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Peter McCormack: Hi Jack. How are you doing mate?

Jack Mallers: I’m a good man. How are you?

Peter McCormack: I’m good. Thank you for coming on. I’m sorry we didn’t do this in Chicago while I was there. That would have been cool.

Jack Mallers: Oh, it’s all good, dude. Thank you for having me.

Peter McCormack: Chicago’s a really cool place.

Jack Mallers: It is. I’m glad to have been born there!

Peter McCormack: Yeah. So I was watching one of your presentations and you said the only intuitive interface is the nipple?

Jack Mallers: Yes. That’s a design quote. So I guess what I mean by that is that everything else has to be learned. That’s the takeaway there. But it’s true! Was the nipple intuitive to you?

Peter McCormack: Not on me. On my mother it was.

Jack Mallers: Yeah to you, not on you. Yeesh, kinky start!

Peter McCormack: I wasn’t going to do an origin story, then I started asking you about it and then you come out with all this really cool stuff about your dad and your granddad. So can you tell me the story because it was really interesting?

Jack Mallers: Yeah. So I first learned about Bitcoin from my father in early 2013, which was right after I graduated high school. So that’s backwards! I’m supposed to tell my dad about Bitcoin after I’d bought a bunch of drugs with his cash, turned to Bitcoin, turned to weed, but it was backwards.

So the Maller’s family story is my grandfather was the youngest chairman of the Chicago Board of Trade. He wrote the funding check that started the CBOE. My dad founded what went on to be one of the more successful futures brokerages in Chicago and we have deep family finance history in Chicago. Actually, my uncle, his company just got acquired by Bakkt and he now leads compliance at Bakkt, which is cool! Now he’s a Bitcoiner. But that’s my introduction to Bitcoin, is that the Chicago finance scene has been deeply invested in and ingrained into this asset because Chicago’s finance history is all commodities.

Chicago essentially invented derivatives on top of commodities. The CME and CBOE are two of the biggest derivative exchanges in the world. So a new asset class, in particular, a new commodity, I mean, how often do you get to be alive for something like that? So all these Chicago guys, Cumberland, DRW, CME, CBOE, the Maller’s family, they’ve been on Bitcoin for a very long time. A new commodity, a new asset class with sound monetary characteristics. It screamed Chicago!

So that was my introduction. Not Silk Road or anything. So it’s definitely a weird one. But I have a cheat code, I’m very lucky to have a father like I do!

Peter McCormack: That’s a really cool story though! So I’m about to do a Lightning month.

Jack Mallers: Let’s do it.

Peter McCormack: So this is the first interview for it, but it’s not going to be the first release. It will come part way through. In all my other interviews, I started asking this question to people, what is Bitcoin? Because I’m always fascinated by the answer and it’s always different. It’s really interesting actually. But I think for this series, I’m going to ask it slightly differently, so what is Lightning?

Jack Mallers: Wow, okay! So Lightning is an attempt to increase the transaction throughput of the asset more generally speaking. That is the value proposition of the white paper. What it is technically, is a layered protocol on top. It leverages the security of the base layer and introduces new peer relationships.

So Bitcoin’s base layer is global settlement. Every activity is broadcasted to everyone on the network. Everyone has to validate it, everyone has to append it to the Blockchain and in Lightning, you have these link to link relationships, where if you and I make a Lightning payment, no one else on the Lightning network needs to know about that.

So that scales infinitely better and the relationship there mirrors more of what we would want out of general commerce activity or micropayments or whatever. But the ambitious goal was to make sure that we can get more throughput out of Bitcoin, the asset class because there are some technical limits on the base layer.

Peter McCormack: So to give a bit of context on my background and what we’re talking about today, I wanted to talk about designing UX. So I used to have my own web development agency. I started out as a UX designer, so I’m ultra critical of everything. My favourite book is by a guy called Steve Krug called “Don’t Make Me Think”.

So I’m ultra critical of everything and I’ve just started dipping my toes in with Lightning and I’ve had a few struggles. It’s a subject I want to talk about with you, but would you say that with the Lightning network, would you agree with me that the goal is to create fast, easy and secure payments?

Jack Mallers: Yeah. Well, I’m always hesitant to cement goals on top of Bitcoin. Bitcoin means something different to everyone. I mean, speaking on the guys in Chicago and my origin story, there are guys that trade cash-settled derivatives because a new asset class that’s largely Reddit morons trading this thing, that’s a dream world for a professional trader. Those guys don’t care. Bitcoin to them is a new revenue stream.

Then Bitcoin to someone in Venezuela is something entirely different. So I’m always hesitant to cement goals for Lightning. Lightning’s goal can mean something to me and someone in Chicago at the CME, totally different than you. But certainly, those characteristics are certainly what a majority is trying to achieve. I would agree with that.

Peter McCormack: I guess. Also, I saw you say that people can’t use Lightning easily yet. Do you still stand by that?

Jack Mallers: Yeah, for sure. Well, I guess the metric I’m using in my brain right now is that there are more people that can’t use Lightning then there are people that can. So I think by definition to say that people can easily use Lightning, that would mean that the majority are comfortable onboarding themselves and benefiting from it. I don’t think that I can comfortably say that. We’ve made a lot of progress, but I still think that there’s much more work to do, than the work that has been done for sure.

