#1493 Edan Yago | Bitcoin Is Ready To Explode Globally

Edan Yago is the CEO at BTCS OS & Core Contributor to BitcoinOS. In this conversation we talk about bitcoin, what is going right, areas of improvement for bitcoin, and how bitcoin can continue to scale to many different use cases. =======================Franzy makes franchise ownership accessible for dreamers, go-getters, and investors alike. With the AI-powered Franzy Fit Score, match with the best brands for your financials, experience, and goals. Explore franchise options, get pre-qualified, and access expert coaching to guide your journey. Ready to own a business? Visit https://franzy.com/pomp today!=======================Reed Smith is a dynamic international law firm dedicated to helping clients move their businesses forward. With an inclusive culture and innovative mindset, Reed Smith delivers smarter, more creative legal services that drive better outcomes for their clients. Their deep industry knowledge, long-standing relationships and collaborative structure make them the go-to partner for complex disputes, transactions, and regulatory matters. Learn more at www.reedsmith.com=======================Ledger has been trusted for 10 years to secure 20% of the world’s digital assets. Their latest devices, Ledger Stax and Ledger Flex, feature secure touchscreens for safer, easier crypto management. Go to ledgerpomp.com to take control of your digital future=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on guys? Today we've got an awesome episode with Iago. He is the core contributor to Bitcoin OS. He's been building things on top of and around Bitcoin for years. In this conversation, we talk about Bitcoin's current winning streak, what's going right, and how we got here. Then we talk about areas of improvement for Bitcoin and how we can

• 0:46Anthony Pompliano?

  continue to scale it, both not only in terms of transactions, but also many other use cases. Iago's got many interesting ideas and he's been working diligently, trying to figure out very technical aspects of how we can improve Bitcoin. I really enjoyed this conversation and I think you guys will as well. Here's my latest conversation with Iago.

• 1:03Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:27Anthony Pompliano?

  Today's episode is brought to you by Franzie. If you're a dreamer, a go-getter, or someone looking to own a business, you better listen up. Franzie is the ultimate platform to make franchise ownership accessible and achievable for everyone, from corporate escapees to side hustle seekers and investors. Franzie does more than just list franchises. It's equipped with the Franzie Fit Score, an AI-powered matching tool that finds the best brands for you, based on your financials, your experience, your risk tolerance, and your goals. You can also get pre-qualified to see exactly what you can afford, check brand availability in your area, and discover the hottest new concepts hitting the market. And if you need guidance, Franzie's team of expert coaches are there to help you navigate the world of franchising and find the right opportunities for you.

• 2:10Anthony Pompliano?

  So whether you're just starting or you're looking to expand, Franz's got everything you need. Head over to franzy.com/pomp today and start your journey to business ownership. Again, that's franzy.com/pomp to start your journey to business ownership. Today's episode is brought to you by Reed Smith. Their practice of law has the power to drive progress, to move businesses forward and support them in achieving their goals. By seizing opportunities and overcoming obstacles, Reed Smith is focused on outcomes. I personally use them as my law firm and I think that they are fantastic. They know that your time is valuable and that your matters are important. Their deep industry knowledge, longstanding relationships and collaborative structure make them the go-to partner for complex disputes, transactions and regulatory matters. Reed Smith delivers

• 2:52Anthony Pompliano?

  purposeful, highly engaged client service that drives progress for your business. Go to reedsmith.com to learn more about the best lawyers in the game. reedsmith.com. Go check them out today. Today's episode is brought to you by Ledger. They're celebrating 10 years as the most trusted name in crypto security. With over 7 million users and 20% of the world's digital assets secured, Ledger continues to lead the way in protecting your crypto and digital ownership. Their latest devices, Ledger Stacks and Ledger Flex, feature the world's first secure touchscreens, making managing your assets easier and safer than ever. Plus, the new Ledger Security Key App offers a secure alternative to traditional passwords, enhancing your digital security. Go to ledgerpomp.com to take control of your digital future. That's

• 3:36Anthony Pompliano?

  ledgerpomp.com. L-E-D-G-E-R-pomp.com.

• 3:44Anthony Pompliano?

  All right. I thought a great place to start the conversation is Bitcoin is winning and I think there's a lot of people really excited about this. Bitcoin has outperformed altcoins and it's pretty much blown most people's expectations away. Usually in a market, the largest asset is actually the one with the least volatility and the further you got on the risk curve, that's why you're pushing out on the risk curve, you get more volatility both up and down. That's not happening here. So what do you think is driving this?

