[00:00:00] Speaker A: When you hold the bitcoin yourself, you already have the control over it that you don't get with any other custodial financial instrument. And I think that people need to think about that more because, you know, you can come to bitcoin and you know, at the start because of, you know, it sounds good. I'm going to invest my dollars and I'm going to get the bitcoin. The bitcoin is going to become worth more than the dollars over time. That's usually what gets them in, but. But I would say what makes them stay is the permissionlessness of it, is the fact that you can have this money and it's your money and the bank can't decide.
We're not going to bank with you anymore. You've got to go and find someone else. The exchange can't get hacked. If you want to go somewhere else in the world, it's not like they're just going to say, well, I'm sorry, we don't allow our money to go to that part of the world. It's not really your money in that sense.
[00:01:11] Speaker B: What is up, guys? Welcome back to Bitcoin Audible. I am Guy Swan, the guy who has read more about bitcoin than anybody else. You know, we have got Craig Rawl on the show today.
I've actually been trying to get him on the show for a little bit and the last, the last time we did this, I totally missed it because I'm terrible at keeping up with my schedule and so we kind of scrambled together and I thought, I thought I was going to miss out on it this time too, and I was very upset. But we made it happen and we got everything together and I'm very glad I did. We had an awesome conversation and it was good to actually sit down and chat with him. But he, he is the, the engineer, the, the builder behind Sparrow Wallet. Now, probably a lot of you guys already know about Sparrow Wallet.
It's been, it's been around for quite some time now. And I know I've talked about it quite a number of times on the show because I use it for a couple different reasons, but I just wanted to pick his brain about, I mean, you know, just about the normal stuff, spam issues and like kind of the cycle and the thinking, but like really about the technicals of bitcoin and how he saw what era or what, I guess, place did he see most of the various tools and how to think about scaling and multisig and security and, you know, being a sovereign, like that's what Sparrow Wallet is about, right? It's like being a sovereign person in bitcoin having all the tools and all the information available to you. Not like being afraid and like hiding stuff away to make it easy but, but by making the interaction with it easy but showing you like, like giving you the visibility into everything that you're doing.
And I've always, I've always had a special place in my, in my wallet software stack for Sparrow Wallet. So we will get into all that real quick. Our shout out to our sponsors we have Leden IO for bitcoin backed loans and in particular for Leden is try it out for. Well if you're, if you're getting a bitcoin backed loan there's no reason to go get one if you don't need one. But if you're trying to avoid selling your bitcoin and anybody who's ever done like the traditional credit like gotten a mortgage or whatever and like knows like the horror of the process of getting a loan, you should, you should experience a bitcoin backed loan because it is the easiest and simplest and fastest thing ever. Like I don't ever want to get another fiat loan again and if I ever do any other loans that I do need to get I'm just going to do a bitcoin backed loan and then pay it off and then keep my bitcoin. So anyway, check it out Leden Ledn IO um and I've got a link with a little bit of a discount for you guys right down in the show notes.
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Just basically light for humans and health and then synonym and pub key. That's P U B K Y pubkey app. Check them out. Actually have a video very recently about the experience of logging in with pub keyring. And that's like kind of like my favorite thing about their whole, their whole model. And then lastly the HRF Human Rights foundation has been awesome. They supported my work and it's hard to compete with the Human Rights foundation on just how much incredible work they do. They fund projects, they, they run the Oslo Freedom Forum which you can get tickets for by the way which will be down in the show notes the Financial Freedom Report.
And they just support freedom fighters and activists and help defend and protect people and share the stories and the tools for doing that all over the world. Like literally all over the world. So shout out to them and definitely check them out and follow them everywhere that they are. All right with that, let's go ahead and get into today's episode. This is chat146, building for sovereignty with Craig Raw.
Craig Raw. Welcome to the show, man. This is. This is first time, right? We haven't. Haven't done a show together, have we?
[00:05:56] Speaker A: That's right, yeah. First time here?
[00:05:59] Speaker B: Hell yeah. Hell yeah. Well, welcome to Bitcoin Audible, man. Welcome to Bitcoin Audible.
So I wanted to get into. So I have a handful of wallets that are kind of my favorites.
And one of the things I love of Asparo is one of them.
My. My main, like, goto with like, business and day to day is Nunchuck. But I found like, one of the most interesting ways that I actually use Sparrow is, is that, like, because you can easily, like, I can access everything with it.
So what I actually do is I have my business wallet that is also in my nun truck. I export it and we both, both my bookkeeper and me, put it into Sparrow and then I will like send labels or whatever. And so, like, he just has a copy of what's going on in my wallet so that I don't have to like export transactions and stuff every.
Every month or whatever and send it to them. But I just want to basically start this out to say Sparrow is a really cool wallet. It's one that I've used in some fashion for a really, really long time.
And there are a handful of things where it's like, man, I wonder if there's a wallet that does this or can. Can we actually, like, do this thing? And most. More often than not, Sparrow is like, oh, yeah, yeah, you can just do that or you can just export this thing or you can do this.
Wanted to shout out because I know you've been working on this for a really long time and Sparrow's your baby or whatever, but it just. It's a. It's an awesome tool. It's a really awesome tool.
[00:07:37] Speaker A: Yeah. Thank you.
Yeah, I mean, I try and make Sparrow so it's sort of a general purpose tool. It's kind of your fallback tool as well. If things go wrong, you've got Sparrow there to give you all the detail about what's going on. So you can really figure it out some of the other tools might try and be more kind of beginner friendly, but I think Sparrow is there to kind of help you out if you really want to know what's going on. If you want a kind of a deep look into what you're doing.
[00:08:05] Speaker B: Yeah, yeah. Hell yeah. That's exactly the way I think about it too. So I wanted to ask a few questions actually.
Maybe this is the place to start it off.
Have you seen the recent stuff about the Patriot act being extended to basically Bitcoin to coin joins and mixers and silent payments and all of that stuff? Have you seen that recently?
[00:08:34] Speaker A: Do you mean the. I remember something around that. I think they were talking about single use addresses and. Is that what you referring to? That kind of. There was just a wide swept of common things that we do with Bitcoin today that were suddenly not going to be okay anymore.
[00:08:52] Speaker B: Yes, yeah, basically. Basically they're trying to make it that the wording of the Patriot act can be applied to basically how users use Bitcoin and privacy tools and all this stuff.
And I don't know the degree because it seems like a kind of extra legal thing that they're trying to do. This has been on the mind because. On my mind because we just had the roundtable the other day, um, and we talked about it for a while on there, but seems like they're trying to go about applying this essentially, essentially outlaw privacy tools and forcing people to use Bitcoin in a very particular way.
Not by passing new legislation, not by defining things with new law or voting on anything, but literally just saying that oh, Patriot act applies here and therefore any of these things are against the Patriot act and now you can't use them. And I noticed that silent payments were just implemented or I saw it in the Changelog or something in Sparrow, which I haven't used it yet if it's actually live. But I was just curious, maybe just in general, but then how do you think about it as a developer who's like trying to build stuff that, you know, works for how the users want to use it?
Because increasingly it seems like even if you just build tools for other people that do what they need or want, you can get in trouble these days. And it just, it's bonkers. It's so bonkers that somehow we are in this place. But it does seem like it's a risk. And I'm just kind of curious your take on how you think about that and being a builder, I guess.
[00:10:39] Speaker A: Yeah, sure. So I think where the risk lies Today it's running servers not producing code.
It seems like they are, at least in the US still pretty strong First Amendment protections around just writing a piece of code, I think where, you know, where. Unfortunately, I don't agree with this. The way unfortunately the line seems to get crossed is when you start running the code and when you start running the code and particularly accepting all kinds of information and it seems that the transfer of that information to you and then the sending out of related information based on that information is where we get this kind of risk for the builders today. And that's what we certainly had with the recent issues around the tornado cash case and Samurai case.
What we're seeing there is that they've been prosecuted not for writing the. Well, in the. So some Samurai case, the kind of Android wallet, it's about running the coordinator and that's the server part.
So that's really where the line lies. Now, of course, that shouldn't be of much, you know, that shouldn't be of much help to us because we all have to run our own nodes and those nodes accept all kinds of information.
