The co-founder of Samourai Wallet, rejoins me in this episode to talk about the current state of bitcoin privacy techniques, and some exciting updates coming soon to Samourai Wallet. We talk: 

• Creeping KYC and has bitcoin social culture regressed? 
• Does taint exist? 
• Coin selection algorithms. STONEWALL, and Solomon
• Stowaway / PayJoin
• Wallet fingerprinting and whether it’s an issue
• Mobile mixing
• Dojo and Ronin Dojo
• Thoughts on Lightning and Liquid

Samourai Wallet links:

• Website: Samouraiwallet.com
• Twitter: @SamouraiWallet
• SW Telegram: https://t.me/SamouraiWallet 
• SW Whirlpool Trollbox Telegram: https://t.me/whirlpool_trollbox 
• SW Dojo room: https://t.me/samourai_dojo 
• Ronin Dojo: https://t.me/RoninDojoUI 

Relevant Prior interviews: 

• SLP29 with SW
• SLP78 with SW
• SLP117 with Pura Vida
• SLP130 with Ergo
• SLP138 with Matt Odell

Sponsor links:

• Kraken
• Unchained Capital
• CypherWheel by CypherSafe

Stephan Livera links:

• Show notes and website
• Follow me on twitter @stephanlivera
• Subscribe to the podcast
• Patreon @stephanlivera

Podcast Transcript:

Stephan Livera:

Samourai Wallet. Welcome back to the show.

Samourai Wallet:

Good to be back. Thank you for having me.

Stephan Livera:

So obviously I’m a big fan of the wallet. This is now your third appearance on the show. We’ve got to get a bit of an update from you on what’s going on with Samourai wallet and “Bitcoin for the streets.” Let’s start with “Bitcoin for the streets,” right. So this is the thing that has come up in some of our earlier discussions and also other, let’s call them related podcast episodes. People like Pura Vida or ErgoBTC who was on the show as well, where we’re in this environment where we’re seeing more and more creeping KYC as you say. How do you see that playing out?

Samourai Wallet:

Creeping KYC in general?

Stephan Livera:

Yeah.

Samourai Wallet:

Well, we know how it plays out. We’ve seen the introduction of KYC in the 1970s. We’ve seen the massive enlargement of the KYC program after 9/11 encoded in the Patriot Act. And we’re at the point now where we’re starting to see everyday people can be financially excluded as a result of this system. So if these people make the wrong social move, they might find themselves on the wrong end of the ability to get a bank account or anything like this. So we know what KYC ends up as, and “Bitcoin for the streets” is kind of the antidote to that. And we started that slogan towards the end of 2019, “Bitcoin is for the streets”, in response to the growing KYC based infrastructure not only on Bitcoin main chain, but on Lightning and other various aspects. And we just felt like it was time for Bitcoin users to get back to their roots, to take a self-reflective stance and ask themselves, “Is this thing going the right way?” Yes, it’s successful. Bitcoin is successful, objectively, from when I started in 2013. So when I started in 2013 to now, Bitcoin is more successful: there’s more users, there’s a higher market price, there’s more services. All of that is true. But culturally, is it going in the right direction, or have we just built a replacement for the existing system?

Stephan Livera:

Gotcha. Some of this discussion also reminds me of this debate about okay, HODLing and spending and so on. It’s fair to say that the economics of it are driven by the HODLing factor, but I see you as making more of a social commentary argument here around the use of Bitcoin in day-to-day spending as as opposed to HODLing. Now, in fairness, I’m more on that HODL side, but my view is more like, if you are spending, when you do so, you should use a CoinJoin kind of spend. What’s your view?

Samourai Wallet:

When I came into Bitcoin, what interested me about it was the economics, as what I would consider an Austrian. Well, it’s weird with Austrians. You either really hate Bitcoin or you’re really into it. It’s a very strange thing. So that interested me just in general, but what really got me going was that I needed to move money from the US to the UK and it was very expensive to do that. There wasn’t TransferWise or if there was, it was very early. So it was a $50 thing to move funds from the US to the UK. And I needed something that I could do that with. Then Bitcoin checked all those boxes. So I came into it because I needed it from a utility standpoint. But what interested me was the economics of it all. Shortly after that time, I have been living on Bitcoin, fully. I don’t make a fiat salary. I make a Bitcoin salary and that’s changed the way that I think about Bitcoin, from less of a theoretical economist point of view to more of a utility point of view. Because I use this on the streets every single day. If I’m unable to convert BTC into some sort of currency that most people will accept, whether that be fiat in the form of bank notes or fiat in the form of a gift card, then I have a real serious issue. And that’s really where Samourai Wallet started and came from, was my co-founder and I both living on Bitcoin, both earning in Bitcoin, both requiring Bitcoin to work for us in order to pay our rent and to eat food and to do all this stuff that you need to do to live. We didn’t feel like there was a wallet out there that satisfied any of those types of users. And even if that was such a small niche of users, we felt like, well, we should make the software for them. And that’s where Samourai has come from.

Stephan Livera:

Yeah. It’s interesting because you’re eating your own dog food to use the software term that in some cases you get people who make software for who they think is their customer, but then they haven’t really got a clear picture if they’re not using it for themselves and day-to-day, seeing the troubles and the problems and what needs to be fixed and improved on the product or on the service.

Samourai Wallet:

Yeah, absolutely. You have to eat your own dog food. It’s absolutely essential, especially with Bitcoin. And with 2015, 2016 we saw the rise of a lot of apps, a lot of services out there, or the decline of a lot of giants who were titans of a very small industry just completely crumble, vanish, or fade into technological irrelevance, precisely because on the product level they stopped using their product. They have no idea what it is they’re trying to do. And they kept trying to design “Bitcoin for grandma” or they kept trying to design Bitcoin for these non-existent users, when Bitcoin users were right there demanding the features to make it usable for them. I say it a lot in our telegram room and there is a large amount of truth to it, but we built Samourai for us. You’re along for the ride, so you may not like our decisions to, for example, remove fiat from the wallet. You may think that was a stupid choice. You may think that was a bad product move and you’re totally entitled to that opinion. But we make this product for us, so we want to use this in the way that we want to use it. And if you’re into that, and you like the product, then you’re going to really enjoy it. And then if not, then there’s so many other wallets out there.

Stephan Livera:

Gotcha. Yeah. And there’s definitely a focus. I see, even as I’m in the chat room and I see the focus around the use of Bitcoin in Darknet markets, and it’s this idea that, well, if the Darknet markets aren’t using whatever this product is, then maybe it’s not practical or it’s not ready yet. What’s your thought on that?

Samourai Wallet:

Well we have to ask, who were the first group of people to implement Bitcoin in an economic and e-commerce sort of setting? And it was the Darknet markets. They came first. They didn’t look at it for the economics. They didn’t look at it and go, oh, yeah, this is limited supply. Okay, great, yeah. That’s not what they’re in there for. They were there for the censorship resistance. They were there for the finality the instant finality and the fact that they did not have to rely on a third party to perform whatever transactions they were performing. So they came in and they accepted it before anyone else, before any of the nerds did, before anyone else. Because they saw real use and utility and it solved the problem for them and it’s still, to this day, is solving a problem for them. So, if the Darknet markets aren’t taking up your technology, in the relation of cryptocurrency—your privacy coin, your improvement to the network, whatever it is—then I think that that deserves some reflection. You have to ask yourself, well, why? Why not? With Bitcoin even so early, Silk Road, 2011 when that started, they took that risk, they implemented this and it just worked. They didn’t have to do a bunch of stuff. It just worked. So yeah, Bitcoin is, if you really try to understand it, it looks very complicated on the surface, but in fact it’s complicated, but there’s beauty in its simplicity. You can grok it from a 1,000 mile view, whereas I see a lot of these other things start popping up on side chains or Layer 2 stuff, and it requires a lot, lot more thought around it because it’s so much more complex and yeah, there’s just a beautiful simplicity to Bitcoin. I think that attracted the Darknet because of that, it was easy to implement and it served the purpose.

Stephan Livera:

Yeah. And as I understand today, Darknet markets online, they primarily use Bitcoin, but there’s also some use of Monero, but they’re not using Zcash in any meaningful way. They’re not using any of these other cryptocurrencies. It’s basically Bitcoin because it’s the economic winner. And potentially Monero.

Samourai Wallet:

I’ve seen Monero and Bitcoin, yeah. I heard that some Darknet was accepting Dash or something, which is laughable. That coin has KYC built in at the protocol level. It’s a joke, but I’ve heard rumblings of, “Oh, this Darknet is going to implement this coin.” And I think those rumblings obviously are not true, but I think that they’re useful for pumping whatever coin it is that that person is trying to pump because people do know the value that a Darknet implementing a certain coin has. That’s a big event for that coin.

Stephan Livera:

I guess the point as you’re saying is that Darknet markets are not yet using Lightning, for example.

Samourai Wallet:

I don’t know of any, no. Yeah, you would think that Lightning would be an ideal choice for a Darknet. Because you have to deal with confirmations and the risk of double spends and all sorts of stuff when you’re transacting anywhere, but especially what you could classify as a moderately risky transaction. So you would think that Lightning network, which claims to be private, which I don’t know about, I don’t know enough about the Lightning network. And also you do not have the issue of double spending. You do not have the issue of waiting around for confirmations. You would think that that would be a perfect application at a retail level. Why haven’t they done that?

Stephan Livera:

My thought on that is more like, maybe it’s still early. Maybe it’s still being developed.

Samourai Wallet:

Totally. I think it is too early. I think , yeah, that’s the right answer. I think it’s incredibly complicated, it’s not straightforward to implement. And I think anyone who is a merchant and has tried implementing Lightning to serve more than just a small group of people on Twitter, to actually serve a large number of consumers, they run into the same kind of issues, scaling issues and all sorts of stuff—rebalancing their channels and not having enough inbound liquidity and not having enough outbound liquidity or whatever—there’s all these things that happen and I’m not knocking the Lightning network, it’s an early tech, but it certainly isn’t ready. And there’s so many different What Ifs that could happen. And that was my point about the simplicity of Bitcoin. With Bitcoin, the state is either spent or unspent. That’s it. The UTXO is either existing or it’s not.