• 4:06Speaker 02

  I think two things. First of all, we've got this asset which went from zero to $2 trillion in 16 years. Started as a white paper, became the first true new asset class of the digital age, right? But it did all Of that during a period of time when the largest country in the world and all of the other nations were sanctioning it, right? The United States was sanctioning North Korea, was sanctioning Iran, was sanctioning Russia, and was sanctioning Bitcoin. Now, all of that has ended suddenly, right? So we've got this asset, which is the ability, a proven ability to grow faster than any other asset while under sanction. And the sanctions are falling away. In fact, the, you know, this administration is saying it's a priority, right?

• 4:48Anthony Pompliano?

  So is that like, I heard somebody describe it as it's like pushing a, a beach ball under the water? And then basically you take your hands away, what happens? Like the thing just pops?

• 4:59Speaker 02

  Yeah. So I think that's, that's a big part of the story, right? And then the, the, you know, nothing in Bitcoin has ever been priced in, right? Like no one was pricing in a $2 trillion asset even six months ago, right? Certainly not 10 years ago, right? This asset is going to continue growing. Everything is working in Bitcoin's favor right now. So the, it's becoming an established asset. It is becoming an established asset, which is not connected to any particular geopolitical constellation at a time that the post-World War II geopolitical constellation is falling to pieces. It's the first digital asset for a digital native generation who are about to inherit huge,

• 5:44Speaker 02

  the largest wealth transfer in all of history is going to be boomers giving their, you know, inheriting to their kids. And, and that's like real estate, it's stocks, it's bonds. A lot of that is going to get converted into Bitcoin because these are people, you know, you and me. I've grown up with Bitcoin as our first asset. And probably the most important thing that's happening right now is, you know, we've, we've opened this box with the most powerful genie mankind has ever opened, right? Which is AI. It's the, the amount of productivity within my businesses that is, it is already generating is insane. Like I can do much more with fewer people.

• 6:27Anthony Pompliano?

  Like what are some examples of how you guys are using AI inside of these kind of Bitcoin related companies?

• 6:31Speaker 02

  Uh, development, right? So everything from actually writing code to testing. Um, the ability to do research, including complex mathematical research, uh, everything to do with marketing and, uh, uh, preparing materials. Um, the, the, the, the truth is this is like a superpower for every single person who's currently using it, right? And, and, and it's general purpose and it's very, very plug and play, right? You, it's, it's basically like everyone gets this really, really smart assistant who keeps on getting smarter and smarter and smarter. And so it's going to take a little bit of time, but only a little bit of time for then productivity to start reflecting in the market. Right? We're going to see substantial growth.

• 7:15Speaker 02

  And where's the crocs gonna go? It, it doesn't look like the, the reason we saw a week ago Nvidia and, and the magnificent seven crash was because it suddenly became, it suddenly dawned on people that they're going to really, really struggle to capture the value that is being created. There's this massive trillions of dollars of wealth are going to be created, but the, the tech itself, the computer itself is commoditized. And so where is that new wealth that is being generated going to have to go? It's going to go to the scariest asset. It's going to go to the most digital asset. It's going to go to Bitcoin. That's before you even think about the fact that AIs are going to be a big part. And, and eventually they're going to be the majority of the economy. AI agents interacting with each other and they're not going to interact in dollars or stable coins because they don't care about the price of vegetables.

• 8:00Speaker 02

  They don't eat vegetables, right? What they care about is the price of computes. They care about the price of energy. And, and BTC is the asset of computing. Why won't they use stable coins though? I mean, look, they might, but the reality is that, um, for them, it is going to be a much like we, why did? I'll put it the other way around. Why do we use stable coins? You use stable coins because you've got, um, you know, you're very, very physical, very, very human expenses. AIs don't have this. They will have higher frequency transactions. They will want those transactions to be more tied to a digital economy, both in terms of energy and compute. And Bitcoin is literally just energy plus compute.

• 8:42Speaker 02

  And because it's entirely permissionless and it's the largest digital network in the world. Right. So they may be using Bitcoin for settling stable coins. They may be using other assets as well, but a big part of that is going to be almost by default in BTC. Seventy percent of the crypto space is BTC. So I think to a first approximation, seventy percent of these transactions are going to be in BTC.

• 9:06Anthony Pompliano?

  Mm hmm. And when you see the AI agents coming to the market, how much of this is like a trading type stuff? Because that seems to be a lot of what people are doing right now versus, hey, AI agent, I need to book a trip. Go and do some research for me. Figure out the best places to go and stay, rent a car, you know, do blah, blah, blah, whatever, and then go book it all for me.

