the file to someone why can't you send money the same way with the internet. Yeah,

2:56:55Andrew CamilleriI mean, they had a great pitch, but ultimately, they were destined to fail, I guess, like we all knew, by by as soon as everyone saw it from the Bitcoin space, was like, yeah, these guys are not going to launch. I I would love I would love that vision, but again, it's not up to me. It's really about driving people to want to experience it. I don't think people do yet. They don't have a need for it, so you have to give them that craving. You have to show them something that makes them think, oh wow, okay, now I see. Now this is why I want to do it. And maybe for us, maybe it was like, yeah, I wanna I wanna fix the money, fix the world, but I don't think that's the agenda anymore.

2:57:39Vlad CosteaWhat's the agenda now?

2:57:42Andrew CamilleriI don't know. Can't be that good. I don't know. I I I I don't have anything positive to say now about this, so I'll try to keep that away.

2:57:59Vlad CosteaI paused for a second because there's someone in the chat who told us that none of us clowns were around for ChangeTip.

2:58:09Andrew CamilleriNo clue what that is.

2:58:11Vlad CosteaSomething for sending tips on Twitter. I think I was around for that. I remember people were using bots for sending tips to each other.

2:58:24Andrew CamilleriBut I mean, it's just such a silly use case, you know? It's like, it's like, it's basically the same thing that the Bottlepay guys did. And what's, what's the other one? There was another one. Tip me. No tip. Tippin.me or something like that.

2:58:40Vlad CosteaTippin.me. Yeah. That's the one. I think I still have some coins in there. Maybe I should check.

2:58:46Andrew CamilleriThere's probably nothing left there. I think they probably shut down or something, right?

2:58:52Vlad CosteaBut Bottlepay was so exciting when it came out.

2:58:56Andrew CamilleriYeah, but it was still the same thing, right? The custodial Lightning wallets.

2:59:02Vlad CosteaYeah, which shut down because of regulations. But what it did from a UX perspective was to let you add this button to YouTube, to Twitter, to pretty much every social media platform ever, which you could use to send some Bitcoin to someone. Yeah. And they they had to install the plugin to receive it. And it's cool. Like, if we ever figure out a way to do this without custodians, it's gonna be even cooler.

2:59:32Andrew CamilleriI mean, with Ark, I know I'm like a running ad at this point, but. I'm trying to.

2:59:38Vlad CosteaNot be a running ad, I'm giving you the opportunity to be one.

2:59:43Andrew CamilleriYeah, but with Ark, actually, like, the SDK to build a wallet on Ark is so minimal. And you can like, you can vibe code like you yourself can probably vibe code a wallet with it, like, in a day or two or maybe three. And it's like like I I really think like for for businesses that have an account balance on your on their websites for for you know basically you top it up or not, you can probably replace that with just an Ark non-custodial balance and it would function in the same way. I really think you can achieve something like that with Ark because all you need to do is basically store a private key somewhere safe and your wallet will just show VTXOs that arrived here.

3:00:29And every time you want to you want to buy a service or something, you just click a button and it will craft a transaction in your browser, sign it, send it, the the website receives it, boom, your services are there. Not only that, but we also we're really kind of championing this this this usage of long lost features in Bitcoin. So, for example, we we have a proof of concept for doing Spilman channels, like the good old Mike Hearn Spilman channels, one directional, yet super super fast and efficient, and only requires one interaction for for every for every transfer. And what you do with Ark like the main reason they never took off is because it's it's very clunky to do on chain.

3:01:16Like, you have to create a transaction that opens the channel, and then you can basically keep sending sending, sending, sending until one of you closes the channel by itself. With Ark, is like opening and closing channels is like trivial, like it's cheap, doesn't matter what you're doing, it's just very, very fast. So you can fund one channel at a as an Ark wallet to to a service and you can just basically, yeah whenever you want to send money, you just click a button and it's just one signature transfer and you're good to go like, like the money has been sent over like instantly. So yeah, I mean, plenty of things like that we can do, especially with like, online services online, like if you do like a Bitrefill with this kind of functionality, I think it would be so such a killer, killer UX, while still preserving the non-custodial uses.

