SLP131 Parker Lewis – Bitcoin is Intuitive

Parker Lewis, Head of Business Development at Unchained Capital joins me in this episode to talk about a range of things:

How he went from global macro hedge fund to bitcoiner
What the Fed gets wrong
A Hayekian appreciation for bitcoin
His blog series, Gradually, Then Suddenly
Bitcoin becoming intuitive
Unchained Capital Caravan – open source & free multi sig

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Stephan Livera links:

Podcast Transcript

Stephan Livera: Parker, welcome to the show. I’ve been trying to get you on for a while, but we finally made it happen.

Parker Lewis: Yeah. I think we tried to do it back in June at Bitcoin 2019 in San Francisco. Didn’t work, but glad that I finally got to come on.

Stephan Livera: Yeah, that’s great. And obviously look, I know you, I’ve known you for a while. But just take a minute or two and just introduce yourself for my listeners who might not know you.

Parker Lewis: Yeah. So I am the head of business development at Unchained Capital based in Austin, Texas. I’m originally from Austin, moved back here a couple of years ago and met Joe and Dhruv the two cofounders at Unchained and they asked me to come on board and help build their business and had been at Unchained for just over a year. Got into to coin actually through a friend of mine who told me about it originally and , very excited, that’s Will Cole. And he just joined this week to be our chief product officer on chain. So everything’s really coming full circle. The, person who originally told me about Bitcoin is coming on board, to help us build out the financial services platform and here at Unchained. And we’re just extremely excited about the future.

Stephan Livera: Yeah. That’s awesome. So how did, well I guess Will was the one who got you into Bitcoin. What was it that you first saw about Bitcoin and , most people were skeptical about Bitcoin the first time they hear about it. What was that like for you?

Parker Lewis: That was, I’m sure we’ll get to talk about this, but I was extremely skeptical for probably two years before I before things started to click for me. So I was around the periphery and looking at it and trying to understand and, I often times equated it to look at a blank wall. And , there being a canvas there and it’s just blank, but then once you see Bitcoin, it becomes a masterpiece. And that was really me. I was staring at the problem, not understanding it. And then slowly as kind of meeting more people that were involved with it and peeling back different mental blocks, one by one, then it finally started to make sense to me. And that really became the foundation for a lot of the pieces that I write as a part of the Gradually, then Suddenly series because I’m almost going back through and recounting my own experiences and breaking down the logic as I then came to understand a lot of things that were, that were formerly very grey and, seemingly confusing to me that, that once I worked through became very intuitive.

Stephan Livera: Right. And let’s set the scene a little bit. So what were you working and doing professionally before you saw the light with Bitcoin?

Parker Lewis: Yeah and that’s, a big part of what helped me understand Bitcoin. I was working for a hedge fund based in Dallas, Texas called Hayman Capital run by a guy named Kyle Bass. And while I was there, I was really pursuing two independent paths. I was one doing independent research on Bitcoin because I was interested in it. And at the same time I was doing a lot of research on the Fed and the financial crisis and QE really under my responsibilities at the hedge fund, which was a global macro hedge fund and I was doing research to, it was, it was around the time that the Fed had been signaling that they were going to begin in short order unwinding the balance sheet. And as I was trying to form my own opinions as to what the transmission mechanisms would be and what, how it would affect markets, I went full down the rabbit hole of ultimately in order to understand what would happen when the Fed unwound QE, I thought I needed to understand, what really happened during the financial crisis and the aftermath, the financial crisis, how was the Fed thinking about it then?

Parker Lewis: And then how would that inform my view as to how they’re likely to react or what the impact would be once the Fed actually started to unwind some of that activity. And, ultimately the two paths led to one, as I was becoming more educated on Bitcoin, understanding why it existed and how it worked, I was also understanding these dynamics with QE. That led me to the conclusion that the mere instance of QE all it does is cause the credit system to expand, which then dictates more QE is required, not less. And so that’s, when things began to click for me, which was Bitcoin exists, from a practical perspective because QE it is inflation resistant form of currency that has a fixed supply. And when you look at it versus all of the alternatives, all of the other alternatives are dictated to increase massively in in supply because of the very nature of the credit systems that support them.

Parker Lewis: I often talk about, and this is one of the things that I, the way that I looked at the dynamics and the credit system, which ultimately led me to Bitcoin. It was just looking at the U S credit system and seeing a system that has estimated by the Fed 72 or 73 trillion worth of debt. It’s only supported by approximately 2 trillion actual dollars actual reserves in the banking system. And when you think about that leverage dynamic, that is the dynamic that ensures that QE isn’t just a possibility, it’s an inevitability. And that’s really what Bitcoin stands to fix.

Stephan Livera: Yeah. Excellent articulation. And I’d love if you could just touch on from the point of view of a more mainstream finance or economics person you were discussing there around transmission mechanism. Can you just spell out what are people in the normal financial and economics world thinking of when they think of that?

Parker Lewis: When I think about it is, thinking about the first order, second order, third order, what are the actual mechanics by which the Fed either expands its balance sheet or shrinks its balance sheet and really thinking through yeah, not, not necessarily the end result in terms of, what happens at the end of the line, but really just from a mechanical perspective when the Fed goes and purchases treasuries in the market, and this is one of those instances where just in September after the Fed basically had interest races at zero from 2009 to 17, or they started raising short term rates in 2015 but they didn’t actually begin to unwind their balance sheet until the end of 2017. So effectively you had eight years of easy money policy and then after only approximately 12 months of tightening, and removing liquidity from the system, they suddenly had to reverse course.

Parker Lewis: And a lot of that reversal began happening late last year, beginning of this year. And ultimately it ended up with the repo market spiking in September and the Fed having to reenter with QE and initially in the form of overnight repo and then term repo and all of it is essentially QE. But then when I think about the transmission mechanism, it is, what are they actually doing? In the context of when the Fed is going out and purchasing treasuries or purchasing mortgages, actually going into the open market and buying it. And what is it doing? It’s taking those financial assets off the market and replacing them with dollars. And then on, the other side, when the Fed was withdrawing liquidity for the system, effectively what was happening was rather than the Fed reinvest proceeds to, to repurchase assets that were maturing.

Parker Lewis: So as, as the treasury was having to repay debt for a long time, the Fed would take those repayments and then just go buy treasuries. Well, what did they do when they were shrinking the size of their balance sheet? And what was the transmission mechanism? Once the treasury would repay dollars that were associated with treasury zoned by the Fed, those dollars would essentially go into a black hole and disappear from the market. And that had, when you think about the magnitude in which they were shrinking the balance sheet, it was just insane. equally as it was when they were actually expanding the balance sheet, they were withdrawing $50 billion a month of liquidity. And then kind of the next order effect of that is, okay, well where does that liquidity come from? And so when I talk about transmission mechanisms, it’s really thinking about first order, second order, third order impacts to think about, where the impact will happen most acutely and most immediately.

