#370: Jack Mallers on the Future of Strike, Zap, & Lightning Network

Jack Mallers is the founder of Zap, which has created Strike, an application that allows anyone to send money instantly, with no fees, anywhere in the world. In this conversation, we discuss the Lightning Network, Strike's recent progress, tiered KYC, and Ethereum's misleading marketing. =============================== ExpressVPN lets you access the internet as if you’re from a different country. There are hundreds of VPNs out there, but ExpressVPN is ridiculously fast. You can stream everything in HD quality with zero buffering! If you use my link right now at EXPRESSVPN dot com slash pomp, you can get an extra three months of ExpressVPN for free! That’s https://www.expressvpn.com/pomp =============================== Choice is a new self-directed IRA product that I'm really excited about. If you are listening to this, you are likely part of the 7.1 million bitcoin owners who have retirement accounts with dollars in them, but not bitcoin. I was in that situation too. Now you can actually buy real Bitcoin in your retirement account. I'm talking about owning your private keys and using tax-advantaged dollars to do it too. Absolute game changer. https://www.retirewithchoice.com/pomp =============================== Pomp writes a daily letter to over 50,000 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://www.pompletter.com

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

• 0:00Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off.

• 0:11Anthony Pompliano?

  Jack Mahlers is the founder of Zap, which has created Strike, an application that allows anyone to send money instantly with no fees anywhere in the world. I'm a proud investor in what Jack is building with Zap and Strike. In this conversation, we discuss the Lightning Network, Strike's recent progress, tiered KYC, and Ethereum's misleading marketing. You definitely will enjoy this podcast episode with Jack, just as I did. Before we get into the episode though, I want to quickly talk about our sponsors. The first is ExpressVPN. Not too long ago, over 100 million people had their personal information stolen in a major data breach. Social Security numbers, contact details, credit scores, and more.

• 0:55Anthony Pompliano?

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• 1:40Anthony Pompliano?

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• 2:24Anthony Pompliano?

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• 3:09Anthony Pompliano?

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• 3:54Anthony Pompliano?

  Lastly, don't forget that I write a daily letter to over 50,000 investors about business, technology, and finance. I break down complex topics into easy-to-understand language while sharing my personal opinion on various aspects of each industry. You can subscribe at pompletter.com. Again, pompletter.com. Let's get into this episode with Jack Mahlers. What a legend. I hope you guys enjoy this one.

• 4:17Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 4:43Anthony Pompliano?

  All right, guys. Bang, bang. Jack is back. What's up, dude?

• 4:47Speaker 02

  What's up, man?

• 4:48Anthony Pompliano?

  How are you?

• 4:49Speaker 02

  I'm good. How are you?

• 4:51Anthony Pompliano?

  I'm pumped. You're killing it. You're killing it. For those that don't know, Jack is the founder, CEO, boss, brains, whatever you want to call it, of Zap, which is the makers of Strike. We are proud investors of the business and Jack and his team. So maybe for two minutes, just give us like the overview for people who didn't listen to the first time you came on the podcast.

• 5:17Speaker 02

  Yeah, so I'm Jack. I'm a third generation financier in Chicago. So my grandfather was chairman of Chicago Board of Trade. My dad started one of the bigger futures brokerages here. And now I'm in finance, but in this weird internet money asset thing. And I'm probably most well-known for my work on Lightning and particularly Zap. And our flagship product, Strike, is really booming in popularity. It's a neo-bank of sorts in the fintech space, very similar to Venmo or Cash App, but it's built from the ground up to be interoperable with Bitcoin and the Lightning Network protocols, which gives us a lot of efficiencies and gains in the payment space.

• 5:57Anthony Pompliano?

  Explain that. So when you say it's built, kind of bottoms up to be interoperable with Bitcoin and Lightning, just highlight that a little bit or elaborate.

• 6:06Speaker 02

  Yeah, so I mean, I think there's a general movement in the fintech payment space towards neo-banking. This idea Cash App is growing and booming in popularity because your money is made more accessible. Legacy banking showing up to chase JP Morgan with your passport and documents, proof of Address is really outdated and people want accessibility with their money. They want their money to to really act for them and be in their pocket at all times. And so we wanted to replicate that model, but use Bitcoin and Lightning as it's a more efficient money rail. It's a value transfer protocol that's inherently global. It's inherently cheaper. It's peer to peer.