So it's not like I'm saying this is, is the answer, but for me as a builder, I make sure that I just write code and that's how I kind of think about on it.
That's not to say that the world is an entirely legal place. It's not always governed by laws, it's often governed more by politics. And that's what I think we're starting to see here is that there's a political force which is certainly acts with the law and influences the law and interpretation of the law. And that's really what we're seeing here is a case where we've got these very strong societal feelings towards protecting society against terrorism. And what is going on is there's just so much momentum behind that. I think we may be starting to see the end of that momentum now.
Maybe it's starting to dwindle a bit and we're starting to see that fight. But really society in general has to decide just how far they want those protections to go.
Do they want to restrict all privacy to the extent that they're essentially giving up control of their lives to the state in order to get some imagined protection from, you know, these, these sort of people out there who are looking to disrupt their lives, which is sort of a very much a, a 2000s era viewpoint? Or has the world changed since that point and we are now in a phase where people have a more balanced and nuanced view where we say, yes, terrorism is bad, but we can't put everything at, you know, at the behest of it. We can't, we can't allow that to be the only point on the agenda to determine how we are going to set our laws in place and are we going to decide what the powers are of those who run, who run our lives in the state and that kind of thing. So it's.
That's kind of how I see it in broad strokes. It's really a case of we are in a state of flux and I think we need to really try and determine as best as we can by writing code, by doing other things. There's all kinds of levels in which this needs to be done, but I don't think we should see it as a lost cause. We're just in a society that is always trying to evolve and always trying to move forward.
And it's up to us to try and determine as individuals within that what kind of society we want to live in.
[00:14:59] Speaker B: Yeah, I'm curious, what's your background?
What did you do before Sparrow and Bitcoin?
[00:15:08] Speaker A: So I was involved in building a number of small businesses.
Some of them got to almost sort of medium size, but that sort of on entrepreneurial life, if you will.
And it was a lot of fun.
It was also a lot of hard, hard work. And yeah, it was just a period of my life that I was actually keen to leave leap behind. You know, there's a certain amount of enjoyment you can from, you can gain from, you know, building a thing and hiring a big staff and doing all of those kind of things. But then there's also a desire for me anyway to create. And it's quite hard to do that when you're running around trying to manage a business. So that was my previous life.
[00:15:59] Speaker B: Yeah. No, no, I, I feel that a lot is the.
You kind of think about like being an entrepreneur or like starting a business as being a creator, but then at some point you're mostly just managing people and like this thing, this organization, as opposed to really getting the time to sit down and create yourself.
I, I feel that like a lot that makes a lot of sense to me.
How do you monetize, like Sparrow's free?
How do you, do you. Do you get like grants like other people just support the Sparrow project or something? Or is this just like in your free time? Like, how, how do you, how do you do this as a, a project specifically?
[00:16:42] Speaker A: Well, as I say, I was lucky enough to have run several successful businesses in the past. It gave me the breathing room to be able to take something like Sparrow on, which I took on as a non commercial role. So I don't seek to monetize Sparrow in any way. It's really not my goal. I think it adds a slant to things.
And I know that being a product designer in a commercial business is that you're always trying to think about what is the monetization angle that really directs the way the product is built on a very fundamental level.
So that's just really not something that's easy. That's an easy fit in the wallet world. And I know many wallets have struggled with it. I just didn't want to have to deal with that and I was lucky enough to not have to deal with it. That's not to say that I don't value the donations that Sparrow gets. It's certainly great to get that. So, you know, I know in particular that all the bitcoiners who do donate really value the bitcoin that they donate. So every one of them. I know that it didn't, wasn't parted with without some thought, but Sparrow itself is not designed to be something that is going to have some kind of a fee model attached to it.
Gotcha.
[00:18:01] Speaker B: Gotcha.
I'm curious in.
How do you think that's actually kind of really cool that this is totally a passion project and you just want to build it?
I honestly think that's where the best things are built pretty much, because you're building for yourself essentially.
And one of the things that I find that say drive me crazy but you know, like just irks me a little bit is people who build things that it seems they don't even use the things they build. You know, like there's, there's like this disconnect. They're trying so hard to like solve someone else's problem. That, and I can, I can even see that in like, like a really good thing is that they're, they're trying to focus on like, okay, what does this other person need? What is, what's their situation?
Rather than. And I've always felt that like just building something that you want to build and building it for you so that you can use it is the way to actually build things because it's the only, it's the only kind of intimate relationship with how, how you're going to experience it that any of us actually have. You know, like if we actually are just sitting down and using it.
So it's, it's cool. I've always felt those have like a special place because those projects seem to last. And I don't know how long has Sparrow been going now? I feel like I've. I've had it on my computer for God knows how long. I don't know.
[00:19:41] Speaker A: It was first released in 1st of September in 2020.
So we are.
Okay.
[00:19:48] Speaker B: That's younger than I thought. I would have thought this was 2017 era. If I if like my memory, I would have been like, oh, no, I've had this for like eight years, like 100%. I've had Sparrow for a long time.
[00:20:00] Speaker A: Yeah, it's actually interesting the sort of era in which a wallet is built really defines quite a bit about it.
You know, if we look at a wallet like Lectrum, for example, which was introduced so long ago, it really feels quite amazing. Introduced in 2011, I believe, which is really amazing. I just want to say that that is an amazing fact.
One of the issues you can have with that is that because all of the code and the technology is tied around a certain way of seeing bitcoin, you have to then migrate and evolve all of that over time. So one of the biggest advances in wallet technology has turned out to be PSBTs, which we all now use and pass around and sign with.
Sparrow was lucky enough to have been built in the era of pspts, which is actually a relatively recent thing. You know, it's sort of. I think it was around 2017, 18 that it started coming in. It was only really around 2019 that it became more commonplace. So, you know, Sparrow just came in at the right time to build the whole wallet around this concept of take one object, let's take it through the steps of signing and get it out there. Which kind of gives all of these new technologies like multisec, which was still relatively underused at the time, a really good basis to be built on. Before that, how would you have geographically distributed multisec? What would be the object that you would carry around from one place to the other?
So, you know, I think it's quite. It's quite handy that Sparrow was built in the time that it was. And I think in future there will probably be some new way of doing things and some new wallets will come along and build off that, and that will then give them the advantage of having been built around something which was more appropriate for the era in which we found ourselves. So, you know, yeah, it's just interesting to kind of see how these things have evolved and being familiar with, you know, on a light level Some of the code bases of some of the other wallets. I can see how the era in which they were built really influences the entire design and the thinking behind the UI and everything in the wallet.
[00:22:18] Speaker B: Yeah, yeah, 100%. Well, I guess just for the audience, PSBTs are partially signed bitcoin transactions, but it's what you're using when you're passing around doing multisig, as he said.
But I, I'm actually curious because I remember when PSBTs were becoming a thing, kind of, what was the technical challenge to that? Like, what was it that made.
Like, how was it different before? And what is it about PSBTs? Like, there's not. There doesn't seem to be. At least in my practice, there's clearly like no order that things have to be signed. Like, how does it actually.
Do you. How well do you know the technical nit and gritty of like, how PSBTs came about and what makes them work the way that they work? If, if you want to dig into that a little bit, I'm a nerd, so yeah, sure.
[00:23:13] Speaker A: So I'll go into how they work first.
Basically, it's a file format. You can think of it as a file format.
It can be anything, but consider it. And it has a number of different slots in it for these different pieces of information that you need as you sign. So first of all, you have to have the transaction and all of the information around that, right? So that all of the. Everything from the transaction version to what inputs it has in it, to what outputs it has in it, all of those details need to be in there in some way or form in a standardized way that wallets come in, read and understand.
And then we, obviously, as we're signing, particularly in a multi seg, we need to add signatures to it. And there are also slots for that. So you can, as you go around and you can add them to the inputs as you sign all of those inputs. So you can add a signature for the first signer and then later on a signature for the second, and then later on a signature for the third. Let's say you need all three. And then once you have all of those combined, there's a defined way in which you can extract the signed transaction from this larger format called psbt. So that's largely how it works.
