Gigi: Bitcoin From Speculative Asset to Savings Technology


Topics

My guest today is Gigi a software developer and computer scientist. Gigi wrote “21Lessons”, a book in which he shares his learnings from falling down the Bitcoin rabbit hole. Two years ago he quit his job and started to work solely in the Bitcoin space.

“Bitcoin already has all three functions of money. It is a store of value, medium of exchange and unit of account. It’s just not evenly distributed yet.” – Gigi

“As I see Bitcoin evolve, I think it will be a global settlement layer for something approximating central banks. And since it’s obviously superior to gold and every other form of money we had, like Bitcoin is by far the best money we ever had.” – Gigi

Our topics include:

  • Building reputation in the Bitcoin space
  • All mistakes he made
  • How to educate people about Bitcoin
  • The different entry points to Bitcoin
  • Explaining scarcity
  • The three functions of money
  • Bitcoinization will happen in 10 years
  • Lightning Network adoption and usability
  • Why Bitcoin does not “move fast and break things”
  • Current technical developments in Bitcoin
  • Messaging on top of Bitcoin

Sponsors

Ask a question

Support the podcast

Donations

Shownotes

Recording Date: June 25, 2020
Location: Online

Recommendations

Links

Transcript

Anita Posch [00:04:54] Okay. Hello, Gigi. Welcome to the show.

Gigi [00:04:57] Hey, Anita. Thanks for having me.

Anita Posch [00:05:00] I'm glad that you're here. It's the first time that you're my guest. Please tell us a little bit about you. When I first saw your name online, I thought "derGigi" seems to be a German speaker and yeah. Then we met at the lightning conference in Berlin and yeah, I'm really curious about your profession and your story.

Gigi [00:05:21] Yeah, I'm, I'm indeed a German speaker. So for everyone who is not aware "derGigi", Gigi is a name and der is that German pronoun. So, if you know German it is kind of obvious that I'm German speaking as well, or at least you can guess it as, as you did Anita and yes. so. My background is in computer science and I, fell down the Bitcoin rabbit hole.
The last couple of years, really hard, like it got it, got worse and worse over time. And, like two years ago now, I think I quit my job and I've been in Bitcoin the full time pretty much. And, yeah, as I said, my background is in computer science and I've been working in the software industry for the last 15 years and, I should have been very primed to find Bitcoin early and I actually found it quite early as well, but I dismissed it for the first couple of years. yeah, it's the same story that you've heard. Before a million times, probably like you first hear of it, look into it a little bit, but you think this can never work and it's just funny internet money.
And, so that was the case for me as well. And that's also part of the reason why I, dedicated so much time, in the last couple of years to education and, doing my part in hopefully, helping some people to not make the same mistakes that I made.

Anita Posch [00:06:47] It's true. It's very common that people find it, dismiss it and then come back again because Bitcoin. Wow. It's still alive.

Gigi [00:06:55] Yeah, exactly. Yeah.

Anita Posch [00:06:56] Yeah. And how are you earning your money? I mean, you're full time working in the Bitcoin space. And are you developing stuff or doing work for clients?

Gigi [00:07:08] well, I was lucky enough to, to earn quite a bit of money beforehand and also, yeah. I had some savings that I blew through in the last couple of years. So, I wasn't exactly profitable, the last couple of years, but, I hope to get back into the software side of things again. So I've been writing a lot of words for Bitcoin in the last couple of years, and I started to write software again, particularly in the Bitcoin space.
So, of course it would be quite easy for me to find a regular software development job, but, you know, as it is in, in Bitcoin, it's kind of eats you up and, I'm not interested in working on anything else besides Bitcoin. So, yeah, that's what I focus all my time and energy on. And I've been working with a couple of companies in the Bitcoin space in the last couple of years.
So now already like last couple of months, especially. And, I can't talk about anything publicly yet, but, I think I will probably have a software development gig, yeah. a couple of things that I can do. Let's put it like that, that will also be profitable for myself.

Anita Posch [00:08:23] A great story actually, from, from how should I say a nobody with Bitcoin to having a software gig and being in the middle of it. I think that's a very common story also in this space that people just start to contribute and suddenly they are Bitcoin core contributors.