• 6:50Speaker 02

  And it's an open public standard that's collaborated on by thousands of participates on the internet. And so we can do a lot of payment, whether it's remittance, brick and mortar, online commerce, rewards, we can do that all likely much cheaper and much faster as long as I can get your bank account or your debit card to speak the Lightning and Bitcoin protocol. And so that sounds really complicated, but that's why we do it. That's where we're an expert. And so we're really just building on top of, you know, what PayPal started, what Square started. And we think that this is just the intuitive next step is incorporating Bitcoin and Lightning into that model.

• 7:29Anthony Pompliano?

  And so really what you're doing is you're taking all that complexity and you're offloading it from the user having to do that for you to do it, right?

• 7:36Speaker 02

  Correct. Yeah, I mean, these efficiencies have existed in Bitcoin, the asset class for a decade now at this point. The problem, though, is it required a laundry list of, you know, you gotta be a computer scientist, technical expertise, you gotta incur capital gains when you spend it, you gotta deal with volatility. And it really priced out a mainstream user or a mainstream business or whoever to really act on this asset class. And so we abstract that away. When you use Strike, you have no tax consequences. You don't deal with any volatility. It's as easy as downloading the app, entering your email and linking your bank account to use.

• 8:17Speaker 02

  It can be used from anyone five years old to 50 years old to 100 years old. And so we take all that on as a business, which is the real innovation. It's not only a technical innovation, but really there's a lot of product and user experience brought to us by us as a company. And I think that that's innovative, considering this space, you know, hasn't really prided itself on UX over the last decade. And then I think we bring serious value there outside of the obvious technical innovation.

• 8:47Anthony Pompliano?

  So let's maybe talk a little bit about Strike and the beauty of it being that, you know, the user doesn't even know this or they're using Bitcoin. They're just sending dollars, the recipient's receiving dollars. Talk a little bit just about how it actually works and then any metrics you want to share around user acquisition or usage from those users, just as you guys have kind of launched in the early days.

• 9:09Speaker 02

  Yeah, so one of the main innovations of Strike is abstracting Bitcoin into the background. So Bitcoin as a value transfer protocol, the value's been there ever since Satoshi wrote the white paper and ran the first node. The accessibility though to that value has been really tough. You have to be a computer scientist. You got to pay capital gains. You got to deal with volatility. And so we take that all on as a business. I mean, that's our job to do that. And as a user, you sign up, you link your bank account, you scan a QR code and you click pay. And it's really, really dead simple. We abstract all that. We can get into the live trading and sort of the fanciness in the background. But the point is that mainstream

• 9:49Speaker 02

  users can now benefit from what is the greatest value, peer-to-peer value transfer that's inherently global that the human race has ever encountered. And as far as our numbers, I mean, we launched our beta 45 days ago. We've already exceeded over half a million dollars in volume. We do hundreds of thousands of dollars every couple of weeks. At this point, we're likely to hit our first million dollar month, either September or October. Thousands and thousands of users, we're going to be entering Europe market, UK, likely in Q3, which will open the gate to Ritman. And since we've got a partnership with Visa,

• 10:32Speaker 02

  some big merchants onboarding in the acquiring side, we recently launched our rewards program. So we're flying at high speed. I think we've got some of the most talented engineers in this space. And yeah, good things are happening, man. Lightning works, Bitcoin works and Strike works. So I think the haters, haters may be upset, but we're pretty happy with how things are going.

• 10:54Anthony Pompliano?

  Every time I talk to you, there's always new products and in more progress, which is usually a good sign. Lots of people wanted to know about KYC and then various states that you can operate in, can't operate in. So maybe just talk a little bit, high level, just how you think about KYC and state by state rollout, and then any updates there in terms of things you guys are doing.

• 11:16Speaker 02

  Yeah, so one of the challenges with launching this product is there's obviously compliance and regulation involved, but to what depth is the question? The only severely regulated business so far in this space has been brokerage services and exchanges, because that has been the use case for Bitcoin. Bitcoin is a speculative Bitcoin. Do I keep going?

• 11:41Anthony Pompliano?

  Yeah, of course. Let's go.

