Udi Wertheimer is a developer by trade, and one of the most thought-provoking and controversial figures on Bitcoin Twitter. We’ve had a few back-and-forths on Lightning adoption on Twitter, so I wanted to do a full episode.

In our talk, Udi explained his views on Bitcoin and the Lightning Network, the value of stablecoins, as well as the Metaverse, Web3, Web5, and tribalism in crypto.

→ Udi’s Twitter: https://twitter.com/udiWertheimer

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00:00 - Intro

03:15 - Udi Wertheimer Intro

08:58 - How Udi’s Views on Decentralization Have Evolved

12:30 - The State of Bitcoin Development

32:32 - Scaling Bitcoin on the Lightning Network

55:59 - Taro & The Role of Stablecoins

1:12:33 - Lightning Wallet Usage

1:19:16 - The Lightning Round

Udi Wertheimer - 00:00:00:

Over time, I kind of changed my you know, as I learned about Bitcoin more and just became fascinated with that, I kind of came to see all of the amazing things that Bitcoin can do that I wouldn't have considered before. And the promise of Bitcoin adopting the good parts of Crypto. I feel like that promise was kind of forgotten. I think that a lot of us in the Bitcoin community misunderstood the signals of having high fees on the main chain. I think a lot of us thought that this means that people are trying to make transactions like payments, like everyday payments with Bitcoin, and therefore we thought that Lightning will be a fix to the scaling problem only really in 2018. I think that development really kicked off, and in the last year there was a lot of growth, but I think it was a lot compared to other parts of Crypto market. I think the growth just wasn't as fast as some of us expected, probably with Lightning since the designs are completely new, and then we kind of start from the ground floor while everyone else has a three year advantage. That's kind of rough booty.

Kevin Rooke - 00:01:15:

Wertheimer is a developer by trade and one of the most controversial and thought provoking people on Bitcoin twitter. We've had some good back and forths on Twitter about Lightning adoption, so I want to do this episode to get a full picture. Buddy and I first started talking about Bitcoin and Lightning Network and how his views have evolved over time. We got into stable coins and we even got into time. We got into stable coins and we even got into the Metaverse web Three, Web Five, and Tribalism in crypto more broadly. Udi has forwarded his split of the sats for this show to the Human Rights Foundation. So if you enjoy this episode and if you learn something new, the best way you can support this show and the Human Rights Foundation is by sending in sats over the Lightning Network. You can use a ton of different podcasts and 20 apps, but my favorite one to use is Fountain. If you want to earn some sats, the best way you can do that is by following me on Twitter and waiting for me to post about future guests announcements. Every time I post a future guest announcement that I'm going to film with a certain guest, I will tweet about it the day before we film, and you'll get an opportunity to send in questions for that guest. When I do that episode, the best question will get a share of the sats for that show. We had BTC, McBoat Face got sats from the last episode, and he's getting sats on this episode for his listener question. So if you want an opportunity to be added to the show splits, send in some great questions. Follow me on Twitter. Quick shout out before we get into today's episode. Today's show is sponsored by Voltage. Voltage is the industry standard and next generation provider for Lightning Network infrastructure. Today's show is also sponsored by Zebedee, and Zebedee is your portal into the world of bitcoin gaming. We'll have more from Voltage and Zebedee later in the show. Hoodie thank you for joining me today. We've got lots of topics to go through. I've been following you on Twitter for a to go through. I've been following you on Twitter for a little while, and I find it takes to be really fascinating. Bitcoin takes, Lightning takes, crypto takes. So let's start with your background a little bit, because your Twitter bio says you're a comedian. But I know you have some pretty sophisticated views on the crypto market that most comedians don't have. So tell me a bit more about your background and how you spend your time today.

Udi Wertheimer - 00:03:47:

Well, first of all, thanks for having me. And I've been secretly watching some episodes of your show for a little while. I love it. I think you're, like, really focused on the specific Lightning thing, and you do it like, you know, you really go down to details, and I love that. So thank you for having me on. And as for me, I got fascinated with bitcoin probably a while ago. I me, I got fascinated with bitcoin probably a while ago. I don't like naming years, but a good while ago and my original kind of fascination with it was because I was kind of a decentralization nerd at the time. I was really excited about how things like BitTorrent and stuff like that works. And as a software engineer, I was really attracted to how Bitcoin works in the background. I also had some basic, but still some experience with online poker at the time. Really not anything noteworthy. But the one thing that struck with me is that as an online poker player, I knew very well how difficult it was to transfer money to places that your bank or credit card company doesn't want you to transfer money to and from. And also I discovered what custody means when a lot of the online poker websites kind of uploaded, turned out to be like a poker websites kind of uploaded, turned out to be like a big Ponzi scheme and didn't really have the funds that players thought they had. So these two concepts of censoring transactions and custody were, I think, very clear to me. Well, for most people in Western countries, didn't really have any concept of those ideas. So when I heard of Bitcoin was like, oh, that's exactly what I needed for this use case of online poker. I haven't played online poker since I've heard of Bitcoin, but at the time I was like, wow, this is exactly answers the needs of that use case. So I was fascinated by it and just how it works. And I think over the years, I became more and more interested in the kind of more economical and financial side of things as opposed to just the technical side of them. But that was definitely how I first got into it. And in the context of Lightning, even before Segwin, I think around 2016, if I remember correctly, I was involved in this research project of how we're going to take what we call back then collared coins, which is really just tokens, put them on bitcoin and then use Lightning to transfer them. These days, there are at least two projects that come to mind that they're trying to do a projects that come to mind that they're trying to do a similar thing. Taro Lightning labs and synonyms, I think, is the other one. So at least the two of those, if not others, that are trying to do the same thing. But we were looking at that back in 2016, even before Segue, even before Lightning was even materially practical. So I have a long history with Lightning. I was always fascinated by it. I really think it's cool. Definitely. As an engineer, I like the way that it works. It's an interesting thing to think about. But of course, recently, in the last year or two, I think I've been known more and more with my interest in non bitcoin crypto things, and I think a lot of people don't particularly like that. And my view on Lightning also kind of changed. Well, I mean, I still think that it's a fascinating project, but I kind of can't ignore the fact that it didn't develop as fast as I think a lot of us were expecting earlier on, which there are a lot of reasons to that. Like I mentioned, the Sigwa thing before Segway was activated, there wasn't really much you could do. We could talk about it, we could explore the ideas of it, but couldn't really build it. And then only really in 2018, I think that development really kicked off. And in the last year there was a lot of growth, but I think it was a lot compared to other parts of the crypto market. I think the growth just wasn't as fast as some of us expected, probably. So that's kind of something that I like thinking about. Yeah, I think that's a good background.

Kevin Rooke - 00:08:57:

Yeah, that's perfect. We got a lot of rabbit holes to go down. Now, I want to start with the first point you made about being a kind of decentralization or you were really interested in that concept. How has your views on the importance of decentralization changed since then?

Udi Wertheimer - 00:09:14:

Yeah, so back then, I wouldn't consider myself a decentralization maximalist. Right. I viewed it as a way to fix a problem again. For me, it was the poker thing, which I never did again, but that was what was on my mind back then. So I viewed it as a way to solve a problem. And in my mind, you needed as much decentralization to solve that problem. That's it. And bitcoin was just the only thing around these days, if someone was looking to build a poker thing, I think that there might be easier ways to do that than using bitcoin directly, like stablecoins and whatever. But over time, I kind of changed my as I learned about bitcoin more, just became fascinated with that, I kind of came to see all of the amazing things that bitcoin can do that I wouldn't have considered before. And things like being resistant to inflation and things like being resistant to censorship of all kinds, and staying resistant to censorship over the long term, like stable coins. They're fairly resistant to censorship right now, but I can't guarantee that they'll stay that way in ten years from now. So I came to appreciate a lot of these aspects about bitcoin, and I still do. I just don't think that's the answer to all of the world's questions and all of the world's problems. I think it's very useful for some use cases. It's kind of hard for me to imagine it becoming the way that everyone interfaces with money just because other people have other needs. Not everyone needs the things that bitcoin is really good at.

