Lightning Power Excel Plugin, Lightning Residency

Welcome to the Stephan Livera podcast.

Hey guys, welcome back to the show. Today we've got Pierre Rochard who basically doesn't need an introduction. Welcome, Pierre.

Hey, thanks for having me back on.

Oh, it's always a pleasure to chat with you, Pierre. just for anyone who is new or maybe this is the first time they're listening to the podcast, the first time they're listening to an interview with Pierre, you guys should know who Pierre is. Look him up online. He's very well, influential in terms of Bitcoin. He's the co-host of the Noted podcast, which is, you know, the best Bitcoin podcast in the space, and he is also one of the co-founders of the Nakamoto Institute, which And I think Pierre has also done really well recently to now get more involved in other aspects of Bitcoin, which we're gonna talk about. but I think, yeah, probably the most exciting thing is the lightning payments within Excel. So Pierre, maybe you wanna open it up a- and give us some background on that

Yeah, sure. so, when, let me, let me go back to the beginning of this, which is that, there was a conference in Texas that was hosted by, Gary Leland and Tony Zuccala, and they, contacted me to come speak, as well as people like Turde Meister and Michael Goldstein, aka Bitstein, and Safedine as well, and so- So, yeah, I, I was, that was an obvious yes, right? Like, the, it's an awesome crowd to be, speaking with. and at some point, I got an email from Nick Batches asking like, "Hey, can I be-- can I participate in this as well? here's what I've been thinking about with regards to the Lightning Network, rate of return." And, I just started reading and I was like, "Oh, yeah, this guy, like, has..." Is onto something very interesting with this topic, and I haven't really seen anyone flesh it out to the same extent as Nick Bhatia has, and at one point at the conference I asked him like, "Oh, you know, have you, calculated this yourself or are you like using the, API on LND?" And Nick's Nick's a really smart guy, he's, he's not a software developer, and so he, he hadn't really had the opportunity to like programatically interact with LND, and I got, I, I think it, it got me thinking like, well, how would someone like with Nick's finance background interface with Lightning correctly, or at least with the, the least friction, right? Not necessarily correctly, but with the least friction. And, it immediately came to mind that you would use, Microsoft. Left Excel. and, I think that it came to mind because, first of all, I've been an Excel user for a very long time. I went to business school for accounting, and so I've been in Excel, and then second, secondly, from a software development perspective, I created an Excel plug-in in C# before, so I knew that, because C# is such a widely used language, that it would be entirely plausible possible to write a LND client in C# and have it, connect with an Excel spreadsheet. And basically the idea is to use Excel as a user interface that doesn't actually store any data per se. It is just a user interface for interacting with your Lightning node and extracting data from it, sending payments, from it, and opening and closing channels and connecting to peers, disconnecting from peers Pierce. so all of the operations that you can see are feasible through the, LND API. either I've already implemented them in the plugin or I, I anticipate implementing them. So I think I've got like coverage of at least seventy-five percent of the LND API, and This, this was actually relatively easy to do, in C# because, the API uses a standard called gRPC, that was created by Google, and the idea there was to have one standard that several different programming languages could use. And so, for example, the, LND itself is written in, a language called Go, which was also developed by Google, and, I needed to develop in C sharp. Well, thanks to their use of gRPC, that was really easy because I was able to generate all the boilerplate client code, and interface with their, LND API very easily. so, yeah, that, that, that helped, make development kind of, reasonable, And the, the, the Excel API itself isn't perfect, like it's, it's got some issues with, concurrency, essentially when, when the, plugin itself is performing actions on the sheet and the user is as well, it can crash. so there's definitely like things that I, I'd like to improve, and that, that's definitely avoidable, but, it's, it's just, it's a, it's a tricky problem to, to solve. But anyway, I've, I've been rambling.

Yeah, sure. No, well, tell us a little bit about the setup of the plug-in, like how would you set it up?

Yeah. Yeah. So you download a setup dot exe, file and you run that and like any other installer on Windows, it'll install the plug-in in, Microsoft Excel and then you would open up Excel and you would, go-- So there, it adds a, a ribbon to the top of Microsoft- Soft Excel, and you click on this ribbon and you click Set Up Worksheet, and it will populate the workbook that you have, with different sheets. And so you have like, the first sheet is a sheet that shows you, for example, like the, the connection information, how, how is your node being communicated with? Because by, by default, if you run this, it will actually- Actually start a node in the background because the plugin itself comes pre-packaged with LND in it. And so once it starts the, the node, it is getting you onto the Lightning Network and connecting you with other peers. And alternatively, you could have the node already running in the background and the plugin will detect that it is running, it's, it's smart like that, so it won't start its own node if it sees that one's already running on the computer. and then the third alternative is you can connect to a node that is remote. So maybe you're running a LND node inside of BTC Pay server because you are accepting Lightning payments at your web store, and you also want to be sending payments, and you wanna be using that LND node that's remote, to, to, to send payments with, and, and then you can go onto Excel and, use this plugin to, to do that. And you can also see Like all the payments you've received from your web store. So I, I wanna actually add tighter integration with BTC Pay server in particular, that way you can have more information than just what's available from LND. I think that enriching it that way would definitely help accountants, figuring out, you know, all of their, their, their revenues and their, the cash they collected, essentially the, yeah, the, Bitcoin peer-to-peer digital cash they've been collecting.

Yeah, that's great. So maybe talk a little bit about what are the actual commercial ways that an accountant will use this in practice?

