Roy Sheinfeld of Breez rejoins me on the show to talk about the latest with Breez and how Lightning Network is enabling a whole new world of possibilities.

We chat:

• Breez updates
• Merchant adoption of Breez
• Lightning network podcasting
• Taking payments offline
• Cloud backups
• Lightning development

Roy Sheinfeld links:

• Twitter: @Breez_Tech 
• Website: breez.technology
• Podcasts on Breez: Streaming Sats for Streaming Ideas
• Introducing Lightning Rod

Relevant episodes:

• SLP94 Roy Sheinfeld – Lightning Network Services for the Masses
• SLP134 Rusty Russell – Lightning Multi Part Payments

Sponsors: 

• Swan Bitcoin
• Hodl Hodl Lend
• Compass Mining
• Unchained Capital (code LIVERA)
• CypherSafe (code LIVERA)
• CoinKite.com (code LIVERA)

Podcast Transcript:

Stephan Livera:

Roy welcome back to the show.

Roy Sheinfeld:

Hi, Stephan. Great to be back. How are you?

Stephan Livera:

So there’s been a lot of stuff going on since we spoke on the show last time. So maybe just give us a flavor of what you’re working on these days over at Breez.

Roy Sheinfeld:

Sure. So Breez, for those of you who are unfamiliar with the work that we do on Lightning, we’re basically building a services on top of Lightning network to help Bitcoin become a medium of exchange. A lot of folks do not believe that we can become a medium of exchange, but we are. And we aggressively working to make that a reality. I dunno, when we spoken last, but it’s been, it’s been a hell of a ride in Lightning. Last year we were mostly focused on improving the infrastructure and they use their experience of of Lightning on mobile. some of the stuff that we’ve implemented include the creating channels on the fly, implementing zero confirmation channels, supporting MPP, graph of TV sessions. A lot of the stuff that we are doing is to be able to run a Lightning Lightning node in an optimum manner on a mobile device.

Roy Sheinfeld:

And so good portions of last year were dedicated to that. But on top of that, we are, we also started the adding vertical solutions on top of our platforms. And last year we’ve added the point of sale and to Breez allowing everyone out there to be a merchant with, with a click of a button, basically no need for a bank account, no need for anything just down Breez switched to the point of sale view and you are all set, ready to accept tracking payments. And then most recently, a week ago actually. We’ve added, podcasting support, podcasting 2.0 is now included in Breez, allowing users, listeners to stream sats to their favorite podcasters.

Stephan Livera:

Excellent. That’s obviously going to be my favorite feature. So yeah, that’s, that’s gotta be the incentive it’s like you guys put in the Lightning podcasting. So now I’ll, shill your app to listeners so that they can do two in one, right? Yeah. So look, I guess, just to bring it back a step just for our listeners who are new, I’ve got a few listeners who are new, obviously we’re going through a bull market. So people who are listening and you’re not really sure what is all this Lightning staff to think of it as an easy way to do lower cost transactions. And essentially, you can get around that. There’s obviously some engineering and some trade offs around this, but an easy way to get started is to try with Bree. So Roy, can you just tell listeners if they are new and they’re signing up, what does the experience look like and what can they do off the get go?

Roy Sheinfeld:

Well, actually, where a lot of our users don’t really understand how this stuff works behind the scenes, it just works. So you download Breez, you put, you top up the wallet with some Satoshis, you can, you can even buy Bitcoin. We have a partnership with one day, you can buy Bitcoin using your credit card or a bank account. You can receive Satoshis via like network, or you can even do an on chain, transaction. We do, we are a Lightning wallet. So everything is swapped to Bitcoin on Lightning. And off-chain, and then you started thanks for listening to podcasts or whatever, do whatever you want. We don’t know what you’re doing with your set of sheets. a lot of our users don’t even we get a lot of feedback that, well, yeah, this is great, but it’s custodial. Well, no, because it’s so easy to use. Breez is not necessarily a Breez. We’re when you top up your wallet and you don’t have a Lightning channel, we open a channel on the fly and swap your Satoshi’s to the Lightning channel and you can instantly start sending or receiving payments.

Stephan Livera:

Yeah. So that’s a really cool feature around to Breez. So obviously for listeners who are new, we very much encourage in Bitcoin, this ethos, not your keys, not your coins. And so that means as an example, you can, you want to try it to use the services that give you more sovereignty and more power in your control. And so that’s a good way, and this might be a good option for you. Maybe you’re a new listener, or maybe you’re a regular listener. And you’re thinking of what to tell your friends when they want to get started. And so for some of them, they are going to just be more interested in getting a hardware wallet and just stacking into that. But those people who want to get involved into, this, this world and try to earn sats. Maybe this is a way for you. And so for example, you might have an exchange and you might’ve bought some Bitcoin. Well, now you can withdraw some out of that exchange into your Breez wallet. And then you can do that with a Bitcoin on chain transaction from the exchange, right? You might go the exchange and say, Hey, I want to withdraw $50 worth or a hundred dollars, whatever. And then Breez will then swap that in, into Lightning for you. Right?