Parker Lewis: But ultimately at the end of the day, it comes back to that idea of, cause this is one of the ideas that that’s often is misunderstood, that it, that the problem of the active management of the money supply, which Bitcoin fixes is both on the expansion of the monetary system and then the contraction, because both of those activities send false signals. So just as it was destructive for the Fed to add $85 billion into the system per month back in the period from 2009 to 2014 it was equally as bad to then withdraw 50 billion a month. It essentially creates a shock to the system where signals are manipulated merely as a function of the money supply rather than the underlying supply and demand structures of real economic markets.

Stephan Livera: Yeah, right and also what we see is it becomes a very, it’s like a political football. So the Fed starts manipulating in one direction and then the results maybe they’re not liked by the powers of the time, and then they’ve got to now try and walk it back. And there’s not really, they sort of claim that there’s a bit of a science and a reason behind it, but it’s when we apply that Austrian economics lens to it and we understand that really, that expansion of the reserves is what enables the commercial banks who then go off and lend out. And that’s where this additional money creation comes in. So what was your journey like in terms of learning about Austrian economics then, and how that applies to the Fed and the existence of a central bank and the lender of last resort?

Parker Lewis: Yeah. So one thing that I think that you just brought up there, and I’ll kind of lead in with this and then talk a little bit about my discovery of Austrian economics and the principles. But one of the things as you point out the Fed likes to represent that there is some scientific thought behind or some modeling behind the amount of dollars that they either withdraw from the system and or on the other side that they add to the system. And that’s just a complete fraud. One of the exercises that I did when I was trying to understand how QE works and understanding, how the Fed thought about QE. one of the things that becomes apparent is that, in a really undebatable way, the Fed is just chronically wrong.

Parker Lewis: And despite that fact, a lot of people within the markets turned to the Fed and they say, well, the Fed wouldn’t be doing this unless, the Fed wouldn’t be draining liquidity out of the system if they didn’t know what they were doing, if they weren’t particularly confident. And then all of a sudden the repo market breaks. And in the last three months, 300 billion of liquidity has been added to the market. Six months of the prior withdrawal that happened in three months. And when you go back and read the transcripts from the Fed, post QE, one example that I like to point out for people is that in the middle of QE 2 almost to a person, 15 out of 16 people thought, over the summer of 2011 time period in which they would be unwinding QE would be early 2012, six months later, they will never unwind QE 2 and I think the recent dynamics that have had happened in the market to require a massive amount of liquidity to be injected to it, which will only require more is, one of those examples where the Fed may claim outward when they’re in their hearings or in the press conferences with with Congress that ultimately they don’t know.

Parker Lewis: They don’t know because they can’t know. And that’s one of the foundational principles I think of Austrian economics. And, one of the authors that I read a lot of, and I’m still catching up on all of my Austrian economics is Hayek, but the idea behind the pretense of knowledge and that the idea that, essentially unmanipulated markets will always and unmanipulated price signals will always possess more information than any individual can possibly possess. And, that isn’t, no matter how much data or how a bunch of modeling you look at it, and no matter how many metrics you may have at your, in terms of the Fed, they have access to all this banking information. No matter how much information they have, their knowledge is inherently limited. And that’s a core idea behind Austrian economics is that particularly as it relates to price signals and in markets that when left to their own devices, and this is why Bitcoin, I think in my opinion, will be so transformative is that it will ultimately be the most un manipulable price signal that has ever existed in the world.

Parker Lewis: And when you have that, the end result will be a communication of not necessarily perfect knowledge, but far more perfect knowledge that current market signals and price signals that the dollar, the Euro, the Yen could ever possibly communicate because they’re actively manipulated.

Stephan Livera: I love the points you were making there, Parker, and particularly the point around the Hayekian notion and obviously the most well known essay is his classic, The Use of Knowledge in Society. And that’s one of histories most cited economic papers. And it’s interesting you say that because also during Greenspan’s tenure with the Fed, he was known for really trying to go deeper and trying to understand more information. So he, as I understood, he would actually try to make businesses and banks actually report more information to the Fed. And for all of that additional data, what was the result that we got out of it? Right. It’s not like they managed the economy any better. If anything, they might’ve done worse. What’s your view?

Parker Lewis: Yeah, it’s almost like it’s the Fed, stupid. When you think about, and there’s also a famous quote from Greenspan before Congress when he, when he said, my model was wrong, it’s that no matter how much information you have and no matter the sophistication of your model and the forecast that it’s ultimately imprecise and that at the end of the day, and this is something that else, there was a 2004 speech that, that Bernanke gave. And I think, I believe this is before he was Fed chairman where he actually talked about there was this period in the lead up to the financial crisis that in mainstream economics circles is referred to as the Great Moderation and Bernanke in a speech, and I believe it was 2004, maybe it was 2003.

Parker Lewis: He talks about how he does it. He didn’t think that monetary policy and active management of the money supply got enough credit for a combination of both low price volatility in terms of inflation as well as low output volatility in terms of kind of the trajectory of the economy. And then you fast forward to 2008 and then there’s a massive amount of volatility. And the financial crisis was on the, truly on the verge of collapse and virtually every bank or every investment banker, every major bank, it was practically for all intents and purposes and solvent. And, nobody comes back or at least in those circles, nobody comes back and asked those hard questions about not whether or not the Fed is part of the solution, but whether it is the problem. And I think that’s, that’s the core question that, people as they come to learn about Bitcoin will continually ask themselves.

Parker Lewis: Because historically it had been really a philosophical debate and an economic debate as to whether or not the active management of the money supply is a positive and it really has become a default within virtually any university, at least that I know of, that Austrian economics just isn’t taught. And, we can sit around and, kind of talk till the cows come home about it. But now with Bitcoin, what we ultimately have is a market and that the market will ultimately decide it’s not just an economic debate. There are two systems and they’re competing with each other. And as more people adopt Bitcoin it’s a signal that, just left to their own devices on a simple AB test. whether somebody understands Austrian economics or Keynesian economics, they look at, A and B, which one’s better? And when they understand that, in the case of the dollar it is designed to lose value and by its very function will continually be manipulated by a central bank. And then they look at B and the monetary policy of Bitcoin is perfectly executed and fixed without any central authority, the average individual will pick B. And, and so, one of the, the dynamics around Bitcoin that I particularly like the most is that it’s voluntary and it’s a market test rather than an intellectual or philosophical debate.

