Preston Pysh (00:07:03):
But meanwhile, we have somebody from Forbes, who’s probably writing an article right now about how the energy use is going to take over the entire planet here in about six months with Bitcoin mining. The power’s coming out. So, like here you got these waterfalls or however their harvesting the energy from the hydro dams. And I mean, it’s going to produce this energy one way or the other. It’s coming out. It’s just there for the taking.

Samson Mow (00:07:35):
Actually, energy is quite abundant, just our ability to harness and transport or transmit it is quite limited. And I think mining will be driving a lot of advancement in the sector to improve upon that and better harness energy overall. So, I think there’s a net positive here. You need some new technology that moves things forward and the demand for Bitcoin mining and the economic bonus that gives you is that potential factor that can push us ahead technologically.

Preston Pysh (00:08:07):
So, Adam, you initially described like, hey, we’ll lease this, we’ll come, we’ll set it up. We’ll service it. And you pay us. We come up with an agreement with what energy rate we’ll pay that you’ll be providing to the mining rig. And we want to keep the Bitcoin. Do you find yourself in a situation where you think energy producers are going to say, nah, just give us the MMU itself and we’ll keep the Bitcoin. Are you guys at that point, or do you think that they kind of like the structure of this right now?

Adam Back (00:08:39):
Well, I mean for sort of conventional infrastructure, they may not be that familiar with Bitcoin. So, the prospect of just getting paid conventionally for the power with a power purchase agreement sounds good to them. And of course large-scale bulk power at the generation point is relatively low cost. So, that could be win-win. But no, there are other people we work with, like ACA for example, a CT who are they funded the new division for connectivities with Bitcoin. And so they were obviously much more interested in getting the Bitcoin. So, we can construct a different way to make that work economically.

Preston Pysh (00:09:32):
Well, luckily for you guys-

Samson Mow (00:09:34):
It’s kind of a Trojan horse.

Preston Pysh (00:09:35):
Yeah.

Samson Mow (00:09:35):
It’s kind of a Trojan horse, because they will like this model now if they’re not familiar with Bitcoin, Bitcoin mining and the economic benefits. But down the road, if they do learn more about it, then we can shift the model a bit and [orange peel 00:09:49] them.

Preston Pysh (00:09:50):
Why are we letting these guys keep the Bitcoin and then they’re paying us the … Yeah, I love it. Talk to us about where you’re at on the development of the MMU itself, because it looks like it’s coming as a package deal, had the sleek Blockstream logo on the side of it. And you guys obviously have all the hardware and infrastructure inside set up. You’re providing the service labor to make sure this thing is running around the clock in case it runs into any hiccups, which I wouldn’t suspect anybody wants to try to take that on themselves, that you would be leasing this to anyway. But how far along are you guys in that process? Have you shipped any, are you still in the developmental phase? Talk to us about where you’re at.

Adam Back (00:10:35):
So, we have MMUs running, but obviously we’re interested to scale that up a lot more and place them around the world in sites that have, I mean, sometimes remote sites also. So, we have the technology to operate these using the Blockstream satellite. So, we do have a bi-directional version of the satellite, which we’ve used for as a backup to networking for mining or as a, potentially, as a primary. And so that’s the kind of model. Obviously at this point, miners are in relatively short supply. And so that’s one of the bottlenecks for mining generally actually.

Preston Pysh (00:11:29):
So, not only do you guys have this announcement, you have another massive announcement that just came out today and you guys are getting into the ASICs business. So, I’m sure everybody out there is hearing this announcement just saying, oh my God. So, talk to us about this. What in the world is going on at Blockstream with respect to ASICs?

Adam Back (00:11:51):
Well, I mean, it’s obviously a big part of the mining space and if you’re providing hosting to individuals and to companies, access to supply chain for miners is a factor. And so we work with a number of manufacturers today, but we’re interested to add some more decentralization. So, an additional manufacturer built sort of more in a West and internationally. There’s a lot of manufacturing that’s China centric today. So, it’s good to have some kind of geographic diversity of where things are made. And so we obviously when there’s a shortage for miners as is the case today, there’s a supply and demand situation. The prices tend to go up as well, reflecting that. So, it’s also a good time economically to enter the space. Now, people are looking at the announcement, but actually we’ve been working on this for really a couple of years in the background and under wraps and with both Spondoolies, who if you look around on the internet, you’ll see that they’ve been making miners for a while.

Adam Back (00:13:16):
And the Spondoolies team is joining Blockstream to form the Blockstream mining division. So, we’ve been working with them and the Foundry partner for a while now. And so we’re projecting to have them in market Q3 next year, which is, I think faster than people would assume if you just think that somebody who’s starting an activity and usually the R&D phase on a new miner would take in excess of a year. And I think another factor with mining is it’s a very specialized area. You need to have deep expertise. Many people who’ve tried it from scratch have run into issues or failed runs. Even some of the big companies have had technical failures. So, we have a lot of confidence in the Spondoolies team. They’ve made some very nice equipment in the past, which we owned and operated in the past. And so we’re very interested to bring a quality enterprise grade miner to market.

Preston Pysh (00:14:26):
So, you guys are going to have a lot of IP in this, or are you piecing together a lot of different components that doesn’t necessarily have IP for Blockstream. I’m just trying to understand how much of the manufacturing you guys are doing and how much of the intellectual property for the growth of it or for the initial launch of it.

Adam Back (00:14:47):
Yeah. So, the way the acquisition of Spondoolies is structured is actually is a IP purchase. Now, of course Blockstream has participated in the [inaudible 00:15:03] defensive licensed activities. So, we’re generally a fan of open intellectual property. So, to create a level playing field, but obviously some of the chip level libraries are covered by patents outside of our control. So, we’re generally operating in the defensive pattern mode as usual. And that’s the way the deal structured. And we’re planning a roadmap for these miners. So, we’ll seek to improve the space over time.

Preston Pysh (00:15:42):
Samson, did you have anything else you wanted to add about the announcement?

Samson Mow (00:15:47):
Yeah, I think touching upon what Adam was mentioning, this is a major thing for the Bitcoin mining industry. There have been very few manufacturers outside of China. And that does pose some sort of a risk to the Bitcoin network, if all the production and manufacturing and everything is based in one graphical region. So, having Spondoolies under Blockstream now helps us to decentralize the production of Bitcoin miners. And I think if we can grow this business to the extent we want to, then we could become a potentially major competitor in this space and grab a large chunk of that market share from the other manufacturers as well. I think traditionally Spondoolies has been known for aiming for more professional grade miners. They were one of the first to try the one uniform factor, whereas everyone else was doing the shoe box style Bitcoin miners.