Roy Sheinfeld:

Exactly. Exactly. And then we also have users using, I don’t, can’t recall the name of the mining company, who, who compensate users for…

Stephan Livera:

I think it’s NiceHash.

Roy Sheinfeld:

Exactly. So NiceHash supports Lightning. You can, you, can we throw form a nice hash to Breez there’s plenty of Lightning supporting services, including fun games like, thunder games, [INAUDIBLE] developing or Lightning roulette and others, so you can also do that if you want. We have a heavy thunder game [INAUDIBLE] using Breez.

Stephan Livera:

Yeah. That’s really cool. And so I can imagine, obviously there’s the obvious pushback, which some people will be like, Hey, why do I spend my Bitcoin? I want to, I want to hold it only. But I would just say, remember, in order for you to get those sats, unless you mined them yourself, someone had to sell or spend that for you to get those sats. And so that’s, I guess, part of how we have to recognize this is, this is a phenomenon and an overall economy now. Yes, I do recognize holding is the most important part. But for people who want to live on the Lightning, today, people who want to use it today and there are people out there who do do that.

Roy Sheinfeld:

Oh, by the way, we’ve been growing like crazy. So a lot of people are using their fats. And I think we can get into that discussion. But I think that if you get to think about the meaning of holding and Bitcoin as a store of value, I think what people sometimes miss to understand or don’t they realize that in order to be a great store of value, Bitcoin has to become also a medium of exchange.

Stephan Livera:

Yeah. Yeah. And I think it, this really enables people to do that. And I think it also makes a lot of sense for the merchant case. Right? So let’s say you are a one-off, and you don’t have the time to go and set up a full blown thing. You just want to get started the easy way. So you can just start up res and it’s got a POS app. So for those of you out there, if you have friends who are thinking about trying to accept Bitcoin for their services, you can get them onto Breez started just like that. You can literally get them to download the app and toggle, like set up a wallet and then toggle over to POS mode. And then boom, now they can start accepting sats. And they had kind of like a merchant just using their iPhone or even like an iPad. Right?

Roy Sheinfeld:

Exactly. And as you said, Stephan, a ever every time that we add a wholesaler to the Bitcoin network, someone sold his Bitcoin or their Bitcoin. So in order to grow the adoption of Bitcoin, you need to sell some of your Bitcoin, and Breez, it very easy, simple way for merchant to onboard. I’m getting pictures all around the world, from people in India, for people in the Philippines, from people in in Brooklyn, New York, all over really, street merchants using Breez in order to accept that, which is absolutely wonderful.

Stephan Livera:

Yeah. That’s really cool to hear now, I’m curious as well, because this might be a point of contention around the community where obviously people want there to be this non-custodial culture. But I understand that in some parts of the world, people literally, for them to pay an on chain fee, it is actually quite a high amount even to open that channel. So how are you thinking about that? And is it, is, would you say there are certain thresholds and maybe below like a certain threshold, they actually do have to use custodial Lightning or perhaps community custodial, as opposed to just kind of a non unknown custodial, or do how are you thinking about that question now for those people?

Roy Sheinfeld:

Well, the reason I started varies is to demonstrate that you can have, when people talk about custodial, typically they talk about the user experience and my, my, my reason of stuffing Breez’s to demonstrate and to show the world that we can do, we can keep all the bit confuse and still make Bitcoin, a currency and have a user experience that is on par with custodial services. And with Fiat, there is of course, a question of opening channels, what we do in Breez, we take a minimum fee of of when we open a channel, which is actually the 0.1%, from the transaction, but right now for this specific operation, we are losing money. Meaning we are subsidizing the channel, the channel open opening right now for some of the users.I hope that we vertical solutions like the merchant solutions and with the content consumption like podcasting, then we’ll make enough money out of users that we’ll keep subsidizing a channel opening for those who can pay the fee for these channels.

Roy Sheinfeld:

Eh, so in the long run, exactly like email is free and a lot of the SaaS services, people are using are free. It being in this free freemium model is being subsidized by, by bye heavy users.I, I think, and I’m seeing that that’s the that’s what’s happening right now with breeds.I think we’ll be able to subsidize a lot of the channel opens for users who can pay for channel opens and retain this non-custodial model. Because for me, Bitcoin is Bitcoin only if it exists in a non-custodial fashion, there’s no point in developing custodial solutions. They’re just saying just another form of banks.

Stephan Livera:

Yeah. Right. And so let’s talk through some of the typical hurdles that may be in years gone by, because obviously Lightning is very early, right. A lot of people will say, Oh yeah, see, Lightning has been around. And it’s been how many years and another 18 months. And these are the typical things people would say. And obviously in the early days, there was not as much routing capability. And so you might be a lot more likely to run into some kind of routing failure when attempting a Lightning payment, but nowadays that’s, that’s improved significantly. What’s your experience been around those kinds of initial issues that people were facing in the early days versus where they are today in 2021?

