Finishing out our week all about the lightning network with a guys take episode. What is up guys? Welcome back to the crypto Cana me. This is Guy your host the guy who has read more about Bitcoin than anybody else, you know, and I wanted to close out our week on lightning with we kind of have been doing a lot of brainstorming about lightning and just trying to imagine and think about the applications that are enabled and we just read Jack Mallory hours Olympus announcement which Olympus and Breeze right now have been the best examples to see where the user interface is going because as the user interface shifts to lightning first as the as the on-ramp to bitcoin the easy and simple and fast way to just start interacting with Bitcoin. As those is that bridge is gapped. Essentially. We don't know. We don't know. He says in the article. We don't really know what this will enable like we can guess but we don't have any concrete evidence. I mean, there's been ideas floating around for you know, decentralized or digital digital money applications for decades where you know, we just the opportunity to even try them out. Simply has not been there. And there's also a lot of I'm not even a hundred percent sold on the idea that decentralized applications are even going to be a huge market like it might not even though I think it's important for the market itself to be decentralized. It's like I think it's Simon Morris is series on the lessons from BitTorrent. Is that okay? Well, what are the most important things like minimum viable decentralisation is what he referred to it as is only decentralized that which is most critical to decentralize. However, there's a big limitation there because everything we wanted to do like all the applications we may have wanted to I have a huge problem. They have a massive bootstrapping problem because there is no infrastructure. We have to create an infrastructure for these things. And there was the question was always always. So how the hell do we pay for it? How do we say infrastructure has to be paid for how on Earth? Yes, it would be great to have this wonderful like decentralized social media. Ation, yes, it would be wonderful to have this great decentralized blah blah blah. But how do we actually pay for it? How do we get it? So the infrastructure problem is solved and that's what I think lightning is actually enabling lightning is providing just it it's incentivizing its own infrastructure layer, like the the infrastructure that we will need for those sorts of a Locations will now be built in to just for the sake of making payments and scaling the base layer of a decentralized money. So in this second layer technology, we're actually seeing all the incentives and all the funding necessary to make this second layer happen and it's because of the demand of the underlying money that we would see and need the demand for a second layer. So so we've already found the incentive necessary to build out the infrastructure. So now it's like what kind of applications can we build with this? What can we actually do with this new tool? Is this a huge market? Like do we have all of these major like applications that we could do centralize some social network or file storage or something like that? Is this does this make sense? Is there a huge need to actually do this or does the internet kind of I can do that already. Is that it? Is that a problem? Does that need censorship resistance? And I don't know. I don't know it's tough because in our current environment, we do have a lot of situations where we need or at least where things are trending in such a way where censorship resistant resistance is becoming more obvious as a need. A lot of people are getting very very comfortable like social networks in particular getting very comfortable, which is deeply For me people that they politically disagree with so I think that is a concern that can't be outright dismissed. Same thing with payment platforms PayPal and in this is why Bitcoin exist in this is why lightning exist, but the question is do we have to go a step further do we now need to use this infrastructure due to decentralize other things because that's what it could enable and it's funny as a lot of people just thought blockchain and making your own token was going to do this because Cuz Bitcoin was such a great example. And again, this was something that I was initially really excited about. That's why the whole idea of the DNS name coin the very first altcoin that ever was which I in my mind was a totally legitimate project and an attempt at using this tool to decentralize other things, but I think it makes I'm now the years since considering that it doesn't make sense to do it in its own token because you're having to do. Strap the value for some single utility when when your boot strapping a money when you're creating a money that is secure and honest with this technology if that's what that's what Bitcoin is doing is its using the technology to make easily verifiable provable Global money. That's how you get the value of the token and then then you can build on top of that. It doesn't really make sense to try to create the value of a token around every single we don't need a token for every possible use Case of the thing it doesn't that doesn't make any sense. That doesn't make any sense from a saleability and a market Standard perspective. So in the crypto economy telegram chat actually had a friend make a really interesting point and it was funny because this was while I'm making all these episodes about lightning it said he kind of gets annoyed with the fact that all these Bitcoin podcasts are focusing on Lightning because it feels like focusing on the coat of paint that we're putting on an aircraft carrier which doesn't really matter and that's it. That's a actually a decent analogy in my opinion. I think it's a little bit misses the point but not by much. I kind of push back on that and was like, I think the analogy is better that like we had this giant ship we have this huge foundational infrastructure to build stuff on top of the whole point of it. It's more like a cruise ship maybe is what we build on top of it like so what services and restaurants Applications in a pool and like you know, what's going to be on top of this ship but yes, the invention the powerful part of this entire thing is the fact that we have a ship now to build on top of but as far as like adoption and further integration into the economy, it's really important what we actually build onto this ship the infrastructure will enable a ton of stuff and now we have to figure out what it will enable. Aside from the fact that it's you know, it's a ship that allows us to abandon the Titanic. The one that we are on currently it's a ship that will actually survive. So that's really the major use cases that in the context using that analogy as far as like other currencies go if all the other currencies are ships is that they have been designed in such a way that they're all just going to sink and they are all in the process of sinking. So the key the absolute critical Part of this thing is that we have a ship that's just not going