Samson Mow (00:16:46):
And I think we want to keep on going in that direction and aim for more enterprise grade hardware. It’s just easier to manage. And I think we’ll be able to gain an advantage in that area, because if you standardize the form factor, you can standardize a lot more things and swap out chips easier when they burn out or when they’re no longer cutting edge and just replace the parts that you need to replace. I think a lot of miners are designed with the obsolescence in mind, but I think what we want to go for is minimizing waste on that side and optimizing for efficiency.

Preston Pysh (00:17:23):
That’s really interesting to hear you talk about the swap ability of various components inside the rig itself. And I think that, that’s going to be a welcome change for many people in the space to be able to upgrade without the cost of replacing every single component inside the rig. Let’s go ahead and transition to Blockstream finance. So, well, Adam, the last time we talked, you were getting ready to do your miner node. For people that maybe didn’t hear that conversation, explain to them what the node is. And then I’m just kind of curious how it turned out for the first traunch that you guys did with the issuance.

Adam Back (00:18:03):
Yes. So, the Blockstream mining node was sort of reactive. We had people were aware that we were doing, providing miner hosting for enterprises and individuals who were interested to invest. And so we got a lot of inbound requests. And so the Blockstream mining node was partly a way to satisfy that demand. And so it is actually a security token. So, it’s a proper security via Luxembourg’s securitization vehicle provided by Stocker, which is a equivalent of a share registration agent for the nodes. And financial instructor, a little bit different. So, sort of we use the model that we arrived at ourselves by mining for a number of years, which is to fund it and not sell the coins as you go. So, keep the coins to the end. And so it’s pre funded, it’s a three-year node. And that’s approximately the useful lifetime of a miner these days, plus or minus.

Adam Back (00:19:09):
And so it basically accrues the Bitcoin inside the node and at the end of the period, the current holder would to receive the Bitcoin. And because it’s an actual security token, users can transact it. So, today they can transact OTC. And there seems to be a decent amount of OTC transactions occurring. There’s a Blockstream finance channel where people seem to be meeting other buyers. And we’re also expecting one or more exchange listings in some months. And so that will provide another hopefully price formation and we can find out what the market pricing is for this kind of product. There should be some kind of correlation between the prices of different things in mining space. Now the money nodes is if you sell it before maturity, you would expect the current value to reflect both the Bitcoin component and the remaining money components.

Adam Back (00:20:17):
So, let’s say you sold it one year into three periods and it accumulated a certain number of Bitcoin that will be part of it. Plus the remaining 24 months value on the contract. I think people got more interested in which they bought earlier. Basically we’ve done two sales traunches, and we’re probably doing another one. And then obviously the exchange listings later. And so I think people like to see something operating, otherwise they feel like they’re buying it on spec and it’s coming in three months, which was the original traunch [inaudible 00:20:54] back in March.

Adam Back (00:20:55):
And so seems to be more interested in buying it on a secondary market now. And it’s been going pretty well. As we said, the mining profitability is quite high at present. It’s been making a return of about 0.3% a day. So, if it were to keep going at that trajectory, it would have recouped the capital investment within a year. And it’s a three year product. Now, of course many inputs to mining are variable. The Bitcoin price, the hash rates. Of course, the hash rate depends on supply of ASICs and other people building up power infrastructure and security in ASICs and putting them online. So, we’ll see how that plays out, but we’ve been pleased with it so far.

Samson Mow (00:21:41):
It’s quite interesting. When we were socializing the concept of the BMN, one of the biggest questions we get is why not just buy Bitcoin? Why buy this? And we have back-tested models where in certain situations it does become more profitable to mine Bitcoin than to buy Bitcoin. But typically those are during bear markets and such, but you can also have that when there is a big drop in hash rate. So, if the timeliness of the BMN is just great.

Samson Mow (00:22:12):
It launched and then there was that massive crackdown in China. And you had that mass exodus of miners leaving, or just shutting down, period. And the profitability, as I mentioned, just spiked on the BMN. If you’re looking at that just as investing in a traditional financial instrument, you’d just ignore the Bitcoin mining part. You’re getting excellent yields on this instrument here. So, I think a lot of people were very happy and that’s why people are trading at OTC now because they want more of it. And the people that bought early were just very pressured and they look like they’re geniuses.

Preston Pysh (00:22:51):
I would suspect that your variants would be way lower by owning this versus owning Bitcoin itself. Just as far as the variability in the price of the security.

Samson Mow (00:23:04):
Yeah. It’s kind of a locked in dollar cost average. You’ve committed to it and you’re going to average over time, no matter what. So, in some ways it’s better than dollar cost averaging, because you kind of you’re locked in and you’re locked in at a specific rate of acquisition.

Adam Back (00:23:23):
Yeah. I mean, certainly in the back-testing, it appears to be the case that you get a lower volatility return. And that’s probably because there’s some downside protection historically. Say if the hash rate, if the price falls, the hash rate falls, you mine more coins than you expected to. Because of the mining strategy baked into it, you keep the coins to the end. And usually across the three-year period there’ll be a price fall and a price rise of some significance. And so we actually did something like that a few years ago at company level. And so basically we started mining when the price of [inaudible 00:24:13] batch of miners at a time when the price of Bitcoin was $15,000. And at the end of the duration, the price was seven and a half thousand dollars, but we still made a 25% profit.

Adam Back (00:24:23):
So, if you’re looking at a buying Bitcoin you would have lost 50%, we made a 25% return instead. And at the time we found this surprising. And so we embarked on all this analysis and back-testing to see often that kind of thing would occur, what the average is? Basically to pick apart why that happened. It’s because at the bottom of the market, the price fell to 3,500 or something. And so basically it mined two and a half times as many coins as we projected and even the price was half and ended up making a 25% return at the end. And of course in effect, we ended up keeping those coins to the state at which point that looks very good overall, compared to the dollar into it. But I think it’s a very good … and people don’t have the intuition.

Adam Back (00:25:12):
So, they will often put money into mining where they’ll pay the power bills by selling some of the Bitcoin. And that’s not a good idea in our view, because what you end up doing is selling most of the coins of the bottom of the market, because the percentage of the coins you’re having to sell is related to the price and at the bottom, that’s getting near to break even, and you’ll be selling like a big portion of the coins. And that’s when you were accumulating and that’s what ultimately provides the downside protection in return. So, we reflected that in a BMN node structure, basically. So, the power is pre funded. It keeps a 100% of the coins and it has a relatively cost efficient sort of administration fee.

Samson Mow (00:26:04):
I think you can kind of say, there’s two kinds of miners. There are the miners that are just in it for the profit. And it may make sense at a certain point in time to do what Adam was saying, which is if they just sell off some coins every month to pay for the power, and they’re still incredibly profitable. The cost to mine one Bitcoin right now is six, $7,000. And the price is pretty high right now. It’s 48, 49, but there’s another type of miner, which is the HODLer miner. So, that miner is really mining to HODL. And like for us, we mine and we keep everything. We’re not selling off every month to pay the bills or pay operational costs. And in effect, the BMN is turning people into the HODLer type miners because they’re locked in for that three-year period. So, they will accrue those benefits because of that structure.