Roy Sheinfeld:

Yeah. There are still issues. Stephan, let’s be honest. The Lightning isn’t perfect yet people are bugging me because it resists still in beta. And we have a warning when you open the app that don’t the money that you don’t want to lose, but I have to be transparent and very, very clear with our users. I think classroom is stealing data. That’s my personal position. And that’s how I present that to the world. but I think has improved significantly specifically in terms of liquidity, two major, features were added to Lightning last year. One is one book channels, the ability to open large amount of channels between the hubs between the lucky nodes, and that increase the liquidity of the network is significantly at the other improvement, which is I think much more important and was key to the development of lacking in the ability to work.

Roy Sheinfeld:

The payments from one note to the other is MPP the ability to split a payment to multiple parts and route this payment via different routing paths,that was a huge improvement. And I know I’m witnessing the average transaction amount increases from, I think a couple of years ago, two years ago, towards around $1 or $2. And now it’s 50 it’s around two 50 bucks even a transaction. And I don’t know if you saw the Eric Wall thread about trying to pay, trying to pay enLightning. He was a successful to send the 100,000 bucks via Breez by the way, because of MPP, because the payment was split to multiple parts, was it,

Stephan Livera:

Was it a thousand dollars? I can’t recall exactly.

Roy Sheinfeld:

I think a 1.8 million Satoshis, which is around $1,000 on those doors, I think. Yeah. And that was something that is, you weren’t, you couldn’t do that a year ago and even six months ago, that was impossible. And I would say reality and empathy. Yeah. Empathy really helped to route the larger payment more reliably.

Stephan Livera:

Yeah. And I think that reliability is key because when you are taking a new person in, you want them to have a nice experience. And so doing all these little things, and I think a lot of the Lightning apps and Lightning builders in the space have really put a lot of work in to smooth over a lot of these little things and hide things away in the corners, like little things like having the channel automatically open or automatically able to take, to receive. Right. Because I remember, I think a Breez in the early days, you had to wait for the channel to confirm,

Roy Sheinfeld:

Yeah, that’s changed. Yes. There’s a lot of it’s not small change incremental change, but there’s a lot of incremental changes that seem small maybe to the end users, but make the entire experience a much more seamless and holistic, creating channels on the fly, meaning you don’t need to wait to the channel, to be open. The channel is being created on the fly when you receive a payment and you can, we create a zero confirmation channel, meaning you can immediately spend the funds after receiving, without waiting for on chain confirmation. Also MPP is a huge deal in mobile. We’ve actually optimize and change the MPP algorithm on mobile devices to allow the user, to spend all the funds from all of the channels that they have inside the mobile device inside Breez. That’s not how MPP work, but this is something that users expect, meaning you receive funds, you are able to spend all the funds since trivial in a field application, not as trivial in a non-custodial Lightning application. And we’ve implemented that. Although I don’t know if you’re recalled the issue of channel reserved and yeah. So in Lightning, if there’s, there’s, there’s a need to save some of the sats. They locked the forever until the channel closes. And we modified, we forked LND to get rid of that as well. So you can send all your funds, and have a zero balance in Breez.

Stephan Livera:

Yeah. So I’m curious then could that represent a risk to Breez’s side? If I don’t dunno, maybe someone is being more adversarial or someone’s like thinking very attacker minded if they were to spin up a lot of these and then just burn a lot of, Breez’s capacity or a lot of bit Breez’s sats on channel closes.

Roy Sheinfeld:

Well, keep in mind that with the zero channel reserve, we are the ones that are opening the channel. So actually the zero zero channel reserve is for users that open channels and then close channel immediately and to lock a user’s funds. So if we are the ones that are opening the channels, I think we’re good on that regard.

Stephan Livera:

Yeah, I see. And then also the big problem early was people were struggling to get inbound liquidity. So they had this issue where they would start up a Lightning wallet, but then not be able to receive because they didn’t have any incoming capacity. And I think that’s one area where Breez kind of innovated in that way to make it a much more slick experience where they just open the wallet and they’re able to receive straight away. So what kind of capacity do they have when they start Breez up today?

Roy Sheinfeld:

They don’t have any capacity when they stop Breez. That’s the whole deal with the zero confirmation channel. So let’s take a step back for a second. We call this service and LSP Lightning service providers. Lightning service provider is the entity that onboard users to the Lightning network. Exactly like an ISP on boards, users to the internet. So Breez has the say very sleek, cool Lightning client, but it also has the power of providing a LSP and LSP services being an LSP network. So when you’re still in Breez, you don’t have any inbound capacity when you start receiving funds in Breez. Then the LSP opens a channel to the end user, to the node running on the, on the mobile device. And we currently add the 100 K of Satoshis extra to the incoming payment. And we do that by creating an on the flight channel with the zero confirmation. So it’s very dynamic and we do that up to a 4 million satoshis and we limit the local balance of all the channels to 4 million.

Stephan Livera:

Gotcha. Yeah. Let me just quickly see what that then allows people to be a merchants right away, right. Like if they were to receive, and so I guess they can fund it either with a on chain payment or with a Lightning payment and it will swap into or it’ll become a channel on their side. Right?

