FFS088 - Matteo Pellegrini

[00:00:00]

Intro

Matteo: when it comes to the vision, so when I was building the app, uh, you know, you think about it. And you kind of dream, what is the final form of this thing, you know, if you get everything right. And some days I would just go in my car and drive around because, you know, you get ideas. And I was like, wouldn't it be cool if this app, you drive around and this app will show you, Oh, here's all the people in this town, they're in Bitcoin or nearby. And then you, you got another tab and you see all the meetups and then you click another tab and you saw the merchants.

And as you drive around, it will just refresh and it will show you everything that's nearby automatically. So that's the final vision of the, of OrangePillApp.

[00:01:00] [00:02:00]

Welcoming Matteo Pellegrini

Luke: Welcome back to the Freedom Footprint Show, Okay,

Matteo: you very much guys. Good to be here.

Knut: Yeah, good to see you, Matteo. We see each other, uh, about once a month, uh, usually, because I'm an advisor for Orange Pill App. And we always have fun on those, in those meetings. It's me and Ben Sessions, Natalie Brunel, [00:03:00] Daniel Prince, Nico Lamanen, and who else is there? Well, Brian Lament, Brian Lament, of course, and we have loads of fun in those meetings and brainstorm.

I really appreciate those because they're so different from what I'm used to in Fiat land as far as meetings go. So, uh, this is way more fun. so what is the, you recently released this merchants feature on orange pill app, can you tell us a bit

Luke: I'm pausing this, I'm pausing this. You skipped right over the thing again, come on.

 [01:44.

Knut: No, no, no, I was thinking doing the merchants thing first and then the other thing, but okay, okay, how do you want it then, Luke?

Luke: Well just start with the Orange Pill App and vision and stuff. You get to see behind the curtain, Matteo, since we're,

Knut: Okay.

Luke: know.

Knut: Okay. I'll start from somewhere. So, all right.

Origin and Vision of Orange Pill App

Knut: So, uh, uh, Matteo, can you tell us about the, uh, the vision for orange pill app, uh, the origins behind the app, [00:04:00] how, how the idea came to be and, um, where are you going with it in the future?

Matteo: Yeah, sure. So I'll tell you the story of how I got the idea. June, 2021, I went to, uh, Bitcoin, Miami. Which was great, I got COVID, almost up in the hospital, but besides that, it was a lot of fun. And I went to this conference, there was like 10, 20, was crazy. And I, and I was trying to make friends, but I, you know, it was not very easy to make friends. I was like, wow, all this Bitcoin is in the same place.

And it's basically a networking event. And I loved it. I ended up meeting some people and then having dinner together. And it was great. And then I come back to LA, recovered from COVID. And then I was like, well, I want to meet more big connoisseurs. and it was like, where do I find them? You know, so I'm on Twitter all the time.

Back then, I mean, even now, I'm on Twitter all the time. And, uh, you know, on Twitter [00:05:00] it's very difficult to know who's nearby. So I end up going to a meetup. Maybe October of 2021, and you know, you drive an hour because in LA everything is one hour away driving. I drove to this meetup in a brewery, beautiful place, and there was like 10 of us.

And I kid you not, like maybe three or four were not in Bitcoin at all. This is 2021, so everybody's, there's an NFT craze. Ethereum is gonna flip Bitcoin. So I'm like, Oh, okay. So I drove one hour to basically talk to big connors and, you know, it was okay. There was some big con, it was great, but it's a little awkward because you don't know them.

You know, it's like, Hey, do you have a Twitter? What's the Twitter account? All right. So on the way back home, I'm looking at all the building that I was living in Santa Monica, I would look in all the building in Santa Monica There's gotta be more bitcoins around here. It's like, I actually went on Google and said, how many [00:06:00] people live in Santa Monica?

It's like 400, 000. And so if you have even 1%, it's like 4, 000. I said, how do I find these bitcoins without me going to a meetup one hour away with After that, now you need Bitcoin. So I got this idea in my head that was like ruminating. And then, beginning of 2022, one of my friends called me out and said, Hey, I want to talk to you.

I have an idea. He knows I have a background in technology. And so I, so he tells me he's building a dating app for people that are very active. let's say you're a surfer. You want to date somebody that's also a surfer because then you already have something in common. I go, okay, that's great. So as he was telling me this vision of his app, I was like, that's how you do it. You know, dating apps already solved that problem of how do you find people nearby that have some interest in common? Obviously, you know, if you're a man, you want to meet a woman or a man, [00:07:00] whatever it is. And that's how I finally, and that's how the, the, the inspiration for Orange Pill App came from, which is like, you use a mobile device. the approximate geolocation, and then you filter the people that get inside the app, which is why we have the paywall, you know, you have to filter aggressively because I had this kind of trauma of going to the meetup and, you know, 40 percent would not even be saying, I definitely don't want to replicate that. And so then, you know, I come out with the paywall idea, which obviously was, I think the paywall is like 50 percent of why Orange Pill App is as successful as it is. is the paywall, because it does the filtering for me, number one, and number two, actually attract a certain kind of people, the people that, the people, and I think now I was reflecting the other day of this, because obviously there's [00:08:00] never been a social network, as far as I know, and I think I would know by now, there's never been a social network that started So, I think that's it.

With the paywall, no free trial, no free, like, everybody pays to get in, no exception whatsoever. And obviously, you know, it's going parabolic almost. And I was, and I'm thinking like, the reason why big coiners like this model, I think it's two reasons. One, because we are very well aware of what is the difference between the signal and the noise.

Because in, in crypto, it's a lot of noise. Ethereum, Solana, N-F-T-I-C-O, so we're like bombarded by noise every single day, whether it's on Twitter or in in mainstream media. There's a lot of noise around Bitcoin and, and Bitcoin is cryptocurrency and, and so there's a desire of Bitcoin is to just like, let me pay to find the signal, which obviously [00:09:00] in fear world, I don't think this model would ever work. And then there's also the, um, the benefit of once I get in, I know you're one of us I know you've paid $3 or a hundred dollars. If you get, if you get the lifetime and there's an extra level of connection, like I know you're in Bitcoin 'cause otherwise you wouldn't be here. And I know you're, um, not just in Bitcoin, but you are so much in Bitcoin that you're willing to pay. To be on an app that is obscure, and so that creates, that unlocks all kinds of, uh, opportunities and use cases. You know, you probably told you this, Knut, uh, there was an NBA guy in the app, which ended up being an investor, and he would fly out to all over the country to play basketball, and the moment he land, take the app, see what's nearby, invite them to the game for free.

Free tickets, courtside, [00:10:00] NBA, after the game. He would spend like an hour with them to talk about Bitcoin, take pictures on the court. And it's like, so I talked to the guys, like, you know, people think it's a scam because whoever get invited by an NBA player to an NBA game for free, like, you know, and then it was like, yes, no, I know some people have told me like, is this true or not?

Anyway. And then he told me, look, I have hundreds of thousands of followers. The guy won a championship with LeBron. I have hundreds of thousands of followers on Twitter and Instagram say, if I post who wants a free ticket for this game. I don't know who's coming, I don't know if people are even nearby. So, through this technology and through the filter on the paywall, it was able to get people and then, you know, you pay 3, the next thing you know, you're hanging out with an NBA player.

And so, so the paywall, yeah, the paywall is definitely, uh, at least 50 percent of the success of Orange Pill Up, if not more. that's, yeah, that's the origin story of Orange [00:11:00] Pill Up. Now, when it comes to the vision, so when I was building the app, uh, you know, you think about it. And you kind of dream, what is the final form of this thing, you know, if you get everything right. And some days I would just go in my car and drive around because, you know, you get ideas. And I was like, wouldn't it be cool if this app, you drive around and this app will show you, Oh, here's all the people in this town, they're in Bitcoin or nearby. And then you, you got another tab and you see all the meetups and then you click another tab and you saw the merchants.

And as you drive around, it will just refresh and it will show you everything that's nearby automatically. So that's the final vision of the, of OrangePillApp.

Launch of Merchants on OPA

Matteo: And now we just launched Merchant, uh, three days ago. Uh, which, you know, it's, it's a big deal because it's, it's even harder to find merchants.

Because, [00:12:00] um, and I've been looking now online like, you know, where can I find merchants to tell them about Orange, have this feature. It's like I was on a website the other night. It's called BitPay and it's beautiful website. Website. It's corporate. You can tell they spend a lot of money and they have a list of all the merchants that accept because well this is great, now I'm gonna contact them and let them know they can also get an account. And I kid you not, I contact three of them. I found their Twitter account. Send them a message. Hey guys. You accept Bitcoin? Three out of three? No, we don't accept Bitcoin. And I'm like, okay, just so you know, you're on a website that says you do, blah, blah, blah. And again, we go back to the paywall, the filtering.

It's, it's, if it's something is free, you get the noise. And so, so merchants are live, you know, um, we just launched three days ago. We have 41 now. funnily enough, this is a very funny thing. So I live in North California [00:13:00] in a town of 10, 000 people. And next to me. There's a town, there's 150, 000 people, so it's not that big, but it's the biggest town in the area.

