Excerpt
We discuss the challenges and strategies for onboarding the next billion people to Bitcoin. Learn about the importance of self-custody, addressing high transaction fees, and utilizing tools like Lightning and e-cash. Discover insights on overcoming technical challenges, prioritizing education in the global South, and making Bitcoin user-friendly for everyone. Watch now to see how we can make Bitcoin accessible to all!
Panel with: Calle, Abubakar Nur Khalil, Julian Liniger & Joe Nakamoto
Transcript
Come on guys, woo! We’re going to onboard a billion people in this panel today, okay? So, for the purpose of this panel, and thank you so much for the lovely introduction from Stephan there, I’m going to require a little bit of audience participation first, and then we’re going to address these qualms and queries with the panel. Then we’re going to look towards the future and hopefully give you all something to go away with so you’re learning as part of this process. So, I need to do a show of hands first. I need to refer to my notebook for this. I can basically see you all.
Firstly, who here feels like they have been onboarded into Bitcoin? Raise your hand if you’ve been onboarded. Okay, so we need to work on the guys on the front row in particular. Okay, who here has tried to onboard a friend or family member into Bitcoin? About half the room. Okay, Abubakar, come on, you onboarded your brother no? Half and half. Okay, who here has been told to shut up by a friend or family member when talking about Bitcoin? Yeah, I like the honesty. Okay, and finally, who here has successfully onboarded their friend or family member into Bitcoin? Well done! Round of applause for you guys, well done, superb work.
And finally, who here feels ready or prepared to onboard friends, family members, people in the street into Bitcoin? Who feels like they can address that Bitcoin message? Okay, so like a third of the room. Calle, this is literally your job, man. I already onboarded people, so I feel ready for it. Okay, thank you very much, guys. That’s to give us a sense of where we are right now if you scale it up to say the next billion users.
So, let’s address that. Where are we in 2024? Because personally, I feel like the title of this panel is maybe a bit overconfident. I would suggest that we’re at maybe, you know, 50 million users, of which 40 million probably have their coins on something like Coinbase or Wallet of Satoshi or something else that’s quite problematic. Let’s go to you first, Anita. Where are we in 2024?
Yeah, you’re right, the title is very optimistic, but I hope it’s the future. The number you were just mentioning, I think it’s around 100 million or so people who have been using an account on a regulated exchange. So, is it Bitcoin, is it crypto? We don’t really know. But I would say that’s not a small number because given the fact that Bitcoin has existed for 15 years, I mean it took 40 years until we were able to decently stream video. It took like, we in Bitcoin are around the time, if you can compare it to the creation of the internet and the distribution of access to the internet, we’re like in 1998. And in 1998, we had 120 million people using the internet, and now it’s over 5 billion. So I hope we can go there too, but it might be a little slower, maybe, but we will see.
But I was promised hyperbitcoinization at least three years ago by the likes of Max Keiser and other big Bitcoin bulls, so where is it? Surely it’s around the corner. Julian, what do you think, mate? Where are we?
Yeah, I mean it always takes longer than we think, right? But I actually also believe that we are already further than we might think. I mean, I think we have grown to this number, whatever it exactly is, faster than the internet. The internet has taken around 20 years to get that number, and now we’re at 15 years and around the same number. And we could maybe also argue that the number is actually higher because we were talking about 100 million, I mean that’s 100 million registered users on Coinbase. Only Coinbase has more than 100 million registered retail investor users. Many of them have bought Bitcoin, and then there are Binance and other centralized exchanges, and a lot of wallets. I think there are like 400 million active wallets that have a small amount or a bigger amount of Bitcoin on them. So I think the number is probably somewhere in there. Certainly far away from a billion, but I also do believe that we get to a billion and eventually the 5 billion users that the internet now has faster than when the internet developed.
Okay, is that one of those things where one could come before the other? We could have more Bitcoin users before internet users? 7 billion Bitcoiners before 7 billion internet users? That’d be fun. What are you going to say?