Yeah, so, at first, like over the foreseeable future, I don't see this necessarily as being a tool for accountants. I see it really as a tool for power users. And, in fact, so the, the, the group I'm starting is called Lightning Power Users, and the website is lightningpowerusers dot com. And the plug-in is called the Power Excel plugin. and so in that regard, it's really, it's not even about someone who is working in accounting and tracking, payments per se. This person, might just be a, a business user in general. They might, you know, have a marketing background, and they have an idea for a lightning application, and they need a, some kind of way of prototyping it. And like I, I don't know what I don't know, right? So I don't know, how exactly someone would- Or what their exact idea would be, that's kind of the point of creativity, right? but giving them a tool where essentially they don't have to be a developer to be able to iterate on Lightning and to, try different things out. Now, there's, there's that, and then there's also just people who work in finance and accounting, and, and more broadly throughout the business world who are running Windows and who are very interested in Bitcoin. They have read Safedean's book, they've read Mastering Bitcoin. Bitcoin and they want to get their hands onto a way of interacting with Lightning and learning by doing essentially. And so that's really hard for them because they'd have to get into the command line and they are probably Windows users, right? So, they're not familiar with like PowerShell and the command line on Windows. So having this Excel plugin gives them an easy window, from an environment that they're entirely familiar with, which is that of a spreadsheet, which allows for a lot of ad hoc analysis So, for example, they might, you know, want to like create a graph of their channel balances or something like that. You know, you could, you could really experiment with visualizations there. And then on the quantitative side, like with Nick Bato and the Lightning Rate of Return, if you have like all the fees you have there, you have the capital inflows and outflows of you allocating capital to channels, and you can, you can use all this data that's at your fingertips, you know, copy-pasting it around, doing pivot tables, whatever. Whatever you need to be doing to, to see, the calculations that you're looking for. So that's, that's kind of the, use cases I see for the immediate futures. Really people experimenting.

Fantastic. So all of you accounting and finance people, you can stay within your safe space of Excel and INDEX MATCH and VLOOKUPS and tinker around with Lightning with the Power Excel plugin. How about things like, handling of things like decimals and so on? Just because of obviously the, you know, eight decimal places with Bitcoin, how does it work with that?

Yeah, so that's a great question. so what-- the way that the, LND API is set up, and I think it's reasonable, so I'm sticking with it, is to use satoshis, right? So one Bitcoin equals a hundred million satoshis, and, that is for the amounts that we're talking about on Lightning, it's entirely feasible to have it display, you know, maybe like five million satoshis, right? Like that's, that doesn't take up a huge amount of space in terms of, an Excel cell. and there are currencies like the Japanese yen that have like high amounts like that, right? and then you might be like, your payment to Your coworker might be five hundred thousand satoshis or something like that, so or fifty thousand satoshis. And like, I, I also, I like that it has the unit bias in the opposite direction of what we've been suffering with, with Bitcoin, of people logging onto Coinbase and being like, "Oh man, Bitcoin is so expensive, it's almost, you know, six thousand dollars." which, you know, and then they look at Litecoin or whatever and they're like, "Oh, that's, that's much more, you know, affordable." So that's kind of like a nonsense cognitive bias that some people have, have, and, with, by using satoshis, I think that we can go in the opposite direction. And I would really advocate that everyone in the, in the ecosystem move to satoshis. And frankly, if, if s- if being in satoshis means that the quantities of money that you're moving around are astronomical, like, you know, you're moving billions of satoshis, like, that's a, that's a first-class problem, you know, like, I don't think that you Units, if, if you're, if you're rolling like that and you've got your Lambo.

Exactly, billionaires in satoshis. Yeah. Well, hopefully. Well, you know,

you can, so you can be a billionaire in satoshis by owning like sixty-five thousand dollars worth of Bitcoin. and that's, that's like, it's weird because we live in a world where to some people that is a, a rounding error and to other people that's like more

than, that's

In terms of channel management, does the plugin help you open new channels or is it more like LND does that in the background for you?

both, actually. So, by default, it's configured if the LND is the, the one that's bundled inside of the, plugin is being used, by default it will turn on what's called Autopilot, and Autopilot is just as its name implies, it is automatically opening and closing channels for you in the background so that you as a user don't have to think about that. Now, this is the very first iteration of Autopilot that's come out of LND. And, they will be very clear about this, and I'll be very clear about this, is that it's a, it's a starting point, right? So, Autopilot is going to get increasingly sophisticated over the coming years, and the current iteration of Autopilot like could use a lot of fine-tuning, and that means that you're going to be manually intervening as the user. So the interface allows you to create and close channels yourself, and in fact, so, You have one tab that has all of the pending open channels, right? So the channels that you started opening, all of the open channels, all of the channels that are being closed or in the process of being closed, and then all the channels that were closed in the back, before. And so All that's on one tab, and then you also create channels there. And basically, the, the, the way I found of closing a channel is that you, you delete the cell that has the channel ID in it, and then it'll, it'll shut, close the channel for you. so you just have to clear out that cell.

Very interesting, UI there. Yeah, cool.

Yeah, because otherwise you'd have to have like a button for every channel, and buttons are a pain, in, in Excel plugins. So I figured, you know what? Let's do it a little more creatively and, hack around a little.

So just around at the time your plug-in was getting announced, there was some discussion, and I love Jockema's comment, which was, "When this macaroon authentication token moon?" and- And I just, I was curious actually, just with the macarons, some people have spoken about it, it's a little bit difficult to understand and set that up. Do, do you mind maybe explaining a little bit about around what that macaroon is?