Now, of all the foreign merchants that sign up all over the world, we have one in Bulgaria, one in Dubai, one in Australia, two of them are in the town next to me, which is like, how is that even possible?

Knut: And you would never have known without the, the feature.

Matteo: yeah, there's, yeah, there's no way. Yeah, there's no way I would find them. So that's, that's kind of the orange pill up. Origin story, the vision where we're going. I mean, really what we, what we're gonna, what we're trying to do here is to create as many offline, in person connection between the corners as possible, which in my view are way more powerful than an online connection.

And also they're obviously way more censorship resistant than online connection, right? The government can come and shut down [00:14:00] Twitter, your email accounts, anything. Uh, but if I know there's a guy in the next town that I can buy gas, or if I know there's a butcher here and a grocery store here, and we're going to get CBBC, maybe we don't, maybe we will, I can just go and, you know, pay in Bitcoin.

There's now a way to step out of the system completely. Outside of fiat, completely, you can get put in bitcoin and now you can spend bitcoin. You never need to touch fiat.

Knut: So, speaking of CBDCs, like, what's the risk here for the merchants, like, imagine the CBDC salesman, some authority, using orange pill app to go and find all these merchants and shut them down and point a gun in their face, like,

Matteo: Well, um, so we don't, you know, obviously, you know, we don't verify, we don't do KYC. [00:15:00] There's no, we don't do KYC, you can be anonymous as you like. the merchants, they tell us they accept Bitcoin. Obviously, you know, they pay to be on the app. So, uh, the most likely to accept Bitcoin. Um, I think the government has many, many, at least in the United States.

I don't know, in the United States, the government, many, many ways to find out who does what. Uh, you know, I don't know if you guys watch the documentary Citizenfour, uh, Snowden. And I say, it's, yeah. You should probably watch that show. there are many, many ways that the government can figure out what exactly you're doing if you're online.

And that's, again, that's one of the reasons why we want to create offline connections, because even if, even if the ones here that, so for example, again, I live in this 10, 000 people village, basically, and I, when I moved two years ago, I don't know anybody. I found a friend through Orange Pill Up, right? And now I have his phone number.

I met his family, met his friends. We're friends. He's actually the [00:16:00] only friend I have here because I work too much, I never go out. But now I have this connection with this guy, so I don't, if orange pill gets shut down for whatever reason, let's say. I have this connection, so now I am antifragile.

Knut: I've experienced that recently down here, like I have a friend there in a neighboring town here about an hour away, and we, we met in Amsterdam, and we connect via orange pill app all the time down here, and

Matteo: that's cool.

Knut: and have lunches and stuff,

Matteo: Yeah, yeah, exactly. It's about creating these connections.

Knut: yeah, it's about the real world connections, and like, yeah, uh, it's sort of a, Redundant question, because this, this problem, as you say, it will, it, it will happen anywhere, anyway, like, uh, bitcoiners sort of need to be more vocal, and more, people need to see that we're not trying to be criminal here, we're just [00:17:00] trying to say fuck the banks, fuck the state, they're the criminals, and this is gonna be a hard pill to swallow For many, but it, but it works, and it works better than the other systems, so, let's just hope that they don't come with, you know, horses and boots and batons and stuff.

Orange Pill Web App

Matteo: Yeah, so another thing, but you make a good point. So, actually, I've thought about this a lot. because, you know, we had a problem with Google and Orange and a trademark.

Knut: A ridiculous problem. Yeah, the intellectual property laws are so fucked. Like, there is no intellectual property. Well, there is one, but all the others are just bullshit.

Matteo: So, and basically we were Removed from the Google Play Store in the United States only, thank God, for like two months. And I, you know, I've, I literally will [00:18:00] forget what I'm going when I'm dry. Cause I was thinking, how do I fix it? Anyways, eventually I figured out a way. We're back on the Google play store, but I was thinking like, you know, obviously Google and Apple can shut me down anytime, you know, they can shut down any app they want, Twitter, if they want to, you know, so we're building the web app.

we're building a web app, which is going to be a website, which it's very hard to shut down a website. Um, and so we're going to have a red, a parallel way to use orange blood, even if we get to a place where, for whatever reason, Apple shut down every single Bitcoin app and Google shut down, which I don't think is going to happen.

especially in the United States. I mean, you know, we have very strong, uh, you know, uh, property rights law. Um, but you know, at the end of the day, there are probably private companies that can kind of do whatever they want. Um, so we're building a web app just to give us all the [00:19:00] possible, uh, optionality.

Knut: I'm looking forward to the web app a lot, because like, that's, uh That's really convenient, I love when you have the option to do computer or phone, like,

Matteo: right. Yeah. Yeah. It just, I just need more developers and more time. That's all.

Knut: yeah, yeah, uh, like, I'd like to unpack some of the first stuff we went into, uh, because, like, I, there's so much to talk about here, like, uh, you said, uh, finding, you talked about finding the signal in the noise, and, And the latest thought I have about that is that Bitcoin is not the signal, but it's the greatest tool for noise removal ever invented.

So like, that's, if you think about it on a real philosophical plane, like, that's what Bitcoin does. It removes noise. It removes the third party from the transaction. It allows for people to, to interact directly with one another in ways that simply weren't [00:20:00] possible before Bitcoin and across borders, um, with whomever, wherever, whenever.

Matteo: There are no borders.

Knut: no, exactly. And, uh,

Matteo: There is no concept of borders on the blockchain. There is no such thing as a border.

 The Concept of a Satoshi

Knut: no, exactly. And there's no Satoshi either, but we'll get to that

Matteo: That is, yeah, that is, I actually found out because of your interview with Giacomo. Uh, I had no idea. Yeah, yeah. I actually sent, it's funny because I was talking to, uh, I got an orange flop that was Bitcoin slash, uh, ordinals. I'm like, do you even, I was like, it was trying to convince me about ordinals. Like, man, uh, you can't, Satoshi doesn't even exist.

That the, the sats don't even exist. Like, what do you mean? That's not true. I said, look, go listen to this podcast. So I sent your video to more than one person with the Giacomo.

Knut: Nice. Nice. Yeah, that's the thing. [00:21:00] The way I see it, and I've been thinking a lot about that, and like, how to frame that, and how to, like, warn people about these stupid JPEGs.

An efficient way and like a beautiful way to to say it and the way I see it that the Satoshi like the Satoshi does not exist. All that exists is UTXO like unspent transaction outputs, right? And so the Satoshi is not data. Uh, it's not even information. It's something else. It, it only exists in our minds because all it is, is, is keeping a secret and that keeping the secret is the thing that allows you to change the state of the network or of the time chain.

Uh, and you get to change it to a certain extent and the extent to which you get to change it is the amount of Satoshis you have. But all of that [00:22:00] is in your, in your head. And it's nowhere else. And I, I find that insanely fascinating.

Matteo: Somebody made an um, somebody made an analogy. It's like osh, it's like a meter. It's just a unit of measure, but it doesn't really exist.

Knut: No, exactly. You can't buy a meter. You can buy a foot.

Matteo: It's a convention, yeah, you can buy a full long sandwich, but uh, it's just a convention amongst humans that this long is one meter, doesn't mean it exists in nature.

Knut: No, exactly.

Matteo: It's the same idea of sats.

Knut: Here, our friend Dominic Frisby would start debating us on, on the metric system.

Matteo: Yeah,

Knut: But I do. Yeah. You're, you're, you're from Italy, so let's not get into that.

Matteo: I am familiar, as you can tell.

Bitcoin the Network vs Bitcoin the Asset

Knut: yeah, speaking of the Satoshi and the thing, we had a, uh, a conversation about, and I [00:23:00] saw a tweet of yours about how Satoshi should have, uh, named the network one thing and the asset another. So can you, can you explain your, your thinking around that?

Matteo: Right, so I was thinking about, so I'll be honest with you. Around Christmas time of December, I just got into this mining thing, the high fees environment problems. The ordinals. I'm not a miner. I've never even seen an ASIC in my life. Um, so I never really look into, you know, how does money work and the fees and the block rewards and all that kind of stuff.

So, but anyway, so I see the fees spiking and I start thinking about, well, We have a problem here that if fees get too high, no, here's what happens. So somebody, okay, here's, here's the story. A woman on orange pull up approached me and said, look, we want to onboard students [00:24:00] in this high school and we want to give them, um, a hardware wallet or card or something cheap with 50 of Bitcoin on it. I was like, wait a second, you're gonna give them nothing because at that point, like a transaction was like 30, right? It was like the top of the field, like, and I had to explain, look, if you give 50 of Bitcoin, these people might never be able to actually use this, spend it or move it, do nothing with it, right?

So what did you mean? So I explained the point of fees. And so then I started thinking, okay. These are actually, so there is two things in Bitcoin, which unfortunately they're called Bitcoin, but you have the network and you have the asset and you need both. together, but they're separate, and they're separate properties.

So the network,[00:25:00] the property, so we say Bitcoin is decentralized, censorship resistant, divisible, portable, durable, etc. In reality, you have, those properties are actually not, um, so the network has only three properties, two properties. The censorship resistance is not on the asset, meaning, again, if I give you 10, Bitcoin and you can't move it, there's no censorship resistance there.