So, I think there is a big distinction that we need to make already here at this point. Is there a difference between people who own bitcoin and owning Bitcoin in the sense of legal ownership, not only your keys that you hold and no one can take it away from you? I think that number is way less than 100 million. That’s the only true way of actually owning Bitcoin, we all know that. But, you know, considering that many of these users are on regulated exchanges, they have some kind of way to assert their ownership. That’s one thing. But I think when we talk about hyperbitcoinization, we actually mean using Bitcoin, not only owning Bitcoin, and that means also accepting Bitcoin. I think in that regard, we have a lot more to do. Merchants are not accepting Bitcoin as you would wish. Most of them who want to do so struggle with the technical capabilities of doing so in a self-sovereign way, which makes using Bitcoin disproportionately more complicated than just owning it. And I think that’s the actual challenge, the technical challenge that we need to face.
No, I wholeheartedly agree, and I think we’ll come to the point about medium of exchange or using Bitcoin as actual money, you know, the spending narrative that we’re seeing more and more of. We’ll come to that a bit later in the panel. Before we get there, I want to drill down more on that idea of onboarding and being onboarded. Julian touched on it, and Anita touched on it as well. Abubakar, what are you seeing from your vantage point? You’re the voice of the VCs here. We love a VC in Bitcoin. I’m just kidding. The crowd goes wild. What do you reckon? Onboarding into Bitcoin. Do you have to say, run a node and eat meat and embrace sunlight, not avoid sunlight? Does it mean that to be onboarded into Bitcoin, or can you merely just have some coins in a wallet, say a Coinbase, say a Relai, or any other centralized exchange? What does it mean to be onboarded, Abubakar?
I mean, we’ll have to keep it simple, to be honest. Have something that we can hold on to as an effective definition, objectively speaking. But I’d like to first make a comment on the analogy of the internet and then get into that as well. Something we should have in mind that’s very, very important and analogous to how the internet evolved is you need to have a sufficiently mature enough infrastructure for it to be able to adopt or to have that sort of adoption level where millions of people, or even in the case of Bitcoin or the internet, billions of people get onboarded. I think we’re getting to that stage of not only maturity but the widespread nature of the tooling for Bitcoin for that to happen. So I think we’re on the right trend with regards to that. In terms of onboarding, I think we have to think of it purely from the point of view of use-case-driven onboarding, in the sense that you’re onboarded as long as you use Bitcoin. So if your use case is just holding Bitcoin to ensure that you’re protecting yourself against inflation, for example, that is onboarding as well. If you’re using Bitcoin to send remittances, for example, that is onboarding into Bitcoin. If you’re using Bitcoin for, you know, maybe taking off certain amounts of currency and using that to engage in commerce and things like that, you’re onboarded into Bitcoin. Where you’re not onboarded into Bitcoin is to larp about using Bitcoin or to pretend like you have bitcoin when you essentially hold cryptos and all you’re doing is portraying yourself as a bitcoiner on social media. That is not being onboarded.
Love it. Okay, let me push back on that further. What about if you are flipping JPEGs in the form of ordinals on Bitcoin? You’re running a node, you know, you’re buying beautiful pieces of art on the Bitcoin blockchain. Is that onboarded?
You are onboarded in a different aspect of Bitcoin, which is heretical in my view. Heresy on the main stage, I’m just kidding. But in general, I think for people that are using Bitcoin in non-standard channels, it’s really one of those things where you can’t stop it and there will always be individuals using that. And if you’re talking about the internet, for example, we see a ton of that where there are use cases that are a lot more practical or a lot more objectively useful than just, you know, Digg on the internet.
Okay, I want to ask a question here concerning that topic. When the internet started to expand across the globe, there was no one telling anyone how to use the internet correctly. It was, you use the internet, you don’t.. Most people don’t care what you use the internet for. You write emails, you go shopping, whatever. But you’re a user as soon as you have anything to do with the internet, basically. So in the case of Bitcoin, we seem to have a very strong view of how to use Bitcoin correctly. And also, that influences the number that we report on when we say this and that many people are using Bitcoin.
I think it comes back to the original question, right? Are we, let’s say, 5 million users who hold their own keys, or are we 100 million users who press the button that sends Bitcoin from A to B?