Yeah, so I think that this reflects kind of the difference, the cultural difference between, Bitcoin Core, the C++ you know, quote unquote reference implementation, and, LND and basically, the LND is really like, with gRPC, they're doing cutting edge stuff, and they're doing things a little differently than what's done in the rest of the ecosystem or in Bitcoin Core. So, macroins is another example of that, and it's, it's an advanced way of authenticating, users. You can kind of think of it like an API key, but it's enriched with, better, data and properties. So, I think that it's definitely- A form of future proofing, in that macarons are going to be able to evolve to provide advanced features. So for example, you could give a read-only macaroon to your accountant, who then, would use the Excel plugin to download all the data, but wouldn't be able to send payments or open and close channels. So, conversely, you could create a macaroon that is only for sending payments, and you can't get any data from the, node. Or you, maybe a macaroon for only opening and closing channels, but You can't, you know, send any bitcoins or anything like that. So I think that there's like a variety of different ways that macarons will be able to be used, and that, that they picked something that is going to provide so much flexibility in the future, I think is great, even though in the short run, because, people aren't used to working with macarons, it's definitely a disadvantage and it's a headache for developers, but hopefully that's kind of a learning curve that we all, get through and we come out the other side with a stronger way Of authenti- authenticating than, the traditional authentication models that we've used in the past.

interesting. Yeah. So, I mean, that could potentially even be used as a control point within businesses. Okay. And now, let's talk a little bit more generally about Lightning residency. So maybe give a bit of a background on it and, you know, just your high-level experiences on it.

Yeah. So I, I knew that Chaincode Labs had done residencies in the past, and I think I applied to both or at least one. and got rejected. So when I heard that they were doing a Lightning residency, I, once again got excited and, applied again, and they accepted me this time. So I think that for anyone who, who didn't get accepted to the Lightning residency or, or past Chaincode Labs residencies, like don't, don't hesitate to apply again. I think that there's no, it's not like they rejected you like as a person or something like that. Like, they, they just, they get a lot of Quality applicants, and, they're always looking for different kinds of people. So for the Lightning, residency, they were looking for people who perhaps had a background in creating Ethereum, decentralized applications, or, had created, you know, only web interfaces, or, you know, like different backgrounds than, for example, with Wind or with, with Bitcoin itself, like the residency there, they were looking for people with a background in, in systems pro- Programming and C++ and, you know, peer-to-peer networks, like that, that kind of, level. So, the-- I, I don't know if they're gonna be doing a lightning residency again. I hope that they do, because it was awesome. basically it was one week of, every morning we would have an expert in, in lightning, essentially, would speak, or actually, well, it would, it was like four per morning, if I recall correctly, four experts and, These people were like either from, you know, people who are writing the node software, the Lightning node itself software, to application developers, and so for example, we had like Christian Decker there, who is one of the authors of c-lightning, and, we had the creator of Satoshi's Place, Lightning Koala, and like, I, I could list them all off here, but they were all, some of the top-notch people who are in the Lightning ecosystem. And it's interesting too, 'cause like the Lightning ecosystem has kind of developed a different, set of, of people. Now there's overlap obviously between Bitcoiners and Lightning, Bitcoin developers and Lightning developers, there's overlap, but, not, not as much as you would otherwise think, and they are kind of their, they attract different personality types. And I think the Lightning actually a-attracts more application developers than Bitcoin ever did, and for a number of reasons. But really, I think it comes down to the critical, properties that Lightning has, which is that the payments are, almost instant and the fees are almost zero. And so those two properties combined make it for a much better, programming experience than, the on-chain Bitcoin payments ever were.

Yeah, right. So you don't have to build in as much of, kind of contingency or like there's additional complexity around that.

Right, exactly. so, I mean, that's not to say that like Lightning is a free lunch, like it, it has its own, different complexities, but from an application developer's perspective of, you know, you're receiving payments, like it's really nice to be able to receive the payments instantly and not have to like worry about zero confirmation or whatever. so, yeah. And then that was in the morning, we had, really good talks, and I actually every morning, to stay focused and to stay off of Twitter, I set myself up the challenge of writing up all the notes of what I was hearing. so if you actually go to medium dot com and, I think it's slash, pierre underscore rochard, or just search pierre rochard lightning, and I think that it'll come up, which is that I, I-- every morning I wrote up the, notes from the-

Yeah, fantastic, I'll put that in the show notes, obviously. maybe you wanna touch on some of the other projects that you found promising? Yeah, so,

so yeah, in the afternoon everyone worked on their own individual projects and obviously like lots of conversation going on about different things. I thought the, the most, interesting two projects were both about integrating lightning into the browser. and- The Ethereum ecosystem has such an integration, it's called MetaMask, and basically what it means is that if you go to a website that has MetaMask, enabled on it by, by the owner of the website, the host they can request access to your MetaMask wallet and then, you know, send you CryptoKitties or send you other, nonsense tokens over the Ethereum blockchain. So that's great and all, but, we need the same thing in Bitcoin, and we've, we've never really had the same thing in Bitcoin. I, I think Dark Wallet is what came closest to that, but, it just doesn't have the right-- again, again, the right user experience, that, that you- You would expect with such an interface. so, Willow Baron is a developer who has a development history in Ethereum, and he decided to take on this project of creating a MetaMask clone for, Lightning. And so this essentially allows you to, connects to your Lightning node, and you go to a webpage or any given webpage, and so for example, they could go to stephanelivera dot com, and they can- They could see an article that they want to buy, and, they're, they would receive a pop-up that's like, "Hey, Stefan wants to know if you have a Lightning wallet. Do you wanna tell him that you do?" And you're like, "Well, yeah, because I wanna pay for this." And then you could, for example, you, you could do more advanced things. So for example, you could have an advanced thing which is like, "Okay, he can automatically take up to a dollar from me." It's kind of on the honor system that, like, the alternative would be to have like a pop-up every time that you navigate to another page, it's like, hey, you know, pay another nickel or whatever. and so you can have like these quote-unquote micropayments, you know, we can debate as to whether they're actually micropayments, in the browser. Now, we could also debate w- how much demand there is for micropayments and whether paywalling is good or bad or whatever. But really, I mean, you could use this on, like, Amazon, right? Like On, and instead of entering your credit card information and all that, you could just have your, I think that he's calling it, Jewel, the, the extension, you can have your Jewel extension, pay for whatever you're ordering. So I, I thought that was interesting because I think the most, most Lightning payments are gonna happen in the context of e-commerce, not in like physical stores. So I think that the more we enable the e-commerce experience, both from like the mer- Merchant side with like BTC Pay server, and the consumer side with this, this, browser plugin.