Kevin Rooke - 00:11:16:

Right. That's interesting that in earlier on the last few, five, six years, seven years maybe, you're talking about poker, and that was your use case there. It was like you wanted it for just poker, and then over time, you uncovered new use cases for bitcoin. I wonder, do you think at this point, have we uncovered all of the bitcoin use cases? Have we discovered what it will be used for?

Udi Wertheimer - 00:11:43:

Yeah, that's a really good question. Who knows? But just looking at recent years, I think that kind of the narrative around bitcoin and how people expect it to be used change a lot, so I wouldn't be surprised if it changes again. I view bitcoin as this thing that it just is. It exists and it has the properties that it has, and we, as me or humans, are trying to find out what's the best way to use this tool that exists in the way that it does exist, and we can't really change it much. So we're looking for the best ways to use it. And I think that given the circumstances around us and just the dynamics of the world, probably the way that we use it will change.

Kevin Rooke - 00:12:31:

Now, when you think about the development on bitcoin, there's this mean now, our narrative, I guess, that's persisted in the last year or so, that bitcoin is just this, like, digital rock. You can't really do anything with it. No one builds on it. It just sits there and it just does its thing up to 21 million. Has bitcoin development from like, a software perspective, has that met your expectations over the last few years? You talked about Lightning have started slower than you anticipated.

Udi Wertheimer - 00:13:01:

Yeah. Okay, so let's see. I think there are a couple of ways to answer this question. I think on the most basic level, I think that a lot of what we call bitcoin development is really focused on things like reliability, making sure bitcoin remains reliable over time, a bunch of low level fixes that make things like note syncing faster and easier and things like networking between bitcoin nodes is more efficient or less susceptible to various types of censorship. And in that sense, I do feel that bitcoin is a lot more reliable today than it was, let's say, ten years ago. And even to the point that in the past we had a lot of significant technical concerns about bitcoin survivability. And I think that these days, many of them, if not most of them, have been kind of remedied. And while I cannot promise that bitcoin will stay here forever, I think it's much more mature and stable than probably most of us thought it could ever be. So in that part, that's amazing. But there was also this promise there are people have been talking about earlier on, which was, if you look at altcoins, let's say in 2015, 2014, whatever, a lot of them promised some weird features that some of them are really laughable and were laughable features that some of them are really laughable and were laughable at the time too. But the response from bitcoin is always been back then, look, if altcoins stumble upon something that is actually useful, I don't know, privacy features, smart contracts that are not too inefficient, I don't know, whatever it is, if they stumble upon something that we could actually use, then over time, bitcoin is going to adopt it and grow stronger. And bitcoin doesn't have to be the first one to do those things. And I really subscribe to that idea. I was like, yeah, no problem. I don't care if we're going to be two, three years late into some feature, five years later into something that's fine. I think bitcoin is so superior to these other assets that whatever, we can take the slow approach, and that's probably better if we get to keep the other amazing properties that bitcoin has. I kind of doubt that this is going to happen, though, these days. There are multiple reasons for that. I think that really, first of all, a lot of the discussions about just what is technically possible, it kind of moved away from the bitcoin community in these days. They happen in other crypto communities. I think it's very unfortunate that some kind of loud thought leaders in bitcoin propagate this idea that people in crypto must be either stupid or evil, because that's not true. Some of them are really smart and really skilled, and they're not evil at all. Some of them, some of them are not trying to do any sort of ponzi scheme and they're doing cryptography research and doing whatever. And a lot of those things do not happen inside the realms of the bitcoin community anymore. They used to, and they don't really, because I think that a lot of these people just don't expect their ideas to be implemented in bitcoin anymore. So it's not an issue of really anything other than they're trying to make an impact, and bitcoin is kind of resistant to people trying to impact it, which is not a bad thing. I think that's what bitcoin should be, but it creates this culture of stagnation, which I'm not sure how to bridge that gap because I do think that there are things we can learn. We're probably going to talk about things like recent developments on Lightning and stable coins, as I mentioned before. I think that if we hope to it's a question do we as bitcoin or want to even compete in that field of stable coins? Should we do we stand a chance to win? I don't know. Those are big questions. But I think that if best partners do want to compete But I think that if best partners do want to compete there, we can't close our eyes to what's going on in other ecosystems. We have to learn from that. There's been a lot of progress in the last two, three years with regards to how you can use stable coins in those other chains, those other platforms. So if we don't, if we refuse to learn anything from that, I think there's a very small chance that we'll be able to compete. It's kind of a two edged sword. On one hand, yes, I think bitcoin became much more reliable than it used to be and kind of fulfilled that goal of being a stable asset that people can trust. It will stay here for the asset that people can trust. It will stay here for the long term. That's amazing. We think of that today. That seems trivial, but back in the day, no one knew if bitcoin was going to stick around. So that's amazing. Getting to that point, I think, is amazing. But on the other hand, that promise of bitcoin adopting the good parts of crypto, I feel like that promise was kind of forgotten.

Kevin Rooke - 00:19:09:

Was there a particular moment where you think the community shifted away from having this promise and having people think that, oh, if something interesting happens on another chain, we'll adopt it here to now we're just doing our thing and we're going to kind of close our eyes to what's going on in the other stuff.

Udi Wertheimer - 00:19:29:

Yeah. I think in 2017, with the entire block size debate, we had a lot of bad blood and think that's a time when at least a big part of the bitcoin community felt like it was under attack and felt like kind of the big blocker camp was sort of not playing fair and that it would be a good idea to not just not trust people's intentions anymore. You know, and it might have been warranted back then. I think people were very naive before that happened, so I think the response was reasonable, but then it turned into I think we probably swung the other way too hard. And these days there's this immediate assumption that anyone with any sort of proposal must be trying to destroy bitcoin. And I think that's not a good way to discuss things. Sure, you can discuss things this way. It's not impossible, but it's not the best way to discuss things. And I think it's also not necessary anymore. I think that at the time, this kind of group of maybe very technical people were really kind of we're thinking 20 16, 20 17. They were really kind of very important keeping that Quinn alive. And I think these days, when we have institutions involved in nation states involved, and this is the mainstream asset that most financially active people in the world know about, I think that we don't need those kind of old keepers to make sure that Bitcoin survives. I think Bitcoin will survive this time. I think we kind of got to a point where we don't need to be that protective. That's not to say that every stupid proposal needs to be implemented. Maybe none of them should be maybe like bitcoin should stay exactly the same as it is. But I think that the animosity towards the idea of changing things is just not needed anymore. I'm not even saying it's not about is it good or bad. I just think it's not necessary because I think Bitcoin is strong enough now that it doesn't need all of those extra precautions. Right, but we'll see.

Kevin Rooke - 00:22:10:

If you were to think about some of the ecosystem pieces that have migrated to other chains, some of the most impressive things that you've seen happen now on other chains that are not happening on Bitcoin. What are some of those things? We talked about stable coins, but are there any other elements that you think the Bitcoin ecosystem would be smart to embrace or at least consider these kind of topics?

