Will Cole of Zaprite rejoins me to talk about: 

• Merchant adoption and why it’s different this time
• Improved custody
• How Zaprite works
• Accounting and integration
• How adoption will be driven this time
• Circular economy
• The lie of 2% inflation

Links:

• X: @willcole
• Zaprite: https://zaprite.com/

Sponsors:

• Pacific Bitcoin Festival (code LIVERA)
• CoinKite.com (code LIVERA)
• Mempool.space

Stephan Livera links:

• Follow me on X @stephanlivera
• Subscribe to the podcast

Podcast Transcripts:

Stephan (00:00.501)
Will, welcome back to the show.

Will Cole (00:02.83)
Stephan, thanks for having me, man.

Stephan (00:05.013)
Lots of things going on. I know you and Parker have recently shifted over to ZapRite, so we’re gonna chat about that. And I know you and Parker perhaps have been working on some ideas around the way we think about Bitcoin. So let’s get, you know, let’s start with a little bit of that and yeah, actually maybe you just wanna tell us a little bit about the shift to ZapRite as well. Let’s start with that.

Will Cole (00:28.726)
Yeah, yeah. I guess, you know, in our little world here in Austin, it was a big move for us. Parker and I left Unchained back in November and took a little break, first of all, like you. I was third time over becoming a father again. So, born in February and took a little bit of time off for the first time in, what, 20-something years. And Parker was writing his book, so that was nice. And then, of course, we…

Stephan (00:46.093)
Congratulations.

Will Cole (00:58.742)
We got pretty itchy there after just even a few months of not going into the office every day. And really, you know, obviously we knew we wanted to work in Bitcoin. We were just exploring and, you know, for me in particular, you know, while building unchained and working with that team, you know, I just have tunnel vision and can’t really think about anything else going on. I don’t look at competitors. I don’t really look at what’s going on in the industry. I’m just sort of focused on.

us and our customers. And it was really kind of a great moment for me to see, you know, what’s been happening in lightning since 2019, you know, what’s, what’s been going on in the world of Nostra, you know, all those types of things and, and what’s going on in the world of mining. And so we were really just trying to find problems that hadn’t been solved or hadn’t been solved well. And, you know, for me personally, you know, on the product and engineering side,

I like these things I call like in-between businesses, right? I consider Unchained to be an in-between business where the problem we were solving on one hand, you had full custodial exchange setups like Coinbase or Kraken or Gemini or something where a lot of people keep their coins. And on the other end, you had people putting single SIG devices or multi SIG devices in their home safes.

just trying to figure it out. And Unchained kind of found this like in between space that they could live in where you could do multi-sig, but maybe because of collaborating with Unchained, you would actually do it, you know, instead of just saying, yeah, it’s the best way to do it, but I can’t do it. I think Mutiny is another one of those types of businesses. Lightning Wallet, you know, I’ll admit, after Node Launcher, Pierre Richard’s Node Launcher stopped being active.

I stopped doing non-custodial lightning. It was just kind of a pain in the ass. It was even kind of a pain in the ass back then, but I was just using custodial lightning. And when Mutiny came around and I could set up a non-custodial lightning wallet in 30 seconds, like what a beautiful in-between business. And really it’s just a question of what are you going to abstract? Like, you know, you can’t have your cake and eat it too. You are going to make sacrifices. And so that’s where my mind always went to.

Will Cole (03:22.99)
And that’s where I was going to when I was thinking about what I wanted to work on next. It’s like, what is the ideal of what someone can do? And then how do I make sure people actually do it by giving up a few of the things and making it easy enough to do? So this is a real roundabout way of saying, you know, we looked at a lot of things. I was looking at mining. I was visiting coal plants all over Wyoming and trying to figure out how Bitcoin miners could own their actual energy production. I still think that that’s a big horizon there. Problems to knock down.

And then when we were looking at payments, the real thing that popped up was I wanna accept payments for things that I do. I wanna be able to contract and charge in Bitcoin and things like that, but I don’t wanna run a server. Was basically the question I was, or the problem I was trying to solve. I love BTC Pay Server on one side, but it was a lot of overhead for what I wanted to do personally, what Parker wanted to do personally. And then, you know, on the other end of that,

spectrum you had like the open nodes or bit pays of the world where it’s you know, fully custodial counterparty risk, you know all those types of things. I didn’t want that either. It was more like I already have wallets that I like, you know, single-sig wallets, multi-sig wallets that I like. I just want the money to go there I don’t want an in-between step and it just turned out that there really wasn’t anything out there to do that and So Parker and I were really ready to go out there and try to do something in the e-commerce space with just that

But then we remembered there was a guy that worked in, out of PlebLab in Austin, had also worked out of the Bitcoin Commons a bit. His name’s John McGill, and he had started this company Zapprite, and it was really around contracting, right, invoicing. And we talked to him a little bit about the e-commerce setup. He’d already kind of built the back end that we had envisioned. Turned out he had a really similar vision of where he wanted to take Zapprite, so we just joined teams, right? It made a lot of sense.

Stephan (05:20.326)
Great. And so, yeah, I think you’ve spelled out, I guess, where ZapRite sits, because obviously many listeners will be thinking, oh, hey, I could just run my BTC Pay server and blah, right? Which of course that’s a great option. I, you know, support that. I use BTC Pay myself. Um, but there is, like you said, this in-between group of people, and that’s a sizable group of people. And I think it’s important that we, obviously you and I, and probably many listeners, maybe many of us are kind of in the more, let’s say hardcore camp,

There’s a lot of people where we need to get out of the echo chamber and reach people and make Bitcoin easy for them. I think that’s really what it is. It’s trying to get more people in. And, you know, I think it’s interesting to talk about this as well, because sometimes people maybe frame it in the wrong way. They say it’s kind of like mass adoption at all costs kind of thing. And to me, it’s not that it’s more like how can we expand the pie of Bitcoiners?

and it’s still going to be a relatively small group of people, broadly speaking. So, where we are today in the world, how many self-custodial Bitcoin users are there? Probably less than 1% into the global population, something in that range. And we want to get to 10% or 20%. At least what services can that marginal person who’s the fifth percent, the five percentile person, not the 1% percent person. But how are you thinking about these questions?