Yeah, fantastic, I like that. And I think it comes back to that same idea of similarly what you were doing with your Excel plugin, which is you're sort of trying to bring Bitcoin and Lightning to where people already are.

Yeah, and so I like, I see each of these as being, complementary. And in fact, Lightning Labs themselves, they're creating a, an app that's kind of like, it's like Slack. It's, it's a cross-platform application that, uses, LND, and, basically the difference between, like, for example, for, for mine, I wanna expose as much data as possible because I want the user to really see what's going on. Under the hood, because presumably they're using this to educate themselves or out of some kind of curiosity, and desire to experiment, whereas with like Joel, like, you want to abstract away and hide all of the underlying data because the person is using it to actually send payments, right? They're not using it to, experiment with necessarily, and, kind of the same way with the, Lightning Labs, desktop application, they're trying to keep it, Very user friendly for someone who is, actually, you know, using it to send payments. and yeah, each of these like fills its own niche. and we'll, we also have mobile wallets that are coming out. we'll have different, different kinds of use cases for different people.

Yeah, sure. And actually, you touched on this a little bit before around this idea of micro-transactions, and obviously, as I'm sure you've read Nick Szabo's work on this idea of mental accounting costs or mental costs of these small- small transactions. Do you have any thoughts on how, you know, the ecosystem will deal with that? Is it just a case of we're just gonna batch things?

so I think that like the- First of all, I think that, the way I was using micropayments was, incorrect from the point of view of, like, Nick Sabo's article, in that he's really, he's talking about like micro-micropayments, you know, like actually micropayments. we have used the term micropayments to mean, you know, anything from like a five dollar in-app purchase, to, you know, a nickel, but, really I think that it's going to depend on the- Entrepreneurship and experimentation of, people with, these interfaces, and I don't think that we can know a priori, whether people are interested in paying a dollar per high quality research article or not. Like, the, the other thing too is the internet has gotten so big that you can kind of find something that like anyone is willing to pay for, and there's- Really like a niche group for everything. So we see this with like, like Patreon, for example. There's people on Patreon that are like, "Oh, I'll, I'll teach you how to do the ukulele," and this person's pulling in massive amounts of money that would be like completely unprecedented for someone teaching the ukulele before. but thanks to the power of the internet and software, it's entirely economically feasible. So I don't think that we know, exactly, but really- My, my, my, my bet is that we're going to use Lightning for the same kind of stuff that we use any payment system today for, you know, like getting your groceries and, you know, buying your coffee at a coffee shop, maybe with some pastries too. So, I, I don't think that it's going to like cause, socioeconomic upheaval because people can send, you know, fifty cents for some, blue check blogger. post. I, the, yeah, we'll, we'll see how it goes, but I think that really, if, if we look into who's going to actually be using Lightning, it's gonna be people who, have been accumulating Bitcoin for however many years, they are well above their cost basis, and they're interested in experimenting with things. And so, like, i-in my mind, it's, it's not, we're not gonna have people buying bitcoins so that- That they can use Lightning anytime soon. Eventually, yes, plausibly, but within the next five years, I very much doubt it. It's gonna be people who bought bitcoins low and now they're high and they want to try out something like, like the Lightning payment network, and essentially like- Not even necessarily cash out of some gains, but, they, they want to learn more about Bitcoin, right?

Yeah, fantastic thoughts. I agree with you very much. Now, how about on the concept of "earner" adoption? Maybe that's another way that some people will want to spend, obviously, if they earn in Bitcoin or they earn on Lightning, well, then they might need to spend on that as well.

So it's interesting because we have this issue in Bitcoin of, privacy, right? And, it's always a big problem of, how, how private are, Bitcoin payments? Because, if you are interested in investing, or let's, let's use the, the correct term, speculating on Bitcoins, if you're interested in doing that, you should, so one option is to go onto an exchange and do KYCAML and connect Your bank account and send dollars and buy, bitcoins, and then you send your bitcoins to your wallet. Now, that's a fine option. Another option is to use like local bitcoins where you show up and like you give cash to someone and they give you bitcoins, and that's, that's also like that, that option is maybe a little more private, but now increasingly even people who are selling on, a local bitcoins are doing, having to do K, email K Y C. So That's not a silver bullet either. What you gotta find is a way to accumulate-- now, if, if privacy matters to you, which I think that it should matter to everyone, and if you're trying to find a way to accumulate bitcoins in a private manner one fantastic option is if you are a small business owner, is to accept Lightning payments, from customers of yours. And essentially, what this allows you to do is that, these payments are entirely like, it's, I would argue that from the, from any third party, it's not just, pseudonymous like Bitcoin's network is, it's anonymous. Like they don't even know That a payment occurred necessarily. they would have to correlate much more information than they would have to, with Bitcoin. And, and like it's, it's a diametric, you know, it's completely different than self-doxxing yourself with an exchange by giving them all your identification information. So, you could accumulate bitcoins, and be doing it like by, you don't even have to be settling on chain, right? Like you could be accumulating capacity On the Lightning network, and routing payments and doing all this stuff with, with coins that you got from, you know, someone buying your coffee at your coffee shop, and, you know, obviously you should follow the law and pay taxes and whatnot, but in terms of having- Privacy with regards to, maybe other your, your banker or, other people in your family or, a-any number of parties where, you know, and it, it can be as simple as not wanting to have your personal information at an exchange that could get hacked, right? Like these exchanges get hacked all the time. If they get hacked with your po-por-passport picture and your proof of residence, okay, well, now someone knows where you live. And They know that, they know how much in bitcoins you bought. Like that's not a good situation to be in. And so privacy isn't necessarily about trying to evade taxes. Privacy can be about evading private criminals, not just public criminals like governments.

