Eric Yakes is the author of ‘The 7th Property’. In this interview, we discuss how a Bitcoin native banking system could evolve, predicated on a practical vision where not everyone will be able or willing to self-custody. Eric has theorised how Fedimints may form the basis for a new digital age of free banking, and the risks and opportunities this would present.    

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As Bitcoin is a new form of money, then it stands to reason that it could become the basis for a new global monetary system. Yet, it is not a certainty that this will happen. And how it may manifest is far from settled. Eric Yakes is one of the leading thinkers on this topic. His ideas around how Bitcoin banking may develop are evolving to respect the central tenets of Bitcoin’s ideology, whilst making pragmatic allowances for real-world constraints.

The principal issue for Bitcoin banking is the provision of custody. 2022 gave everyone clear grounds to promote cold storage. However, with widescale adoption, there will still be significant demand for third-party custody solutions. Therefore, one must consider which custody solutions maximise trust. Fedimint provides such an alternative where trust is federated, with the intention that this federation is a known community. 

Fedimint is not only a custody solution, it is also a means for issuing value. A Fedimint can issue Ecash against the held Bitcoin. This Ecash acts as a bearer instrument that can be stored on mobile phones, with the privacy characteristics of physical cash. Ecash could also be transferred via the Lightning Network. This opens up the possibility of a quantum of decentralized federations developing and operating akin to the free banking era of the 19th century.

There are issues. Third-party custody in any form involves risk. There will be occasions when trust is broken, Bitcoin is lost and innocent people are affected. There are also risks associated with a rise in fractional reserve banking, and questions over the issuance of credit through such systems. However, as Eric Yakes asserts, if Bitcoin is to be more than Gold 2.0 and become the basis for a global monetary system, then these are risks that need to be faced.

The Future of Bitcoin Banking with Eric Yakes

Matt Corallo is a Bitcoin Core developer and open-source engineer at Block/Spiral. In this interview, we discuss the nexus of ordinals, mining rewards & decentralisation risks. We also talk about the impact of a permanent high fee environment on digital transactions, the challenges faced by Bitcoin wallet developers, and the new wave of talent working on Bitcoin Core.

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Bitcoin has come a long way since its inception, but it continues to evolve. The past few months have seen significant discussion regarding the recent development of ordinals, mining rewards, and the challenges of maintaining mining decentralization. In essence, there is a continual battle to ensure Bitcoin’s infrastructure is fit for purpose in enabling an uncensorable, trustless settlement of transactions. 

These challenges are an inevitable part of the development of innovation. Each issue requires a solution, which in turn, leads to new issues. For example, the impact of a high fee environment has been to highlight limitations and risks with the Lightning Network. Then there are the UX issues associated with wallets and issues in relation to compatibility across different protocols. 

Whilst each of these technical issues requires discussion and understanding, the wider perspective is that there is a perpetual need to improve Bitcoin's infrastructure and continue to maintain its security and decentralisation. Therefore, we need the right environment for developers to learn, collaborate and deliver. And, the wider community needs to be supportive and nurture this talent, protecting them from toxic attacks and iniquitous litigation. 

There are certainly a number of big organizations out there who understand this and are modestly and diligently working to support people like Matt and others, to allow them in turn to support Bitcoin and the needs of the whole community. And it is certainly encouraging to hear that there is a new wave of developing talent being brought into the Bitcoin Core “team”. 

Whilst this interview reinforces the fact that we can never take the huge efforts being applied for granted, it is still amazing to see the strides being made in the world’s most successful open-source project. That we can collaborate voluntarily across the internet to change the world of money, in the face of massive challenges, should leave us all in awe.

The Limitations of Lightning with Matt Corallo

Car González is the co-founder of Pleb Lab, a Bitcoin accelerator in Austin. In this interview, we discuss the Bitcoin community in Austin, why he decided to start Pleb Lab, how to grow Bitcoin development and the importance of third spaces for Bitcoiners.

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Building businesses is hard. Many brilliant ideas often don’t make it through the first year - it’s not their concept or even their people that’s the problem, they’re just not robust enough to survive. This is where accelerators come in - providing support when companies often need it most.