Udi Wertheimer - 00:22:35:

Yeah, so the way I view other chains these days, well, some of them are just flat out scams. A lot of them are just flat out scams. But the ones who aren't the few that aren't the way that I would view them is as pools of liquidity that is permissionless. So first and foremost, very different from Bitcoin. It's not even trying to do what bitcoin is trying to do. Bitcoin is a form of money, I think a form of very hard money, maybe the hardest money ever. And the role of the Bitcoin blockchain is to enable the Bitcoin asset to exist and function. That's it. That's all it does. The other chains do completely different things. Completely different. I would even remove Ethereum from the equation because I think that Ethereum is sometimes kind of marketed as a competitor to Bitcoin, and I think it's not. But if you look at other smart contract platforms like the finance chain and Salana and whatever, there are a bunch of them. They're technically very similar to Ethereum. are a bunch of them. They're technically very similar to Ethereum. They're probably even more centralized than Ethereum is, but other than that, they're technically very similar. And they're not even pretending marketing wise or whatever. They're not even pretending to be money. They're not saying, oh, the reason so one exists is to create a hard money. No one's making that claim, as far as I know. You know, those chains are a way for for people to tap into pools of liquidity. So what does that mean? For example, let's say I have some dollars and I have some stable coins and I want to get some Bitcoin. Then I could use these chains that have people who put their own liquidity in there. They put their dollars in there and they put their Bitcoin in there and they're like, yeah, I'm happy for you to use this liquidity, pay me a fee and use this liquidity to trade in and out of what you want. And they do that without stuff like KYC because they're able to participate anonymously. So the people providing liquidity are able to participate anonymously. They're able to execute trades for their users also anonymously, and they can be in any jurisdiction in the world. Maybe they're in Dubai where their country does not require them to look into who is trading using their liquidity. So they're able to offer things that maybe a US company cannot. Does it make it decentralized? I don't know. I mean, it's definitely not as decentralized as Bitcoin is. I would say that it is less centralized than Square, right? You get transparency and auditability and you get the ability to use those things without necessarily identifying yourself. I cannot promise you that those systems will still be available in a year from now. I think they will, but they have been able to resist many types of censorship. But I don't know, I don't know for sure. For Bitcoin, I feel like I pretty much know that will be here next year. And for those other things, I can't promise. But the thing is, if what you want is to just be a user and move in and out of, let's say, Bitcoin and USD, you can do that and you don't care if the service is going to be there in a year, you're using it now. It's not custodial. So you don't need to give them access to your assets. You use it now and walk away. And then when you need to use it again, you can go and use it again. Of course, those services do require someone to take the risk, right? So maybe me and you as users do not need to take a lot of risk, but there are going to be liquidity providers who will take some risk, but that's fine because they choose to take that risk and they're compensated for it. So I think that's capitalism, right? So I think that's a very reasonable system. I think it's useful. I think it's saying that it's useless is a very odd thing to say. It's obviously useful. It's used in the billions of dollars all the time. And even with all of the recent news of liquidations and of people not being able to pay back their loans and what have you, a lot of big issues. Those systems still work and they work as well as they worked two months ago. The people who chose to take risk, some of them lost money. But the people who just use those systems to trade in and out of stuff, nothing happened to them. And the systems are still available. We can still use them. So I think that's a good sign.

Kevin Rooke - 00:27:47:

I think I agree with you on that. On the topic of decentralized exchanges, I think it basically effectively has made it so that anyone can become an exchange, a mini exchange.

Udi Wertheimer - 00:27:57:

Yeah, I can say that I don't.

Kevin Rooke - 00:28:01:

See why that's a bad thing in any way. I think why should we be limiting the exchanges to the New York Stock Exchange and Nasdaq? Why should there just be like three? Why can't everyone do it?

Udi Wertheimer - 00:28:14:

Yeah. And then the same thing goes to use cases like lending and leverage. Again, I would advise a lot of care and caution when using leverage, but if someone wants to, then I think that having it available in a permissionless way is good, strictly good. And of course, I was talking about trading bitcoin and stable coins, which I think are two very fundamentally valuable assets. Of course, you can also trade like complete shared coin scams that's also available on those platforms, but you don't have to, that's the point. You can choose to only use them in the way you want or not use them at all. And those are things that bitcoin on its own just cannot offer. Right now. Do we want the bitcoin chain to facilitate trades between, let's say, bitcoin and USD directly? I would say probably not. I don't think that complexity would come with a cost, and I think we probably don't want it. We don't need to, because we can go and trade bitcoin on other chains, but there are many things we could do to enable those other chains to interface with bitcoin more safely. So right now, if you want to kind of move your bitcoin to another chain, really what you're going to do is trust some custodian to hold a bitcoin for you and issue a token that represents those bitcoin on another chain, and that just introduces more trust. Now, mind you, billions of dollars of bitcoin are in tokens like that right now as we speak. So apparently for some people it's good enough, but I think it would have been good if we could have done those kind of things without as much required trust. One very interesting idea from the ethereum world is what they call ZK roll ups, or zero knowledge roll ups, which is kind of a way to pack a lot of transactions, which can have so called smart contract logic attached to them, back them and compress them in a way that you eventually settle the main chain, but the main chain doesn't know what happened in the history. You just kind of settle every block or every few blocks and you save a lot of space. So it's kind of a compression technology in a way similar in the benefits to what Lightning would maybe give you, but it's not necessarily very good for payments, but it's good for transactions that have logic like smart contract stuff. So it's kind of on the ethereum side, definitely enables you to pack a lot of those transactions a small space. But the really interesting thing is that in order to do that, you don't necessarily need smart contract support on the main change. So it is not inconceivable to make relatively small changes to bitcoin that would enable this kind of a side chain to act in a way that is kind of trust minimized and so reduce the things that reduce the cost to the overall system. To nodes. To people who don't want to participate in those things. Have the cost for them to be very low. While allowing people to benefit from that if they want. Now, that's research that's going to take years. I don't expect that to come to bitcoin anytime soon, and I think probably never going to come to bitcoin, but I think that it's at least something that would be interesting to explore. There may be other ideas like it, but because it could enable bitcoin to do things that it cannot do today without adding a lot of trust.

Kevin Rooke - 00:32:28:

Right, that's an interesting idea. I want to talk a bit about scaling bitcoin specifically with Lightning right now, and maybe we can kind of like level set and give people an idea of your overall views on, let's say, the Lightning Network ecosystem today, what kind of job it's doing today in scaling bitcoin, in enabling new applications. What's your overall sentiment?

Udi Wertheimer - 00:33:04:

All right, so this is going to be harsh. And later on, I can tell you what's my kind of bullish case for the Lightning Network, and I do have one, but I think that right now I think that Lightning is kind of optimized for use case that I doubt many people care about. Yeah. So it looks like it's kind of optimized for just peer to peer payments, maybe some of them very small, but they could also be big. And those are payments that are best when they're kind of decentralized, right? Like when they're kind of censorship resistant and so on. My main concern is I don't think people want to pay with their bitcoin. I don't. And it seems like a lot of people also don't. And I think it's kind of an historical view. But I think that the reason that we kind of got to this point is, again, if you go back to the block size wars, the narrative back then was a bitcoin sucks because it cannot scale, because we cannot do more transactions. People who are kind of because we cannot do more transactions. People who are kind of on the small block side said, well, we can do Lightning if that's what you want. If you want to make payments, we can do Lightning. And that is much better than making payments. On a chain with bigger blocks, which I kind of agree with. So that was kind of the idea back then. But I think that what a lot of people forget is the context to why people wanted to make transactions so bad back then in 2017. If you take a trip down memory lane and you look at block usage in 2017, of course blocks were full most of the time. They're full now as well. But there's a big difference because back then, people were making transactions that they considered to be very urgent, and it seems like now they're not. So if you look at why did the transaction fees grow so fast back in 2017 and now they're relatively low. It's not just because blocks are full or empty. That's not the only consideration. It's also about urgency when making a transaction. Because if you have a lot of people in 2017 were like, I need to make this transaction right now, and I'm willing to pay whatever for it, you're going to have fees hike up because no one cares about how much they're going to pay. They just need to pay right now, today, while still a lot of the blocks are full, very rarely does someone have this urgency where they're like, no, I need this to confirm in the next ten minutes. There's a reason for that. This isn't a coincidence. The reason that transactions were so urgent in 2017 was that we were in a bull rally in the bull market back then too. in a bull rally in the bull market back then too. But back then, the main way to transfer value between exchanges was using bitcoin. If you were any type of crypto trader trading firm, if you were an arbitrage person trying to take advantage of arbitrage between exchanges, which back then was massive, all of those ways to make money back in 2017 requires you to try to move bitcoin as fast as you can between exchanges. Bitcoin was super volatile. It went from a price of, let's say around super volatile. It went from a price of, let's say around 300, $400 all the way to $20,000 in a year. So a lot more volatile than was investable market. A lot of opportunities to make money right, for people who are into that kind of thing or into trading or whatever. And so you had all of these people racing each other whenever a trading opportunity appear, arbitrage opportunity appear, which is all the time people are racing each other of who's going to be the first to transfer their coins from one exchange to the one to the other one, where the opportunity is. And that's why people were like, yeah, I'm going to is. And that's why people were like, yeah, I'm going to make $5 million off of the trade, so I don't care if I'm going to pay $100 fee or $200 of mine. And that's why the fees skyrocketed that much back then. These days situation is completely different. Bitcoin is rarely used as the kind of reserve currency of crypto these days. It's mostly stable coins and the activity is also a lot of the kind of trading activity wasn't even on centralized exchanges, was on ethereum based and smart contract based kind of decentralized exchanges. And that's why ethereum fees skyrocketed the same way in this bull run and bitcoin. Bitcoin fee is really dead at any point because a lot of people on the ethereum site had urgency. They're like, okay, I'm seeing a trade that can make me a lot of money, so I'm willing to pay whatever for the NFT. I'm willing to pay whatever on the fees because I know that I tend to gain so much, or I believe that I tend to gain a lot. That's why the fees showed up dramatically. That's why they're low now, because everyone thinks the bull market is over. People don't feel it's as urgent to make their ethereum transactions right now. Right. And as urgent to make their ethereum transactions right now. Right. And the blocks are still full. It doesn't mean that the blocks are going to be empty, but it's really about the urgency. So back then, in 2017, people looked at the bitcoin chain and said, well, bitcoin doesn't work because the fees are so high. We need a solution. Then we took those four or five years to work on a solution, which is Lightning. But meanwhile, people don't use bitcoin for that anymore. Lightning, while it is much more stable these days, and I think again, in 2017, it was like a science fiction novel, how Lightning was going to work, and now it's here, it works. That's amazing. But I think the use case has changed so much. It's just not comparable to what people were talking about in 2017. People just don't want it. People do other things, and other chains especially people are just minded about making a profit. They don't have an allegiance to one system or another, to one type of infrastructure or another. They don't care. They're just going to use what's the least resistance way to get to the profit they believe they're going to make.