Peter McCormack: Yeah. So my experience so far is that I’m always thinking about how do I onboard people? Like if I were to onboard one of my friends or my dad onto Bitcoin, I’m quite comfortable with Bitcoin now. I’m quite happy with that. It’s like, get yourself a hardware wallet. I give them a couple of videos to watch and then I’m like, “just go onto an exchange, buy some and move it into your hardware wallet” and you’ll learn a lot. To layer on, excuse the pun, but to layer on Lightning now. I don’t think I’m ready.

I don’t want my friends to even be thinking about it yet, because of my own experience. So how do you feel at the moment that it’s kind of being pushed out there to use? I know with warnings, but it’s being pushed out there to use, which is fine. But when I saw Jack Dorsey promoting it to potentially millions of people, I was a bit like, “whoa, I don’t think we’re ready yet”. How do you feel about that?

Jack Mallers: I wouldn’t say we’re ready either, but I wouldn’t say Bitcoin is necessarily ready for what it’s been marketed as, as like a world solution to some of the world’s greatest problems. So yeah, the fact of the matter is with Bitcoin, there’s no company, there’s no CEO and a lot of this stuff is organic.

What you saw in 2017 was a fierce marketing push of this thing that has serious potential and serious value as it stands today. I mean it traded at $20,000 for 10 seconds. Was that grossly overvalued compared to the current development and where the asset is, as far as maturing in global economics? Yeah, of course, it was and we shot right back down.

So yeah, that happens. A really powerful man in Jack Dorsey can tweet what he wants about it, that’s a cool thing and he did. Sure, Lightning has a lot of attention to it. Sometimes it’s good, sometimes it’s bad, but it’s the nature of the industry. You live in these type of hype cycles in Bitcoin, we’re all familiar with them at this point!

Peter McCormack: Yeah, I think so! If you’re onboarding somebody… So I just met your girlfriend. Was she into Bitcoin when you met her?

Jack Mallers: No.

Peter McCormack: Okay. So you’re onboarding her into Bitcoin. How do you do it? What’s your journey for onboarding someone?

Jack Mallers: So for my girlfriend and some of my family members, I give them a QR code that is to one of my nodes and I just let them scan it with their Zap app. They get some article or make a micropayment on Satoshi’s place or something and let them just live it.

Peter McCormack: Into Lightning?

Jack Mallers: Lightning. Oh, Bitcoin in general?

Peter McCormack: Yeah, Bitcoin in general.

Jack Mallers: I don’t know, I think it largely varies. I’ve got a bunch of hardware wallets that I share and I’m down to experiment with people. I’ll even help him set up a Coinbase account if they’re inclined to that. So it varies for sure. Some of my more technical friends will set up a full node together, but I don’t know. I guess depends on the use case. It’s not a very helpful answer!

Peter McCormack: You obviously just told me a process there for Lightning because that was my next question. I was starting to think about it because I have been thinking a lot about education. I’m starting to feel like, there’s almost levels. I wouldn’t want somebody to go straight to Lightning. I think that’d be quite a scary prospect. Say you have a wallet that has both Bitcoin and Lightning because I think it’s too big a step.

Jack Mallers: I almost disagree.

Peter McCormack: Oh, right. Come on then. Hit me with it!

Jack Mallers: Yeah, I got you. So I honestly envision a world where there will be Bitcoin users that never touched the base chain.

Peter McCormack: I don’t disagree with that.

Jack Mallers: You can buy Bitcoin, get it delivered over Lightning, buy whatever you want over Lightning and then just keep topping up by buying $10 of Bitcoin delivered over a channel instantly. So I don’t think that the base chain is a requirement to use the asset. To be honest with you, Lightning introduces a whole new relationship with the end user. I think some of the characteristics of Bitcoin in the base layer and what it’s been the last 10 years, it’s really tough to develop a relationship to the general retail investor.

I think Lightning in some of the characteristics it brings, that relationship is going to be much more powerful in the next 10 years. So some people, I think an introduction to Lightning first is great. Look at this thing, look at this asset. It can cross borders, it can pay fractions of a cent. It’s much cheaper than VISA, the throughput is infinite. I guess there’s certainly technical limits but we don’t have to get into that. So I think that that’s a fair introduction to Bitcoin.

So I’m not sure I totally agree with that you have to sync a full node or write down a seed of a hardware wallet or something to then make a micropayment. I don’t know.

Peter McCormack: So it sounds to me, like your thinking years ahead though?

Jack Mallers: Potentially. For sure. I mean all this stuff is early. As someone who’s building a product on top of this stuff, you also have to understand that no one is going to geniously stay up late at night and sketch the next beautiful Lightning interface that’s going to take over the world. Every good product is trial and error. You put something out into the world, you see who pokes, you see who touches and you learn. What’s the quote, “if you’re talking, you can’t be learning”. As a product person, you have to be observing, you have to be a good listener, you have to be patient.