It's like if I give you a, like if I give you a, um, If I tell you, Hey, there is a, there is a nugget of gold at the end of the ocean, but it's yours and it's censorship resistant. You can, it's, it's, it's a better asset, but go get it. You can't, right?

Knut: So, so, so, just to be clear here, this is about, still about the fees, so you're calling the fees a form of censorship in a way.

Matteo: No, no, no, no. I'm just looking for now. I'm talking about the property of the network.

Knut: [00:26:00] Okay,

Matteo: The censorship resistant is provided by the network, which is the nodes and the miners. It is not the asset itself. Like, I can give you the, forget about fees for now, right? So, if I give you Bitcoin and you lose your key, you can't move it anymore. So there's nothing to do with the fees, but the Bitcoin is still divisible. It's still portable and it's still durable. The Bitcoin is going to be there forever, even if you don't have the key. So it's still, you still have those properties. But unless you can access the network, you will not be able to use the network properties which are censorship resistant and decentralization. These are network, these are properties of the network. Now, and then you have property of the asset itself, which is divisible, uh, portable, fungible, uh, you know, [00:27:00] all the money properties that, you know, we all Now, these two things, in order to interact with each other, the mechanism is the fees. So you have the asset and you wanna send it from me to note. I have to pay the fees so I can access the network and, and, and benefit from the network properties, which are decentralization is not really a benefit. Decentralization because nobody really cares about decentralization per se. It's that decentralization enable censorship resistant, but the industry is not even a problem.

It is not even a property.

Knut: now it's a, it's a means to a greater end, an unfortunate, unfortunate means to a greater end.

Matteo: Right, exactly. And so now, and this I think is the reason why people, some people think, because we say, uh, Bitcoin is for enemies. So that's what I got into this, uh, thinking about. What does that actually [00:28:00] mean? Bitcoin is for enemies. And then I figured out, okay, the asset is for animals, meaning you can, you can be the most horrible person on earth. Nobody should be able to, uh, stop you from using Bitcoin, the asset, meaning you want to send Bitcoin from North Korea to Iran, build a nuclear bomb, whatever. Okay, you, you, you should be able to, uh, move the asset as you please. The network is, is not for enemies. In fact, if you think the network is for enemies, you're going to lose everything else, as we are seeing now with, uh, you know, with the fees. Um, and so now once we understand that there is the network and the asset and the distinct properties and you need one to access the other and the other to access the other and the mechanism to access these two, uh, elements is the fees. Now we can [00:29:00] talk about the fees are in a way, definitely a way to censor the, to censor the Bitcoin.

You know, um, if I'm a state actor, for example, the United States has 200, 000 Bitcoin today. Forget about the ETF, which, you know, technically, you know, you can, you can count them as government property, right? So you can just imagine if the U. S. could say, okay, from now on This 200, 000 Bitcoin, we're going to make sure every single block is full, and we're going to pay the possible highest fees so that Knut and Luke and Matteo and all the people that have maybe one or two or three, whatever, it's impossible for us to use the network. And there is this, you can say, well, but you have Lightning Network. Okay, but how do you open a channel? How do you go from on chain to the second layer? You still need to make a transaction on the on chain. so that's, yeah, that's, that's kind of my insights about [00:30:00] you have the network, which is not for enemies and needs to be protected at all costs, because without the network, the asset doesn't do anything.

If you can't use, if you can access the network, it doesn't matter how many bitcoins you have, where you keep them, et cetera, et cetera.

Knut: Yeah, yeah. I have a ton of thoughts about this, of course. First of all, the, the, the dichotomy is, it is made up, but it does make sense from your point of view, like you're, you're, but, but as, as we went into briefly before, like the Satoshi doesn't really exist, so it's just the network and there is no asset.

The asset is in our heads. So to, to the, to the network, there is no asset. It's just the network. Like, uh, and it's a network of human actors acting on incentives and all the computers involved are merely tools for helping us verify. Like, that's the thing about running a node, for instance, I think [00:31:00] people misinterpret what that's good for.

And they think that if they run a Raspberry Pi at home, they help the security of the network. The thing they help is they're, they help verify their own transactions. Like, uh, that's what you run a node for so that someone isn't sending you fake bitcoins, or, uh, in a sense, right?

Matteo: There's all sorts of advantages of running a node, but,

Knut: yeah, yeah, there's all sorts of, but that's the gist of it, and also that's, that's what, it is a part of the network because that's what enables things like a user activated soft fork and stuff.

So, so, so it does have an impact, and it is a good thing to do. Um Yeah. And, and when you say another thing here, uh, is when you say that the United States has 200, 000 bitcoins, what that really means is that some guy has 200, 000 bitcoins. Some guy possesses them. the United States [00:32:00] may own them on paper, but some guy has the keys.

Like, a custodian, or whatever it is, the custodian is not an institution, it's a person, and they might be in some sort of multisig solution, but at the end of the day, it's just a guy, or some guys, Keeping a secret from one another. So, so that's a, that's another thing to consider. Like, if this guy is ethical and the United States wanted to do something akin to what you described as clogging the chain with bullshit.

then that some guy might just take the Bitcoin and fuck off. Like that's, that's a possible scenario. So there's, there, I'm just alluding to this because there's, there are so many things at play here that are not obvious at first glance. What are your thoughts?

Matteo: I don't really know how the U. S. government, [00:33:00] uh, store their Bitcoin, um, if it's on Coinbase or if they have the wallet in some building in the Pentagon. I have no idea. I know the, you know, the U. S. government has a Let's call it access to 200, that seems Bitcoin, I think from Silk Road, uh, if I'm not wrong.

Knut: Yeah, I know. And, but there, there is a custodian somewhere and that custodian is always vulnerable to a 5 wrench attack. Like,

Matteo: Oh, yeah, yeah. Um, but you know, the point being, whether, whether it's the US government or whether it's China or whether it's, uh, Ordinals and who else, who knows who's finding them, you can definitely, so as far as I can tell, by the way,

Maximum Fees in Bitcoin

Matteo: I actually then, I was so worried about this thing I wanted to figure out what is the maximum amount The fees can be on a sustained period.

Knut: oh yeah, yeah. Yeah, we had a conversation about that. [00:34:00] I remember we had a call about that, about, like, brainstorming about that about a

Matteo: I think I've actually figured it out because fees are paid in Bitcoin, not in dollars

Knut: Yes.

Matteo: and Bitcoin as a, as a finite amount, 21 19. 4 million and some are lost, some are in, who knows, but let's say all are available. and then you, you, you can work your way down to figure it out. So as far as like, so here's my prediction. Fees are never going to stay above 1, 000 sats per Vbyte for a long period of time, because there is not enough Bitcoin to sustain those amount of fees. So let me run you through the math. At 100, 000 sats per Vbyte, if you have one output and one input, the smallest possible UTXO, as an insertion would cost you 200, 000 sats, okay?

Now, that's the [00:35:00] smallest one, so we're being very generous here, so let's call it 200, 000 sats. It will cost to make one transaction. Now, you, uh, so on average, a blockchain, a block has 4, 000 transactions. So you do 200, 000 sats, by 4, 000, it's 80 Bitcoin. So imagine in transaction fees. It's 80 or is that Maybe it's eight.

It's eight or 80. I don't know. It's eight something, but like eight. The bottom line, if you multiply this by, uh, 52,260, which is the number of blocks per year, you end up with 420,000 Bitcoin paid in fees. Each year, but now, obviously, at this rate, it would take, um, in 10 years, you will spend 4 million Bitcoin, which they're not even available to be spent on fees. And so, and so that's, so that's [00:36:00] kind of my 1, 000 sub per bit, but at that level, there is simply not enough Bitcoin to be, uh, because obviously you have to think that the only way for fees to be high, if it's the block is full. If the block is not full, transactions should be one set per bibyte, because it's that economic behavior.

so the, since you can have to put, you can put 4, 000 transactions, you can, you can do the limits, right? so, yeah, so my prediction is, uh, so I came up with this 1, 000 set per bibyte, you end up costing 400, 000 Bitcoin per year, just in fees, which is obviously not sustainable. And if you look back at history, I think we've never been above 1, 000 sats per vbyte, for very few blocks we've been above 1, 000 sats the median fee, obviously you have always the guy that paid 2B coin by accident.

and so that's, that's my calculation. So, but now, so now think about this, right? So here's the problem. So say we get to 1, 000 sats [00:37:00] per vbyte as the new normal. And making a transaction is 200, 000 sats. you have UTXO that are 1 million sats, you can only make 5 transactions, and then it's gone, in fees. So any UTXO below 1 million is basically dust. and so one warning, if anybody's listening and doing the DCA 50 a month and transferring 50 out, that's probably not a good idea. You mined up basically DCA and nothing. and so now, you know, if people have 10 million, even if 10 million sats user Excel, which is, you know, it's not bad, uh, 200, 000 transaction fees is 2 percent fees. And unlike fiat, where you can always make more of it, you can't make more of Bitcoin, which means at some point you're going to run out of stats because of fees. And so fees are really, if I look at the blockchain or Bitcoin, at [00:38:00] a holistic level, the weak point, and I know it's, you know, you have the block size wars, we keep the block size small, which is what causing fees to be high, of course, because of decentralization of the network, but the fees, as far as I can tell, It's the way to attack Bitcoin.