Roy Sheinfeld:

Exactly. Or buy Bitcoin via or via FedEx or other Lightning supporting exchange or or not. because we also to swaps on chain to off-chain swaps, but merchants need actually don’t need to fund the wallet. They need to fund their wallet from customers. Whenever a customer wants to purchase something, they send them a Lightning payment and the channel is being automatically open.

Stephan Livera:

Yeah. And that’s a really cool factor because I think if I were to try and onboard somebody as a merchant and I didn’t want to have to go and teach them all, Hey man, you got to set up your channels and you got to make sure you’ve got inbound capacity and maybe you’ve got a loop out here. It’s more like, no, just get this app, receive it on the app. And then the app will deal all the channels in the background. So I think that’s an important factor just to call that out, just for people who are new, if you’re thinking about how to start taking payment. Now, I guess this would just be I guess it makes the most sense if you are just kind of a one man band. But I guess how would it work in the case where let’s say it’s a store and there’s multiple employees and you, now you need to start managing it like that. How would you sort of build it from there for a merchant that is,

Roy Sheinfeld:

So we have a feature in the Breez point of sale, which is, managing manage your passwords or a manager or something. I don’t know. It turns the wallet to receive only mode when you switch it on, and only admins only managers can unlock the wallet and spend the funds from Breez. So imagine a store with multiple workers, you set up Breez for all your employees and you switch, for the employees that you don’t want them to spend funds, you switch the manager password in the settings, and then you are all set.

Stephan Livera:

Yeah. Gotcha. Yeah. So that makes a lot of sense then. So, you could have, let’s say an iPad in the store and then the employees can punch in and they can ring up the bill and say, Oh, this is $30 for your order. The customer just pays it either on chain or Lightning. And then later the manager can come along and enter their pin and receive subtle, spend some of that out, or exactly. Yeah, exactly what they want of that. And so

Roy Sheinfeld:

The agent that the install Breez on their employees, mobile devices and they set the password on their employees, mobile devices. And so we have that as well.

Stephan Livera:

Oh, right. Well, there you go. So that’s another way where you can have multiple devices Oh. Being in play at the same time to be for that same merchant. And then on the other side, so let’s say that merchant now wants some fiat. So, they need to pay their bills. They need some fiat, Australian dollars or us dollars or whatever. Then at that point, that’s where they might need to then go find an exchange to deposit. And they would send a deposit using Lightning into that exchange to get their US dollars, Australian dollars or whatever out, or obviously if they’re able to find someone who wants to buy it cash in person. Okay. But in most cases they’re probably just going to be going to an exchange for that right.

Roy Sheinfeld:

Exchange or broker support sales sell as well.you have a very nice service from B3 field that allows you to have a fixed fiat amount to hold the amount in a BitRefillcard, inbuilt refill, if you don’t want to face a price volatility. So there are a lot of options out there.

Stephan Livera:

Ah, clever. Yeah. So you could basically buy that BitRefillcard and at the end of the day, say, and then just hold those and then spend those if you needed them inside the BitRefillecosystem. And so that’s another way to kind of play together. So I think that’s what you were talking about with this idea of Breez, not just being a wallet, but being kind of like a Lightning platform, if you will, to enable these connections. So can you tell us a little bit about some of the connections there then? Like what other ways are you looking for Breez to sort of collaborate or, socialitate?

Roy Sheinfeld:

So definitely so Breez is actually, as you said, a platform, even if in the first show that we’ve done that I didn’t like the word wallet because it’s really, I don’t think the term is a good fit for, for Lightning clients and equality. Just a very small aspect of what we do and other are doing in the ecosystem. There is a wallet, but it’s also just a very small part of being a payment service in the Lightning ecosystem and LSPs and other part of that, but also the infrastructure, the platform that we’re building inside the client. So we have a point of sale. We have we have a podcasting, which is the first example of streaming sats for content. We can we can discuss this further in second, but we also have an app view and the apps view, it’s an open marketplace for Lightning apps.

Roy Sheinfeld:

So every app that supports web LN, can be integrated into Breez. And we have a lot of apps in the — I think it doesn’t have seen the Breez, the marketplace it’s, our users are really enjoy and use a lot. So, LN market is being heavily used among the Breez users to trade to bet on the Bitcoin price, say short or long Bitcoin, and they’re earning sats as a result, or losing sats. And BitRefill is being heavily used. And then whether we have swap services to other coins and we have,whatever, like lacking rule that we have [INAUDIBLE], which allows you to top up the credit card, a debit card using Lightning, and buy whatever you’d like with with the debit card. And so there’s a really nice ecosystem of Lightning apps out there and we expect to have more.

Roy Sheinfeld:

And what we want to do in Breez is actually to keep building Breez as and open platform for in many ways. So Breez, unlike other services is open in a sense that we don’t limit you to the Breez LSP. You can open channel against other, other, other nodes in Burris. So we want to add more LSPs to breed. We want to add, like in pool to Breez, in order to increase the liquidity or even eventually for you to earn some, interest on your Bitcoins. There’s a lot of stuff that we’re planning in that regard.