Stephan Livera: Yeah. That’s brilliantly articulated there, I like how we could argue really that Bitcoin is just so much more predictable than any other money supply. And it also brings to mind this idea of having a certain amount of humility, right? Because the central bankers they think they’re the masters of the universe. They’ve worked it all out. We don’t need to worry, they’ll fix it all the economy for us. But then in reality, look at all these things that have happened. And a great point that I’ve seen you echo this as well in the past as well is this idea that we have to have an appreciation for things that are the result of human action but not of human design. And I think that’s a very Hayekian idea. Can you elaborate a little bit on your thoughts around that and how that applies?

Parker Lewis: Yeah. And I think that that is, it’s one of those things that I think people, that frustrates people the most about Bitcoin, not necessarily people that have, not necessarily bought in, I don’t want to say bought it, bought in is probably the wrong term, but that understand kind of the how and why Bitcoin works or at least, I don’t know if there’s truly an possible, to understand it to a full extent, but that when you take a step back a lot of people look at Bitcoin and they look at the design architecture of it and they immediately want to copy it. And there’s this, something that I haven’t written about expressly, but there’s this idea that Bitcoin is Myspace and it will be replaced by some newer, better version. And ultimately, the way that I think about that is people can look at the design of Bitcoin and they can copy the code tomorrow.

Parker Lewis: What they can’t copy and what can never be copied is the organic nature by which Bitcoin was spawned. And the randomness that was inherent I wasn’t involved in the quote in the early days. I think that ultimately we’re still very much in the early days of the global monetization event. But that when you think about the reason why Bitcoin is functional and the reason why it works is because this, despite the fact that there is an engineering design behind the code base, that ultimately in terms of everything that happens within the Bitcoin ecosystem, is not coordinated by conscious control. The decisions that I make individually as to the work that I do at Unchained, people who join Unchained to work here, other people who work on Lightning, everybody, in a completely uncoordinated way are looking at, at this space and, figuring out what it is they’re interested in and figuring out how they want to contribute.

Parker Lewis: And the net effect of that is a system that works, but it’s also one that has a high degree of randomness behind it. And the other idea is that, once now that Bitcoin exists and once the network effects have started to reinforce each other, I think Trace Mayer often talks about the seven network effects of Bitcoin that it’s impossible to overcome that if you’re merely looking at the design and thinking, I can switch this little bell or whistle and, I’ll have a better Bitcoin and it completely misses the point. And one of the things that, Hayek also talks about, cause this is an idea that, I didn’t certainly come up with, but it’s an idea that I’ve leveraged or I’ve helped, crafted my own thinking around as it relates to some of the writings that, Hayek put out where that it’s this idea that people, and I don’t want to just frame central bankers on it, but that people that believe inherently that you can centrally plan an economy, they don’t realize, that the whole point of a pricing mechanism, money, a market economy is to abstract away from conscious control.

Parker Lewis: And that ultimately the greatest things that are designed by humans are designed as a function, that are devoid of conscious control. And I think that’s a great epitome of what Bitcoin actually is.

Stephan Livera: Yeah, that’s excellent. And some of this discussion reminds me of Gwern’s classic article. It’s called Bitcoin is worse, is better. And there’s a particular part there. And the crazy thing is this was written in 2011, believe it or not. So there’s a section in there where he’s saying one of Bitcoin’s greatest virtues is that Bitcoin can wait for its opportunity. So I can’t remember the exact quote, but it’s something like if you sit by the river long enough, you can watch the bodies of your enemies float by.

Parker Lewis: Yeah. And I think an application of that is that some of the, some of the greatest lessons are learned the hardest. And for all the people that come and try to change Bitcoin and or create their own better version of Bitcoin, ultimately will come to learn why Bitcoin works and it will be a function in part because of their own failure.

Stephan Livera: Yeah. And I’m a big fan of your recent series, your blog series which is called Gradually, then Suddenly. So I think it’s a really phenomenally written series. The articles that have all been excellent. They’ve all been stellar, tell us a little bit about how you got the idea to do this series?

Parker Lewis: So there were a lot of and I touched on this a little bit previously, but there, I was somebody who stared at Bitcoin for a long time and was not able to create a mental model around it. And there were a lot of people who contributed to unlocking certain mental blocks that helped me come to an understanding. And one of the things that, one of the ways I frame it is that Bitcoin is extremely not intuitive until it becomes intuitive and then it becomes hyper intuitive over time. But the only way for it to become intuitive is to experience it, to have Bitcoin, to understand how it works to understand time after time, every 10 minutes that the network continues to function despite no central coordination.

Parker Lewis: And, along my path, not only did I rely on other people to help me peel back one by one, various different mental blocks, but, someone who is a good friend of mine and who I value incredibly is Saifedean Ammous. And as I was thinking about writing, that was one of the inspirations, but it wasn’t just because I wanted to give back. It was in part because one of the things that I recognized with a book, like The Bitcoin Standard was I don’t have enough time in the day to explain Bitcoin to all the people that ask me about Bitcoin. And what did I started to do is leverage the Bitcoin standard. I mean, me and my friend Gideon Powell bought 250 copies. And anytime anybody would ask me about Bitcoin, I just give them the book, The BItcoin Standard and I say, Hey, read this.

Parker Lewis: And then if you can devote 300 pages worth of your own time then I’ll answer any of the questions that you have about it, but start here. And that got me to thinking about just leveraging my own time and I leveraged The Bitcoin standard. And then there were a number of things that, through my journey I had questions about and I thought about, and then once I became involved in Bitcoin in the sense of, in working here, I found myself going and talking to prospective clients or people that were interested in Bitcoin and they would always often come up with the same exact questions because, they’re many of the same questions that we all have, on our own journeys. And so, part, it was a way to distill my own thoughts on, on topics that I previously had issues with, but that I also knew new people coming to Bitcoin would have on their journey to Bitcoin.

Parker Lewis: So, combination of leveraging my own time. I do spend quite a bit of time, the first time I put pen to paper on one of those I don’t know, how the end product actually turns out, but I can promise you that the first time I dump my thoughts on paper, it’s a bunch of garbage and then I edit them and it helps distill my own thoughts. So when I’m talking to people, I can articulate those thoughts better, but then if I invest that time upfront, then as people have those questions, I can send individual articles to them so that they can help unblock their own mental blocks along the way.

Stephan Livera: Right. And each of these articles, these essays, they range, some of them can be slightly longer reads, but they’re very comprehensive and addressing a specific point and they’re often addressing common objections or comments, sticking points in people’s understanding. I love this one where you wrote a Bitcoin is Not too Volatile because I think that’s one of the most common objections for people. How do you think about that and how do you try to explain that to people?