3:02:12Vlad CosteaYeah, I I can see that happening. And I wish it would happen. I wish we had conquered this segment of the market with people just wanting to send tips around the internet. But then again with the HODL culture it it's just more difficult. It's not about the means to do it, it's just about the mentality behind it. There used to be a time when people were just sending bitcoins to each other being like yeah here's this kind of money there's not much you can do with it, but hold it just in case. And from this point onwards, it just became greedier and greedier to the point where people say, I don't want to spend any Bitcoin at this conference. I might just be the next Laszlo, you know?

3:02:56Yeah, yeah.

3:02:57Andrew CamilleriIt's true. It's true. I don't know if you. If you only hold your Bitcoin, it's like, there's no point in it. Like, I don't think anything will happen out of it, right? It's like be the change you want to see in the world. That's why I make it a point that if there's a place where I can spend my Bitcoin, I'll do it. Like, I'm I'm not gonna look at all my pennies that I spent in Bitcoin and cry about how it's basically a 1,000x you know, it's like, it is what it is, you know. Bitcoin is supposed to be money treated like that. It's not your gold rock and under your mattress.

3:03:36Vlad CosteaOh, you're not thinking about your legacy hard enough. Your grandkids are gonna have to get jobs, you know, you can basically create generational wealth and you're throwing that away just because you're a hedonist who wants to spend all his money whenever he can on stuff that is fiat, you know, it's not sound money. You're not investing enough of your energy into digital energy. Shit. There is no second best to this.

3:04:04Andrew CamilleriHard pitch, hard pitch. I guess I won't eat my lunch or dinner or breakfast.

3:04:10Vlad CosteaI mean, are you sitting in a chair right now?

3:04:14Yeah, that's bad.

3:04:17Andrew CamilleriYeah, I know I know.

3:04:19Vlad CosteaYou have books behind you like why?

3:04:24Andrew CamilleriI had to read about Bitcoin, right?

3:04:26Vlad CosteaSo yeah, but you could get the much cheaper PDF. You could pirate it. Stack even harder. Like, what's the point of building this economy and making authors rich from selling books? That's true. When you can just make yourself rich.

3:04:47Andrew CamilleriYeah, I guess, I guess maybe you're right. Maybe I should just stop promoting payments and just start accumulating.

3:04:57Vlad CosteaBut once again, if there is no demand. For the supply then the price cannot go up, so you do need people to use it and make it useful and make other people's want it. Because if other people don't want it, they will not buy it, and if they don't buy it, the price doesn't go up. And sometimes all they need is a small amount to make them want more. I agree.

3:05:23Andrew CamilleriI agree. It's just. It is hard, right? It is hard to motivate everyone across the entire spectrum. You have to make the whole UX approachable to people so that they can try it out and then they you want them to hold a bit of Bitcoin so that they see their value going up, but then they get into this like, oh wait, I don't want to spend this, the price is going up. So it's like a weird cycle, right? Like you need the whole the whole like you need the balance to it and I don't I don't think people find that easily. Like when you when you're when you've been through enough of it, I think maybe you appreciate it, but it takes a while and well we'll see we'll see.

3:06:08Vlad CosteaI appreciate that you went from being rather pragmatic and someone somewhat of a pessimist to being more optimistic towards the end of the interview.

3:06:18Andrew CamilleriYeah I I do oscillate a lot like again I'm I'm pessimistic on the behavior of people. I am optimistic about Bitcoin I would say that's why I'm still here building on Bitcoin.

3:06:31Vlad CosteaBut once again building stuff requires other people to be optimistic too and be open-minded about trying new stuff because if they only say on-chain and Lightning are the only orthodox ways of using Bitcoin and everything else is a shitcoin, it's damaging for the entire ecosystem.