Preston Pysh (00:26:59):
I think that, so for a lot of institutions right now, they can’t get access to Bitcoin just through sheer charter limitations. Does this vehicle provide them an opportunity to invest in a debt instrument that kind of bypasses some of those charter limitations that they might have by forcing them to own some type of debt instrument?

Adam Back (00:27:25):
Yeah, we’ve actually seen that play out. So, we had a couple of people express interest and financial institutions that had those kind of internal policy question marks where they don’t yet know how to institutionally own Bitcoin, but they could own a Luxembourg security. And so I think they felt that it was a good way to start basically, because at the end of it, they’ll have Bitcoin and they’ll have the option to receive the dollar equivalent or the Euro equivalent. But by then they may be in a position to take physical possession of the coins.

Preston Pysh (00:28:04):
So, they might have to sell on the open market. They might have to sell it a day before the maturity, which I’m guessing the price of this is just basically going to peg itself straight to whatever underlying Bitcoins associated with the account right before it matures. So, they’re able to sell it on the secondary market or in the public market right before it matures. And then they bypass all of this. But yeah, like you said, maybe by then there’ll be able to take physical custody of the coupon.

Samson Mow (00:28:36):
I think there’s three ways to do it. Either you’re buying a Bitcoin tracker, an ETF or something like the BMN. But all are viable ways for those types of entities to hold Bitcoin indirectly I think. And I think there is an added benefit of holding the BMN, because it is a Luxembourg security. It will have an [ISN 00:28:56] number. It can be held by any securities broker or any type of financial entity like that. So, it plays very well into that kind of market segment.

Preston Pysh (00:29:08):
So, when are you going to do it in the US?

Samson Mow (00:29:12):
We’re working on that. We’re working with INX, so we’ll see what we can do.

Preston Pysh (00:29:16):
Okay, all right.

Adam Back (00:29:18):
And I mean, I think another advantage of it being a security is the brokerages will give a margin credit basically. So, a credit line for trading where the focus is held against the stocks and bonds in a portfolio. [crosstalk 00:29:40]. Potentially it’s a way to get leverage against a Bitcoin related product.

Samson Mow (00:29:44):
I think with the gray scale, you cannot borrow against it, but you could borrow against a BMN.

Preston Pysh (00:29:51):
Oh, that’s interesting. Let’s go down that path because that was the next path I wanted to talk to you guys about. So, you got a lot of people out there. They have substantial Bitcoin positions. They don’t want to sell. They’ll do anything to avoid selling their Bitcoin to pay for whatever expense they might have. So, they want to go buy a house. Let’s say they want to buy a $500,000 house. And let’s say, they’ve got $500,000 worth of Bitcoin.

Preston Pysh (00:30:15):
They’re not going to sell their Bitcoin, realize the capital gains and buy the house. They want to borrow. They want to put down a down payment of 50 or a $100,000, and they want to use their Bitcoin in order to basically take out a loan to put down the down payment or whatever that is, whatever gymnastics we want to play with this, but anyone who understands Bitcoin isn’t going to sell it. So, how are you guys thinking about providing a solution to that quandary for anybody that understands Bitcoin and wanting to use it to buy real estate or any type of large expense in their life?

Samson Mow (00:30:51):
Right. So, as you know, we acquired Adamant Capital and we’ve branded that or rolled it into Blockstream finance. So, the BMN is issued under the Blockstream finance umbrella, but we do have plans to launch a number of innovative Bitcoin instruments. We’re thinking about doing an alpha fund. So, similar to the one that Adamant was doing originally. So, you invest Bitcoin and you get returns on Bitcoin. We’ve kicked around the idea of doing a US dollar alpha fund. I’m calling it a plunge protection fund. So, this would be a US dollar fund where we would take some of the capital to invest in stable yield areas and then take some of it just to place them in orders and buy Bitcoin whenever there’s a big dip. So, in effect it’s plunge protection, but I have at Adamant, I also talked about doing some mortgages under the Blockstream finance brand too, because I think that is something that Bitcoiners do want. So, much like you said, people don’t want to sell, but they want to say buy a house or an apartment or something.

Adam Back (00:31:56):
Yeah. I mean, I think the key is to get the lending rates down, because mortgage lending rates are quite low with zero interest rate policies and so on. And Bitcoin related finance rates tend to be quite high, because there’s a shortage of dollars to use for leverage in the system. I think that’s because ultimately anybody who’s interested in Bitcoin tends to get heavily invested into Bitcoin or run low on dollars. And so they’ve largely exhausted dollar liquidity and that puts the price up of Bitcoin related dollar liquidity. And of course now there are large amounts of fiats in the system in general in fixed income in bonds and pension funds that are getting very, very low rates. And so you would wonder that those two things should normalize eventually. But I think for the moment they’re hesitant to place funds into Bitcoin and exchange margin lending and things like that.

Adam Back (00:33:06):
So, it means that at least so far, the lending rates against Bitcoin have been a bit high to use as collateral for a house, let’s say. So, I mean, as you were hinting, one thing that people could do, and I expect some people out there doing this, is take a smaller loan against Bitcoin, like a 10% loan against Bitcoin, put at the down payment and then get a conventional mortgage on the rest. Try and get as large, higher leverage mortgage they can because the mortgage rates will be low and not bring down the average cost of lending and reduce the liquidation risk as well, because the Bitcoin’s [inaudible 00:33:44] is then percentage-wise small. So, I think that’s the kind of interim thing. The BMN, because it’s normal collateral, you might be able to get directly lower rates on it if you give it to a broker.

Preston Pysh (00:33:58):
You just got to find some type of mortgage house that understands all of this and understands the risks associated with that type of collateral being used. And that seems like that’s the biggest hurdle right now is finding a company like your company that can bridge that gap and provide that offering to the clientele that I think is exploding right now, all around the world. That’s demanding a product like this, but it just doesn’t exist because we’re just so early. But yeah, man, I hope you guys pull it off.

Samson Mow (00:34:32):
Soon you might be going to Adam Back to get a mortgage loan.

Preston Pysh (00:34:35):
I hope so. I mean, to be quite honest with you, I mean, anybody who’s selling their Bitcoin right now to make a substantial purchase like that. I think they’re crazy. I think they’re nuts, but obviously we see the world through a different lens than most people. So, the Lightning network seems to be just taken off right now. It seems like there’s numerous incentives that are driving this adoption and this use. We’re seeing it with the rewards cards. We’re just seeing a really innovative wallets that are enabling Lightning transactions. I’m kind of curious to hear what you guys think is like one of the driving forces of why Lightning is taking off at this point. And then any other thoughts that you guys have on kind of where you see it going as far as like a projection into the next year or two?