Gigi [00:08:43] Yeah, I think if you put your mind to it, there really is no barrier to entry. That's the nice thing about Bitcoin like, if you, if you work hard at it, there is no one who is able to stop you. Like if your contributions are actually good. And if you have meaningful things to say, or even meaningful things to contribute on the code side of things, then I think it's, it's quite easy to, build yourself a reputation and also, join other teams and stuff like that.
And we see that we see that over and over again. And, very recently a friend of mine Rash, he published, a medium article where he wrote about his journey of not coding at all, like from hello world to Bitcoin core. And that's, that's very impressive, like not knowing anything about coding and like two or three years later, contributing to Bitcoin core.
That's, that's quite an impressive feat. There are a bunch of people like him that, that managed to do that. so yeah, it's, it's, it's an interesting space. That's for sure.

Anita Posch [00:09:44] I heard a similar story from Amiti Uttarwar she's also a core developer. And she also told me that story that a few years ago, she didn't know how to code. And I think that's great that it's so open and, without restrictions. Yeah. So everybody can really participate. What grasped your interest the most when you, rediscovered Bitcoin for yourself and then fell into the, rabbit hole.

Gigi [00:10:10] Hm, that's a good question. Hmm. I'm not even sure if I can, can answer, meaningfully, because it took me actually multiple touch points with Bitcoin again. So I, it seems I'm a very slow learner and I think, I think it was the third or fourth time around when I heard about Bitcoin.
That I took it more seriously. And, as I said in the beginning, like, I focused on that occasion because I hope that not everyone makes all the mistakes that I made. So I made all the mistakes. There is there is to make, like I went into mining. I went into all the altcoins. I thought that, Bitcoin is like the first version and it will be surprised by, pretty much every project that I looked into.
the marketing side of many altcoins is, quite well done. So, if you don't know anything about the systems and about economics and money in particular, you might think that, other systems are superior in so many ways. And again, I made all the mistakes and it took me a very long time to get it.
And I think, what, what really, what really clicked for me? what, what was like the breaking point where I understood that this is something different is that it's not a part about technology. It's not necessarily a technological invention per se. Like it's another, a new app or anything like that, or a new shiny thing, but it's really about an invention in money and reinventing the money.
And this is something that only happens like every couple of millennia, you know? And, it's, it's also a very profound reinvention of money. I view it more as something that improves upon gold in such a profound way that you basically have this digital, super gold that you can teleport across any communications channel.
And once you understand that money is an extremely important tool for society in general, then it, it dawned on me that this is not simply a play toy or an app or anything like that, but it's a really profound societal change and I think, I think it's, it's interesting to think about it in this more fundamental sense in the same way that the cypherpunks felt about strong cryptography in the sixties and seventies, that it will change society completely because it's just such a, a novel invention in such a new thing that really empowers the individual.
Of course we need cryptography for Bitcoin, but I think what is interesting in Bitcoin is it's not merely a cypherpunky payment system. It's a reinvention of money and scarcity and it's the first thing that is truly absolutely scarce and all those things combined. It doesn't really necessarily have to do with technology in the widest sense. It's really about a reinvention of money. And I think that what's the most important thing for me to grasp.

Anita Posch [00:13:03] Yes what is your experience in educating people about that? Because I think many people fear the fact that Bitcoin actually, is an opt out of the current situation and also an opt out of the hierarchical systems of a nation state, and many people then say, wow, I'm, I'm scared of how, how should this go?
And I know I don't want Bitcoin. Yeah. It's too disturbing in a way. I always have this impression. And also if you discuss about, the functions of money or what it is, people get so emotional, that you almost cannot discuss with them. And I think, yeah, and I think one thing is also that we don't learn how money is coming into existence in school or anywhere else.