• 11:42Speaker 02

  Bitcoin is a speculative asset class. That's been what's attracted most users to date, right? Is that if I buy this thing, I hold this thing, I get richer. And that's not far from the truth. And so the most successful businesses have been those that offer that service. However, we're very different. We use Bitcoin almost as a utility function. So we're like a quasi processor and regulators were really thrown off by us. I remember calling some of the biggest law firms in the country and explaining the idea and put their brain immediately in a pretzel. And so it's been, it's been a long haul and a journey and they don't necessarily know how to regulate us. So right now, we kind of fall under the exchange

• 12:23Speaker 02

  regulation with some exceptions. So, long story short, that's the reasoning for the KYC. Do I think KYC should exist for strike? No. Do I like KYC? No. Do I think it's helpful? No. But do I want to go to jail and have my business shut down? No. And so I maintain relationships with these people. At the end of the day, they're human beings. They mean no harm. And so what we've deployed is a tiered KYC. So in the beginning, when you download Strike, you can enter your email and your phone number and 75% of the time, that's going to be enough. And you're able to use the service up until certain limits. And then as you use the service and grow as a user, we'll need more and more and more information. These limits aren't hardcoded. In fact, they aren't even a strict law. Again,

• 13:07Speaker 02

  we kind of just fall in this no man's land. We are Really innovating and the first of its kind in this space. We're almost making the laws with regulators as we go on, which is fun and painful at the same token. So that's my as transparent as I can be rant about KYC. If it were up to me, it wouldn't exist, but I think it's even more valuable for us as a business to comply and push forward because we're really paving a way for many more in this space to follow in our in our footsteps and making great strides. So you know, do as we can.

• 13:41Anthony Pompliano?

  And you call this tiered KYC?

• 13:44Speaker 02

  Yeah, so we break it into two steps. There's light KYC and what we consider full KYC. Light KYC gives us enough information for our banking partners and regulators to feel like they know relatively you're a real human being, you exist, you're not a terrorist, and that you can make consumer level payments because at the end of the day, we're not allowing people to send 500 grand of cash overseas yet. These are small retail payments, retail users, mainstream type user. And so regulators and banking partners feel comfortable where I got your name, I got your email, I got your phone number.

• 14:25Speaker 02

  You know what? You seem like a good guy. You're allowed to scan a QR code on our watch and that's okay. But if you start exceeding limits of, you know, a couple thousand bucks, 5,000, $10,000. Well, hey, if you don't mind, what's your address? Because you are you are spending a lot of money or what's your birthday? And so this is an active conversation. I mean, I used to be an engineer all day, all night. Now I'm a suit that just happens to prefer a hoodie. But I spend all my time talking with regulators, really grinding them down into what they're trying to accomplish, explaining lightning to them and get hopefully get these limits removed and get them comfortable with the idea that Bitcoin as an infrastructure piece is going to play a part in payments.

• 15:07Speaker 02

  And then that doesn't mean that anyone's at risk of laundering money or funding terrorists. It's it's very similar to, you know, what Stripe does or what Square does and they don't require you to give your social security number when you want to be a merchant on their platform. So I think we'll get there, but to their credit, it's all new and rightfully scary. And so that's kind of the transparent inside look at a day in life for me.

• 15:36Anthony Pompliano?

  Talk a little bit about, you've done a fantastic job going and meeting with these regulators and really translating kind of the things that I think people in the Bitcoin community know and understand and are excited about to, I'll call it regulator language, right? Or kind of, you know, adult language if they were saying it. But ultimately, I'm assuming that these people are not excited about this, like you said, kind of brains in a pretzel, but they seem to be coming around. And so talk a little bit just about as these conversations have progressed and you've gotten to know these people, like that transition from regulators and from law firms and things like that into like, oh, wow, this is a really cool idea. And like, we want to actually help make this happen rather than fight it.

• 16:15Speaker 02

  Yeah, so I think an important point to keep in mind is that at the end of the day, these are all human beings and I don't think any of them are acting maliciously more so than just doing their job. The real risk that Bitcoin poses to a local regulator, so not the President of the United States, who ultimately has great control over the US dollar and a strong relationship with the Federal Reserve, I'm talking about local state regulation. The risk it poses to them is getting them fired and getting them in trouble and ruining their reputation. And so what they can't have happen is give someone like Strike a lot of leeway and have

• 16:56Speaker 02

  that backfire and have Strike end up, you know, funding the next terrorist attack and they're fired, everyone's, you know, in the can, Bitcoin's reputation is down the chute. And so that's the real risk. And so what's good for me is just going, hey, shaking their hand, letting them know, I'm a human being too, I mean no harm, I'm not trying to fund the dark web, I'm not trying to allow people to transact privately on malicious services. I'm trying to improve payments. I think payments are really expensive. I think that there's a lot of opportunity to make things faster, cheaper. I think remittances should be a free and instant service and that people shouldn't Have their lives put in harms way in third world countries by trying to pick up a Western Union check.