Stephan Livera:

Yeah. That’s fantastic. We’ll have to get into some of that, but I think we’ve also get into the podcasting now. So tell us a little bit about how the Lightning podcasting works.

Roy Sheinfeld:

Yeah. So podcasting is podcasting 2.0, that was being pushed by Adam, the wonderful Adam Curry and Dave Jones, Podcasting 2.0 Is an open, testing platform, allowing everyone to register their RSS or podcast RSS in podcast, index.org, that’s their site. And the Lightning is a great feat with podcasting 2.0 because the entire idea of podcasting 2.0 is to have an open forum for a free platform for freedom of speech, and in order to achieve that, you really need a peer to peer money. You really need to have peer to peer economy because of censorship, not only censorship, but also, let me break it down to you. So currently in the purchasing wall and that better than the need for sure, podcasters are making money through advertisements, and these advertisers and the content curators are actually control the content.

Roy Sheinfeld:

If they don’t like sound something that is being said in the podcaster, they can stop the funding of the podcast or they’re even censorship, they flag censorship to the podcaster. And if you want to have a free platform for freedom of speech, you would need also to have a peer to peer economy around that you really need to have a way for users, for podcast listeners to compensate the podcaster directly without the involvement of the curators or even banks, for that matter, because censorship can be applied via the money transmitter, Breez is a great example, to the say the power of the lacking economy, because when you have a node running in your pocket, basically you can compensate the podcaster directly without any middlemen taking a cut from your earnings or applying censorship to your content.

Roy Sheinfeld:

By the way, it’s not only censorship. It’s also the quality, the quality of the podcast because competing over advertisement and is also changing the quality of the content being created in the podcasting world. So you need to have clickbaits and you need to have some essential content in order to attract more users. We want clean content, high quality content. And if we want that, then enters the value for value model that Adam and Dave are preaching where users can compensate a podcaster directly without the involvement of third parties. And then you can be dependent on your community of listeners.

Stephan Livera:

Yeah. So it adds a whole new level. And I think the way Adam Curry has been talking about it is he saying, people can just start contributing in a different way to the shows that they like. And then it’s, it’s all one feed. So it might still have the ads in it. But then his view is like, Oh, you can, more kind of, you can skip, do you feel like less guilty about skipping the ads or whatever, I guess that’s one way of doing it. And maybe other people are thinking of it. Like they would actually go and have a separate feed, which is ad-free. And I guess it’s even from my point of view, it’s a little bit difficult because we’re not difficult. Like, Oh, look, poor woe is me kind of thing, but more just like technically achieving it because I actually do provide ad-free version for my Patrion listeners and Patrion does a feed for like, which is the ad-free feed for them.

Stephan Livera:

And then I also give the MP3 version in a separate private chat group for those supporters, but it’s a bit more manual. It’s not as kind of built in with a slick app. So that’s kind of a difficulty there that I do have a Sphinx thing going, just like my, my buddies over at tales from the crypt who are big on that too. But it’s just an interesting little development that we’re seeing now that we’re trying to do this whole Lightning podcasting 2.0 thing. So I guess that’s just a little bit of color from my side. Yeah.

Roy Sheinfeld:

Yeah. And it definitely we’re just getting started, right. I’m sure that if it will be successful, then the tools get will be easier and they provide you with the support that you need in order to publish an ad free version. And the old game right now is very Rick Ford’s advertisement. But just like Patreon, ] and I think if we’ll be able to succeed with with this, value for value model, on top of Lightning, then the tools we’ll build the tools that you need in order to succeed with that. And you’re either way, you’re becoming less dependent on your, advertisements funds, which is great.

Stephan Livera:

And the other thing with the whole podcasting 2.0 thing is it does like a split, like a breakdown of where the sats are going. So for the listener, you’re, you pick a certain rate of how many sats per minute, whatever, a hundred sats a minute or whatever, whatever rate you pick. And it then does a breakdown of obviously some of that goes to the podcast or some of that might go to the app. Some of that might go to the podcast index, like, and then the way this might be built out in the future, people might, if they are contributing in some way, maybe if they’re doing some kind of design or marketing work for the show to help promote the show, then maybe they get cut in on having, some of the stats that get streamed to them. And there’s a lot of power with this because you can basically set this up on an app and you can just download it on an Android phone or whatever. And it’s not necessarily the same as having to go through a normal employer. If you can set up an app and get paid, Bitcoin for your services in this way, it’s just enabling a whole new world of possibilities. Right?