Parker Lewis: Yeah, I think one, one concept that I explained to people is that volatility does not equal store value. And that really, goes either way. It’s that volatile assets can be great stores of value and Bitcoin is a great example of that. just, taking it as that as an example and looking at the historical context, yes, it’s extremely valuable. But if you take a step back and zoom out over any extended period of time, a Bitcoin rises in value over time and really that’s a function of it’s fixed supply. But then on the reverse side, not volatile assets can be very bad stores of value and the dollar is a great example of that.

Parker Lewis: And for people that, to, to steal Vijay Boyapati’s term people who deride Bitcoin because it’s too volatile, often point to the dollar and point to Bitcoin’s volatility to explain why Bitcoin can never be money. And then if you, look at a long term chart, the dollar and the dollar’s purchasing power, over time it becomes evident that, it’s a disaster. And really that’s, because the dollar is designed to lose value. The Fed targets 2% inflation. And it has been, to this point in time, very effective and slowly and marginally devaluing the dollar. I think ultimately at some point that that is one of those graduates and suddenly type things. And when you, when people think about the volatility of Bitcoin, they look on very short term basis and they, it’s almost like they’re imbuing on Bitcoin.

Parker Lewis: Like it’s like it exists in a vacuum. And obviously in the real world, nothing exists in a vacuum and it’s certainly not Bitcoin. And, people have to recognize that, I won’t say, no one in the world, but practically no one in the world has a hundred percent exposure to Bitcoin. And when, when people look at Bitcoin and they say, Oh, well, Bitcoin can’t be money because it’s volatile. They, ignore how all volatility is ever managed by anybody. It’s through diversification and diversification in the case of Bitcoin does not mean buy Ethereum or buy some altcoin. It means that you own other assets and that you plan around Bitcoin’s volatility, not just by the mere fact that it is volatile. But as it relates to your own tolerance for that volatility.

Parker Lewis: And so, to me, I look at Bitcoin today and I’m not sure, I like to think of Bitcoin in total in terms of its purchasing power, but somewhere around 150 billion or 160 billion of purchasing power. And if you look at the, as reported by the Fed to the net dollar net worth of households in the United States and it’s a hundred trillion and you have to recognize that despite the fact that Bitcoin has risen dramatically in value since its inception it’s still a very small asset class. And not, that’s not fair to say. It’s not an asset class. It’s a form of money. And I believe that it’s already a better form of money despite its volatility. And, and when you think about the dynamics around Bitcoin adoption and that often Bitcoin, generally around the Bitcoin halvenings, Bitcoin is adopted in waves.

Parker Lewis: And when you recognize that Bitcoin has a perfectly inelastic supply schedule and then you think about that in the context of adoption, increasing by orders of magnitude, what do you expect to happen? Yes. Like by its mere nature, it will be volatile. And this was a comment that Michael Goldstein mentioned to me, which is stability is an emergent property in Bitcoin and it will only be stable when say a billion people own it. And if only, I don’t know what, no one knows the number of people that own Bitcoin today, but if it’s 60 million or 70 million people, and ownership doesn’t mean, when, when people generally start buying Bitcoin, it represents a very small percentage of their assets that over time Bitcoin will acquire sufficient liquidity that in the future it will not be evolved, but it will only not be volatile until adoption relative to the embedded base represents a very small percentage rather than what it exists today in terms of each coming adoption waves which is generally orders of magnitude.

Stephan Livera: Yeah. So essentially the main point then is that you manage the volatility through your position size, right? So that means if you’re not so comfortable with that level of volatility, well then you just have a smaller position in Bitcoin as a percentage of your net worth, et cetera. And I think the other point is that many longer term Bitcoiners, they know that they simply have to zoom out, right? They know that over where the typical establishment economist is saying, “Oh, why would I use Bitcoin to buy this loaf of bread”, the typical bitcoiner is thinking on a much longer time horizon, aren’t they?

Parker Lewis: Yeah, absolutely. And that’s, also on the reverse side of that, that’s the opposite of the dollar. Often times when people think of the dollar as as not volatile or as as a good store of value, it’s generally on a very short term basis. It’s thinking about today versus tomorrow rather than today versus 10 years and 20 years. And when you look at the contrast that Bitcoin provides, it’s the contrast next to the things that it’s immediately competing with principally the dollar, the Euro, the Yen. And when you extrapolate the, 2% inflation target ignoring any potential future hyperinflationary event you quickly recognize that 2% over a year, which many people have been lulled to sleep over, over 10 years is 20% and over two decades is 40%. And ultimately what that causes is people to be essentially running on a treadmill, to recreate over the course of a decade or over the course of two decades, 20 to 40% of their wealth.

Parker Lewis: And, the ultimate end point of that is an incredible amount of malinvestment. And that when you, when you look at Bitcoin and you look at managing Bitcoin’s volatility, it’s really on some continuum between your knowledge of Bitcoin and your comfort and view of the future relative to the amount of assets that you have. And the longer that the more convicted or the more conviction that you have, in Bitcoin and its viability and confidence in it, the greater you’re willing to tolerate increasing volatility and allowing it to represent a larger portion of your total assets.

Stephan Livera: Fantastic. And the thing we’ve seen is just constantly shifting narrative of skeptics, right? So at the start it’s all Bitcoin is not backed by anything. And then later we get into this idea of, Oh well fun. Even, even then Bitcoin is just going to get banned, isn’t it? And then now you’ve got an article called Bitcoin cannot be bad. And you talk about some of the mental gymnastics that some Bitcoin skeptics put out there. So what’s the better way to think about this instead of Bitcoin being banned?

Parker Lewis: Yeah. And there’s really two fault lines that I think about the idea, that if Bitcoin is extremely successful and if it threatens the dollar or the Euro, the Yen, then the Fed or the treasury or the ECB or the bank of Japan will step in and regulate Bitcoin out of existence. And really when you think about, that’s devoid of reasoning and becomes more of a hope strategy and it becomes a hope strategy for those who, didn’t buy Bitcoin when they should have. And when I think about it, it is that ultimately what that scenario would mean is that Bitcoin went from nothing to, essentially a good and a monetary good that is threatening the global reserve currency, the dollar, or even if you believe that it hasn’t gotten to that extent when some power that be, that steps in to try to stop it is certainly that it is orders of magnitude higher than it is today.

Parker Lewis: And so, on one fault line, it is okay so this thing Bitcoin rose from nothing to a position where it’s working so well and it’s working so well as money that it’s potentially threatening the dollar, the euro or the yen, and then somehow that thing that spawned from nothing is going to be put back in the box. And that can somehow be regulated out of existence by Bitcoin. But what is logic and how does that actually happen? And then when you start to think about, yes, any individual country whether it’s the United States or any country in Europe or Japan or China or India, can ultimately, and probably will not across the board, will attempt to put in a ban and make the ownership of Bitcoin illegal. But, how does that actually function? And, and really that when you think about Bitcoin, it’s designed to evolve and to route around and to immunize threats.