• 9:28Speaker 02

  I think you maybe remember like the way I got into Bitcoin was through AI, right? Two thousand and eleven, I was at Carnegie Mellon. I was building out neural networks. And because of that, I ended up by mistake, reading the Bitcoin white paper. And it just, these two things clicked in my mind because I was really, really concerned about what this world, which was going to be mediated by like, everything's going digital and there are no property rights in the digital world. What was it going to look like? And suddenly, you know, the Bitcoin white paper was like, here, here's the recipe. Here's how we actually bring for the first time property rights. And then as a result, by extension, any rights into the digital world. So,

• 10:09Speaker 02

  so I think as you're, as you're, you know, thinking about what this economy looks like, it's going to be more and more and more. In the last batch of Y C, there's one of the companies is a company, which is their whole thing is they're trying to buy other companies and replace all of the employees with digital agents. And so, you know, one of the big problems, you know this, as someone who's built a business, what is the most complicated thing of building a business? You know, regulation's tough, zero to one is tough, figuring out the market is tough. But ultimately, the hardest thing is the human element. Scaling the talent that you have, replicating the talent that you have.

• 10:52Speaker 02

  But let's say you finally put together like the perfect team with the perfect culture and they know how to work together. You can't just copy paste that. But if you do the same thing with AI agents, you can't, they can just like build the perfect team and you can copy paste it to new problem sets. So I think people are massively underestimating how impactful this is going to be, even in the short term and certainly in the medium term. It's going to, um, you know, all of the complexities of, you know, your guys, you know, they've taken a snow day today, right? AI doesn't take a snow day. AI doesn't get involved in DEI. AI doesn't get involved in sexual harassment and AI doesn't get sick. You know, AI doesn't get pregnant. So, uh, you know, or, or, or call in, it's just all of this stuff, this complexity.

• 11:38Anthony Pompliano?

  By the way, our team will not be taking us to snow day. They'll be here by the end of this. Now that I've said, get your.

• 11:43Speaker 02

  Well, I mean, what you should text them is they've got like, yeah, they'd be here in 30 minutes. So they're replaced by AI.

• 11:50Anthony Pompliano?

  So when we think about Bitcoin and stable coins role, like one of the things that stable coins also are doing is they are very large buyers of US treasuries.

• 11:58Speaker 02

  That's right.

• 11:59Anthony Pompliano?

  Great business model for them. David Sacks, the new crypto and AIs are, uh, he's come out and he said, hey, we think that this can further enhance the dollar's dominance. This can protect the global reserve status. And it is, you know, he estimates trillions of dollars of demand for, uh, these treasuries. When you see that, um, do you feel a little bit like Bitcoin is taking a backseat to the stablecoin stuff? Or is it just, you know, in my mind, it almost feels like kind of short term versus long term problem, right? Stable coins are a Band-Aid for the short term problem. Bitcoin is the solution for the long term problem.

• 12:29Speaker 02

  I think these are very complementary assets, right? So, um, Bitcoin BTC isn't a currency yet. Maybe it never becomes a currency for, for day-to-day payments, at least for humans in the way that we think about a currency. Plus it is volatile and it's never going to stop being volatile, right?

• 12:50Speaker 02

  And so if you are, you know, mathematically limited and you take time to, you know, you need to calculate each time, this is not a problem that a computer has. It doesn't need to try and figure out like the BTC, how much was it worth yesterday, how much is it is today. Math is, you know, it's its native tongue. But for us, it's really important that the groceries are the same price every single day. And if they are not, if the price of groceries changes, people get really angry and are in the streets, right? So I would say that stablecoins are a very, very human asset. BTC is a little bit more agnostic. It can be human, but in many ways, and I've expected this for a long time, it is like digital first, and as a result,

• 13:32Speaker 02

  it's AI first. But regardless, even for us right now, as just people, putting aside AI, BTC is this long-term sound money, commodity money asset. The dollar is an asset created by a government with even with the best of intentions, you know, from Elon Musk, is adding, you know, close to $2 trillion of debt every year. It is inevitably that no, no, nobody stops the train when it comes to that just means a slow grinding inflation, right? It's built into the mechanism. And so these are just two very, very different assets in terms of what

• 14:17Speaker 02

  they're doing. Even when we had the gold standard, there were people using dollars, right? The dollar was backed by gold, but people were still trading in dollars.

• 14:27Anthony Pompliano?