Kevin Rooke - 00:40:09:

Yeah.

Udi Wertheimer - 00:40:11:

So I think we kind of got into the sort of trap when we said, well, the fees on bitcoin were high. That's because I guess people thought maybe that it's because people are buying a lot of coffee cups in places with bitcoin. But that was never the case. The reason the fees were high was because people were using that to generate profit on arbitrage and trading whatever. So we have Lightning now. I'm not sure that we have what to do with it. Yeah.

Kevin Rooke - 00:40:41:

I hope you're enjoying the show so far. I just want to give a quick shout out to our sponsor, Voltage. Voltage is the industry standard for Lightning Network infrastructure, creating layer two applications and services on top of bitcoin starts with voltage, where you can spin up nodes, get access to liquidity, optimize your node and much more. Voltage is leading the way as the next generation provider of Lightning Network infrastructure. And if you want to get a free trial and start using Voltage today, you can do so at Voltage Cloud. I think you're right on that use case of trading. It's more or less migrated to other chains. There is an emerging case for making Lightning exchange transactions just because you can settle it instantly and it's often faster than some of the other chains. But that is a very niche use case still. And there is still challenges when you try to like, you can't send 10,000 bitcoin over Lightning. It is like a very niche use case now. And I think the most successful ones to date are Ln markets and collider places where you can do derivatives and get a lot of leverage. And so you may only need to transact in a smaller amount of bitcoin. But I think beyond the exchange stuff, what are your thoughts on the other applications that are now getting a bit of traction in Lightning that also we probably didn't foresee in 2017? Things like, for example, this podcast is going to be on Fountain.

Udi Wertheimer - 00:42:17:

Yeah. So I think first, just to clarify what I said before, I don't think that Lightning ever was even meant to be a solution for traders. I think that the engineers and the product people working on Lightning early on saw it as a payment mechanism to make smaller payments, for sure. I think that a lot of us in the bitcoin community misunderstood the signals of having high fees on the main chain. I think a lot of us thought that this means that people are trying to make transactions like payments, like everyday payments with bitcoin. And therefore we thought that Lightning will be a fix to the scaling problem. But I think that what we didn't understand is that's not what was going on, but the reason that the fees were high was because people were trying to trade and Lightning was never supposed to fix that. I don't think it's designed for that. So we kind of put a lot of weight behind a solution to a problem that didn't necessarily manifest yet, and I'm not saying it never will. I do see the point saying that, well, maybe in ten years, bitcoin become kind of ubiquitous, everyone has it, and maybe they choose to have all of their savings in bitcoin and then they'll be more inclined to make bitcoin payments too. Maybe, but right now it's not the case. So similarly with those new use cases of the Fountain stuff and the value for value stuff and so on, pro experimentation, I think it's interesting and I'm really interested to see how it pans out. And I think there's been some growth there too. I kind of look at experiments in the past both in bitcoin and even before bitcoin. In earlier years, bitcoin transactions were very cheap. Main it bitcoin transactions were very cheap. And people used to use bitcoin for tipping, for example. Like you had like companies that had those tipping widgets, you would deposit some amount of bitcoin, and then you could tip people on Twitter and you could tip people for articles on Reddit and you could do all of those things. This was somewhat popular inside the bitcoin community, like as a novelty. Like someone would have posted something interesting, you would send them a small bitcoin tip, and that was very cheap. Sometimes it was free because the bitcoin was custodial. No one really cared if it's custodial or not. It didn't work out. The reason it didn't work out doesn't seem like it didn't work out because Lightning wasn't ready. It seems like it didn't work out because people didn't want it. It didn't find the product market fit. And people try those kind of things before bitcoin, too. I don't even remember the name of the company. But there was a bunch of silicon Valley startups back in the day that would take let's say they would take a PayPal deposit from you. And then you would have $50 balance on their website. And then they would use micro transactions of a few cents out of this balance or whatever to kind of pay for articles or pay for whatever. We also see those things in other areas of crypto, by the way. The brave world is kind of trying to do something like that. When you have some balance of coins and they distribute it to bloggers and YouTubers and whatever, that you spend more time watching. I think Ripple has an experiment similar to that too. Those things, they existed for many years, none of them caught on. The brave browser is semi popular, but not because of that feature. That feature doesn't really catch on. Look, don't know if maybe there's something missing in those that the Lightning stuff can kind of unlock. Maybe. It just seems like there have been many attempts, and the thing I can't see is why is it Lightning specifically? It's going to make those use cases better than all of the attempts that were before. I feel like if this is such a good product to pay the value for value stuff, for example, if this is a product that people want, then I doubt that they'll be like, I want this because it's Lightning, because it's decentralized, because it's self custodial. They either want to use it with PayPal too, or they don't, is what I feel like. And then, okay, as bitcoin becomes popular, sure, we will transition to Lightning over time, over PayPal. So that's why I'm kind of skeptical of those, just because people have tried those ideas for so many years with bitcoin, without bitcoin, and that's the only reason I'm skeptical.

Kevin Rooke - 00:47:43:

But I think that's fair. That's definitely possible. Yeah, I think But I think that's fair. That's definitely possible. Yeah, I think that's a fair assessment, especially when you talk about tipping and things like that. I'll play devil's advocate here for a minute, though, and I think one thing that I find interesting on Lightning is that in past examples, when you've seen tipping even pre Bitcoin or even pre internet. It's often been like a one directional tip. Like you pay, you're spending, right? You're losing your money when you tip. We're now seeing the ability to go both ways on Lightning where people can spend and earn. And I think it is going to change the ways in which people behave with the money they have if they are earning everyday. I'm not sure of that, but I think there could be something there. Actually, there's two examples I'll use as stacker news and Fountain. Right now on Fountain, just as of last week, you can earn for listening to a podcast, right? So I, as a podcaster, run an ad or something and I could pay, I say, I don't know, for every listen it's 100 sats and the listener actually gets 100 sats. So it changes the relationship people have with those platforms. Whereas there was just never a way to earn money through Reddit or Spotify. Spotify wasn't going to pay you a fraction of a penny for listening. And a good example for Reddit is Stack or News where you get but.