Yeah, no, agreed. And I mean, I would push back on the idea that we tell people how to use the internet because I certainly remember telling my grandma how to use the internet correctly, but I definitely wasn’t doing it in the way that perhaps bitcoiners do, you know, in terms of ideologically trying to impose something on other users and therefore using that as your yardstick to measure from.
But I think it was on another level because you couldn’t own a part of the internet. With Bitcoin, you can own a part of the Bitcoin network basically.
Well, you can also own a part of the internet by running a server, for example. And this is something that people have been actually pushing for, that the decentralization of the internet should have depended on people running their own servers. We kind of threw that idea away somewhere in the ’90s when we realized that there is a huge technical burden for people to run their own servers. And we’re facing very similar issues today with Bitcoin again. This is a fantastic discussion, and we’re only 10 minutes in. Great, thanks, guys. We’ve already touched on lots of different ways of using Bitcoin, but I want to take another vantage point. Perhaps, Julian, you could comment on how does the retail world compare to, say, the institutional world? Because at Relai, of course, you’re onboarding both parties, right? You’re looking at big companies, big businesses, teaching them how to have a Bitcoin strategy as well as teaching the likes of Average Joes like me how to use Bitcoin effectively.
I think the onboarding and the education journey is a lot different between these two segments. The smaller, just the normal people on the street, the small retail investors, they want to try it out, right? To try it out with 50 bucks, 100 bucks, 200 bucks without even really thinking about it, without really getting deep into the rabbit hole, without even consuming a lot of education about it. They just want to try it out. So what brings them in a lot of times is the speculation aspect, is the even trading aspect. And then they go from Bitcoin to shitcoins, do all their experiments, and then all of a sudden they learn because they have skin in the game. Somehow they own something, it goes up and down, they freak out, etc. They have an emotional connection to it, and in the end, they really learn about it. Some sooner, some later, arrive at a point where they understand Bitcoin as what it is: sound money, digital gold, something that has all these benefits. And then they get into a savings mindset from a speculation, trading, experimentation mindset to, okay, this is savings technology. I want to have a DCA long term. I want to save my purchasing power in the long run, etc.
Let me just interject one sec. To what extent does that resonate with you guys? Have you also gone through that exact journey? Just raise your hand if that is something that you also experienced. The rest of us are still trading shitcoins, it’s fine. You know what I mean, that’s the journey that a lot of us go on. But carry on with your point.
I would say, on average, right, of course, we’re all different, but that’s kind of the trend we see. But on the other hand, for private clients, as we call them, or high-net-worth individuals or businesses or institutional investors, they, of course, don’t come in and just buy something and stack sats a little bit and try it out. They have a much longer kind of education and onboarding phase before they actually do something. Family offices, for example, or entrepreneurs that want to buy Bitcoin to put it on their balance sheet, it’s like B2C versus B2B sales cycles, right? They can be seconds or minutes for B2C, they can be years for B2B. Now, that’s exactly the same thing. It has pros and cons. The cons may be it takes a long time, but the pro is once they are committed, then they invest sometimes six, seven, eight-digit amounts, and they go like Michael Saylor. Michael Saylor is the extreme example. They go really all in, and these are the heavy hitters that then make it very interesting.
Okay, yeah, and we’re seeing that pan out at the moment, right? Well, hopefully, in the buildup to the next bull run. Calle, what would you like to say there?
I’m wondering, I mean, just to put more spice into this discussion a bit, does it really matter if we onboard companies and high-net-worth individuals like that? I mean, the title of this panel is “How to Onboard the Next Billion People.” It’s called people, right? Not dollars, basically. So if Michael Saylor joins the Bitcoin network, it’s just a single node appearing on the Bitcoin network. It doesn’t really change anything. It changes much about the economic idea and the narrative behind Bitcoin, obviously, and that’s clear. But in terms of how hard it is to expand Bitcoin, how hard it is to tell the story of Bitcoin, to take people into the system of Bitcoin, take them out of the fiat system, and put them into the Bitcoin system, it doesn’t really matter. So onboarding a Michael Saylor, from the perspective of the Bitcoin network, is the same thing as onboarding some person from Senegal running their own node, for example. And that’s very important to remember.