It just gives us a standardized way to be able to pass these things back and forth. Without that we had no way of doing it, that it wasn't some proprietary thing that the wallet had come up with. And that really Gives us the ability like seed words like but3032, if you know what that is. It kind of gives us this common language for wallets to interoperate. Which is one of the strongest things that we have in bitcoin today is just this interoperability between these different wallets. And no one's siloed and sitting in a particular wallet and stuck there.
In terms of the history, I actually don't know it super well.
I do know that pspts were originally developed and then kind of left on the shelf for quite a while.
And I believe it was the Cold Card team who sort of came along and said, we think this is great tech and we're going to build it in. And from there it started. So it often happens that way.
We have someone who comes up with a good idea and then maybe it gets taken up and maybe it doesn't. It sort of has to go through many years of incubation before it gets to a point of really getting put to the test. And then it has to pass that test of actually being used in real life. And if it passes that test, maybe others will adopt it. And then you're starting to get to a standard which is actually, you know, useful and becoming a general purpose.
You know, it's a, it's a wonderful thing when it happens, but it's, it's quite a long, long road.
[00:25:56] Speaker B: Yeah, yeah, 100%. It's kind of like a layer on top for kind of putting how you hold and construct and like grab everybody's relevant information.
That allows you to then extract like basically do a calculation from that formatted set of data for the transaction as it actually would be when fully signed on Bitcoin, which is not very nice, a handy, easy to pass around format.
So it's kind of like just a layer thing on top of it. Kind of like, like seed phrase was a great example actually is that you know you actually have.
Bitcoin actually has keys, right? Every address has a private key, but a seed phrase is an abstraction on top of it where like here's this really easy to remember, easy to store 24 words or 12 words or whatever, where you can generate a master key that then generates all the sub keys. And it's, it's just a layered approach to actually be able to, to recreate all the things you need for a multi sig. Which is really cool. That is really cool. I'm glad Cold Card picked that up.
And I don't think I even knew that Cold Card were kind of the, the Ones who brought that back to life. I just knew that that was the first.
I'm pretty sure cold card was the first time I ever used it with PSPT on a SD card.
Oh, mini Script. Mini Script. I wanted to ask your thoughts about miniscript and is. I don't think Sparrow miniscript is. Has very little support anywhere. But I've been more and more excited about it as time goes on and Sparrow is one of the ones first ones that I think about is like oh, I bet Sparrow will probably have that or I wonder if Craig's thinking about that. So I was just curious your thoughts on miniscript and how to. Because I love the little.
There's so there's a little view when you go to a transaction and it basically shows the little branches and the stuff and every time I look at that I always think like, oh that'd be a cool thing to see. My little miniscript.
My little miniscript pass. I'm just. How do you think about that?
Do you have any plans for it or is it even a focus?
[00:28:11] Speaker A: First of all, I think miniscript is really a developer tool.
It's sort of interesting that it's got so much that that particular word, that brand almost has got so much recognition beyond the developer space. Because what you don't really want is users coming up with all kinds of weird and wonderful ways to lock up their coins.
And some of them are definitely going to lock up their coins forever, right? Or do something else like. Like that. So that's luckily not the way in which it's being being used.
It's just interesting that that the term gets. Gets used because really what many script script is is just a safe language to construct what we call bitcoin script kind of stacks which Bitcoin script is the actual programming language within Bitcoin.
So what we're actually talking about when we talk about miniscript is we're talking generally about a decaying multisig. Right? That's actually what we generally mean and that's an interesting term. Right. So you know, it's a. If you just think about the words itself, decaying, not something you would usually want for your life savings, right?
A funny term to use and I think it's worth dwelling on that for a little while.
So generally what we have is say, you know, we have a two of three and then later on it becomes something a little bit less secure. And I say that in better commas. But you usually. What you'd get down to is at first only you can sign for your coins, and then later on there's some state where other people can sign. Right. I'm just going to make it as general as we can.
Usually how that's done because of the restrictions that we have within Bitcoin itself, is what you have to have to do is lock your coins up, and because it decays, you kind of get to a point in time where the security on those coins then drops and as I say, someone else can sign for them.
So that means that you have to keep track of the period of time.
And obviously all of these periods of time are associated with a particular UTXO within your wallet. It's not your wallet as a whole, it's. It's one UTXO in the wallet.
So you now have a user experience where the user must keep track in some way or form. I mean, the action needs to be taken, otherwise the security of that UTXO will decay. That's the situation that we're in. That's the product here.
That's an interesting user experience, because in my experience, most users are not that great at doing that kind of thing. That's not to say that they aren't users out there who absolutely are. I'm not taking away from that. But in general, most users, and I'm sure you can think of people that you've introduced to Bitcoin, and if you'd introduce them to a decaying multisig, how confident are you that they are going to keep track of, in some way or form, the expiry date, if you will, the date in which the security on that UTXO expires and needs to be rotated into a different one. So that's the first one that gives. Gives me pause for thought.
[00:31:41] Speaker B: Yeah, Typically not very much.
[00:31:44] Speaker A: Yeah, yeah. And then you might end up in a situation where people think they have security X, security level X, and they actually have security level Y. And that's not really a great situation to be in. The second thing I think that needs a bit of thought is you're going to then have a situation where people are going to, just by virtue or consequence is maybe a better word of this fact, are going to want to rotate all of the UTXOs in their wallet at once, because they kind of get there. We have a multisig, presumably it's a geographically distributed multisig. You're not going to have to. If you have 10 UTXOs, you're not going to want to visit, you know, both of your. Let's say you have two or three, both of your locations 10 times in a year, you know, that's 20 visits. That's a lot.
That's a lot of. That's a lot of stuff to do.
Generally what is going to happen is that people are just going to be like that's too much. I'm going to rotate my UTXOs at the same time. And that creates a privacy issue because now you have to consider that likely because fundamentally we have no ability to broadcast a transaction and have our node hold it or restrict it for broadcast to the wider network.
I have actually proposed a PR to do this in Bitcoin core but it hasn't yet been done. So we have a situation where likely those broadcasted transactions are all going to end up in the same block and they might end up with all in the same block for every period that you go through. And then they all start to look very much like they're linked on chain to anyone. Right. Anyone that can view the chain. So that's the second issue. And then we have a third issue which comes along in the sense that we can then an attacker can then see, oh that's interesting. This person is rotating all of these UTXOs every X period. So every three months or six months or every year I'm going to wait until that year is almost up and then I'm going to do whatever I'm going to do because I know that the security is going to delay at that point in time. Now that one is maybe a bit further removed, but there is definitely something to be said for the information that you are leaking out into the world by the rotation of these UTXOs. So those are my kind of thoughts around.
Would be interesting to debate it back and forth with people who invested a lot of time into this. I personally think the decaying multisig solution fits better with a managed setup. Something along the lines of what Anchor Watch is doing. I think that that makes a great deal of sense.
[00:34:30] Speaker B: Absolutely. It's much more better as an institutional tool.
[00:34:35] Speaker A: Yeah, but whether it's I'm focused on the self sovereign stack, whether it's a good tool for the self sovereign user in general, I don't know. My mind is still not made up on that and that's guess why I haven't rushed into it. I just sort of wanted to see what is the real world usage actually like. And I don't think we've quite got there yet. I think we have to go through a few years of this thing being used by a reasonable number of people to really know what the consequences are of these decaying multi sigs.
[00:35:08] Speaker B: Gotcha. Yeah, I wonder my thinking about and I guess really the big thing for my construction because if you have a set decay where you do literally have to refresh it every three months or six months or whatever, you do clearly have a point of demarcation where you're revealing information where you know, you have to be proactive about your management.
And I guess it's kind of covenants that would be needed to do it in the reactive way where you, you have a, you have a set that has like a certain set of rules, but then you have a branch where you know, five of seven keys can send it, but they can only send it to one location that basically that starts the decaying of the keys.
So that you could have like basically an inheritance thing where like all your family members or friends can get together and like spend your coins, but you still. But then as soon as they do that, your wallet says somebody's trying to spend your coins with these keys. And then you have the three months to counter the decaying keys and send it back to you. But I guess it would either be covenants or you'd have to do like a pre signed transaction where you gave it to all of your friends or family or you put it in the, you know, the legal trust or something like that so that you already knew exactly what address it was sent to and what the rules were. And then it's supposed to just sit there and do nothing until one of these situations are created. But another perfect example of why this is a very institutional tool. But I actually like it for the, the kind of notion of like or the implication of what you can do from an institutional perspective and from a legal perspective of like setting these things up in a, like, I mean it feels like a. How do you, how do you build finance without custodians everywhere? You know, like, how do you, how do you build finance as a literal service, as where people are helping each other and you actually split up ownership of all of this stuff amongst different people and institutions.