Stephan Livera:

Let’s go more into Samourai wallet and the privacy implications and some of the different products and so on. I think it might be good to start with a high level concept. As I understand of you from you and the team at Samourai is that “taint” does not exist and it is observed only by each different participant who is either observing the blockchain or using the blockchain themselves. And then I’ve also heard from TdevD (@SamouraiDev) the CTO and co-founder of Samourai wallet and his view is speaking about these concepts like fade and scatter and dilution. Can you tell us a little bit about that and taint in general, the Samourai wallet position?

Samourai Wallet:

Sure. Well, taint doesn’t exist as you say. I mean it’s just a human thing put on top of an agnostic layer. And it doesn’t exist in Bitcoin. It doesn’t exist in fiat, but it does exist because it’s there, right? People can go to jail based on the history of their funds. People can be denied, like I said earlier, bank accounts because they can’t prove where their wealth has come from. So the concept of taint, it’s kinda like where does the government derive its legitimacy from? Who cares? They are here, right? And that’s the same thing with taints here. So when you look at it that way, you have to play their game. And in playing their game is where we come up with concepts like scatter and fade. So scatter, let’s see how we can explain scatter. When you have a set of UTXOs, scatter measures how best to spend a UTXO, so as to preserve the privacy that has been attained prior to that transaction. So if you’ve mixed, if you’ve done a transaction like a STONEWALL or something like this, scatter will determine and simulate what this spend will do to your overall transaction graph and your overall cluster. Fade, on the opposite end, measures how much distance has been applied since one transaction. And this is all that technical stuff and stuff that happens in the background of the wallet. When the wallet decides, “I’m going to use this and this UTXO to compose this transaction.”

Stephan Livera:

Gotcha. You know what, just to keep it accessible. Obviously I know what you’re speaking about and I think many of my listeners do, but just for those who are not following, just a super quick: UTXO means unspent transaction output. And so remember when your wallet spends Bitcoins, what it’s really doing is it’s signing certain inputs and the best analogy I’ve heard is like you’ve got a piece of gold, I’ve got a hunk of gold and then I melt it down and recast that into little bits that I send to my participant or to the other person. And then I would receive some of that back as change. So quick example, if I’ve got 0.5 Bitcoins and I want to spend 0.1 BTC just, high level, think of it like I’m spending 0.1 BTC to use Samourai wallet and then 0.4 BTC is coming back to me. That’s my change. UTXO, change output rather. And so in blockchain analysis, one of the things people talk about is this idea of proximity to, for example, the Mt Gox hack, which was a famous exchange in 2013. And some of the coins associated with that will get flagged by analysis of chains by a company. And bringing it back to this concept of scatter and fade. Fade in this case is measuring distance from the Mount Gox address, for example.

Samourai Wallet:

And even more than just distance from a specific address, it’s more about, so let’s, let’s use the example of a Darknet market. Let’s say I have done an illicit transaction on the Darknet market, this is very serious, I bought some sort of religious material in some theocracy. I could go to jail for a long time for this grave sin. And I did that three weeks ago and I noted that down, in my wallet I made a note and said, this transaction refers to this illicit religious purchase. What fade would do is when selecting UTXOs, as you just explained what UTXO is to the wallet selects UTXOs to make a transaction. When it’s doing that, it will select UTXOs that maximize the fade between that illicit transaction and whatever transaction you’re making now and at the same time display that to the user and show them just how much fade and how much distance has been applied.

Stephan Livera:

Gotcha. And so for most users, you’re typically, if you’re just coming from a random Bitcoin wallet, you would just see your balance, but actually in the background, what your wallet is doing—think of your wallet like a key chain. And it holds the keys for lots of these little pieces of Bitcoin as we mentioned, those little chunks of gold or UTXOs in our model. And that’s one thing I like about the Samourai wallet because it actually deals with that complexity for the user so long as you use some of the tools and the algorithms that are in place. So an example here is the STONEWALL algorithm as you mentioned. So can you tell us a little bit about STONEWALL and what you’re thinking to do with that and building in the scatter and fade idea?

Samourai Wallet:

Yeah. So STONEWALL was one of our first decoy features. I’ll call it a decoy feature. And the idea of STONEWALL was let’s create a transaction that appears to be a CoinJoin, mathematically looks like a CoinJoin and you can’t prove it’s not a CoinJoin. But we know, and the user who made the transaction knows it’s not actually a CoinJoin. And that was in 2015 that’s one of our earliest features. It wasn’t called STONEWALL back then though. And what that does is it introduces these transactions into the blockchain where anyone who stumbled across them, or an analyst who’s looking for a CoinJoin style transactions would come across these and they may mark them as, “Oh, these are CoinJoins” or something like this, but they’re not. So anything that we can do to make their information the transaction graph incorrect—their clusters contain more false positives—we look at that as a win. So that’s the idea around STONEWALL. And then we’ve extended that now in 2018 where we came out with something called Cahoots, which is a multi-person, two-person CoinJoining technology. And there’s two types of Cahoots. One is a STONEWALL x2. So this is actually a STONEWALL that pretends to be a CoinJoin, but it’s actually a CoinJoin because it’s two people actually joining their coins together. But they can’t be differentiated from a standard STONEWALL. So what we’ve done in doing that is now any transaction that’s a STONEWALL as of the date that we released STONEWALL x2 could be a CoinJoin, could be a fake CoinJoin, impossible to tell on the blockchain. So that again adds a lot of doubt to the confidence of the chain analysis data sets when they’re dealing with STONEWALL transactions.

Stephan Livera:

Right. And so again, just a little bit of background for the listener who might not have listened to other episodes. One of the key ways of framing or thinking about this from a chain spy or chain analysis type of person is they’re looking at a certain cluster of addresses. So remember we were talking about UTXOs, well, one of the ways that chain spy companies try to break that is by essentially creating what we call a transaction graph. And then looking for all the linkages between that and they might have exchanged data and then they might have an insight into, “Oh okay, this is Stephan Livera, and he KYCed with ABC exchange and we saw he withdrew to this address and this is the trace of the transactions.” And so STONEWALL is a kind of way of helping break that clustering idea.

Samourai Wallet:

Yeah. So we’ve had some insiders at various chain analysis companies who like what we do and they do feed us information every once in awhile. And I don’t know how reliable or accurate it is, but I like to think it’s probably true. When this particular company encounters a STONEWALL transaction they just put it to the side. They don’t bother adding it to their cluster because they realize that they cannot, with any mathematical certainty, determine the input to output mappings. And if they add it to their cluster it would just increase the amount of incorrect data and it would increase the amount of false positives that are triggered. And look, they don’t want false positives triggering because then their customers get mad at them. Their customers who are the exchanges say, “Hey, all of these people who have no business getting shut down are getting shut down because your software is telling us that they should be.”

Stephan Livera:

The other important point is that just bare STONEWALL versus doing something like running through a Whirlpool CoinJoin and then doing a STONEWALL is a more powerful combination. So can you tell us a little bit about the flow there? I know we spoke about this in the last episode, but just for the listeners who aren’t familiar, that idea of, running through a Whirlpool CoinJoin and then doing your STONEWALLs.

Samourai Wallet:

Yeah, sure. Whirlpool is our CoinJoin implementation. And when you enter into Whirlpool, no matter with what amount you enter into, on the other end of the whirlpool, when it’s done with its process, you’re going to have a bunch of like sized outputs depending on which pool you entered. So if you entered into the 0.01 BTC Pool, then you’ll have a bunch of outputs of 0.01 BTC. When you go to spend those, because it’s very likely that you’re going to need to spend more than an exact amount of 0.01 BTC, your wallet will probably need to choose multiple inputs when you’re making a transaction, right? So if you’re spending a 0.05 BTC, then your wallet will need to select 5 .01 UTXOs to make that transaction. Now most wallets will just immediately select those five, make the transaction, and if there’s change required, send it right back to you. This is less than ideal because there is no mathematical uncertainty there. It’s 100% certain that these five inputs, these five 0.01 BTC inputs belong to the same entity and they’re going to this destination. And if there’s a change output then they know that this change output belongs to the original entity as well. In order to combat this, what we’ve done is put a PostMix spending tools directly in the wallet and one of those PostMix tools is STONEWALL or STONEWALL x2 and the reason you would want to level up your Whirlpool with a STONEWALL on the way out is additional entropy or additional confusion as to, “Well, I know this was a CoinJoin back one hop, but now this spend, I can’t figure it out. Is this, who’s the owner of these inputs?” And especially if it’s an actual STONEWALL x2 which is a secondary CoinJoin with a friend, there’s really no hope at that point of tracking the inputs to outputs. And that’s on the spent. So you got the Whirlpool process, which you can think of doing that before spending like you’re preparing your wallet, right? This isn’t something that you’re spending to Whirlpool. That’s not how it works here. You’re transferring your funds into your Whirlpool specific area of the wallet which is segregated from the main area of your wallet and you’re preparing for the point where you will need to spend so that when you do go to spend, you’re not sacrificing a huge amount of your privacy to do so.

Stephan Livera:

I think another way to think about this, if you are a merchant or if you are receiving a lot of inputs because you’re getting paid, you have to also remember that one of the ways that chain analysis and other related companies and Cyber Trace and CipherBlade and a few of these other ones Elliptic. One thing that they could do is if they know that’s your address, they can send you one little piece of Bitcoin and then see where it goes afterwards and then try to understand, “Ah okay, this is where it’s gone and connected through to this guy’s cold storage or outwards afterwards.” But one way to think about that now is if you first run that through Whirlpool, then you are breaking the link.