Second thing I want to say is, how do we scale and increase the number of bitcoiners? I think there’s something that we can also learn from the internet, which is in terms of layers, right? So I just want to make this comment very clearly because some people will hear that one of the biggest challenges in Bitcoin scaling or onboarding people are the fees. So you will hear shitcoiners say, “Use my chain because my chain doesn’t have high fees.” The only reason why they have low fees is because no one is interested in their system. So as soon as you have people using a system, naturally, it will increase in fees. So no shitcoin out there has a better way of scaling than Bitcoin. We all have the same problem. Scaling a blockchain doesn’t work cheaply. And I think here we come to the actual problem and the core of this discussion for this panel is the fees that go up and up and up, and over years and years, we somehow start losing a major part of the world’s population in being able to onboard them into the system. And I think that is one of the biggest issues that we have in Bitcoin. We will be able to get everyone in San Francisco into Bitcoin, it doesn’t matter, but will we be able to do the same with the continents that don’t profit or benefit from the world’s economic system as it is structured today? That’s the actual problem that we need to solve.
Heartily agree. Can we get a round of applause here? Yeah, great point, really well delivered. The Saylor point, I totally get it, like we are all Satoshi in one way or another, except Craig Wright, except Craig Wright. Good point. That guy is another round of applause.
However, some people’s influence in terms of onboarding others is a lot heavier than, say, like, you know, when I got onboarded into Bitcoin, I did my best to onboard my family and my friends and maybe converted two people, you know, in this ideologically speaking frame of mind. But when you think about the amount of people, just the sheer volume of people that have been onboarded into Bitcoin since Saylor adopted Bitcoin, and I think that in many ways those, as long as those people are preaching the right message – are you self-custody and whatever – then they can be a huge force for good as well. But, and this is where we segue to the global South. Here it comes, yeah. Any need?
Now we can first segue into ETFs. I mean, holding an ETF is not – you’re not onboarded. You don’t have – you have paper Bitcoin, nothing else. And a lot of that, what’s coming from a lot of US bitcoiners, I want to say is this: Bitcoin is an investment. That’s its only goal, actually, because the poor people in the global South, they are not having a great influence even if you onboard 100,000 of them. They only can save a small amount or use a small amount, and that doesn’t help the number go up. And they mean the number of value of the price of Bitcoin go up. But I think we sit here because we want the number of people to go up who can use Bitcoin. And of course, the fees, the rising, the higher fees are an issue for that, especially in a time when Lightning is not there yet. I know it will come, but if I tell, because my focus is of course on self-custody, and if I tell a person in Zambia who is even a money trader, so he knows how to deal with Bitcoin on-chain and with Lightning, but when you want to onboard them into Phoenix, for instance, and they do it at a time where the fees are high, I get screenshots from people like that telling me, “This is crazy. I’m immediately deleting that wallet again because I paid for $50 opening a channel. I paid a $20 fee. I will never ever do that again.” So you lose these people. So in my work at the moment, I’m telling people, “Okay, start with Wallet of Satoshi until you have stacked a certain amount of Bitcoin, like $100, and then you can move it if you want to save it for the long run to on-chain or to Liquid or maybe to self-custody Lightning.” So I’m hoping for, and I hear it from a lot of developers, yesterday on the hack day, there is a lot of work going on and it’s going to come. Lightning self-custody will become easier. I also believe that actually swapping into Liquid might be a good idea for a lot of people because at least you have self-custody and low fees as of now. So yeah, I’m trying different approaches, but of course, for the use case of medium of exchange, which is more important for African countries because people can’t save, what they need is a censorship-resistant, permissionless money that they can receive from their families from everywhere else or that they can send within African countries because the banking system is not working there. You can’t easily send money from Zimbabwe to Zambia. It’s not very easy and very expensive.