The network is through the fees, which obviously we've been seeing this now for, um, you know, without being conspiracy theorists. And whoever is paying ordinals to JPEG, you know, if I'm a bad, if I'm a bad actor and I say, okay, how do I stop Bitcoin? Plug the blockchain so nobody can use it.

Knut: Well, you don't stop it, you just pause it. And you force people to hodl for a long time. Uh,

Matteo: But so you said, let me ask you this. I know you told me this, but if I want to buy a house in Bitcoin, am I going to wait six months to make that transaction? [00:39:00] You

Knut: well, well, you could make the seller wait six months. You can write

Matteo: viable to me.

Knut: in the contract that, okay, I'm going to buy this house, but I'm going to, I'm not going to pay more fees than this. Are you okay with that? And you can make a deal like that. And also, the thousand sats per vbyte, it's an estimation, I get that.

But there are other ways to pay miners than on chain, which is the problem. And this is also why it's so important for solo miners and smaller mining things to be. To actually be miners and not just be hashers. And the only, about the only way to do that right now is to connect to Ocean. Ocean has no competitors at the moment, like, the alternative is solo mining, I guess.

But all the other pools set their own rules and you don't have a say in the rules. And then, then you're not a miner, you're a hasher. You're selling hash[00:40:00]

Matteo: You're an employee, basically.

Knut: yeah, exactly.

Matteo: You know, I've looked, uh, I've looked into this, again, since kind of Christmas time. I've been thinking almost every day about mining and, fees and what are the second and third. Uh, effects of, you know, we go back to the hash, uh, to the, to the block size wars and we choose to keep the blocks small to fit, um, you know, about the blockchain trilemma, of course, I think there is another, there is a dilemma as well, which is, you can either have decentralization of nodes, or you can have Low fees, which means as many people as possible can access the network.

You can't have both.

Knut: No, and, and, uh, of course you choose decentralization, because if you have low fees but no decentralization, you're back with fiat again.

Matteo: [00:41:00] Exactly. It's a dilemma. You can't. But at the same time, you know, if you have these additional nodes. But then the fees are 10, 000 sats per byte, let's say. Now the transaction is 2 million sats. So basically you, you, you, only Michael Stiller and Coinbase and BlackRock can use Bitcoin. Like whatever you achieve at that point, you know, it's, there's no free lunch.

That's what I'm trying to say. There's

Knut: Yeah, no, no, no, no, and, and, and there is no second breakfast, speaking of Michael Saylor. And, uh,

Matteo: There's no

Knut: we'll, we'll, uh, and there's no fucking brunch. It's a made up word. Uh,

Matteo: like Satoshi.

Knut: It's still a breakfast. It's your first meal per day. Like, you break your fast, it's a fucking breakfast. Like, um, where was I going with this?

I completely lost my train of thought here.

Matteo: the dilemma, you know, the, the, the, the no free lunch.

[00:42:00] [00:43:00]

Zero-Sum Game of Mining

Knut: yeah, so, so this is the thing. Here's another thought nugget for you to chew on when speaking of mining. You know the theory of how Bitcoiners, Bitcoin Moves the shelling point of violence. So the, the basic thing premise is if the asset is in my head, even if I point a gun to your head, you get nothing if you kill me.

So it disincentivizes violence and coercion. Here's, here's the caveat, like, is this true for miners though? Don't miners have an incentive to attack one another? a miner.

Matteo: one another.

Knut: Yeah, so if there's a hangar with, full of ASICs, and there's another hangar full of ASICs, I have an incentive to blow up that hangar full, my, my, you know, I have a double incentive because like, my hash power goes up, and also, his [00:44:00] hash power goes down, so it's a double

Matteo: Yeah, of

Knut: whammy,

Matteo: yeah, definitely. I mean, it's mining is a ultra competitive, uh, environment where it's, it's a zero sum game. Either I mine the block or you mine the block. And, and definitely the more hash power I have, the higher the chance I mine more blocks than you. And the less hash power you have, the still more the chance. so here's another thought that I had a couple of months ago. Then maybe explain why we haven't seen the miners, civil wars, because Bitcoin is a finite asset, right? That means, so imagine we live in a Bitcoin world, there's only Bitcoin. Just imagine that for a second. Now, what happens is all the productivity of the world has to fit into this box called 21 million.

Knut: everything divided by 21 million.

Matteo: Exactly. Now, but wait, [00:45:00] I think it gets better than this. Now, obviously, as, as economic actor, we always want to improve our lives, which means that's why productivity goes up all the time, because I want to make my life easier and you want to make your life easier.

So you got to think about how am I going to make this thing that I'm doing faster or cheaper? And that's how productivity, uh, and that's how technology exists and productivity. So

Knut: Yeah, it's, it's even simpler, like, if you practice, you get better,

Matteo: right. Yeah,

Knut: all prices ought to go down. It's as simple as that.

Matteo: Yeah. It's, it's, it's, yeah, exactly. So now, but think about this, right? I mean, I'm in California. You're in Spain and Luke is in Finland. In the fiat world, whatever you do in Spain and whatever you do in Finland, whatever I do in California, we don't benefit from it. Unless I'm using the product or service that you're working on,[00:46:00] right, clearly. But in a Bitcoin world or in a finite monetary system world, since all the productivity has to fit in the same box, whenever you increase your productivity, I gain from it

Knut: Yes,

Matteo: because my, the purchasing power of whatever Bitcoin I have has to go up to match your extra productivity,

Knut: exactly.

Matteo: which is.

The fiat world is actually the opposite, it's the reverse of that, because there's always more units.

Knut: Well, it has a, it's not the actual, it's not the exact reverse, it has a bit of that. I would say it's a, I, I call it the dog on three legs. It's a handicapped version of Bitcoin, basically, but we do. Since fiat currencies are exchangeable for one another, there is a certain synergy, like, you're, but then [00:47:00] again, there's the money printer, so the system itself handicaps itself, like, it

Matteo: no, exactly is the printing that is the printing that, so when you print, you're making the box bigger and bigger and bigger to think about the, the amount of money in circulation is all in a box and you own a percentage of that box, which is whatever your net worth is in fiat. in Bitcoin, the box cannot get bigger.

In fact, it actually gets smaller every day because people lost the keys and, you know, let's just say that box is fixed and you have to stuff more and more productivity in it. In the fiat world, they can make the box grow faster than the amount of productivity that goes into the box, which is why we have inflation.

Knut: yeah, I would say you and Luke benefit from my productivity whenever [00:48:00] inflation is slower than the increased productivity of mankind.

Matteo: Of course,

Knut: So that's why I say it can be, yeah.

Matteo: which is the, yeah, but, which is the whole point, which is how inflation even, um, um, exists. It's only if you print more money than the velocity of productivity. You have the velocity of money printing that has to be higher than the velocity of productivity, and now you get inflation. If, if the money printing is lower than the productivity increase, you get deflation.

Knut: This is why, why prices were so stable on the gold standard, because the increased efficiency in finding new gold was what, yeah, was about the same as the increased productivity and everything else. And Bitcoin is a completely different beast. Because bitcoins won't. So it's not digital gold. It's, it's so much better.

Yeah.

Matteo: but it's even better because when you think about it, [00:49:00] people lose sats, whatever, every day. So actually it's not even fixed, it's the box itself is shrinking, which means your percentage of the network increases unless you lose the keys. And so this process is even faster, but anyway, so back to the miners, right?

Obviously miners get put in Bitcoin. That's all there is. And so maybe one of the reasons why they don't go and blow up each other, um, facilities is because they know that now, of course, the money is a very unique environment when it comes to Bitcoin, but maybe one of the reasons is because the amount of Bitcoin that they own increases is a very Whenever somebody makes Bitcoin better in some way, shape, or form.

But I haven't thought about mining, uh, in terms of violence, to be honest with you. Uh, that's the first time I've heard that. But it kind of makes sense,

Knut: Yeah. I, I, I spent a, uh, a bit of time thinking [00:50:00] about it and I think miners do have an incentive to, to keep Bitcoin working, uh, long term, but they also have,

Matteo: Bitcoin.

Knut: Yeah, but they can also get paid in fiat, and this is why it's so important for a miner to be an actual miner and not just a hasher for a bigger pool, because the thing that happens is like, so, the pool participants The hashers, they, when they see that a pool is getting too large, like it's approaching 50%, then they need to switch pools.

And they usually do that because they're afraid of Bitcoin being taken over by one pool. The problem is they don't know the ownership structures of the pools. So the same entity may own both of the biggest pools, which is what, like, look, yeah, yeah, may, so, so this, this may or may not be a problem. If it's true, it's definitely a [00:51:00] problem, and we should be, stay vigilant and do what we can to, to like, protect Bitcoin, because Bitcoin is precious.

The, the experiment cannot be replicated. We cannot have a Bitcoin 2. 0. This is it. Life is not a rehearsal. Bitcoin

Matteo: We have one shot at this.