Udi Wertheimer - 00:49:09:

I mean, they do pay a fraction of a penny for listening, right?

Kevin Rooke - 00:49:12:

Not you? No, not the listener.

Udi Wertheimer - 00:49:14:

Oh, you mean it pays the listener. Okay. Yeah.

Kevin Rooke - 00:49:16:

So the listener earns on Fountain now. And then the idea is like what happens when you put sats in the hands of millions of people? If they get to the scale where there are millions of users on Fountain, like there are millions on Spotify, maybe 100 million, what happens? Does that change the way then that people decide whether or not to tip? If they have this small balance, it's not going to change their life, it's not going to make them rich, but maybe they take their $5 every month and they just send it to their favorite artist in the same way that they might just like their favorite artists instagram post. And I think there's room for that to scale. And it's a bootstrap mechanism to get new users, which may be something that Bitcoin has been missing for a while and that a lot of the crypto apps had this bootstrap mechanism in the form of a new token. You could always just launch a token and everyone comes in, hey, Air Drop and hey, look at that. All of a sudden we got 100,000 users. And now it's like we have a different mechanism that's rooted in the same money that people recognize as like savings technology, but it can be deposited in any amount and therefore it can be sprinkled across all the most valuable users. Like right now on Stacker News, the way they distribute it, they use a web of trust and then basically it's like the most valued users, the most valuable contributions, your influence on the site is going to go up. Your Air Drop that you get every day goes up. And so I think there's going to be an opportunity for people to start earning without having to spend, and then they can spend afterwards. And maybe that changes that relationship. People have to tipping, because I agree, if it's just straight up spending, like, hey, pay me some money, I'm poor, I need a tip. We've had that system. I don't think there's a meaningful change in just that alone. But when you combine it them with earning, I think actually earnings probably the first step to a lot of this. That could unlock some interesting use cases down the road.

Udi Wertheimer - 00:51:31:

Yeah, that's interesting. And I think if Lightning becomes easier to build upon and easier for developers to kind of implement, then we can expect more and more kind of experimentation with those ideas that you're talking about. Because, look, I don't know what's the best formula and how to do those things, but the easier it is to build upon them, you're just going to have more and more people experimenting and trying out different parameters and trying out different things and yeah, it's definitely possible that at some point someone will hit upon something. And I think then the question is, is Lightning or can Lightning be the easiest platform for people to experiment upon? I don't know if it is right now, but I think that it's getting much better so we could get there.

Kevin Rooke - 00:52:32:

What do you think about well, actually, before we get into stable coins, one more question on Lightning stuff is the ability to earn four tasks. And effectively, this is a job. This is like just people making money in smaller amounts in this. Like, I don't know if you call, like Uber and Airbnb, if you call that the gig economy, maybe this is the micro gig economy or whatever word you want to use. Do you think there's value in that on a global scale? This is perhaps not most interesting to people in North America or in Europe or in developed nations, I think. Do you think there's a value to be unlocked there that's like, uniquely unlocked by Lightning for perhaps people living in El Salvador or in the Central African Republic or somewhere where maybe you have a phone and you can now earn one dollars a day, $2 a day, and you just bumped your income by ten or 20%.

Udi Wertheimer - 00:53:36:

Maybe? Honestly, I don't know. I don't know much about El Salvador and these other countries. I honestly don't know. I think it's definitely possible. The only kind of input I have of that is that I would imagine that people who live with lower wages and are looking for edit income streams that are of that nature, like a task like nature, I would imagine they don't have a lot of allegiance and loyalty to the kind of asset and technology they're going to use. So they're just going to find whatever opportunities available to them and go to the one that pays the most the crypto ponzi are doing that too. They're basically taking money off of big, rich investors and then they take like 1% of that and sprinkle it over some of the smaller countries or people who have a much lower income. For them, it's a lot of money and it makes for very good PR too, because you're really only giving up 1% of your income in order to increase your numbers very heavily. So as long as that kind of as long as they're managed to bring money in from big investors, that works. I think you're going to have a lot of not just in the crypto side everywhere. You're going to have people trying to solve those imbalances. And then the question is again, do bitcoin and Lightning provide something that the others can't? Can bitcoin Lightning really compete there? And the answer is, I don't know. I'm all for experimenting there and that's, again, why I think that it's really great that Lightning is stabilizing and getting to a point where it's easier for developers to experiment with those stuff, so maybe they will find something that Lightning is uniquely capable of doing for these markets.

Kevin Rooke - 00:55:59:

One of the latest experimentations on Lightning is Taro, or Taro, however we say it. Yeah. I want to get your take on how you think Taro will evolve and what role it will play in the context of this 200 billion dollar stablecoin market, which is now if we wrap all these stable coins together, they're effectively the second largest crypto asset today. What role does Taro play, do you think?

Udi Wertheimer - 00:56:34:

So taro is very early on, right? Like it's basically a spec right now. As far as I know, there isn't any public working quote, and that will probably take time and that's fine. But I think that, first of all, interestingly. There seems to be a lot of misconceptions about what it even is. And Taro, at the most simple level, it's in addition to the bitcoin base layer, really doesn't require any changes to bitcoin, but it really only requires the main chain to really function is kind of a way for people to settle transactions in other assets that are not bitcoin. Using the bitcoin main layer. And then depending on the type of asset and depending on the liquidity that it has, some of those can be transferred on Lightning as well. And then the question is, what are we going to use this for? Terror doesn't care if it's a stable coin, if it's some weird ponzi shit coin, if it's an NFD, the protocol doesn't care what it is. Lightning cannot transfer NFDS. But on the main layer, it can be whatever it wants to be. But I think that the main use case that has been presented as an example for why we would want to is stable coins. Yeah, as you say, stable coins grew, like unimaginably in the last couple of years, but also in the last five, six years. Definitely more than I think most people expected. I used to think that stablecoins are a very odd idea. I was like, well, why it's still centralized, so why are we using a blockchain for them? They used to use bitcoin for settlement in the past. Theater was originally issued on a protocol called Omni that was using Bitcoin. And I believe the team is like, as we speak, they're working on a way to transfer stable coins on Omni with Lightning, which is a separate effort to Taro me, myself. Back in 2016, I was working on another standard that was called Standard. No one was using it, but we hoped it would become a standard for transferring cold coins on top of Lightning, with the same idea of doing that for stable coins. And in the process of researching how this was going to work, we eventually gave up that idea. And even though we had a working implementation back in 2016 on Tesla, so we kind of gave up on that idea because we didn't think that Lightning necessarily has benefits over using stable coins on other platforms. I want to say in that context, there's this trap that engineers like me often fall into where we say, well, there are two possible solutions, and solution A seems like it's technically inferior to solution B, so solution A has no chance, and that's not how the world works. Sometimes the technically inferior solution does win. So I'm not saying here, oh, stable coins and Lightning cannot work. Maybe they will. Maybe they will be very big. But I think that especially for stable coins, when you accept that the stablecoin is going to be centralized, and when you accept that you're going to have trust in the issuer, then the benefits of Lightning seem to kind of diminish. I think a lot of people have made a very good point on how using stablecoins on Lightning would benefit Lightning and would benefit bitcoin. I kind of agree with those, but I'm not sure if they benefit the stablecoin users, so I'm not sure they're going to come again. We'll see. I'm known to be a very skeptical person, but the reason is I'm a bit skeptical of that is we have very easy ways to use stablecoins today on other platforms. I don't even talk about Ethereum, but if you look at something like Tron, I always bring it up, and people always think I'm joking. But Tron is the number one infrastructure for transferring USDT today, so both in transaction volume and both in just transaction count. So there are more transactions and with bigger volume too. People use it all the time. It's super fast, it's super cheap, like we're talking subset, transaction fees, and of course it's centralized. But why would you care? USD is centralized anyway, right? The main concern that people often bring up is that, well, what happens if Tron is forced to shut down or whatever? And I think the important thing to understand is that even if that happens, the holders of USDT or Tron are not affected because the issuer task can always say, okay, we have the last snapshot of balances at the time that chronicle apps for whatever reason, and we can take that and transfer that to any other chain. So it makes a lot of sense to use the most efficient and the cheapest one at any given time. And then if something happens, we just move to another one. And that seems to be what the market shows as well. So then the question is, why would you want to use Lightning for that? Which is we've all made Lightning payments. We've seen them fail. Even these days, let's say, optimistically, they will fail about five to 10% of.