Adam Back (00:35:31):
Yeah. So, Blockstream is one of the sort of three main developers off Lightning core protocol. So, the c-Lightning team of Blockstream has been working on core protocol work, but we’ve also released recently something called Greenlight, which is an interesting server assisted way to do Lightning. And the trade off is it provides the same kind of improved reliability and a lower latency that you get from a hosted Lightning wallet while actually having accuse yourself.

Adam Back (00:36:13):
So, how it works is we modularized c-Lightning. So, there’s a module called HSM, which contends the keys and does the key operations. And normally that’s just a software module inside c-Lightning. But what we did is we separated those. So, you have that key management on a client, it can verify enough to be secure. And then the server is sort of doing the routing, staying up to date with the network state, tracking the status and uptime of nodes. And so when you come to make a payment, it’s much faster and there’s less kind of traffic going backwards and forwards between a client. And some of the clients saw intimately connected or low bandwidth devices. So, that will generally make for more reliable experience. So, we announced a couple of launch partners who are using it.

Adam Back (00:37:12):
And so we’re hoping that we’ll see more Lightning software companies use that as a way to improve Lightning. Certainly Lightning’s assets in network and a growth rate of that have been increasing greatly. I think it’s proven to be pretty good for kind of a lower value retail faster payments. And you certainly saw a lot of interest in that in El Salvador. Now that’s primarily driven off of Lightning.

Preston Pysh (00:37:49):
So, Adam help me understand the tech. So, you said server assisted. So, I have my own full node here at the house. If I didn’t want to go out and set up my own full node, I can basically outsource this to a server that you’re running, but yet I’m still holding the private keys. And so you’re basically running the node for me, but yet I still have control of the part that’s important. Am I understanding that correctly?

Adam Back (00:38:14):
That’s right, yeah.

Samson Mow (00:38:15):
That’s exactly it. So, most people are using SPV wallets now, so they’re just, they’re not running their own full node, but their keys are still on their phone or on their device. And you’re using some Electrum server somewhere else. So, in some ways, this is a parallel of that. So, you have your own, your keys stored locally, perhaps in your phone. And then Blockstream is running this Lightning infrastructure in the cloud. And the great thing here is that solves one of the biggest problems, which is channel management. So, we don’t have this right now, but down the road we will be doing a lot of that balancing and channel management for end users. So, you don’t have to deal with that complexity. You won’t have to worry about being able to route payments successfully and all that stuff that you want to abstract away from the end users.

Samson Mow (00:39:04):
For them the most important thing is Lightning just works. I can just pay someone if I have enough money in my wallet and it’ll just work perfectly. So, I think this is a really good step, because with Greenlight you can also take that node in the cloud and run it locally when you are more established and more familiar with all this stuff. So, it’s kind of the best of both worlds. You can onboard the beginners into this system and they can off-board. And all the while they have their own keys and full control over their funds.

Preston Pysh (00:39:36):
So, you had mentioned the channel management and for people maybe not familiar with how complex this can get, just kind of give a generic example of what you mean by the channel management. And then also, I know there’s a lot of work right now taking place where people are trying to come up with like statistical models in order to find the fastest path for larger scale transactions. Like if I wanted to send $5,000 over Lightning, it’s extremely difficult today just because of the channel management issues. But based on some of these new algorithms that people are coming out with, you’re going to be able to conduct a transaction of that size fairly easily and fairly quickly through these dynamic models that are then able to sniff out where there’s channel capacity in order to route this through multiple different nodes.

Adam Back (00:40:27):
Yeah. I mean, I think one of the problems is that as a new user, when you connect the channel, you fund it and that means you can send Lightning Bitcoin, but you can’t receive, because you can only receive if there’s funding coming towards you. So, we’ve been working on a few things, I think, c-Lightning was the first to have a dual funded channels. So, you can create a channel where there’s funds coming from both sides. So, sort of like a coin join going into a channel in a way. Spend from both parties to set it up. So, the channel capacity is kind of somewhere in the middle. The other problem that sometimes occurs is that the spending habits are pushing all the funds towards one end. And so your channels get imbalanced. And in theory, you should be able to rebalance them by sort of … Now, if I have two channels and one is getting low, I can kind of send money to myself out one channel and in the other channel via some other people.

Adam Back (00:41:40):
And that’s the theory, but in practice, it tends to deplete channels in between. So, you’re kind of trying to complicate rebalancing a job there. So, that’s where it gets more interesting. And then the capacity issue you’ve mentioned where people would find that as you increase the amount you’re trying to spend, it would get less reliable. And that’s because there’ll be some channels that you might route through that don’t have enough for that payment. And so there’s been some work in the last year or so on these multipath payments where you can pay somebody with parts of the liquidity coming via different channels. So, if there are enough channels, then that will work also.

Preston Pysh (00:42:30):
So, right now, when I look at wallets that you could have on your phone, it looks like Muun and Blue are some of the best user interface type wallets for Lightning type transactions. I’m curious, because I know you guys have a green product. You also have Aqua, I’m curious if you’re going to be bringing some of those types of capabilities from a user experience kind of vantage point where it’s just, I don’t have to think about it. I can just do it. Is that in the works or kind of where you guys at with your thinking on that?

Samson Mow (00:43:02):
Definitely we want to get it into Green and Aqua. We want to give access to Blockstream Greenlight in those two wallets.

Preston Pysh (00:43:11):
Okay.

Adam Back (00:43:12):
Yeah. And I mean, in some ways it’s a simple program model. So, I think it should simplify, integrate Lightning into a smart phone wallet. And I don’t want to … So, as far as I know, at least until last year, maybe it’s improved now, but BlueWallet was kind of custodial rights. So, it’s the service side model. And so I think people do that because of the usability, lower latency, high reliability. And I think also they can kind of share channel capacity so they can have fewer channels. So, less things to rebalance. I mean, one factor we’re rebalancing as well as the cost, because you can rebalance channels, but if you have to create a new channel that incurs main chain fees, and when the traders get busy in a bull market, the Bitcoin main chain fees get pretty high.

Adam Back (00:44:12):
So, with Blockstream we also have for Liquid network and c-Lightning or Lightning can in principle work on top of the chain. So, we have Lightning on top of Liquid as well. And that’s a way to get lower fees and potentially channels with other assets in them like a channel with Tether, for example. But people that are using Tether. Often that is for trading or even business to business transactions internationally, because it’s a cheaper, faster wire transfer basically. But for the smaller payments, if it gets used for that kind of use case, or for more scale then Lightning, Tether or Liquid is another distinct possibility or other stablecoins. There’s also the Canadian dollar, the Euro as a Euro stablecoin by SideSwap. There are a number of stablecoins.