Gigi [00:13:49] Yeah, it makes you suspicious of the whole education system, right? Like why don't we learn about anything like that? I think it's it's you know, if, if you are prone to conspiratorial thinking, then, this looks awfully deliberate, that nobody really knows what money is and how it works and how the modern banking system and the fractional reserve banking system works.
And what central banks actually do and so on. So, it's, it's definitely hard to work against this yeah, almost like in the indoctrination of the masses that, you know, money has only worth because money can only work when governments are behind it. For example, that's one of those lines of thinking that many people have, educating people on these issues is really hard as you pointed out.
And I think you're right when you say that a lot of people are really afraid. It's, it's always difficult to change the way you're doing things and, Bitcoin is such a profound change it will also inevitably change your worldview if you learn about it especially if you come from what many people call it, default Keynesian view of the world.
Like you have to have inflation for the economy to work, for example, and all spending is good. Like you have this broken window fallacy in economics that, you know, everything that that leads to people spending money is good for the economy. So in essence, the ridiculousness of this thought is that everything that breaks is also good for the economy.
So you could just go around and smash windows and it would be good for the economy because you will need more people that make windows and so on and so forth. So fighting against these kinds, these lines of thinking is really, really hard. But I think like, I think there are ways to talk about Bitcoin without necessarily talking about Bitcoin.
And I'm a huge fan of this approach. I think a lot of people instinctively know that the money is broken, even though they can't articulate it. I think a lot of people deeply feel and know and realize that just leaving your money on the bank is it's, it's a fool's errand. Like. You must not do that because it will just lose purchasing power over time.
And I think a lot of people also realize that the money gets worth less and less. Like if you talk to people that are 50, 60, 70 years or older, they will remember a time, in like in Austria and in Germany where a German Mark or in Austria the Schilling like 20 Schilling would buy you almost a lunch, you know, and if you convert it to Euros, it's like Euro 1,70 or something, or let's say a Euro 1,50 and a Euro 1,50 buys you nothing today. And I think a lot of people instinctively know that and that's, that's something that's, it's a very easy entry point in one aspect of talking about Bitcoin, that the money is broken and, that we live in an inflationary environment where just money loses its purchasing power over time.
And I think everyone kind of knows that. And then there might be many ways to talk about Bitcoin. We follow talking about Bitcoin for different groups of people. There are so many people now online that get deplatformed for example, or it get censored by PayPal. or, you know, if you look in the sex worker space, for example, they have a very hard time of getting any access to any finance services.
So getting bank accounts and stuff like that, in the U S we also see the same phenomenon with the Marihuana industry and other like Industries at, let's say at the, at the fringe of society, even though it's not really the fringe but it's not mainstream accepted. So, there, there are a bunch of people that, that immediately get what's like some of the problems that Bitcoin is trying to solve. And, yeah, if, if you're a political activist as well or a journalist, you might want to an uncensorable way to get money and, to hold your money. So I think all those things are entry points to talk about Bitcoin without necessarily talking about Bitcoin directly.

Anita Posch [00:17:57] That's true. And, you're right. I'm also adjusting it always like in which group I am at the moment. And you just said use cases. Yeah. I mean, I, what I see in the German speaking world, or let's say in the so called developed world, in most cases it's speculation, like saving money, a hedge against inflation but, I was in Zimbabwe in February and the people, very fast, they understand what Bitcoin is. If you tell them it's uncensorable, you can send it from US, from Europe to you in Zimbabwe, you can send it out of Zimbabwe and the kleptocracy cannot get it. You know, and I, the funny thing is, I mean, it's not really funny for Venezuelans, but I think the Venezuelan government now offers a Bitcoin payment over BTCpayserver
and, So also the government, that totalitarian or authoritarian realize that, Bitcoin has a value.
And what you also said before, I mean, the banking industry is basically old technology banking industry is about 200 years old, I guess. And it's accounting systems are not up to date and they are not made for the future. We saw that also in the Wirecard case today.

Gigi [00:19:17] Yeah. I think, you know, that's, that's, that's very true. What you were saying about banking being a really old technology and it's, it's, it's ridiculous once you start to think about it, that you can't make any bank transfers on the weekends, for example, and bank transfers sometimes take up to three or four days or even longer, like once you cross a border with a bank transfer, it might take a week or longer.
And a lot of people, have these problems naturally, as, as you also pointed out, but also in Europe, you know, we have, many Gastarbeiter like, they, they work in another country and they they're trying to send money home and, all around the world, people realize that there are now thanks to Bitcoin, way easier and better ways to do that.
Because if you're using the banking system, then you're just pay an insane amount of fees and it takes a very long time and you might not be able to do it, like depending on your circumstances, Andreas M. Antonopoulos talks about that a lot. That so many people, they don't have any, government mandated identity or another.
Or, or a postal address. And then suddenly you cannot create a bank account. Like, as I said, the banking system is so old and archaic. It's just not fit for the 21st century. And that's what I really love about Bitcoin as well, that it's not tied to your identity, like identity, only exists in a form of, of private keys pretty much. And you can, like, it doesn't matter who you are or even what you are like, even if you're a computer program or even if you're a dog for that matter, you can have a Bitcoin address and start accepting payments. And that's just a very, very powerful thing in Bitcoin. As we talked before on the development side, there is like no barrier to entry and that's also true for just joining the network and creating accounts and stuff like that. But you also talked about how in the West it's mostly, it's mostly used for speculation and I do agree that that has been true for the last couple of years, but I also see it thanks to the stacking Sats and Auto DCA movement I see it shifting, I see it shifting to more of a savings technology because now even in the developed world, a lot of people wake up to the fact that governments can't just print money out of thin air. And, in response to the coronavirus, we saw that this is exactly what they did, and they printed trillions upon trillions of dollars and euros, and just pick your, pick your favorite central bank, and you will see the amount of money they injected into the system, the amount of money they printed out of thin air, it's just insane.
I think people realize that no matter where you park your wealth, it will inflate in a way. I think a lot of people decide to take this bet and hedge against the current system and just start saving small amounts in Bitcoin, weekly or monthly. We currently are living through this mental shift in the developed world to view Bitcoin, not as speculation anymore, like not as pure speculation where you put money in and after you made 10 X or a 100 X, you get the money out again and go back into euros or dollars or yen or what have you, but really see the saving and use Satoshis as your measure of wealth and value. So to speak.