So the pace of Lightning as it relates to the consumer is not on my time. It’s on their time. I’m just here to listen and to tinker and to be very observant into how people… What their relationship is with the asset, how they use it, how they want to use it, how they see it now, how they envision it in the future. But that’s on their time. Bitcoin is on the world’s time. The world isn’t on Bitcoin’s time. Does that make sense?

Peter McCormack: Yeah. No, it does. But it’s quite interesting because I obviously want to talk to you about designing UX. Your website says “making Bitcoin usable”. Have I quoted that exactly right?

Jack Mallers: “Making Bitcoin usable for everyone” yeah.

Peter McCormack: That’s right. Okay. So let’s talk about designing UX. How do you feel generally about designing UX across Bitcoin generally?

Jack Mallers: Yeah, so I would like to introduce my introduction to design and UX. So I come from Chicago and Jason Fried who is the CEO of Basecamp, he’s a very polarizing figure in design and UX and just company’s structure in general. He thinks venture capital’s really bad. He thinks having a company size bigger than 50 makes no sense. He’s very lean.

He thinks taking in any form of debt on day one, if your product is supposed to be making money, you should sell it, no advertising business. He’s very polarizing in that sense. But his opinions on design and UX are very organic. He’s some of the best in the tech space on it. He’s been my mentor since I was like 17 years old.

Peter McCormack: Basecamp? They also do Campfire…? I know those.

Jack Mallers: Yeah. So I went to college for two months, dropped out and I went into a coding bootcamp that he was kind of a funder I guess or mentor of, and we built a relationship that lasts today. So all of my design principles and how I think about the product, all come from Jason. So I think in Bitcoin, design and product and product thinkers, there aren’t a lot of them and design is severely undervalued, which is okay. I think that that’s not by mistake.

I think that largely designed wasn’t needed in the first decade of Bitcoin. It’s largely technical problems. The fact that it’s a commodity and it needed to foster some form of market and exchanges and derivative products, was a much more important problem than establishing design principles that reach the next billion users.

But we’re almost at that point and I think the design will become much more prevalent as stuff like Lightning begins to mature. But all of my product thinking and stuff, I cannot credit myself. That is all people like Jason and the folks in Chicago that basically raised me. I didn’t go to college. So that’s where that comes from.

Peter McCormack: That’s pretty cool. I know their products from when I had my company. Is it a to-do list?

Jack Mallers: Yeah. So it was formerly 37signals.

Peter McCormack: They wrote a book right?

Jack Mallers: Yep. Plenty of them. DHH is the co-founder and he’s fairly polarizing then on the tech side. But yeah, it was formerly 37signals and to Jason’s credit, his traditional story, he thought it was far too complex for them to have so many products. So Basecamp was the majority of their business, Basecamp was the majority of their users, Basecamp was what they were good at.

So he basically gave everything else away. There are people I know that run those other products now, which are great businesses, but the simplicity, being good at one thing, being focused, being lean, being patient, these are all things that he prides himself on and is successful at doing. So that was how it now is Basecamp. But you’re right, it was 37signals.

Peter McCormack: So are they less than 50 people then?

Jack Mallers: Yes, to my knowledge. Last time I checked in they were about 40. But I mean the profit and numbers that they do, that’s very impressive. I know their IOS app, for example, is one of the top on the App Store and the IOS team is 3.

Peter McCormack: Well if they keep growing, they’re going to have to have some form of pruning!

Jack Mallers: Maybe! But it’s unclear. I know a bulk of their staff is customer support. Jason takes the relationship with the end user very seriously. These are the types of things that I really appreciate it. But as far as engineering goes, one of the things he prides himself on is, no one should have to work more than 40 hours a week.

If you work more than 40 hours a week, you’re a maniac and realistically, you should probably work like 20, because the hard part is not actually working. If you’re an engineer or a designer or podcaster, the hard part isn’t doing the thing that you’re professional at, it’s figuring out what to do in optimizing your time. If I understand what features to build, what to be designing, what to be learning from Lightning users, well then actually doing that is not the hard part.

But what people tend to do is stuff their schedules with meetings, they tend to overwork. They do an array of things because they don’t really understand what should be done at the time. So he prides himself on that and if you’re good at understanding what to do, then the amount of staff that you need to actually do it, is very minimal and they don’t even have an enforced office. Everyone works remotely. You just casually do work throughout the week, but it’s great work because you know what you’re doing and you’re very good at what you’re doing.

Peter McCormack: Do you know how many hours you do a week then?

Jack Mallers: Oh Man. Well, I don’t think I can count because a lot of this I don’t consider work.

Peter McCormack: Yeah, well that’s the point! What we’re doing right now isn’t work. I consider work the stuff that I’m doing where I would rather be doing something else. But right now, I wouldn’t rather be… Well apart from being with my kids, I’ve really enjoyed doing this. But when I’ve got to upload something to my website, that’s work. So I think I do about 60 to 70 hours a week, but I only think about the 30 to 40 hours of that as work.

Jack Mallers: Yeah I don’t know man. I probably spend 100% of my time thinking about Bitcoin, seriously! That’s being dramatic maybe by 5%, so maybe 95%, but that’s not work to me. That’s my preferred lifestyle to be quite honest with you.