Exactly, yeah. and also another good topic, and I think you were sort of touching on this as well, and I think Alex Bosworth had a good comment recently where he was saying that in a sense, when people participate in Lightning Network, they are washing their UTXOs. Those around amongst each other as well. So that's another angle.

Yeah, yeah, and it, it just, it opens up a lot of different opportunities.

Yeah, yeah. And then the other one is obviously if you're a freelancer or you're contracting and you're working internationally and you just take payment for your services in Bitcoin and Lightning, that's another way as well.

Yeah, and really like, you don't even have to be abroad for that to be useful. For example, here in the US, maybe you're like twelve years old and you're not allowed to open a bank account. Right? Like, why shouldn't you be able to make money on the internet, obviously doing, you know, normal things, and, you know, you might be like, a video game player that wins bets or something, and, or an online poker player at the age of twelve. and hey, that's-- that, that way you don't have to get your parents' permission. But that's kind of an extreme example, but there's like all sorts of people who are excluded from the mainstream financial system or don't have access to a bank account, Access to just creating a lightning wallet.

Exactly. Yeah, yeah. So it's about enabling more where more things to happen where you couldn't do those things before. I think let's turn a little bit more broad

I commented before Pierre that there's just an incredible amount of work that needs to be done to kind of get this thing over the

line.

a

litany, a long list of things. so, for example, one, one, efficiency opportunity would be to, replace Lightning's current punishment model with, what's called L2, E L T O. O, and this proposal, was created by Christian Decker and another gentleman, I believe, was also the co-author on it. and so they, they wrote the white paper, and it's, gotten a lot of positive feedback. The issue is it, it requires, adding one opcode to, Bitcoin's, settlement layer, and so, you know, that, there's some debate about that opcode, and so hopefully that gets sorted out, and once that opcode is implemented it'll, it'll save us, on-chain capacity, with this model and, I think it's, I think it's better for the Lightning Network that it, it uses L2, from, from what I've read, I'm not an expert on the matter, but I found it to be persuasive, but that might be like a few years out. So there's other things that are more immediate, I mentioned Autopilot earlier, the, that, that needs to get worked out because basically the goal is to have you be able

Reliably and not have routing failures. Right now you have routing failures, I don't know at what frequency, it probably depends on a lot of different variables, but at too high of a frequency. And, having a better autopilot system would allow us to dramatically reduce the number of, of routing failures that happen. and then you have like, I think it's called atomic multipath that would allow you to send larger payments by breaking them up into smaller payments. So that's also, you know, something to look forward to. and yeah, there's just like a, a lot of different, tooling, you know, developer-related, things that could be improved. So for example, for someone who is trying to improve, someone who's trying to improve the performance of routing and improve the autopilot feature, they might want to have the ability to do data analysis Whether it's with R or with Python, Pandas, and, you know, having the ability to g-get that data, into a form that's usable by data scientists, that, like, that itself needs to happen, like that's engineering work right there, and that, you know, we're not there yet. so there's that, I think there's, there's a lot of different, so for example, I'm, I'm, Schnorr is going to help, with Lightning, I believe, with, you know, opening and closing transactions, but, to- I'm, I'm sure I'm missing lots. Those are the ones that immediately come to mind though.

Yeah, sure, sure. And then how about from a Bitcoin Core point of view, there's been discussion on things like splitting up the code between the wallet and the consensus rules. Do you have any comments on that?

Yeah, I, I don't, I mean, if that were to happen, it's not happening anytime soon. I think that there's-- it's kind of strange because there's, there's people on the project who think that the wallet shouldn't be a part of the project at all, and then there's others who only work on the wallet and, like, obviously they, they could still work on the wallet if it was a separate project, but It's kind of, it's difficult to maintain the full node and the built-in wallet separate in separate codebases entirely. really, you would have to like abandon the idea of the node being, a wallet as well per se. And, that's just, that's going to be, that's gonna take a very long time for, for that to happen. although, and then the, the other thing too is that, like, I hear some people say that, like, lots of people use The Bitcoin Core wallet, and then I hear other people say like, "Nobody uses the Bitcoin Core wallet." So there's clearly, a lack of information, I think, that, that makes it even harder to, for the Bitcoin Core contributors to make decisions about what to do with the wallet. me personally, like, the Bitcoin Core wallet is the first wallet I used back in two thousand thirteen. I actually, I, I synced up a full node without knowing that there was any alternative. I, I didn't know that- That there was Electrum or any like SPV, I thought that it was just like you download Bitcoin QT and then it takes a couple of days to sync and then you can send a payment to it, and that was kind of my initial user experience. And, and since then, like, I found that to be so easy that I'm always like surprised when people are like, "Oh, it's so hard to, sync a full node or to use the Bitcoin Core wallet." I was like, "No, it's, like, I, I didn't know any better obviously,

Yeah, I mean, if even if you're on Windows, it's literally just like double-clicking and running the file, right?