Parker Lewis: And I don’t spend a lot of energy worrying about it because, on the other side of the fence is what position would you, just from a logical standpoint, what position would you rather be in? Would you rather own the asset that has risen in value orders of magnitude at the fear of when that happens that, the Fed or the ECB or the BOJ tries to prevent it from growing further or be in the position of not owning that asset. And so when you think about the asymmetry and really the asymmetry alone, if you come to understand like whether or not you understand anything about how Bitcoin works or why it works, if you understand that what it’s really designed to be is a better form of money and that, at least in my opinion, it’s a very binary outcome, either it works and it will become a global reserve, current currency or a fails. And what that means is there’s inherent amount of asymmetry. The downsides 100%, but the upside is many orders of magnitude. And then as you begin to learn more about how and why Bitcoin functions, then your view of probabilities or possibilities begin to change and your tolerance to, to, expose yourself to even greater asymmetry only extends from there. So, on one hand it’s that it’s practically not possible, but on the other hand, which position would you rather be in owning that asset or not?

Stephan Livera: Yeah. And it’s an interesting as well to point out that even politicians and regulators and bureaucrats are also going to face that dilemma on a personal level because they can either as Michael Goldstein said, well, do you personally believe number go up? Well then you’re going to try and own it yourself. And then once you or your family members own it, are you then going to go and ban it? Well, it’s a bit of a difficult mental gymnastics to try and execute.

Parker Lewis: Yeah, I agree. And then when you think about the practical application and recognizing that Bitcoin is global and, and not necessarily the game theory view of any member of Congress or central bank treasury, but just of the dynamic that the country is that are, Bitcoin, from a practical perspective represents the most mobile capital that has ever existed. And that the countries that create the most accomodation, a combination of the greatest amount of regulatory certainty and are the friendliest as it relates to Bitcoin, capital will flow to those, to those places and those jurisdictions and every jurisdiction that takes the opposite view is competing with those other jurisdictions that take a more open and a more friendly view. And to think, it doesn’t necessarily happen overnight. And of course, if the U S government came out tomorrow and said, Bitcoin is illegal, what happens tomorrow?

Parker Lewis: Does the price likely drop? And could it potentially impair the near term growth of Bitcoin? Yeah, likely. So, but in terms of over the long term and it, does that kill Bitcoin? No. And does it accrue to the benefit of some, some other jurisdiction that is friendlier for it and where people will move to over time? Yes. And I think that the US is a, is a perfect example of human capital, physical capital, monetary capital flows here because people property rights are the strongest and there’s the rule of law. And so whether it’s in the United States or Ireland or some other country in Western Europe, someone will see the benefit of that and that mere competitive threat will hopefully, prevent somebody who may otherwise make a bad decision from cutting off their nose to spite their face.

Stephan Livera: Fantastic. And I love this other article you wrote. It’s, Bitcoin is not for criminals, right? So right now it’s very common that you’ll see the exposure that typical news websites will try to get clickbait and say, Oh, look at this big illegal thing, Bitcoin being used for nefarious purposes. How do you try to explain that point?

Parker Lewis: Yeah. So that’s the most recent article that I just published last week. And this idea that the Bitcoin is not for criminals or Bitcoin is for criminals. In many ways, it’s an extension of the of a theme in, the idea that Bitcoin cannot be banned in that both of those ideas, they are admissions that Bitcoin works and is functional in some context. Whether it’s the case of, Oh we need to ban Bitcoin cause it’s threatening the dollar. If you peel back the layer of that on unit is well embedded in there is your admission that Bitcoin works. And if it didn’t, we would have nothing to ban. And then in the context of, claiming that the Bitcoin is, just for criminals or the only practical reason that somebody would use Bitcoin would be to facilitate some illict purpose.

Parker Lewis: Again, it’s, there’s an admission embedded in there that is Bitcoin is functional. One of the ideas that I talk about in in Bitcoin is not for criminals, is this idea that and the idea stems not just from the silk road, but it was certainly popularized around there and there’ve been any number of widely publicized events where somebody that used Bitcoin to to launder money or to facilitate some other type of illegal activity. And what the default assumption about from those skeptics is the only reason that people use Bitcoin was because it allowed them in some form or fashion to evade law enforcement. And, from a practical perspective, none of those people, anyone facilitating criminal activity, they’re not in the money losing business. And they’re not just using Bitcoin to evade governments that physical cash, physical dollars are used.

Parker Lewis: Are the preferred funding currency of illegal activity. And I can promise you, despite the fact that Bitcoin has existed for the last 10 years, that those physical dollars that it used to evade law enforcement having continued to be laundered back into the banking system. And so, kind of when you think about it first from the perspective that one, anyone who’s using it for illicit purposes, not merely doing it to evade law enforcement and B) they couldn’t be doing it unless it was functional, and then C) that recognizing that the dollar is still the preferred funding currency of criminals everywhere, that when you start to extrapolate those ideas, it is that if Bitcoin is functional for any activity, whether it be for some illicit purposes, it’s an admission that Bitcoin works. And if it does, then it works for everybody.

Parker Lewis: And one of the ideas that I talk about is that this idea that Bitcoin is just for, facilitating illict purposes. And as a result, we need to ban it. however impractical that possible scenario is that that it could be banned. That those, that activity ultimately forms a litmus test for the rest of the network. And I kind of used this last article to talk about the idea of censorship resistance. And that’s, one of the things I try to do in most of my articles. It’s not just to, explain, why is a certain idea is wrong or right. But then it’s to actually educate somebody on how Bitcoin works. And one of those, the points that I talk about in this last article is censorship resistance.

Parker Lewis: And when you think about, illicit activity or criminal activity as a litmus test, it’s this concept that the type of activity that is most susceptible to censorship is illict activity. And one of the, something that recently came out, I believe it was in August, that, OFAC sanctioned a few Chinese nationals and they actually listed probably, a dozen Bitcoin addresses that were associated with three individuals. And that, one of the critical tests for Bitcoin is whether or not some outside influence or some central party or a group of centralized parties could influence Bitcoin from the outside in. And that ultimately if Bitcoin would be at risk of failure, if you have someone who is known to be an illicit actor sent Bitcoin and not that, a company such as PayPal or visa or bank of America would prevent, a transaction is that whether or not the Bitcoin network at a protocol there would actually confirm a transaction that was otherwise valid based on the network’s consensus rules.