Will Cole (06:27.818)
Mm-hmm. Sure.

Mm-hmm.

Will Cole (06:44.81)
Yeah, I mean, like I think about it strictly from like a product mindset, right? You know, that’s how I’ve been thinking about the world for, you know, 20 years now and, you know, from a product mindset that, you know, there’s the ideal of what we know, you know, the value of Bitcoin to be and how to obtain that value of the censorship resistance of, you know, all those types of attributes that we talk about every single day. How do you get people to actually do it? Right. And what are you willing to sacrifice along the way? So like in the Unchain case, I can make it very simply.

we could get people to be fully self-sovereign at the expense of some privacy, right? So it made a lot of sense for people that already had KYC coins, that weren’t using mixers, that weren’t doing those things, that had inheritance, you know, things that they wanted to think through, right? And they would give up that privacy, but they would maintain sovereignty, right? And so I don’t pretend that these in-between type of businesses or products don’t have costs associated with them, right? However, you know,

That’s up to the entrepreneur to decide about what’s the best trade off, right? The mutiny guys, I think they made the perfect trade off with the mutiny wallet, which is like, you can have, excuse me, you can have a non-custodial lightning setup, but you, uh, we’re going to manage liquidity for you. It’s just not even an option. We’re just going to do that. Right. And I think that’s a beautiful, you know, trade off for me. Now it’s not going to be for everyone, but it is, I think a very reasonable segment of the marketplace is going to find that really attractive.

With ZapRite, it’s the same sort of thing, right? Where we are going to make, you know, you don’t get to run your own server, right? That is a trade off that some people might not wanna make. But if they like their custody solution, right? And they don’t want that type of overhead, it could very well just be because they’re a small business and they don’t have the ability to run a server, right? Some people don’t have that ability, even though it’s not the hardest thing in the world to do. It is a…

It is overhead, right? Or maybe they have certain uptime requirements that they can’t do themselves. So I think about these things about like, in terms of adoption is like, the ideal is, I want people to be sovereign over their wealth. I want them to minimize their counterparty risk, right? I think that that’s of the problems that we’re trying to solve right now, maybe the most important one to do, right? I had focused on that on the custody side. How can we help people who want to earn in Bitcoin?

Will Cole (09:09.706)
you know, get that same benefit with never taking that first step. And I don’t know, maybe some of your listeners will be familiar with this as well, is that I actually got inspiration from the Fiat world, which is a company called Modern Treasury. A lot of the Bitcoin companies out there that, you know, deal with credit card processing and things like that and Stripe can be your best friend one day and then tell you that they hate Bitcoin companies the next day. You know, it’s just, it’s just kind of murky out there on whether or not.

Stephan (09:13.622)
Yeah.

Will Cole (09:37.25)
these big payment processes are going to do business with you. And then in comes a company like Modern Treasury where they don’t take custody of funds at all. They hook up your bank account to your customer’s bank account and they’re making direct payments to bank account to bank account. And it’s a one time setup. And I looked at that and thought like, well, if they can do that in the fiat world, like I’d like to do that in the Bitcoin world.

Stephan (09:59.782)
So let’s talk that through a little bit. So in the Zaprite setup, now the only experience I have with Zaprite is actually funnily enough buying Parker’s books. As an end customer, like paying, I’ve seen it, but what does it look like for Parker or for you? Can you just talk through what that looks like in terms of, I presume in that case Parker is self-custodying the coins or it’s being, maybe if there’s a lightning custodian, he can withdraw those.

Will Cole (10:03.403)
Mm-hmm

Will Cole (10:08.728)
Yes.

Stephan (10:28.109)
Can you just walk through a little bit where the custody is sitting and a little bit of that setup?

Will Cole (10:31.646)
Yeah, 100%. Yeah, so with Zapprite, what we’ve decided to do is be sort of wallet or custody agnostic, right? It’s bring your own wallet. And the two main use cases right now are for e-commerce. You’re selling something online. It could be a ticket or a book or an event or whatever that might be, or a single product SKU or whatever that is, or you’re a contractor. We do invoicing as well. And the whole idea behind this is that you have these things that

We call connections and you come in and you just say like okay, what what’s my custody setup? Oh, it’s a treasurer Okay, I can throw an x-pub in and we’ll increment addresses and whether you’re selling something online or you’re invoicing to you know You know a company that you’re working for or something like that You can get the Bitcoin sent directly to that we also give you fiat rail options You know So you can if you’re charging in dollars and in Bitcoin you can use like a stripe account or direct ACH payment but the idea is that

is that we’re not trying to get in the way of a customer’s custody choice, right? So now most of our customers are choosing self-sovereign options. So that’s either a single SIG, XPUB, or say like an unchained configuration file to go straight to like your multi-SIG setup. However, some of these merchants do need to do exchange.

They do need, you know, if they get too much Bitcoin in, they might need to get some dollars out because they have obligations and dollars and payroll and things like that. So you could also come in and bring your strike account, for instance. And that way, if you’re getting too much Bitcoin, you can always exchange some out. And there will be more of those options coming down the line. You know, we’re working with River and other companies to make sure, you know, at the end of the day, we’re trying to be sort of custody agnostic, although making sure that self

choosing the custody with all the myriad ways you can do self-custody, making sure that that’s seamless on Zapprite.

Stephan (12:29.589)
Gotcha. So that I guess that’s from an on chain perspective. What about from a lightning perspective? How does it work there in terms of the custody? Like does ZapRat offer that lightning aspect or do you need to bring your own or roll your own for that? Or can you just walk us through that?

Will Cole (12:44.058)
Again, it’s sort of like on chain where like you if you have your own L&D, you know set up You can you can hook all that into Zapprite as well or you could just use strike We’re gonna be adding more options more wallets as it goes This is from the merchants perspective from the from the buyers perspective or the payers perspective You can use any wallet, right? As long as they’re accepting lightning or accepting on chain and you have a wallet that works you can you can send them money

Stephan (12:51.619)
Gotcha.