Anita Posch [00:22:37] How do you explain to people the concept of scarcity? So, that Bitcoin basically is a deflationary or not a debt based instrument. And, how could the economy thrive without having these keynesian manipulating of the money supply.

Gigi [00:23:00] Hmm. I think, I think the first thing that's important to realize is that's the idea that you have to manipulate the supply of money for the economy to function is a very, very new one. If we look back into history, we saw that we saw a long periods of time where we had hard money and gold was used as the money and we still had working and flourishing economies.
And, if you, if you study history, you will see that the Belle epoche, where a lot of, great works of art, great architecture, great advancements in science and great literature and many great things that have happened. And we had, we had a great booming and functioning economy and we, we had nobody who actively managed the money supply. We had no central banks that injected liquidity into the system and all these weird words they have nowadays for printing money. You know, like there are so many, so many, so many euphemisms for printing money. It's, it's hard to keep count and, explaining scarcity: I think, I think people instinctively realize that money should be scarce and things that hold value have to be scarce. I think that's why people try to diversify into real estate and into oldtimers and into expensive watches and what have you? I think people instinctively get scarcity. It's not something you have to pitch to people, but it's really hard to wrap your head around how Bitcoin achieves scarcity.
So, so that's really difficult. And I, to be honest, I haven't found a nice succinct way at, in explaining how bitcoin achieves this kind of scarcity. I think the best, the best metaphor I have is to compare Bitcoin to a game where if you look at the game of chess, for example, the amount of squares you have on the chess board is predefined and scarce and everyone agrees that a chess board only has this size and these amount of squares on it. And if you, if you're trying to change that you will play a different game and that's, that's in a way how Bitcoin's consensus rules work, and you could explain it then along those lines, but it's, it's really hard to wrap your head around.
So, it's, it's very easy to say Bitcoin has 21 million Bitcoins and that's it. And it doesn't really matter. Why it is that way. And it doesn't matter if you truly deeply understand how this works. It's just important that you know that. And I think that's also the main entry point for most people that you've, you've heard it so many times that there's only a limited supply in Bitcoin that you have to 21 million and nothing more, and you will start to believe that.
And once you start to realize what this means, you're, you will try to get some, you know, as Satoshi said "in case it catches on".

Anita Posch [00:26:01] Yes. It's also compared very often to property. So on earth, there is only so much property and, if it's run out, it's run out.

Gigi [00:26:11] Yeah, absolutely. I really like the, the real estate comparison as well. And a lot of people use it as well. Yeah. Yeah, I I'm I'm I don't know. I think again, with property, there are many comparisons that you can make and, I think it's, it's a very useful analogy as well for absolute newbies because it, I think it lands really quickly.

Anita Posch [00:26:36] Yeah, very often when, there is a discussion about the monetary properties or the properties of Bitcoin being money, the three functions of money are mentioned like a store value, medium of exchange and medium of account. And then everybody always saying, yeah, but Bitcoin is not a medium of account and it will never be so, and I always think, this might be just a, you cannot see so far, you don't want to see the possibilities and that's why you dismiss it and say it doesn't have these three functions that money has to have, but it's just a definition.
I mean, definitions can change can't they?