Preston Pysh (00:45:14):
There was a person on Twitter asking about mesh nets. I think we’re still talking about kind of the same technological space here, but make me smart on mesh nets.

Adam Back (00:45:27):
So, there is some sort of emerging market concept that people tried to build, which is to use the Blockstream satellite to get the bulk data. So, they’ll have a situation where a high capacity bi-directional internet is expensive. And so with Blockstream satellite, we’re sending the history to sync up Bitcoin nodes. And more recently we also added Lightning gossip data. So, you can keep a Lightning node up to date on the satellite. And then you still have some like direct connectivity, because the satellite service on offer to buyers of the base station today is receive only.

Adam Back (00:46:22):
So, they’re going to be using bandwidth, but it will reduce their center bandwidth, which we’ll be going over 2G or 3G, which is locally expensive in some markets. And so, one concept was to use mesh networks or wifi hubs to repeat and broadcast that through a local area, through a village or a marketplace or something like that so that you could share the bulk satellite data for running a full node or participating in the Lightning network. And so the mesh is pretty interesting technology. Obviously it’s a way to kind of have a onwards broadcast repeating kind of peer operated network rather than a conventional network operated by a cell phone provider or something like that.

Samson Mow (00:47:11):
I have a peer to peer internet, and we have a integration with goTenna. So, they are a producer of little mesh net dongles. So, you can actually use that already in the wild today. And use goTenna with Blockstream satellite to send the transaction through a mesh net up through the satellite. And there’s no need for internet at that point really.

Preston Pysh (00:47:36):
So, that’s fascinating. So, are you guys using the wifi signal then to do that? I know Samson, you just said this goTenna. So, I don’t know what frequency that’s operating on, but so your satellite is broadcasting the signal of the blockchain. Then it’s hitting some type of hub. You’re using goTenna or even a wifi router to then distribute it throughout whatever community. Are you using the wifi signal or are you on different bandwidths? What are you guys using?

Adam Back (00:48:03):
goTenna is a different spectrum.

Samson Mow (00:48:06):
It’s wireless network. Wireless [crosstalk 00:48:09].

Preston Pysh (00:48:08):
Wireless, okay.

Adam Back (00:48:09):
So, it’s hop by hop. And so the concept is that you’ll find your way through the network. And if it’s a message that needs to go to the internet proper, somewhere in the mesh network will be people running 3G data or something like that. So, part of the concept that goTenna we’re also interested in is micropayments using Lightning itself so that the use of the peer to peer bandwidth can be managed, not saturated by one user or something like that. So, it’s a way to do quality of service metering.

Preston Pysh (00:48:45):
That’s fascinating. And I would think that there’d be a huge demand for this in smaller towns, remote locations, whatnot. I mean, wow, interesting. I didn’t know you guys were working on that.

Samson Mow (00:48:59):
We’re working on a lot of stuff.

Preston Pysh (00:49:00):
Yeah, I’d say you guys are working on a lot of stuff. Speaking of working on a lot of stuff. I know the El Salvador announcement was just kind of making the airwaves whenever Adam and I talked last. I’m curious if they’ve reached out to Blockstream or you guys have reached out to them in reference to doing the mining there with the volcano or any other type of activities down there. Because I mean, if it’s now legal tender in the country, I would imagine that they are trying to set up as much infrastructure as possible. So, I’m curious what you guys have or if anything.

Samson Mow (00:49:33):
Right now our discussions are mostly around the bond. So, we had a call with them a couple of weeks ago to talk about potentially doing a bond on the Liquid network, using our asset management platform. So, that could be an interesting way for them to tap into some more of that geothermal energy that’s powering a lot of the grid right now, but it is costly. So, I think what you would need to do is sell a bond, take some of the proceeds from the bond and build up more of that energy generation infrastructure. And then get into mining. And I think proprietary mining would be the best bet, because geothermal power is typically more expensive than say hydro, but if you just prop mining and let’s say it is a component of that bond offering, like the bond is backed by some portion of hash rate, then I think it’d be fine if the cost is higher than say hydro.

Preston Pysh (00:50:33):
Yeah, I think your new model here by selling hash rate via bond vehicle is just going to flip fixed income on its head here. It just needs more time. Like anybody in the fixed income space that’s ignoring this is holy moly.

Samson Mow (00:50:49):
Well …

Preston Pysh (00:50:50):
Go ahead, Samson.

Samson Mow (00:50:51):
It always is that way. It’s always that way, like when you’re pushing at the boundary of like all this technology and innovation, you can do a lot of interesting things that most people in traditional markets will not really think about because that’s not available to them. They can’t really securitize hash rate.

Preston Pysh (00:51:12):
Yeah. Give it a couple years. Hey, I wanted to ask you about just the gaming industry in general. When am I going to be able to like watch a Nintendo game and instead of running around collecting Mario coins, we’re running around collecting Satoshis? What’s this progression take? Because you guys are obviously at the forefront of this idea, there’s some other companies out there that are starting to incorporate Sats via Lightning network into their games. I saw a Will Reeves had a really cool announcement where he’s basically doing Pokemon Go, but with his Fold app, you can walk out in front of a store, say at Starbucks, they can go out in front of their store and like literally sprinkle some AR augmented reality Satoshis in front of their store.

Preston Pysh (00:52:02):
And then anybody who has the app can see that there’s free Satoshis in front of the Starbucks and I can go over there and I can walk into the store and order a coffee and collect some Satoshis off the ground. And that’s already happening. So, how does this evolve into the major gaming companies and do you see this kind of, what’s this trend look like, just kind of give us some of your thoughts, Samson.

Samson Mow (00:52:25):
Well, the playing field is wide open. I think we’re still in the very early days of applying a lot of this technology into the gaming and entertainment space, even there’s [inaudible 00:52:38]. I think they’re the ones pushing forward on a lot of the play for Sats integrating into a lot of mini games and things like that. There’s also the NFT contingent. I saw some people commenting on your [inaudible 00:52:49] started saying, talk about NFTs. Well, I think Light Nite has a lot of their game items as NFTs. And then my game, Infinite Fleet, we’re also pursuing the NFT route. We’re also adding a cryptocurrency for the game currencies.

Samson Mow (00:53:03):
So, replacing World of Warcraft gold, but with a crypto asset that is fully portable and can plug into all this ecosystem built up around Bitcoin. Because as a liquid asset, you have access to all that with a Blockstream Jade, you can set a multisig and store your game currency in a multisig wallet, which is very interesting. You can conduct atomic swaps for game NFT. So, the ships for the game currency. So, you don’t need a trusted third party to intermediate that transaction. Players can fully transact peer to peer. And I think that opens up a new model where trade can be greatly expanded and you don’t have to worry about getting ripped off in a trade.