Samourai Wallet:

They’re definitely breaking the link. Yeah. There’s nowhere to go from there. So years ago we implemented something called Dust TX alerts. This is to combat the exact scenario that you’ve just mentioned where if you have a known address an analysis company could send you a very small amount of Bitcoin there. So maybe it’s an address you shared on Twitter, and follow the flow of those funds. Back then most wallets just didn’t show you anything to do with UTXOs at all. So you had no idea really that, that would follow you around throughout your transactions history. And in Samourai wallet that’s where the feature “Do Not Spend,” came from. Right now it’s being used mostly as a reverse coin control feature, but that really came from the ability to say, “Hey, dust has entered your wallet. This might be a way to track you. Would you like to mark this as, ‘Do Not Spend?'” And that’s where it came from.

Stephan Livera:

And I think while we’re on this topic of “Do Not Spend,” we should probably also touch on toxic change. So again, for the background, for the listeners, when you do a Samourai, while it’s a Whirlpool, what actually is happening first is you need to do a TX zero. So let’s make an example. Let’s say we’re going in the 0.01 BTC pool and I’ve got something like 0.055 BTC. Just a little bit over 0.05 BTC. And then I do my TX zero and that cuts that down into five 0.01 BTC pieces, just a little bit more to account for mining fee and so on. And then part of the fee goes to Samourai wallet as well. And then there’ll be a little hunk of change, a little piece of change that comes back into my main wallet, from a analysis point of view that’s known as toxic change. Can you tell us a little bit about that and how to manage that?

Samourai Wallet:

That was a excellent description of what toxic change is, and it’s a very hard problem to deal with. We’ve done our best. And I think we’ve done a good job of making sure that that toxic change, which is a reality of Bitcoin. The UTXO model. You can’t get around it. We’ve made sure that that toxic change at the very least is completely separated from the actual mixing that occurs after the TX zero. It goes back to your main account in your Samourai wallet, your main wallet view. But you’re absolutely right. Even keeping it out of the main mix and putting it segregated, there’s still a risk there. And the risk is that you will use that change in another transaction that, say let’s pretend you’re now sending to some sort of KYC service. You would use that change as part of the transaction that you’re making to this KYC service, thereby linking that this particular TX zero belongs to this KYCed identity. Now, your threat model that might not worry you so much because you’re not particularly worried that Coinbase is going to shut you down. You should be, but you’re not, and that might not bother you. But I think that it’s something that normally users shouldn’t really have to worry about, but the reality of Bitcoin is that they do have to worry about that right now. We’re doing a lot though on this, in following updates. We’re working right now on a big update to Samourai wallet, which includes mobile mixing. And as part of one of the updates that come shortly after that, we’ll be introducing something called Bad Bank. And what Bad Bank is, is another completely separate area of your wallet. Now it’s still part of your wallet with your 12 words and your passwords. You can still restore the Bad Bank. It’s not custodial or anything like that you’re in control at all times, but it’s just a separate derivation of your wallet to keep all of these things that could really trip you up away from your primary balance and away from your Whirlpool balance. So you have three different areas within your wallet. And one of the really cool things about the toxic change, the TX zero change is that it actually becomes really useful to use for certain types of transactions because the assumptions are that each TX zero belongs to this one entity. Therefore, you would make the assumption that if you had a transaction with the change outputs of two TX zeros, those would be the same entity in one transaction. But you can’t necessarily say that because of transactions like Stowaway.

Stephan Livera:

And what’s a Stowaway?

Samourai Wallet:

So Stowaway is, we released this at the same time that we released STONEWALL x2, it’s a type of Cahoots transaction because it’s a peer-to-peer CoinJoin between two participants. It’s also known in the industry as a Payjoin or as a Pay to Endpoint. We introduced it as Stowaway. So a Stowaway is a really cool transaction because it looks, on the surface, if you look at it on the blockchain, it looks like a simple transaction. What we refer to as a simple transaction is two outputs.

Stephan Livera:

Like two inputs two outputs.

Samourai Wallet:

The number of inputs can be many. It can be hundreds of inputs, but two outputs and output one or output output zero could be the destination. And the second output would be the change back. That’s the assumption, that simple transaction like that where you have two outputs, it’s generally accepted by most that that’s likely to be destination and change. And then all the inputs must belong to one person or one entity. So if you’re a chain analysis company and that’s your assumption, you’re in for a real treat because with Stowaway we create simple transactions. But on the input side, those are two participants. Those are two separate entities. So if you’re using your TX zero change in particular on these Stowaways, you have TX zero from user one and TX zero from user two and then Stowaway destination. The cluster is completely wrong and completely broken. And what ends up happening is all Samourai wallet users start to generate this giant cluster. And it’s kind of cool because you can imagine these people, these chain analysis companies encountering this cluster and thinking like, “What do we do with this? How do we deal with this?” Because we know that we cannot make any assumptions about the composition of these transactions.

Stephan Livera:

I see. So essentially they have to either cluster you all together and then the problem is if there are enough people doing Stowaways with each other, then it just becomes too difficult.

Samourai Wallet:

You can’t tell. You wouldn’t be able to know. Since the day we released Stowaway, that has meant that any transaction on the blockchain, that has two outputs? That could be a Stowaway.

Stephan Livera:

Let’s summarize that. So the STONEWALL is the one where you’re using the algorithm and it’s just you. STONEWALL x2 is the one where you and I are doing a transaction together to spend to somebody else. And then the Stowaway is a transaction between two users.

Samourai Wallet:

So if I want to send you Bitcoin, I would do a Stowaway with you. With you and to you.

Stephan Livera:

The only part though is, and this comes up: wallet fingerprinting. So this is something where even if you are, from a network perspective, you use Tor and so on. And even again, let’s be clear, Tor is not a silver bullet, but let’s say you use Tor and you will find from a network perspective, let’s say you used CoinJoin techniques and you’ll find from a transaction graph perspective, another way by which you can be fingerprinted is certain ways that a wallet crafts a transaction. And some examples here would be the nLockTime and sequence number and RBF signaling (RBF: Replace-By-Fee). So can you tell us a little bit of your thoughts on wallet fingerprinting?

Samourai Wallet:

Yeah that’s absolutely right. Bitcoin core has a fingerprint with nLockTime +1, I believe is what it is. Various wallets have fingerprints based on the way they order outputs in a transaction. Very, very early on 2015, I believe Kristov Atlas who’s a security researcher in Bitcoin created BIP 0069, which is a BIP that makes the sorting of inputs and outputs deterministic. So that is a way to try to combat the fingerprinting of wallet software based solely on the way they sort—

Stephan Livera:

That they order the outputs?

Samourai Wallet:

Exactly. Because at one point you would have something like, I think blockchain.info. They always put the destination as the first the first output. There you really can’t get around it. There is going to be fingerprinting. One thing that we’ve talked about at Samourai, we don’t identify this as a huge problem, first of all for us to solve. But we have talked about it and one of the things we could do is, is have like a profiles in the wallet. Say, “Hey, I want the wallet to emulate a Bitcoin core wallet now, or I want it to emulate an Electrum wallet now,” and whatever we can determine as Bitcoin core fingerprint, which is the nLockTime or Electrum, which is, I’m not entirely sure we could then simulate.

Stephan Livera:

And you can kind of bluff as that way.

Samourai Wallet:

Yeah, you could do that. Who cares if you’re using Electrum or Wasabi or Bitcoin core or something, that’s not a huge attack vector. It’s one, it’s a string to pull on for sure. But it’s not like the main thing. In your example, the user I think is pretty well covered. If they’re running their own node and they’re going through Tor and they’re doing all that sort of stuff, I think they’ll be okay. They have bigger, much bigger issues. Coin selection and PostMix spending and stuff like that, than to worry about wallet fingerprinting, I think.

Stephan Livera:

Gotcha. Another topic I’m keen to touch on is coin selection. So, obviously STONEWALL is a big factor inside of that. And so again, for listeners who are not familiar, coin selection refers to your wallet. Remember your wallet is a key chain and it’s got lots of different pieces of Bitcoin. And then coin selection relates to which of those pieces does it choose to spend. And so Samourai wallet, you mentioned the STONEWALL, which is like an algorithm that you can cleverly merge different UTXOs in such a way that you’re keeping track of things like scatter and fade and so on. And you mentioned you’ve got another coin selection algorithm coming called Solomon. So can you tell us about that?

Samourai Wallet:

So like I said though, Stowaway was a very, very early innovation at Samourai and it’s still rather rudimentary. It doesn’t remember past activity. When you do a STONEWALL today, it’s blind to the past. So a lot of stuff gets selected. UTXOs say, oh this one and this one, there’s no combination that these are connected. Therefore, I’ll select these two and then it will go forward. But other than not using UTXOs that have been seen together in the past. And input merge, besides doing that, which I think is just a basic thing that all wallets should aim to do. It’s not that smart if you understand what I mean. Solomon is the name of our upcoming UTXO selection algorithm that covers STONEWALL, that covers Stowaway and that covers some other types of transactions that we have coming down the line. So it’s a more encompassing algorithm and that’s just the result of many years of development of these different algorithms finally converging to a point where it makes sense to replace these different algorithms with one overarching one. With one overarching one to tie everything together, so Solomon will remember a transaction that you’ve noted down and Solomon will keep track of how much fade has been achieved since you noted that transaction down in relation to where you are today. And it will make intelligent choices on UTXO selection to maximize the scatter and fade of the transaction.

Stephan Livera:

I like that approach as well because it means the user has to do less thinking about their own UTXO set. And if we want Bitcoin to be a tool that is available to people who are not necessarily hardcore Bitcoin enthusiasts, like say you and I are, or many of my listeners, let’s be honest. It needs to be able to be used without such a conscientious decision making about every single transaction. And if we can use an algorithm to sort of help make smarter decisions for you, then that’s a good step.

Samourai Wallet:

The algorithm will be able to do it way better than you will.

Stephan Livera:

Even if you were, even if you are @LaurentMT or someone like that.