Gigi [00:27:14] Yeah, of course. I think what a lot of people miss, that use that as a line of argument to dismiss Bitcoin, is that we've never seen a monetary good, develop in real time. And we've never seen anything being adopted as money in real time. And since everything is moving so quickly nowadays, or we live in this technological exponentially moving world like everything is happening quicker and quicker. It seems like it's already hard to make sense of the world. And, I have the feeling that it gets worse and worse every year and every month. And, I think this is also true in Bitcoin that everything is happening faster and faster and faster.
And we now see I strongly disagree that Bitcoin if you look at the three properties, you mentioned the store of value, medium of exchange and unit of account. I think Bitcoin already has all three. It's just not evenly distributed yet. There are definitely people that use it as a store of value.
Like the hodlers of last resort use it as a store of value. I use it as a store of value. A lot of Bitcoiners use it as a store of value. Even a lot of you know, wealth managers nowadays, start to use it as a store of value as well. And it's definitely a medium of exchange and it always was a medium of exchange, like starting from the first transaction for real goods, which was Laszlo's pizza transaction.
And it's it's still used as a medium of exchange because there are some goods and services that you can only acquire for Bitcoin, even if it's something innocuous, you know, lightning stickers and T-shirts and hats and socks, you know, there's Mt. Socks, for example, which only accepts lightning. And there are many stores that only accept lightning.
And I expect more people to set up the stores and offer services and goods and only accept the kind, because that's the only money they want to have. And they don't want to jump through the hoops of converting Fiat to Bitcoin. And it's also a unit of account and a lot of people don't realize that.
And, it, it kind of, it, it kind of disappoints me almost on a, on an intellectual level that people don't really realize it because if you're trading shit coins, then bitcoin is your unit of account. If it isn't, then you're just a really bad trader because especially in, in the, in the altcoin space, Bitcoin is the numeraire like everything is related to Bitcoin.
And if you're not tracking your wealth in Bitcoin, you're just doing it wrong completely because you might be up in USD or Euro terms, but you will be down in Bitcoin terms most likely. And so not only that, not only traders use Bitcoin as a unit of account, but a lot of Bitcoiners start to use Bitcoin as a unit of account, as well.
As I said before, I think we are currently living through this mental shift from speculation to savings. And I know a lot of people and myself included, I, I measure my net worth so to speak in Sats and not in anything else. Like, I don't care about the dollar value. I don't care about the Euro value, as I've said many times before Fiat is that kind of that to me.
And, I think, you know, if, if Bitcoiners are right and it plays out Bitcoinization and Hyperbitcoinization plays out as we describe it in the next couple of years, and I, I personally believe it won't take that long. It might take, you know, 10 years, but that's not a very long time span. Then denominating your wealth in us dollar terms or in Euro terms is completely nonsensical because it's, it's inflating like hell. And, as we said before, thanks to the stimulus packages and fighting the Corona virus, economically it's, it's plainly obvious that, all these currencies won't have stable value in the long term and they will only lose value. So what do you use as your unit of account is I think, you're, you're it's part of your personal preference as well. And so, in my opinion, Bitcoin has all the three functions of money already, a store of value, unit of account and medium of exchange. And I think it's plainly obvious that it does. It's just not evenly distributed and not all people on planet earth see Bitcoin as a store of value as a medium of exchange as a unit of account.
But, you know, we, we see this adoption waves and I can't tell you how, how many more adoption waves it will take until we hit the critical mass. But I think it won't be that many. I would be surprised if, if it was more than three, you know, that's also where my 10 year time horizon comes from. So I, I, last year I speculated that, it will only take 10 years until we hit something like a critical mass.
And, last year, this meant, three halvings. So we now had one Halving and in the next eight years we'll have two more. So if the, if the adoption cycles continue to coincide with the halving cycles, then I think it won't take more than three more hype cycles for Bitcoin to gain, an extreme amount of traction and become something like a global money.
So I hope that answers that question about the three, the three properties of money that Bitcoin has, I think it already has them. And I think a lot more people will wake up to the fact.

Anita Posch [00:32:30] That's a great answer. What do you think about the Lightning network, how long do you think, will it take that people don't have to know the difference between lightning and the Bitcoin baselayer anymore.