Stephan (13:09.965)
Gotcha, yeah, yeah. Okay, great. And so, yeah, I guess that’s a little bit about ZapRite. And let’s talk a little bit about this idea that we were talking about offline, which is the narrative shift, let’s say. So as, you know, just setting the context, as it seems to be a common idea, and I probably agree with this idea, which is that we’re gonna go store a value, and then later we’re gonna transition into medium of exchange and then unit of account. And I think…

Will Cole (13:21.271)
Mm-hmm.

Will Cole (13:24.674)
Yeah.

Stephan (13:38.509)
Famously, Nick Szabo popularized this idea. Vijay Boyapati mentions this kind of idea as well in his bullish case for Bitcoin. And I see that as a logical thing. Even though I personally spend, I recognize that most people are just gonna be hodling and hodling is gonna be the very highly dominating use for some time to come. Now, of course I would love if we were all living on Bitcoin today, but I also recognize that’s not where we are. But I’m curious your view there.

Will Cole (13:49.518)
Mm-hmm.

Will Cole (14:01.27)
Mm-hmm.

Will Cole (14:05.29)
Yeah, I mean, Nick, obviously Nick Szabo influenced me incredibly along my entire Bitcoin journey. What he wrote post Bitcoin and even pre Bitcoin in that sense. But yeah, I think that I’ve definitely been aware of this narrative at least since 2016, is like focus on the store value side, focus on custody, focus on these types of problems right now. And I buy into that logic because even if you wanted to accept Bitcoin as payment, you

If there weren’t satisfactory custody options out there, it’s kind of moot, right? The first question that a merchant or anyone trying to earn Bitcoin has to ask themselves is if I got Bitcoin, what can I do with it? Can I keep it safe? Right? Otherwise, I’m just going to exchange it out immediately. I don’t even blame companies like BitPay that came really, really early on where the number one part of their business was just exchange, right?

Storefront says we accept Bitcoin, but merchant accepts dollars. It’s like, well, if you’re around in 2014, maybe that was the best option. Right. It, you know, the custody options were few and far between at that time. It was, it was more difficult to self custody. I think a lot’s changed in the last six, more than that. Um, you know, uh, what does that be? Uh, nine years, uh, since, since those types of companies around, there are a lot of really strong custody options now, um, on the self sovereign side.

multi-sig, single-sig, open source, companies like Unchained or Kasa, you have a lot of options. And I wouldn’t go so far as to say that custody solved, but the options out there I think have reached a sort of threshold of quality to where any reasonable person who wanted to accept Bitcoin can find a satisfactory answer out there for storing it.

has cleared from the person who wants to accept Bitcoin, now they have to accept Bitcoin to that place, right? Because if they understand the value of Bitcoin, of accepting Bitcoin to begin with, one of the things they’re going to want to avoid is the counterparty risk that comes with full custodial options, right? If you can’t do that, then using Bitcoin or accepting payments in Bitcoin, it’s not pointless, but it’s been

Will Cole (16:33.198)
you know, sort of damaged in some way. You’re, you’re, you’re not really getting the benefit that you could be. And so I do think that this next wave, and I think we’re at the very beginning of it right now, and we’ll see it a lot in whenever the next bull market comes about, is that outside of people just going to exchanges and buying Bitcoin, one of the ways they’re going to stack sats is by accepting it in their businesses, probably starting up.

grassroots from small businesses. These are individuals who have unilateral decision making abilities at their companies and with management of the treasury to say like, well, I want Bitcoin for myself personally, and I’m out there, you know, earning money in the market, you know, I have an e commerce store online, or I’m a lawyer who has, you know, this roster of clients, and I’m relatively self sufficient, I get to choose how what people pay me in and in that the demand for payments.

is not going to come because you know we go hassle a bunch of point of sale you know restaurants or something like that saying hey you should really accept Bitcoin because then they’re just going to turn it all into dollars immediately anyway it’s going to come from those people that have made who understand the value of Bitcoin and have the decision-making power over their business to say I want part or all or you know whatever it is of my treasury denominated in Bitcoin and one of the easiest ways they can do that is just to get it at the point of sale

wherever they are selling. So I have heard a lot of you know counter claims to this. I don’t even think that people that don’t view the world this way are necessarily wrong if you look at it from like a historical perspective. But I’m trying to you know see where the wind’s blowing and logically what makes sense to me is that it is going to be these merchants that sort of set off the adopt the next adoption curve of because they have the sort of power to make that decision.

Stephan (18:25.937)
Interesting. And so the counter view right now, as I said, I spend Bitcoin myself, I earn and spend, I try to live natively Bitcoin, but I suppose the counter view might be like, hey, it’s too early. We’re not there yet. Maybe it’s another cycle. What would you say to that idea? Because, you know, the principle, I guess, counter argument, or main two counter arguments I can think of is obviously number go up. Why would people spend their coins? Because they would rather huddle. Number two, in many countries, capital gains taxes.

Will Cole (18:32.803)
Of course.

Will Cole (18:38.702)
Mm-hmm.

Stephan (18:53.793)
So what would you say as to why now or in this current coming cycle and not a future cycle?

Will Cole (19:01.954)
Sure. Well, I don’t know for sure, right? I’m making a bet right now. I’ll point back to, you know, say early 2020, right? The same argument was being made around multisig and, um, and that it was just too confusing. The market wasn’t there yet. And at the beginning of 2020, that was the current state of things. There were, you know, maybe low number of thousands of people using multisig.

I mean you could see the transactions on chain, right? It was a very small percentage of wallets that were being spent from That that were multi-sig wallets and I know from you know working at a place like on chain in early 2020 We didn’t have a lot of customers, right? But over that year got a little bit better and then in 2021 there was an absolute freaking boom, right?

The doubters didn’t predict that. Not even on the chain, we didn’t predict that, right? We were making a bet that sometime soon, people were going to make this leap. I’d say that I’m making the same sort of argument here on the merchant side, which is, look, at the end of the day, there are people that want Bitcoin, right? And the best way to get it right now, for the most part, is just to go out and buy it with your dollars, right? That there are going to be people out there that they find a more efficient way to obtain that Bitcoin, right?