Samourai Wallet:

Exactly. The algorithm is @LaurentMT distilled into an algorithm. You know, like it’s even better than Laurent. It’s great and it’s a very good selection algorithm and you’ll get into trouble trying to do this, manage this all yourself. It doesn’t matter who you are. You will make mistakes. If your strategy relies on note-taking, like labeling each transaction that you make, it’s not sustainable. It’s good for us, but it’s not a longterm solution. And it’s not a grandma argument I’m making because I really hate the Bitcoin for grandmas argument. I’m not making that argument at all. I want hardcore users, but I don’t think they have to be hardcore nerds. I want them to be hardcore about privacy. I want them to be hardcore about sovereignty. I want them to be hardcore about censorship resistance. I don’t want them to have to understand the complexities of UTXO management.

Stephan Livera:

One other point with Payjoin or Stowaway: Are there any thoughts or ideas you have on making that work across wallets or for example, if BTCPay Server were to have a Payjoin way of the merchant offering the user some way of doing a Payjoin as a payment?

Samourai Wallet:

Yes. I think that’s more of the idea around pay to endpoint. Beause you’re paying until the endpoint. As opposed to Stowaway which is really about peer-to-peer. It’s about two users interacting with each other as opposed to a user and entity, a merchant or something like that. I don’t see merchants really taking that up. I don’t see that as something merchants would be all that interested in doing. Maybe Darknet merchants. But what incentive do they have to offer a Payjoining service.

Stephan Livera:

But I am hearing actually that some of the BTCPay Server guys are interested in the idea of having Payjoin built in.

Samourai Wallet:

Oh yeah. No, I’m sure they are. And I think that would be cool. I’m not opposed to it. I’m looking at it from a product perspective. If BTCPay Server is targeting hobbyist Bitcoin users like us, then yeah, that would be something cool that people would like. But at that point you’re just doing peer-to-peer. You’re not actually doing anything with the merchant. You’re just doing it peer-to-peer and instead of you using Samourai, you’re using BTCPay Server as your client. Okay, that’s cool. A big merchant who uses BTCPay Server is a cheapair.com. Do you think they’re going to offer Payjoin services when you buy an airline ticket? I doubt it. Why would they?

Stephan Livera:

Yeah, so potentially, you’re right. I don’t know. Maybe they would. It really depends on what way the prevailing winds are blowing on like, “Oh, you’re helping these—”

Samourai Wallet:

But not even just that. It’s just an extra step of complexity.

Stephan Livera:

But I’m saying if you imagine if BTCPay Server was literally like “enable a checkbox” or if it was there just on by default.

Samourai Wallet:

Yeah. More privacy is better, so I’m definitely not saying they shouldn’t do this or it’s a waste of time. Pay to endpoint, Payjoin, Stowaway, it’s really, really cool. The type of transaction that that creates is so powerful because it looks so innocent and there’s no way of detecting it and it completely breaks the dataset of whoever includes it within their cluster. So however you get there, it doesn’t matter to me.

Stephan Livera:

Right. And so I guess we can take it then that were that to occur, then Samourai wallet would offer a way to pay and Payjoin with that.

Samourai Wallet:

Yeah, they should contact us. We have a working implementation of Stowaway.

Stephan Livera:

We talk about some of these ideas, but right now there are, as I know, there are only two implementations of Payjoin. It’s Joinmarket to Joinmarket. And even then, that’s like a CLI thing and Stowaway between two Samourai wallets. And so right now there’s no way for you to Payjoin with somebody with a different wallet type to your own. And that’s to me that’s very limiting.

Samourai Wallet:

Oh, absolutely. Yeah. No, absolutely it is. But it’s still very early tech. It’s still very, very early tech and you’re going to have these sort of compatibility issues until you don’t. I’ve talked to with the Joinmarket guys, I talked to Belcher and Gibson and I said, “Where can we meet in the middle and make some changes to both of our implementations so that they work together?” And I think that makes the most sense. You know? But I think it would be very rich for someone who hasn’t implemented this tech to expect us to change our implementation to fit with theirs. So I think that if some developer is interested in implementing this type of technology, they should reach out to the existing stakeholders of the technology. So that would be Joinmarket and that would be Samourai. And that person would maybe even be the person to act as the one who bridges all the services together and says, “Hey, what can we do so that Samourai, and Joinmarket and service X all work together?” I think it’ll happen naturally just as time progresses. We need to prove to the market right now that this is in demand. That’s the only way to do it.

Stephan Livera:

Yeah. So users get out there and start doing some Stowaways, hey?

Samourai Wallet:

And if they were, we wouldn’t know. Remember that, we don’t know. First of all, it’s not a premium feature. We don’t charge for it or anything like that. So we don’t have a way to keep track of how many people are doing Stowaways or how many people are doing STONEWALLs or anything like that. All you could do with STONEWALLs, because you can find them on the blockchain, is write a script to try to find them. But Stowaways you can’t, the Stowaway just looks like any ordinary average transaction.

Stephan Livera:

Great point. One thing I’ll add here as well is that Chris Belcher and I think Adam Gibson has mentioned similar, that they’ve both mentioned that it doesn’t take many Payjoin transactions to start really screwing up blockchain analysis across all of Bitcoin.

Samourai Wallet:

We released it so close together. I don’t remember who really stepped first or when was the exact date, but whoever it was on that date changed the game. Because after that date, you cannot look at a simple transaction on the blockchain and know for certainty that this is a single participant and this is the destination and the change. You can’t know that anymore for every single transaction that’s occurred because there is no fingerprint on a Stowaway. It looks like all the other transactions or on a Payjoin. So thereby every other transaction on the network gets this cloak of protection.

Stephan Livera:

Right. I think Adam Gibson has mentioned that as a steganographic technique.That’s the term he uses.

Samourai Wallet:

Exactly, exactly. And Stowaway, Payjoin, Pay to end-point. It’s a steganographic tool. That’s the type of transaction it is. So you have decoy transactions, you have distance transactions like Ricochet, you have the pure mathematic transactions like Whirlpool, which is just brute force mathematics and combinations. This is 10,000 combinations to get to this result and that’s pretty good. We’ll go with that. And then you have the STONEWALL, like I said, which is a decoy type of transaction.

Stephan Livera:

Also. So recently there’s been this whole debacle around Wasabi wallet getting flagged. So essentially some users, so the two recent examples, which to my knowledge, are the third and fourth cases that I know of. So there was Catxolotl from Binance Singapore. And then the other guy was RonaldMcHodled. RonaldMcHodled was withdrawing from Paxos. And so it’s sparked up this whole debate about basically how easy is it to flag CoinJoin transactions. My perspective on it was, look, these are like an unforced error. Wasabi should not have had a fixed fee address. And in fairness to Wasabi they are now changing that, after a lot of debate and a lot of time on this topic.

Samourai Wallet:

It doesn’t matter now though. The impact has already been made. There’s no going back from more than a year of address reuse. It’s tied into the architecture of the mixes now. So it’s very good that they finally changed that. But it really isn’t going to do all that much.

Stephan Livera:

The next point then, and so again, it comes back to that question again. Proximity to the Wasabi fee address versus fingerprint. Right? And so fingerprint is like, there was this kind of debate about could a blockchain analysis person from the outside identify, “Oh look, that looks like a CoinJoin because I can see there’s⁠—” and so there was this debate around⁠—.

Samourai Wallet:

There was no debate. There was an attempt to shift what happened and make a What If. Well, what if it was this thing that we know, everyone knows all CoinJoin transactions, well almost all not Stowaways, all CoinJoin transactions can be fingerprinted. Yeah. We know that. Everyone knows that. No one ever argued that that wasn’t the case. So this debate was a tactic to get people talking about something different than, “Hey, wasabi has had this fixed fee address since the beginning and have been combative to anyone who has suggested that they change that, only until this year. Only until what, last week or something. So, there was no debate. It was obviously proximity. It has nothing to do with fingerprint.

Stephan Livera:

And I think the e-mail that Catxolotl shared with some people, and I think he might’ve even tweeted this publicly, indicated that as well because the e-mail from the compliance department of Binance Singapore said something like, “Oh, this address.” Right. And so it was very clear. Anyway, I think that aside, the broader point is more like there’s a cat and mouse game here.

Samourai Wallet:

Yes.

Stephan Livera:

And it’s going to continually be occurring, right. So eventually it will probably get to the point where some exchanges or some chain spy companies will start flagging a transaction and flagging a customer merely for the use of withdrawing from an exchange and then running through any type of CoinJoin because they could code their software and their tools to identify that and flag that behavior.

Samourai Wallet:

Yeah, no, no, it’s totally feasible that they could do that. The processing required to scan every incoming transaction or outgoing transaction and even performing one hop of history on it is quite a bit. That’s quite a lot of processing, especially if you’re Binance who are doing so many trades a day. So I don’t think that’s realistic. Is it possible? Yes. Could they build that system? Yes. Would it be worth the investment? Probably not. It’s like anything else. These companies that are regulated, they have no choice in the matter. They have to follow these certain regulations. They’re not looking, unless you’re a real established player, you’re not looking to create more difficult regulations for yourself. If you’re like a Coinbase size, you might be doing that now to try to prevent competition entering this space. I think what exchanges will do is take the approach where it requires the least amount of investment and the least amount of work on their parts. And what that entails is contracting with a third party service like chain analysis or Elliptic or Crystal or one of the hundreds of these places and relying on their tools, and their risk assessment scores and their analysis. And these guys are not doing that. They’re not scanning one hop back for everyone because that’s just crazy. So how do you deal with it? Like I said, we have distance tools and that’s about literally building distance. It’s brute force distance between point A and point B. Can the exchanges look back and figure out that you did this? Of course they can. The blockchain is a public ledger. You can look back through anything and figure it out. Have we ever got a report that a Ricochet user has been flagged for using Richochet? No, not in the entire time Ricochet has been been around because these exchanges aren’t doing that. They’re really going for a minimum approach to this.

Stephan Livera:

The lowest hanging fruit.