3:06:50Andrew CamilleriTrue, but I mean we're building Ark and you can just wait and see basically like like we we know. We don't have the same luxury, right, as Lightning. Like Lightning kind of recklessly launched in 2018, 2017 with like a CLI, and people are like, yeah, I'm gonna run this. Yeah, I'm gonna spend a bunch of money trying to open channels and manage everything. Like we definitely won't have people doing that on on on Ark like they they they've been through the pain, they're like, not again, no way. I I want something super usable from the get-go. So we're taking this wait and see approach and making sure that when they see, they see the right thing straight away.

3:07:32Vlad CosteaI like that. Beautiful. You should write it down.

3:07:36Andrew CamilleriYeah, I'll get the transcript off you.

3:07:39Vlad CosteaYeah, it's a really good way to pitch it. But at the same time on Lightning, or in this case, there was consensus like this is the way to scale. This is the way to do payments. Like, everyone agreed for a few years that this is the best way to go forward. Until I think a couple of years ago, when shit hit the fan and we realized the limitations of Lightning, which were evident if you're technical about it, but not very proven in practice. Once we saw that in practice, we're like, okay, we need different L2s.

3:08:13Andrew CamilleriYeah, I mean, and it's hard, right, because everyone was trying to to cram Lightning into everything, you know, it's like, okay, you have a Lightning node, good, stuff it in there, but I I I look at the Lightning nodes and I all I see is a big black box that you you it's full of complexity, very hard to manage, very hard to understand what it's doing, like, like I I honestly believe the way Lightning is going, I don't think you're going to be able to get new devs and to keep building it like this. Like, everyone has their own silo now, like they're all like Phoenix is basically a locked down Lightning node at this point. They operate very efficiently because it's locked down. And then they act as a like the the Phoenix LSP is basically the bridge to the rest of the Lightning network, but like, you know, internally, they do a lot of custom stuff, right?

3:09:08And, you know, this big big black box is scary to me in terms of, like like, I don't find the appeal to work on it because I don't think I'll have a say in how this black box works. At least with Ark we kind of, we we have a black box kind of basically where it's the operator that's running the code. But what you run locally is very easy, very lightweight, very understandable. Like any any developer should be able to understand that and be able to reason it's in their heads. Like I spent a long time trying to add Lightning nodes to basically everything, you know? And it's like the the site, like you can get there, you can you can go through all the pain and managing all the routing, messaging, and and the channels, and weird fee spikes, and.

3:09:59And all sorts of unilateral forced closures that happen, and you can manage all of that. But then you hit the point where you're like, it's still not great. Like, how do I make this even better? And I I you get confused on how to get further. And that's where you're you're stuck with basically just using the existing implementations, which may or may not do the job for you. I think they do do they do it sufficiently well, but only in their dedicated environments. So Core Lightning only works on Unix devices, for example. So you can't run that on a Windows, for example. You can't run that on a phone. Phoenix is a lockdown version, basically. So basically, you use their own apps, for the most part, or phoenixd nowadays.

3:10:48LND is, I guess, jack of all trades, master of none kind of thing. I don't know. If you're a business operating Lightning nodes, that's great. Like I'm sure you can manage, you can make it work, but it's it's not what I want to see. At at least Ark is kind of like giving me a new light at the end of the tunnel for for for people to feel at ease integrating something for Bitcoin.

3:11:18Vlad CosteaYeah, and I'm really happy to see this happening. Competition between solutions is what we should have had from the beginning like I I wish we didn't go all in on Lightning and just had a healthy market for L2s from the beginning and see which one is gonna get the traction which one is more efficient for accomplishing this use case yeah.

3:11:44Andrew CamilleriI don't think it was possible because you know it's like it took a long time to get to to what Lightning is and it took a long time for Ark to get to what it is but it requires other building blocks to get there so it's like like TumbleBit almost made it there too it was it was basically there and then it ran into this operational blocker which is a shame but they also never fleshed out the entire scaling capabilities of TumbleBit as far as I remember so I mean I don't know I guess Lightning actually did win in the end because you know they did all the hard work and they put all the engineering effort and they actually shipped it and got it to run and TumbleBit's main problem was basically somebody not wanting to run the main infrastructure whereas Lightning did not have main infrastructure that's a killer selling point right at least when you're trying to bootstrap something.