And it makes sense in the context of Sparrow or whatever that you, this is about the self sovereign stack and you know, building for like directly the, the user. Not a, not a kind of institutional tool or tool for a bunch of lawyers and stuff.
Well, actually, you know what, we'll go ahead and just get into this. What are your thoughts on the whole spam drama? Do you have, do you have an opinion on this? I have to ask everybody because it stays, it stays relevant Drama for months on end now. So I gotta ask everybody's opinion.
[00:37:52] Speaker A: Yeah, I mean, look, I don't really have, you know, strong public views on it.
You know, I would just encourage everyone who wants to take a view on it to not trust the talking heads, whoever they might be. And really, you know, except for me.
[00:38:11] Speaker B: Listen to Guy. Listen to Guy and just believe whatever he believes.
[00:38:16] Speaker A: Yeah, I mean, I think that there's been a lot said obviously, but there's also been a lot of claims on both sides which just needs real thought as to what is the fundamental issue here. And it seems like the most recent turn has taken is really focusing on legal issues. And now we have a lot of non lawyers debating legal issues, which is always probably a great waste of time, to be quite honest with you. Yeah. Because the reality is if you're not a lawyer, you just don't understand the law. You just don't.
[00:38:50] Speaker B: Most lawyers don't either.
[00:38:53] Speaker A: Yeah. Well, also the law, as we've seen with samurai and with tornado cash, the law gets interpreted according to the political winds of the day.
So you know, when you're starting to get into those debates, for me, that's when the value really starts fall, fall off. Because now you are dealing with, you know, my opinion versus yours and neither of us really know much. You know, it's, it's just, it's just not a, a technical debate anymore. So I try and focus on the technical aspects of it. I try and think about it from a first principles point of view. I'd encourage others to do the same.
[00:39:31] Speaker B: Yeah, yeah, that's fair.
Good, good way to avoid the topic and, and have good advice at the same time.
The. I wanted to ask how you have, how do you think about like all the layer 2 stuff? So this will go in line with like just kind of general thinking about fees because fees have not been, have not been a problem, you know, outside of like a couple of days where there's like I'm a flood of spam and you know, everybody's having to pay like a high transaction for like a minute and a half generally. I mean, I go, I go like, I think yesterday I was sending out some payments to people and I think I was paying one satoshi per bite on like all four or five of the transactions that I did. I was like, this is nice. This is, I'm, I'm going to get spoiled if this just keeps going this way.
But I have felt for a good while that we're kind of in an in between stage for bitcoin's maturation where we had this kind of like big push that started in 2013 and I felt like it really wound down in 2020 and kind of 2021 era where we, we just kind of like went on this hump of like, oh, Bitcoin's going to be for retail and E commerce and everything. And it's just kind of like, I don't know, we kind of like pulled back from that and we just kind of realized that not only are there like a bunch of obvious scaling limitations or whatever, but it's just not quite built for that. And then there's a far, far more important and more universal use case of money that can't be manipulated and everybody needs it just to save money to have something that actually grows in value with you're just not where you're not being stolen from.
And so that kind of took center stage.
But and importantly when it comes to like institutions and governments and businesses and all of this stuff, like basically putting it on their treasury balance sheet and, or using it for settlement, we're only in the beginning curves of that. And so even though we have enough, had enough users to kind of like put this apparent fee pressure on using Bitcoin, but with the pullback from the idea of like we're going to use it for retail and E commerce all, all the time, forever, kind of in my mind just understanding the stages, the natural stages of monetization is that that doesn't come first, it kind of comes at the end is we're moving into kind of like the second layer. The. And I don't mean that in like lightning or ark. I mean it in the second layer like institutions, settlement, governments, like large entities using this for long term capital.
But once that gets to a point where it's, it's large enough where, where you have like a million businesses or institutions using it day to day or saving in it persistently consistently. I very much feel like there's just going to be a switch one day and our, our cheap fees are going to be gone.
And so I wanted to get your take on how you like Sparrow obviously is just like you just had like kind of like fee management that's just transparent.
But I just wanted to think how do you think about it in a, in a more general sense? Like do you, do you kind of see that path? Do you kind of always think that, you know, there will always be periods where fees are low? How do you think about things like ARK and lightning and state chains in relation to the wallet but then also kind of personally I want your big picture view and then maybe some nit and gritty that you have on that whole image of where bitcoin is and, or might be going.
[00:43:33] Speaker A: Yeah, I think it's very hard to predict the future, you know, really, Gosh dang it.
But you know, the one thing I've learned as I get older is that it's, it's, you know, you might be able to say with some, some degree of, you know, high possibility what the next year holds or two years out. But when you start getting to five years or 10 years, really it falls off dramatically. And I think people overestimate their ability to predict five to 10 years out. So, you know, as, as you say, we are now in the stage and I think it was very, it's certainly in hindsight very predictable to see that likely the institutions would realize the benefits of sound money before your man in a village in Africa, you know, who has got to deal with all kinds of miseducation, poor education and just frankly lack of education before, you know, he or she gets to understand what are the benefits of this technology and how can I use it. So, you know, when is that going to happen? Is it ever going to happen? We just don't, don't know. What we do have to do is try and build technology for that date. And we know that bitcoin layer one is not going to scale to that. So we have to have alternatives built. We know, I think now that lightning is not going to be the technology that the man is or woman is going to run themselves because it's too complex. And that is an issue in and of itself. So you know, there's various technologies that are being built around the side and that's kind of how I think about it is we're very much in an incubation phase for all of these layer layered layer twos. Lightning is certainly the furthest along. And then obviously we have all of the sort of pseudo layered layer twos which are the ranges and the ETFs and these kind of computers of things. Those will always exist and those will continue to suck up a huge amount of the kind of layer two volume and take away from the transaction fees.
So those things exist and maybe that will become the dominant way that people do it. But we have to invent self custodial ways of doing things. And it's obviously not a black and white line. There is a certain amount of grayness to it as I think we've all kind of come to Realize that it is a unilateral exit from a layer to a self custodial thing. Well, it depends, but maybe it depends is kind of okay.
We don't yet know the answers to these things and we have to I think, keep an open mind as these things are being built out because it might never get used, that it might become the dominant way that people use Bitcoin. We just don't know yet. What I would like to see is just continued work on them. You know, I think it's great that so much energy is being poured in there. I think that I'm certainly not opposed to any of that. I kind of recognize the limitations of the technology that I work with and I'm very much fine with that.
But I do think we need to be thinking for what happens further down the path. So that's kind of my, my broad strokes. I don't have a particular feeling about any, necessarily any one of them. But obviously I learn I lean towards privacy, I lean towards the ones that offer the best self custodial experience because those are ultimately the ones that are going to survive the critical tests that will come for them further down the path.
You know, we can't imagine that there will be a case where the custodian will not fail. The custodian will always fail in some situation somewhere. Right? They're always just waiting to fail.
So we need to have the exit or the what is the solution when that thing happens. And I think that those are the tests that still need to be passed by every one of these solutions that attempts to share utxos, which is in effect what most of them are trying to do. So that's, yeah, those are my, my kind of broad strokes thoughts at this time. I think we're still, we're still figuring it out and we probably will, will be for many years, years to come. And that's okay.
[00:47:57] Speaker B: Having to sell bitcoin hurts, especially when you are certain it is going to be worth more in the future. But you can actually get access to the Fiat without selling it by using a bitcoin backed loan.
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You know I feel like, like bitcoin is very multidisciplinary, right. There's like a hundred different ways you can comment bitcoin and be fascinated by it.
And I'm curious what yours was like. Was it a technical thing, a philosophical thing?
[00:50:35] Speaker A: Yeah, I mean it was, I guess it wasn't one. One thing.