The reason I’m choosing merchants and not, you know, buyers in this case is that I think you’re right. The incentives on the buyer side right now is not necessarily to spend their Bitcoin. But I think that merchants are gonna put people into a sticky place here. I think that they will discount their products if you pay in Bitcoin. You already see that in some places, you know, my favorite VPN out there is Molvat. If you pay in Bitcoin, you get 10% off. Like these guys fucking rule. They have a great product. And for that type of discount, I’m happy to pay in Bitcoin.

Right. I also think that reading the tea leaves in terms of capital gains taxes and things like that, I think it’s very likely that we end up with, at least in the United States, with a de minimis amount of Bitcoin that can be spent without capital gains. I think that’s almost inevitable. I don’t know what that number is going to be, but I think for most normal purchases, say anything between zero, one cent and two hundred to six hundred dollars is going to be exempt from capital gains taxes.

Will Cole (21:20.626)
I don’t think that we need to rely on that for this to be successful necessarily, but I do think those types of things are very likely to pop up here rather soon. But most of all, I would say that the people spending Bitcoin are going to be put in a position that they’re not being put in right now, which is the daily things that they want, whether it’s someone’s Shopify page or they’re paying for…

you know, paying a lawyer or paying an architect or something like that. If those people want to be paid in Bitcoin, they’re going to have to figure it out.

Stephan (21:57.193)
Yeah, interesting. Yeah, and so I think, let me, I guess I’m parsing your argument this way is it’s going to be merchant led in certain ways, because those merchants will prefer the Bitcoin to the fiat. And so that’s, I guess that’s the thesis that you’re putting forward. That’s the idea.

Will Cole (22:10.626)
Mm-hmm.

Will Cole (22:18.258)
Yeah. I mean, if we think that people want Bitcoin at all in the future, merchants are a part of that, right? There’s just people that want Bitcoin, right? If there are satisfactory ways in order to keep that Bitcoin safe, if they’re sad, and if they can find ways to obtain that Bitcoin without some of the downsides of going to an exchange without some of the counterparty risks that they would take otherwise, there are a lot of benefits actually to taking Bitcoin directly from your customers, right?

and directly into the custodial solution that you prefer. I think that this actually becomes the preferred way for many people to get Sats.

Stephan (22:55.741)
Yeah. And I think it’s also important to point out here that we’re saying merchant, but even individuals can be a merchant in this context, right? Because an individual, instead of just being an employee of a company, maybe he is now a contractor and he’s billing people and they could be all around the world. And for them, it may literally be easier to pay with Bitcoin than to pay, than to do fiat wires. And so it may actually be easier to use Bitcoin. And that individual who in this context is a merchant.

Will Cole (23:04.27)
Correct.

Stephan (23:24.425)
He wants Bitcoin. And so this is, I guess, so ZapRat could offer, and ZapRat is not just US, right? It’s international, yeah.

Will Cole (23:31.026)
It’s worldwide. And your use case right there is the foundation of how Zapprite started. That’s John McGill’s entire story, right? So he’s an Irish citizen, right? Who is doing a lot of work in the United States. He’s a contractor. He’s a designer. He’s a technologist that has a lot of clients. He wants to be paid in Bitcoin. None of the invoicing options really work for him. He builds Zapprite to scratch his own itch, right?

And where Parker and I came in is that, you know, John was very, very far down the line with that, with that invoicing product is very popular amongst Bitcoiners around the world. And where we came in is we wanted to, you know, expand that into the e-commerce, you know, and eventually, you know, other spaces. But that the mechanisms, right, if you imagine what he’s actually doing in that, the product that he’s building is basically a UI.

in a user experience wrapper are just around your wallet and my wallet. You’re, you know, I do some contracting work for Stephan. Stephan needs to pay me. It’s just connecting your wallet to my wallet through this invoicing front end. Same thing that we’re doing now with payment links on the, on the e-commerce side, but very much what you’re talking about is exactly why Zappride was built. Was just on the individual contracting level.

Stephan (24:47.981)
Gotcha, yeah. Okay, so it makes a lot of sense then for, particularly in the contractor case where you have a payment request. Now, if you weren’t willing to run your own BTC pay, then that’s where ZappRite can make it very simple and easy. And that, I guess, comes back to that question we were saying before around getting outside our echo chamber of, you know, people who are maybe not at the level that they can run their own BTC pay. And that’s where ZappRite can sort of open the door, make it easier for businesses and individual contractors to take payment in Bitcoin.

Will Cole (25:12.02)
Yeah.

Stephan (25:17.265)
And even from the end user purchases perspective, they might be using some other solution to kind of get around their own capital gains taxing as an example, like the strike use case, right? Like they might just be literally pulling out their strike app, paying with fiat on their side, but the merchant or the contractor, the Zapprite user in this case, is still getting their Bitcoin that they wanted. So it’s sort of easing the door, yeah.

Will Cole (25:29.314)
Absolutely.

Will Cole (25:42.682)
It’s the opposite of what Bipay was doing in the early days, right? So like Bipay was just taking in Bitcoin from me and you and turning it into dollars for the merchant or for the contractor or whoever, right? It’s kind of inverting that. Absolutely. And Stripe was one of our first custodial integrations exactly for that reason. The other thing that I would say in all this is, and this really comes from Parker, but

Stephan (25:46.239)
Right.

Stephan (26:03.747)
Yeah.

Will Cole (26:12.282)
you know, uh, to sort of summarize his thoughts on this is that, you know, whether you’re an individual or you’re a small business or big business, you know, uh, having Bitcoin at all is a balance sheet decision, right? Um, a lot of people have already made that balance sheet decision, right? Micro strategy has already made that balance sheet, uh, decision block has already made that balance sheet decision. Most Bitcoin startups have made that balance, balance sheet decision. And you and I as individuals have made that balance sheet decision.

So the only question at this point is how do we get it? Right? And right now, almost everyone, including MicroStrategy, including Block, including most of the startups out there that keep some of their treasury in Bitcoin, they’re going out and they are buying Bitcoin on an exchange or OTC or something like that with money they raised or money that piles up from their customers, right? So they’ve already made the decision that they want Bitcoin. We’ve made it and those companies have made it. Now the question is, is there a more streamlined way

to receive that Bitcoin, right? I think there’s a big enough market of people that have already made that decision to really lead to a boom in these, I won’t call them kind of in the payment processing world to start building out that use case on Bitcoin rails.