Parker Lewis: And that if that was brought to bear and if that was at risk, if that was made possible, then the network would simply be shown to be censorable. And if a single transaction, or a series of transactions associated with any individuals or any, any enterprises or, or potentially even nation States were shown to be sensible, then it also demonstrates to the network as a whole is sensible. And if the network is a whole censorable then the very basic functioning of Bitcoin is at and specifically the 21 million fixed supply, which in my view is the fundamental value proposition. And so when we think about the idea that Bitcoin is just for criminals, it’s one, it’s an admission of it is functional and that if it is functional, that it’s functional for everybody. But really then when you turn that on on it’s head is that it has to be functional for the most, “unwanted activity” to ensure or to serve as a litmus test that it is viable in all use cases.

Stephan Livera: Yeah. And, I love this point you also make in the article, which is around how the competition for Bitcoin is global and there’s people who produce them as value will accumulate more Bitcoin. Right. And you also point out here that the actual percentage of people who are doing illicit activities is going to be much smaller than the legitimate economy. And so it’s basically like throwing the baby out with the bath water to say it’s only being used by criminals.

Parker Lewis: Yeah. And one, idea here is that if you recognize what Bitcoin is and if you recognize to, whatever extent or to the extent that you understand it, that the Bitcoin does have a fixed supply and it’s designed to be a better form of money and the fact that it has a fixed supply will make it a more functional over time, medium of exchange with a more clear price signal and a more perfect information that, to recognize those facts and to believe that even if you kind of have blinders on that in that world when you, when you have the worlds of apples and Microsofts and Airbus and AT&T and GM and all the E and P companies Exxon mobile, Shell. And then when you think about all of the individuals, doctors, lawyers teachers, all of those people are competing for, finitely scarce resource. Who, amongst those people are going to create the most relative value and whoever does in aggregate is going to have the most Bitcoin. And to think, through some extension that, the illicit activity in a future Bitcoin economy will represent more than it does in the existing dollar economy is not really an application of, any logic at all.

Stephan Livera: Yup. That’s right. And it’s, it’s it’s a phenomenal series, what’s the feedback been so far and what are some ideas you’ve got on where you’re gonna take it next?

Parker Lewis: So the feedback’s generally been positive. There’s always some people that disagree with certain points and, and that’s ultimately the reason why I put the, put the information out there. It’s not that it’s by any means, essential source of truth, but it’s putting my ideas out there and, helping to articulate my thought process for people who, in many respects, likely as they’re coming into Bitcoin, will be asking a lot of the same questions that I asked over a period of time. And so the feedback’s been very positive and I continued to Dhruv who’s one of the cofounders here at Unchained he kind of, sometimes he’ll ask me laughing and say, how long are you going to keep doing this? And I just tell him how, however long it takes.

Parker Lewis: And so I don’t have an immediate plan. Initially I was doing it every week and now, for the last four or so, I’ve been doing it every three weeks. So I’m just going to keep writing. And just yesterday I put out a request for, for suggestions and there were about 20 great suggestions. So I think I’ve got all of my future material set for all of 2020, but we’ll see.

Stephan Livera: Very nice. And while we’re here, we’ve also got to talk about Caravan. So this new multisignature stateless coordinator. Now I’ve had a chance to just play with the tool. Can you just give an overview for the listeners who might not be familiar?

Parker Lewis: Yeah. So Caravan is a tool that we have been working on for probably the last six to nine months. And one of the things that and one of the reasons for it, a large portion of it is driven by the nature of our hosted application.

Parker Lewis: So we offer a two of three multisig for individuals in two different applications one where an individual or a business holds two keys and we hold one and that’s actually holding the physical keys in a manner in which we never have the private key manner that that is the clients. And then another application where we have one key, a client has one key and then a third party independent institution has the third key. And virtually everything that we build here at Unchained is on the foundation of multisig and, we think about the world of Bitcoin with the idea that security security of your Bitcoin, is ultimately greatest win. Individuals and clients hold their own keys and that we can add into that security element by creating redundancy, giving people access to multisig. And when we look at the problem set we as individuals believe that multisig provides a greater level of security than single sig.

Parker Lewis: And that when you look at the general and natural progression of people that enter Bitcoin, it is generally that the longer that someone is in Bitcoin, the more likely they are to self custody. But those people that self custody generally rely on single key setups. And so the foundation being, a collaborative custody approach where clients continue to hold their own keys but they get access not only to our technology to be able to coordinate keys in, into, to achieve multisite quorums, but then they have the benefit of us as an organization, not only securing a key, but then also being there on a daily basis to countersign. Whether it’s a client loses a key and they need to do a key sweep. Or if they simply want, to have two keys, one of them in deep cold storage sign a key and then have us countersign.

Parker Lewis: One of the key missing elements, and this is where Caravan comes in, is that our clients, even though they hold their own keys, are in most respects, unless they’re highly technical client, they are dependent on our hosted application. And one of the most often questions that would come up is, well, what happens if Unchained goes away? Or what happens if our website is down for an extended period of time when someone needs to access their Bitcoin? And in that respect, Caravan represents a really important security column for our clients, but then it has a number of other applications outside of that as well. And, the security column that it provides for our clients or really anyone who is interacting with any company like ourselves that is deploying multisig in the way that we, we are it provides individuals a way to interact with a third party to control the majority of their keys, but know that they have an easy path to spend their Bitcoin and to access their Bitcoin completely external to Unchained or, or external to the third party.

Parker Lewis: So that, in terms of the inception of the idea behind developing Caravan w w w was really where it began. But then ultimately the other reason is that it also provides a tool for individuals that don’t want to rely on a third party or interact with a third party to be able to access multisig and in a manner that that lowers the bar for them, for an individual who’s comfortable holding a single key and knows how to set up a hardware device. They, may value their anonymity and not value the additional security that our key can provide. And that we can provide financial partner. We want those people to access multisig as well. And so we think that more and more individuals will adopt multisig, whether they’re working with a third party or not.

Parker Lewis: And so today, Caravan presents values both for our clients as well as individuals that want to access multisig but may not have the tech technical capability. And then the third idea behind Caravan is that it is our hope that we’ll get community involvement and other, other contributors. And that Caravan won’t singularly do this, but that we can help contribute to the development of multisig standards. Because while we believe that multisig and the way that we deploy it provides greater security, we’re also recognizing that there are certain limitations of a multisig setup today. And, just as an example, one of those is that the end, the end state of where we hope to be with multisig is that the individuals can verify receive addresses on their actual devices. And is our hope that in working with various different hardware providers that we can drive towards standards to make that easy and where we hope that Caravan can be a tool, that not in all respects, but that in many respects, contributes to the creation of standards.