• 17:40Speaker 02

  I think that I can solve that problem and they really understand that. And as soon as I can explain the technology, give them a demo, have them download the app. No one, no human being wants to be an enemy. I think part of being a human being is the opportunity to be part of something bigger than yourself. I think everyone in the Bitcoin community can relate to that. That's one of the beautiful things about Bitcoin is no one is bigger than Bitcoin. And it's really great to be a part of this thing. And I think regulators feel the same thing. They don't want to look at Bitcoin as maybe probably the greatest investment opportunity and technological innovation of our lifetime and likely for centuries to come. And they don't want to be the enemy. And so I think they're very willing.

• 18:24Speaker 02

  They just, they need some job security, just like the rest of us. So that's, that's my impression and they're good people. They pick up my phone call. I'll get them cub tickets when, when they do me favors, you know, the whole nine, the whole nine.

• 18:38Anthony Pompliano?

  Talk to, talk about fees and how strike makes money. I saw a lot of people tweeting saying, you know, kind of how the hell is this possible and how do you make money?

• 18:45Speaker 02

  Yeah, well, I, you know, how does Square make money, right? I, I does, no one charges the consumer. There's no native business model for the consumer. For you to offer P to P payments, or even if you're Visa, you know, your debit card. You're not charging the guy who's buying the coffee. He's already paying for the good or service. The very clear customer is on the acquiring side. And so there's a few revenue models that are super intuitive to strike is that we're getting involved in the acquiring side. And so right now acquirers, which is fancy word for merchants, they foot the bill in all of commerce. Right? And so we think we can offer them a similar or better service for cheaper than what they're paying now.

• 19:30Speaker 02

  We also are a OTC desk of sorts is that we trade all of our own flow. So how does a trader make money? I think you guys can all answer that question yourself and I'm a trader. So we also handle all of our own flow. So we're very similar to a Robin Hood. Incentives that we handle in live trade, uh, consumer retail flow. Uh, and then, you know, there's all sorts of sub industries and payment space like remittances. I think right now our main priority is finding target market, uh, fit and ensuring that this product is here to stay, that it scales and we understand the landscape and where we can drive most efficiency. But as far as business models go, I mean, they're all over the place. I think we're, we're in a really, really good space.

• 20:13Speaker 02

  I, I totally get the caution, uh, in that, you know, if you're not paying anything, then you, you are the product and that I'm selling data or anything, but it's very clear in our terms. I mean, I personally would never do that, but don't take my word for it. It's, it's in our terms of service, it's in our privacy policy and the consumer is not our customer. The consumer is a valuable asset to us as a company. We, we really value the fact that you guys all prefer to send payments over strike and that you enjoy our service and we'll continue to deliver to you for free. But that is as honest I can be with you without giving away, you know, the secrets that are worth millions of dollars at this point, so.

• 20:56Anthony Pompliano?

  Don't give those away, Jack.

• 20:59Anthony Pompliano?

  You had a, uh, at this point, what is called epic and viral thread, uh, about Ethereum, uh, and Vitalik, et cetera. Honestly, you take it away, it's your stage, uh, talk, explain what, what was the, the thought process there? And, uh, has your mind changed at all?

• 21:19Speaker 02

  Yeah, I mean, I, I wouldn't say my mind has changed. There's certainly things I want to clarify. The point of the thread was not to discourage, uh, innovation and people trying new things. I'm a big fan of, of people trying new things and I'm one of those people. So I do respect Vitalik, uh, to great lengths in, in certain categories. My problem is, uh, there, there's a few things I have issues with. One is that Ethereum is a.

• 21:51Speaker 02

  Is an attempt, it's an experiment with no uh, technical backing as of, as of yet to date. Um, there's no proof that what they're trying to do is going to work. Um, and so far it hasn't really worked. However, the marketing is the exact opposite. And that's my huge problem. Um, is that it seems that their marketing is malicious. It's misleading and it's intentional. Um, and I wish that they would be more transparent and more honest about that because it's in return, very damaging to the cryptocurrency space. Um, when ushering in new users and these users are getting burned and getting an experience that is just false advertising is uh, my first thing.