So I don’t know, you can probably do a count on how many hours I’m working on Zap in particular. I do a lot of other interesting things in the exchange space. I’ve been a trader my whole life through my dad. But I mean all Bitcoin centric. So I don’t think it’s fair to count my work hours because it’s my preferred lifestyle.

Peter McCormack: Do you have any of your own personal design and UX principles?

Jack Mallers: Yeah, I guess. I think the best designers copy though. Good designers create, great designers copy. There’s no reason to be reinventing principals. Design is all about creating an experience for people to gain value. So the relationship they have with a screen or the relationship they have with a menu at a restaurant, I mean, these are all experiences where people are looking to accomplish a thing and you have to help them do that.

So if there are prior ways how people are traditionally adept to accomplishing things, then just use them. So for me, I largely copy a bunch of people. I pride myself on intuition, seeing myself forward. A lot of the reasons I think… I like chess and just being an observer. I’m a very observant person. But I don’t consider myself necessarily like a dominant creator. So I don’t think I’ve necessarily invented design principles that I use.

Peter McCormack: Do you go on like Dribble to get ideas?

Jack Mallers: God, no! No way. No offence to the people on Dribble. Everyone has their own Mojo, but that’s not mine.

Peter McCormack: So can you point your finger to things within the Bitcoin and crypto world that you think, whether it’s design that you like… I’ll throw out one, to begin with. By the way, I don’t use Coinbase anymore, but I think their design and UX is brilliant. Every time I ever used it, I thought this is just so easy. I think they’ve nailed it. I think there were a few others. Do you have any that you point to?

Jack Mallers: Yeah, well in Coinbase’s sense, design is a really broad term. So to say that they have great design, it’s kind of like Bitcoin has great decentralization. It’s like, “yeah, whatever the fuck that means, I don’t know”. But in Coinbase’s part, what they’ve done is they’ve done very good polarized marketing. So Bitcoin to people, it’s complex, it’s computer science, it’s math, it’s speculative, it’s dangerous, it’s drugs.

They’ve taken that relationship that people have with it and they’ve created a direct polar opposite. Even if people don’t directly relate to Coinbase, it’s very clear to identify Coinbase, because it’s black and white to people. So they go, “well, if I’m not that, I must be this. If I’m not the drug lord, but I want to get into this thing, I must be Coinbase”. They’ve created that relationship with the industry and that is what they’ve been largely successful at.

As a designer, you digest their UI and some of the things, the design principles that they’ve deployed, I don’t necessarily think it’s great in comparison to design maybe that Jason does with Basecamp. But their overall branding and marketing in how they have contrasted themselves in the industry are top notch for sure. I think there’s a lot of companies like that. I think Blockstream is branded really well. Bitcoin core is branded really well. Not to say that the Bitcoin core contributors themselves are to credit that, I think the community brands Bitcoin core very well.

So I think branding in Bitcoin, has been very powerful and largely successful with some folks, but actual design, the user interface and the relationship people have with the tools they’re using is still largely poor, even on Coinbase. Recently the #deletecoinbase, I’m going to my old accounts and trying to click through. I click on “my accounts” to get to “my wallets”.

What do you mean “my accounts”, it makes no sense. I’m largely confused. I can’t find Bitcoin because all these other shit coins are out there, that I have no balance of! Why show me something that has no balance? Design and actual relationship with products I think is going to take a lot of work.

Peter McCormack: It depends on the goal because the counter-argument to that would be, they’re advertising to you other shit coins that they want you to go and buy.

Jack Mallers: Sure. But then Coinbase isn’t an iterative design. So they aren’t reacting to their users’ experience and trying to craft a good one and help them. They then they are tactically trying to sell you something. So they’re now like a salesman and a broker, not what they market themselves as, just like the Bitcoin company that’s here to help.

That’s their marketing page, is like “can do no wrong”. The blue brand, like the Chase Bank and Facebook, like “we are the staple”. So I agree with you. They are shitcoin salesmen and I think Coinbase struggles with the business model. Personally, I think that Brian Armstrong is an idiot and that he’s not a businessman, but you’re right. In design terms, I’m there to accomplish a thing and they don’t help me do that. So in design terms, that’s very binary, you’ve failed.

Peter McCormack: Is there a link between design and security?

Jack Mallers: Sure. I think there’s a link between design and anything, design and whatever people are trying to accomplish.

Peter McCormack: But is there a conscious link between design and security? So when you’re working on Zap and there are certain things you have to think about with security, are you having to think about the design in relation to that?

Jack Mallers: Yeah, for sure. One of the things in Bitcoin about security, what’s paramount is just education. It’s just understanding how to secure yourself. What Bitcoin does is it flips the scale and where people are self-sovereign in their own right and secure in their own right.

It takes a sense of education for people to understand how to secure themselves and that’s a design challenge. Is how do you bridge really complex protocol stuff, really complex computer science, mathematics, really complex security principles and turn that into a digestible screen that people can understand and help themselves with. So yeah, I think that’s a design problem, for sure!