to sink that is sustainable and we can all get on this ship and it will carry everybody properly. But with that we also have to build things on top of the ship. It's like, you know TCP and HTML without the web without actually building out the web. So yes, okay. It's a powerful tool and yes, it decentralizes communication, but that means that we it's important that we Figure out what sort of communication we can actually do with this that was limited or just impossible before. So that's what that's what I want to kind of break into. I want to brainstorm in this episode about exactly that sort of thing. And you know, maybe we are just talking about what color were going to paint the aircraft carrier because really the major use case of Bitcoin is just that it floats in an ocean full of ships that are all sinking. So that's the multitrillion-dollar use case without a question. Everybody needs it just so they don't have to they can stop bailing water. Water out of all these other ships that they've been on for, you know their entire lives mess. That's kind of what we're doing. I think it was the kind of an interesting analogy is that we're all on sinking ships, but we're basically the economy is working overtime like everybody's overheated because not only do we have to do all of the normal things that we want to do have our Leisure and are productive activities and all this stuff. But we also have to take time out of the day every day to bail water out with buckets. Um, that's kind of what inflation does is it creates this constant bleeding of the actual productivity and it soaks up all these resources into a completely unproductive Direction and takes it out of the pricing system and the incentive structure that actually produces things that actually makes life better and creates a higher standard of living. So we're really we're all on sinking ships and we're having to spend half our day bailing water out of the ship just so that we can sit down and do Being productive. So the two main elements to lightning that I think is real that are the real game changers. Is that because this is a payment later and this is you know part is just because this is derivative of Bitcoin and you build these channels and this network with Bitcoin transactions, and I've said numerous times in the past that Bitcoin transactions will slowly go from thinking of where the transaction itself is the exchange of the ownership to Transaction being used to build networks that they are network connections as opposed to specific like final ownership their contracts. They're living contracts to ownership that create networks. So I think the idea of just like owning a one person owning a specific you txo will start to kind of fall into the background. But that's a little bit. It's a little bit out there for our discussion today. But the major thing is that this is an open payments layer. So this is like the web of payments so we don't have to partner with square or you know call up AT&T and get them to add. I mean AT&T, I'll call up visa to get them to adopt or PayPal to get them to adopt some application that we're like trying to build. Can't just go up and just build an application for a machine to make billions of PayPal payments back and forth between like my users and just do that. Like I'm gonna get shut down immediately or like I just won't give be given access to you know, their API or whatever. I won't be able to talk to their system. This is not it is not a permissionless open system. It is a highly restricted and closed Source system. Like I don't I can't like go in and like You know edit stuff in the background of PayPal can install the PayPal infrastructure onto my computer and use it and that's one of those things where I think be teased out. I really wish I had gotten a chance. I thought I was going to earlier this week until my computer took a dump on me and I got everything got refocused, but I thought I was going to install BTC pay server this week finally because I really want to play around with this because I think this is a huge enabler of it's essentially that's what you're doing you're creating. Own you're installing your own PayPal on your computer in a sense and you can modify it and added extensions to it. And it really everything. I've been reading and looking into seems really exciting. And I love that project. I think that's a huge huge part of making this accessible and building out the tools that we can actually do with this and enabling, you know businesses and online websites and stuff to really control all of their own finances. Unfortunately, I really have not gotten a chance to play around with it. Even though it's something that I try to follow pretty closely and I'm really excited about this one of those things that I just have not tinkered with yet, but the other thing aside from the openness and the fact that we can just build whatever we want which totally opens it just like anybody can build a website like anybody can build a payments application. You can create a machine that does billions of payments and you know owns its own Keys like you can create your own little Interface and stuff with lightning like it's programmable. It is programmable payments where Bitcoin is programmable money, but aside from that the scaling the possibilities in the the ability to scale. I think we'll start to get early on with lightning as Lightning becomes more and more user-friendly and we get things like Olympus and zap and Breeze and these things basically closing the gap between ween wanting to use Bitcoin and then getting it immediately and lightning and turbo channels, you know in particular is just a great great simple concept. Is that even if we have to go through lupins and loop outs a lot, even if we have to use the submarine swaps, which that that's Loop in and loop out and we have to do on chain and we have to do splicing and every once in a while. We need to close or open channels. even if lightning only presents particularly at this stage before we get really key solving really key problems like amps or maybe even getting a different concept of like how to deal with routing or something like who knows who knows there could all there's so many areas for improvement with lightning that any one thing could have a huge shift in how well and how robe have reliable and robust the network is but even if it only represents a five 10x scaling benefit like at an early stage. That's a huge. That's a huge deal that is nothing to scoff at if we're talking about like going 10x scaling because every transaction a you know, third of the network is is a channel transaction that then offloads 10 additional transactions. That's a huge freaking deal that we did not have to change anything at the base layer to get essentially 10. NX the block size simply because of how we utilized it and I think that in combination with the fact that I think it's inevitable that we get way more than 10x specifically because of that whole open payments layer principle or the that characteristic of it is that somebody is going to figure out an application or create something somebody is going to have the imagination