Knut: One shot. So, so it's, it's very important to, uh, if you're a miner to, to, uh, Act morally, if not for anything else, then for your own survival, your own long term survival, is entirely dependent on you knowing where you direct that hashing power.

Matteo: Yeah, the, the, uh, again, I didn't know much about mining until two months ago, and then I went so fast into the, yeah, miners getting paid out of band

Knut: It's a problem.

Matteo: uh, is definitely a problem. Uh, I mean, miners, it's actually the pools that get paid out of band. Um. It's,

Knut: they are the miners. They are the miners.

Matteo: [00:52:00] that's true, they're the miners. yeah, no, there's, uh, there's definitely a lot of shenanigans going on then.

If you never look at mining, you have a different view of Bitcoin. Once you start looking at mining, I think you get more nuanced and a little bit more realistic. About, uh, the Bitcoin, the ecosystem, and maybe I shouldn't have done that, but I have

Knut: Well, well, there are, it's not simple though, and I don't think this JPEG bullshit is some sort of sustainable long term attack. I just don't, I just don't see that happening. I think there's There's some risks to it involved and like it might reduce the functionality of Bitcoin somewhat for a certain amount of time, but I don't see it as a sustainable thing.

And also, miners getting paid off band, like, Everything in an economy is connected. There is no such thing [00:53:00] as a circular economy. Uh, we all Bitcoin transactions are usually you're buying something that is not another Bitcoin. You're buying something outside of the chain, right? So, so, so everyone was always going to be paid in something that wasn't Bitcoin.

the problem here is like that, that the, these mining pools have a, another. Incentive than to just like provide hash power to make the best monetary network ever created secure. uh, and get paid in new Bitcoin. They also, the thing is that they're not Bitcoiners because they don't see how precious those Bitcoins are.

They, they are fiat minded. They want to grab as much cash as they can, as fast as they

Matteo: absolutely, yeah, there is a lot, uh, you know, now that I've, you know, that I had this company for almost two years now, I've actually spoke with a lot of companies in Bitcoin, and I can tell you, there's a lot of Bitcoin [00:54:00] companies. There are no Bitcoin companies. you talk to some companies because I was trying to build my payment infrastructure. Uh, for the Bitcoin, uh, for the Bitcoin membership, and I took to some companies that I was kind of fond of it before I get into, uh, this business, like, oh, yeah, you have to KYC, like, what do you mean I have to KYC?

What's the, what's the point of doing Bitcoin and KYC? What is the point? It's like, it's like going to a vegan restaurant and asking for a steak. They just go to the steakhouse, but they would just throw, I actually got angry one time and got the call. They would just throw KYC like it's nothing. I said, oh yeah, you just KYC.

That was the problem. I said, are you serious? Anyway, so yeah, there's a lot of, uh, there's a lot of fiat people in Bitcoin, more than, than I could ever imagine. And, uh, you know, don't [00:55:00] trust verify. Let's put it that way.

Knut: Well, it's going to take a hard, it's going to take a long time for people to, to get out of the fiat mindset. It is, it is a very tricky thing to do because you're programmed to think that money is one thing. And now all of a sudden you have to think that this other thing is money. It's the very, most people can't like get over that threshold.

They think of Bitcoin as something that they deal with in order to get more dollars and not the other way around.

Paid vs Free Products

Matteo: Yeah. Yeah. And, you know, I give you an example, you know, again, orange pull up is completely paywall, right? No free trial, no freemium. And I, which obviously is very unique business model. And I can tell you that, especially now less because people, you know, people have learned kind of, but at the beginning it's like, wow, why, why should I pay for, for, for this? And when you think about it, this is the most fiat mindset ever. [00:56:00] Why should you pay for somebody else's labor? Like, are you serious? Like, like, Bitcoin, you know, actually come out with this kind of When it comes to business models, you have two kind of business model. You have the honest business model, which is Hey, do you want this?

Pay for it. Use it. Get that. You know, do you want this steak? Great. Here's 20. And then you have the, so you pay up front, you know what you're getting. It's transparent. And then you have the dishonest business model, which is everything is free. Don't you worry. We might steal your data and sell it to the biggest advertiser, but it's, you know, and it's, it's.

It's by definition a dishonest business model because you don't know what you're paying for, you don't know what, in fact, when you don't pay for something, you're most likely going to end up paying more in some [00:57:00] indirect ways. And, uh, yeah, the fiat virus is very prevalent, without a doubt.

Knut: the saying goes, if it's free, you're the product, and the add on to that is, if it's publicly funded and quote unquote free, it's not free at all, but you're still the fucking product. Yeah,

Matteo: it's, uh, yeah, it's, it's, that's a trick. You see, that's a trick of fiat world. They trick us, especially in Europe, free healthcare,

Knut: yeah, yeah, yeah, yeah.

Matteo: It is not free, number one, because the teacher, they still need to get paid.

Knut: Yeah.

Matteo: And then. You see, this is a thought that I had many years ago because now I live in the U.

S., but I'm from Europe and from Italy, but I can't tell you how many I do when I go into people. Oh, but you guys have to pay for our healthcare. Isn't that crazy? It's like, you [00:58:00] know, obviously everybody pays for healthcare and I'm not defending, by the way, the insurance model, but that's a different story. But if I'm the government and I want you to have more power over you, me giving you free stuff is how I get you to be more dependent on me and I still charge you.

Knut: Yeah.

Matteo: I still charge you with taxes and inflation, and I, it's the perfect, it's the perfect robbery, actually. I give you something that you think is free, I get more power over you, because now you need me more than before, and I still charge you. And people will go out and defend me. It's,

Knut: Yeah. Yeah.

Matteo: it's perfect.

Knut: It's so ridiculous. There is no second breakfast, as we've been through already. There is no second breakfast and people, the only reason that they can get away with calling it free is that the media is state funded or [00:59:00] state subsidized.

Matteo: The media, the education, it's everything.

Knut: and like, it's so depressing, like people actually vote for higher taxes.

Like how gullible can you be? Like.

Matteo: They, they don't, I mean, they, they don't, they don't, they don't even know. You know, I, you know, I call this the fish and the water problem. Have you heard the story? Two fishes, they bit in the morning, and one goes to the other. Hey! How's the water today? And the other goes, water, what is water?

Knut: Yeah, exactly.

Matteo: When you are in water all of your lives, you don't even know they can, what is water. And so people don't even know what is the government. They just think, Oh yeah, sure. Education is free because, you know, we pay taxes. It's, it takes a long time and a lot of time. It takes a lot of reflection and, and, and study and even the willingness to be saying, Oh, I've been [01:00:00] wrong all my life. And all the people I know have been wrong, it's kind of hard when you, you know, it takes some kind of person to say, hold on a second, have you all been wrong here?

Have you all been fool for decades or my life? You know, it's not easy. I can understand, you know, I can understand why people don't want, and also why, as you know, the last thing people want is to be wrong.

Knut: And what's that Mark Twain quote? Like, it's easier to fool a person than it is to convince him that he has been fooled. I think there's a lot to that because people don't want to be wrong and they don't want to, yeah, so it takes courage and self criticism and those are scarce assets.

Matteo: The various guys, yes.

[01:01:00] [01:02:00]

Orange Pill App's Road Map

Luke: rabbit holes and all this, firmly interesting. From my part, I like the direction you guys have kind of taken it. But from my part, I just want to pull things back into the Orange Pill app space of it all.

 [01:00:54. 462] year for Orange Pill app? What are you hoping that the app does and any hints at big things coming up?

Matteo: Yeah, so 2024, uh, you know, again, 2023 was our first year and, you know, we had to battle with Google and multi billion dollar public company. So it was not, you know, it was not exactly a walk in the park. but, you know, we, you know, it was a [01:03:00] great year and, you know, we grow from zero to almost 9, 000 members now. So 2024, you know, we just launched merchants. Uh, which in my mind was the last big piece of the puzzle that they were, there's the first piece, which is the networking. So one-on-one I found nearby Labs. I contacted them. We got to get a beer or because our conference together, whatever. And then we had the events, which we built last year.

All the meetups, all the, in fact, I think we're already the biggest repository of Bitcoin. Only events in the world is orange. So we have 300, 400 of them. And any given day on the app. And then the last piece was merchants. And, you know, again, just launched. And now we're going to build the web app, as we mentioned before. We're also going to build an event ticketing feature. And so you could, you [01:04:00] could be selling tickets to your meetups, conference, could be selling tickets to their, to the conference. And this is all. In Bitcoin, because my goal is to, my goal is to speed up Bitcoin adoption, basically, that's, that's really the goal here.

How do we speed up Bitcoin adoption? And obviously one way is to give more tools to people to find each other, uh, do business with each other. You know, the ticketing, it's You know what's funny, uh, a story I just heard a couple of weeks ago, which blew me away. There's this guy that I, that I, you know, I send message to as much members as I can.

And this guy told me, Oh, I don't even have Bitcoin. And I'm like, what do you mean you don't have Bitcoin? What are you doing here? You're paid to be on an app that's for Bitcoin. And he told me this. Well, I've been hearing about bitcoins for years, but I don't know anybody in [01:05:00] real life to talk about bitcoin.