I did have, have a really interesting, you know I kind of was CTO at the businesses that I mentioned and kind of my job to stay current with what's going on in the world of tech. And that's how I came across it first. Um, and it was so different from every other technology in my in that I saw kind of flowing past every single day that I. I immediately was suspicious of it. I felt that it kind of must be a scam. And then I spent the next six, seven years trying to prove to myself why it was a scam.
And really, as anyone who tried to understand Bitcoin in that time would know, the information was so poor, there was so much misinformation that it was extremely hard to try and figure out answers to certain things. So it really took many years for me to do that, but then kind of figuring it out. And there was also kind of the need to say, you know, if you are trying to save some money, what is the technology you're going to use? You know, and we're looking at all the financial technologies of the world, from bonds to stocks to gold to all of these different things. And I had that need and I wanted to try and figure it out. And I kind of ended up at the conclusion that all of these traditional financial technologies were just not in a great place. They may have been in the past, but they all just looked overpriced and with an uncertain future to me. So it was also an economic point of view that I came into this. And I've had a strong interest in the economic side of things ever since. It's always. It's kind of, I think, a fairly well understood topic these days, but it remains very interesting to see because ultimately that's the real driving force behind it, is the economics of it.
The technological integrity is very interesting, but what is going to cause this thing to be used? And that's really the economics that surround it.
What is the tool that society needs at this time in its sort of societal evolution? So that's.
It was really those two forces, I think, driving me towards interesting.
[00:53:11] Speaker B: Do you have a background in economics or anything? Was it just something that interested you? Because I feel like you talk about the traditional things like gold and bonds and equities and all this stuff, and being able to see that they weren't in a good position, but kind of going in the reverse analogy of Bitcoin during that period was just full of misinformation and just like straight garbage.
I would say you kind of have the.
A very similar difficulty in the reverse to. To seeing the reality of bonds and, you know, all of the traditional assets or whatever is. Is what.
Was there something in particular that let you kind of see through the lack of a better word, propaganda about how, like, bonds are safe and the government situation's fine and there's nothing like what was there. Was there something in particular that let you Kind of see through that or a source or something that you dug into that you really liked.
[00:54:19] Speaker A: I think I had the great advantage of not having a traditional economics background which allowed me to see things, as I'm sure you know, you have. And many who listen have tried to explain Bitcoin to somebody with somebody with a traditional economics background is a frustrating and you know, it really takes a long time and because ultimately there are certain truths that are Simply stated, like 2% inflation is just a truth. It's not really, there's no, there's no kind of background for it. It's kind of just stated as something we must accept.
And to question it is, is sort of is trying to question whether one plus one equals two. It's kind of, it just doesn't really come into that. So I think that that was my big advantage, was coming in with that. And really I was just looking to buy an asset at a good price, you know, so you want to always buy low and sell high. And if you look at stocks, they've just been going up for a very long time and if you, you know, would read what people are saying, well, they'll say, well, you know, kind of at an all time high or near an all time high. And that just doesn't sound great, does it? And then you look at the countries of the world and you know, you look at, and you just see how they're printing money and you, you know, you look at how they're managed and who's running them and you're just not filled with confidence that this is your 20, 30 year, you know, bargain. You're not going to be, I'm going to, you know, tie my wealth to these guys and they're going to look after it. It doesn't feel great. So then you're looking at gold.
And gold is certainly interesting and I got quite deep into that. But ultimately you have to hold physical gold because otherwise what are you really holding?
And then when you start looking at holding physical gold, you're already talking about vaults and all kinds of things where ultimately you can go and visit your vault and you can see, you can maybe say, well, this is my gold bar. But is it really your gold bar or do they just take the next person down and show them the same bar and it's also their gold bar? You just don't really know. So you have all of these kind of questions which come into your mind and they might sound that you can just pass them off, but for me, I just couldn't.
I was like, well, I can't sleep knowing these things that I know I need to find something else. And that's really what kind of led. Led me down this path. So it was just going through all of the different options that were available to me in the kind of modern world of finance and saying to myself, you know, I'm either going to invest in my own business, and that was not something I wanted to do anymore. I didn't want to run a business anymore, or I'm going to find something else. And bitcoin, was that something else?
[00:57:15] Speaker B: I'm curious, so your, your touch points, how quickly did you go from first off, was there, was there one in particular thing that you remember, like a aha moment that you have with bitcoin? Because, like, this is something that I'm always kind of searching for when I'm trying to explain bitcoin to normies or people who are on the fence or, you know, trying to convince themselves that it's a scam, but aren't quite succeeding.
They're just interested. And I feel like so many people have different aha moments, and I'm curious if you remember or have a particular one. But then after that, how long before you started Sparrow and did you just kind of dig right into this?
What was the time between your kind of finding Bitcoin and being like, I want to build something for it?
[00:58:04] Speaker A: Yeah, I mean, I think, you know, the sort of aha moment wasn't a particular moment in time. It was really developing the conviction that I couldn't find a flaw.
No matter how hard I tried, I couldn't find the flaw. It just seemed to me that so long as the game theory held in the way that the world worked, I'm talking about the broader conditions of the world and, you know, people's natural tendency to want to acquire, you know, more of what they have and want to work towards their own. And so long as certain of these fundamentals that we assume to be axioms hold, couldn't see the floor. So I think that that was my kind of realization point. And then, you know, beyond that, I really started to get into it and look, look at the tools. And I tried to, as I've said in sort of other places, I tried to then build a multi vendor, multi segment in order to do it in the right way. And I started using Electrum Wallet to do it. And I just kind of ended up in a place where it just felt like there were too many layers of things that I had done that I wasn't confident in my ability to reproduce and wasn't confident in the ability of others to reproduce. And that kind of led me to think, right, let me try and start building something else. But I actually started building a transaction editor. I couldn't, I almost couldn't imagine building an entire wallet. At first it was too large a job.
So I just said myself, you know what, I'm just going to build the transaction editor around this PSBT object and let's start there and see where we sort of go build something really fully featured. Oh wow.
[00:59:50] Speaker B: So you just started right at.
[00:59:52] Speaker A: So you know, and kind of just building that to be as fully featured as I could. So still in Sparrow you can edit every part of the transaction, literally every bite within the transaction that goes out and you can see it down there at the bottom as well, you know, so it gives you a real sense, you know, how else do you really know exactly what's going out out there? But you have, you know, so that kind of takes you all the way down to that, that sort of level.
And then the wallet kind of came as a result of me saying, well, I now need some transactions to get into this editor. And, and that's kind of where I started building the wallet. And so it's, it kind of grew from.
Were taking one step at a time, but ultimately it's serving my own needs was the driving force behind it.
[01:00:38] Speaker B: Gotcha. Are you on a, or do you consider yourself on like a bitcoin standard or whatever? Like have you just kind of like gone full in or is this just kind of like a passion project and you have your savings in bitcoin? You know, like I was curious, like how do you, do you use Sparrow like every single day? Do you make transactions every single day?
[01:00:57] Speaker A: Basically I don't make reductions every day.
I would love it if I could pay for everything, but of course I still living in a world where you can't. However, I will say that particularly where I live, things have got a lot easier. I think South Africa is now one of the most bitcoin enabled nations in the world largely due to an app called Bunny Badger which is a fantastic app. So we actually have here in South Africa a lot of payments technology which relies on QR codes. We have a number of different apps which, and you know, the restaurants or you know, whatever places you go to will their payment slip will have a QR code printed on the bottom. And these have been going around for many years.
And quite recently the company and the app, same name called Money Badger, has allowed you to scan the, these well known QR codes and pay using your Lightning wallet. So I'm not using Sparrow in that case, but I'm certainly paying with Bitcoin and I would say now you are able to go to, you know, I don't know, but at least, you know, at least half, and that's a very rough guess, but at least half of the places that you would normally visit, from coffee shops to whatever. And you'll be able to pay with Bitcoin now and that's really, I think a game changer. So, you know, it's not quite on the level of Kenya. Kenya because of MPISA and Tando is really, you're able to literally pay someone selling, you know, straw hats at the side of the road in some rural farm. But here in SA, we're not doing too bad.
And it's, it's, it's really great because I think a lot of people have been quite negative about bitcoin being used as an, as this kind of medium to be able to pay your everyday bills and we're getting there pretty fast now.
So.
[01:03:03] Speaker B: Wow. Yeah, dude, I did not know that.