Kevin Rooke - 01:03:01:

The time, depending on the size.

Udi Wertheimer - 01:03:04:

Yeah. And then you need to make sure you have the route, the channels. Why even why go there? Why put stable coins inside a channel, which means you can't use them anywhere else outside of the channel? Why do that? If something like Tron offers you the efficiency of it's yours, you can move them wherever you want. You can do whatever you want with them. You can move them to other chains too. Yeah, I'm not sure that it offers a solution. I feel like we already have a stablecoin solution. It's good. Maybe if we did that five years ago, maybe, but now it's difficult, I.

Kevin Rooke - 01:03:54:

Think, for a Lightning node operator. So this is not the user perspective, this would be the perspective of a node operator. I do think there's a lot of similarities between what Taro might enable and what a liquidity provider on Uniswap would get. You're effectively your own exchange. In both examples, like, it's slightly different, you're exchanging things in a different way, your routing rather than swapping assets. Well, you're swapping and routing, but you're passing on a payment to someone else. But it seems like it's effectively going to be a similar outcome for an operator of a node. And I guess then the question is, is there going to be enough demand from consumers to send those payments through to make the node operator successful and actually earn money? Is that your sentiment right now? That the usual constraint.

Udi Wertheimer - 01:04:49:

Yeah, mostly. I think it's very true what you say, that this can enable the sort of functionality, but I think it's important to note that it's inferior to what's available on other chains. So, yes, I can be a liquidity provider that tries to take fees out of people converting from USB to BTC and vice versa. But it is kind of capital inefficient because I will have to lock more coins than what I'm willing to probably trade in order to enable that. That's one, two people around me will have to do so. Other people will have to lock coins inside channels that will not even participate in the trade. So it's just less capital efficient. And if it's less capital efficient, that means that fees will probably be higher, and it's just not as fluid as it would be in something like, let's say, Uniswap, which is definitely in the latest inclinations, very focused on capital efficiency and being as cheap to operate as possible. And being cheap to operate means that end users can pay much lower fees. If you cannot compete with fees on something like Unisop, if I'm going to build, like, a product that uses Lightning to convert those to Bitcoin, I'm going to say, well, the fees here are higher, but it's Lightning. I'm not sure it's such a great sell. Like, people will say, well, Unisopot gives me better fees, so I'll probably go there.

Kevin Rooke - 01:06:37:

Push back on that real quick. Because Unisop's V Three, the capital efficiency improvements there, that was only significant because it was very capital inefficient in V Two, right?

Udi Wertheimer - 01:06:49:

Yeah. No, that's true.

Kevin Rooke - 01:06:53:

It did get adoption in V Two, right? Like, it did get people to use it while being a capital inefficient solution.

Udi Wertheimer - 01:07:00:

Yeah. And I think the reason for that is because there was no alternative before. So here's the problem. In the larger crypto space, people have been building those solutions for, let's say, the last few years. And with Bitcoin, we're starting to catch up from the ground floor. The designs are very primitive compared to what is available today on Uniswap and other DeFi apps or whatever. And it's totally fair that we start from a primitive design. That's okay, that's how you start. But the problem is we started three years late, so we don't exist in a vacuum. We were competing with products that are much more mature now, and it will be very difficult. The problem is that with Lightning, you have to design it from scratch. It's not like if I'm building on Solana, I can take a lot of the concepts that people have already built on Ethereum and adapt them to Solana and start on an equal footing and build from that. But with Lightning, since the designs are completely new, and then we kind of start from the ground floor while everyone else has a three year advantage, that's kind of rough. And you add to that the fact that we know that the designs that you can express with Bitcoin and Lightning are necessarily more limited. Like the amount of possible designs that you can express is more limited.

Kevin Rooke - 01:08:46:

Correct.

Udi Wertheimer - 01:08:49:

So it's not an easy point to start from. Now, I'm not saying it's impossible, but it's not easy at all. Again, all we have for Terror right now is the paper. I think that the team at Lightning Labs is amazing, and I think the community around them is amazing, too. So I think that both what they will be able to pull off and the community that I believe will adopt a lot of this, I'm very bullish on what can happen there, but. We also need to be realistic about what we're competing with. It's not easy.

Kevin Rooke - 01:09:25:

And I think probably the path to if I'm putting on my Lightning bull hat, I'm saying, like, the path to winning here, I don't think is a direct competition against what is on other chains. I agree that there's network effects here and that going head on against something like Uniswap has failed for people on that same chain already.

Udi Wertheimer - 01:09:48:

Yeah.

Kevin Rooke - 01:09:49:

I don't know why it would be different to do a head on Uniswap competitor on Bitcoin. But where I think we have an opening is in the types of transactions that can't happen on other chains or have not been proven to successfully happened on other chains. And what I mean by that is, like some of these subsent transactions and subdollar transactions, machine to machine transactions, I think there's an economy that is waiting to be tapped into, and maybe Lightning is the solution for that. But I'm pretty confident that now, as you say, when feeds move over to Ethereum for trading, it renders a lot of the microuse cases useless. You can no longer do them there. I think the scalability of Lightning and the peer to peer design might make it the solution for this new class of transactions. And so, in a way, it may not be competing directly against Ethereum or other chains. It may be carving out its own niche using similar technologies like pooling liquidity and swapping assets back and forth. permissionlessly. I think that could be an opening, I guess, for Lightning.

Udi Wertheimer - 01:11:16:

Yeah, it can be. I think it can be. And I think it will be very interesting. When I look at the data and I really like the episode you did with man, I forgot his name, the guy from Arcane. Very interesting research about Lightning usage.

Kevin Rooke - 01:11:40:

They've written two reports now. Arcane?

Udi Wertheimer - 01:11:41:

Yeah, they have two reports and the later one came out after Square Cash App added support for Lightning deposits and withdrawals. And you can see so I think the most popular, probably, or the most widely deployed Lightning enabled apps are probably roughly something like Cash App, Strike and Shivo in El Salvador. I would imagine that there are probably at least three of the top four.

Kevin Rooke - 01:12:19:

Do you think those are top three in usage as well, or in deployed.

Udi Wertheimer - 01:12:24:

With users in enlightening usage? I have no idea. Probably not the top three. They're definitely the top three deployed, though.

Kevin Rooke - 01:12:35:

Yeah. I wonder what kind of usage Cash App is getting. Cause by a mile, they have way more users. So now these users technically have Lightning access, but I really wonder what that penetration rate like, how many of those users have ever done a Lightning transaction?

Udi Wertheimer - 01:12:51:

Probably not a lot, right? Yeah. But the thing is, the rest of them, the so called true native Lightning wallets that basically only do Lightning transactions, or I think the numbers were that there are about 100,000 of them installed. So 100,000 all time installations of Lightning, only maybe 150,000. Yeah. So low six figures of all time total installations of these apps. And then when you look at Cash app, that's 80 million people have it installed, so it dwarfs everything else. So in the sense that even if 1% or that's probably not 1%, but even if it's 0.1% of cash app users use Lightning, that's probably more than everything in the other Lightning stuff, especially if you consider that they're not active users. It's just total installations. So I don't know what it looks like, and it's very hard to tell, but I think that we have this idea already that most users probably don't care about the decentralization part as much. They will just use they're happy to use Shiva, Strike or whatever that is, fully custodial, KYC, all of that stuff, as long as it gives them access to what they want. And the reason I say that is, well, so I think they also wouldn't care to use Tron or Salana or even a centralized app that uses Tron and Salon as a back end, especially when all they do is deal with several coins. So there's trust involved. Anyway. So again, it comes down to do I believe that Lightning has some benefit that those custodial builders will choose to use Lightning instead of something else. I don't know, man. It's hard to convince me of that, maybe.