Samourai Wallet:

Yeah, the lowest hanging fruit. And in the case of Wasabi, it’s like your, your mixes are connected to one of the largest scams and Ponzi schemes in crypto history. It’s enormous. And there is not even one hop of separation between your mixed UTXOs and this and this Plus Token. There’s not even a hop, you’re in that transaction together. So that’s the lowest hanging fruit. That’s where they’re going to go for. So that has nothing to do with fingerprinting. No one’s fingerprinting Wasabi transactions. You don’t really even have to, they’re so obvious. So it’s not about that. It’s absolutely proximity and it’s absolutely a distance thing. And the tools that we’re building around include distance but also make it again, so that if an analysis company encounters a Samourai transaction and counters a STONEWALL and counters a Whirlpool, it just is easier to put it to the side and deal with it later. Otherwise, it’s going to pollute our current transaction graph, which in a state of Bitcoin wallets in 2020 is pathetic. Privacy is not even a second or third rate feature. It’s way down there for most wallets out there. So they have a great transaction. They have pretty good certainty as to who owns inputs, outputs, not identity, but which inputs go to which links. They have very good graphs of that. Adding Samourai stuff into that mix would just make it a mess. Their confidence goes from 90 to 80 to 70 and that’s a big drop.

Stephan Livera:

Yeah. It comes down to, could they present that in court or would it be good enough for that? And probably not because the probability that this is an accurate view of what’s actually going on inside of all of that.

Samourai Wallet:

It’s a really, really good point. Would that hold up in court? Because at the end of the day, this is all, like I said, based on math, this is all based on probabilities. So we could mathematically prove that the probability that this input is connected to this output is like 13%. Does that meet the standard of proof or where does that lie? And that’s going to be something that’s going to happen eventually, the court system will encounter that and there will be a decision based on that.

Stephan Livera:

Right. And so this also comes to this question of deterministic links versus probabilistic links and no real linkability, let’s call it. And so some of this also flows from the CoinJoin Sudoku sort of analysis and also related is this subset sum analysis idea and it’s just this idea that if you’re looking at the inputs and the outputs and which one could have paid which output and this is what kycp.org is trying to get at. So can you tell us a little bit about your views there on deterministic links and avoiding those in your mixer and in your general day to day transaction behavior?

Samourai Wallet:

Yeah, absolutely. So, kycp.org you mentioned is a web service built on top of Boltzmann, which you can consider Boltzmann the predecessor to Solomon. And what Boltzmann does is it looks at a transaction that you’ve either broadcast or you want to broadcast and it scores it based on the linkability. A deterministic linkability between input to output and a deterministic link is 100% linkability. So there’s no question about it. There’s no other way, the mappings of this input to this output. So it’s connected. What we try to do with Samourai with STONEWALL is by adding more inputs and outputs than necessary and by including like amount sizes on the output side, what that does is mathematically make it impossible or very difficult to say with 100% certainty that these inputs connect to these outputs. So you might have a certainty of 33%, you might have a certainty of even less. And that’s where the score of entropy comes from. So in the Samourai wallet, when you’re able to enable STONEWALL, it will tell you, “Oh, this STONEWALL has three bits of entropy or this STONEWALL has 1.5 bits of entropy, which is the lowest amount of entropy a STONEWALL can have. And all that means is the number of combinations between inputs and outputs is higher or lower. And that’s all. So a 3 bit entropy transaction means that the probabilities that you’re able to link a specific input to a specific output of that transaction is very low. But kycp.org will show you the probabilities. So if you pop your transaction in there it will tell you input zero is connected to input one at a rate of 25% if you’re using Samourai or 100% if you’re using just a standard wallet.

Stephan Livera:

And so just for listeners who aren’t familiar or if you have never used Samourai wallet, the recommendation is, as we mentioned before, when you come out of the Whirlpool mix that you should use a STONEWALL spend as a minimum level and you’ll see that little toggle when you go to spend of, yes, my wallet can construct a STONEWALL or no, it cannot because you’re trying to spend too much or your UTXO set is not compatible. It does not have the right level of inputs to make that transaction.

Samourai Wallet:

Or the inputs have been seen together or something.

Stephan Livera:

Yeah, that’s right. You might be doing an input merge and so on. I think there is a Gist where TDevD has written out the exact activation conditions for STONEWALL for those more technical users who are interested.

Samourai Wallet:

Yeah. And even that’s now kind of out of date with Solomon coming out. So we will have better documentation than a Gist for that. But overall that’s kind of the idea. Like, if you don’t have enough UTXOs and you’re in your wallet, you won’t be able to create a STONEWALL just because you can’t do it right now in the wallet. There’s not a lot of user feedback. The user doesn’t really get told why they can’t compose a STONEWALL. That’s something we could do better on and giving the user more indication saying, “Hey, if you do this, this, and this, you might be able to compose a STONEWALL.” Just a little bit of help.

Stephan Livera:

Yeah. And for example, right now it’s a little difficult to know how much could I do a STONEWALL with, right? So let’s say I’m sitting in my wallet with 1 million sats in my PostMix wallet. And typically, as you’ve mentioned before, you usually need to spend a little bit less than half of your balance. But again, it depends on what UTXOs you’ve got and so on. So even that is not an easy science. So let’s talk a little bit about running Dojo. So for listeners who are unfamiliar, Dojo is like running your own little server. You’re running your own server and you’re checking your own balances. Whereas most Bitcoin wallets will check against the central server or they will just query out to the SPV, the broader Bitcoin network. So on the topic of Dojo, we’re seeing now more and more people are using Dojo. So can you tell us a little bit about current development on Dojo and where you see that going?

Samourai Wallet:

Yeah, sure. So Dojo, I think we’re at version 1.4, 1.5 now. We have a version that’s ready for release any day now, so I don’t remember which one. It’s such a great project because we run Dojo at Samourai wallet. So if you just got Samourai wallet from the Play Store and install it, you’re using our instance of Dojo. That’s what it’s being powered by and nothing stops you from going, “Actually, I want to run my own copy of that.” So it’s such a powerful server. And it’s such a powerful piece of software. It powers all of our users without a hiccup. And it’s definitely gonna power your two or three wallets that you register onto it on your Raspberry Pi and it will do a real smooth job of it. So I think what we want to do with Dojo is have it be the home base, the platform for our users who choose to go down that route. And we want it to be as easy as possible for users to choose to go down that route. We don’t think that every user needs to do that. There’s just gonna be some that don’t want to, they don’t want to have the hassle of managing a node and hassle of having to do updates and security stuff and they just don’t want to. And they’re fine trusting Samourai not to lie to them, which is what it comes down to. Samourai could lie to you, Samourai could say you have a million satoshis but you don’t, right? If you don’t run your own node, that is the risk. And that’s not a concern for everyone, but for those who it is a concern for, we have the software for you. And that’s Dojo. So it’s been mostly, I would say 90% of Dojo has been community pushed. We put out the software, we released it and have kind of stepped back and just said, you guys make this a thing because we don’t have the resources to support it. We don’t have the resources to run technical support and stuff on that product. We’re barely doing it enough with Samourai wallet. So you’ve got guys like @BTCxZelko @GuerraMoneta, @Crazyk_031, the whole crew of the RoninDojo guys, they’ve taken what we’ve done in Dojo. They’ve forked it but not changed the project just added on top of it and they’ve made it extremely user friendly. Extremely user friendly to run on a Raspberry Pi. Now they have it so even if you have Windows you can get it running. They’re all about opening up access to this product and to this ecosystem and making it just accessible to anyone, it’s so cool.

Stephan Livera:

Yeah I’m a big fan of RoninDojo as listeners might know, I run one myself and I use the RoninDojo variant or specific one. And so a big shout out to @BTCxZelko and @GuerraMoneta for that, and @Crazyk_031 for some of the documentation and helping users with it. That’s a good way to use it. And I think the other cool thing is you can run one for your family. So you don’t necessarily have to have everyone in the family able to use command line and set up a RoninDojo. You can have just one person set it up and then the other people in the family can just pair their Samourai wallet on their phone with the Dojo on their Raspberry Pi.

Samourai Wallet:

And that solves for that use case: a person who doesn’t want to deal with the security updates, who doesn’t want to deal with having to run their own node. If they have a savvy family member or someone who can run a node for them, then the experience for them is no different than installing Samourai from the Play Store and running it. All they have to do is scan a QR code and then they’re connected to their son’s node or whatever.

Stephan Livera:

I think the Tales From the Crypt guys refer to this as the Uncle Jim’s node. Uncle Jim runs the node for the family and we need an Uncle Jim in every family. Now when it comes to Dojo we’ve also got to talk about the impact of Dojo use on Whirlpool. So this is that whole thing around, what percentage of Whirlpool users doing CoinJoins are using Dojo using their own node? Let me summarize the concern from the community just so you can speak to it. One of the concerns that you see on Bitcoin Twitter and elsewhere is this idea that, Oh no, if not enough people are using Dojo and it goes mainstream with mobile mixing, then some of those users might theoretically be doxing their mixed addresses to the Samourai central server. Now that’s the concern. It also ties into how many people are using Dojo. Now, I haven’t seen the latest statistics, but as I understand, it’s over 60%.

Samourai Wallet:

Yeah it’s been over 60% for the last few weeks now hovers between 60 to 62%.

Stephan Livera:

And so even taking that number as it is right now, that already is above the threshold as I understand you need two Dojo users in every mix. And then beyond that, you don’t actually have to trust.