Peter McCormack: Okay. Let’s talk a bit more about Lightning because like I said, I’m just starting to dip my toes in. One of the things I’m a bit confused about is, what I need to know about? What do I need to be aware of? So for example, I downloaded your wallet and the first thing it asks me to do was connect to a node. I was like, “huh? Does that mean I need to have… Is that my Casa node?”

So do you envisage a scenario… I’m trying to think a few years ahead. So I’m kind of happy if we’re to say everything now is taking us to where we want to be. But do you envisage say few years down the line, everyone should and will have a node? Or do you think you will just open up a wallet and instantly be able to use it?

Jack Mallers: So the reason that that’s the case with Zap, is Zap has some very strict principles. When I wrote the Medium post in I think it was August 2017, Zap was for the community by the community. It was going to stay strict to representing some of the core principles that make Bitcoin great today and it wasn’t going to compromise on those. It was going to be a staple that represented hodlers and users of the like, and it wasn’t going to get dissuaded by venture capital or by anything like that.

So for Zap, the reason that we make you connect to a remote node now is because running a node on your cell phone, which is the goal, is not quite obtainable yet. So there’s a light client called Neutrino, which is pioneered by Lightning labs and Lalou in particular. What that will allow you to do is download Zap from the App Store and there will be a Lightning node running on your cell phone.

So all of a sudden there’s no need to connect to a remote node and there’s no need to trust anyone else. The node is actually on your piece of hardware and then from there, you can whatever, scan QR codes and what have you. There’s no barrier to entry or external resource. But for the time being, the only way to have that seamless experience is to have a custodian that… I mean I don’t like these custodial wallets. I think that they’re great for education. I’m glad people get to experience Lightning.

But I think that it’s largely gaslighting. People are so excited about… I mean Lightning is a fascinating breakthrough in technology. What it’s able to accomplish piggybacking off Bitcoin is absolutely fascinating. For people to take that concept and take the excitement that people have about that and gaslight them and go, “oh, you want to participate in this revolutionary payment system, efficient settlement of this commodity asset?

Well give me all of your Bitcoin and ask me permission to spend your Bitcoin for you”. It’s like, “well, what the fuck, man?” So that is what Zap will not do forever. So right now the only way to use Lightning on your iPhone in the true Bitcoin way, keeping principals strong and firm is to connect to some other remote node that’s fully validating because you can’t do it on your cell phone yet.

But to your point in a year or two, you will be able to, even sooner maybe. I’m testing it right now internally today. I can show you, where you download it and the node is on your phone. It’s a light client so it should sync mainnet in like 30 to 60 seconds and then you’re good for the rest of your life.

Peter McCormack: But do you even see a scenario where you download the wallet and the node is part of that?

Jack Mallers: Yeah. So you download the wallet and the node actually comes baked in compiled into the application.

Peter McCormack: There’ll be no setting up of a node?

Jack Mallers: No. It’ll just be like, “hey, here’s your seed”. In case you lose your phone or even if to you Lightning is $100 or so and if you lose your phone, you lose 100 bucks, so be it. Then you get to just use it. I think it’d be great if you can open your Lightning wallet, buy $100 worth of Bitcoin and it gets delivered to you over Lightning instantly. You then go scan a QR code and buy a beer and a blunt or whatever you’re going to do!

Peter McCormack: So it’s probably good at this point because there will be people listening who don’t understand. If you just explain the difference between a custodial and a non-custodial wallet.

Jack Mallers: Sure. So a custodial wallet is where you’re trusting… Someone else is custodying the asset for you. So basically you hand over your asset, they are in charge of securing it, they are in charge of using it. Frankly, they can run a fractional reserve, they can go lend it out and then when you want to spend it on their behalf, you have to ask them permission. So what that usually looks like is just a UI button that says send. But what you’re actually doing is saying, “hey, sir, of the owner of my coin, may you please, if you can, pay this request.” The dynamic there is totally against what got us here.

I think custodial services will be around forever. I think that there will always be people that opt for them and that’s okay. But if we were okay with using custodial services then we could’ve come up with a much simpler way to scale Bitcoin and Lightning. We could have used this really dope thing called a database and it’s sick. Coinbase pioneered it in the Bitcoin industry and we could have done that. But implementing a protocol that keeps the same principles that make Bitcoin amazing, that make it self sovereign and make it important, it’s paramount.

Peter McCormack: So is Blue Wallet custodial?

Jack Mallers: Yes.

Peter McCormack: So that’s interesting because me as someone who’s not technical and always is happy to look at things with my kind of dumb eyes on, I wouldn’t be able to tell you the differences between Zap and Blue Wallet, as somebody who just first time downloaded the two of them. What that says to me are two things. Firstly, I think people should be given a strong warning if something’s a custodial wallet, but also at the same time should there be a bigger debate around this?

Jack Mallers: So that’s the only issue I have with the Blue Wallet. I was in a Twitter thread with the guy, saying my opinions and he seemed to have been offended or something, and here, listen. At the end of the day, it’s so early and everyone’s trying to help. I don’t think anyone’s being malicious honestly, maybe Bitfury and their wallet.