Kevin Rooke - 01:15:07:

But yeah, I have two data points for wallet usage today, but I want to get your sense for, like, how many transactions do you think are happening on Lightning today? Like, per day? I think bitcoins about 250,000 transactions. What's your guess for Lightning transactions? Not like in app transactions, but like a true Lightning transaction.

Udi Wertheimer - 01:15:31:

Yeah. So the numbers I've seen and again, that's completely extrapolated. The data isn't public, right? So you have to kind of but I think if you talk to merchants I tried to do that recently to reach out to merchants and see what they see on their side. So the numbers I've heard people talking about both from, you know, I asked both wallet providers that track the usage of their own wallets and merchants that track the usage of their own websites. And the numbers I've heard is that people believe that it's probably around a million transactions a month. So maybe 2 million. If I'm missing the mark completely, then maybe it's 5 million, but it's not 100 million.

Kevin Rooke - 01:16:17:

Yeah, I think I'll for sure say I believe it's way over a million. Because I have two data points from past conversations. Wallet or Satoshi actually has a ticker on their website, and I've been just tracking it, and they don't really talk about it much. They do like Milestone Tweets, but they're doing about 200 to 250,000 transactions per month, which is one wallet. And then Breeze is I had Breeze founder, Royal, I guess, two weeks ago, one week ago, and he said they are doing 200 to 300,000 transactions a month as well. So right there we're at half a million in a month. So I think for sure, but they are two big players, so maybe your.

Udi Wertheimer - 01:17:09:

Five stars are yes, I would go with 5 million. That's fine.

Kevin Rooke - 01:17:16:

It's interesting to see how I wanted to get your take on that because I think there's a consensus in the broader crypto space that there's like nothing online, there's less than a million. I think your estimate would probably be higher than a lot of folks who are not in the Lightning ecosystem.

Udi Wertheimer - 01:17:33:

Right, well, and I only know that because I went out and asked I try to ask people, both world developers and merchants, that's the only reason I even have an estimate. Right, yeah, I agree with you. I think a lot of people would probably assume it's lower. It's probably more than a million. It could be like two, three, even five. But the reason I'm saying five that way is because I don't think it's more. I don't think we're not going to find out that there are 2030, 50 million transactions a month. I guess it's a question of what you're comparing it to. If you want to compare it to Lightning usage three years ago, then I think it's impressive growth. I think we didn't expect it back then necessarily to get to a million so fast. So it is impressive, but then when you compare it to the growth of the rest of the crypto space and just financial, just fintech and payment in other sectors, then most of them dwarf that. So I don't know, I guess it depends on what you're looking for, what you were hoping for.

Kevin Rooke - 01:18:49:

Yeah, that's fair. Okay, I know we're running out of time, but I have a bunch more questions, kind of like rapid style. So I do this segment called the Lightning round. Listeners can send in questions. We got one question from a listener and they're going to be adding to the show splits for today. So I got a stream of the sats cool that are sent in, but I have a bunch of other questions for you. Just rapid style. So are you ready for the Lightning Round?

Udi Wertheimer - 01:19:15:

Yeah, let's go.

Kevin Rooke - 01:19:16:

Welcome to the Lightning Round, presented by Zebedee, your portal into the world of bitcoin gaming. The Zebedee app offers a full featured Lightning wallet, seamlessly integrated with your own personal gamer tag so that you can earn bitcoin on all of Zebedee's games on mobile and desktop. It's never been more fun to earn bitcoin, and Zebedee is your key to it all, to claim your personal gamer tag and start earning some bitcoin of your own. Download the Zebedee app today. First question you have in your Twitter Pin tweet. Whenever you're not sure what to say, just say Metaverse. So I have to ask you, how do you define the metaverse? What does that mean?

Udi Wertheimer - 01:19:59:

To you, man. Yeah, I tweeted that before. The whole, like, I need to just answer quickly, right?

Kevin Rooke - 01:20:11:

Answer super fast.

Udi Wertheimer - 01:20:13:

Okay. So what it means I'll let go of the background. What it means to me is just really it's just the internet. Right? I think a lot of us move our lives to the digital world more and more and people communicating over Twitter more than they communicate with people in real life. That's the metaverse. That's what it really is.

Kevin Rooke - 01:20:38:

That's fair. In ten years, will we be using the words web three and web five?

Udi Wertheimer - 01:20:44:

I hope not. It's so grinch. It's so grinch. Both of them, if you had to.

Kevin Rooke - 01:20:50:

Pick one to outlast the other, which one lasts longer? Is it web three or web five as a narrative, as a term?

Udi Wertheimer - 01:20:58:

Well, web five is a joke, and web three isn't meant as a joke. Right. So they're not really competing on the same ground. Sometimes jokes last longer. Right.

Kevin Rooke - 01:21:21:

We've seen dogs coin success.

Udi Wertheimer - 01:21:23:

Yeah.

Kevin Rooke - 01:21:27:

Okay, I want to talk about your I want to do a psychology question here because you're someone on Twitter who I followed you now for a few months, and I've noticed that you have no problem bouncing around different ideas and, like, jumping into different groups, having different discussions, advocating for and advocating against the same topic almost like the next day. And I think a lot of people struggle with that in bitcoin and crypto is like, we have tribes and we are in that tribe, and we never leave that tribe. What I guess message do you have for people in crypto who are part of these tribes? What would you like to see from them moving forward?

Udi Wertheimer - 01:22:13:

Yeah, so when I go to a bitcoin event, definitely the last two or three years, everyone is like, oh, here's the shit corner. And then when I go to an etherium event, I was like, oh, here's the Bitcoin maxi, which is really funny. I would kind of advise everyone to try to strive to end up in that situation, because I think it kind of means that you are not married to any position and you're not blindly following things just because other people expect you to or because you have a blind spot. I think it's not a bad position to be in when people can't put you in a specific label or camp at least can't consistently do that. Back to what I said before about what a lot of people said early on about bitcoin and how bitcoin will adopt what happens on other crypto things if they make sense. I do think that back then, bitcoin was kind of seen as the king of crypto. That's what people called it too. Yeah. We have a lot of old coins and they're trying a lot of things, but bitcoin is the king. And I think people don't use that terminology as often anymore. I think that very often people try to say, well, bitcoin is just not crypto, it's just something else. It is not part of the group. And I think that's a mistake. First, just because of the composition of people involved on both sides. If you go to a crypto conference, I think I think a lot of hard line bitcoin is would be surprised. But if you go to a crypto conference, the vast majority of people there are bitcoiners, as in they hold bitcoin and they intend to continue to hold bitcoin for the foreseeable future. Not everyone, absolutely not everyone. And there are some people you will need to want bitcoin to die. But that exists. But the vast majority are bitcoiners and they're bitcoin supporters and they believe in the future of bitcoin. They want to see it succeed. And I think that that very odd artificial divide that if someone is interested in other things too, then they can't be a real bitcoin or they don't have the best interest of that project in mind or in heart. I think that's wrong. I think that's a mistake, and I think we're missing out on a lot of ideas that some of them might be good, but that doesn't mean we have to accept the pond denominators that are involved in a lot of the crypto stuff. But also that's the beauty of a free market. Those people aren't asking us what we think about some ponzi mechanism, if we like it or not. And people aren't asking us if we like how they use bitcoin or not. They're going to do it. They're going to do it regardless of us yelling into the void about how it's bad. I don't us yelling into the void about how it's bad. I don't think it really helps a lot in any way. And instead I think we should let I thought back then, back in whenever, when I started looking into bitcoin, I thought it's awesome that people can start their own crazy projects and can stay anonymous while can start their own crazy projects and can stay anonymous while doing so, and they can do whatever they want, and then some people will choose to risk their money on that and some people will not. But the fact that it's possible, that was one of the things that made me excited about bitcoin the most. And I always saw bitcoin as the asset that enables those things. I don't need them to be built on the bitcoin chain, but as long as bitcoin is an asset that is truly censorship resistant and truly neutral in a way that anyone can use it, even if I don't like this person, then that enables all of those things, 99% of which is going to be scams, because that's just human nature. But out of that experimentation, some useful things can and do come up, I think, brilliant.