Yeah, yeah, exactly. so I think that it would be good if the wallet continues to evolve within Bitcoin Core. And now, now here's the real, controversial view I have, is that I think that there should be a Lightning node C++ implementation, that is, embedded inside of Bitcoin Core. Now, not, not as part of the project, but as a new project That essentially, stays up to date with the rest of the Bitcoin core code, but has this, patch set on top of it for implementing a C++ Lightning node, that doesn't even use the ZMQ, notification interface. Instead, it uses the actual, like there's, there's an interface within Bitcoin Core that gives you events, for example, when there's a new transaction that comes in or a new block, and having it all, wrapped into one Beautiful package. Just like, Jameson Lopp has a similar type of thing with Satoshi, where he collects a bunch of statistics from the node, but it's not, it's, it's using the Bitcoin Core code base, but it's a layer on top, and so it's not like he's asking them to merge that in. And so I think that I'd like to see the same thing with, with Lightning, and then to, to have a Lightning QT interface, that would have the same role that today's, Bitcoin Core, QT interface has. yeah, I, I'd love to see that, and if I wasn't working on this XL plugin, that's what I'd be working on because, I think that there's, there's interesting opportunities there.

Yeah, it sounds plausible to me. I mean, as far as I know, I mean, correct me if I'm wrong, I know that there was like a roast beef fork of, I think BTC-D, and the idea is that it was easier to, you know, run Lightning on top of that. so it doesn't sound that it One thing that's interesting and you, you bring it up, is just this idea that there are lots of these projects, but then we have to spend time to keep them up to date, right? So as an example When an RPC call becomes deprecated from Bitcoin Core, then downstream of that, some wallet creator might say, "Well, hang on, guys, I was relying on that. What, what do I do now? So, so that, that takes a bit of work." Do you have any comments on that?

Yeah, so I think that, that's going to be like, that's, that, that kind of problem isn't unique to Bitcoin and that, in the world of software at large, this is a common issue. Now, there are companies and organizations and projects that handle it better than others. so you could, you could debate about, how well Bitcoin Core handles it. I think that they handle it relatively well, given that they do, provide, you know, deprecation warnings Well ahead of time. it's just hard to communicate things in a decentralized system, right? And, some people might not even know that they're relying on a feature, and then when it gets ripped out from under them, they notice. so, I think Bitcoin Core is doing a reasonable job at it. Like, obviously there's always an improvement you can make, but, yeah.

Yeah, sure. Okay. And then how about, other software that interacts with Bitcoin, so whether that's wallets, block explorers, or just accessible multi-signature solutions? Are these some areas that you foresee a lot of work coming?

Yeah, so, for example, with the Bitcoin Core wallet, something else I wanted to mention was having a hardware wallet integration, so that's currently missing, and that would be-- that would allow you to use your full node to verify payments that are being sent to your hardware wallet in the most frictionless manner possible. and that I'm excited about.

there's, partially signed Bitcoin transactions. Oh, there's a new, thing called, output descriptors that Peter Walle is working on, which is basically, as, as we start having like different kinds of outputs, we wanna start having, or, or we wanna have a robust way of describing these outputs, and basically an output is a- It's a quote unquote locking script, so it is locking up coins, and you have to solve the puzzle in order to unlock the coins, to-- and the way you solve the puzzle is by providing an input, and that input has to be, you know, customized for, for the output. Now, when a wallet is trying to figure out if an output belongs to it, it has to try-- currently, it has to try every different kind of- Output script, when really, it should just know what kind of output script to expect because that's gonna be based on the address that you gave to the person. And so if they decide to send to a different, if they, if they decide to send to a different address because they reverse-engineered your address, that's kind of their problem and they need to pay you to the correct one. so yeah, output descriptors is, is interesting, as well, and that's going to, I think- Im-im-improve the, the performance of a lot of these different, wallets if they, if they implement them. Although really, it's, I think it's Bitcoin Core is gonna use it first of all, and like it's got this like, it's got a lot of different logic for trying to figure out if a, transaction belongs to the wallet or not, and this is, opportunity to refactor that and simplify it.

Yeah, fantastic. And then how about hardware projects at

Bitcoin?

a

hardware node. And the other thing too is that like, my Excel spreadsheet and the Jool, browser extension, like, these can communicate with a remote node, so they could communicate with your Casa node that's on all day long at home. not using very much electricity while you're, you know, out and about, and then when you come home and you open up your laptop, like you can be connected to this, and you don't have to wait for it to sync or anything like that. so I think that kind of hardware is great, and I hope that they continue iterating on it and continue improving that product so that, it becomes very popular and allows people to, you know, take some measure of their financial sovereignty, back from trusted third parties.

other hardwares like, hardware wallets, hardware wallets are like continuing to improve, and I've, I've used, I, I've used a few of the different kinds of hardware wallets to just like test things out on, and so far my favorite has been Trezor, but don't take this as kind of a recommendation to keep your life savings on it. I'm just talking about from a user experience perspective. I thought the Trezor had a good user- Your experience. yeah. Yeah. I don't see, I don't see other hardware that's like immediately needed for Bitcoin. oh, one more thing, there's, I think that, you know, I was talking about hardware wallets, but really it speaks to a broader issue of, HSMs, hardware security modules, I think

is what it stands for, and like-

Back up your, your seed, right? but in terms of it being, useful for you, did it-

Direction that we might end up going. So at the moment, it looks like the way we're going over the next year or two is to kind of move towards this model of having your home, you know, your trusted node, whether that's, and there are various different products.

Yeah, I was, I was chilling the, Casa Huddle node, but really like, y-you can, you can build your own if you are a hobbyist who wants to, like, dig into this and, you know, get your own Raspberry Pi or really, I think that you should get even something a little more powerful than a Raspberry Pi. I've, I've heard good things about, I think it was called the- The Odroid, I haven't used one myself, but, I, honestly, like, I have a desktop at home that I just keep on all the time, so, that, that works as my full-time node, and I don't really see a reason why I need to get a separate hardware device, other than to cut down on electricity a little bit, I guess. I would imagine computers are pretty good about not consuming too much electricity when they're not being used very much.