necessary and create something that takes thousands tens of thousands. Maybe even millions of payments and it will be something probably simple that just wasn't possible before that just didn't quite all the corners weren't quite right to get it to fit together into the market. So let's take a quick break before we get into the list. Now. We kind of set the foundation for what I think is going to start enabling these things because I've just kind of like got a general list of things. I've been brainstorming about and thinking about with What things that I've been reading about and watching on videos there's there's some really interesting proposals and there's a lot of things that I think have been sitting in the wind for you know, 15 or 20 years. It may actually finally see the infrastructure the incentives and the decentralized payments layer necessary to now enable it so let's take a quick break and hit our sponsor and then we'll get into kind of what I've been brainstorming on. What could possibly be enabled with this new layered Financial ecosystem? What is the second layer give us that we may have never seen work prior to this. For anyone who has a podcast anchor cannot be beaten particularly for trying to get off the ground their entire platform is free. This includes unlimited hosting both in audio that you upload and how much your listeners download. I have uploaded an incredible library of audio now and I've never paid anchor a dime. In fact, they connect me with other sponsors and have run an ad consistently on my show. So they've paid For exposure to my audience that's really hard to beat even if we ignore that I can record directly in the app or my browser. I don't need any other software. If I don't want it I can edit at sound effects clips and they automatically publish to all of the top podcasting platforms. I never had to do a thing. So if you were thinking of starting a show or already have a podcast, there's no better platform out there check out anchor by downloading the app or go to Anchor dot f FM today So again the key element to all of this is the fact that is it is permissionless that essentially Jack Mallards myself. If I was any good at coding anybody can simply create a competitor to Visa can create a payments application with some specific utility some specific. It is the web of transactions and just like the HTML and www was the web of communication of information. In this is the web of Exchange in finance. So there's going to be an ocean of things here, but we'll start actually with what I think is working right now. I've been using Bitcoin. Excuse me. I've been using lightning quite a bit lately. In fact, all of my main wallets now, none of my main wallets are Bitcoin wallets. They are lightning wallets. I do own time on occasion have to make Bitcoin transactions, but I try to keep it to a real minimum it. it's probably a A seventh ish of the number of transactions that I make most of it is own lightning now and that's pretty powerful and there are a handful of applications that have really made me. Exciting about the fact that this is changing my habits. Not necessarily the fact that oh goody. I'm spending more but when I have to spend I have an option with lightning which just wasn't the case like it's literally been only in the last couple of months two to three months tops. Then I realized that I'm using lightning a lot more and I don't even know when that shift happened. I just slowly got into it because I was playing with things and then I found that I got stuck. Doing things that actually provided me a useful service and truth be told one of them is tipping. I love the fact that like people tip me on the bottle the bottle app. The lnt x pot on telegram with tip and Dot me that's actually a pretty I just checked my account every once in awhile and somebody has given, you know, what five or six days later. Somebody gave me a tip for some tweet or just for the show or something because they didn't want to You know donate or do patreon because I have to subscribe and put in, you know, their information all this stuff. So like I totally get that and I would love to have I would actually have to love to have something like patreon that you actually do with lightning, but we're not yet there yet, but I think we will be it looks like there's already some things in the works that have to do with capabilities that are provided with the whole delay CH TLC's which you can dig into with Alex Bosworth if you want to kind of explore A little bit and then also amps the multipath payments. There's something in there that I definitely read. I just didn't get to dig into further about subscriptions style payments where you can essentially validate early on that. You've got these funds available available to continue a subscription going forward don't know how it works. So, you know, don't ask me I haven't gotten there yet. But so tipping has been a major part of this and lightning really brings that into the Forefront again. And it's also a really great like first use case something simple to sort of test the waters with small amounts because that's you know, micro payments are kind of lightnings thing. Like I regularly get tips of like a hundred satoshi's or a thousand satoshis which are like a penny and like a tenth of a penny like that's a tiny amount of money being moved, right? So even though that might just be like a first use case something that will kind of get people in the door to play with it. There's no telling how big that Is really and you know tipping does not there are very few projects that can really be sustained on donations or tipping. A lot of Open Source projects have this issue like that's not an uncommon thing and that actually leads to the next thing that I've been really surprised at how much I've kind of gotten into and maybe this is just me but the SATs for ads there is a say the Ellen TX bought it's a bot for lightning Network transactions and wallets and tipping and all this stuff in Telegram and they have started this interesting little test case on sats for ads and what happens is that people pay and I have run a couple of ads for the crypto Konami and just you know mention it and sometimes I've just done a couple of more just for bullshit because some people are paying for one and they'll just say something random and I'll Like it's a conversation that they actually set their price and you pay to reach a certain group of users and that shows up as a direct message to that user. Well through the lnt X Bots and I pay pretty close attention to it. I watch them and sometimes I click on them because like it's a bunch of is usually a lot of lightning stuff people like, you know trying to be like, I've got this new lightning app. And here's this perfect demographic of I think it's like, you know, a hundred and 50 ish users right now and you can actually just check the rates for everybody. So, you know exactly how many people you'll reach based on the number of characters in your message, but it's pretty amazing. And like I said, this is kind of a new thing. It's almost like I've always thought those there have been those previous