Gigi [00:32:42] Hmm, that's a good question as well. I think it's obvious that we have to, like the technology has to develop in a way that this differentiation will be made in the background by software. I think. People must not care about these things in the same way that when you use the internet, you don't care about the amount of, TCP IP packets or, that that are sent or how exactly they are rooted.
And you don't care about the layers below you only care about your WhatsApp screen or your Snapchat screen and whatever is presented to you there. And I think we already came a very long way in the Bitcoin space. I think there are a lot of very usable wallets already on the desktop side, we, we have ZAP for example, which is already really nice from the usability standpoint, granted, it's still kind of technical to get up and running and know how everything works and you need your own lightning node and stuff like that. But, I I'm very bullish on the mobile space in particular because I think the default computing device of the world is the mobile phone.
And, we saw the already great developments on the mobile wallet side, and I think it will just continue to develop. I think the, I think the most difficult thing in Bitcoin in general is that it requires a lot of personal responsibility. And if you want to use Bitcoin properly, like if you want to be a first class Bitcoin citizen, so to speak, you will have to take self custody.
And it doesn't matter if this is lightning or, or, or the base chain, like, as Andreas likes to say, not your keys, not your Bitcoin. And I think this will always be true. Like we will always run into situations where we will trade off convenience in favor of self custody.
And I think people will always get burned by that. And I I'm I'm, I'm still very optimistic though, because just, you know, a couple of years back, we had no HD wallets for example, we had no, no seed phrases. We had no QR codes. All these are new developments and, using Bitcoin in the very early days was extremely difficult and technical.
And nowadays you can't just download a wallet and write down your seed phrase. And you're good to go and in to answer your question more directly in terms of Bitcoin and lightning, I think everything will be abstracted and I'm, I'm also very sympathetic to the idea that, Pierre Rochard popularized that pretty much every transaction on the base chain will be lightning channel open or close. that's that's, that was his claim. And I believe this to be true. In essence, it might not be lightning. It might not be lightning channel open or close it might be, other higher layer transactions, so to speak. But I think it's obvious that the base chain can't scale. And just for that reason alone, we will have to have something like lightning that, that is truly usable by everyone. And I think it's also insane that we're still so early that just regular people can use the base chain because I, I see, as I see Bitcoin evolve, I think it will be a global settlement layer for something approximating, central banks. And, since it's, it's obviously superior to gold and every other form of money we had, like Bitcoin is by far the best money we ever had. And I think as you also said, you know, the Venezuelan government now accepts Bitcoin, for, for a citizenship, like, for their passports, for the passport payments and I think more and more governments will also realize that, you know, they can simply use the best money we ever had.
And, once this starts happening, we will see a completely different Bitcoin, like, I think Bitcoin already went through multiple phases and changed what people perceive it as. And I think this will happen again and again. And in terms of, in terms of usability, I think it will just take time. The internet was also very hard to use in the early days.
Email was extremely hard to use in the early days. Encryption was almost impossible to use for the last 20 years and only now with, with yeah, an insane amount of development and also political activism and also many pushes from many different directions. We now have HTTPS and SSL and encryption by default, and every messenger is script encrypted, and people also start to, they start to, expect those things.
Like if you don't have the green lock in your browser, you will probably be suspicious of whatever website you're on. And if there are the new app you're using to send messages isn't end-to-end encrypted people start to get suspicious because who knows, who might be listening in. And I think the same will be true in the finance space as well.
Like if, if people get used to using lightning, for example, if transactions aren't instant and and nearly free and if setting up an account isn't like as easy as just installing any app, then people will get suspicious. I believe. And I think the usability is already almost getting there. I, I would, I would wager that after the next hype cycle, we're pretty much ready for mass adoption on our, on the payment side of things as well. Like, merchants setting up, point of sale systems very easily by just, using their phone or using an iPad or anything like that. And, also mind you, sorry for rambling on for that long, but it's, it's a lot of things can happen. And I think a lot of people under estimate what can happen quickly because so many large companies are also waking up to the fact that Bitcoin is a, an, a real thing and an extremely important technology.
And if you look at what Square Crypto is doing, for example, they are one of the largest payment processors, pretty much in the U S and, they're perfectly capable and I think it's also in their interest to switch from using the legacy banking system to Bitcoin over the long run.
Like they are currently handling so much money and they're having point of sale services and solutions they offer so many financial services and they have to use the legacy banking system to settle payments and to do other things. And it would make so much sense for them to just use Bitcoin.
And I strongly believe that Jack Dorsey understands that. And I also think that is part of the reason why he is so bullish on Bitcoin because he, I think it will just also be an insane competitive advantage if they do that. And once they do that, like, It will hard to describe what it does to Bitcoin as well, because suddenly at the snap of a finger at you have it, Bitcoin is adopted, you know, and I like to, I like to think of that as the voiceover IP moment in the Bitcoin space, because the same was true for the internet.
Like not many people used the internet back in the day and it wasn't used for many things. Nowadays the internet is so ubiquitous that nothing would work if the internet would go down, you know, like health care and just communication in general. And VOIP there was a moment like, it was period of time obviously, but every single phone call now goes over the internet.
And I think the same will be true in Bitcoin. And in finance, like every, every single financial transaction, it just makes sense to do it over Bitcoin and not use anything else. Just like every single communication it makes sense to use it, to use the internet for that. And, and this happened and people didn't really realize that, you know, like if you're just a normal consumer, you don't realize that you're, that you're, the voice you're speaking in into your telephone gets transmuted into digital bytes and will be sent over the internet and it will come out on the other end, but it actually happened.
And the internet hosts all telephone telephony, all of telephony pretty much. And I think again, the same will be true for Bitcoin that everything that moves value across yeah, across space, it will use Bitcoin underneath and that's a very long answer, but I think again, all of that will just be, abstracted the way, and you will just be using your smartphone app and it will use lightning and Bitcoin and maybe other layers underneath and everything will be taken care of in time.
That's a great
Anita Posch [00:41:20] reference. I mean, I, what comes to mind is, and all of this telephony started with one under sea cable from Europe to the U S and we see what we, where we have gone from there. Yeah.