Samourai Wallet:

I saw someone came up without figure of what you need. I didn’t verify it myself. To me, the whole thing is concern trolling. So I’m not concerned about that. We have Dojo. It’s out there. Use it. If you’re concerned about us knowing your XPUBs or anything like that, then use Dojo. That’s fine. Regarding Whirlpool, I’d never ever design the system where we’re the adversary. The adversary is chain analysis companies using public blockchain data. Okay. So in this threat model where we are the adversary, what we have is knowledge about off chain data. We know what you don’t know. Just by looking at the chain, we know more than you because you don’t know by looking at a Whirlpool transaction, which users are Dojo users and which users aren’t and you have no idea. So really you have to trust that the 60% that I’m saying is even true. So this whole thing is just, to me it was again a way of changing the conversation, putting the conversation somewhere else to say, okay, yeah you released Dojo, but it’s not enough. No one’s going to run it. You need all these people to run it to make it worthwhile. I was like, okay, I’m less and less concerned with the Twitter guys who have never built anything, who have never deployed anything, who just sit and have an opinion about stuff that is just completely uninformed, you know? So I don’t really worry about that at this point because I know the software we’re building is actually having an immediate impact on the users who it was meant for. The users who we built this software for are using it. The users are using Whirlpool and they are using STONEWALLs and they’re using Ricochets. They’re using it all. They’re using everything the way it was designed. And that’s as an entire platform and entire ecosystem. So the rumblings on Crypto Twitter or whatever really don’t concern.

Stephan Livera:

Yeah. And I mean speaking from my perspective as an interested observer and a fan of Samourai wallet, to me it seems like the goalposts are just ever shifting. “Oh yeah, you did this thing, but now this is the new goalpost and if you aren’t meeting this goalpost then you’re just not good enough.” We’re in this open source environment and ultimately you can either build something yourself or you can pay someone to develop something that you like or you just put up with it. Like, then don’t use it. These are our options and to me it seems a little bit like everyone’s trying to dictate everyone else’s product roadmap or plan.

Samourai Wallet:

It’s a very Twitter thing. That’s a very Twitter thing, and it’s not just about Bitcoin. It exists in every subculture and every community on the internet. If you’ve been around the internet long enough, you’ve seen this same behavior, pop up an IRC channels, you’ve seen this same behavior pop up all over the place. So it’s not crypto related, it’s not Bitcoin related, it’s, it’s a people problem. And to me, you just have to deal with it. You just have to be strong and you have to know as a product person, you have to know that what you’re doing is right on the product side. You just have to know it and whether Livera gets it, whether this guy on Twitter gets it, whether @MrHodl gets it in his shirt store, it doesn’t matter to me. I’m just going to build the software. If you want to use it, use it. And it’s as simple as that and definitely, definitely will not be dictated to on how to build this.

Stephan Livera:

Let’s talk about mobile mixing. So this is a feature that’s coming and I have had the opportunity to be a part of the testing group as well. So it’s kind of in an early testing stage. Now I think it’s pretty cool in that it can really expand the number of users who might feel like, Oh, it’s too much work to install a desktop app and maybe they just want to do a mobile phone version. So can you tell us a little bit about mobile mixing and how that’s going?

Samourai Wallet:

Sure. Well that’s been the day one goal when we started Samourai from the first day, which was actually around this time in 2015. The ultimate goal was to get mixing on mobile and it’s taken a long time and a lot of foundation but we are pretty much there. So, as you know, we have quite a small closed testing group which is designed primarily to just hit the protocol level stuff of the mixing on mobile hard, make sure that Android isn’t killing the service. Make sure that you’re able to mix properly, make sure that remixing kind of works. Make sure that all of the little things that just are unknown because no one’s ever done mixing on mobile before. And it’s quite a difficult thing to pull off. There’s a lot of stuff going on, a lot of communication going back and forth between the coordinator and the wallet. And of course it’s not cleartext communication, it’s all like Chaumian payload stuff going back and forth. So these are big packets. Mixing can just take a while right now, especially with low liquidity. Whirlpool is doing fine, it’s doing all right, but it’s nowhere near the levels of what we think it’s going to be at full release. So you’re just waiting around and latency isn’t a friend of mobile, mobile, especially since Android 6.0, Google has been killing background processes and killing background services. So having all that stuff going on on mobile at once is a challenge in regard to some mixing. But I think we’re pulling it off and I think we’re getting close to a release that will initially be more focused on rapid fire once one round mixes where you go from TX zero to pre-mix and pre-mix to PostMix. So you mix once from start to finish. And what we should do I think is then try to push people onto the desktop app and say, Hey, you can get free remixes over and over and over again. And yeah, you could do that on mobile, but who wants to sit there with their phone open for days? Go put this on desktop. Just let it sit there and run. And I think we’ll be able to onboard. Not a huge number of our user base who are very much mobile only. But I think we’ll be able to capture a few of those guys. Say, okay, let me go ahead and connect this to the desktop app so that I can have free remixing on all of these things constantly going on and use the mobile app when I just want to do a rapid fire initiation of a mix.

Stephan Livera:

So the idea is you might kind of tick off the mix and it’ll just run on from then and you won’t have to sit around.

Samourai Wallet:

Exactly. Yeah, you could do it. I’ve been testing that use case. I’ve been testing the Whirlpool mobile app as running it as a service running all the time. And my findings are in fact that if you wish to do this, it’s best to do so on Android 6.0 because that was the last version before Google started removing background processes and stuff like that. I’ve had the app running for three or four days now, and it’s just been doing great. On Android 7 and 8 and 9, you need to go into settings, disable background data restrictions and disable battery optimization for the app. And after you do that, then you get a pretty decent experience for longterm use. And I’m talking more than an hour or so in this. For normal activity you just launch the app press go and it should happen fairly quickly.

Stephan Livera:

We should remember that if that user is already running Whirlpool CLI which is basically offered as part of RoninDojo. So if you just want the easiest setup, use that. But we should understand that those users already using CLI don’t really have to worry that much about it anyway because they’ve already got the remixing coming from that anyway.

Samourai Wallet:

Yeah, exactly. So you could have CLI running on your home server. You can have the desktop app connected to your CLI on your laptop or whatever, and you can have mobile app all connected to the same Whirlpool instance. All connected in the same wallet, never mixing with itself, never doing anything weird like that. So it’s just all tied in. It’s not 100% tied in unfortunately. And that’s just a time thing. We need more time to get everything connected up because if you create a note, for example, on your mobile UTXO list and say, Hey, this Whirlpool UTXO I want it to be no ABCD. When you go onto the desktop app, that note won’t exist there because that is all local to the device, to the client. We don’t have a server where that gets sent to that then the other clients can pull it down front. We just don’t have that. So there is some elements that are disjointed, but the core functionality of mixing will work across all of the platforms at any given time.

Stephan Livera:

Another two things I want to mention with the mobile mixing version. So again, as I’ve had an opportunity to play with the new version, I’ve noticed that there is now coin selection and you can select an individual UTXO whereas in the past you had to do it by reverse. So you had to basically select every other UTXO go “do not spend” and then spend. Now you’ve actually got the option where when you want to spend you can select this UTXO and spend the full amount or only spend from that UTXO and then take back the rest as change. So that’s a pretty cool feature.

Samourai Wallet:

Honestly, it’s my favorite of this release. I’m super excited for Whirlpool. Obviously, like I said, it was day one, we wanted to get that done and I’m going to be very happy when it’s out there. But the UTXO list, I am not able to use the previous version that we had with the “do not spend” and you have to flag everything. It’s so much better with the new UTXO list. And I think that that’s just a, that’s just a product of using the wallet every day. If you use the wallet a lot, if you transact a lot, you will end up with a lot of UTXOs. Especially if you’re STONEWALLing, right? Because a STONEWALL will create extra UTXOs so you’re going to have a lot. And then managing all those UTXOs like you said, you have to go through, let’s say you have a hundred UTXOs.

Stephan Livera:

Yes. It’s too time consuming.

Samourai Wallet:

You have to go do 99 of them and I’ve done it. That’s the thing. I’ve done it and I’ve gone through that pain. And when you walk through that kind of hassle, you go, okay, I need to fix this for our users because this is crazy. So what we have now I think is really, really cool.

Stephan Livera:

The other really cool thing that I like is multi TX zero, multi UTXO TX zero. So currently for users who are not familiar, you would have to select a single UTXO and then push that through the normal Whirlpool process. Now you might have three or four pieces of UTXO and push them all through a Whirlpool with this new mobile mixing feature.

Samourai Wallet:

Lower fees for you. That’s what that ends up being. Lower fees for the user.

Stephan Livera:

Is that something you intend to bring on the desktop version as well?

Samourai Wallet:

I would like that. The desktop version is very basic. It’s just a lack of resources. We have one developer who’s working on Whirlpool primarily, so, and he’s done the desktop GUI. He did the CLI and he’s done all the protocol work and everything. So he’s a Jack of all trades in that respect. So we just haven’t had the time to really flesh that out. We have had an open source contributor on Whirlpool GUI, @pajasevi. He’s contributed to various open source projects. I think he’s contributed to BCPay Server and BlueWallet and stuff like that. He started contributing to Whirlpool GUI. And I think that you’ll see some really interesting things coming down the line in terms of getting that really nicely refined. I have no aversion to bringing that particular functionality into the desktop app. We didn’t do it to maximize our fee revenue or anything like that. It was just easier to do a simple selection. The the other thing about mobile that’s different from desktop is you can mix from any address type. It doesn’t have to be SegWit. It doesn’t have to be Bech32.

Stephan Livera:

So you can mix from a 1 address or from a 3 address.

Samourai Wallet:

Yeah, exactly. Altogether in one TX zero. So you can say, Oh yeah, this one, this one and this one. All right. Add those to the mix. So it’s a nice upgrade for users who were doing that anyway because they realized that, okay, if you’re paying per TX zero—.

Stephan Livera:

They had to merge themselves.

Samourai Wallet:

Right. I might as well merge it beforehand. So I only pay one TX zero, which is obvious. Well, we just made it so they didn’t have to do that step, where we could just mark it for them.

Stephan Livera:

And for a merchant, let’s say they’re receiving lots of little chunks and none of them are over that 0.01 BTC threshold, then they’re kind of stuck, right. So they have to do a merge. But now with the multi UTXO TX zero, again, that’s a bit of a mouthful, but you can merge it all as part of your TX zero and then kick off your mixing process from there. So you skip a step.

Samourai Wallet:

Exactly. It makes it a little easier.