  And let's talk about maybe some of the scaling challenges, maybe the areas of opportunity, the areas for improvement with Bitcoin. You know, I think of this as like when you're winning is the exact time that you need to be paying attention to how you could be disrupted or what your weaknesses are. What are some of the things that you see with Bitcoin that we actually could improve on to help accelerate it?

• 14:48Speaker 02

  I mean, look Bitcoin as it is right now. Is extremely limited. One of the reasons it hasn't been used in more high-frequency commerce is because of these limitations. Right? So you can only do so many transactions at a time. The transactions are relatively expensive and you can't build any applications or services directly into Bitcoin. So, you know, for most of the people who got into Bitcoin over the years, like the one thing that Bitcoin promises you is it's like your financial sovereignty. You're truly free. You're basically financially off-grid, right? It's not money that sits in a bank and the bank can confiscate it. It's not money that, you know, can be stopped at the border.

• 15:33Speaker 02

  It's literally the one thing that you can truly own, even like real estate here in Manhattan. You know, when COVID rolls around, you know, you're not allowed to charge people rent anymore, right? So it's the one thing that the only rules around it are set by you.

• 15:48Speaker 02

  But the problem is that if you want to actually do anything with BTC, if you want to do anything with Bitcoin, then you have to give up all of that. Right? So people just sit hoddling their Bitcoin like dragons sitting gold. Because if I want to lend it, if I want to turn it into a productive asset, if I want to trade with it, if I want to use it to create a Bitcoin-backed stablecoin. If I want to, you know, use it with a service, I am inevitably today giving it up.

• 16:18Speaker 02

  And then, you know, I'll go to a Celsius or a BlockFi or an FTX and people got very, very burnt by that again and again and again. So the question is, how can we build an application layer? An economy around Bitcoin, which is natively secured by Bitcoin and natively interacts with Bitcoin. Is as decentralized by Bitcoin because it is Bitcoin. It's basically just an extension of Bitcoin and sort of, you know, a lot of us have made this distinction. You're one of them, right? The distinction between Bitcoin and crypto, right? There's Bitcoin and there's everything else. And crypto was supposed to be the answer to this question of how do we build an economy around Bitcoin? How do we build applications around Bitcoin?

• 17:02Speaker 02

  And so we've got all of these smart contract chains that have come out and they let you build smart contracts, which are basically like these supposedly trustless systems, which are supposed to allow you to do decentralized finance or decentralized autonomous organizations, et cetera, right? But none of them interact with Bitcoin at all. Bitcoin, and in fact, every single one of these chains is basically like an island which doesn't communicate with each other. And so we've got, we're in this, this weird situation where BTC, the asset, is just powering ahead, but people can't do anything with it. And this whole application layer that was supposed to, you know, promise us, you know, Web three, decentralize all the things, empower people, disempower the large organizations, protect your, your, your privacy, protect your data,

• 17:44Speaker 02

  monetize your life, all of this stuff has basically fragmented into a bunch of little, little pitsy islands with, with no access to the big asset base and have basically become a whole bunch of casinos with terrible UX because of the fragmentation with liquidity, fragmented, user bases fragmented.

• 18:05Anthony Pompliano?

  When you think of those casinos, how much of it is people are trying to get rich? And if they look at it as like a form of financial investment, although they understand that it's risky versus it is pure entertainment?

• 18:16Speaker 02

  Well, I think it's, it's, it's a combination of entertainment and trying to get rich, but the entertainment is driven by the desire to get rich. It's just kind of like Vegas, right? So people go down to Vegas to have a good time. But the reason you're at the roulette table, the reason you're, you know, at the slot machine, just that action, right? That pulling that thing, it wouldn't entertain you for very long. What's actually entertaining, what's driving the entertainment is maybe I'm going to get rich or maybe I'm going to lose it all. It's the adrenaline rush of wanting to get rich. But the thing is with the, with, with, with where we are, I think as a, as a culture right now, especially economically,

• 18:55Speaker 02

  is there's seeped into that is a, is a, is a certain stench of desperation. People figure like this is their last shot. And, and so people are desperately trying to go for the riskiest gamble they can when they're, you know, in the meme coin world. And sure, they're having fun, but, but that fun is driven by the adrenaline and by the desperation.

• 19:20Anthony Pompliano?

  When you think about what you guys are building, describe kind of at a high level, what is it that you guys are building on top of and around Bitcoin that you think is going to help solve some of these issues?