Gigi [00:41:34] Yeah, I think, I think people, Marty Bent likes to say that as well people are so impatient, you know, like Rome wasn't built in a day and also the internet and everything, all of it, all the awesome, nice pretty things we have nowadays online. They weren't built in a day and also the Bitcoin infrastructure and, the layer on top of it, it won't be built in a day.
It's still built at lightning speed. Like it's breakneck speed. Like the lightning, the lightning white paper is I think not even like three, four years old, something like that. So just, just give the developers a couple of months or a couple of years and we will be there.

Anita Posch [00:42:10] Yes. And the being slow in Bitcoin, has also a reason because slow means secure or, I mean, and not too complex, getting too complex, very fast because that's also insecure in developing Software

Gigi [00:42:24] Yeah, absolutely. I, a small chapter in my book, 21 lessons talks about that where, Bitcoin is the antithesis of moving fast and breaking things like Mark Zuckerberg from Facebook popularized, this phrase that you have to move fast and break things. And that's the, that's the general idea in software that you can just iterate so quickly.
And it doesn't matter if something breaks because you can always fix it later, but Bitcoin is by nature very very different. And as Satoshi famously said, the design of the system is made in such a way that it's set in stone from day one. And so you can't really break things like if you, if you break things, it will be, it will have catastrophic consequences.
And so, as you said, it's, it's a feature of Bitcoin that it's really hard to change. And the development on the, on the base chain is slow moving, but I wouldn't even say it's slow moving. It's just deliberate. And another feature of that is as well that's the other layers you build on top of it, they are completely disconnected from, they don't influence the base layer.
So if lightning fails completely, for example, or also if liquid, for example, first completely Bitcoin wouldn't care. Like if, if, if lightning has a fatal flaw and we will find out that it doesn't work at all, Bitcoin would still work as expected. And I think it's very important to build things that way, that you can't have a catastrophic failure just if an upper layer fails.

Anita Posch [00:43:48] Because you have a backup, basically.

Gigi [00:43:50] basically

Anita Posch [00:43:51] Yeah.

Gigi [00:43:52] have fault pretty much. Yeah.

Anita Posch [00:43:54] what do you think are the most interesting technical developments in Bitcoin.

Gigi [00:44:01] wow.
There are so many hard, hard to pick just one. Improvements are really interesting from a technical perspective. There are Coinjoin proposals that are currently in the work there's Payjoin that is really pushed forward hard by multiple people and all.
And, I think, Schnorr and Taproot are really interesting because, it enables so thing but I'm, I'm very bullish on like all those developments, they are very close to the base layer, but I'm also very bullish on everything that is, happening above with lightning.
And I really like how people are experimenting, with, creative uses Bitcoin and Juggernaut would be one example of Sphinx chat would be another where you basically, you, other way around a lot of messaging apps, like WeChat, WeChat in China, for example, they, they started all this, like a messaging app, and now they have payments with everything integrated.
And now we have people that use lightning, which is like a payment system first and foremost, and they built a messaging into it. So you can't have something that works like WhatsApp, but you have payments integrated because also basically what's happening there is that every message you send will cost you like a very small fraction of a cent.
So. it costs you actually one Satoshi to send a message at least. And, I think all of that is interesting. Another thing that I really think is interesting is, things identity and login and, authenticating because I think basically identity on the internet is kind of broken or at least, the username password idea is a really bad one and it's kind of broken. And we see that with every hack, every password leak, every like very bad implementation of password systems. And I think it's really interesting that people have found a way to use your own node to authenticate yourself and so many interesting things.
It's it's again, it's hard to just pick one.

Anita Posch [00:45:52] And I also always get the impression, or I know that people are not aware of the fact that Bitcoin can be the basis for so much more, as you just said. Yeah. For journalists, for messaging apps, with inbuilt Bitcoin payment, and many, many that are to come and also like people always say Ethereum is so super because we can do smart contracts on it.
Yeah. You can do this also on Bitcoin.