They play an important role for startups by providing expertise & resources to early-stage companies. These programs offer an environment where startups receive mentorship, gaining invaluable insights and guidance to navigate the challenges of business development.

Businesses in Bitcoin are no different. The need for Bitcoin-specific spaces is critical, and in 2021, Pleb Lab was founded to address this market. They created a hacker space and accelerator that supports early-stage Bitcoin startups and developers.

Accelerating Bitcoin with Car González

Tony Giorgio is the co-founder and CEO of Mutiny Wallet, a self-custodial lightning wallet. In this interview, we discuss the privacy implications of using Lightning Network, challenges faced by Mutiny, the concept of coin swaps, the web-based nature of Mutiny, the Lightning Service Provider (LSP) model, and the potential future developments of Mutiny. 

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Just over three weeks ago Mutiny launched what it refers to as the “first self-custodial lightning wallet that runs on the web.” Being web-based means that Mutiny can innovate without the restrictions that can and are placed on wallets distributed via app stores. In this fascinating podcast, Mutiny’s co-founder and CEO Tony Giorgio sets out the background, challenges and future for Mutiny.

Mutiny started as a hackathon project that the founders developed whilst working at Voltage, the Bitcoin-focused infrastructure provider. Voltage supported the founders by allowing them to develop Mutiny whilst also building the lightning service provider for Voltage, which now also powers Mutiny!

Tony discusses the challenges faced with interoperability on lightning nodes, having intuitive payment functionality for non-technical users, and the difficulties of enabling automatic software updates. Tony also explains the concept of coin swaps, how Mutiny utilizes lightning as a contract layer for these transactions, and how this approach eliminates the need for a middleman and allows users to control their funds in new ways.

Tony finally covers the advanced features of Mutiny wallet: integrating cold storage, social tipping, facilitating wallet connections, and other innovative features such as enabling people to manage subscriptions on top of Lightning. Then there are Mutiny’s future plans like integrating e-cash and allowing users to easily transition from a custodial to a non-custodial lightning transaction. It’s an exciting project, to say the least.

The Bitcoin Mutiny with Tony Giorgio

Christian Decker is a researcher and developer at Blockstream. In this interview, we discuss the evolution of the Lightning Network and the challenges of making it more user-friendly. Decker introduces Blockstream’s new service, Greenlight, which simplifies the management and security of running a Lightning node. We also discuss the concept of covenants in Bitcoin and how they can be used to restrict the spending of funds. 

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I first interviewed Christian Decker about the Lightning Network in April 2019. Over the past four and a half years, the Lightning Network has made significant strides in terms of its technical development, to the satisfaction of many of those working on it. However, the challenge of making the Lightning Network more accessible to non-technical users remains as the potential means to accelerate wider adoption.

The current situation is that users require a deep understanding of Bitcoin and Lightning, which can obviously be off-putting for many. This led to the development by Christian of Blockstream’s new product, Greenlight, which aims to simplify the management and security burdens of running a Lightning node. It aims to provide a non-custodial Lightning-as-a-service, predicated on Blockstream's commitment to transparency and user empowerment.

Greenlight was born out of the need to bridge the gap between custodial and non-custodial solutions. It provides a user-friendly onboarding experience, allowing users to have their own Lightning node while Blockstream's servers handle the operational processes. The keys remain on the user's device, ensuring security. It has been designed as a tool for all users: from end users who need assistance with managing their funds and channels on the Lightning Network, to app developers who struggle with integrating Lightning into their applications.

However, whilst Greenlight makes the Lightning Network more accessible, it doesn't necessarily make it more decentralized. There is still a level of centralisation in infrastructure and traffic monitoring. The goal is to educate users and empower them to run their own nodes, thus increasing their self-sovereignty on the Lightning Network.

Our conversation was a deep dive into the evolution of Bitcoin and the Lightning Network and the exciting future that lies ahead with services like Greenlight. As the community continues to explore and innovate, the goal remains the same: to make these technologies more accessible and empower users to take control of their financial future.

Scaling Bitcoin with Christian Decker

The media lies, governments mismanage, and our financial systems are failing us. In Mr Obnoxious, Peter McCormack explores the new frontier of tech, money and governance.

New tracks tagged #Lightning Network