• 22:34Speaker 02

  And my second thing is uh, Ethereum, I think is very damaging to Bitcoin in that same sense. Uh, in that, um, they, they, you know, claim that the Bitcoin developer community is malicious and mean. Um, they claim that Bitcoin is slow, that Bitcoin isn't cheap. Uh, and they really use Bitcoin to uh, self-market themselves. And I think it's selfish and I think it really, I mean, I myself have spent my entire adult life and career in Bitcoin. And uh, I don't think that it, that it's fair. And I think, I know people like Vitalik owe early Bitcoin developers an apology. And I think it's about time someone called them out or maybe, I mean, it's long overdue. Someone called them out, but I'll put it this way.

• 23:19Speaker 02

  I'm not scared to call them out. So that's, that's my, you know, high level two minute uh, summary is I, you know, I, I appreciate Ethereum as a project. Do I think it's working? No. Do I think that they're lying in their marketing and they're telling retail investors it's working because they got a funnel in retail somehow? Last time it was ICOs, this time it's DeFi. Yeah, I think that is happening. I think that there are people that are knowingly lying to retail investors and you know, in securities industry, that's a, that's a crime. And I think that uh, they have no problem conveniently uh, blasting individuals in the Bitcoin space like Greg Maxwell and Bitcoin, the project, um, to their own personal gain. And I take that personally because I've dedicated my life to Bitcoin. I really, really don't appreciate that.

• 24:04Speaker 02

  So that was more or less my uh, my, my qualms.

• 24:08Anthony Pompliano?

  We'll, we'll do the uncensored version next time.

• 24:11Speaker 02

  Uh.

• 24:13Anthony Pompliano?

  But explain a little bit about the misleading marketing. I think that this is a nuanced point here that when people hear that, they just go, I don't really know what that means. So elaborate on that.

• 24:23Speaker 02

  Yeah. Okay. So in this cryptocurrency space, trade offs are very well defined technically. So the reason Bitcoin may appear slow, it may appear expensive. That's because it's decided to be decentralized, to be censorship resistant. So as far as I'm concerned, there has been no technological breakthrough to provide censorship resistance and a decentralized property faster and cheaper. Okay? And, and this is not up to debate. This is just math. And so, for example, for some blockchain or cryptocurrency project to advertise themselves,

• 25:07Speaker 02

  you know, it, it in that realm, like, oh, we're, we're faster and cheaper than Bitcoin. Oh, and we're also decentralized and we're also censorship resistant. According to math, the last time I read, you know, research papers, that is a lie, bold faced lie. And so that's just a high level example that I think everyone can relate to. You've seen the coin market cap advertisements and such. And so, or Vitalik will say things like, I don't see any difference between a light client node and a full node. I mean, that's just a bold faced lie, or you are, you know, dangerously idiotic on the topic. Either way, not good news.

• 25:46Speaker 02

  And so I guess without ranting more, that, that's, that's what I mean is that sure, there can be blockchains that are faster and cheaper. But let's take the decentralized and censorship resistant labels off those. Do you mind? Because they can't accomplish them all. And I know that for a fact. It's just computer science. And, you know, it would take 10 more Satoshi white papers to the level of brilliance that Satoshi delivered to deliver on all the promises of Ethereum and the other top 10 altcoins in the, in the overall total market cap. And so that, that's my problem is the computer science isn't there, but, but the marketing's there. And it's really misleading to innocent retail investors.

• 26:25Anthony Pompliano?

  So my favorite test to run with people is all this DeFi and, and stuff like that, that comes to be decentralized. I just asked the founders, if the government came and said, you had to go to jail if you don't shut it off, could you shut it off? Yeah, right. Like, oh, oh, you could. Okay, that's not decentralized. Right? Like, that's the whole point is if there's like a kill switch, it's not actually decentralized. It's not censorship resistant. It's not, you know what I mean? Like all of these examples. And I think that we're now getting to the point like there's a, there's a very real argument to be made that if Ethereum was found to be a security, if Ether was found to be a security and was told to shut down, could they shut it? And I think they could.