• 19:29Speaker 02

  Sure. So, look, basically, this problem that I was talking about is that you can't do anything with your BTC. And the entire world of crypto, which was supposed to be built on this massive asset base, $2 trillion asset base, cannot connect with it? That is the problem that we're looking to solve. I think those are basically the two fundamental problems that we have with both Bitcoin and crypto today. Crypto isn't succeeding because it doesn't have BTC. BTC isn't achieving its mission, right? And my number go up, sure, but it's not achieving its mission of freeing people because, you know, you're being driven into the ETF and you're just being driven to sit on the asset. Okay, so how do you fix it? Well, Satoshi, in the very, very first version of Bitcoin that was ever released,

• 20:12Speaker 02

  there's weird clues that he actually thought he knew what the solution was, right? So, in that version 0.1.0, there are little remnants, not only of Bitcoin and the first blockchain, but also of the first decentralized application, the first DAP. There are little remnants of code that he didn't fully pull out. And the first decentralized application that was ever built was called Poker Lobby and was built by Satoshi Nakamoto. And his idea was, well, I'm building this money. People are going to need to do something with it. So I'm going to build a decentralized, trustless poker game into this thing. And he stripped it out just before he made it public

• 20:53Speaker 02

  because he realized that the way that Bitcoin was today and back then as well, because it hasn't changed that much, it just wouldn't scale. So, this is, you know, a problem which has obsessed me. The very first sort of token that came after Bitcoin, the very first attempts at token, was actually an attempt to build applications and tokens on Bitcoin. It was called colored coins. It was this idea that you could take like a set and add some metadata, color it, and then it could represent gold or it could represent, you know, shares of a company on the world's best ledger, right? The Bitcoin ledger.

• 21:33Speaker 02

  So.

• 21:34Anthony Pompliano?

  Why did colored coins not work?

• 21:35Speaker 02

  The reason colored coins didn't work is because because you were coloring sets and there was no way to add additional information. There was no way for Bitcoin to understand or see anything outside of what was just happening inside of the chain. Basically, those tokens were as limited as Bitcoin.

• 21:55Speaker 02

  As BTC is, and so just the as developers, developers are just straight jacked it too much to be able to build something interesting. So, you know, I was on your show a few years ago, and I was talking about us building the world's first DeFi for Bitcoin. And we built the sovereign into the largest DeFi ecosystem for Bitcoin. You know, there was a central flaw to everything that we were doing, which is that you had to put your Bitcoin into this this multi-seg federation in order to move it into the system. And this problem kept me awake at night. It was a security flaw. It meant that I wasn't comfortable putting most of my Bitcoin into it, and it meant that the system wasn't being secured by Bitcoin.

• 22:36Speaker 02

  And so back in 2021, we set up a research group to try and study this problem, and we we had this belief that there was a way to scale Bitcoin.

• 22:51Speaker 02

  Basically, provide infinite scale, provide infinite programmability, basically take this entire application there. Build like a decentralized internet on Bitcoin instead of on all kinds of other systems. And that you really only needed one thing to do that, which was the ability to verify a new kind of cryptography called a ZK proof. Now, we can dive into it, but for now, I'm just going to put that aside and say, imagine you had this kind of cryptography, which basically allows you to prove that something happened in the outside world or prove that a computation happened to Bitcoin. And then you could make Bitcoin, you could execute it on Bitcoin, right? And we believe that in order to make this change, that we would need some kind of software in Bitcoin. So we started working for for for almost four years, we were working

• 23:35Speaker 02

  on on on building out this software for Bitcoin. Until at the end of 2023, we suddenly had this moment like in Pulp Fiction, you know, you open up the suitcase and the light shines. So it's like the choir of heaven sung to us and we realized we probably had figured out a way to do it without any software at all. And so in April, we published a white paper describing how we were going to do this. White paper was called BitStark, which is the the this sort of a stark is a kind of ZK verification for Bitcoin. And then in Bitcoin National, just before Trump got on stage and spoke for the first time ever in block eight, five, three, six, two, six, Bitcoin opened its eyes and got a brain. We verified the first ZK proof

• 24:20Speaker 02

  in Bitcoin. Now, at the time, it was a very, very awkward sort of hacky kind of thing. It was it took 54 transactions. It was, you know, hard coded. We could only prove like one thing, which was like A times B equals C. But since then, we've been building out a system to make this general purpose, to build an operating system, right? The Bitcoin operating system, so that you can do any kind of computation, any kind of scale on Bitcoin. And probably by the time people are watching this, we will have launched the testnet of the system. And and, you know, it is something that even we thought was going to be impossible, despite the fact that we'd been banging our heads against this problem for over 10 years. And

• 25:05Speaker 02

  now we're sort of on the precipice of it happening. So in many ways, like, it's kind of poetic, right? The first chapter of Bitcoin is coming to a close. The chapter of Bitcoin, the hated sort of sanctioned asset is coming to a close. And now, the the the the new chapter, the the chapter of mass adoption of Bitcoin is about to begin. And for that, we need the technology for Bitcoin to scale, to have inherent privacy, to have smart contracts, to have applications built in it, to have AI interact with it.