like services or whatever get paid to watch ads or what not and they're actually running like their own payment set up. The background have to get Banks and all this stuff. So there's all this unnecessary overhead for something that's micro payments and I just think it was not feasible, but it makes me wonder if now you've got the example of Brave. I'm not sure if anybody is check out the brave browser. I love the browser. They've got this really awful token though. It's a shit coin where they're trying to scald basic attention token, but what they were trying to do is tokenize people's attention, but I think the issue with that is that when you create When you don't have a stable money, they're trying to they're doing the pricing and the reverse they're trying to use the attention and the value of the attention to price the money. That's what the a lot of the altcoins and shit coins or the utility tokens. That's I think what the utility tokens have backwards. They're trying to use the utility itself the attention or the network or something like that to try to price the token and what you need is a money so that You can price these things you need, you know stable core monetary system so that it can be used to price stuff doesn't make any sense to try to create individual tokens for Market private it soft. It's so backwards. And so I think I think they have kind of an interesting idea in the fact that they the intention is there and I think they're trying to figure it out. But the fact that they made their own all coin I think was a terrible terrible idea. And I think it's just completely backwards economic logic that we're going to have individual pricing tokens for every single utility out there when we already have God, how do I even explain this? It's like every industry every service having its own token to try to price those services and those products when the whole point of the pricing system is that it is the intermediary it is the medium. It's the market Standard by which we are able to price the other things because it's money so it doesn't make any sense at all to create all these monies that are just for one single use case and then make some sort of crazy huge Forex Market to Arbitrage between the value of every utility against every utility. It just doesn't make any sense. It's completely antithetical to why money is actually useful. If every single good and every Network and every service that we want is priced in a different thing why even price it I mean seriously, like they'll point of the price is that it's an easily identifiable thing that everyone can weigh against its this is all about measurement right? It's all about measuring value. Like the whole idea of a basic attention token would be to what's the value of our attention market and a token for just smart contracts is what's the value of the smart contract money are a conference smart contract Market. Well, the idea of a utility token is that we will have measurement standard measurements for everything that we would measure rather than a standard measurement to measure everything. So instead of everyone knowing what the length of a meter or a centimeter or a decimeter or a millimeter is we would have A standard measurement of a couch and then your couch would be how many couches is it? Oh, well, my couch is 1.2 couches. And then oh, what's the length of your house? Oh, well, my house is roughly, you know, 8.9 boards wide and then they check on their app to see what the measurement of a board versus a couch is it's like, okay, that's one point three couches man. That's a lot of couches man. That's like 10.4 couches or something. Holy crap. You got a big house. It doesn't make any sense. The point of the measurement is that it's the standard. We're all measuring length here. We just need a standard form of measuring length. We don't need a new measurement to measure everything so that we can create a market and this really great like the idea of creating a decentralized market for exchanging thousands and thousands of different tokens and utility tokens and value tokens is the same as having a nap, too. Instantly convert between the length of a couch and a board and how many DVDs wide is my car? It just it just doesn't make any sense. Okay. So now that now that I've got the whole I have thrown out the idea that the bat token is any sensible means of creating a Market Round attention or around paying for ads or creating an alternative like decentralised ad market now that we have the lightning Network and a universal measurement to price the value of things in this case our attention now, it's like can we actually build that I don't think the utility token. None of it makes any sense whatsoever. But I think the idea of trying to decentralize ads is actually a good one. So I'm really interested in the utility. It just makes no sense to price it in anything other than the dominant money because then the price is meaningless. So as little as SATs for ads is it's a fascinating use case that I didn't quite expect and I'm surprised that I'm interacting with it. It's my reason I can't quite tell you why maybe it's just the novelty of lightning and I like to play with lightning but there is something different about it from those sorts of schemes and the pay for your attention and the bat token that I always just dismissed. I was interested in Brave actually when they were using Bitcoin as micro payments, but as soon as they created a token I was like, okay this is crap and and it's really upsetting because Brave itself. The browser is pretty awesome. I love it. It's my main browser. So Love to see them actually adopt something like lightning and attempt to do this again in kind of the SATs for ads concept. I would like to see SATs for ads build out and try to become a larger thing. I think there's potential there and I find it useful to myself. I have used it specifically to be like, okay, I can reach these 147 people to May Vary may very well be interested in my podcast and that's cool. So I think there's kind of something there. Now the other thing that I use a lot is fold and gift cards like bit refill and the whole SATs back concept like lollies and folds do and like the the ability to do easy and cheap micro payments without having to with without having the banking infrastructure at all to just simply facilitate your payment through them and do like an affiliate share like lollies does. And then get money back in SATs. That's so much cheaper for them to manage and then obviously it's Bitcoin as money. So as the price go up goes up, you know, you're saving it's that change its the whole lawn mower concept. I'm not sure if anybody remembers about that, but there was an app called lawnmower that would put your extra change every time actually you actually had to connect it to your bank account so that you could watch for every single transaction, which honestly was a little bit scary and kind of stupid Maybe. But I did it because it would round up every transaction. So there'd be like a transaction for $19 and 53 sent and it would immediately by 47 cents worth of bitcoin for me. However, it would