Preston Pysh (00:53:46):
Samson, let me ask you this and I’m sorry to interrupt you. So, your Aqua wallet versus your Green wallet, do you see, and maybe I’m characterizing this the way I’m thinking that it is, but I’m more asking this, that the Aqua wallet, do you see this more of an NFT type I’m playing this game and it’s giving me these tokens and I can basically bring those tokens into my Aqua wallet and swap it into Bitcoin if that’s what I ultimately want to hold versus that token. Is that how you guys see Aqua playing into it versus Green, which is just purely a Bitcoin wallet? What’s the difference between those two?

Samson Mow (00:54:25):
Well, both Aqua and Green support Bitcoin and Liquid. I think Aqua aims to be more seamless. So, it’s all in one view. So, you see Bitcoin, Liquid Bitcoin and all the liquid assets as if it was one thing, even though it’s two chains, whereas in Green, you’re toggling between the two different chains. And I think green is aiming more towards power users. Like people concerned more about privacy. We have tour functionality in there. But Aqua, I would say is more leaning towards surfacing these liquid assets, having on-ramps. So, we have integration with wire in Aqua and I’d like to get more and more things plugged in there. I think there’s a number of different exchanges that now have buy Bitcoin easily easy on ramps. And there’s things like fast Bitcoins. We want to integrate SideShift, SideSwap. Just ways to convert assets easily in Aqua for people that are more interested in assets than just super secure Bitcoin storage.

Preston Pysh (00:55:25):
Now I interrupted you. Finish your thought, if you can remember where I interrupted you on the gaming side.

Samson Mow (00:55:31):
Yeah. So, it’s just really like where we can see it going with this technology like crypto assets, Lightning, Sats, and NFTs in the games industry. So, I think this is a great potential here to integrate a lot of technology to facilitate trade, facilitate more open markets around these ecosystems. I think it’s difficult to … The holy grail is people will think you can buy one item in game A and take it into game B. I think that will be challenging, just because of the business model around that. If I’m Electronic Arts, I don’t want a Ubisoft player to take their gun into my game, because that’s a lost sale. But what we could see is within the umbrella of EA games, they can have free flowing assets, because that’s all their own ecosystem and business. And you would see the like for Ubisoft or Activision or for Exordium, which is what we’re trying to do too, with the INF currency and those NFTs.

Preston Pysh (00:56:31):
Do you really think that they need a blockchain to do that. I mean, you’re seeing a lot of this in the gaming space right now, where they’re managing whatever ledger they’ve got for a, whatever scarce digital items they have in their game. Does it really have to come through a blockchain or is there a big incentive for them to enforce through encryption that the scarcity of this is maintained? It just doesn’t seem to me like that would necessarily be the case.

Adam Back (00:56:59):
Well, I think it’s like a interoperability level. So, you could use the central website from the game producer potentially, but then that’s not going to integrate very well with a crypto exchange or wallet. So, it’s a kind of online account. So, I think cryptocurrency and Bitcoin introduce people to a different model of thinking about things. So, then I’ll treat other assets in that way is it was convenient I guess. And it also makes it verifiable. So, we’ve been talking about them as NFTs, but essentially they are game artifacts that you can bring out into a wallet. You can gift to somebody, give somebody an artifact, you can sell it, you can swap it. Put it into the wallet, then you put it back into the game. So, I think it’s kind of open network trying open network theory on games, because traditionally they’ve been quite controlling.

Adam Back (00:58:06):
They try to deter or prevent people from buying things or mining things by employing people to play the game and then sell the items on a gray market. So, rather than fight it, just kind of embrace the open networking and see where that goes. And I think that’s a more user-friendly thing to do actually. And generally in other segments, open networks have tended to win, because it enables more third party innovation. So, it’s easier for somebody to make an auction site or a swap site or a swap wallet. And it will work together. So, the same technology can be used for swapping Tethers for Bitcoin as swapping swords for Bitcoin. And technology wise saying for example SideSwap wallet has an integrated marketplace where basically users can enter orders. So, they can build their own market for an asset that SideSwap didn’t directly support, which is the user set up market.

Samson Mow (00:59:16):
Yeah. I think they have a BJ’s on SideSwap now. I saw something like that.

Adam Back (00:59:21):
Cool.

Samson Mow (00:59:22):
Yeah. But to answer your question, I think it’s really about that permissionless element. You could do something and use some signing or whatever, but ultimately if you’re not using something like Liquid, it would still be in a central repository or a centralized system, which is prone to abuse and control by whoever’s managing that system. And the problem is when you get into things at scale, you have the Apple app store thing where they control all the apps now. And it wasn’t like that in the beginning, but when that system grew and they achieved that level of dominance and ubiquity, then they’re effectively now the gatekeeper. But if you are using something like Liquid, you kind of guaranteed that, that’s external to that say game company.

Samson Mow (01:00:09):
They’ll never be able to grab your assets or lock your account and take your funds from you. You’ll have that in your noncustodial wallet. And ultimately it just gives people back control over their things. Whether it be Bitcoin, you USDT, or a game sword or a spaceship or a game currency. And the goal is really just to make things more bearer. To go back to that system that existed before everything was centralized in a database. Things are yours. You have it in your control.

Preston Pysh (01:00:43):
So, I really respect both of yours technical expertise. And so I’m curious what you guys think about something like Stacks. Trying to do decentralized finance on top of Bitcoin. Stacks is just one of many different things out there that are trying to do this. You have Rootstock, but it seems like any solution that pops up has another token that’s associated with it. That then is trying to peg itself either to Bitcoin, or is just its own standalone protocol at its own base layer. So, I’m curious how you guys view this and how this is going to mature. And I keep hearing rumors that Defy can find its way through somehow on Lightning. How do you guys see this kind of playing out long-term?

Samson Mow (01:01:34):
Adam, do you want to talk about that?

Adam Back (01:01:37):
Yeah, I mean, I think that John Pfeffer has an interesting … It started as a kind of collection of thoughts for himself, and he shared it with some friends and I went viral. So, it’s called An (Institutional) Investor’s Take on Cryptocurrency, something like that. So, it basically describes his analysis and thesis that Bitcoin is an asset class. And that utility tokens that are used to create smart contracts or store names or whatever the features of all chains are, won’t ultimately hold onto value. So, his argument amongst other arguments is that it doesn’t make sense on a business level to pre-buy a utility token. It would be like you decided to buy a million bus tickets. Well, you’re not going to do that. You’re going to buy the bus ticket when you need the bus ticket, you might buy a week pass, but that’s about it.

Adam Back (01:02:53):
And generally the thing that you’re buying, networks get cheaper, this get cheaper. So, if you were to pre-buy bandwidth in 1990 for the next 20 years, you have a very bad time, because you’d have paid a fixed price. And the price has fallen by multiple orders of magnitude since. So, I think that his argument is that businesses that want to use the smart contracting features of a particular chain, it would make sense for them to buy the utility tokens to use it just in time when otherwise they have the inventory cost, which is not helping them. So, of course, that’s kind of, there’s a lot of marketing around it and that has supported higher prices. But if we accept that, that’s the economic fundamentals of it, then the market can’t remain kind of irrational indefinitely, and it will come back to the incremental network costs rather than the speculative value. And so I think that Bitcoin is different in that regard in being additional commodity.