Absolutely, and I think the point there is that the context is so misunderstood online. You said you can start with Wallet of Satoshi. If you tweet that or something, it’s heretical, you know, to steal Abubakar’s analogy earlier. But the reality is that you have a family or, you know, say you’re talking about a trader in Zimbabwe. He had cash under his mattress. He’s going from a devaluating, hyperinflating currency under his mattress to, yes, a custodial, but it is Bitcoin, which tends to go up in value over the medium term wallet on his phone. And so, I mean, I’ve seen this person in Peru, I’ve seen it in South Africa, I’ve seen it in Cuba, I’ve seen it in Senegal. I’ve seen it all over these emerging markets worldwide. The transition from cash under the mattress to a custodial Lightning wallet is actually tremendous. It’s huge. And so if we can then get that next leap to the self-custodial solutions, then we’ve cracked it. You know, we’ve solved one of the biggest issues for the global South, which is money. You know, it’s why the global South continues to stay poor relative to the rest of the world. Calle?
So speaking of those people who will call you a heretic when you say that a way to onboard a person onto Wallet of Satoshi is maybe a way to do, I would say like most of these people are just larpers. This is very important to keep in mind. They don’t onboard people, they don’t know what they’re talking about. It is an ideological trap that we have built ourselves in Bitcoin. It’s a very strong echo chamber and everyone knows this, like I’m not telling you anything new about it. The problem with ideology, and I mean you can support parts of this ideology and I think some parts of our ideology are very smart, but ideology doesn’t scale. Don’t depend on the message of Bitcoin, how you understand Bitcoin today will scale to the world. It will not. Ideology is way, way, way slower than technology. How we scale Bitcoin is a technological question. It’s not an ideological question. You cannot teach the entire planet to use keys correctly. This is simply not possible. If you figure out a way, then please also tell them all the other things that people should know about. It’s not going to happen. So I think fighting an ideological fight is good to the extent that every user of Bitcoin at some point in their journey must know that Bitcoin can be owned by only yourself. You can be the sole controller and owner of your Bitcoin. It’s very important to realize that at some point, but this is not how you start with Bitcoin. Normally, most people just want to use internet money first. They want to use some other system that exists. Most people in the beginning don’t even care or know or understand what it means that you’re the only controller of money. So it’s a very long process and when we overload people with just what you should and what you shouldn’t do, this is how they will turn their back and say like, “You guys are crazy, I’m not interested in that.” We should tell people and show people that it solves actual problems that they have in their lives and we show them that the solutions are technological. Later, we can then start indoctrinating them.
Indoctrination comes later. Fair point, fair point. Please do applaud. Let’s stay on the theme of the global South. Abubakar, you’re one of the bitcoiners that became orange-pilled in the global South, in Nigeria, and stayed crucially in the global South, whereas you see a lot of them, we can call them larpers as well, the guys that move from the global South once they realize actually it’s a bit easier to do Bitcoin stuff in certain other more developed parts of the world. What do you see on the ground in Nigeria? Does your experience echo that of Anita’s?
It does, and I think to tie it back to the point you’re making about the benefits of orange-pilling a certain crowd versus another, I think it’s very important that we prioritize. For us to get to the billions and billions of the masses, we have to prioritize onboarding those masses because without having them as the folks that are actually onboarded, the priorities shift in terms of the technological standpoint. What are we building for? Who are we building for? What are the guarantees, both security, privacy, technical, and otherwise, that we’re ensuring is really adhered to at the technical level in terms of the on-chain development or even with Lightning? So I think we have to focus, one, on orange-pilling those that actually Bitcoin will benefit the most, which tend to be the masses themselves, specifically in places where Bitcoin is not exactly, you know, as high-level, or at least they’ve done it through a grassroots level. In terms of my own perspective, one of the main reasons why I still choose to remain in Nigeria and to build from there is because there’s a level of disconnect that you get as soon as you leave the continent or the place where things are happening, and you start to lose touch with exactly what the pain points are. You start to develop, again, postural statements, really, when it comes to how to onboard people the right way, and thinking with a lot of armchair philosophy, essentially. So for me to stay true to the mission requires me to be on the ground, to connect with people that I grew up with. There’s no point in me dictating to them, as countless generations have had done to them, on exactly how to use money, how they should use tools, and like that. I feel for Bitcoin to really succeed, it would have to mimic the pain points that people on the ground that need