So I used your app to study bitcoin, and now I own bitcoin. Which is like, it's completely mind blowing. But yes, I wanted to make sure it was not a scam, and I wanted to talk to people in person, and I didn't know anybody. So I used your app as a no corner, and then I became a bitcorner. Which is kind of, you know, which is, yeah, it's something, you know, that's, that's You build a technology with one purpose, and then people are going to use it in ways that you can never fathom.

Uh, like this guy is like, cause you know, when I built this app, I took it, this is the app for the Bitcoin maxi. People that have read all the books and all the podcasts, and they don't want to listen to other posts, and they want to go out and actually socialize and build maybe a family or friendship or a company or whatever it is.

And now I see people, and this is, I mean, this is an extreme [01:06:00] case. The guy doesn't even have Bitcoin, but I've heard of people that they basically use orange pill up as a shortcut of education, but you can go and listen to all the Knut podcasts and all the Michael Saylor and all the real love and all the safety, which that's what I did, right? Or, you can go on orange pill app, and then, because they're all Bitcoin maxi, and the Bitcoin maxi, they love to teach newbies about Bitcoin. So they go, and they, and they find, hey, can you tell me about money? And they love it. So they use orange pill app as an educational tool to like, because, you know, Knut obviously has a vast knowledge, but you can't get to Knut and not everybody can get to Knut, right?

It's very, you know, obviously time is scarce, but there is, there's thousands of Knut kind of level big corners around the world that are not public, but they have all this knowledge and now you can find them. Even if [01:07:00] it's online, even if they're not nearby, because you just need the information, the knowledge.

And so there's all this, uh, element of, speeding up the adoption of Bitcoin and giving more tools and also making the network more resilient. Again, if I know the butcher where I can get my meat, And we get CBDC, and the government say, you know, you can't have more than this amount of meat per week or per month because climate change, whatever, whatever.

I don't care, but I need to know where is the butcher. I need to have that connection first. And so that's, you know, that's one of the goal of the app. Create connection so we can be. Uh, we can step out of the fiat world.

Knut: Mateo, you've said before that the goal of orange pill app is to make orange pill app redundant. So, so like you're accelerating, uh, hyperbitcoinization. So when, when we're actually all Bitcoiners. There's no need for orange [01:08:00] pill app because then everyone's the same anyway.

Matteo: Yeah, there's, um, there's an argument, there's an argument there. Personally, I believe hyperbitcoinization, it's, it's, it's not next week or next month or next

Knut: No, no, no, but, but, but it's a fun, uh,

Matteo: years.

Knut: yeah, but it's a probably many generations, but it's a fun thought experiment, uh, regardless. So so I was thinking about that when we talked about, um, on honest miners and stuff before, uh, and you know, being bribed outside of the chain and everything. So, and when you talked about that, no coin or just going on orange pill app to find Bitcoiners.

Like, would you define that person as a Bitcoiner before he had Bitcoin? Like, maybe, right? Like, what is a Bitcoiner? It's a, it's a very strange, abstract term, but I think there's an argument to be made that a Bitcoiner is a person that, uh, [01:09:00] holds honesty. Uh, higher than anything else, in higher regard than any, any other behavior.

They want, we, we love honesty, like, we want honesty everywhere. So that, that, that leads to another question. Um, if, if hyperbitcoinization happens and everyone's using Bitcoin. Orange pill app is redundant, but isn't Bitcoin itself redundant too if everyone's honest?

Matteo: Yeah, well, I can tell you this. I can tell you this. I was talking to an investor last week, and he's in Bitcoin, but he's not really in Bitcoin, right? And I asked the guy, what is the percentage of people that are pro honesty, pro freedom, anti government, anti state? would you say is the percentage? 1%? 2%?

3%? Like forget about Bitcoin, right? If you ask, [01:10:00] if you go on the street and say, Hey, do you think the government should be bigger or smaller? Do you think the government should tell me, uh, what vaccine I need? Or, you know, there's definitely a percentage of people in the world that don't like that. And I told the guy, look, these people are all Bitcoiners, even if they don't own Bitcoin.

They just don't know yet that Bitcoin is the tool to get what they want.

Knut: Yes.

Matteo: And you know, so I told the guy, look, it's very reasonable to think that at least 1 percent of the world, it's anti government, pro freedom, pro honest. It's probably more, but let's just 1%, that's 80 million people. Now, Bitcoin Maxi today, or whatever you want to call them, I call them Bitcoin Maxi. It's probably half a million, maybe 1 million, maybe.

So, so I sent a tweet actually after this call, I say, okay, so if 1 percent of the world is [01:11:00] eventually going to be a Bitcoiner and now it's only 1 million, that means the price of Bitcoin has to go up 80 times, because we're going to go from 1 million Bitcoiners to 80 million Bitcoiners, if you only get 1 million, sorry, if you only get 1%, right?

but, uh, but do I think that everybody's going to be honest? No, it's, that's not human nature. do I think everybody's going to be a big conner? No, if I'm honest, there's never going to be a world. I mean, if you study enough history, um, you see these over and over again. There is always people that want more government, there's always going to be people that choose security over freedom.

That's just in human nature and there's, the minority are choosing freedom over security. I don't

Knut: Yeah, well,

Matteo: a society where,

Knut: [01:12:00] perceived security, that's what they're

Reality and Incentive Structures

Matteo: yeah, in their mind is security, you know, um, because you can say reality is only perceived, right? You can say reality

Knut: Yeah, yeah, yeah.

Matteo: It's what you think is reality.

Knut: Here's another rabbit hole.

Matteo: Yeah, there's, there's another Robby Hall, but so, yeah, so there's, in my view, look, there's always going to be a need in, because of human nature, there's always going to be a need for a tool to find people that are in the minority, pro honesty, pro freedom, anti government, no matter what. Now, Bitcoin could be 10 million and Bitcoin could be the global reserve currency.

That's not going to change human nature.

Knut: Somewhat. It's, if you remove the, if you move the shelling point of violence and change the incentives, it's

Matteo: It changed the incentive. Exactly. It doesn't change the human nature. You don't change human nature. [01:13:00] You can change

Knut: do you draw the line?

Matteo: You can change the incentive structure.

Knut: No, it's, uh, no, that's why we're in this, I guess. Like, we've, we see a, we really do see a brighter future here.

Matteo: Yeah, we have a tool now. We have a tool for the first time, at least in my lifetime. We have a tool to achieve what we always wanted, which is more freedom, less surveillance, less scrutiny, less restriction. The internet was supposed to be this, but obviously the internet has been captured completely.

Obviously, um,

Knut: completely. It's

Matteo: well, compared to the original vision, it's pretty much,

Knut: yeah, but it's still better than only having landline phones, you know?

The Problems with Nostr

Matteo: yeah, but, but, but the internet was the tool that was going to liberate humanity from government. Oh, [01:14:00] we can now find each other. We can now communicate with each other. And then you have the NSA and then you have Facebook and all this big tech and, why? And again, and this is one of the reasons why I'm not exactly bullish on Nostr is because the internet. Did not have economic incentives embedded in the protocol. If you remove the economic incentive of Bitcoin, Bitcoin dies tomorrow. Literally, there will be no mining. There will be no nodes, except some cyber punks. I mean, the reason why people get into Bitcoin is number go up. I mean, that was my reason.

I don't know about you guys, but I think 95 percent of people would say, okay, yeah. And then you, you know, come from the, come from the gains and stay for the revolution. The internet didn't, because it was free to use and anybody could use it, there was no cost to use it, it got captured by big tech and big [01:15:00] government. and, and that's kind of one of my criticism of Nostr, which I, align in to, I align with Nostr on the principles. I, I don't, I see three problems with Nostr. You want to get into that? One is psychological, one is technical, and one is strategic. Thank you. so the psychological problem is this, right?

Why do people use social media? There's two reasons, as far as I can tell. One is to consume content that is not available elsewhere. So TikTok, short, addictive videos. You can only find them on TikTok. Instagram, beautiful women and places. It's like all rosy. It's on Instagram. Twitter used to be, and now it's getting deeper, but it was.

Uh, short form, either very funny or very intelligent content. So [01:16:00] reason number one, because if you could find the tweets on, on, on CNN, you wouldn't need Twitter. You just go on CNN. Obviously, CNN doesn't do that. That's different kind of content, so that's why you have Twitter. So number one is to consume content that is not available elsewhere.

And number two is to propagate your ideas as far as, as wide as possible. So you can have your ideas and you can tell your wife or your husband, your friends, your children, which, okay, great. It's 10 people, 20, or you can be on Twitter. Let's, let's take Twitter, right? You can be on Twitter and all of a sudden you have a thousand people or 10, 000 or a hundred thousand. And that's what social media enables you, right? So, one, consume unique content. Two, increase your idea propagation reach. Now, if you look at Nostr, obviously it fails on both counts. Because they, you know, I spend a lot of time on [01:17:00] Nostr. I would say probably 90 percent of the content that I can find on Nostr.

It's also on Twitter because everybody is so much on Twitter, right? There is no need really to go on Nostr to read Linh Alden's thoughts when I can, I'm already on Twitter, I can already see that, right? There is nothing unique in terms of content on Nostr. And then the reach is maybe 1 millionth of Twitter.