Stephan Livera:

One other thing, let’s zoom out more and just talking about Bitcoin’s blockchain and the bloating UTXO set and so on. What’s your view around that with there might be cross-purposes, right? So somebody who is more concerned about cheapness of fees and not privacy at all. They might think, Oh, Hey, I want to have all my UTXOs into one, whereas the Samoura model of using STONEWALL and including additional inputs makes transactions larger and also the use of all these additional pieces of UTXOs out there. How do you think about that? Is that just the cost you pay for privacy?

Samourai Wallet:

I see privacy as a cost. It’s as simple as that. Things will come down the pike that reduce the impact on chain. You’ll have things coming on like Schnorr and Taproot that have the ability to impact that going forward. But ultimately we have to realize that privacy does have a cost and it is more expensive to be private and that’s just how it is. And I find people who sit there worrying about the size of the UTXO set to be basically in the same camp as the big blocker guys who sit there and worry about the size of the block. It’s like, get something real to worry about.

Stephan Livera:

And as I understand the view from some of the Samourai guys is a bit more like maybe people have this 2017 PTSD that we’re going to see massive fee pressure really soon. And I think it depends on your view on whether there was a lot of spamming of the chain in 2017 by certain actors who may have wanted to push Bcash or SegWit2x, whether any of those actors were doing this kind of spamming of the chain. What’s your view on that?

Samourai Wallet:

Yeah. I don’t think it’s even up for debate. I think it’s very, very clear that they were. @LaurentMT has done phenomenal research on this. He called it tracking Moby Dick. And this was an entity that he discovered via use of OXT, which is our analysis platform, and he’s been able to connect the dots between this entity and various other economic actors who at the time of that scaling war would have been pushing for larger blocks. That was an entirely manufactured crisis. Entirely. And it was both successful and unsuccessful. I don’t think it was successful in what they were trying to achieve, which was to get larger blocks. I think it was successful in warping the perceptions around the Bitcoin network because that lasting legacy of the fee pressure and, “We can’t have a repeat of the fiasco of 2017” or whatever. Well if you were transacting during that time, it really wasn’t that bad. You had to go and look at what the mempool is doing, which you don’t have to do all that often now. You had to go and check it out. But if you had a wallet like Samourai, you were bragging to people that you were only paying like 20 sat fees and still getting confirmed while these idiots were paying 300, 400 sats. Right? So it was an entirely manufactured crisis. I think a lot of Bitcoiners now are latching onto that in order to pump Lightning.

Stephan Livera:

Right. And so I guess this comes to your skepticism a little bit around Lightning. Let’s stay on this fee topic for a second though. The view from that kind of person might be, look, next time we have a bull market, we’re going to have another fee crisis and it’s going to be just as bad and everyone’s going to be paying huge fees for on chain transactions. And I guess your view is more like no actually that 2017 stuff was overly artificially pumped. And so even if we did have a bull run, it won’t get so bad, is your view.

Samourai Wallet:

Well I mean it might, I mean we might hit fee rates of a couple of hundred sats a byte, I mean I don’t know. What I saw in 2017 was a fee market trying desperately to cope without having any market mechanism without having any sort of way to actually price itself. I just saw a market system that really had no chance of succeeding and that was because it wasn’t a real event and under a real event where you don’t have a certain actor spamming the chain and introducing a bunch of false pressure, I think that we would see a different play out we out. We would still have people waiting. That might be okay. You might not need to be confirmed in the next block. This is all in the case of a real event of mass adoption, like a real event of mass adoption, which I don’t personally see coming anytime soon. But if it did come, I think that it would take a little bit of time, but not that much time. But a little bit of time before people’s behavior shifted and the way they thought about how they make transactions shifted and they go, do I need to be in the next block? Is my transaction actually urgent or can I wait? I also would expect to see better pricing mechanisms around just how much—Why? Why 300 sats a byte, right? Why 500 sats a byte? Is it because of the amount of transactions in the mempool? There’s all these different variables and I would like to see better pricing mechanisms built out. And the only way that’s going to happen is if there’s an actual fee market taking place, organically being derived. So you can’t centrally plan these things. You have to just kind of see how it plays out. But I’m not worried about it, I don’t think that there’s anything to worry about with on-chain fees. Fees will go high and then they’ll go low and eventually fees will have to go high. Once the block subsidy is done, the block reward’s done.

Stephan Livera:

Right, and most of it will be done in let’s say 10 to 15 years ish. I can’t remember the exact number.

Samourai Wallet:

And you really want to market to develop before that point.

Stephan Livera:

Oh, of course. Yeah.

Samourai Wallet:

You really want something developed before that point. So, honestly, the sooner the better in terms of a real fee event so we can kind of figure out how this all works. Again, there’s bigger things to worry about, so I’m not worried about it.

Stephan Livera:

And so is that your view also on Lightning? That you think it might be interesting, but it’s just not worth your time right now?

Samourai Wallet:

I think Lightning is interesting as a technical project, I think it’s very interesting. I don’t think it’s interesting for Samourai and I don’t actually necessarily think it’s all that interesting for Bitcoin in general. The way I see it is Lightning was forced down our throats as the scaling solution. “There is no other option.” 2017 came. We are in crisis mode. We hit all time highs on the chain. We need a solution and the solution is Lightning. I never bought that. It’s a solution. Why is it the chosen one? I never could get behind that. Is it interesting for Samourai? No, certainly not it’s too early. It’s way, way, way too early. And as I’ve watched the ecosystem grow, as I’ve watched the companies grow out of Lightning network and around Lightning network and what I would call the native Lightning companies as opposed to getting the companies that got started on main chain and then graduated up to Lightning, the native Lightning companies, they kind of disgust me to be honest. They’re all about KYC and custody. To them, that isn’t a red line. Whereas to me, I wouldn’t even conceive of publishing an app whereby we had custody of user funds, would never even conceive it. And I know that in 2013 had anyone come up with such a proposal, they would have been laughed out of town. Just put it that way. Because that’s such a dirty word. Such a red line where now in Lightning network land people go, yeah, but it will get better. Yeah, but that’s only custody right now. When we get this fixed, it won’t be anymore. And I was like, when does it work that way?

Stephan Livera:

The other one people might say is, Oh, but it’s only for small amounts, right? Like only $30.

Samourai Wallet:

Yeah it’s only a little bit. Okay, so what’s the point? So is Square or PayPal and Cashapp and all these guys, you can do the same thing. So why not do it there? At least those guys, you know who they are, they’re not some rando on Twitter. So to me it’s just not interesting. There’s really zero, zero interest. People getting excited about using fiat on your Lightning network. Swapping this. Who cares? But that’s just me and there are going to be people who do care and those people need to be able to work on that stuff. And I’ve always said this, I have been critical and harsh on Lightning network, but I’m never been critical and harsh on the people building out Lightning network because they’re just building, they’re just builders. So as a protocol I’m not all that interested as a network, I’m not that interested. I’m happy to see people working on it. I’m happy to see a lot of UX development happening there, which makes sense because a lot of UX is a lot easier when you’re dealing with custody. You can hide a lot of complicated concepts that you just can’t hide if you’re a noncustodial wallet.

Stephan Livera:

So again, I’m optimistic on Lightning. I accept though that it is early. Personally, I see a lot of development has happened over the last year or so, but absolutely, it’s still early. There’s a lot of work still to be done. Ideally we want to get to that vision of having like Schnorr and Taproot and then having stuff like L2 and stuff like that. And also that idea of point time locking and so on to help privacy. I would love to see a world where we could sort of use techniques across both. So as an example, you could have a wallet that’s using CoinJoins, but then also use the CoinJoin funds to open your Lightning channels. But I suppose in your view it’s just too early for that sort of thinking.

Samourai Wallet:

I mean from a product level, I’d say why? Who’s that serving? Is that serving, 5,000 guys on Twitter? Or is that serving the Darknet market guys? I don’t think so.

Stephan Livera:

Potentially it could, couldn’t it?

Samourai Wallet:

I mean, again, let me know when one of them implements Lightning network and then we’ll talk.

Stephan Livera:

Yeah, this is something I’m also careful about as well is making sure to not oversell things. Because there are merchants who try to do it and sometimes run into problems on getting inbound liquidity or just setting it up correctly. So I am sort of careful to not push that aspect of it too hard while at the same time being enthusiastic on it. Another thing I’ve seen, to switch up a little bit, you’ve mentioned some thoughts on Liquid. So I think this is one of the things where, from my perspective, I see benefits in certain use cases. If you’re an exchange or trading desk, absolutely, Liquid, two or three out of the 15 functionaries makes total sense. But there are also other ways that you might view Liquid or even criticized Liquid. If users are not being sold the right story or being sold the wrong message. Do you see that in Liquid at all or is your criticism something different?

Samourai Wallet:

No, I think that’s pretty accurate. And I agree with you. I think that there is a use case for Liquid. There’s an absolute use case for Liquid. And you’d be crazy to say there isn’t. However, what I don’t understand is why they don’t appear to be going for that use case. They appear to be going after a consumer market, which to me makes zero sense. But who am I, I’m not on their team or anything like that. So I’m just one of those guys who are commenting. My big issue though is I’ve seen certain big personalities whose voices are respected and whose voices are listened to by the wider community, saying that Liquid is Bitcoin or Liquid is just as good as adding Bitcoin or Liquid is better than Bitcoin because you have all these privacy enhancements on top. And this to me is dangerous. And it’s not the fault of Blockstream for people saying that about their product. They can’t control what other people say. If one of their own employees are saying that, which I have seen, that’s a different story, but let’s just forget about that. On the broader scale, they can’t control what people are saying about their tools that they’ve built. But I think this falls on users. This doesn’t fall on Blockstream. That’s the thing. This falls on users. Users need to ask themselves, is it custodial, can I get out of it just as easy as I get into it and can anyone prevent me from getting out of it? Those questions have to be asked. And if you ask those questions and answer honestly, then it’s very, very clear that it’s nothing like Bitcoin. At all.