aggregate it over like a couple of weeks because it could not charge every single time. It could not pay out every single time because it costs too much can't pay somebody $0.47 over the banking Network and you know costume I call she like a 50 Cent just to do that like Justin. Initiate the payment and as also where we see a lot of applications already the gift card thing that's a real use case and I love it to get a discount get a 10% discount just yesterday. I used fold with lightning from my Breeze wallet and I got 20% off at Starbucks. I reloaded my card with like 24 bucks and got like five dollars and sixty. I can't remember exactly. How much was it was like 50 some odd thousand SATs back just by using My Breeze wallet and I can top that up this that's a big discount 20% discount at Starbucks. That is not something to just dismiss particularly when I might need to cash out in order to you know, get my coffee like my daily expenses that is money that I didn't have to cash out for a premium like think about it. Like if I use square or something like some cash app service or something, which is great and crazy convenient, but when I sell I am not selling for spot I'm selling for Their overhead for their Gap. So like let's say the price is $10,000. I might get you know, ninety eight hundred and fifty dollars worth of whatever I sell in Bitcoin. I get 98% I get like a 1.5% spread right? Well with fold I get the exact opposite. I get a 20% bonus if I'm selling for a Starbucks gift card, and I think it's still up to day. I might actually refund just because Even the price is low. I might I might just not drink coffee for the next two weeks. But if I know I'm going to be spending money at Starbucks and I need to cash out. It makes way more sense due to the gift card. Yes. It's a little bit of a headache but it's saving me a lot of money on a lot of things when I know I have to cash out and I don't really have another option. The gift cards are really saving me in a lot of ways and I usually just get very near like if I can get like seven percent back at Home Depot. So or something and I'm spinning like a hundred and sixty bucks. I'll get a hundred fifty dollar gift card. So I'm not I'm not wasting money by spending unnecessary Bitcoin, but I'm saving, you know, a 7/10 and a half-ish dollars on a hundred fifty bucks at Home Depot. And then I just pay the remainder and because the transaction is instant, I can do it just sitting in the like it didn't take any time. I don't have to like prepare. I can do it in the store and that's a big deal to me. I'm trying to save as much Bitcoin as possible. And sometimes I had to cash out the better price I can get for doing that the more I am going to be on board with that option and the gift cards really have been the whole SATs back stuff has been really great in that regard. The next one I've used on occasion. It's not a huge thing for me. But I know this is a giant market gambling gambling is a huge use case. I'm inclined to think maybe I'm wrong about this but gambling is such a huge Market that I've constantly wonder if that's really we're going to be where the killer app for the lightning Network finds itself in doing some sort of gambling that you just can't and you know when you were talking about like Centralization is about breaking the rules. Again. Go back to the BitTorrent lessons is it's about breaking the rules. So what rule are you breaking gambling is one of those gray areas where it's difficult to do in a lot of countries and jurisdictions and to have a global easy low payment like micropayment gambling like set up. I think there's a lot of potential there. And that is something that I have found myself doing a couple of times and I will still kind of go back to even if it's something stupid like lightning spin or of the the slots or what not mean. I don't bet much but it is still kind of fun to just do for like 5 minutes at a time. And then lastly privacy just the just the whole nature of payments privacy is a big deal to me and That's definitely a consideration when I'm doing a lot of this stuff. Like I know when I get bit refill or fold or something like that in using like a gift card and stuff. I'm getting privacy. Like I'm I know that data is going straight like it might be connected to an account. But that's just that accounts just connected to my email and doesn't tell anything about me and you know, maybe fold can like tell somebody else what gift cards this account bought but they don't know, it's me and That's that's not something to Discount either because that is definitely something I consider when I'm doing that is that I know I am getting a degree of privacy with that payment that I'm not getting with anything else. So even though I'm using it mostly for gift cards now, I would love to see that the more things that I can actually use with lightning and the more circular that can become I would love to do more enlightening. I've been really having a great time with it. And I think there's so so much potential there. So I want to see I want to see what other people can build with this. So here is where we get into. The major things that I think could be a huge possibility for Bitcoin or excuse me for the lightning Network did it might enable that we could not accomplish before? And the first one that I really want to get into because I am still waiting for this like I mean, I love my my apps, you know, my telegram whatever my chat apps, but I still think even if it's as slow as email, even if it's something like email, I think an encrypted decentralized store-and-forward system is really really important and I want that really bad. I want that for a full. Like end-to-end encrypted there is no Central server. I am paying a micro payment maybe to lightning servers or whatever to store my message for a little bit and then forward it to the people who come online and I told I talked about this in one of my previous guys takes episodes of the app that I want to see for lightning. It is a decentralized encrypted chat and where I add friends based on their public key, and I'm encrypting the The message just so that those friends can decrypt it end of story and I don't even care if it's a little bit sluggish. I wouldn't use it as like my main messaging but I would use it for a lot of things and I would use it to share certain stuff. And I think that would be a huge. I know I would use it. I would be all over it. And because the message forwarding is already built into lightning. I'm pretty certain that there are people working on this. In fact, I keep hearing little rumors here and there but this is just a big one for me. He personally I really want to I really want to see what could be possible with the lightning infrastructure to enable something like this and that immediately leads to the whole neighborhood watch concept is everybody talks about the Watchtower Skeptics and the lightning Network Skeptics talk about how watchtowers are centralized and you have to trust somebody else. Well, that's what it came up with. The idea of I came up with the idea of the neighborhood watch is that I have multiple devices. That our