• 25:35Anthony Pompliano?

  How do you do this with what many people would say are the limitations of Bitcoin in terms of block sizes, scalability, etc.? Are you using the Lightning Network? Are you using something else? Like, just describe kind of the scalability that you're able to leverage in order to be able to do something you're describing?

• 25:49Speaker 02

  So let me, so actually, let me, let me explain just briefly about zero knowledge, right? Zero knowledge proofs is a way of proving something without having to provide almost any knowledge about how you, you, you prove.

• 26:03Anthony Pompliano?

  The best example I always use is if you walked up to a bouncer at a bar and you had to show your ID, they also see your address, your full name, all that stuff. But really, all they care about is, are you 21? And so if you could basically, they knew you were 21, but you didn't tell many of your information, that would be an equivalent.

• 26:18Speaker 02

  So if you just like put your ID into a slot and then a red light or a green light go, they know nothing about you. They own, they don't even know if you're 21. They just know you're above 21, right? So that's what zero knowledge proof cryptography was designed for. It's actually designed for privacy. But turns out that this kind of cryptography, because it's providing privacy, is actually providing compression as well, right? Because you think about it, you've got all of these details that get stripped out and one important detail that you require is, is provided. So this kind of cryptography, in large part because Ethereum was so bullish on it, has really advanced tremendously over the last few years. And so now we're at a place where you can take any kind of computation and you

• 27:03Speaker 02

  can run that computation and fold it into a tiny zero knowledge proof that proves that the computation happened exactly the way it was supposed to. And these proofs are 300 bytes, right? That is, that is nothing, not even a kilobyte. And so what we can do is we can take 300 byte proofs and write them, verify them and execute them in Bitcoin so that you can take thousands of transactions, compress them into this tiny little 300 byte proof, and, and, and then write it to Bitcoin so that all of these proofs get, become basically a Bitcoin transaction.

• 27:39Anthony Pompliano?

  And what would you use this for? Like, give me a real world example of something I would do that would, you know, benefit from using the system?

• 27:46Speaker 02

  Sure. So I'll take it up by levels, right? So the, the number one thing that people are interested in doing with this right now is there's this entire world of crypto, which has been divorced from Bitcoin, right? So now we have

• 28:02Speaker 02

  Bitcoin Layer 2s. We have Ethereum Layer 2s, we have Ethereum. We have a whole bunch of Layer 1s like Cardano are integrating with BOS. Because what they desperately want is to be able to bring BTC into their system. And now, for the first time, it's going to be possible to do this without any third-party trust at all. Basically, cryptographic integrity, trustless system. We can now do trustless bridging of BTC. And this turns Bitcoin, the chain, into a hub, where all of the rest of crypto basically becomes a Layer 2 to Bitcoin. And then, the second thing that you can do is you can then use this for scaling transactions. So you can run thousands of transactions, roll them up into a single transaction,

• 28:46Speaker 02

  and as a proof, write that to Bitcoin. And so you can scale out the number of transactions, potentially infinitely, that you can do with Bitcoin. So fast, cheap, much faster, right? Cheaper and, you know, boundless scale. And so when we talk about, for example, us being able to make payments, or even more importantly, like maybe automated systems like AI making payments, suddenly this becomes truly feasible. And it has the big advantage over something like Lightning Network is that it's not pre-funded. Just like a regular Bitcoin transaction, you send it when you want to send it. You don't have to pre-fund anything. Then, the more sophisticated and maybe more exciting thing is like, a few weeks ago, we demonstrated the ability for people to take

• 29:31Speaker 02

  one of the most secure and common programming languages of the web, Rust, write software in Rust and turn that into a smart contract on Bitcoin. So, you know, let me just say, what is a smart contract? All right, so here's the idea with a smart contract. 10 years ago, Vitalik, who had been working on Bitcoin, became, and was working on colored coins actually, became super frustrated that you couldn't do anything in Bitcoin. So he created a chain where you could do verifiable compute. That's what a smart contract is. It's a computation that everyone can verify. Maybe that computation is a DEX, like a decentralized exchange. Maybe it's a lending pool. Maybe it's a voting mechanism, whatever.