So obviously there's no need, I mean, the, the There's no value for me to send, uh, my thoughts that I want to propagate, because, you know, there's a, the meme propagation or it's evolutions and the filtering, you know, the, the, the Richard Dawkins move, right? You want to propagate your genes and you want to propagate your memes, which are your ideas.

That's what humans do. And so now I go on Nostr and I have one millionth of the views that I would get on [01:18:00] Twitter. And also I, there's really nothing unique on Nostr that I cannot find elsewhere where I'm already have. So that's number, probably number one,

Knut: Well, well, let me interrupt

Matteo: a big problem, by the way. Yes, please.

Go

Knut: yeah, a short, a short interruption there, because, uh, I think the idea is, uh, it's doubled now. But also if Lynn Olden, or anyone else, gets shadowbanned on Twitter, you'll still find her on Nostr. So it's like a safety net that people have both, because they can also, it's also easier to detect if something's wrong with Twitter if you're also on Nostr.

So that's like the devil's advocate argument for that.

Matteo: You know, a good, a good, a good example, a good analogy that I had once is like Nostr is like a gun. I have a gun in my house because I live in the United States, so I need a gun. Because everybody's got a gun. So I need to protect myself, okay? But I [01:19:00] have a gun in my house. I don't use it and I don't want to use it, but I definitely want to have it. To me, this is the, this is the clearest, uh, definition of Nostr. I have a Nostr account. I don't want to use it because there is nothing unique there. The reach is very small, but I definitely want to have it in case something goes wrong with Twitter, which obviously is very unlikely because you have the economic incentive.

But yeah, if Twitter tomorrow gets shut down for whatever reason, or Elon Musk loses mind even further. And so, you know, I have to go fight yourself, Twitter, I'm going to shut it down. Yes, Nostr is going to bloom, it's going to be, I'm glad there is a, I'm glad, I'm glad I have a gun in my seat and I'm glad there is Nostr as an option, but it's not what I want to use every day.

Because the reason why I'm on social media is, again, unique content and propagate my ideas as far as I can. Um, so that's the first problem with [01:20:00] Nostr, which Which is the problem of all the network products, why it's very hard to disrupt network products because of this reason. But now obviously, you know, I have, I had the same problem when I launched Orange Pill Up, which is why we don't have a feed on Orange Pill Up.

And we're never going to have a feed, no matter how many people ask me about the feed. Because the last thing I want is to compete with Nostr, let alone Twitter. The moment you step in that ring, it's game over. Because people are going to think, people, this is how the humans, this is how the human brain works, right? We do trade off analysis all the time in our brain, subconsciously. If I'm talking to you, I'm not talking to Luke. And I'm talking to my wife and I'm not going for, it's trade off all the way down. so the, the humans are really good at doing this in the background. So if I'm on Twitter, I'm not on Nostr.

If I'm Nostr, [01:21:00] I'm not on Twitter. Now, of course, we already talked about why Twitter is way better. Anyway, so that's problem number one. Problem number two is the technical aspect of, censorship resistant, which Censorship Resistance is just a service that is provided to you by somebody else. In the case of Bitcoin, it's a service that is provided to you by the miners and the nodes. Up paid in big, there's an economic, uh, component because nobody does, not nobody, but most people don't do nothing for free. Um, and Bitcoin works because there are no free rights. Everybody has to pay to access the network no matter who you are. The net the network doesn't care if you're Michael still or if you are the player with one size, it doesn't matter.

You pay the access. Now that economic value is now used by the people providing you the censorship resistance, and now [01:22:00] you get to, you pay for the access, you pay for the service. So on Nostr, everything is free, which means the relaying clients have to come out with their own monetization models. Because obviously it costs money to run the nodes.

It costs money, sorry, it costs money to run a client. It costs money to run a relay. I actually ran a relay for a couple of months because I actually wanted to learn, which is why I know that a lot of clients are dropping off and there's a little bit of censorship already. Without the economic model, you don't get the security model. because the security model costs money and the only way to get it, if you have an economic model, which is the genius of Satoshi. Figuring out that you need to have a token that has value. Well, it didn't have value, but you need to pay the miners in some kind of form. And so Nostr doesn't have that.

And you can say, well, but you can pay for relays or you can pay for clients. Yes, you [01:23:00] can also pay for a blue check on Twitter. Does it mean anything?

Knut: Okay, a couple of questions here. Like, first of all, when you say consume content, Another way to express that is listening to other people. That's all you're doing when you're consuming content.

Matteo: Listening or watching a video or, you

Knut: Yeah, but even if you're watching something or you're a video or a picture, it's, it's someone communicating something

Matteo: Sure. Yeah.

Knut: Uh, and that might be the person's intentions are mostly unknown to you. They might be selling you something, an idea or a product or a service or whatever.

Matteo: Yep.

Knut: But you, you,

Matteo: an agenda.

Knut: yeah, uh, but you, you do consume content because you know that the only way forward in life is to get information into your brain and, and, uh, filter it and something will pop out the other end, hopefully.

So you can give something back.

Matteo: [01:24:00] come out of it, no matter what. We don't have, we don't have a choice of not being influenced. There's no such thing as, we're all influenced by, by ideas and a lot of stuff. Even the weather and everything else.

Knut: Yeah, yeah, yeah. Well, you can go up in a mountain and be a hermit and, uh, live in a cave that's, like, the furthest away from

Matteo: You don't,

Knut: of others you can get.

Matteo: up there.

Knut: No, probably not.

Twitter and Blue Checks

Knut: So what do you think the, the, the Twitter, one of the first things Elon did with Twitter was this, uh, blue check mark thing that all the celebrities got pissed at because now they weren't special anymore.

And it's just 8 please. Uh, do you, and it's very similar, it's similar to orange pill apps. So, so do you think that was a genius move and do you think it will help free speech? Like what, what does it do?

Matteo: Yeah, so, yeah, if you look at Elon Musk, right? think, I mean, obviously I'm not in his mind, but I, as far as I can tell, he really cares about humanity, and he [01:25:00] really cares about free speech. And, I mean, he's literally been on stage telling the CEO of Disney to go fuck himself because he was trying to censorship.

Knut: so epic, I had a tear in my eye and goosebumps, I fucking loved it.

Matteo: He has a few money. Let's, let's put it that way. That's what happened when, when you have a few money. So now, so where does censorship come from? Think about it. Where, where does censorship come from? So you have two places that censors come from. One is your own morality, right? So you say, well, I am, uh, very religious.

So if you're an atheist on my platform, I'm going to ban you. Cause I, I, I don't like your ideas. I don't want your ideas to propagate.

Knut: But that's not censorship.

Matteo: Well, I'm talking, if you are, uh, Elon Musk operator, if you, if you run a social network on a social network, you can, obviously we have our own morality. You can say, well, I don't like these people, [01:26:00] so I'm going to block access to my platform.

So I censored them. Now, I know you can say it's my platform. I do whatever I want. But if you look at the example of Twitter, right?

Knut: Yeah, yeah. But if

Matteo: And before, before Elon Musk, I mean, that was obvious, like all the people that got banned because they say women cannot be men. That was completely ideological, right? So, censorship comes from two places.

Your own morality, or whoever is pulling the string morality, and advertisers. That's it. There's no other place, or the government.

Knut: government is the biggest, biggest, uh, sinner here, I think.

Matteo: Yeah, so the government obviously, as we know now, the government was telling Twitter, ban this guy, or de plast him, okay?

Knut: Well, okay, these are all interconnected, because like, the, uh, the more fiat, the fiat monetary experiment runs, the more important it becomes to be, to be, uh, to be politically connected. [01:27:00] And Virtue Signal that,

Matteo: to appease the money printers.

Knut: yes, instead of actually providing value to your fellow man. So, so, like, that's, that's clown world.

That's what it is. That's why we see these weird things and people focusing on weird issues. It's because it's more, it's more lucrative for them to be political than to actually provide value.

Matteo: Exactly. So back, so back to Twitter and Elon Musk. So obviously we now know that Disney pressured Twitter to censor some content. That's clear. And one of the reasons why we're never going to have ads on Orange Bluff, by the way. It's also one of the reasons, right? Because the moment you add ads, what is ads really?

It's somebody paying you to perform a certain action. We go back to the economic incentive. The more I get older, Knut, the more I realize that all of the money, explain almost everything,

Knut: Absolutely.

Matteo: [01:28:00] all of the money It's, it's, it's, it's, whenever you look at the world and you don't understand, just see where the money are and you're probably going to end up finding the truth.

Anyway, so, so now Elon Musk said, yeah, so the way to escape the advertiser, uh, uh, power over a platform is to charge people to use the service. Cause obviously running a Twitter costs, I don't know, probably 50 million a year or more. I don't know, but, uh, obviously, so there's a cost. The cost, who paid, so here's something that you and I talk about this.