[01:03:07] Speaker A: Yeah, yeah, it's really, really great.
So some good work.
[01:03:13] Speaker B: Let me understand this, this kind of setup. So Money Badger does it does.
Is it something where it's able to pay the merchant on your behalf and you pay them Lightning so that like the merchant itself isn't necessarily adopting or has any idea about Bitcoin, but basically there's like a through line where somebody else is fulfilling. We can pay these QR codes at these businesses and then you just pay us in the app. Is that, is that how I understand?
[01:03:45] Speaker A: That's right, yeah. I'm no expert on it, but I, I believe so. So what the Money Badger app does is it acts as a translation between, so it can understand the QR codes of these different payment apps which would normally be sort of a credit card based based thing. And when you scan the app with that, with that app it says, right, can I open your Lightning wallet? Whether it's Zeus or what, whatever, it pops open, shows you the Lightning invoice and you, you just pay it and almost instantly you know the things paid, the slip comes out of the till, you're done. It really is very smooth. Now we've had this in what is our, one of our largest kind of Walmart type stores called Pick and Pay here for many years. Data's been, and actually that technology has been I think integrated into wallets like Blink and Aqua. So you can directly Scan there. But now we've kind of taken a step further into all of these different coffee shops, restaurants that have already got these other payment apps kind of built into their systems. So it's getting to the point now where you don't have to go and scrounge around to find a place where you can pay. You can kind of do it everywhere.
[01:05:03] Speaker B: Dude, that's awesome. The only thing in my area is steak and shake, and it's like the closest one's like two hours away or something.
I still haven't done it. The only in person actually buying stuff with bitcoin that I've done well outside of bitcoin conferences is I paid for a couple of meals in Lugano, which I was surprised how many they have a ton of merchants that are actually directly accepting USDT and bitcoin with lightning. And one of the places I went to, they'd never done it before and it's like, oh, okay, yeah, yeah, no, I've. No, we've had some people do that. Let me go, let me go ask. And they do the thing or whatever. Which. It didn't seem like any difficult of a process. He was just kind of like, I think I'm supposed to hit this button. Yes, okay. Yes. Okay, it worked. All right, cool. I guess we're good.
But you use it day to day in that way. Do you actually pay with bitcoin at a lot of these places?
[01:06:00] Speaker A: Absolutely, absolutely. Yeah.
As I say, it's very easy. It's always my first approach. If I can. I will certainly choose a store. Choose a coffee shop based on the fact that I know that it does accept it. And as I say, it really is amazing how fast it is. You might think that, oh, there's a delay, there's something. It's not the case. It's. It really just works immediately. You often still sitting there on your phone waiting for the confirmation when the slip's getting printed behind the till.
And that just feels, you know, you almost feel like you getting away with something, you know, it's an amazing thing.
Yeah. Yeah.
[01:06:43] Speaker B: Dude, that's crazy. I did not know that about. I couldn't have told you anything about like where adoption or usability was in South Africa, because I feel like we don't hear about South Africa that much or it at least doesn't make the news. Like, I had heard about Kenya and M. Pesa, obviously, they're. They're pretty prominent.
I heard about, hear a lot about Nigeria. And in fact, we just talked about this on the round table. Is that bitcoin is actually popular enough in Nigeria that they. Not only did they walk back the it's illegal, which they still have like restrictions. And it's not, it's not like you can just use it and there's no problems or whatever. It's like, we don't like you using this. But there's a lot that they just can't do anything about.
But they just rolled back their cbdc, they had their Enaira running for four years and they just basically threw in the towel and they were like, well, fine, I guess, whatever. And we'll be using bitcoin and shit.
So that's really cool. It's amazing. That's like, God, that's one of the coolest things about this is that like, progress can happen everywhere and you can just like not know about it. You know, like, everybody's still building, things are still moving and. Do you know anything about South Africa? No. It's like, well, you can go, you can go like, spend it at like half the merchants just because of this like really useful tool or this one thing that this guy built or something.
And like that's, that's like really one of the things that just gets me about how beautiful an open, permissionless system is. Like, like, that is. That is the thing about the Internet, right, Is that anybody, anywhere can build something that actually makes it easier for everybody. And then you have an example or a, a case where you're like, oh, well, we could just do this here. Or I can actually just use this tool here too, because it's just open source, it's just a network. This is, this is available anywhere.
That's fascinating though. That's so funny that I just had no idea. What's your favorite Lightning Wallet? Which one do you have the best luck with if you're going to tell somebody to do this in South Africa? What Lightning Wallet do you use?
[01:08:57] Speaker A: Well, I kind of run my own node, so I don't think I'm the best person to ask.
I use Zeus. Zeus connects to my own node. So I think if I was to recommend a wallet, I'm not actually sure these days.
I really love Phoenix. I think it a. It's a amazing wallet. What they managed to there is just. Is just really, really good. However, here in sa, you've got, as I said, those two wallets, Blink and Aqua. So if you've got somebody who's really just very new, they've now got a wallet which they can take down to, as I say, one of our local Kind of big chain stores and it just works. You don't need any kind of other apps. You can just literally scan. So that's really cool.
So I'm kind of torn between, between those.
[01:09:44] Speaker B: Yeah.
With your own node, how do you, how's your setup exactly? Do you have a.
Do you do like a cloud thing like voltage or not. Not, not saying that you use voltage, but I mean, maybe you do, but I mean in the sense that like, do you have like a web server that you connect to or is this just literally do you run it over Tor or Is it a Start 9 device? Like what's your, what's your lightning setup that you find is reliable enough to do this day to day?
[01:10:17] Speaker A: I actually use BDC Pay Server because I need to run that as part of the donation server and it has. So BDC Pay Server manages L and D on my behalf when I say obviously manages the kind of installation on my behalf and then I have to obviously manage channels myself. But yeah, it's been pretty good, I must say. It's a. It's, it's. It's really worked. Worked well. It's kind of always stays up to date.
Yeah, I think, I think it's a good way to kind of go at it if, if you need that additional kind of store front end.
[01:10:54] Speaker B: Yeah.
BTCPay server is pretty legendary.
It has been around the block and it never fails.
I've used it for God knows how long. I don't know, it's like one of those things that's just kind of like the default of like. Well, no, yeah, it's just there and it just kind of always works.
Do you have any other indispensable tools in kind of your bitcoin stack?
[01:11:24] Speaker A: Yeah, I mean we could get into all of the hardware wallets that I try to, you know, just spend. I try to maintain fairly neutral kind of stance on them.
But yeah, I mean there are some that I quite enjoy.
I think I have. I think I must have more hard rewards than any other human being on the planet.
There's literally not a hardware wallet.
[01:11:48] Speaker B: I'll give you a run for your.
[01:11:49] Speaker A: I doubt it, I doubt it, I doubt it.
I've got some really esoteric ones and I've always got a, a new one coming up that I have to build in because, you know, people come up with new stuff luckily.
[01:12:04] Speaker B: Yeah, I guess you have to give. You have to work with it with Sparrow all the time. So you kind of have to have every one of them, don't you? Yeah, you probably do have me be.
[01:12:10] Speaker A: That's right, yeah.
I will say it's really nice having the new kind of era of QR code wallets because they kind of, we have some QR code standards now and you know, we can have support for a wallet even if you know it's not, it's the wallet still works. So for example, there's a new wallet called the era Wallet which I'm looking at now which can work as a keystone wallet which is kind of cool, right? You don't have to now go and build a whole new kind of USB comms stack for this particular new wallet. If that was the case, I can assure you we would have much fewer wallets in the world. And it's good that we have options and people in different regions are building different, different, different things. So big, big fan of the QR codes and using those and that's kind of where I lean. So you know, if I'm going to be using a cold card it will probably be the cube because of the QR codes and the batteries are nice as well.
I will say that in terms of build quality, you know, you've got the sort of ledger flex which I have one here. These are really beautifully built.
I won't speak to, you know whether I think you should be putting your whole stack stuck on them. That depends on your feelings about led to the company. But the actual device is a, is a real joy to, to use. It's just like it's just really such a sort of a modern and well built kind of thing.