But I don’t think Blue Wallet is being malicious. I think they’re doing great and they are largely helping people experience this stuff. But I do think that there’s an aspect of gaslighting like, “hey, you want to experience Lightning? Well, download this”. That’s not experiencing Lightning. I can deliver the same experience to you before Satoshi wrote the white paper. Chase wire me $1,000 and I’ll do database transactions on your behalf. That’s Venmo. That’s not interesting.

But you’re pitching it as something that’s revolutionary and it’s not and I think there should be disclaimers. There should be some more form of education in my opinion. I think also, is it relates to Lightning, there are some serious features that you lack by being a custodial wallet. So the cool thing about Lightning is that every single node is actually an online identity.

Alex Bosworth has talked about this online all the time, is where my public key of my Lightning node represents my online self as I interact in this network and gamble online or purchase articles for less than a penny or whatever it is. If I’m using a custodial wallet, as you can imagine, that node represents a million people, so you don’t have the sense of identity online and I think that people will soon realize as this stuff matures and things like Zap integrate with gaming solutions, where your Zap wallet represents your gambling account or gaming account or wherever the case is.

A Blue Wallet user can’t have that. They’re going to still have to use their email, give their passport information to create an online identity. With Bitcoin and with the Lightning network, you don’t need to do that. So I think that is going to be a big thing and that being your own node, being self-hosted, being noncustodial, will represent an online identity where you are in control of your data, you are in control of your online self and you don’t have to dox yourself to participate in an online network of things.

I think that will become more apparent soon. Right now the only use case of Lightning is to pay for something and tweet about it. And that’s okay! To Blue Wallet’s credit, they allow people to do that seamlessly. But in the long run, I mean the principles that got us here, some of the key features like online identity through public keys as opposed to my personal passport information, I think some of that stuff will start to rear its head as this stuff matures.

Peter McCormack: How do you feel about something like tippin.me then? Because it feels like a bridge?

Jack Mallers: Yeah. Again, I don’t think anyone’s here to be malicious. I think the tippin.me can be done in a noncustodial way and it will. The guy who built it has messaged me a few times and we’ve gone back and forth, seems like a great dude and I’m very proud of what he’s done. Because what’s most important about tippin.me is the general education of like, “wow, this Lightning things cool. Look what it could do, this is something that wasn’t really possible before!”

The implementation of it, if you have a centralized service, technically you could have done that before, like everyone Chase wires in money to an account and then you just tip and a database controls who has what money. But I think general education and visually representing a lot of the fancy code that is going on behind the scenes is very important and paramount to getting people excited and creating the network effects of people wanting to donate to developers or contribute time themselves. But as far as actual implementation goes, I think that there’s much better ways to build it and I think he’s aware of it and we’ll see that for sure.

Peter McCormack: All right. So the only other thing within Lightning that I’ve seen, that I don’t fully understand or haven’t taken the time to look at it. But if people have said to me, “ open up the channel with me and we can transact.” I’m thinking to myself, “what does that even mean?” I don’t know what that means. Do I have to go on, click and find you and open a channel or is it just the same as Bitcoin? We just have an address we send to?

Jack Mallers: So opening a channel is establishing… It’s a multisig transaction with another peer. Now all of that though I think, is and will be abstracted. So even tools like Autopilot, within LND where it’s an agent that scans the network and the liquidity within it and then “opens channels” for you, it onboards you onto this experience. I don’t think these are all… We’re so early.

So in the whole Bitcoin space, what alt coins are in my opinion, is an arbitrage on the trend. What I mean by that is there’s so much energy, passion, hope and money that is interested in this new phenomenon. Then there is general education and understanding of why it’s important and what actually is creating value. That is an arbitrage opportunity. One is way higher than the other and by arbitrage means you can make money on the difference. So what people do by that is making something called Ethereum or Pinkcoin or whatever and they pitch it to you and they know that you have the enthusiasm, the money, the energy to get behind it but don’t generally understand it.

We’re seeing that gap narrow and narrow and narrow. One day there will be no opportunity like that and a lot of these, altcoins will go away. It’s the same type of thing on the Lightning network, as people are so excited and so pumped and things like channels, multisig, hopping, push payments and stuff like that are being touted and spouted and you have to learn it!

I don’t think that’s the case. People are more excited that there is development pace and that will slowly come down and come down and eventually Lightning will be an experience that you have on Cash app and Venmo and it’ll come with much cooler features and dynamics. But I think there’s arbitrage’s on the trends generally within the whole industry.

Peter McCormack: Is there any attempt for standardization of say terminology within Lightning, because the different experiences I’ve had with Lightning, there seems to be slightly different terminology to things and I was a little bit confused. So my first experience on Blue Wallet with Lightning. I was just very confused with the whole moving money between two accounts. I just got very confused. Then I’ve looked obviously at Zap and I’ve looked at tippin.me. Is there anyone making any attempt to create some kind of standardization?

Jack Mallers: No, I don’t think so. Well, there are certainly the BOLTS back, that’s the standard spec of the protocol and of course, I think as a community we should work toward standards. But I think a really cool characterization of Lightning is if you look at the Bitcoin network, nodes on the Bitcoin network have to come to consensus about every 10 minutes.