• 30:12Speaker 02

  How do you verify? How does compute become verifiable in every single smart contract chain today? The way it does is you take the entire instruction set, the whole piece of software, you shove it into the chain. And then every single verifier, validator and full node on that chain needs to independently run every single interaction, every single computation independently. That's why smart contracts don't check, don't scale. That's why Ethereum didn't scale. It's why Solana goes down, right? It's because you're, instead of doing one computation, you're doing the same computation, but many, many tens of thousands of times. But zero knowledge proofs offer us a different way of doing this, right? With zero knowledge proofs, you have maybe even a single person run a computation.

• 30:57Speaker 02

  They can just create a tiny little proof and put that into a blockchain that they've run the computation properly. And that computation has now become a smart contract in the chain because it's verifiable proof, verifiable computation in Bitcoin. And so in a way, if you remember, you remember how in Kenya, they never got landlines. In Africa, they never got landlines. They leapfrogged straight into mobile phones. Well, Bitcoin is, is this perfect pure play ledger, like it's the perfect ledger for the world, the perfect settlement mechanism for the world and doesn't have all of this complexity of shoving all this stuff into it. And it turns out now that we didn't need to shove anything in at all. We just needed to wait for ZK proofs.

• 31:37Speaker 02

  And so it's really, there's, there's this constant, you know, poetic justice about Bitcoin. And the poetic justice about Bitcoin now is just as we need smart contracts for Bitcoin, just as we need scalability for Bitcoin, the technology to make that possible has presented itself.

• 31:52Anthony Pompliano?

  An idea's time has come.

• 31:54Speaker 02

  Exactly.

• 31:55Anthony Pompliano?

  All right. What has been the hardest part about doing this so far? Was it the understanding how to do the ZK proofs or something else?

• 32:01Speaker 02

  Yeah, I've been figuring out how to do that in Bitcoin has been considered impossible for most of Bitcoin's history. So, so that is a, a major breakthrough. Now it's more about the implementation details. Can we build the tools around this that make it really easy for developers to use? And can we integrate enough of these other systems so that Bitcoin can become what it's always meant to be, which is like an internet of value?

• 32:30Anthony Pompliano?

  Yeah.

• 32:32Anthony Pompliano?

  Tell me your vision. So the technology works. Let's just hold that as an assumption. It's a big assumption, but let's just say that you get it to work at scale, etc. What changes about Bitcoin moving forward and what does the world look like in that kind of timeline?

• 32:46Speaker 02

  Well, I think what changes is that Bitcoin stops being just a store of value and can become a medium of exchange, can become a unit of account and can become much more than that. So BTC is sort of what we're usually talking about when we talk about Bitcoin. It's just the asset. But there's this really valuable infrastructure that we've built. It's the world's most perfect pure play digital ledger, right? There's this one ledger that we can all trust and this one settlement mechanism that we can all trust. And this one system for property rights that we can all trust, right? It's the perfect substrate in which to build, you know, a free market economy for the internet.

• 33:28Speaker 02

  And so that's, I think, the most exciting opportunity. It's building a borderless, digital free market that is unstoppable. And it's a very American idea, I think.

• 33:44Speaker 02

  So that's the exciting thing. Then beyond that, right now, we've got still 30% of like the crypto space is not BTC. That's not insignificant junk and it's fragmented across all of these chains. They don't talk to each other. There's constantly, you know, we're funding the North Korean government. Every time there's a bridge hack, they, last year, they stole $1.6 billion, which they've been using to fund building their, you know, their intercontinental ballistic missiles. It's basically been funded by hacking bridges, right? So now we have the ability to build Bitcoin as a hub for all of this infrastructure that we've built to actually integrate with each other and be secured by Bitcoin.

• 34:27Speaker 02

  And so on the one hand, we get to release BTC on this and then we get to turn Bitcoin, the chain, that into this like intent of value. And then the third thing is we get to unify crypto into a cohesive. Industry.

• 34:42Anthony Pompliano?

  Do you think the rest of the stuff dies away? Or do you think that it kind of exists out there? But people prefer to use these, you know, kind of tools, services, products on top of Bitcoin?