Roy Sheinfeld:

Exactly. It’s a different economy because it’s a transparent economy. What if you listen to one of Adam’s podcasts, no agenda or focusing 2.0, we, you see, for example, yet he adds — the guy that does use chapters. it’s a challenge to doing chapters for forecasts, Breez supports that by the way. But he adds that guy, or people can add the guys who are doing the podcast images or the podcast sounds and et cetera, et cetera. And really there’s a direct compensation from the end user to the guys who worked on the podcast without going through any third-party. That’s amazing. That’s th that’s the power of Lightning. You can’t do that with any other, in the field world. That’s, that’s not possible under the hood. The way that it’s being implemented is every entity that is being compensated,has its own Lightning node and Breez, the client is doing [INAUDIBLE], is a way to send sats without an invoice.Breez is doing key sense, to the note, depending and splits the payments the mean minute per minute payment, based on the ratio the podcaster has decided.

Stephan Livera:

Yeah, that’s pretty cool. I’m wondering as well. I know you’re more a technical guy yourself, so you’ll probably have some appreciation for this. I’m curious why it’s kind of done as like a streaming on the go, as supposed to, doing it like a one payment at the end when they’ve stopped listening. I’m curious if there’s any insight you have into that, or whether that might mean there’s a lot more, HDLC is flying around the network around the Lightning network. Would that represent like a dos vector there, or is that, you think that’s an acceptable.

Roy Sheinfeld:

So a couple of things on that, one currently it’s a voluntary model, but no one says it’s going to stay like that. So imagine a world where the podcasters are speech streaming, podcasts, or music or movies or videos, if you continue to pay sats. And so in that model, you have to string sats because as long as you stream sats, you receive the content. That’s, that say one thing. A second thing is the fact that, from a technical standpoint, from a client standpoint, it’s much Cher. It’s very robust to string sats because imagine someone forced closes the app or on installed the app, then you, you are not relying on the, on the, on the, on settling the balance at the end of the show, keep in mind also that we don’t have a credit card as a collateral, right?

Roy Sheinfeld:

You need to stream sats because if you stop, if you decide to stop streaming set, then we, can’t all you accountable. The only way to hold you accountable, the user is for you to stream sats. And I like it. And I’ll tell you, and I can, I, that’s my, that’s my opinion. I like it as a stress test for Lightning for the Lightning network. And I saw it just published an article yesterday and, and LA Lou, rusty from Lightning lab server fly.I, I like to test the robustness and see flattening can handle a lot of HTLC streaming because that’s the power of Lightning. And I think we need to start testing the waters.

Stephan Livera:

Yeah. I think that’s a really good point. You make there that it is time to start testing these out and seeing how they grow. And if there are issues identified as better, they’re identified early. So we’ll see where that goes. And in terms of another…

Roy Sheinfeld:

And I’ll tell you, and one other thing, Stephan, podcaster love to see his sats streaming all the time. people sending me screenshots of the whole staff or of the incoming sats, that’s the cool factor and the cool factor is, yeah,

Stephan Livera:

I know. That’s certainly very cool seeing it stream in and ping off the notifications in my Sphinx app. And I guess it’s kind of the idea is to try to make it all interoperable, right? Because if I have set up the Sphinx app, but then I can receive, from other people on other apps, then it’s kind of all becoming one growing, ecosystem.

Roy Sheinfeld:

That’s what you said right now. That’s the key for the success of Lightning. Lightning has to remain open and, and, and the, and the decentralized, you can’t, you can, but that’s not power of Lightning. You can build closed gardens on top of Lightning. But I think that once we’ll do that, then Lightning is doomed to fail. We need to keep Lightning open. And with the podcasting 2.0, we have an open standard and open protocol for everyone to join. And Jack [INAUDIBLE] Yesterday you reflect one of our tweets saying he wants to add the podcasting 2.0, to his hat — to strike, which is amazing. And that’s, that’s the power of Lightning, being an open, decentralized platform for transferring a peer to peer money.

Stephan Livera:

That’s really cool. That’s really cool to see where that’s going. And I guess just a couple of other questions that people might have just from a practicality and being pragmatic. Let’s say someone wants to accept a payment, but it’s being done online and they might, post that invoice and then have to deal with the expiry time. Or maybe if their wallet or their phone is off. How does Maurice deal with in those kinds of scenarios? Like, I guess historically, maybe people might’ve said something like in a private DM, they might’ve said, Oh, Hey, I’ll sell you this thing. Can you pay me to this address? But then maybe because of time zones that other guy wakes up and he only sees it a couple of hours later, and then the guy who’s receiving his phone is offline. So in a Bitcoin transaction world, that would have been fine because it’s just going to the address. How does that work in the Lightning context and how does Breez kind of get around some of those kinds of issues?

Roy Sheinfeld:

So we have a couple of ways to mitigate that. Yeah. So in order to receive a Lightning payment, both parties need to be online at the same time. It’s kind of like having a phone call, they need to talk together at the same time in order to do this Lightning transaction, we have a couple of ways to mitigate that. One is called the connect to pay, which works between Breez users only. And just because others haven’t implemented this protocol, but you can send a link, to pay someone. And when this user is ready to accept the payment, he clicks on the link. The sender receives notification that their pay has joined the session. And they have like an online session of payment and that’s leveraged mobile notifications in order to coordinate the payment session. Another way to mitigate that is by using a LN URL, we support LN URL withdrawal.