So that’s why you don’t want multiple implementations of a full node is because if you get out of whack just one time, it’s a catastrophe! It’s a disaster. On Lightning that’s not the case. You can have different implementations of the protocol that have different design goals and aspirations and things that they want to achieve. The same thing at the wallet level. I think in particular, like the difference between a spendable wallet and saving Wallet UIs on Lightning or just one balance.

These are all just design challenges and these are all people throwing things on the wall and seeing what sticks. I wouldn’t say that we need to come to a consensus of what we should all use. I think that the market will generally tell us. People will be like, “that’s really confusing” and “I’m not using your wallet because I don’t know what the fuck is going on.” Then people will stop designing it that way and that goes to show how early we are. The fact that there’s so many different ideas in UIs that it’s generally unclear what works.

Peter McCormack: So let’s talk about Zap. It’s kind of cool that you… Are you doing it all on your own?

Jack Mallers: Yeah. I now have funded, my family has funded a few guys that seem to have been contributing a lot and very passionate about it. I basically DM’ed them like, “hey, would you guys want to do this full time?” Because Bitcoin has been amazing to my family. It’s the best thing probably that’s happened to my family, one of at least. We’re always looking to give back to the community and see ways that we can help.

So one of those was, “hey, we’ve created this thing and it seems to have cultivated a lot of energy, a lot of aspiration, a lot of talented people. So let’s give back and fund some of them”. So there are two devs that we fund, that seemed to be really passionate about it and that they want to work on it more full time. But outside of that, I think Zap has 45 contributors at this point and it’s all just community driven, passion driven.

Peter McCormack: How do you coordinate that?

Jack Mallers: I don’t.

Peter McCormack: How does it co-ordinate itself then?

Jack Mallers: We have a Slack and just GitHub man. So everyone that’s contributed to Zap, I actually haven’t met. So the two biggest contributors, I’ve never met them in person. I can scroll through the contributor list and I’ve never shaken hands with pretty much anyone.

Peter McCormack: How does the peer review and approval…

Jack Mallers: So they’re maintainers of the repository. So I’m one of them and these are people that know the repository, like the back of their hand. They know the immediate goals of what the project should be trying to do. They are the same with Bitcoin core and they are in control of merging code in and out. But it’s people submit support requests, people come in. I think the cool thing about Zap is it isn't just submitting the equivalence of a BIP, as Zap needs to have this functionality.

But people come in as designers and say, “have you thought about this way of expressing balance or something? Have you thought about this?” So there’s all sorts of proposals and it all goes on in Slack and on GitHub. Yeah, it’s very natural. To be honest, people would assume that, “God, you’ve got 45 people all over the world trying to make progress on a product, that’s got to be hostile! That guy wants blue and that guy wants red. Now we’re just in a pickle”. But it’s not the case.

Zap is very clear about its goals and its aspirations as a movement, not just a product. It’s something that represents a greater purpose. That’s why people cultivate to it and when you have a united vision and motivation, that attracts a very particular person, that it turns out, there happens to be a lot of, it’s actually not complicated to make progress. We all kind of want to do the same thing and it’s a good feeling. But people intuitively are like, “sheesh man, do you guys flip a coin?” It’s like no, we all post our ideas and it turns out, that guy seems like he’s right. That’s a good one and it’s just that simple.

Peter McCormack: Is Zap a company?

Jack Mallers: So I incorporated because to pay people out and such, I don’t want to have any personal liability.

Peter McCormack: Yeah, of course.

Jack Mallers: But no, it doesn’t operate for profit. There are certainly some interesting things. So coming from the background I have in markets and in finance, a characteristic of Lightning is it increases the velocity of the asset. It increases the efficiency of settlement of a bearer instrument. That means the world to markets and how a commodity becomes efficient. This is not particular to Bitcoin.

This is, generally speaking, if you look at the history of commodities or other assets like inner exchange linkage, is one where… I mean activity on an asset is going to migrate towards the most efficient way of settlement, the cheapest way of settlement and in velocity increasing on an asset is going to make markets efficient. It’s going to make everything more efficient. So that, I think there’s a huge opportunity there and as a market person, as someone whose family has history and finance, I think that there may be some interesting stuff.

I’m always dabbling around, trying to help Bitcoin in the best way I can. But as it stands today and forever, I want to speak in the now, I want to speak till I die. Zap and the wallets and products that you see will always be open source, it will always be free and it will never compromise on its original principles.

Peter McCormack: Take me five years ahead, 10 years, whatever kind of time frame you want, where will Zap be? What’s the goal?

Jack Mallers: I remember answering a question like this, almost right after I launched Zap and I like to think of Zap more as a movement. It’s a relatable thing, that people cultivate because it represents a better world. It has principles and a meaning and in a reason to exist that people identify with and they relate to and they admire it and they respect it.

So I would hope in 10 years, whether Zap is still the most popular Lightning wallet or whether it means that it’s established design principles in the Bitcoin industry and it’s looked to figure out the relationship that people have with the asset or it helps merchants or whatever. Zap is more broadly, these principles that represent a greater Bitcoin and helping Bitcoin become more usable and a better asset. So I think that’s not a very helpful answer, but in my opinion, I would hope that type of energy to exist in 10 years.