Stephan (27:29.393)
Fantastic. And so this does also get into the question around circular economies, right? I know you have thoughts on this. I believe you I think you’re saying you believe it’s a bit of a misconception Why do you believe circuit this term of circular economy is a misconception?

Will Cole (27:47.442)
It’s, so this is something that, you know, John and Parker and I have talked a lot about, right? Um, is that, um, uh, for Bitblock boom, Parker put up a, uh, a infographic, um, that was basically saying like, here’s this imaginary theory of the circular economy, where you have all these nodes of people around and they all connect to each other, you know, in this perfect sort of like web of, uh, payments. But that’s not actually how things work at all.

not in the least. What happens is that you hire a plumber and the plumber bills you and he bills you in Bitcoin and you have to make a decision. It is transactional. It is peer to peer. It is company to customer. And after a long time, a gradual buildup of a lot of people making a lot of individual decisions that benefit them for whatever balance sheet decision they’ve made.

you get something that looks like the circular economy, but it doesn’t start that way. And it doesn’t need to be bootstrapped in a way where you say like, well, the network isn’t valuable until all these people are connected in this way. It’s like, no, you just need a lot of individual decisions. And with the amount of Bitcoin education out there and with the growth of people wanting Bitcoin in general over the last 15 years, right? What we see is that

there are more and more people making that individual decision saying like, I want Bitcoin, right? So there’s not a circular economy, right? At all in practice, it’s just individuals saying, Hey, I’m doing something for you. I’d prefer it if you pay me in Bitcoin. It’s a very simple, simple idea, right? And that once enough people make that decision, it starts to look like a circular economy, but it is a gradual buildup, just like anything else in Bitcoin has been gradual, right? Understanding that coin was gradual.

Understanding how to use Bitcoin was gradual understanding how to store Bitcoin was gradual. There’s not going to be a moment in time some sort of Singularity where everyone just starts trading at Bitcoin. It’s just going to sneak up on you after a long period of time You know at first it was just the people writing books about Bitcoin that were accepting Bitcoin And then your electrician is gonna ask you for it and then you know, it’s just gonna keep on happening and keep on happening to where you as someone who

Will Cole (30:07.31)
you know, has Bitcoin is going to have to figure out your own balance sheet strategy of how do I spend and replace or how do I start earning in Bitcoin so I don’t have some of these, you know, balance sheet issues.

Stephan (30:20.201)
Right, and so it can also bring up thoughts around what people call circular economies, as an example, famously Bitcoin Beach, Elzante, and many others around the world. I know there was an early one in the Netherlands as well. I think it’s called Arnhem something. I can’t remember the exact name. Anyway, there’s a bunch of these. But to the point you were making, it’s not necessarily that the people in these economies are only earning from other people in that same…

Will Cole (30:31.426)
Mm-hmm.

Stephan (30:49.133)
town or region, in many cases, the income may be coming from outside of that region, right? And this comes back to even just a general broader economics point, which is, you know, sometimes people confuse this as well. They confuse this idea of having like a trade surplus or a current account deficit. Like they sort of get a little bit confused in thinking that, oh, just having a trade account, you know, surplus is a good thing, and because you’re kind of earning more than you’re spending. But the reality is, in many cases,

Will Cole (30:50.079)
Mm-hmm.

Stephan (31:16.589)
there will be different individuals who you have a surplus or a deficit with, right? For example, if there’s a convenience store near me and I go buy sparkling water or something every now and then from them, well, I’m not earning any money from them. I’m only spending to them. I only have a deficit, right? Because I buy stuff from them and I don’t earn anything from them because my income comes from elsewhere, right? So it’s the same kind of idea that the same, it’s not necessarily going to be that you can only earn out of other people who are also Bitcoiners.

yet, you know, and maybe over time it will. But, you know, I think it’s a bit of a misconception in that aspect too.

Will Cole (31:47.978)
Yeah.

Will Cole (31:53.522)
You know, I don’t have any big brain theories for your listeners here. It’s like if your electrician is going to do a job and he wants to get paid in Bitcoin, right? You’re going to have to fucking pay him in Bitcoin. You’re going to have to figure it out. Right. And what I’m saying is it’s becoming more and more rational for those people to charge you in Bitcoin, right? It was always kind of a weird thing that we ended up in where a lot of the payment processors in the Bitcoin space where their main business was exchange. Right. The problem was, is that.

there weren’t a lot of people that wanted to accept Bitcoin. Right. And so in order to build a Bitcoin payment system, your main job was to convert that Bitcoin into dollars. I, you know, right now that’s probably still a bigger market than people accepting Bitcoin on a direct basis without exchange. I see that world changing. Right. I think it will be gradual. I think it happens merchant to merchant, but it’s totally rational, right. Especially for, you know,

like you said, cross-border payments or anything like that, is that it is a rational decision for a merchant to make to opt out of the fiat system as much as it is any individual who wants to opt out of the fiat system. I find people that are skeptical of this to be a little bit odd in their thinking at this point is that…

The people that run businesses are just people. They’re going to make the same rational decisions that we make for our individual families and for our own balance sheets. It seems inevitable to me, even if a little bit early right now, but it is happening.

Stephan (33:28.617)
Yeah. Any comments on the accounting and compliance tooling and things like this? So as an example, if you’re a businessman and you want to take Bitcoin payments, you might already have some kind of fiat based accounting system. And that’s been one of the traditional difficulties is kind of having the Bitcoin side of it and then needing some way to integrate the two. In some cases, it might be simple as just having a CSV and then give that to your accountant and they kind of mix it all together. What’s your view? Is Zapprite doing anything on this or is this still kind of, you know, yeah.

Will Cole (33:36.962)
Ahem. Mm-hmm.