Kevin Rooke - 01:26:47:

If you have one thing that bitcoiners fail to appreciate about other chains or about other communities, what is that thing?

Udi Wertheimer - 01:26:58:

Wow, it's hard to answer and I don't know. I think that one is being a liquidity pool of permissionless access. So it's not trying to be money. I think that we have this struggle with other chains because a lot of people think that they're trying to compete with bitcoin. I think they're not sure. Of course, there's always a competition in the sense that if you don't put your money into bitcoin, you'll put it into something else. But if that's your mentality, then you can say that houses are competition to bitcoin and cars are competition to bitcoin. Sure, in a sense they are, but that's not a way to live your life. I think that those other chains, they're trying to do something completely different. It's not to become hard money. It's not like 2017 when repo people said, oh, we're like bitcoin, but faster and cheaper. Almost no one is making those claims anymore. They're trying to do something completely different. There are liquidity pools that function in a permissionless way. That's useful for bitcoiners too. I'm a bitcoinner, it's useful for me and it's useful for a lot of other bitcoiners. So there's no need for the animosity in many instances.

Kevin Rooke - 01:28:25:

Yeah, sure.

Udi Wertheimer - 01:28:25:

You do have etherium people. Yes.

Kevin Rooke - 01:28:28:

I want to ask the reverse that question as well. So what do crypto folks fail to appreciate about bitcoin? What's that one thing?

Udi Wertheimer - 01:28:36:

Oh, a lot of things. So the nice thing about crypto is bitcoin included is you can choose the monetary policy you're comfortable with and you can opt in. Unlike with the dollars, you can opt in into whatever you think is fit for what you want. It can be completely crazy and it can be very stable. I think that a lot of crypto people just do not understand at all what makes bitcoin special. They think it's like a basic version of ethereum and they don't see that it's intentionally a robust, neutral asset that cannot be changed and how valuable it is. I think probably as some of the newer people experienced massive losses in the last month or two, a lot of times due to very irresponsible monetary policies. If you can even call them monetary policies of their choice, then I think they might get a glimpse of why it is so unique that bitcoin offers like a neutral solution that doesn't have any of those things. That's a benefit. So I think a lot of people in crypto fail to see bitcoin as a long term savings vehicle, which is what I think it is. The idea that I've been trying to promote ever since I kind of veered off of the bitcoin maximal side was that, hey, look guys, you want to gamble in your ponzi schemes? Great. You want to buy NFTs of monkeys? Great. Like, have fun, do whatever you want. I hope it works well for you. I hope you make money. I'm not here to call you stupid, but if you do secure some profits, then I would say make sure that you take some of it and put in bitcoin. It can be as much as I care, but then at least as everything trends to zero, at least they end up being 100% in bitcoin because everything else is zeroed out, and they end up having okay, at least they have some bag of Bitcoin, which is still worth something. Right now, of course, in this particular point in time, it would have been better to just have stable coins and not bitcoin. But I think over the long term, I think that offer many bull markets and bear markets. I think people will be able to notice that their bitcoin portion of their portfolio is performing pretty well over time, and their stablecoin portion maybe not.

Kevin Rooke - 01:31:27:

So that's a good leading for I have a couple more questions, but the next question is, if you have to store your wealth in one asset for the next decade and it couldn't be bitcoin, what would it be?

Udi Wertheimer - 01:31:40:

Man probably real estate. Yeah, probably real estate. That seems to I like it. Yeah.

Kevin Rooke - 01:31:52:

We had a listener question, the only listener question, so they get a split of the SATS. It's a pretty low bar for a question. It's just how are you doing? Wow. How are you doing?

Udi Wertheimer - 01:32:05:

That's good. I'm doing good. I had a lot of fun with this conversation, so I'm doing great.

Kevin Rooke - 01:32:10:

I'm glad to hear a couple more for you. Are there any books that have meaningfully changed your view of the world?

Udi Wertheimer - 01:32:21:

Well, it's going to be very basic, but I like The Sovereign Individual. I've never finished reading it, by the way, but so many people talk to me about it that I have a pretty good idea of what I missed, too. The other one would be well, there are other two, so the second one would be reminisces of Stock Operator. Stock Operator, yeah. Very good book. I love it. I think it and it's just beautiful how everything stays the same over hundreds of years. It's always the same games. So I think even if you're not interested in markets at all, I think it's a very interesting read. And the third one is I have the title in Hebrew. I'm from Israel. I have the title in my head in Hebrew, and the Hedgehog Airs Guy to the Galaxy. Definitely my favorite book of all time. All of my terrible jokes and all of my terrible sense of humor on Twitter that people are so mad about, totally Douglas Adam's fault, all of it.

Kevin Rooke - 01:33:39:

Those are some great recommendations. I like that. Yeah. Okay. I got a question about credit cards. There's an estimate right now, I tried to find a global number of estimates, like, how many people have credit cards. I found an American estimate, and neither of us are in America, but it said 200 million Americans own credit cards today. How many people will own credit cards ten years from now in America?

Udi Wertheimer - 01:34:04:

That's a very interesting question. I think the credit card will end up being its main rule will be to onboard people, to Apple, Pay, Google, Pay, probably. And I guess eventually they'll probably get rid of that step. But what did you say in ten years? Was that the question?

Kevin Rooke - 01:34:29:

Yes. If you have 200 million today, how many in ten years?

Udi Wertheimer - 01:34:33:

Yeah, probably less. Probably a lot less. But because we're not going to have the physical card anymore, I would imagine. Yeah, but not because I think we would use Lightning instead. Not in ten years.

Kevin Rooke - 01:34:49:

That's fair. I didn't want to lead the witness there with a potential solution, but I appreciate the number. I also agree. I think it's probably less than 200 million in ten years. Who do you learn most from on Twitter?

Udi Wertheimer - 01:35:09:

Man. I want to say Eric Wall. It's not even because it's the truth, it's just that me and Eric have a tradition of name dropping each other sometimes and very bad connotations, and sometimes very good connotations. So I owe them a good one.

Kevin Rooke - 01:35:32:

I appreciate all the back and forth conversations with you guys. Often I learn a bunch, but it's also quite funny at the same time.

Udi Wertheimer - 01:35:39:

Yeah, that's right.

Kevin Rooke - 01:35:43:

If you could change one thing, there's a final question for you. If you could change one thing about bitcoin, what would you change?

Udi Wertheimer - 01:35:51:

Man the hot take would be to say something like, remove the 21 million cap and have infinite inflation, but in order to sustain the security of the network. Whatnot? But I'm not going to say that because I don't think that but that's what the cool kids say. What would I change? Probably privacy stuff. I wish bitcoin was more private, and Lightning does show some promise there. So yeah. Looking at something monaro, I wish bitcoin maybe was a bit more like that, but I think that, again, the fact that bitcoin doesn't implement those things is also a strength of bitcoin. I don't think that bitcoin was born perfect. That's very unlikely. But it's resistance to change is a feature. So even if we end up not getting some things that would have been better if instead bitcoin ended up being something that is easy to change all the time, then you probably would have lost its most important property.

Kevin Rooke - 01:37:12:

That's a good one.

Udi Wertheimer - 01:37:13:

Yeah.

Kevin Rooke - 01:37:13:

I appreciate you taking all this time. This was an amazing conversation. I learned a bunch, and I know listeners will, too, because in the show, we talk almost exclusively about Lightning. And I like that we could reference Lightning and compare it to other things, and we can kind of go back and forth on the pros and cons of it, because I think that's important to do. So I appreciate you taking the time, and I hope you got it.

Udi Wertheimer - 01:37:34:

Yeah, you too. Thank you. That was awesome.

Kevin Rooke - 01:37:36:

Where can people find you on Twitter to learn more?

Udi Wertheimer - 01:37:39:

Just don't save your time. Do something else.

Kevin Rooke - 01:37:49:

All right, on that note, I'll let you go. But yeah, thank you again for the time.

Udi Wertheimer - 01:37:54:

Thanks.