Stephan Livera:

And so a parallel: Lightning Bitcoin is Bitcoin. And I think it’s fair to say so because at any given point, to have a Lightning channel, you have a pre-signed commitment transaction, which may be broadcast to the blockchain. And that can be trustlessly settled back into your own Bitcoin wallet and its full reserve. With Liquid Bitcoin, however, it’s fair to say it’s pegged in, however as you mentioned, I think the potential risk is having a permissioned peg out system.

Samourai Wallet:

Correct.

Stephan Livera:

And that’s fundamentally the risk. And so I guess the risk would be, so there are 15 functionaries and I believe there are members as well. But I think the key point here is the 15 functionaries and I think it’s two thirds, so I think it’s 11 out of 15 must sign the peg out request. And so that is potentially where the permissioning—

Samourai Wallet:

We started the conversation with Binance Singapore and Paxos closing down people’s accounts because of proximity to a Ponzi scheme address by Plus Token. So we know what exchanges are going to do. If an exchange receives an order to not release the funds to freeze funds because they’re the result of an active investigation, then we know what the exchange is going to do because they do it today. They will freeze it and not one of those functionaries is going to vote to release your funds. And that’s just how it is. And that makes sense on an institutional level when it’s institutions dealing with institutions, when it’s exchanges dealing with exchanges, totally understand it. Totally get it. They’re stakeholders in their consortium, right? They signed up to this, they’re at the table, they’re impacted by this deal. They can negotiate different rules for different roles within the organization. But you’re a user, you have zero say in any of this. So when you’re just a user using Liquid, I don’t understand what that end game is, why they’re targeting users for this clearly enterprise product. But that’s just again, my personal ruminating on something.

Stephan Livera:

Sure. One other point I could see and I think Max Tannahill was mentioning this idea as well of what might make a little bit more sense for Liquid, not necessarily the LBTC case, but potentially using Liquid for Tether. And so potentially I could see maybe a retail use there where let’s say a news agent just down the road, they want to be able to sell. And so what they could start doing is selling Tether to people just on the street for cash. And then that person could now use that Tether to try and buy Bitcoin. And potentially that’s a case that might make sense.

Samourai Wallet:

I saw a little bit of that go by on Twitter. I’ve been too busy this week to keep track of that particular debate just because I don’t know much about Tether. I’ve never used a stablecoin before and I actually talked to Max Tannahill and asked him some basic questions, embarrassingly like, can you get Tether without doxxing yourself? Cause I just didn’t know. I tried to stay away from commenting on that sort of stuff and I just have no idea. If you can use Tether in a way where it doesn’t compromise your identity via KYC system and if you’re able to withdraw your Tether without someone giving you permission. And if you realize at the end of the day that Tether can just vanish, it’s not outside the realm of possibility. I think it’s less likely as time goes on. But we thought that would MT Gox too, so it can happen. So users should be aware of that. I don’t 100% follow the voucher thing. We have Bitcoin vouchers today. So I don’t know why you would go and get a voucher for Tether, which you then go and get Bitcoin for it. But I think what I did see what Max was arguing for was that actually let’s talk about the people in China who are into crypto rather hold a Tether dollar than their own currency. And it’s much easier to get a Tether dollar than it may be to get a US dollar, which then you have to store. You have to put it under the mattress, you have to convert it into gold or something. You have to do something like that. Whereas the Teller dollar is just there.

Stephan Livera:

So that might be an option for them.

Samourai Wallet:

And I didn’t know if there is some sort of underground economy with Tether, I don’t know. And these are all things that would impact my opinion, would influence my opinion on the whole thing. But, overall, I mean I’m not interested because there is that, that risk there is counterparty risk. You have the risk that Tether just disappears.

Stephan Livera:

For those people maybe they’re thinking I’ll just use it as a temporary pass through and just quickly buy Bitcoin and once I’ve got my Bitcoin then I’m good. So many different ways.

Samourai Wallet:

Isn’t that what it’s for? I mean again, I’m really stupid on this stuff cause I’ve just never been interested in that sort of thing, but isn’t the whole point of Tether was so that you could get virtual US dollars so you could jump between exchanges.

Stephan Livera:

That was a big part of it. And I think what it happened in practice though is some people who were facing some form of capital controls or currency controls in China, ended up using it also.

Samourai Wallet:

So I think that was their thing. So to me that’s pretty cool because those are users, they’re using virtual currency or digital currency in the way that we want Bitcoin to be used. It’s a censorship resistant money. And why are they using Tether? We need to figure that out.

Stephan Livera:

Oh Tether’s coming to Samourai wallet soon guys. I’m joking. I’m joking. I know it’s never coming.

Samourai Wallet:

You know what you’re going to start now.

Stephan Livera:

No, no. Let’s, turn it back to just privacy more broadly and sort of finish it up. Where do you see the hope for users who want to try and maintain their privacy going forward in a world where it’s becoming harder and harder to first acquire that Bitcoin without KYC? Is it Bisq and HodlHodl or is it the family and friends trading network or is it earning Bitcoin or is it mining Bitcoin? What are your thoughts on that?

Samourai Wallet:

That’s a tough question. I think it’s a combination really. It’s a combination of them all. I think some are more effective than others. For me it’s been earning. Before Samourai it was still earning in Bitcoin. It’s just finding what you can do and just putting yourself out there and hustling to try to get a job in the industry. I’ll tell you, it’s a lot easier to do that in 2020 than it was to do that in 2013. So I really don’t want to hear any excuses of, Oh, I can’t find a job because there are so many companies in Bitcoin that are hiring, there was a lot of money that was invested in Bitcoin companies and if you want a job then you can probably find one if you have value to add. So earning is definitely a huge one. Family, friends, yes. Meetups I think are a really good place to be able to do some relatively low value transactions. Probably no more than $1,000 or something. That’s what I would do at a meetup. But that’s a good way to meet people and meet people who might be in the opposite situation of you. So you might want Bitcoin, but they might have Bitcoin and they need to get rid of it because they’re like me and they need to eat. So that’s a very valid way. And mining, you know, mining, it’s one part of the ecosystem I never engaged with because we are being told, even back when I got started that it was, you’re a fool if you wanted to mine, because it was just impossible now. But I’m starting more to think that that was just the narrative put out there by the miner. I know a few guys who hang out in the Samourai telegram room who have relatively recently started mining, that’s kind of crazy. You’re really going up against some massive—.

Stephan Livera:

Multimillion dollar funded companies.

Samourai Wallet:

But that’s cool. That’s awesome. They’re there doing it. And they’ve been happy and they have been receiving a small stream of Bitcoin and these are not miners that are looking to sell when they received some coins, they are doing it to hold, so they’re less interested in the, Am I making a profit on the amount of electricity that I am spending?

Stephan Livera:

Yeah. That’s a smart point.

Samourai Wallet:

And I’m more interested in acquiring Bitcoin without anyone knowing. No KYC.

Stephan Livera:

Right. So you might theoretically think, Hey, I can’t mine them at par in terms of the cost, but if I’m just taking a bit of a loss on the electricity and the maintenance and all these other costs, but I’m getting KYC-free Bitcoin, well.

Samourai Wallet:

And you presumably believe there’s some upside potential, right?

Stephan Livera:

If they are able to speculate, right, if they can say, okay, can I cop the operating costs for half a year? And then if I believe the price is going up in the longterm, then maybe there’s an argument there.

Samourai Wallet:

And I think that’s a valid way. And you have people like Slush who’ve created a Slushpool to make it really, there’s no reason why you can’t join a mining pool. If you have that type of hardware there’s no reason why you can’t. So the access is there. So if that’s something that’s interesting to you, that’s definitely something you should look into because it’s a way of obtaining Bitcoin without KYC. Same with earning.

Stephan Livera:

Another cool saying, andI think we’ve mentioned this before, and TDevD, I think it’s basically his catch phrase at this point. He says, make every spend a CoinJoin. So Samourai wallet, do you want to just make the case for listeners? Why should they make every spend a CoinJoin?

Samourai Wallet:

Well, every spend should just be a CoinJoin because with every CoinJoin, whether you can tell it’s a CoinJoin or not, like Stowaway you can’t tell, it pollutes the dataset and it pollutes the graph of spies and analysts who would apply their own layer of thinking on what should just be a blank slate of transactions incoming and outgoing and anything that you can do to mess with them on that, I think is something that you should do. And it’s not only you doing it for you, but by you doing it, you’re helping everyone else on the network by creating doubt and disorder within what these people think is a perfectly ordered world of inputs to outputs. And this is how things must be. By making every spend a CoinJoin you break that and there’s literally nothing they can do.

Stephan Livera:

I’m a big fan of that. I mean, obviously I’m more about HODLing, but my view is more like if you are spending, you should do it with a CoinJoin. Or a STONEWALL, which looks like a CoinJoin. So look, I think that’s about it. So let’s just finish up with, where can listeners find you and where can they learn more about Samourai wallet?

Samourai Wallet:

Sure. Well we’re on a samouraiwallet.com, and the same on Twitter, @samouraiwallet and on Telegram. So we have a very active telegram group. It’s, I think one of the most active crypto groups. And we have various rooms for various aspects of our software. So if you’re really into CoinJoin, we have a Whirlpool room. If you’re just really into the Dojo stuff, we have a Dojo room for you. And if you just want more of a quiet experience with just the most important updates, we have the main Telegram room as well. And I’m hesitant to mention the secret room.

Stephan Livera:

The secret room is invite only.

Samourai Wallet:

Yeah I’ll get in trouble. I’m not an admin of that one. I don’t have anything to do with it, but that’s where I hang out the most.

Stephan Livera:

That’s right. There’s some very good discussions, but let’s just say that’s an invite only room for that one. So look, thank you again for joining me today. I’m a big fan of the wallet. It is my favorite Bitcoin wallet.

Samourai Wallet:

Thank you so much.

Stephan Livera:

So thank you for joining me.

Samourai Wallet:

Really appreciate that.