• 27:09Speaker 02

  Probably, yeah. And if the government asks for the existing supply, would they be able to answer? Probably not. It's, it's really scary. I, I like to call this whole altcoin trend, I like to call it an arbitrage on the trend. And what I mean by that is altcoins, in my opinion, they're taking the arbitrage difference between the overall interest that society has in cryptocurrency. Because I think at this point, it's fairly intuitive that it's a massive investment opportunity. And it's a technological breakthrough that should not go unnoticed. Fair enough. However, to the ability that someone can understand why it's important, how it works technically.

• 27:52Speaker 02

  I mean, there's a large gap between there. You're getting everyone between high school kids and, you know, 70 year old grandparents that are opening Coinbase accounts and wanting to, to put money in this asset class. Do they know the difference between a full node and a like client and what it means to be sufficiently peer to peer and decentralized? No. So in, within that arbitrage opportunity, I can create Woodcoin and sell it to you. And I think, you know, naturally markets get efficient. And so that arbitrage opportunity is going to shrink and get lower and lower and lower. And it was much easier to sell Woodcoin 10 years ago than it is today. And it's going to be much harder to sell Woodcoin 10 years from now than it is today. But I like to call it an arbitrage on the trend.

• 28:34Speaker 02

  And is it a good thing or a bad thing? It kind of depends on your viewpoint of, you know, do you want a centralized party like a regulated entity like the SEC or something? Saying what should and shouldn't be allowed and what should and isn't, you know, sufficiently decentralized? Probably not. So is this the best way to go about making an efficient marketplace in this industry? Maybe, but it's dangerous, man. It's dangerous. And a lot of people are going to lose a lot of money and they're innocent. And so it sucks. It sucks to see.

• 29:06Anthony Pompliano?

  Give us an update on Lightning Network. You are one of the world experts, I would say, or those close to what's going on there.

• 29:15Speaker 02

  Yeah, well, I think, you know, the most exciting update is it's working. It's working, which wasn't always a guarantee, even as long as a few years ago. So it works, right? Like, we're shoveling, you know, millions of dollars, like I said, through it. And as far as some of the excitements on the horizon, we are lifting the limits, the Lightning community is lifting the limits within the protocol. So talk about being responsible with your marketing and responsible with your rollout. Lightning had really severe limits. So you could not open a channel bigger than 0.16 BTC. You cannot send a payment size over 0.042 BTC. And those limits now are lifted because the protocol has

• 30:00Speaker 02

  proven to be secure enough and reliable enough. And still wouldn't pour all your money into it. We'll do that as Zap as a business. You know, we consider ourselves enough expert. But, uh, yeah, I think that's, that's what's exciting, is that you're talking about a protocol that is instant settlement and self-clearing on an asset class that's natively digital and inherently global. So you can transfer value anywhere in the world for essentially free and essentially instant, for the first time in human history. And so that is an insane thing. And now you can do that without any real limits. And so anywhere between consumer retail payment activity to large traders having private

• 30:44Speaker 02

  relationships with exchanges and doing live arbitrage with, you know, $100,000 Lightning payments and millions of dollar sized channels, everywhere in between. I mean, it's really, I think it's a huge deal. And I think over the next six months or so, that'll, that'll be the big narrative is getting more and more capital on because these limits are lifted.

• 31:03Anthony Pompliano?

  I'm literally, quite literally betting on you and Lightning to be successful. So I agree with you. Last question before I got a fun one for you is talk a little bit about where the Lightning Network is going. So you kind of just hinted a little bit at kind of the movement of millions of dollars and you know, large channel sizes, et cetera. But but just kind of continue going down that thread, if you will.

• 31:25Speaker 02

  Yeah, well, I think one of the bigger opportunities for Lightning is fixing the inefficiency that is in the marketplace within Bitcoin, in the exchange space, in the liquidity space.

• 31:41Speaker 02

  Arbitrage opportunities, settlement between familiar counterparties. I mean, it takes a long time and it's generally expensive to settle between these exchanges between. I mean, Liquid Network, for example, that Blockstream is working on. I mean, that's a solution valued in hundreds of millions of dollars, right? The capital that's backing that and the brains behind that. And Lightning has a chance to achieve that potentially even better, to give you some relative sense of the size of this opportunity in dollar terms. So I do think that right now Lightning seems to be to, well, feed chickens and draw dicks on, you know, digital art canvas.