Yeah, sure, sure. Okay. And then, how about from Needs to be done with Bitcoin.

a lot, a lot, and this is why I, I spend a lot of time on Twitter, tweeting, because I feel like people, we have, we have, it's amazing because we have people who joined Bitcoin like six months ago or twelve months ago who know- Ten times more than people who joined five years ago. and I find that to be fascinating. So, I'm actually learning from people who aren't relatively new to Bitcoin, and I think that's like, the position that you should be in,

at any point, right? So like, I think that new people coming into Bitcoin are always gonna come at it with a fresh set of eyes and are going to see it perhaps even more realistically than the incumbents. Comments are, and I, there's nothing I enjoy more than learning from, new Bitcoiners and learning new ways of thinking about things. And so, they, you know, all this to say that like I'm still learning a lot. I, I only recently learned about how Lightning Network even works, beyond just like hand-wavy details. So, I think that, Bitcoin's a con-continuous process of learning. And there's, so there's going to- We have a continuous demand to learn. Now, that the, the learning is gonna take a lot of different forms for different people. So, for example, on one extreme, like you got people who can self-teach themselves by reading a, a textbook or reading online material or reading the source code, right? So like they, they are entirely self-sufficient, autodidacts. and then on the other end of the spectrum, you have people who- Well, I'm looking on the spectrum of people who can learn. Like, obviously there are people who just aren't interested in learning at all, but, let's, let's ignore those. that, you know, you essentially wanna have a classroom environment and you wanna have someone teaching you, and that's the environment where you're going to learn the most. And so like Jimmy Song has his course, that you pay, I, I forget how many like thousands of dollars Jimmy Song's course is, to be there in person. And to really spend a focused, you know, several days, learning, hardcore Bitcoin material, and it's essentially like a really good cram course, and that works really well for a lot of people, and that's why a lot of people are willing to pay a lot of money for it, and so you have like these two extremes, and then everything in between, right? and I think that there's a lot of like free online resources, but I think that there's also like room for more paid- Paid resources of people who are willing to essentially handhold and, you know, have actual like one-on-one communication with people so that they can learn. and we see this with podcasts like ours, where it's either driven by ad revenue or by

contributions from listeners.

So he

has a, he has a course that's like, I think it's like fifty British pounds, per, for the course, and, he teaches people about different, different topics in crypto. Now, obviously, like, we might differ on what

material is good or not.

That we're gonna

need over the next few years. So, you know, it's, it's not that we would necessarily want the people who are just gonna buy and then sell at the first sign of trouble. It's how do you kind of build the people who-

It takes a combination

of economics and technology. And like, there's lots of people who are like really into Austrian economics, and, you know, the on, on the Nakamoto Institute's skeptics page, the first entry is Niels, who is an Austrian economics guy, and, he, his video is like anti-Bitcoin. so definitely you gotta like, so, you know, the, the economics are complicated, and then the computer science and technology side, it's like, oh, you gotta, you gotta assume that Cryptography can't be broken, right? Like you gotta assume that there's such a thing as, as, as signatures, digital signatures that can't be reverse engineered. and that, that might require you to actually learn about how, how these, like how ECDSA works and how an elliptic curve works and all this stuff. yeah, it, it takes a lot to understand to then be like, okay, I understand like Like the monetary economics, and I understand the technology, and I run my own node, and like now I'm all about buying, and they wanna buy bitcoins, but like the other aspect of it that you gotta think about outside of just the rational, alright, I understand the investment or the speculative case for buying bitcoins, but translating that into actually buying the correct amount. So you can buy Buy too much Bitcoin, right? And the way you do that is by taking out a mortgage on your house when the price is eighteen thousand dollars and going all in, and now you're like way underwater on your loan and you've got to service this debt, and you quit your job because you thought you were gonna be a crypto millionaire. Like, there's, there's a really dumb way to buy into Bitcoin. likewise, I think that you could be like too cautious, right? Which is that, hey, if, if you- You have a very high, level of income and you have, you know, a financial planner and you've got a good financial plan set up and you have an allocation of zero percent and you're buying like fifty dollars worth of Bitcoin a month when, you know, your financial portfolio is in the seven or eight figures, it's like, well, you're being too cautious, like you could be a little more aggressive. yes, Bitcoin is high risk, yes, it could go to zero, but if it's different for you- So if a hundred thousand goes to zero, then for someone who is living paycheck to paycheck and, you know, is, is, struggling to make ends meet, but is, is very interested in this technology and wants to have financial exposure to it, so it really is like, a very personal issue of whether you're even able to invest at all.

Yeah, right. And actually, the other thing I was just, You brought it up with the mortgage concept, is-- as, you know, years ago, listeners, check out Pierre's article, "Speculative Attack," I think it's from two thousand and fourteen. Yeah. And in that article, you spoke about this concept of how people are effectively leveraging themselves to buy Bitcoin, or they may do that in the future, right? And so what we're seeing now is- Actually, the, you know, you got companies like Unchained Capital or BlockFi who are effectively enabling that. So do you have any thoughts on how that kind of concept of leveraging to buy Bitcoin will apply, and obviously what are the kind of the intelligent ways to go about that versus the not so intelligent ways?