3:12:46Vlad CosteaSo if you combine the two, you get Ark.

3:12:50Andrew CamilleriNo, no, no, no, not at all. Yeah Lightning is its own beast, right? Like the channel system there is like, I don't think you'll find it in in many other things. I I would say Ark is a very supercharged TumbleBit, if anything. It's like the the Taproot version of TumbleBit, I guess, Well, with a lot more on top.

3:13:17Vlad CosteaSo why do you think it took so long to build if it's basically a better version of something that previously existed?

3:13:25Andrew CamilleriThings get forgotten. Like, as soon as the first description of Ark came around, I'm like, wow, this sounds like TumbleBit. And people are like, yeah maybe, but it looks like a tumble TumbleBit is more privacy focused I'm like, no, no, no. Read this section in the paper and it had like a whole, it had this idea this concept of a payment hub where people get inside the TumbleBit and you can transact off chain in there over and over and over. Not very flexible as far as I remember, but it was possible, but it was never fleshed out fully. And the idea died there and people forgot about it for a long time until people recreate the whole concept from scratch and they're like, oh wait, ah very similar.

3:14:09Vlad CosteaYeah, I'm once again, I'm happy this exists. I'm happy that Burak had his epiphany when he realized, that okay, I don't want to build on Lightning anymore. I'll do something different. I'm just curious to see who are going to be the operators basically what the liquidity that's required will be.

3:14:35Andrew CamilleriYeah, I mean, we, we are intending to be a Liquid, sorry, an operator, Ark Labs, basically. Arkade is our instance of Ark, basically, essentially. Liquidity concerns, I'm not really that worried, honestly, like, we'll provide the initial liquidity. If we need more liquidity, there are plenty of liquidity providers that we can contract with and provide a deal there. Like I'm really not worried. The only worry I have with Liquidity is if Amateurs try to run Ark, which we definitely don't anticipate for for or expect them to. Because that's how that's how things go haywire. When you have Amateurs trying to run enterprise stuff, things go things go south.

3:15:21Vlad CosteaI'm gonna load it up on my Raspberry Pi 5. Yeah, good luck.

3:15:25And put two hard drives on it and just let it run and tell other people to join it, right? That's how you can.

3:15:32Andrew CamilleriDefinitely the interesting part is you can definitely run it on a Raspberry Pi. It's just what happens when you have a power outage and all your people are now stuck.

3:15:44Vlad CosteaI just had two of them in the middle of this podcast.

3:15:49Andrew CamilleriExactly, it's like you need serious infrastructure for a serious business. That's all, you know. It just comes with the territory.

3:15:59Vlad CosteaAnd once again, what's the incentive for these businesses to become operators?

3:16:08Andrew CamilleriEventually fees. Basically, when you when you create a batch, you can charge a fee on that part. Essentially, when you when you're providing liquidity to batches, to users to have VTXOs it's essentially a loan. Like, like, if you want to frame it in some form or way like to to make sense why you charge a fee. You're providing liquidity to people and it will expire, so they have to go and get new loans afterwards. Every time before if you want to every time it expires, you get the money back. But for you to re to renew your VTXOs, you have to pay money.

3:16:54Vlad CosteaOkay. I'm gonna spend more time looking into this because it's intriguing. And I don't think I have any more questions at this point. Is there anything that you want to add, Andrew?

3:17:08Andrew CamilleriAh I'm I think I'm all talked out, actually. I don't know.

3:17:12Vlad CosteaI think people should check it out. So they should go to the Ark Labs website, which I think is Ark with a K. A-R-K labs dot xyz, if I'm not mistaken. Yeah, sure.