Bitcoin essentially have. Otherwise, everything we’re doing is kind of pointless. All we’re doing is transitioning people from trusted fiat systems in fiat back into another trusted set of financial rails, which just have a different narrative essentially attached to it. So in terms of how we orange-pill and kind of the mechanics and the dynamics we need to watch out for, we need to make sure that the tools that are built for the people that need it the most are built by those people. We need to ensure that people that are building on the protocol level are from those regions, which is why I’m proud of all the work we’ve done in BTrust Builders and overall in BTrust and all the other projects really on the continent, where we’re essentially creating not only Bitcoin developers, but we’re creating conscious Bitcoin developers, i.e., these are individuals that understand the mission, understand the benefits that people have identified themselves, which is why Nigeria is one of the largest P2P markets because we get it. We have four instances of the naira that are not fungible. We have an e-naira attempt, which has, thank God, not worked at all. And for the first time in our nation’s history, we’ve seen a money that actually works for us. So a lot of people still hang on to that. So you have developers that are coming from that ethos and are not only maintaining that, but ensuring that that is a guarantee at the protocol level and not just the case where we have to go at the end-user level, which that’s where the zones are for capture essentially. So yeah, that’s the reason why I stay in Nigeria. That’s the reason why I feel people that really want to make a difference should also consider doing that or at least keeping quiet when those of us are building on the continent.
Very, very strong point and very well-worded answer. Yes, jump in.
I want to emphasize what Abubakar just said. It’s really, really important to be on the ground because I’m from Europe, and I thought, yeah, I’m going there, I’m helping them, I’m learning from them, blah, blah, blah. Yeah, you understand nothing. You know, I came to Zimbabwe the first time, until you get to the point to understand that there’s a street rate, which they call the black market rate to make it seem bad, and there’s a fixed bank exchange rate. But then you know that, and then you go to the shop and realize, okay, when you pay with mobile money, it costs you more than if you’re paying in US dollar cash. But then where did you get the US dollar cash, and on and on and on it goes. Or things like we spoke before about privacy and the dangers that people are in in these countries. There are countries, I think it’s even in Nigeria, where the police searches your phone, and if they find a Bitcoin wallet, they send the Bitcoin to themselves.
Wow.
So we were talking about like orange-pilled corruption, amazing, stealth modes for wallets, which is also interesting for us. You know, like when I’m traveling anywhere in the world, to the US for instance, I’m always a little bit scared that someone might open my wallet or my phone. And so a stealth mode where you can rename your wallet and put on another thumbnail, these are ideas that people who work in the US or in Europe, why would you come to that idea? Only if you’re very privacy-focused. And I think this is important that we also set up higher focus on privacy.
Yeah, no, absolutely, I totally agree. I wanted to get to the solutions or the perhaps future solutions, but one more pain point just to address. I know we’ve talked about the global South. Relai has recently introduced or rolled out Lightning. To what extent in the West, for want of a better word, is Lightning a problem, sorry, a solution looking for a problem? You know, we all have Apple Pay, we all have Android Pay. We can all, you know, most European cities now and most of the US and Canada, you can leave the house with just your phone and survive the whole week, no problem at all. So do we really need a Lightning-based solution in somewhere like the West? Clearly, we’ve made the case for it in the global South, but what about the West? Julian?
I mean, yeah, clearly more and more people want Bitcoin, right, because of its benefits and want self-custodial Bitcoin. But then what we already discussed is the high fees. So, again, for like we, for example, we have around 100,000 users and around 90% of them are what we call retail users that do very small amounts. Like they want to save 25 bucks a week or 50 bucks a month, right? And if you do that, like have a savings plan, 50 bucks a week, let’s say, you amass 52 UTXOs in one year, right? And then once you want to, maybe there’s a fee spike, but you want to send this transaction out, like, boom, it’s not possible, right? So just to scale for 400 million Europeans that might be kind of almost wealthy compared to the global South, but still, like it’s still small amounts, right? Most of them are still retail. They still, you know, have not more than 100 bucks to save a month, but they want sound money as well. They want to save even more than the more wealthy people. They can afford to transact in financial markets and invest, etc., to escape the inflation. But for the people that have 100 bucks to save and then that savings gets, you know, within a couple of years just melted away through inflation and higher prices, etc., they also need it a lot. But on-chain Bitcoin, on-chain, it’s not going to scale. So for me, Lightning is not only a payment network, it’s also a savings network in the end.