• 32:26Speaker 02

  Okay, but now Strike is involved and now remittance is on the horizon. And now we're doing cashback deals. Now we're making it much cheaper. Instead of 2.9% plus 30 cents for a merchant, we can process merchant payments for free. And then I think the next step is going to be DRW, Cumberland, jump trading. The big market makers in this space are all of a sudden arbitraging over Lightning channels, doing large OTC trades over Lightning. This market is becoming extremely, extremely, extremely efficient, fast paced and cheap, which is, you know, gonna, it's gonna increase the velocity of the asset magnitudes.

• 33:07Speaker 02

  And that'll be appealing to a set of investors and a set of market participants that maybe not, don't have the interest quite yet. But I think it'll be a big deal and a mulled them over.

• 33:19Anthony Pompliano?

  It's gonna be amazing. This gets adopted globally. I really don't think people understand the innovation here, nor do they understand how small it is today and how big it can get, like the the delta between where we are and where we're going is absolutely massive, in my opinion.

• 33:36Speaker 02

  Yeah, everything about this industry, the R and R makes no sense in your favor. Not, not against you, but in your favor. I mean, the numbers are, you know, once in a generation. So, you know, lucky, lucky to be alive and involved.

• 33:51Anthony Pompliano?

  And smart enough to, to find Jack Mallers building this. Perfect.

• 33:56Anthony Pompliano?

  So, uh, last question for you, a more fun one. I know you're a big, big basketball fan. How did you survive the last couple of months without going to play basketball nor be able to watch the NBA on television?

• 34:08Speaker 02

  I don't know, man. Every morning I check my pulse, make sure I'm still alive. I don't know. I mean, you control what you can control, right? All these events in 2020 as a, you know, blanket description that have been unfortunate. You know, Bitcoin specifically is a technology that is built for the paranoid, I think. So all of us love speculating on the fact that the world's crumbling and the world has really delivered on that paranoia. And taking basketball away from me, for example, is one of the things I never would have expected. So how have I survived? Fuck if I know, but I'm still here and I'm standing.

• 34:50Speaker 02

  So I really hope it doesn't do that to me again. And then the next time I might, I might die. But yeah, I'm excited. The playoffs are back on. Now I'm, now I'm a Delhi fan because of BlockFi and I'm a Spencer Dinwiddie fan, Nets fan because of you. And I just, anyone win but LeBron. As long as LeBron doesn't win this year, I don't care. That's my only ask.

• 35:13Anthony Pompliano?

  So one of the most depressing things I saw during the like really heavy lockdown period was in New York, they went around, these guys literally went around to every single playground and they took the rims off the backboards.

• 35:25Speaker 02

  Yep.

• 35:26Anthony Pompliano?

  And I was like, come on, really? Whose job was it? They showed up and they're like, all right, you gotta go take all the rims down across the city. And I was just like, I guess that's literally what they're gonna do. So they're pretty serious about it.

• 35:37Speaker 02

  It's been chaos, man. It's been chaos. Like, come on, guys. The least you can do is let us put up a few free throws with a mask on. But I guess not.

• 35:48Anthony Pompliano?

  All right, man. Where can people go, uh, download Strike? People, hold on. Before Jack says this, go try it out. It's super legit, fast as hell. It's cheap. You can send money anywhere in the world, uh, and you do it all over the Bitcoin network, uh, and you don't even realize you're doing it. So go and download Strike. Where can they go?

• 36:07Speaker 02

  Yeah, well, we're crushing it, man. We're now, if you just search Strike in the App Store, we're now the number one result. So you can just, yeah, how about that? So you can just go search Strike in the App Store, uh, for specific links. You go to beta strikeme slash download.

• 36:23Anthony Pompliano?

  Okay, hold on. You gotta, you gotta run that one back.

• 36:25Speaker 02

  Yeah. Beta strikeme slash download.

• 36:30Anthony Pompliano?

  Or just go to the App Store and search Strike.

• 36:32Speaker 02

  Correct. And yeah, we're all over Twitter. Um, I'm the most accessible human on the internet. Every handle is just my full name. I'll answer every DM. And, uh, yeah, I mean, I, I write this at the end of all my blog posts. This community has been so great to me as an individual and so great, uh, to the work I've done and, and the company that is Zap. So I appreciate all your support, the feedback. I read every customer support ticket. So, uh, I really, really appreciate it.

• 37:01Anthony Pompliano?

  Doing a great job, man. We'll do it again soon. Thank you.

• 37:04Speaker 02

  Yes, sir. Appreciate it, boy.