Preston Pysh (01:04:06):
So, Adam, you’re basically saying, and I want to get over to you, Adam, but basically what you’re saying is this whole 1559 update to Ethereum, where it’s claiming to be ultra sound money can’t last. You’re saying that it has to debase itself in a way where it can’t be deflationary. Is that what you’re saying?

Adam Back (01:04:29):
Well, I mean, the collection of alternative to change, there are something like 10,000 of them now. It’s growing rapidly. So, clearly there is not that much scarcity. And I think it’s been a while since I looked, but somebody was producing graphs off a huge collection of coins versus Bitcoin. And across the two to three year period, they would go up and they’d go down and the new ones would start to pour in. So, it’s generally sort of coins go out of favor basically. The people that started them or promoted them move on to the next thing. And the prices fall. So, I think that it’s nobody’s debating the smart contracts are interesting, but what they’re saying is that the value is a kind of network utility value. So, what does it cost in the network?

Adam Back (01:05:29):
And if it gets too expensive, they switch chains and you see quite a bit of that going on today. Now, when people are moving Tether, they’ll switch to other chains readily. So, it’s kind of like you’ve got a search engine, another one’s better, they’ll switch. The one provides more accurate results, they’ll switch. So, it shows that the switching cost is not very high. If the fees go up because things get congested, they move to another chain. Generally, there’s this new acronym, which is the DINO, decentralized in name only. So, I think that actually in terms of utility, the DINOs are the more centralized, the better, in a sense. They can market it as being decentralized. But if it’s very centralized, it’s easier to scale. Well, easier to put a high throughput, because they can put high speed computers in a data center, basically.

Adam Back (01:06:33):
So, I mean, I’m not very … I’m sort of bearish on the long-term value potential, even though I’m bullish on the use case of smart contracting and innovation about that. And so people need to, I think, separate the fundamentals of the economics from assuming kind of, I would argue groundless inference that because there’s utility in a network, the pressure go up. There are multiple networks. These are open source networks. People can copy them and infinitum and they are. And so I think that the cost will fall to the network operating costs and there’s lots of competition. So, we should ultimately get an efficient market.

Preston Pysh (01:07:24):
Samson.

Samson Mow (01:07:27):
Yeah. So, I don’t think you need to add a token onto any protocol and the Liquid network’s success is a testament to that fact that you don’t need to bolt on some token to make something successful. In fact, I think bolting on a token generally will pervert incentives. It’s good short-term. You quickly align people to be interested in the price of this thing and you can gain adoption quickly. But I think for us at Blockstream, we’re in it for the long-term. We want to build something right the first way around. So, we didn’t add a token to Liquid. There is no token. We’ve grown to 1.1 billion in assets in the network. And we see a lot of growth in that ecosystem to people building on this protocol, because it is open and permissionless. Anybody can become a member of the network and build on top of it.

Samson Mow (01:08:20):
So, you have things like TDex, SideSwap. They’re all heavily leveraging this. Hodl Hodl too. I think they want to be build a version of their platform that’s based on Liquid and same for Bisq, because it makes sense. And I think ultimately a lot of these other projects missed the mark. If you’re building something now, for whatever reason, if it’s for smart contracts or whatever, great, but if you’re not including some privacy enhancements to it, it’s really just more of the same thing. It’s more of a legacy system and in a new technology format, which is not very interesting to me. I think without that added dimension of privacy, then it’s really just meaningless. It’s not going to survive any attacks or any threats. It just will crumble when they’re put to the fire. Like Adam said, it’s decentralized in name only. I think to gain that order of magnitude in functionality, you do need that privacy component.

Samson Mow (01:09:22):
You need something better. So, if you have a smart contract, you still want to have that privacy. The way that we’re trying to build some things is that you can have that smart contract, but you don’t need to reveal it to the world right away. You just can reveal it as needed. And Adam can speak more to that, because that’s more his ballpark. But I think for everything that we’re doing, privacy is a key part of that. So, the Lightning network improves privacy for all those transactions. The Liquid network has confidential assets and transactions. And I think what we’re going to be doing with smart contracts will also have a degree of privacy to that as well.

Preston Pysh (01:09:59):
And to the point, Adam, you were bringing up, I see it very similarly as you with respect to the deflationary token part of it and how that does not benefit somebody who’s using that protocol in a commodity or having utility that you’re paying for the processing associated with that protocol. So, I see it similar to just how you see Fiat currencies interacting with each other today, like the Euro versus the dollar.

Preston Pysh (01:10:30):
If the dollar’s debased and it’s inflationary and it has all those attributes, it’s sucking euros into the US, because Europeans can now get cost of products and services way cheaper than what they could before. So, that utility through the debasement of the dollar has forced other currencies that come into it and to be used. And I think that you might run into a similar dynamic. And I think this is what you were describing when you were talking about your concerns with something that would be a deflationary token on these protocols is your not incentivizing the use in the utility of the smart contracts that are then happening on that protocol. And you’re actually incentivizing the other protocols that are trying to do all this stuff at the base layer to be used. Am I describing that accurately?

Adam Back (01:11:22):
I’m just saying that, this is John Pfeffer’s argument, but you can arrive there, I think from different directions or from a technology direction as well, but basically that the transaction cost in the network … So, I think there’s two aspects to the value. One is the utility value. How valuable is this transaction? What benefit did you get from it? Could you run it cheaper somewhere else? And there are many compatible and competing platforms. So, that means the fundamental value if you shop around and look for the cheapest way to run it is pretty low. Like cents or something. And yet there are people marketing these tokens as something called lasting value, but it doesn’t make fundamental economic sense. So, I think markets can sustain a price that doesn’t make sense for a while, but eventually the fundamentals kick in. And you see that with something like … I think some of these markets are a bit inverted, so why did GameStop shoot up in price?

Adam Back (01:12:43):
Well, it’s because a bunch of guys on Reddit thought it’d be funny to show their combined strength and try to do a short squeeze. Because they knew it was heavily shorted. Now maybe it deserves to be heavily shorted, but they knew it was so heavily shorted that they could cause a short squeeze anyway. So, it did that for a while, but obviously that failed ultimately and things … So, it’s like gravity. Something will tend to fall to its fundamental value. And so I think the fundamental value is just really, what does it cost? And it should get cheaper in future. So, if the utility token is covering the cost, because there’s a lot of competition the utility value should just encompass the cost of providing the operation and the cost of providing the operation goes down over time.