Stephan Livera: Right. Yeah, that’s a great point you make there because multisignature is one of those things where obviously there’s a lot of good arguments in favor of using it. It is obviously splitting up your keys. It makes it in some ways it makes it more difficult. Obviously it’s not a silver bullet. There are no silver bullets, but there are difficulties as well with doing multisig correctly. And it’s quite easy for people to shoot themselves in the foot if they don’t have the right setup. And that’s where obviously, having a service provider such as Unchained can help you with that. And there is still some need for building of standards and ways for people to use it in a more secure way. So for example with Ledger devices it’s a little bit more difficult to verify the address that you’re receiving to in these multisignature setups. So maybe it’d be good to also talk through what it looks like. So right now there’s like a version hosted on the Unchained Capital github site to Caravan site, although you are able to self host it as well and run your own version of it. Obviously connect with your own full node and so on. Can you just talk through what that process looks like in terms of the creation and the interact part?

Parker Lewis: Yeah. So and I can just lay out some of the, some of the basics of the way that the Caravan works. So, so one, yes, it is open source there. There is a way to access it on, on github, that’s hosted by Unchained, but you can, fork the code and, run it locally. But in terms of the capabilities, so one, it currently supports Trezors and Ledgers. It supports an open source SLIP 39 air gap protocol that we released called hermit. It can also take text. So if you created a signature offline and wanted to paste a signature and you could do that as well. It’s designed, to host or, or to enable any number of M of N type of multisig transactions.

Parker Lewis: So in our application, that’s two of three, but within Caravan you could create a two of two or a two of three or a three of five up to up to seven keys. And so, one of the things that if you interact and you go out and test Caravan, which you’ll see is one, if you already have a multisig setup and you have access to the redeem script, you can go to the Caravan website, paste in the redeem script, and then export your keys to verify that you have the right key and then use your hardware devices, whether it’s Trezor or Ledger, or if you’re running the open source hermit protocol, then you can create signatures and then broadcast. And, it is also designed as a default to, to use blockstream.info as as consensus.

Parker Lewis: But you can also connect it to your own full node. And so one thing to note about Caravan, one thing to be cognizant of if you’re testing Caravan and we’ve got certain how to videos on our YouTube page and maybe we can link to them in the show notes, but it is a stateless. It is a stateless multi-sig coordinator. And so if you were to upload multiple keys on the create tab as an example and were to generate a multisig address and then if you were to send any amount of Bitcoin there and then refresh the page without saving your redeem script and saving the derivation path for your keys you wouldn’t be able to spend those Bitcoin. And so that’s a really important dynamic of Caravan and limitation today to be cognizant of is that when you are using it, if you’re using it for testing purposes or if you’re a longterm holder and you want to actually use that to store any material amount of Bitcoin to be sure.

Parker Lewis: And there is a way to download the ownership information to download the per diem script that also includes the, the BIP 32 paths you need to store that information in order to then be able to spend from that address in the future. So there are limitations today, but there’s also a planned roadmap that we’re planning, to build out to allow it to be more functional. Today it’s a stateless coordinator but we also want to build more traditional function wallet functionality into it.

Stephan Livera: Excellent. Yeah. And I’ve had an opportunity to play around with it as well. I sent, I got 3 Trezors and I just made a little, just to play around, dip my toes in the water kind of thing. I sent like five bucks to the setup and so on. So you go to the create step and then basically you for each public key, you import the public key and then it will take you through to like a sort of a Trezor interface site. And then you would click allow and then that pulls in the public key from that device. And then it creates, and then you do that obviously three times or however many keys you put in and then you’ve got, it’ll show you, it’ll have like the extended public key. And then it’ll have the derivation path. You can think of that like a folder structure. Like your private keys live on the device, but then without knowing that derivation path, it’s like, it doesn’t know where to look. Right. And so that’s kind of like that part. And then you save the redeem script as you mentioned. And then later when you want to actually spend out of that, you go to the interact tab and then you can paste in the redeem script and then say, okay, spend that balance to this new address. So do you have any other tips for listeners on how they can use the tool or,

Parker Lewis: I mean, realistically, I think that the first step and for many people, our expectation is that Caravan may be their first their first exposure to multisig. So from a practical perspective, users should really use it to familiarize themselves with how multisig works and to simply go and experience it for themselves, to be able to understand how, when you’re actually signing transactions. And creating transactions kind of all of the inputs that are involved in that. It is our hope that over time that, we’ll build out the functionality of Caravan to support more wallets. One of the things that we certainly want to expand on Caravan is to add Coldcard support. But, but from a practical perspective, what Caravan would allow is any individual who wants to have the benefit of eliminating at least the key as a single point of failure to start to experience multisig for themselves. And that if you’re a company and you want to build a company like Unchained or an application like Unchained there are also libraries included that that are there, that people can view and be able to do a code review at the open source code. So, it can also be leveraged by companies that are looking to provide similar services as Unchained.

Stephan Livera: Excellent. And I think a good point you were touching on there as well is that it can actually be quite educational just to play around with the tool. Because when you go in and you actually set up some keys and then you start fiddling around with the different address types and then you see what that does to the other information, it might change the, obviously it will change the address, it might change the address length, it might start with instead of, so if you go with a P2SH that will start with a three and then there are other, there are two other types, there’s the P2SH-P2WSH pay to witness script hash. And then there’s the most advanced one, which is Pay to Witness Script hash. And then there’s also the difference there in terms of compatibility as well. So and again it gets complex, right? So it’s not for the faint of heart yet, but it’s for people who are curious and would like to learn a bit more about Bitcoin and particularly multisig.

Parker Lewis: Yeah one of the thing that I would just note is, we released this just a few weeks ago, but it’s also, as I was alluding to at the beginning of my explanation of it, it is a very effective tool to potentially recover funds from, from another multisig wallet. And,whether or not somebody new to multisig or they have an existing multisig provider. if you use the example of Unchained and this is how we’ve seen some of our existing customers already relying on, on Caravan is is, is simply when they’re getting set up with an Unchained vault to test an external spend. And that’s one of the other important things that Caravan teaches people is that when you’re operating with a company like Unchained that, and they think about multisig and two of three, there’s often times a default that, okay, if I have my two keys out of three, then whatever happens, I’m good.

Parker Lewis: And part of what Caravan educates people on is that there is actually additional information. And so in many ways, while there are still limitations of multisig, multisig does provide greater security despite those limitations. And it educates people in some ways about the fact that, and Trezor actually released a good article about this is that the idea of, what the Trezor device actually is and that when you think about it as a key store rather than your actual Bitcoin, it helps people also understand what’s happening when keys are combined. And then ultimately kind of detaching the idea that the Bitcoin are actually on the Trezor. The Bitcoin are just protected by the keys or the keys or the lock to the castle. And so kind of when you, if you’re using, my recommendation to people would just be that, if you’re trying it out, it’s your first time with multisig, make sure you’re doing it with small amounts, make sure that you store the information on the redeem script. And that also if you’re using third parties, whether it’s Unchained or others, that when you do go through that process of, even if you don’t intend to use it as an active component of your security, it is there to provide additional security and you should know how to use it should the need ever arise.