own lightning all the time. I have my own Casa node. I have my cellphone which uses Breeze and I've got zapped now because I really want to try out a lympus and I'm probably gonna have a BTC pay server setup, which I might even have them like a digitalocean droplet or something so that it's online. Why can't I use all of those devices as watchtowers for each of the other devices like that doesn't seem like a very difficult extrapolation. I've lost no privacy whatsoever and I've got Backups, I've just provided myself with multiple backups because I got plenty of devices. I've always got some device somewhere. That's Own Line. It just doesn't seem like that difficult of a problem as far as a not as far as like a technical implementation have no idea exactly how you would implement it, but I'll leave that to people who actually know what they're doing there. But as far as a conceptual way to not have to worry about privacy and then again to extend the hole neighborhood watch idea is that if I've got a encrypted decentralized messaging with a group of friends. Well, then I just have my trusted friend Network. We're also watched hours for each other. So I'm never going out to somebody even though I could even though it doesn't really matter and it's not like a super trusted thing. Like there's not a whole lot in trusting a watchtower. You don't you're not giving them Keys. It's not a custodial thing. So the relationship really is already not a big concern, but if you wanted to mitigate the minor Issues of privacy and needing to actually give up some information in the case of a dispute. Well, you've already got plenty of people you can trust and everybody can be a watchtower. You know, it's just like a, you know, you scratch my back. I scratch yours sorts of sort of thing that leads me to another video recently about I couldn't quite follow it completely and the accent was difficult enough that I was missing some of what she was explaining but look like a really interesting system to use watchtowers as a way to store encrypted backups of your channels. So that not only could you use a watchtower to basically enforce a channel balance in the case of a dispute, but you could actually have your node go offline. And as long as you had your public key and murmurs, excuse me, as long as you had your private key you could request out to the Watchtower to give you the backups. Cryptid backups that only you with the private key can actually decrypt and restore your node by utilizing again the lightning infrastructure as a storage for your your backup service and that's a pretty powerful tool and that's that's pretty amazing to think they like, okay, we're all ready. What else can we do with these watchtowers? We've got again a infrastructure set up a service built for one specific use case, but now we can start to expand. What these always online servers can do how many pieces of information can we give them? How can we utilize them for other problems that we're having other issues that we need to fill in the gaps for? In another sort of fun when that I thought of recently is physical Bitcoin notes and physical Bitcoins, like open dimes and stuff is to actually use those in payments. It's like imagine if you were just buying a bunch of $20 bills, but like all of your stores in the area didn't have $10 bills $5 bills one dollar bills and change right like trying to use physical Bitcoin like that in Commerce in exchange and physical exchange is really a nightmare like like you have to have again. It's a bootstrapping problem. You have to have a way for someone to divide that thing up because otherwise you need to always spend exactly what it's worth like imagine having to you've got twenty dollars in your pocket and you have to go into a restaurant or a grocery store or something and you have to figure out how to spend exactly twenty dollars like that would be a nightmare right? And that's why I think physical. It's why physical silver like, you know, like you would have all these pork fest and stuff and they try to sell like little silver cards and stuff like that, but you can't do that without the infrastructure. It's it's like selling access to a social network that nobody is on so if if nobody has the change that you need you can't really use it in Commerce. You can't break it up. So lightning actually changes that for physical Bitcoin if everybody who accepts open dimes and physical Bitcoin bills and stuff and there's like an easy kind of standardized way to validate that these are legitimate on and also safe then it's also really not a stretch to think that they might have a lightning Network or a lightning implementation and as Lightning becomes more ubiquitous as the app sphere is really kind of taken over in the payment sphere is kind of taken over by lightning with in Bitcoin. What a perfect way to get your Change back, right. So rather than needing to if I'm trying to spend .01 Bitcoin on a single opened on I don't need the merchants to then have a bunch of point zero zero one Bitcoin open dimes and I want to point zero zero five Bitcoin opened dimes. I don't need them to give me back change in open times if I want to buy .008 Bitcoin worth of things and I've got a point zero one Bitcoin open time. Well, then I just get 200,000 satoshi's back on lightning in my lightning balance. So I hand them the opened I'm they validate and deduct the the difference and then I scan my lightning wallet and they pay me the difference. I get the change back in my lightning Channel. Now, we just skipped a massive bootstrapping problem of a of trying to create a different physical cash medium. It takes forever to get people to adopt the physical cache version, but it's really quick to adopt and integrate this. Software version particularly when the network effects are all in the software version, but those can the physical version can piggyback off of that Network by integrating the two essentially I would really like someone to see that I would really like to see that where there was like a point-of-sale. That's a lot of people trying to make these like Bitcoin point-of-sale things. I really like to see one that could you know verify an open Diamond then pave somebody back change enlightening and I think it really Really could actually enable another rather significant option for off chain scaling by making these bills and open dimes and physical Bitcoin actually viable in exchange without the infeasible expectation that we would get everybody to always have tons of different open dimes and tons of different Bitcoin bills in order to you know, give back correct change. And then we got one we got another use case that Andreas talks about just the idea of streaming money. I mean when I first heard this my brain kind of went went off trying to figure out all the different ways, you could use this and one of the things in my opinion would be a really interesting like video service like a YouTube style service except for its pay for the video and you only pay for what you actually watch. So it's like it's not Nine dollars to get to the end of this video like like you're watching a movie or something or