Roy Sheinfeld:

So you can put your funds, the funds that you want to transfer to someone in an LN URL withdraw-supporting sites like Lightning gift or LNpay or others. There are a few services that support that. And whenever the user is ready to accept the payment, he clicks on the link and then they can receive the funds, which is which it’s also a way to mitigate that. Another thing that we want to implement it, but we were so busy that we haven’t got around to that is a protocol that we call a Lightning road. And that we published a while ago is we want to leverage, hold invoice in order to coordinate these payments. So Lightning world can be a node that holds the funds. It’s an intermediate node that holds the funds on behalf of the payer and settles the payment with the pay once the pay is online. So we have a medium publication that you can search for the Lightning world articles to see how it works in a trustless manner. That’s another features that we want to implement in regards to offline so-called offline payment, because there is no such thing as an offline payment in Lightning.

Stephan Livera:

Gotcha. Yeah. So it’s kind of like an approach of trying to find ways to either wake that phone or to be able to make it wake up and take the payment or some of these other approaches, like a Lightning example, like the huddle invoice style. Yeah.

Roy Sheinfeld:

We want to integrate something like the road, which is similar to, in concept to the concept of a Watchtower, to tackle that we want to be less dependent on, on the platform. I mean, in Google app, we want to, we want to have something that is more introverted into the Lightning way of working with things in that regard provide the user experience benefits.

Stephan Livera:

Yeah. It’s really interesting because there’s, trade-offs all the way, right? Like some people have said LN URL might not be as secure because you’re kind of reinserting this idea of going to the web interface. And then I’ve also heard some of the protocol developers say they want a big fan of the HODL invoice style because it locks up liquidity across the route liquidity network. So, I mean, I guess with all of these there’s trade-offs, and we kind of have to just see what happens and what the market decides it in some sense, which approach in which trade-off is best for people.

Roy Sheinfeld:

I think there will be multiple solutions for multiple use cases. Breez users are using the connect heavily using the connect to pay feature, people who are using, for example, thunder games or other services are using LN URL. We’ll leave them at the road and we’ll see where it takes us. I think some merchants have no problem in holding some of their liquidity.

Stephan Livera:

Yeah. And you mentioned earlier as well around some of these ideas of what you might look at in future, like having Lightning pool, can you tell us a little bit about what that would look like?

Roy Sheinfeld:

Definitely. So Lightning pool is a way to lease channels. It’s a way to increase your liquidity without paying a lot in advance for, for the channel we are looking for way. And that’s the key. Another key for the success of Lightning to increase the liquidity in the Lightning network. I think labs is tricky as this concept of the tool, the service over Lightning pool, where you can at least chat on us. We want our users to enjoy power of Lightning pool in order to increase their capacity to increase their liquidity. And now they can pay 1000 bucks in Breez. I want to start building for all where they can pay 10K in Breez, and we will require services like Lightning pool in order to do that. And Lightning pool has added some features that allow services libraries to coordinate channel opening between twin user, and then someone that offers channel input. We need more features in depth, and we want, I want to, I think, last to support zero confirmation channels and zero channel reserve in order to integrate that into Breez. We also want to make sure this, that the entities that are offering these channels via pool are reliable, meaning have a high [INAUDIBLE] are able to reliably route payments because a lot of the stuff that Breez is doing is in LSPs to ensure that payments are getting routed.

Stephan Livera:

I see what you’re saying. So it sounds to me like your concerns and things around Lightning, Pool are essentially making sure that the users still get a good experience. So I guess just to back up a sec, just for listening to a new Lightning pool allows basically think of it like a channel marketplace. So some people can offer up liquidity and say, Hey, I’m willing to open a channel to you for this amount of sats or this kind of return. And I guess from your side, Breez might be able to facilitate that for Breez users to say, Hey, if you need liquidity, we can help you source that, that incoming liquidity through Lightning pool. But what you’re saying is essentially you want to make sure that the reliability of those channels and certain features around having zero reserve, meaning you don’t have to have that little amount of fee reserve in the channel that you can spend it all down to zero and features around that essentially around ensuring the customer experience.

Roy Sheinfeld:

And you don’t need to wait in order to spend the funds. Yeah. It’s about user experience in real life,

Stephan Livera:

Right? Yeah. That’s a really interesting thing to see there. Also, I’m curious about the automatic cloud backups. So the scenario here might be, let’s say they’re our listener of this show and they are out there trying to teach people about Bitcoin enLightning and they might tell them, Hey, get on this app and you can start stacking sites or spending sites or whatever, and they might have lost their backup. Right? So I think a lot of us who have been around for a while, have friends who we helped onboard years ago, and then they lost that backup. They lost their 12 or 24 words. And then now they’re, they’re gone, they lost the coins. What’s the approach with Breez and the order of cloud backups.