Gigi [00:46:19] Yeah, absolutely. I think, you know, it's kind of hard to wrap your head around because it's also, would I need messaging on Bitcoin if I have WhatsApp and signal and other things? And the great thing about it is that the properties that Bitcoin inherently has, for example, that it's censorship resistant and has no barrier to entry like there's no, you have to go to, to sign up or no company where you have to go to the sign up. And so there's no one that can cancel you. And I think this will be more and more important as the cancel culture we're currently living in, grows and grows. I think phenomenon that people will get de-platformed and then canceled it it will just continue to grow until it's so ridiculous and unbearable that it will just kind of eat itself. But I think it's important to realize that even though it might seem a weird idea and clunky today to have a messaging built on top of Bitcoin it might turn out to be very important in the future.
And we saw that already in the past with the Arab spring, for example, where, you know, governments, shut down the internet and shut down messaging services, shutdown communications. The thing about Bitcoin is, is that it's really hard to shut down and another thing on the technical technological side, developments that I think really interesting, is lot of people working on creative ways to transmit Bitcoin get access to the Bitcoin network without using the internet, like using satellites and using radio systems, using things like that. And, I think all of that work together to just build something that is extremely robust and resistant to, to censorship. And I think just will be more and more important.
And as you pointed out, Bitcoin can be used for so many different things. And I really like a small services that already play around with this idea, for example, on Twitter, there's the stamp bot, which uses open timestamps to take a tweet and just embedded in the proof of its existence in the Bitcoin blockchain.
And so you can always go back and, and have definitive cryptographic proof that this piece of information existed. And, I mean the that are, are, are very interesting. And there we see a lot of services popping up, or we saw a lot of services popping up already where you can have proof of existence and, just have something like put documents in and you can not only claim ownership of the documents, but also prove that they existed in this form.
So there are many things you can do, with Bitcoin, how to use those cryptographic tricks.

Anita Posch [00:48:53] Hearing you talk about all those things always makes me so optimistic about the fact that I'm working in that space. Thank you for that. And we're coming to an end. Why is it so important for people to start staking Sats now?

Gigi [00:49:10] I actually wrote an article about it. It's called, dear friends, dear family. And you can just read that. But in essence, I think, I think, now is still a time where things aren't insanely crazy. And I think that there will come a time where things are completely crazy either in the Fiat world, where just money devalues and the Euro collapses for example, or on the other hand, if it goes crazy in cyberspace and on the Bitcoin side, when Bitcoin just starts to pump and moon, like we've seen it before I think, the wrong thing is get into Bitcoin at that point in time. So, the earlier and the relaxed you can get into it and just set up, set up something today that will just start stacking Sats for you and you don't even have to think about it. I think that's the right approach. And then you don't have to deal with the psychological fallout. If things start to move and get crazy.

Anita Posch [00:50:05] Do you have any book recommendations or other recommendations for listeners to get a little more into Bitcoin? I mean, you also wrote a book it's called 21 lessons. Please tell us a little bit about it.
Yeah, absolutely.

Gigi [00:50:19] So obviously I would recommend reading my book 21 lessons, but you can also read it for free online on 21 lessons.com. If you want to support me, you can buy it on Amazon as well. Book recommendations
actually, I, I have a site called Bitcoin-resources.com and I list a lot of books there. A couple of times if I want to do it multi-lingual as well, because nowadays there are some German speaking books as well, and the books get translated in all kinds of languages, but most of my recommendations are there.
if you're just into it, I think I would recommend two books nowadays, I, apart from the classics, quote, unquote, I think the Bitcoin Standard is always a good choice, but the last books I read and I really liked was "Why buy Bitcoin" by Andy Edstrom, which talks a lot about what money is and the characteristics of money.
And another book I really liked was Kiara Bickers. And it talks in a very funny and interesting way about how Bitcoin works. So if you're interested in the technical side of things, I would recommend that newcomers as well. But again, you know, there are so many great books. it's hard to just pick one or two.
My whole list of recommendations is on Bitcoin-resources.com.

Anita Posch [00:51:32] thanks for the recommendations. I know these two, I read about them, their names, but I didn't look into the books I will do that now. where can people and follow your work other than the two websites you have?

Gigi [00:51:45] The easiest way to follow me is on Twitter. I'm derGigi and I also have a website dergigi.com where I post my work and my writing, because I don't trust medium and other centralized publishing platforms for the reasons we mentioned before deplatforming and stuff like that.
So everything I produce will also be published on dergigi.com.

Anita Posch [00:52:08] Great. Yeah. I also host my podcast and my website on my own server. I will put all the recommendations and your links into the show notes. Thank you, Gigi.

Leave a Reply

Your email address will not be published. Required fields are marked *

Scroll to top