Will Cole (33:56.822)
Oh yeah. Yeah, and I mostly view this through like the Zapprite mindset right now, which is essentially start out with, you just need all the information. So if you’re accepting Bitcoin, you need to know certain things, right? Like how much Bitcoin did you get? What was the exchange rate at the time of the transaction? All those types of things that you would need to report on later. And right now that’s exactly what we do. We build this nice CSV. You have everything you need to…

import it into whatever accounting software you might use or just to send to your accountant in a really nice way that they can manipulate and get all the stuff that you need. In the future, we will do more direct integrations with accounting systems, the QuickBooks and NetSuite, some things of the world, building out a nice webhook system so whatever you’re using, you can just create little events that will eventually just go straight into your accounting software.

you know, something that grows on the ZapRite side over time. But the most important thing is right now, what you can get is every single piece of information you needed to do the bookkeeping, um, uh, compliantly in your jurisdiction, uh, for accepting Bitcoin. Um, it is really important long-term, um, uh, especially, you know, is you have more complex businesses. Um, uh,

accounting gets more and more complex. And so you’ll need those integrations into NetSuite. That’s not really our customer base right now, but it will be soon. And so that is on our radar, something that we’re working on. We have one upgrade coming out next week on that. Yeah.

Stephan (35:39.221)
Okay, so let’s talk a little bit more about where things are going, maybe a little bit more broader, maybe a little bit of macro, a little bit of talk about where things are with inflation. Are we in a recession now? I think this is sort of some of the conversation now. And I’m curious if you have any views on what recession means for Bitcoin. Will Bitcoin take a hit if it becomes clear later that, okay, yeah, the US is in a recession right now?

you know, do you have any thoughts on whether that is going to push people into Bitcoin or perhaps there’ll be an initial sell off because there’ll be people who maybe have to sell something?

Will Cole (36:17.77)
Yeah, I’m not a macro guy in general, but I do have thoughts on this. And for your listeners, that might sound very simplistic, but it seems simple to me, which is I’ll start this with saying it always kind of amazed me that Bitcoin took off.

Will Cole (36:41.346)
I don’t want to say like so fast, but where it seemed like there were a lot of Americans proportionally into Bitcoin very early on. Right. And the reason I found that surprising is that, you know, relatively, we had good money compared to a lot of other fiat currencies around the world. You know, when you have the petrodollar and you have a large demand for your dollars, you’re actually in a pretty good position compared to a lot of other countries.

It surprised me how little Bitcoin took off in the very early days in the Venezuela’s and Lebanon’s of the world, although they seem to be catching up pretty quickly now. So yeah, I think that anyone who experiences inflation, and for Americans, for many Americans, this is the first time they’ve experienced it at any rate over 15%. And I’m not talking about the CPI, I’m talking about actual inflation.

I think we’ve seen inflation at or around 10% many, many times in my lifetime. But this is the first time where we’re seeing it at 20, 25%. And when I talk to people, and these are anecdotes, it’s not a secret anymore. A lot of people’s Bitcoin friend or Bitcoin neighbor or guy who sits next to them at a baseball game, Bitcoin guy. And you can see them.

starting to ask more questions because look, the dollar ain’t shit, right? They’re noticing this for the very first time in the United States. There wasn’t a lot of pressure to understand Bitcoin or to value it because, again, you can look around the world and relatively speaking, if you were an American, you’re in good shape. You’re not feeling like you’re in good shape anymore. When you go to the grocery store and you have a family of four or five and your grocery bill is $400 and it used to be 250.

And then someone’s telling you that, well, there’s only 8% inflation. And you’re like, fuck off. That’s not true. Right. That can’t possibly be true. You know, it costs a hundred dollars to fill up my suburban and it costs $400 to buy groceries. It was less than half of that two years ago. Right. Um, it doesn’t, you know, you don’t have to have a sophisticated macro view to feel that in the United States anymore. And, um, as we know, because of the dollar standard around the world, we export inflation to other countries.

Stephan (38:41.583)
Ha ha!

Will Cole (39:05.93)
We export it to China and anyone that holds our debt. And so those countries are feeling it even more than Americans at this time. And it’s only been happening for about a year, year and a half at this point. And so, yeah, I do think about that. And I do think that, you know, all of those people that are experiencing this for the first time, they have a Stephan Livera, they have a Will Cole in their life who has talked to him about Bitcoin at some point over the last 10 years, they’re going to be like,

wait a minute, like what about this? I can give an example, you know, I mentioned the baseball game thing isn’t actually, you know, a made up thing. I’m sitting next to someone who owns a fairly, you know, successful restaurant franchise here in Austin. He owns the entire business and they franchise, they have like six locations in Austin. And I talked to him about Bitcoin like three years ago, around 2020, and honestly, he wasn’t that interested. It didn’t really appeal to him. And…

you know, towards the end of the season last year, we’re sitting next to each other and he leans over and he’s like, okay, tell me a little bit more about this. And I asked him why he wanted to know more about this. And the reason he wanted to know more about this is because everything in his business, whether it was labor costs or production costs or rent, everything was skyrocketing. Everything around him was skyrocketing. And he saw his treasury balance just being absolutely decimated, right? More than decimated.

because of inflation. It was the first time in his life that he had to confront what we all knew was inevitable, which is the dollar can’t hold its value. And he was seeing it rapidly happening, right?

I don’t know how, I do not know how merchants, I do not know how independent contractors are going to avoid this for much longer. In fact, many of them are making the choice not to and that they can’t avoid it, right? And that they have to make the step. I do think that we have some tooling in the Bitcoin world that we can build to make that transition easier for people, which is why I focused on custody for a long time and now I’m focusing on the…

Will Cole (41:15.602)
direct payments is I think that order of operations makes a lot of sense. And I really don’t think people are going to be able to avoid this. In 2021, I think back and I just forgot the name of the book. I think it’s When Money Dies about the Weimar Republic. There’s a line in that just haunts me. And I tweeted about it before Ferguson. Yes. There’s a line in that like haunts me.

Stephan (41:31.601)
Oh yeah, Adam Fitzgerald I think, yeah.

Stephan (41:37.237)
Adam Ferguson, sorry. Yeah, go on. Yep.