Interesting, so stack on Lightning. When it gets big enough, you get big enough UTXOs, you send it to your on-chain wallet. Okay, solutions time. That was kind of a solution, actually, there. I wasn’t accepting that, so good job, Julian. “Call-eCash”, talk to us about ecash. What is it, and why should we be excited about it? Do you have an elevator pitch? I’m sure you do by now, right?
Yeah, but I want to get back to this point real quick, and then we can transition to that. I think that’s actually the important bit here. Pain is what makes things scale. The same thing happened with the internet. When the internet was introduced, we were sending around small pieces of text, and then at some point, people wanted large pieces of text, and we scaled the internet. And then at some point, people wanted small images on the internet, so we needed bigger internet tubes. And then people wanted videos on the internet, and today we are at 8K video on the internet that you can stream. It’s because we always reached a level where it wasn’t sustainable anymore, and the pain just pushed us further. And the same is also happening in Bitcoin. In Bitcoin, we were only doing on-chain transactions for a while. No one was paying even fees, it was crazy. And then at some point in 2017 or so, things went crazy with the fees, and that’s where we found the momentum to actually work on Lightning and enable it such that we can now, you know, also make use of these transaction batching capabilities of Lightning, basically doing only two on-chain transactions if you want 1,000 Bitcoin payments in between. So now we’re reaching again a pain point because we’re growing, and we’re feeling the pain in opening and closing channels for Lightning. This is just a very simple napkin math problem. If everyone in the entire world had a non-custodial Lightning wallet with opening a channel and closing a channel once a year, you cannot fit everyone into the blockchain. It doesn’t work. So we need to find another way to scale Bitcoin because we’re kind of reaching that point. Another pain point that is also instigated is the heresy happening on Bitcoin with people minting 4-megabyte Wizards on the blockchain, for example. It’s also something that makes Bitcoin scale in the end because it causes a lot of pain. It doesn’t help technically, but the pain really helps.
So coming to new solutions into scaling. There are a couple of them right now on the table. We can also talk about them. One of the things that people are interested in, and I want to give a small disclaimer, ecash itself is not a scaling solution for Bitcoin. It’s important to realize because what I call as a developer a scaling solution for Bitcoin is something that allows you always to exit to the layer below non-custodial without the permission of the upper layer. And it’s very important to understand. So for Lightning, we can truly call it a layer 2 because if you don’t want to remain in Lightning anymore, you don’t have to call the bank and say, “Please send my money back to the layer below.” You don’t do that. You close the channel and no one can stop you from doing so. So it’s a very important property for scaling of Bitcoin itself. However, if you relax the scaling definition a little bit, as we did in the beginning, we say how many people can interact with Bitcoin, how many people can use Bitcoin, then things like Wallet of Satoshi can even be called a scaling solution for Bitcoin. This is getting into heretical territory, so let’s maybe not go there. So coming to ecash, ecash is a way to make custodial solutions on Bitcoin fully private and censorship-resistant. It is something bitcoiners need to wrap their heads around because we’re always using Bitcoin in a non-custodial way, being censorship-resistant and also offering great privacy if you know how to use it. And thinking of custodial solutions always as the worst kind of using money because you can be rugged, you can be tracked, and you can be censored. So with ecash, we’re trying to build systems that can be built similar to custodial solutions that are not able to track your activity and not able to censor you as an individual user, which has a huge potential for the world because as we said, so many people are using custodial solutions because of technical issues we have in Bitcoin.
Let’s get a sense of where we are with ecash then. Who here has used a custodial Lightning solution like Wallet of Satoshi or Blink or something like that? It’s okay, it’s not heresy, don’t worry. Who here has used ecash at some point? Yeah, we’ve got some ecash fans in the house. Okay, nice. I used it. I had no idea how it worked. That’s the idea, that’s where we are right in 2024.