Roy Sheinfeld:

Yeah. As you said, we have also a cloud backups. So Breez is a Lightning wallet. I’m like, unlike a Bitcoin wallet, in order to backup reas, you need to back up a Breez after each payment because Lightning under the hood is a chain of Bitcoin transactions. So whenever the channel state is changing, you need to save that in the backup, if you don’t want channels to be closed. So it requires unlike a regular Bitcoin on chain wallet, it requires an ongoing backup process. The only way currently to implement it in a nice, easy, simple way for users to backup in that manner is to back up to the cloud or to a Breez server. We decided not to back up to a Breez ever because we don’t want users to be dependent on Breez as the backup server. So we’re offering a Google drive, iCloud ongoing backups, and we are adding Dropbox. And we’ll add that soon. And for users that are worried about Google or Apple monitoring their content, because this companies are a bit obscure about the way that they saved the backup data will also add an option to increase the backup date.

Stephan Livera:

Basically it automatically gets backed up to that users, Google cloud, or Apple iCloud or Google drive, or Apple iCloud. And they have an option to add a password if they’re concerned around security of that, or surveillance of that by, the big big Google and big Apple. And so then in the case, like, hypothetically let’s say Breez, it wasn’t around anymore and that user wanted to recover. How would they recover their coins?

Roy Sheinfeld:

So currently you can recover. Yeah.I imagined that if there is a want round, we will provide a utility that allows you download the backup data in easily. Restory teen and LND note, you can do that manually, by the way, in the developer to demonstrate Breez is a full Lightning node. We also expose the developer mode in the app itself. You have a developer mode with all the LN CLI the LND kind of command line, the capabilities, which you can totally control. One of the actions in the developer menu is to export the LND and databases. So we can export these databases and restore it in an LND note. That’s essentially the backup data that we store in the cloud. If we, if we will stop working, then then you can use that. Or, we will provide tools to download the cloud data, or you can compile Breez. Breez is fully open source, which is another topic in the Bitcoin domain. So we are completely open source. You can compile and use the Breeza without even knowing

Stephan Livera:

Very nice. And Roy also curious to get your thoughts around, to Lightning as a protocol. What kinds of things are you interested to see? Are you looking to see things like, I don’t know, trampoline routing or anything else that you’re interested to see come to Lightning?

Roy Sheinfeld:

I think worries me about like, all the advances in the, that you’ve mentioned, or for me, for one they are nice to have, because I think we’ve managed to create a good user experience on top of Lightning what we have right now, traveling payments will definitely trumpet and routing will differently be an improvement because rough sync is going to be a challenge as the Lightning network grows. I think Lightning in general needs to be more robust. We still seeing and experiencing issues with our users, like a spontaneous channels being closed and stuff like that, that we need to resolve. That’s what worries me currently in the day to day into the day-to-day experience. Yeah. Looking forward for Trump, pulling, routing, looking forward, some of the stuff that energy is working out in terms of upgrading existing channels. So the ability to upgrade one channel to another, without closing and opening a new channel, that would be great. For example, channels that offer an Encore, an Encore channel in Encore output, and Corolla, food is needed for, to reduce the fee of channels being closed, closed. This is a feature, is that,

Stephan Livera:

Well, I think there’s, it’s kind of like around things like reliability or just kind of ensuring the fee levels are appropriate using the anchor output style channel,

Roy Sheinfeld:

And that ability to upgrade from one channel to another, that’s going to be key for the adoption of this improvement.

Stephan Livera:

Yeah. but it looks like it’s really exciting. There’s a lot of growth in around the ecosystem as well. Wondering if you have any I guess stories that you’ve seen in terms of merchants or any people who are kind of adopting Lightning and just going straight into Lightning, are you seeing that in your, any of your channels or any of your communicates?

Roy Sheinfeld:

Well, yeah, definitely. I’m getting good. I told you I get pictures from all around the world of people, sending me pictures of merchants using various to accept payments, someone in Israel recently, both the Cheetos in the cities, in Israel and there, the merchant, the merchant use the Breez, it received the payment that was, we don’t even know, that’s the amazing thing. we don’t know the implications of the work that we’re doing. I can tell you for the stuff that we’ve released last week, we’ve tripled our monthly transaction amount in, in a week, meaning in a week we’d done three times more transactions that we’re doing. Yeah. Yeah. And and podcasters are approaching Breez, wanting to be added to the platform, wanting to be monetized. They want to monetize their podcast and start receiving Bitcoins. People want to receive Bitcoins and users are willing to stream stats to content for it. Or that’s. I can tell you, after a week.

Stephan Livera:

Yeah. Well, that’s very exciting and I’m excited to see where it all goes. So Roy, I think is probably a good spot to finish up here. So if you’ve got any closing thoughts for the listeners and what they should do, and of course, where can they find you online?

Roy Sheinfeld:

Well, they can find me practically and ask you know. Breez is not just only me. We’re a team, shout out to my partners, Roei and Akiba Erdem. Thank you. Love you guys. They can find us in telegram. They can find us in medium. We’re doing a lot of content creating a lot of content to help the Lightning ecosystem in medium. So telegram, medium Twitter, wherever I’m here for you guys. Thank you, Stephan. Bye. Bye.

Stephan Livera: Thanks, Roy. See ya.