Whoever paid the cost has the power. I repeat, whoever paid the cost has the power. And if you don't pay the cost, you definitely have no power. The person that pays the cost has power over you, in this case the advertiser, or the platform operator that has to pay the bills. For the relay or the client on Nostr, it [01:29:00] makes no sense to me that I need censorship resistant because I have some specific communication that I cannot put on Twitter and I go on Nostr and I want this communication to be propagated, but I'm not paying for it.

How does that make any sense?

Knut: It

Matteo: How is that a scalable model? How, how can there be a scalable model? It's just, it doesn't make any sense.

Knut: Am I correct reading between the lines here that you're telling us to drop Orange Pill App as a sponsor of the show and start charging people to listen to this thing instead?

Matteo: You should, if you could, if you could, if you could do that, it would be, obviously, you know, we're friends, so, but definitely yeah, of course. If you, I, I give you a perfect example. Um, I have my own morality, of course, and let's say you start shielding Ethereum, you can bet your ass that I'm going to drop the advertising the moment I hear you [01:30:00] shielding Ethereum.

It's my duty, it's my duty to now fund things that I don't like. It's not just my duty, it's strategic.

Knut: Of course. But this is the thing, uh, if I may interrupt again, like, this is why I think the morals are slightly different when it comes to this type of pod. Uh, and advertising and in, with Bitcoin companies in general, because we're, we are incentivized to help one another and we all benefit if each from each other's success.

And still we have to be picky in the Bitcoin space as well with our sponsors because we, we really do want to, to, to use only sponsors whose products we actually use. And, and, uh, That's, that, and, you know, there are so many pods where you can tell that that's an absolute lie when, when they say this, you know, this ball shaving kit is the only [01:31:00] ball shaving kit I use, like, I mean,

Matteo: How do you know? The trust don't verify.

Knut: so, so, um.

So, so that's, I think this is a different thing, and it's also, like, we want to help. If we can help, we want to help.

Orange Pilling Every Day

Matteo: It's amazing because we live in this system called Bitcoin, that the more people, so I think if I, if I just look at the, from a profit motive, right, I just say orange pull up is successful. If more people are in Bitcoin, clearly, except that guy, more people get into Bitcoin because more people listen to Knut, by definition, you're orange pilling people every single day. Your content is listed every single day, and whether it's one or a thousand or a million, every single day somebody listens to you and the lights goes on. And now eventually that

Knut: [01:32:00] What

Matteo: person might end up in orange pilling because, sorry,

Knut: It's just exhilarating.

Matteo: um, which one?

Knut: Of orange pilling someone every day, like, if that is true, like.

Matteo: it has to be true.

Knut: It's beautiful.

Matteo: It has to be true. Your tweets are orange pilling people every day. Your content is orange pilling people every day. It is, you know, it's It's um, and so I benefit from Knut and you probably benefit from me because one, I tell people to watch your show because you might have an episode that goes, you know, like the one with the Jakum about the ordinals and the sats and also because the more people are getting to Bitcoin and now they have friends into Bitcoin and then somebody listen to your show and tell one of their friends to, it's so, it's all a flywheel that we all participate, even if we're not connected. Yeah, [01:33:00] it's magical. It it's magical. It's it's incentive structure.

Knut: It's the thing you talked about before. It doesn't matter that we're in different countries. We all benefit from the success of Bitcoin. And by proxy, then we all benefit from the success of other Bitcoiners, regardless of what their business is,

Matteo: Ab absolute. Yeah, absolutely.

Knut: as long as they're not fiat in it for the fiat gains.

Matteo: As long as it's now, it is now Ftx

Nostr Critique

Matteo: last piece, last, last, last criticism of No sir. And this is devil's advocate of course. there's also a strategic element. So I've learned about Bitcoin mostly on Twitter. I mean, not that I've learned mostly, but I've, I've heard about it on Twitter and I've got, I follow you on Twitter before I listen to your podcast, right? Twitter is the battleground of ideas. Global is where ideas can shape, where ideas can share. And again, we go back to.

The propagation of ideas, right? And [01:34:00] Bitcoin adoption is, let's say, 1%, so 99 percent of the people have no idea what Bitcoin is, or they don't like Bitcoin, or they believe Bitcoin is a ball in the ocean and a kid in the well. Whatever, whatever. So now, with Nostr, you take There's only Bitcoiners, pretty much, that talk about each other as Bitcoiners. Now these people are outside the battlefield. I want, so let's say Matt Odell, right? Which big noster and great communicator and very smart guy. Do you think that Odell is, is best, uh, place in a in no. Or on Twitter? If I just look at Bitcoin adoption, I want big, I want to del in, in the battlefield. I don't wanna del on, on a top of a mountain with 10 big corners talking about how beautiful his. It's, it's a strategic mistake to take your best players off the field. [01:35:00] The field, it's Twitter and YouTube and LinkedIn and mainstream media, it's not Nostr. Nostr is like, oh, we already won, everybody's a big conner, now we can talk about, but we're not, you know, we're 1 percent adoption rate. battle has not even begun. So, by going on Nostr, you, you, you suck away some of these players, some of this talent, and you kind of hide it in a room, and now, it doesn't really help Bitcoin.

Knut: Well, yeah, um, there's, I slightly disagree with that. I think like, uh, though it's a loss for Twitter to not have Odell or Gigi there as much anymore, uh, it's definitely a loss, but, uh, I still think they're, they might be, you know, tired of that whole thing, I mean, um, Getting a lot of followers on Twitter is not a, it's not a positive only, uh, [01:36:00] like the more people that know about you, the more, the more at risk you are of running into psychopaths, you know?

So, so I can understand why people don't, don't want. Want to limit the amount of attention they get because it's, it's sort of a fame or recognition. It's sort of a beast that once, once you released, you can't tame it, you don't know what will happen, you know, the stress and effect and everything like, uh, so I can clearly see why people see that.

Oh, holy shit, I'm becoming famous. I ought to stop this immediately and try not to be.

Matteo: Now that's, that's, that's, that's great, but that's nothing to do with Nostr. You could just stop tweeting. Um,

Knut: you can stop tweeting, but then if you still have an urge to shitpost, like, Nostr might be a good alternative because I guess the ratio of psychos on Nostr is still smaller. I mean, or let's put it another way. There are, there are, there are real Bitcoin psychopaths on Nostr and not, [01:37:00] not, you know, fiat psychopaths.

So, uh, uh,

Matteo: That's, that's true. But anyway, so these are my three These are my three, uh, criticism or problem that I see with Nostr, and hopefully somebody smarter than me go and figure out how to, uh, because ideally it would be great. If you have a platform just as powerful as Twitter, that is not controlled by a big tech, even if it's Elon Musk, it would be beautiful if we had that tool.

The same way, it's very beautiful that I can send you any amount of money I want with one click. It's amazing. And we have it with Bitcoin and obviously fiat, it's the opposite of that. It would be great, but the difference that sending you money doesn't require network effects, but me being on social media required network effects. And so [01:38:00] that's, you know, we go back to the three problems that I explained.

Jack Dorsey

Knut: Yeah, hopefully we can both, uh, pick some better brain than, brains than our own, uh, than our own on, uh, about this, these topics on Madeira, where we'll be talking to, uh, some, a handful of jacks, uh, about this, hopefully,

Matteo: Yeah, I know, Jack Dorsey would be great. I had a little bit of, I don't know if you know this, but he summoned me on Nostr a couple of months ago. He said, you should come on Nostr to debate, kind of, you know, and then I went, my, my, my arguments were not as, as refined as they are now. It was like back in February, like very early days. uh, I would love to be wrong. Honestly, I don't criticize Nostr because I don't like Nostr. I criticize Nostr because I see the problems and I don't see the solution to those problems. But I would [01:39:00] love somebody to tell me, no, no, look, this is how it goes, this is what's going on. I would love that. I would love, I would love nothing, I would love nothing to be wrong about Nostr.

Knut: Yeah, so if you want Jack Dorsey to come on to the Freedom Footprint show and debunk all of Matteo's arguments, leave a comment below, like, subscribe, and click the bell button, brush your teeth, and read a good book every now and then, and yeah, we'll make it happen.

Matteo: Thank you. Thank you very much.

Wrapping Up

Knut: Matteo, we've been going on for almost two hours now, which is a bit longer than we usually do. Uh, but I absolutely love this conversation. It's always good to catch up. And, uh, yeah, we'll see each other soon. I'm looking forward to everything, everything Orange Pill app, and everything we have, every good thing we have coming in the future.

And I have a feeling there's a lot. So, thanks a lot. And, uh, before we've, of course, we can find you on orangepill app. Where [01:40:00] else can we find you? On Twitter, I guess? Not so much on Nostr.

Matteo: Uh, I don't have a Nostr account myself. I have one for Orange Blup. Uh, yeah, on Twitter, the Orange Blup is Orange Blup. And then my personal one, uh, it's Matteo, M A T T E O P E L L E G. Um, and that's my personal one. And, uh, obviously, OrangePillApp, you can always find me. I'm very, uh, receptive there. And hopefully, I'll see you, a lot of you.

I know I'll see you guys in Madeira.

Knut: Great. Take care and say hello to Brian.

Matteo: Thank you. Thank you, guys.

Luke: has been the Freedom Footprint Show. Thanks a lot, Matteo, and thank you for listening.