Adam Back (01:13:36):
So, the fundamental value should fall over time. So, it doesn’t make sense to pre-buy tickets into it. So, that’s it really. I think the rest is kind of marketing or people maybe misapplying company valuation metrics. So, they will look at the assets that the foundation behind a coin has and think that the coins represent ownership of those assets. I’m pretty sure they don’t on a legal basis. If buy shares in a company and it has assets, of course there’s a liquidation value.

Adam Back (01:14:15):
And ultimately you could have a hostile takeover where somebody could buy enough shares and get the assets. And that happens in the physical world from time to time. But I’m pretty sure that’s not the case with any kind of ICO’s or coin tokens. So, people have applied those metrics to it. And so I think it’s just temporary valuation mistakes. And of course there’s a kind of shared incentive to do that because people enjoy trading. So, I think they will play along, because being able to buy something, there are sort of early stage investors so they can make money on it based on naivety of later investors, I think.

Samson Mow (01:15:00):
Or it’s just pure speculation.

Preston Pysh (01:15:02):
Yeah. Okay. This is my last question for you guys. This infrastructure bill, what are your comments on just the regulatory policy takes that you’re getting out of the SEC with Gensler? You’re just hearing a whole lot of takes and opinions as to the direction that this is going. Is it all noise? Is it something to pay attention to? Does it not matter in the longterm? Kind of what are some of your thoughts on this idea?

Adam Back (01:15:36):
So, I think it was a bit disappointing, obviously, the way that, that went in the sense that it looked like they were going to improve it. So, that it would be less problematic, but then it got vetoed at the end for some kind of tactical reason, like a blanket veto of all changes or something. And that it just shows you yet again, the politics is kind of disorganized and random last minute haggling. So, it’s not a good formula to arrive at. Considered a sensible regulation that doesn’t get in the way of innovation. So, that’s a bit messy. I think for a lot of what Gensler is talking about is actually consumer protection. So, reading between the lines, it looks like he’s talking about rug pulls, hacks, people losing money. I think while people are making money, they’re less likely to get upset, complain to a regulator, join a class action.

Adam Back (01:16:39):
But if there’s a sudden 90% drop in something or something gets hacked on a large-scale people get upset and regulators get concerned about consumer safety. So, I think you can chalk that up to the ongoing kind of insecurity of a number of chains, really. It’s not clear. I mean, some of them are hacks and some of them are hacks in air quotes. Like maybe the anonymous people that create it pretended to hack it. And actually took the money. Or some of them are just centralized. So, essentially the people who set it up could take the funds at any time and they chose to do so. And so that happens too.

Adam Back (01:17:25):
So, there’s a range of … or another one is people involved in it just selling heavily shortly after exchange listing or something like that. That will upset investors. So, in the conventional world, there are … I mean maybe they’re imperfect, but they’re intended to be consumer protection rules about share lockups after IPO’s and audited accounts or companies, honesty and advertisement disclosures and things like that. And so those are, I’ll say they’re imperfect, but they arose from previous century rampant stock scams at the beginning of the last century, basically. So, they are intended to be about consumer protection.

Preston Pysh (01:18:13):
Samson.

Samson Mow (01:18:15):
Well, I think in the long run, it doesn’t really matter if they get it wrong, they can still fix it. And the whole point of having Bitcoin is that you don’t have to care about this stuff. So, I mean, if you had to worry about what politicians are going to do to your money, then Bitcoin kind of failed. And I guess that could happen if you rely on custodial services and whatnot, but the whole point is to have your keys. To have them in your possession.

Samson Mow (01:18:42):
And they can’t really mess around with that if they choose to mess around with that. That’s the real point of Bitcoin that you have control over your funds. They’re a bearer asset. And I think those things just kill industries. They’re industry killing legislation that it just gets rammed through sometimes. You still have ramifications from the NYDFS. With the BitLicense. People are not going to operate in New York under that kind of regime. And that’s bad for people in New York. And if he took the infrastructure bill, if that went through as they had it, Americans would suffer and it’s up to them to fix it. Either you go through the proper channels and to replace the politicians and fix it, or you live with it. That’s the only two choices you have really.

Preston Pysh (01:19:36):
At the end of the day I think Gensler is a Bitcoiner.

Samson Mow (01:19:40):
It’s very possible.

Preston Pysh (01:19:42):
What do you think, Adam?

Adam Back (01:19:45):
Well, he certainly has a good technical understanding. He was teaching courses on Bitcoin MIT prior to taking his place. And there are videos online. So, it’s good that regulation is informed. So, we’ll see. I mean, I guess one of the questions on people’s minds is if a Bitcoin ETF will finally make it through the regulatory process. And it’s kind of passed you in a lot of ways, in a sense that I assume some Americans are buying the Canadian ETFs, of which there are now multiple. And certainly some multiple and on six, the Swiss stock exchange and other places internationally. So, the US has kind of been held back on that and it’s a big market. So, I think there are always Bitcoin ETFs in the application process, people who track these things. But I think there are more than usual at the moment. And some new entrants from established financial players of different flavors. Some based on-

Preston Pysh (01:20:59):
Big players, big players.

Adam Back (01:21:01):
Yeah. So, some based on the Futures, because it’s a way to get … I mean, basically people looking at formulaically the reason why previous ETFs have been nominally turned down. And so I think going into the Future gives them access to the CME market, which is harder for the regulator to criticize.

Preston Pysh (01:21:26):
All right, guys, that’s all I have for you. Give a handoff to, if people want to learn more about Blockstream or whatever, feel free to provide a handoff. I’m also going to have this John Pfeffer article in the show notes for people to check that out. And that was the one that Adam referenced earlier, but go ahead and take it off.

Adam Back (01:21:45):
Yeah. So, if people want to look at blockstream.com and everything is under that.

Preston Pysh (01:21:51):
Samson, did you have anything else? Because I know you’re in the gaming space. Did you have any game stuff to handoff?

Samson Mow (01:21:58):
Oh, you can find Blockstream on Twitter at, @Blockstream. We’re on Facebook, LinkedIn, basically everywhere. And if you’re interested in games and security tokens, you can check out Infinite Fleet, infinitefleet.com.

Preston Pysh (01:22:11):
All right. We’ll have that in the show notes. Guys, thank you so much for making time. I’m always just amazed every time I get a chance to talk to you and learn about all the things that are happening out there with Blockstream. It’s just mind blowing, but thank you for making time.

Samson Mow (01:22:25):
Thanks, Preston.

Adam Back (01:22:26):
Thank you.

Preston Pysh (01:22:28):
Thanks for everybody listening into the show. If you enjoyed the conversation, be sure to subscribe to the show on whatever podcast app you’re using. We really appreciate that. And if you have time, leave us a review. So, thanks for joining us this week and we’ll catch you the next Wednesday.

Outro (01:22:42):
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