maybe it's four dollars whatever it is. And so if you watch it and then you get sick of it like two minutes in you can bail out and you've only paid for 2 minutes of the video now in a competition for YouTube You're competing with something that's a free platform for storing all of this. But in the exact same sense you also you have to figure out how to monetize a decentralized. Sure, and if you've got something like our previously talked about SATs for ads well. Now you have a possible decentralized way to put ads in front of certain videos that do get lots of views to offer one a version of it that's free because you have to watch an ad and then another version of it that's paid for by the second or the minute or whatever and both of them have some sort of Revenue sharing with Storage like with whoever is actually running the server that feeds the video to the customer. So there's an incentive to basically create the ipfs of the lightning Network, you know, maybe there's not a huge Market need for that. Maybe it's like solving a problem. This just not really there and particularly in the hole Zhou Bo like minimizing consumer worry standpoint. You don't want anything to be too confusing as to as to how you're using it I could see that as a potential. oil like viable solution to Distributing content That's at least an interesting use case that could have something there. And then another one is an e-commerce layer, which I actually have heard little bits here and there that this is actually being built. This is actually kind of part of some of the lightning protocols there. They're setting a foundation for this already. So and I but I can't I haven't heard anything substantial about it since I just had just here a little bits like like somebody says something like oh no. Yeah, that's already that's we're building that in and I'm like, oh wait a second. Holy crap because that could be what open bizarre didn't didn't quite have at the beginning is like it again. It needs that bootstrapping phase. And if you have your infrastructure already in place because it's the infrastructure of lightning. Well then branching that out to some other use case. Like an e-commerce a decentralized e-commerce application could be really fascinating and open bizarre also kind of controls what people can actually post up there even though you can Fork open bizarre. Your you're starting a new network from scratch. It's like starting a and that's why I don't think darknet markets ever got there's no open bizarre for darknet markets. I don't think yet which is kind of interesting considering the risk of a centralized server. So I don't even know who I that hasn't happened yet. I feel like That would be a key use case for something like open bizarre. So we'll have to see what comes of it with lightning but I think that's on the near Horizon, you know, at least in the midterm and I'm very very excited to see what happens there. But that leads us to what would also be necessary is a decentralized reputation system if we're going to have a decentralized market. We need to have a secure reputation system for that market that can be easily cheated or spammed or you know. it but what's funny is that lightning lightning itself could actually become that with just node statistics because we're actually getting into that part of lightning where we want to measure we want to know how reliable are nodes are we want to be able to have you know concrete data on how well this node is forwarding payments what other people think of connecting to this node how many payments failed versus how How often do they go offline how often do large payments versus small payments get routed. Like there's these sorts of data. I mean some of it we probably can't collect just because you know, it's private, but at the same time we are going to have no statistics. I think that's a really important thing so that people know that they're connecting to a reliable connection into the lightning Network. So I think this is going to be part of the system that actually needs to be built out. Kind of a question of whether or not it needs to be decentralized. That's an important part of it. You know, it leads us back to the minimum viable decentralisation rule is that does it need to be decentralized? Like what's the reason that we should decentralize it? Because it's very much like the Pirate Bay issue is that there were alternative protocols other than BitTorrent that attempted to add in the whole indexing and downloading the torrent in a decentralized way. Way and you know all they try to decentralize everything around Torrance. Whereas BitTorrent just focus on the network itself and it didn't worry about anything else and it just left the indexing and searching of Torrance to essentially The Pirate Bay to websites out there and that wasn't really an issue. In fact that was exactly why BitTorrent succeeded over all of the alternatives. So it might not be necessary to do this, but it's something that may already become part of the lightning protocol because of the need to know the history of nodes that have been online because it's important to have a good reliable connection that we talked about this extensively with the whole LSP lightning service provider concept and then extending that to some sort of decentralized like some sort of e-commerce layer. Or basically an identity like a reputation layer attached to the public Keys involved. I don't think that's a huge stretch to think that might actually be like just extending something that already has an incentive to exist might actually be doable in that way. But then the last thing that I had that I wanted to mention was mesh Nets and this we talked with Admirers from go Tina and his presentation or his proposal of the lot 49 protocol attempting to essentially pay mesh nets for pay for mesh net infrastructure to forward messages on a mesh net and that is really exciting to me. I think I think there maybe I don't know if a lot 49 is it but it's a really fascinating technology and that Was always an issue with Hardware like actually funding Hardware infrastructure is an incredibly difficult thing to do and it really needs a decentralized micro payments payment layer payment system in order to actually do that pull that off and needs to be permissionless. It needs to be something that you know, everybody can participate in and experiment with because it has to be easy to integrate with and it Has to be something that can be Universal like that and the whole idea of a mesh network is to have something that is unsensible. So if you're paying your means of paying to keep that mesh net alive is centralized in not censorship resistant. Well, then neither is your mesh net it's meaningless. So again, that's one of those things that I think has been so difficult to do like the mesh Nets that have existed are only hobbyist, you know, they've never been robust infrastructure. Unless it was actually some sort. It wasn't a mesh net. It was just a centralized service that was offering Wireless. Right? So there may actually be a way to create an incentive for robust infrastructure of a mesh net of a alternative