Yeah, so I think that, it's kind of interesting because, when, when I was writing speculative attack, I was thinking about it from the perspective of how, through the fractional reserve banking system, you have a positive feedback loop-- well, it's a negative feedback loop for the fiat currency, but basically that as people borrow from the banking system, they create-- the banking system creates new units, right, of, of the currency. Currency, now they're enabled by a central bank and all that, but that's kind of besides the point here. and so it causes the value of the currency to go down itself, and then the person who is taking out the loan is also, they're selling the currency and so they are, shorting it and they're buying a hard currency, and in this case, you know, I had my Bitcoin. So you have the, the feedback loop there from the banking system creating new money. if you don't have that feedback loop, then you're kind of in a less effective, speculative attack because, that, that new fiat isn't being created. it's really being transferred from one person to another. and so, for example, when people use BlockFi or use a service like that, BlockFi isn't a, Commercial bank, and so they're not, engaging in fractional reserve banking. they have to find, you know, private money to put into it, into, to lend out. and I think that's the same for all these, Bitcoin backed lenders. and then, so- Even in terms of getting a mortgage, like it's not obvious that the mortgage is creating new money either, because your mortgage would have to be issued by a fractional reserve bank, and not all mortgages are. Like, there's-- and so it's, it's funny because, you know, from the Austrian perspective that is pro one hundred percent reserve banking, financial institutions that don't engage in fractional reserve banking are better than ones that do, right? They're seen as like more legitimate and better. Now, from the traditional banking system, the reverse is true. And so these mortgage lenders that aren't fractional reserve bankings are called shadow banks because they're not, part of the, you know, Federal Reserve Ponzi scheme. So they had to be given a bad name, which is shadow banks. So if you're taking your mortgage out from a shadow bank, you aren't creating new money, and thus you're not contributing to a speculative attack, even if you're buying Bitcoin. Well, I mean, you are contributing, but not as much, right? and so I think that eventually we will have more, bank credit from fractional reserve banks getting created, and getting borrowed by people to buy Bitcoins, but I think that it's gonna continue to be small. And then the other thing too is Who, who should be doing this? it shouldn't be your grandma who, you know, takes out a mortgage to, to do this. and it shouldn't be, even yourself as a thirty-year-old taking out a mortgage to do this, like, it specifically to perform a speculative attack. It should be someone who has a large portfolio of financial assets and is leveraging against that, and so for example, they might be leveraging against bonds, or like, government treasuries. And so they're borrowing money from, they might have a bank that they have a relationship with that allows them to borrow against that collateral, and that bank is more likely to be a fractional reserve bank than not, well, not necessarily, but generally speaking, like, you know, maybe they'd get like a syndicate loaned or something like that to, to, borrow against this collateral, and then use all the proceeds to go buy bitcoins. Now, the way a, speculative attack works is that the central bank that is being attacked has to tighten monetary policy sufficiently to essentially make the lending so expensive, to make the borrowing more ex- so expensive that you can no longer do that trade and you have to Reverse, you're short, and, then you get short-squeezed. So, my view is that, that, the Federal Reserve or a lot of these central banks, like the interest rate that they would have to raise their policy to would be so high in order to fight off the speculative attack that they just wouldn't even do it, and that ultimately the dollar would, would get destroyed. so, we'll see, we'll see how that happens. maybe it'll be in ten, twenty, thirty years But, yeah, that's, that's kind of where, where, where my view is on this.

Yeah, no, fantastic. Yeah, I think I agree, it's more of like a decades out kind of thing, and definitely not for grandma or just the average, punter out there. This is just a-- It's just an interesting idea to discuss.

Right. And, and, the, as part of the speculative tech, like, you would wanna be timing it correctly. Like, you can't just go out on a lark and try to do this yourself. You Bitcoin cycles. And so, you know, we've seen people like warn against the bull market, you know, like Finney did, and he was like, "Oh, we don't want a bubble to happen." Like, you can't stop a bubble from happening, and you can't cause a bubble from happening. but during a bubble, when Bitcoin has achieved sufficient liquidity, maybe you can participate in a speculative attack alongside other investors, alongside other speculators.

Right, right. okay. so I think, we can probably start wrapping up. I suppose we'll, if we, because we're talking about what must be done with Bitcoin, maybe, if you've got any closing thoughts on, you know, how could listeners get involved? Should they learn to code? What's the best approach for that?

Oh, I think that, I mean, even if they're not, even if they're anti-bitcoin, I think they should still learn to code. I think that everyone should, now not necessarily like learn enough to, do a bunch of different things, but, I mean, understand how a for loop works and, how to do some like basic, Basic code, you know, that you could do on Codecademy in a few hours. be-just to, to so that you understand, like, h-kind of the basics of how Why it is that software is so powerful, and if, if you find it enjoyable and you find it interesting and you wanna get deeper into it, there's, you, you can reach out to me, but there's a lot of different resources online, a lot of different tutorials. I was largely self-taught, although I, I've, I've bought a number of books along the way and read through, you know, halfway, a lot of different books and, so, it really depends on your learning style and then whether you- You find programming to be interesting or not. If you don't find programming to be interested, there's still a lot of different things to, to do inside, in, within Bitcoin. and I hope that with, as we build more and more tools that are friendly for users that aren't programmers, that we'll be able to have more and more people experimenting and trying out different things, because, like, yeah, the Lightning Killer app might be created by a non-developer, and so we, we can't exclude that possibility and- we have to give them the ability to, play with it.

Yeah, fantastic. Oh, actually, lastly, how about, if anyone wants to learn more about your Excel Lightning project or Power Excel plugin, where should they go?

Yeah, so I'll, I'll keep you from, releasing this podcast until I have the website up, but,

it's,

underscore Rochard,

and I'll help you out.

Fantastic. Alright, well, that's been an excellent discussion. Thank you very much for coming on, Pierre.

Thanks for having me on. Look forward to coming back on.

So that was my conversation with Pierre. I hope you guys enjoyed the discussion about his new Lightning Power XL plugin and also his experience with the Lightning residency. You guys can find the show notes on my site stephanlivera dot com and make sure you subscribe to the podcast by searching Stephan Livera podcast. That's it from me. See you guys next time.