And then beyond that I'm always interested in seeing all of the DIY Spice stuff. I think they're very cool. I've got some amazing seed signers which have been built sort of metal ones, metal case case ones and they're also just really nice to hold and you know, so again, you know, I'm not going to offer any particular insights as to which one you should use. I think it's best, best to try and, and you know, use several if you're setting up a multi sig.
But always consider, you know, the basics of does this thing have a screen? Is there a secure element? You know, these are kind of important things that you need to consider and if it's not there, why isn't it there and is there a good reason or is there a good kind of backup or fail safe? And that's often the case. But you know, the old truth always applies that people don't generally lose their coins because their hardware wallet failed in some Technical manner. Usually they lose their coins either because they did something silly or there was a social engineering attack. So that's really.
I think there's a lot of debates around hardware wallets and which ones are the most secure. But most people don't lose their coins that way. They lose their coins because they give out their seed phrase or something else on that line. They write the seed phrase down and they don't place it in a secure, secure, pure place. All of those kind of reasons.
[01:15:11] Speaker B: Yeah, yeah, that's definitely a common thread. I've. I don't think I know of a single person who has, despite all the good lord arguments of like, oh, this one's not secure, this one doesn't have a, this one's got a proprietary secure element. And you know, all this stuff, it's backdoored. And, and I just like, you know, have all these conversations. I don't think I know a single person who has actually just had something taken off their hardware wallet because their hardware wallet was compromised.
And bitcoin cookie. I'm not sure if you saw this, this was just posted yesterday, but they just, he just lost their, it seems like their full savings, their bitcoin savings off their ledger.
And he hasn't released details yet over exactly how. But it was on a ledger.
And I was, My immediate thought was because I'm constantly like trying to figure out, okay, how did, how could somebody get in to a hardware wallet, especially with like, you know, headlong keys in the past and you know, friends who have been hit with, you know, exchange hacks and all sorts of stuff, you know, so it's like kind of like a thing of mine. I want to know how people lose coins to help help others if I can.
And, and it seems like the only information he's given so far is just like link. He stupidly clicked a link that was not.
Was malicious.
But I really want to dig into that because I still don't like, I feel like you would have to go sign something the.
If we're talking about like a ledger hardware wallet, you know, this has to be plugged in and doing something, you know, like. Or there's a seed phrase was exposed somewhere because it just seems so insanely unlikely. And like I said, I've literally never heard a story yet about someone says, yeah, I just had my hardware hardware wallet plugged in and something took it over and sent a transaction or whatever. It's like, nah, like that just doesn't, that just doesn't happen. And for the most part, like, obviously Everybody has their preferences. And you know, I'm not like the biggest fan of Ledger, just as you say, because of the company. That's my, my, it's my issue with the company. But I'm not worried about the device. You know, Like, I just.
So, I don't know. I've. I've just yet to hear a reason to like really be worried about most of the, any of like the main hardware that you hear about. Unless of course you're not actually generating keys. But then that's, that's a whole different story if you're like a ballet wallet or some stupid thing like that where they generate the keys at their business.
But yeah, yeah, just for, for anybody out there, just get a freaking hardware wallet, like get a decent hardware wallet and just use it and protect your seed. Protect and protect your seed. Because this, it just seems like that's, that's the only way there's 99.999% of people losing coins is you didn't back up your seed, you didn't protect your seed, and you didn't get a hardware wallet, you know.
[01:18:25] Speaker A: Yeah, agreed. Agreed. Yeah. My, my sort of pieces of advice to add that I would add on that is if you're going for a single sig setup, which is fine, I would recommend using a past pastraise as well. It just adds that little bit of extra entropy, which means that even if the actual hardware wallet's entropy is bad, and I'm really not saying it is, but even if it's bad, it just gives you that extra little bit of entropy on top, which can help to protect your seed. And then if you are starting to get to a point where you are putting your life savings on it, where you're really putting a significant sum of it, go multisig. Invest the time, invest the effort. Yes, it's worth it.
It's absolutely worked. Do not think it isn't. But put in the time and effort and, and do it.
Because I have never. And I, in the wallet game, I do get to hear about people losing their coins, but I have never heard of anyone with a multi sig where it was like money gone. And I don't know why I've never heard of it. It just never happens.
So maybe that'll change one day, but it certainly isn't the case today. And there's a lot of reason to think that you can sleep soundly at night if your money is sitting in a multi sig.
Yeah. Yeah.
[01:19:39] Speaker B: And I'll say because I, I love the idea of the passphrase as like a poor man's multisig. Is that like, it's the. It's the easy multi sig, right? It's like one extra little key. But I will also give a recommendation.
Use an easy. It's. It. It's extra. It's extra. It doesn't need to be crazy. It doesn't need to be 13 random characters.
Make a seriously easy to remember passphrase. Like, even if it's just like your normal password that you've used in a couple different places, that's fine. Just it's. It's an extra. And don't let the extra screw you because I've been there and I know what that feels like because I thought I needed 13 random characters and I'm an idiot and I didn't back it up properly.
But yeah, otherwise passphrase is a perfect. Is incredibly useful and I still use it to this day.
So like, don't think that like it's shunned me off of it forever because I've had a bad experience.
Passphrase a great. A great advice. I love that.
[01:20:40] Speaker A: Co sign that advice 100%. Keep your passphrase simple.
[01:20:44] Speaker B: Yeah. Yeah.
Because honestly, if you ever forget your passphrase, make it so that you. If you just remember that you have a passphrase that you could brute force back into it.
Okay, well, I kind of. I have a little bit of a hard stop just because I told you, you know, we're not. I'm not at my setup and our schedule's a little crazy. But I'm curious before we kind of close this out here in a little bit is.
Well, first, actually, do you. Do you have any thoughts on the whole. And maybe this is just like not your wheelhouse and you don't really care about it on the whole bitcoin treasury thing and how it fits into this cycle. Or is this cycle. I mean, because you've been. Been around for a bit here, so you kind of know what the cycle feels like and might have some sense of an idea of. Of what the bitcoin market feels like in the context of the hype cycle.
But how do you fit in? A lot of people think that bitcoin treasuries are going to be like this, this times like liquidation event. You know what I mean?
And some people say it's a scam, some people say it's just arbitrage on fiat debt. It kind of makes sense that we're here. Just curious if you had a perspective on this or Something that you like to add?
[01:22:16] Speaker A: Yeah, I mean, look, the first thing I'll say is I still think buying bitcoin rather than a bitcoin treasury is, makes a lot more sense.
[01:22:24] Speaker B: It does.
[01:22:27] Speaker A: You may get some short term gains, but ultimately you are buying into a company. You're buying into the people that run the company. You're buying into a whole lot of factors that you can't unless you're working in the company and maybe even if you are, you just cannot really know what's going on.
And that's kind of actually true for any company that you invest in.
Right. There's a lot of unknowns and sometimes it's worth taking that, that, that risk because you like what the company's doing, you like what products it's building, whatever does. Those are good reasons.
However, in the case of a bitcoin treasury company, there's no, unless they have services on, on the side, you know something that they're doing that you like. If they're just, if they're just managing bitcoin, why wouldn't you just go and buy the Bitcoin itself?
You may get some, as I say, some short term advantages because of some particular financial engineering that they're doing. And that may be interesting to you, but it's not to me.
I play here to play the long game. I think that that's the game that counts. I certainly don't want to be in the world of trying to trade bitcoin or for that matter trade bitcoin treasury stocks.
It's just not the game I want to play.
[01:23:44] Speaker B: Bitcoin derivative.
[01:23:46] Speaker A: Exactly. If that's the game that you want to want to play or power to you. I would argue that most people shouldn't be playing that game, that they don't know enough, that there's far too high a risk on it and they would just be much better off buying bitcoin and storing it. And gradually it might not be exciting and it might be harder to sell. See the benefits immediately if you start off from zero, but if you just keep doing it on a consistent basis, year on year, you'll get to a really good point and you'll get to the point where you're able to think about other things in life, which would be great. So that's kind of my view on it is, you know, they are going to exist, they're going to do what they do. As you say, there's a fiat arbitrage play to be had. It was always out there. It's nothing new.
But Unless you are a trader and you want to live the life of a trader and waking up at night and constantly being wired, unless that's your game, I would advise not doing it. It's just not, in my opinion, the right path to take.