internet connections and in the physical space in meatspace, and that's really interesting. I think that's something that we should put a lot of energy and I think all of these At least what come to my mind when I think about what I want to see with lightning going forward, but I have no doubt in my mind that I'm probably going to be shown as probably missing something completely obvious in hindsight, you know, after a couple of years something is probably going to explode like I kind of feel like we're getting close to that or at least I am in my in the ease with which it feels to try to onboard somebody else. It breathes made a big difference there. And now with Olympus that one came totally out of left field for me. I wasn't thinking anything like that was that close? I mean Breeze originally came out of left field. So I'm really excited about the onboarding experience. That's slowly evolving here. And I think probably something is going to come completely out of left field again, like just a complete random development that somebody's like, oh, yeah, by the way, we have this on lightning and I know I will Ready to play around and test it out because now I'm the lightning that works really working for me again. It's not super reliable. It is beta software. So be careful guys. It's not without its headaches. But you know, I deal with that sort of I put up with little inconveniences all the time to get some degree of control that I like. Like if anybody's been following me on Twitter, you know, my computer was just out of commission because I build I use a Hackintosh. I've been using hacking charges for quite some time and is it A headache it is a big inconvenience a lot of the time but I have to admit I went into originally using Hackintosh has for a just out of sheer curiosity and I had no idea what I was doing. I never use the command line or anything and it's a lot of the reason it's one of those things that I wanted to try something out and then I ended up learning a ton about how command line Works what the hell is a bootloader, you know, all these things about computers because I'm I don't know it's fun. I like to play with These things it's interesting and fascinating technology to me. And because of that the fact that there are some minor limitations or I usually add sometimes have to try to different wallets or something with lightning that does not that's not really much of an inconvenience for me. It means I get to learn lightning. It means I get to play around with multiple apps which is kind of stuff. I'm gonna do anyway, so take that with the, you know a caveat. It's kind of like working with a Hackintosh. If you're not ready to kind of experiment learn a little bit and play around. This thing well, then don't do it. It's not going to be like a consumer experience where I always pick up my app my Mac and if there's anything even remotely wrong with it, I'm furious and I'm calling apple on the phone. If that's the state that you're in just give it some time the that we will get to that stage. It's just not there yet. So it is tinkerer stage, but it's good enough that I'm using it and I love it. I've been super happy with it and it continues it continuously. It's incrementally better. I it takes a couple of weeks for me to realize that things have changed but I'll just like trying to play around with this new app or use this new service or like, you know start to try to transfer over. It's like oh, well, they just like Starbucks gift cards now unfold I'm doing that pretty regularly now and I just realized that I've slowly changed my habits and now I'm making use of this a lot and that's really exciting to see it. We value it's given me value. I've been utilizing it. So anyway, anyway, that's those are just a bunch of things that I was brainstorming about. And I wanted to see I'm really kind of curious about your thoughts on this. Was there anything in this episode that you were like? Why is he not talking about this? This is obviously a thing. I want to hear what you guys think could be built on the lightning Network. What? What do you kind of see in the future? That might be Lightning Network novel like in the sense that it can't be built anywhere else and you have to have something like lightning Network for it to be possible. I want to hear what those things are. It fascinates me. And I think there's a crap ton of things to explore and unfold with this. So yeah, that is that's today's episode. We will wrap up this guy's take thank you guys so much for listening. Don't forget if you want to jump into that telegram group and become part of the crypto Kana me crew. Don't forget to check out patreon.com slash the crypto economy and you can help to just you know, one dollar a month five dollars a month goes a long long way and is really a huge help to keeping me able to turn all of the best Bitcoin content into audio and make it so that all you guys who do not have the time to read it all but would love to explore it and consume it giving this. Us Avenue available to you guys. So thank you. Thank you so much to everyone who has I really have loved it. I started telegram group is great to have a gang you guys to hang out with and chat with and throw ideas around with so it's been really great. And if you want to join that's patreon.com slash the crypto economy, and if you can't do that the one way you can always support this show is to share it out with everyone, you know in the Bitcoin and crypto Konami space. Undoubtedly, there are many other people who would love to have articles read to them in audios. They could consume way more of the best Bitcoin content that's out there. So send those people let those people know about the crypto economy and let them know about guys Swan and send them my way. I don't forget to subscribe and follow me on Twitter at the crypto economy, and that'll do it. Hope you guys enjoyed this guys take episode and I'll catch you in a couple of days. Take it easy guys.
Finishing up our Lightning week on the show, I've got a Guy's Take on all the different applications I think are viable here in the early days of Lightning, and also what decentralized projects may make sense on Lightning, but are pointless as "utility tokens." • Sat4Ads (The real BAT) • Why utility tokens are backwards economics • Fold, BitRefill, & Lolli • Making Bitcoin bills make sense • Watchtowers for decentralized backups • A new e-commerce? & tons more! Here's some more great listens to go deeper down the rabbit hole with today's discussion: • Minimum Viable Decentralization [Simon Morris] https://anchor.fm/thecryptoconomy/episodes/CryptoQuikRead_228---Minimum-Viable-Decentralization-e3lfo9 • Estimating and Minimizing Consumer Worry [Nick Szabo] https://anchor.fm/thecryptoconomy/episodes/CryptoQuikRead_195---Estimating-and-Minimizing-Consumer-Worry-e2ndo7 • Richard Myers on a Lightning Powered Global Mesh https://anchor.fm/thecryptoconomy/episodes/CryptoChat_013---Richard-Myers-and-a-Lightning-Powered-Global-Mesh-e4e6ga  If you want to join in the Cryptoconomy Telegram and help support turning all of the best Bitcoin literature into audio, become a patron below! 