Will Cole (41:43.09)
And I think about 2021 in this sense, which is the well-to-do Germans in the Weimar Republic, as hyperinflation started, the quote was, we all thought we were getting rich. Right. I think in 2021, that’s how a lot of people felt. We all thought we were getting rich, right. But it was just a mirage, right? So what happens after that is the next three, four years of our lives.

And I’m not claiming that it will necessarily be as bad as the Weimar Republic and the United States or anything like that, but like it doesn’t just stop, right? It doesn’t just go away. It’s not some Paul Krugman fantasy where it’s like, well, it was 10% and now it’s 8%. You should be happy. It’s like, well, it’s still bad, right? The groceries are still going up. The gas prices are still going up. The housing prices are still going up. This is all bad for us. Of course, his argument would be, you know.

Well, if you just don’t count energy and you don’t count food and you don’t count cars and transportation costs, it all looks okay now. It was like, well, yeah, if you if you take out everything that matters in life, it might not, you know, inflation might not look that bad. But if you’re being realistic about it, there’s no getting around it. Right. So, yeah, on the macro side here, it’s that the illusion of the 2% target, I think.

did a lot for making people not understand Bitcoin. But that contract’s been broken completely. Now, it’s not just that inflation is and always has been higher than 2%. It’s now noticeable in a month-to-month rate if you’re living in Ohio, right? That not only is it not 2%, not only is it not 8%, but it’s 20%, it’s 25%, right? And when that happens, it crushes people’s,

belief system, but it crushes their understanding of money completely. And I would say trying to convince a lot of people about Bitcoin over the years is one of the things that has always been surprising to me is how mad it makes people when you confront them on their understanding of money, right? It makes them angry, not curious, right? You kind of have to back off. Now I think that people will be more receptive. They won’t be so angry when you say, hey, isn’t…

Will Cole (44:02.21)
doesn’t this kind of suck? Doesn’t this make no sense that like you can’t just keep a dollar and spend it in a month and it’s still worth a dollar, right? That, you know, a car that used to be able to buy for $50,000 is now like $105,000. Isn’t that weird? Under a 2% inflation target. I think that the whole illusion of the Federal Reserve’s competency in managing the monetary policy of the US dollar has been shattered for tens of millions of people.

Stephan (44:34.625)
Will a lot of people simply chase into other assets? Will they just chase into property or into other things instead?

Will Cole (44:45.194)
Yeah, it’d be nice to be able to do that. And historically, that’s what people have done, right? I do think gold will do fairly well. I mean, I don’t know. I think real estate and property, people are gonna think twice, you know? Especially, you know, a lot of that money was going into the commercial space that hasn’t done so well. I see a lot of sweaty brokers in downtown Austin right now with, you know, 30%, you know, or 70% occupancy rates.

No, I mean, like, you know, of course, some people will do that. And I do think that there are assets that are better than dollars. There are a lot of assets that are better than dollars. But for people that want to stay in a cash or cash equivalent, that want to do more modest savings without taking the risk of those properties, I think Bitcoin is going to, you know, especially over the next few years compared to any other time.

that we’ve seen with Bitcoin that far more people will be finding refuge in Bitcoin than ever have before.

Stephan (45:47.337)
Yeah, I also think it’s fair to point out that the awareness is there now that I would say most people in the Western world have heard of Bitcoin, maybe they don’t hold it, or maybe they kind of had a crypto punt a few years ago and they kind of forgot about it, neglected it. Maybe now is that second or third touch point for them that now they’re going to take Bitcoin more seriously. So maybe that’s also a little bit of what’s going on. I think…

Will Cole (45:56.942)
Sure.

Stephan (46:14.413)
One other angle that’s interesting is that there may be some people who think, well, hey, if we’re going into a recession, maybe they want to hold some dollars because they think that, you know, assets are going to be on a fire sale, right? That I’m holding some dollars because they want to pick up property on the cheap or they want to buy stocks on the cheap if they’re expecting, let’s say, the stock market to drop a lot in the next year or so. So I guess that might be for some people why they still want to hold dollars or short-term

Will Cole (46:31.12)
Mm-hmm.

Stephan (46:44.129)
because of that expectation, even though they still believe in high inflationary expectations.

Will Cole (46:50.87)
Yeah, I mean, again, historically, that would be the rational behavior. I think that, you know, for the more sophisticated, you know, investors out there, they’re going to have to realize that, you know, Fed policy has become so, you know, dominant, like, it’s one of the best things about working with Parker is every time I tried to come up with a theory about what’s going on in the world, you know, you know, money wise, he’s just like, dude, it’s just the Fed. Like, stop. So I’ve tried to think about anything else. It’s just the Fed.

Right. And what else does the Fed do? Like the Fed has made it pretty clear that propping up the stock market is one of the, you know, they will kill the bond market in order to prop up the stock market. Any, you know, if they have the choice to do so, is that, you know, we could go into a recession, which I think we’re in and the stock market could be totally fine. Right. You’re not going to be able to pick up stocks on the cheap. You’re not going to be able to do those types of things because the Fed has made it its policy to pick up those assets and buy them themselves and create a demand when.

that goes down, it’s like the stock market going down, it’s just not an option anymore, right? Once QE happened the first time, a lot of people said it at the time, you can’t really unring that bell because now that you’ve shown that you have that tool, what is your excuse for not using it?

Stephan (48:05.801)
Yeah. So zooming out a little bit, as we’ve spoken about today, we’re talking about merchant-driven adoption of Bitcoin for payments. And so I guess zooming out, obviously, you were around or you were familiar with what happened in 2013 and 14, right? That was kind of the merchant adoption days. And we didn’t have Lightning then. So I think Lightning is a genuine game changer there. And so what we saw was a lot of

Will Cole (48:25.758)
Mm-hmm. Yeah. Yep.

Stephan (48:32.853)
let’s say businesses who took Bitcoin, but then they stopped taking Bitcoin. And then that was crucially used as an argument by let’s say some of the B cashers saying, oh look, XYZ company, they took Bitcoin, now they don’t, et cetera. Now of course we have Lightning, and Lightning actually makes a lot of these things proper, and it works a lot better for this kind of commerce, low to medium value commerce, let’s say. Obviously high value commerce, you still do that on chain anyway. And so, yeah, I guess where does it sort of…

Will Cole (48:52.771)
Mm-hmm.