[01:24:49] Speaker B: Yeah, yeah. No. 100%.
Anything else to share with? Let's say we go through periods where there's a bunch of new people for the show and I forget and I, you know, try to dig into, like, really technical stuff. But for people who are kind of newer to Bitcoin, what's. What's your favorite piece of advice to. To give them? Maybe, maybe you already just shared it, but. But just. Just in case, what's your favorite piece of advice to give somebody who's new and is like making their first steps down the rabbit hole and trying to figure this thing out?
[01:25:26] Speaker A: Yeah, sure. I mean, I think for somebody who's new, the first thing that they're generally thinking of is, why should I take custody of my coins myself? Right. That's really the first question. And the reasons are really, you know, yes, your coins are likely to be safe for quite some time sitting in some sort of exchange. That's the reality. As much as we might recount the tales of exchanges getting hacked and these sort of things, those incidences are certainly rarer now. I think the real reason, or a compelling reason, is that when you hold the bitcoin yourself, you already have the control over it that you don't get with any other custodial financial instrument. And I think that people need to think about that more because you can come to bitcoin at the start because it sounds good. I'm going to invest my dollars and I'm going to get the bitcoin. The bitcoin is going to become worth more than the dollars over time. That's usually what gets them in, but I would say what makes them stay is the permissionlessness of it, is the fact that you can have this money and it's your money and the bank can't decide, we're not going to bank with you anymore. You've got to go and find someone else. The exchange can't get hacked. If you want to go somewhere else in the world, it's not like they just going to say, well, I'm sorry, we don't allow our money to go to that part of the world. It's not really your money in that sense.
Whoever's collecting the tax in the region that you live can't reach into your bank account and pull that money out. Which is the case of many places.
There's a permissionlessness to it, or you are the only one with permission is a different way of saying it, which I think is extremely powerful and a much underappreciated use of Bitcoin today. And I think that people trust far too much the fact that their bank account is just going to be there day after day.
I think we are heading into a world where financial uncertainty is on the rise. That's just the reality of the macroeconomic conditions under which we find ourselves.
And it might not seem feasible today that your bank account is at risk, but it might be more of a reality tomorrow. And I would start thinking about having some money on the side, just as something that you have control over and someone else doesn't. So that's, I think, the sort of parting message. Just think about that more and think about what that might mean for you, and think about how that is just effectively de risking your future in a way that you can't in just about any other way, in just about any other technology that's available to you. So, yeah, that's my kind of message.
[01:28:28] Speaker B: No, that's a great way to put it, especially in the context of de risking and diversification. It's like, okay, well, how much have you diversified your degree of control over something if hits the fan, you know, like, okay, you've got equities in this market and equities over here, and you've got housing and, you know, all of this stuff. But.
But literally when things get to the point where people are cracking down and saying, you can't make a transaction here and you can't do this and you can't sell this, or, you know, Robinhood closes your account or whatever. Like, what have. How much have you diversified something that you actually have control over, like, explicitly and without question.
And I think a lot of people, the degree to which it's taken, it taken for granted, I think we're. We're moving into a world where you can't take that for granted anymore.
Yeah, increasingly. And I think a lot of people are seeing it more and more.
But word of warning to the people who don't yet.
[01:29:37] Speaker A: Yeah, yeah, I'm sort of happy to say that it does seem to be coming.
At least people seem to be more aware of it. It used to be, I think, a very fringe notion that you might not have permission over your money at some point in the future. And I think people are starting to become more kind of open to the fact as they see various things taking part Wherever you are, whether you're in the UK and you say something wrong and now you get, you know, debunked or whatever as a result, you know, there's just a lot of.
There's a lot of incidences, a lot of news reports in the world of showing that it doesn't take too much for you for your control over your assets to be suddenly removed or to be reduced.
And I think that that's.
That's. Hopefully people wake up to the fact because it's a trend and it just seems to be getting stronger in the world that the authoritarian control over assets is becoming just more.
And as a result we all have to react and we all have to do something.
There's always a force and a reaction that I think we need to consider.
Where we are in that.
[01:30:51] Speaker B: Yeah, yeah. 100.
Where should people direct you? I'll. I'll add in a money badger into the thing just because I.
I feel like I know the name, granted. It's also just a very familiar. A very familiar type of name.
[01:31:07] Speaker A: Yeah.
[01:31:09] Speaker B: But because I did not know about that. So hopefully, hopefully anybody else that could take advantage of it, check that out. But.
And I'll have the link to sparrow. That's sparrow wallet.com. right.
[01:31:22] Speaker A: That's it. Yeah, yeah, yeah, yeah.
[01:31:24] Speaker B: Anything else to direct people to? You got, you know, your. In pub on Noster and all that good stuff.
[01:31:31] Speaker A: Yeah, I'm at. I'm. I'm at most places at Craig Raw, you can follow me there.
Nosterfordshire, Craig
[email protected].
[01:31:44] Speaker B: Yeah, I think I got you brought up right now, actually.
[01:31:47] Speaker A: Yeah, now, yeah.
[01:31:48] Speaker B: Here you are, got your page brought up. I'll be sure to. I'll be sure to have this loaded and Sparrow Wallet and all that good stuff.
If you think of anything else you want to share or direct people to shoot me a message or something on X or wherever.
But dude, thanks. Thank you for coming on. This was. This was awesome. I've always loved Sparrow and been wanting to sit down and have a conversation about it and chat with you for quite some time. So I'm glad we finally got it scheduled and aligned schedules.
[01:32:23] Speaker A: For sure. It's been great to chat, guy. Yeah.
Looking forward to any conversations we might have in future.
[01:32:30] Speaker B: Yeah, man. Are you going to any conferences in the next years? Have you got any plans?
[01:32:37] Speaker A: I'm going to a few sort of events. No conference is planned at this time, so I've got quite a bit of travel. In fact, actually I will be at the Africa Bitcoin Conference in Mauritius later this year.
Okay.
[01:32:50] Speaker B: Okay. That's. I was about to say that's still this year. I got invited to that one. I haven't done that one yet.
If we end up in the same place, we should hang out and chat and I'll try to make it to Africa. Bitcoin conference or something. We'll eventually be the same one and we'll hang out. Okay.
[01:33:07] Speaker A: Awesome. Awesome.
[01:33:09] Speaker B: All right, dude.
All right, guys. Links and details and all the goodies in the show notes definitely follow Craig Rawl. Definitely check out Sparrow Wallet if you haven't. Again, I'm really glad he was able to come on the show and we got to have that conversation and get a little bit more informed on what's going on in South Africa.
I kind of wish I had had the time to pull that thread a little bit more because that's just really awesome. And what a simple man. I wish there was an easier way to like, because we don't really have that QR code thing in the U.S. so there's. There's not kind of like a standard way to. To accomplish that that I can think of naively in like a simple structure in my mind to pull that same thing off. But that's so cool that they could just pay the QR for you and it can translate through lightning. That's so neat. I just did not realize that that was the thing. I can't believe. It's so cool to just see progress, to find out that there's like a huge amount of progress or like a really useful tool or meaningful adoption happening somewhere that you didn't even know about. Definitely check out Sparrow Wallet, though.
I love everything about that wallet, especially if you're someone who likes visibility. You like to see the whole picture. You like all the tools, all the address formats and everything. And you just want to be able to get into all of the nit and gritty and all of the details. Sparrow is. It's the one that I think about when I want that picture of stuff. It makes sense to me to find out that it started with PSBTs, that it was about partially signed bitcoin transactions and multisig, because that is really. It really does shine there.
So that link will be down in the show notes, obviously. Also check out our amazing sponsors. Leden IO for bitcoin backed loans, get Chroma for lighthealth and getting your circadian rhythm right and red light therapy and the HRF Human Rights foundation and the amazing work that they do in their financial freedom report. Newsletter and then PubKey app and the Pub Keyring app to kind of get a feel for a protocol stack, a stack of tools to genuinely re decentralize the web. And I will also point you to the previous conversation chat 145 that we just had with John Carvalho. If you really want to get the whole picture and understand how powerful this this idea is and everything that they're building, check out that episode. That link will also be down below in the show notes. And with that, we will close this one out. I am Guy Swan and until next time everybody, that's our two sets.
SA.