• 34:52Speaker 02

  But the rest of the stuff, I think you probably mean like all of these other L ones and other chains, right? I don't think they're gonna die out. I think some of them, I think they have a choice to make. Like, are they going to be, are they going to integrate and become like the best

• 35:09Speaker 02

  layer, right? Are they gonna, are they going to become a great place to build applications for BTC? And are they going to attract huge amounts of BTC capital?

• 35:19Speaker 02

  Or are they possibly gonna go the way of the dodo, right? I think basically the, this is what we've been seeing in the market, right? We've been seeing that Bitcoin has become detached from the rest of the crypto market.

• 35:38Speaker 02

  And, and, and so there's this huge desire now across Ethereum, Solana, Sui, everywhere, to integrate into Bitcoin because they realize that that is the, that is the, the, the, you know, the economic powerhouse that is powering this entire industry and provides services that are going to be valuable to people who hold BTC and make BTC a much more valuable asset.

• 36:04Anthony Pompliano?

  What do you need the most help with? Like, people who listen or watch this, what can they do to help you?

• 36:10Speaker 02

  Well, I mean, I think there's something they can do to help themselves. Like, we're gonna build this technology no matter what. This is something that we've been working on since, you know, since I got into Bitcoin almost.

• 36:23Speaker 02

  But I think one of the things that we mentioned earlier and we touched on, there's this, this overall sense of nihilism that people have, right? That you have to go out to the casino, you have to be at the casino table, you have to be trying to trade your way to, you know, retire your entire bloodline. And I think trying to retire your bloodline is, is, is a, is a great idea, but it's a long-term idea. It's not gonna happen right now. And so that desperation, I think, I think what people can do is

• 36:53Speaker 02

  Is realize that there's so much reasons for optimism. We're building really, really cool things. We're good, we're, we're, we're building technologies of freedom that we've never had before. The crypto and ecosystem, the Bitcoin market. You know, Bitcoin is finally going to become a currency which is attached to a true free market. That's going to generate massive wealth, like free markets always do. And we've got, you know, technologies like AI, which give everyone who is willing to spend the time to figure out how to use them. Because they're super available, superpowers. And, you know, I know you're, you know, super into, you know, you, you have this sort of vitality.

• 37:37Speaker 02

  Uh, about the hustle. I think there's never been a better time to take risks, uh, to hustle, to build yourself. But the risks that you want to take are risks about on you rather than sort of on some cockamamie meme coin with a hat. So I think the way people can help themselves is extend their time horizon a little bit more.

• 38:00Speaker 02

  Huddle BTC and figure out how they can build something for themselves.

• 38:04Anthony Pompliano?

  It's basically just bet on yourself.

• 38:06Speaker 02

  Yeah.

• 38:06Anthony Pompliano?

  Right. Which is, uh, it's very difficult for a lot of people to do, but, uh, when they do it, most people I know are very happy.

• 38:13Speaker 02

  I think also it's important not to be discouraged, right? Because, um, every betting on yourself, you're, you're going to fail, but there's never been a better time ever to fail. Every single failure is a learning opportunity.

• 38:27Speaker 02

  And, and you just keep going. I think one of the cool things about Bitcoin culture and one of the things that Bitcoin teaches us is that you, you just need to have conviction and keep doing, keep maintaining that conviction. Right. You know, if you've, if you've held Bitcoin for many years, you're definitely up. If you keep betting yourself with conviction, you know, yeah, like Bitcoin, you're going to go up and you're going to go down and going to have, you know, you're going to have your own personal bear markets. But, you know, Churchill had this really great line, "When you're going through hell, keep going."

• 38:59Anthony Pompliano?

  Where can we send people to find you on the internet or find out more about BOS?

• 39:03Speaker 02

  Well, you can go to bitcoinos.bulld, because that's what we're doing.

• 39:08Speaker 02

  I'm on Twitter, Idan Iago on Twitter.

• 39:12Speaker 02

  And yeah, I think probably by the time this airs, you'll be able to go to the Bitcoin OS website and actually get a little taste of the future of truly trustlessly moving BTC from one place to another. And the first application's being built in Bitcoin.

• 39:32Anthony Pompliano?

  I love it. I think that building is obviously incredibly important. And the thing about building is sometimes you're right, sometimes you're wrong. Sometimes the tech works, sometimes it doesn't. Sometimes it takes a long time, sometimes it doesn't. But you don't know until you try, right? And I think that you've always been very focused on, hey, how do we continue to create things around Bitcoin? And so wish you the best of luck. We'll do it again in the future.

• 39:53Speaker 02

  Thank you, Anthony.