Stephan (49:02.157)
Boy, loud, do you think this time is gonna be different now because of lightning and because of the custody improvements?

Will Cole (49:09.506)
I think absolutely. I think I think more than I mean, lightning is obviously you hit the nail on the head. There’s really two variables, right? The custody improvements, I think are number one, right? It’s just the ability to save Bitcoin in a manner that I’m comfortable with over a long period of time is it has to happen first. There’s no way you can just bootstrap this thing from, you know, medium of exchange unit of account before the store value argument has been solved.

problem has been solved and again I’m not saying it’s completely solved but that there’s enough out there now to where I would call it familiar. Anyone who’s familiar with banking and holding dollars can find a custody solution that is familiar to them and is also beneficial to them, right? From there they have to be able to accept it. I do think that this time will be different or I wouldn’t be doing what I’m doing. It doesn’t necessarily mean that I’m right.

But I think that all of the signs of how people are going to accumulate Bitcoin in the future are pointing to this, right? I also know that it’s inevitable. It will happen. Maybe it won’t happen this cycle. Maybe I’m wrong on that, right? Maybe it happens in 10 years, but it is going to happen. And just like Multisig and just like so many of the groundwork that we had to lay before, is that as people make this decision to start moving Bitcoin into their unit of account, right?

the thing that they want to accept, the way that they valued their own balance sheet, the more they’re going to demand it as compensation for their services. I think that logic is sound. I think that the macro environment that we’re seeing right now with an unprecedented in the last 50 years inflationary economy that we live in.

that all of the prerequisites we need for those individuals to start making those logical decisions are here, right? And the next three years, I think is very important for that.

Stephan (51:16.573)
As you spoke about before in 2021, there was what’s called the wealth effect, right? As the stock price went up, people felt like they were wealthy, they could spend more. And I think it’s also fair to say that happens in Bitcoin too, right? As Bitcoin’s price goes up, you see a lot more people willing to spend, right? You look at, let’s say, BitRefill data, obviously that kind of thing goes crazy during bull cycles and you know what, maybe that is also that each time, each time we go around, we do this go around, there’s a whole new bunch of people who are willing to earn and spend just natively.

Will Cole (51:46.275)
Mm-hmm.

Stephan (51:46.585)
or using an intermediary partner to sort of help them. And so, yeah, I think each time that group of people who are willing to actually day to day use Bitcoin is growing. And so I think it comes back to individual choices. Individuals are gonna choose to accept Bitcoin and to spend Bitcoin, and that is what’s gonna drive that next level. And for some people who are more on the outside,

they can look at that and see, oh wow, hang on, there are businesses who take Bitcoin. There are, let’s say, Bitcoin Beach and these communities who are doing it. And so it really does work. So I think maybe that’s where it all boils down for me. What do you think?

Will Cole (52:31.254)
think that, you know, even the premise of this, anyone who’s stuck in 2013 or 2014 is making a very big mistake.

Will Cole (52:42.166)
The idea that something didn’t work back then, not working now because it didn’t work back then is hilariously shallow thinking. I know that it can be hard to get out of. I’ve heard people call this the loser’s curse. You see this in investing a lot, which is, oh, well, I bought Apple in 1997 stock and it tanked on me. Yeah, it’s doing good here in 2004.

But I’m not going to buy it again because I’ve already been down that road with this company before. You can sort of extrapolate that into any type of decision. This loser’s curse of having a bad experience with something in the past and then not having the confidence of or even having an open mind to consider that it could be different because there are different variables at play this time around. 2013, 2014 Bitcoin, it’s just a hilariously different world.

than we live in today, primarily because of the two things that you mentioned, the custody options and the existence, not just the existence, but the sort of maturity of the Lightning Network. I would even say in 2020, I had a lot of questions about, you know, the Lightning Network working, right? You know, people could still have those questions today, but there’s been a lot of risk, de-risking that has gone out of that, you know, answering that question of whether or not Lightning is going to be able to scale the way we want it to for these types of payments, right?

It doesn’t mean it’s 100% going to work, but if you were 50% sure in 2020, maybe you’re 90% sure now. I would say I’ve definitely gone through that sort of change over the last three years myself. Back in 2014, I think that the narrative was everyone was aware that the on-chain payments, other than the B cashers who were delusional.

about this type of thing. Everyone was aware that we were going to have to solve the on-chain problem, that it wasn’t going to happen on-chain, and a lot of people warned about that back in 2013 and 2014. The idea that the predominant narrative in Bitcoin in 2013 or 2014 was that we were going to do all these transactions on-chain is silly. It wasn’t the dominant narrative. There were a lot of people loud about it, but you can’t fool me, I was there, right?

Will Cole (54:59.954)
There was a narrative around it. It was a small minority of people. We argued about it for a few years and we just saw how small of a minority it was. A lot of the talk back then was about sidechains. I think that the Lightning Network in many ways is a sidechain and that we’ve seen one of them come up in prominence and durability and that does change what we’re able to do now.

This isn’t 2013, this isn’t 2014, it’s a whole new world out there. And the tools that we have at our disposal are, it’s an order of magnitude, if not more, better than in 2013 or 2014. It’s just not the same calculus.

Stephan (55:43.985)
Yeah, and look, I’m all about seeing more people earning with Bitcoin. So I’d love to see more people do this. So, you know, the more stackers there are out there, the more this kind of this virtuous cycle continues. So let’s see that grow. And before we finish up, Will, where can people find you?

Will Cole (55:53.789)
Amen.

Will Cole (55:57.335)
Mm-hmm.

Will Cole (56:03.318)
Pretty much Twitter is the main place. I’m at Will Cole on Twitter. Also on Noster. Despite my business partners’ famous distaste for Noster, I love it. It’s on Will Cole there. You can find me. I’ll tweet out my impub at some point here. I think it’s in my profile as well. Yeah, just hanging out in those two places.

Stephan (56:23.925)
Fantastic, I’ll put the links in the show notes and thanks for joining me Will.

Will Cole (56:28.026)
Thanks, Stephan. Have a good one.