3:17:25Andrew CamilleriWe have arklabs.xyz and we have arkadeos.com Always with a K.

3:17:32Vlad CosteaYep. And can this be tested on a Signet or the testnet of Bitcoin?

3:17:41Andrew CamilleriSo I the link I gave earlier is to a Mutinynet instance. Basically, yeah, you can test it on that. We'll be doing additional releases and prototypes along the way. But yeah, this is basically our reference wallet implementation it's by no means meant to be a flagship consumer polished product but we try our best to give the impression of so that people can see okay yeah Ark is real it will ship soon it seems like people have done the work for it.

3:18:17Vlad CosteaYeah so you can do that testing and see if Ark is exactly what it is that you want from Bitcoin if the user experience is better than Lightning if you like the similarity with the base layer because that's the main selling point for the way in which it's going to be used and what else keep an eye on the project because it seems like it's gonna launch this year yeah pretty much it's a big year for Bitcoin honestly there's so much stuff on the way out.

3:18:53Andrew CamilleriYeah I agree I think I think it's it's a very optimistic year I I spent most of last year like down in the dumps. I think this year I'm very positive.

3:19:07Vlad CosteaThe only thing that can basically make this not optimistic or positive is users not using it. So part of the reason why I do these podcasts is to present to people ways in which Bitcoin can work. I'm a technologist much more than I am an Austrian economist. I do like software that I run on my computer and I encourage other people to try it too because for me, it's like being a kid who switched from Windows 95 to XP. You know and I someone just told me that you know, you're gonna have Movie Maker in your XP and I'm like, wow, never had that you're gonna have a better internet browser. That's the way it feels to me I hope that people get excited about it, too.

3:19:52Andrew CamilleriYeah, I hope so too.

3:19:54Vlad CosteaSo, Andrew, how can people follow you and the work that you do for. BTCPay and Ark Labs.

3:20:03Andrew CamilleriSo my Twitter handle is Mr. Kukks so M-R-K-U-K-K-S I'm on Nostr too if you want that my BTCPay you can go to btcpayserver.org ark you can go to arklabs.xyz or arkadeos.com.

3:20:26Vlad CosteaAnd FYI I really wanted to wear that BTCPay hoodie which I got from Riga like two or three years ago but it's too hot. Yeah. I still have it, it's in my wardrobe I only wear it like three or four times.

3:20:44Andrew CamilleriIt's exclusive content, you definitely rock this, dude.

3:20:47Vlad CosteaAnd Nicolas told me that once you put it on you're not supposed to take it off ever. You wear it all the time, it doesn't matter if it gets dirty, if you sweat, if whatever, you just keep it on. Nice.

3:21:03Andrew CamilleriYeah. Yeah. I mean, I guess, good luck.

3:21:08Vlad CosteaAlso let's set a secret word for the people listening up to this point. Like if they listen to the end of the show, they should type something in the comments to prove that they're nice people and they listen to everything.

3:21:21Andrew CamilleriIt might be hard with the multiple streams we've had going, but.

3:21:27Vlad CosteaI might change it. I might actually download everything, make it one video and then stream it once again tomorrow. I'm thinking about it.

3:21:43Andrew CamilleriYeah. Sounds good.

3:21:44Vlad CosteaSo what's the word?

3:21:50Andrew CamilleriShould I come up with one, or?

3:21:51Vlad CosteaYeah, yeah. Say one.

3:21:54Andrew CamilleriOh, shit. Okay.

3:21:55Vlad CosteaCookies. Cookies, write that in the comments. Thank you very much to everyone listening to this. Sorry for the two interruptions. Thank you very much, Andrew, for joining. We met last week in Prague and he already wanted to be part of the show, which I admire. And thanks to the sponsors. Once again, Bitcoin.com News, Edge Wallet, LayerTwo Labs, NoOnes.com Hodling.ch and SideShift.ai and I think I mentioned Citrea or if I haven't I'm saying it again. Thank you all for listening and I'll see you in the next one!