The idea is that you don’t need to understand how it works. You just want to receive and pay, and that should be the UX that everyone aims for.
Okay, well brilliant. Yeah, totally got it then, really understood it. We’re coming to the last few minutes of the panel, and I know that we’ve had some real cathartic therapy sessions about the problems in Bitcoin today. And there’s been, you know, some heresies, some problems, some challenges. What are you most excited about in terms of scaling solutions this year and looking forward? And we’ll build up to a final question for the last minute, which will be about, you know, what’s the biggest catalyst you see for Bitcoin adoption. So what are you most excited about in the Bitcoin space in terms of onboarding this next billion or the first billion people? Who’s looking optimistic here?
I mean, that’s a big smile, I’ll just jump into this. I’m very excited to see the swath of technology that’s now available for developers to not only experiment but actually push the boundaries of some ideas that people thought theoretically made sense, but now we can practically see whether they’re bullshit or really if it could actually help with scaling. So I’m excited about that faction of development.
Okay, super. Julian, what’s exciting you?
I love this as well, and I would like to see or I hope we will see a lot more front-end, like really to the user application layers that the user, as you described before, uses and doesn’t necessarily know what happens in the back end. Like the Bitcoin I own and transact with for free, very quickly, very simply, in a very nice, exciting, user-friendly way. I don’t need to know maybe in the back end whether it goes through on-chain, Lightning, Liquid, ecash, you know, Fetty, whatever. I don’t need to know. As I don’t know if I use today, you know, some social media or whatever, I don’t know what happens in the back end with the internet protocol, etc. And I hope that in the next couple of years we will see much more of this. And then because I really believe that we can make non-custodial, really censorship-resistant, peer-to-peer Bitcoin more user-friendly than in a custodial censorship way. And that’s what I’m really excited about.
Nice, okay, super. Anita, what are you excited about coming to the last minute?
I’m actually excited about the fact that now there are like 20 or 30 educational initiatives in African countries. When I flew there the first time, I only knew about one that was in Botswana, the Satoshi Center by Alakanani Itireleng. And now you have a map of an ecosystem which is, to be honest, for the size of the continent, it’s still small, but it’s growing. And I think it will grow exponentially from that moment on when people get it and realize what they can do with an uncensorable, permissionless money and tool. And I also am very optimistic that we get the message to more and more human rights activists because for them, I believe Bitcoin is really an essential tool to support their work in authoritarian countries. And that’s what I’m working for.
Awesome, okay. Calle, you are excited about more pain.
Covenants. We need covenants to scale Bitcoin custody and to enable UTXO sharing. Keep that in mind, please, when we come to a soft fork. Then read up on it and inform yourself. I’m very bullish on that. The second thing I’m really bullish on are individual developers. Single people with a single idea can change everything in this space. It is fucking insane. Am I allowed to say that? I’m not sure. But a single person can change everything. So open up your arms, let’s keep people coming in and learning about Bitcoin so we can all improve it together.
Fantastic. Okay, we’re going to go down the line. What’s the single biggest catalyst you’re thinking about that might onboard the next billion people? Whether it’s, you know, Trump as president or it could be, you know, I don’t know, CTV being operated. We’ll go down the line very quickly, last 5 seconds. Julian?
I think on the long term it’s going to be inflation, and with that, the price that is going to go up.
Okay, next, Abubakar?
I think the adversity that people face in parts like Africa is going to be a natural catalyst. And I see we need to get to a point where the same way we don’t think about a seatbelt of a car before you purchase a car is the same way we shouldn’t think about all the privacy tools that should be implemented in UX.
Calle?
CBDCs.
CBDCs, wow, great for Bitcoin.
Great for Bitcoin.
Bitcoin bands.
Bitcoin bands, like rock bands.
That too, whatever. Awesome. Please give a round of applause to my wonderful panel: Julian, Abubakar, Calle, Anita, and myself. Thank you very much. Have a lovely rest of your day. Take care.