Stephan Livera: Right? Yeah. I think that’s a good point around the building comfort for the customer as well, that they can feel confident that they would be able to spend it on their own. Even if Unchained were to, hypothetically if Unchained were to disappear overnight, well, okay, I could still spend, I could still use this open source tool to spend it into another set that I would now control, et cetera. And obviously as all you mentioned that you can, obviously you can do on main net just with small amounts or you can just do test net coins as well. So that’s also something for that people to use.

Parker Lewis: Correct.

Stephan Livera: One other point. So in terms of Unchained Capital and the way the approaches with multisig, it looks like the main idea is to use one address, right? It’s, but then they, there can be some trade off there between security and privacy there because from a privacy point of view, address reuse. If somebody were to keep, say spending, they will, so say someone’s stacking sats right now, they keep stacking into that address. That part is probably not ideal, but at the same time, that’s a bit of a difficult thing to navigate. How do you think about that?

Parker Lewis: Yeah, so one of the ways that we think about that is understanding the complexity around key management and coordination of keys and in the privacy components and then the ultimate security components. And when you think about the aggregate and the trade offs involved with that, the one thing to note is that when a transaction’s actually been spent or there’ve been funds spent from a particular address and there have been signatures and redeem scripts broadcast the network that the funds if you were to to respend them to an old address that’s previously been spent from, your actual security has been reduced. And when you think about the coordination function on our side where we’re managing multiple keys and we’re deriving the follow on addresses from each individual xPub that is used to comprise a multisig address that in its current state, the way that our application works is that any time, basically a vault address remains the same and that anytime you spend the remaining funds or that the change is swept to a new address to ensure that you aren’t depositing back into an address that has previously been spent from there is a privacy limitation.

Parker Lewis: If you keep a vault address and have multiple deposits there, that is something that we actively talk about in terms of updating it to and making the, solving the key coordination page to allow for multiple for you to spend to a new address every single time. And that’s something that I expect to be implemented. But right now we’re making the trade off that in terms of the complexity of managing keys relative to the privacy of spending to a single address multiple times. That’s dictated the current approach, but over time will likely improve that functionality to, to make it more like a Trezor where every time you’re spending, you’re spending to a new unique address.

Stephan Livera: Yup. Yeah. And I think that makes a lot of sense. As, as this tool is relatively new. People need to be more careful about it and that’s why I probably security is more important than privacy at this point. So I think that’s a good decision. So look, I guess going forward, what are you thinking people might use Caravan for? I guess we’ve spoken about today, but how might this change in the future and kind of future roadmap ideas?

Parker Lewis: Yeah. And so Will Cole who just this week came on to be our chief product officer. Ge will really control the roadmap. So if people are are interested in contributing he’s definitely an individual here in addition to Dhruv to coordinate with I think over time and most immediately it will, it will simply be improving the functionality of Caravan to be able to, as an example today can only handle a single address. And, when you spend it essentially requires that all of that, the Bitcoin related to that address be spent. I think that that’s a natural thing that will improve in terms of greater flexibility there and the ability to manage change. I think a component to be able, I think this will always be separate, but the ability to layer on a state into that will also likely come.

Parker Lewis: And then the addition of additional wallets, that natively support, or that are compatible with Caravan. So I think that those are the types of things that are most immediately on the horizon. But again, we designed Caravan for, for many reasons, one of those being, to drive toward industry standards or at least make our own contributions in that first and foremost comes from our, from, from our own side of incorporating standards and the Caravan. But, we do hope that additional people, will come to contribute to Caravan where, we work with Christopher Allen actively and we’re working on ways that we can collaborate with him in the blockchain commons more. And so there’s ideas that we’re talking about with him to, help get more involvement and more involvement outside of Unchained and, how that project is actually managed and how that looks over time.

Parker Lewis: So there’s a lot of future plans, but I think in the most immediate terms, it’s improving base functionality, but the ultimate goal is to drive towards standards and to have more and more devices compatible with Caravan.

Stephan Livera: Yeah, that’s excellent. And I guess from a industry perspective, is there anything that you would like to see, perhaps even from the hardware wallets or from any other parties in the, in the Bitcoin world, what would you like to see?

Parker Lewis: My only wish for Christmas is to have the ability, and I know that Coldcard, is advancing down this path and is likely the leader of the pack. But in terms of, across the board improved ability to validate addresses within multisig quorums on the actual hardware devices because that is a core limitation and the number of things that individuals can use and implement to ensure that addresses that they’re getting aren’t potentially being spoofed.

Parker Lewis: But ultimately at the end of the day, the solution to that problem is validating addresses on devices. If anybody’s ever used a Trezor, when they click to a receive address, an address appears within their browser, but then the address ultimately appears on the device and the device is the authority. If there is a distinction between, the limitation between where multisig is today and single key storage, it’s that ability, to validate addresses, on device. And so, as it relates to the hardware providers it would be delving around multisig to make that easier. Whether it’s an individual coordinating with Unchained or whether it’s individual on their own to be able to have the functionality with hardware devices, and ideally across different manufacturers to have, say a treasurer in a ledger within the same multisig quorum and being able, to validate, receive addresses on both of those devices.

Stephan Livera: Yeah, that’s the Holy grail hey, that’s what we’re hoping to get towards. Look, I think that’s probably going to do it for today, but Parker, make sure you let the listeners know where they can follow you online. And obviously I’ll put this in the show notes, but just shout it out now as well.

Parker Lewis: Yeah. So one place on Twitter is @ParkeraLewis, and then another place is on our Unchained Capital blog where I I always post the Gradually, then Suddenly pieces on Twitter as well. But we’ve got a lot of other quality content on our Unchained Capital blog. You can include the link if you could include the link in the show notes, it’s unchained-capital.com and then you can easily find the blog. So it’s not just me who’s contributing to content on our side, but Dhruv releases a lot of good content Phil does as well. I expect Will to over time. And then, one of the big pieces, and this is the project that we’re working on currently is beginning to release pieces on how multisig technically works for people that as they, as we approach the next halvening and as we expect more people to be adopting multisig part of our job and part of what we view as our responsibility is to educate people on how multisig technically works to create that mental framework for people.

Stephan Livera: That sounds really great. I’m looking forward to seeing some of that. But look, that’s gonna do it for today. Thank you very much for joining me today, Parker.

Parker Lewis: All right, thanks for having me on.

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