I hope to, and I’m working to make sure that Zap is a great wallet in 10 years. That you can be using Bitcoin everywhere in your life, that it’s helpful and that Zap can help you accomplish that type of thing, accept it, even trade on top of Lightning. I think that would be great too. So yeah, I think Zap is just here to help and as long as we don’t compromise on those principles and we keep this energy and this vision that Zap is here to make Bitcoin better, simply that’s it, I would hope that that’s still the case in 10 years.

Peter McCormack: Where do you feel we are in the whole journey of Bitcoin?

Jack Mallers: Hmm. I don’t know. There’s no quantitative answer to that because it would depend on what the finish line is to you.

Peter McCormack: But there isn’t… Oh, do you know what, finish line. Hmm. Thought about this and it’s arbitrary, but I guess when you get to the stage where people are using Bitcoin, like Venmo, that regularly, like everyone’s using it. It’s cracked through like a Facebook or Twitter or Tinder, whichever sector you choose, it’s cracked through. Which to me, it hasn’t yet. I don’t think you can draw a line in the sand. I think you’ll just get a feel.

Jack Mallers: I don’t know. I know guys that Bitcoin’s at the finish line when it hits 50k and it makes them worth $500 million or whatever. So there’s different finish lines, but for that one in particular, hard to say, man, hard to say. The reason it’s hard to say is because it’s impossible to draw a trajectory of development. So I got into Lightning, I think it was January of 2017 maybe? It was when I started testing out code and I think LND repository was started in 2016, so fairly early and it was a Slack group.

It was me, Lalou, Stark, one LND contractor, Alex Bosworth and Justin [Inaudible] and this anonymous Bitcoin username, Molly. That was it. There was like nine of us and if you were to tell me back then that today there would be tens of thousands of people downloading Zap I would call you a moron. I would have been disrespected like you were making fun of me. So it’s really hard to paint a trajectory of how many people are going to be dedicated to solving this problem.

But I think within the next decade it’s very safe to say that Bitcoin will be usable for a lot of these aspirational ambitious things that we think so. I think even fairly sooner than that, but that’s me speculating that there’s going to be a network effect of more devs, more money, more people, more Jack Dorseys. I think so! So yeah, that’s my answer.

Peter McCormack: I got a couple more questions for you. What are the most important things that you think need to happen, with regards to Lightning, with regards to kind of development and the progression of the project? What do you think is important to come next?

Jack Mallers: I think it’s really important that we have sound light clients, so that pretty much any hardware that people use in their everyday lives can be a node, so that you don’t have this custodial relationship with anything and that every single piece of hardware, like your laptop, your phone, your desktop are all online identities via a public key and that they are their own nodes.

I think that would be very important. It seems on the development roadmap, at least within LND, that’s the number one priority, as far as me tracking the repositories and in watching Lalou code and stuff. Then I think more broadly, getting people in and out of the asset. Lightning has severe potential there. Right now when I buy Bitcoin on Coinbase, it’s delivered to me in like a week and then for me to make a transaction…

Peter McCormack: A week?!

Jack Mallers: Or whatever, four days, even 12 hours!

Peter McCormack: It’s not instant?

Jack Mallers: Not for me!

Peter McCormack: Why do you think that is? I thought it was instant purchases?

Jack Mallers: Is it? Well, not for me. Or even on an exchange, let’s say, so exchanges are “instant” right? But even getting that then to a personal wallet and using it, I mean, waiting for the six confirmations, waiting hours to be able to send between peers. I mean the idea that I can get in and out of the asset in seconds, I can transfer in seconds. That’s powerful.

So someone needs to be building that type of experience. So from a more product, grander vision side of elevating Lightning to a place where it’s more usable, people need to be getting in and out of this asset and using this settlement efficiency to our advantage. Actually, it’s a very amazing thing that was accomplished and we need to take advantage of it. Then from a technical standpoint, having stable light client, node software where all everyday hardware can be a node and people don’t have to be reliant on custodial services. I mean those are the two probably.

Peter McCormack: All right, last question before we close out. If somebody is listening to this and they’ve not had any experience of Lightning yet and they’re like, “all right Jack, I want to get involved!” Where would you advise them to start?

Jack Mallers: Hmm, involved as in I just want to do the thing?

Peter McCormack: I just want to play with it. I want to… Like I said to you, when I get my friends involved, I’m like, “get yourself a hardware wallet, go on exchange and buy some Bitcoin and send it to the hardware wallet.” That experience alone will be mind-blowing. So the next step they’re like, “all right, I want to get involved in Lightning.” What would you explain to them to do?

Jack Mallers: Well, so the equivalent of like buy yourself a hardware wallet. I think buy yourself a hardware node. So the nodal project, in my opinion, you can buy this box. It’s a full node. It’s a Lightning node. I mean to your friends at the pub or whatever, they don’t need to know that.

They plug it in, it works, and then they click run Zap or run whatever, and it just launches and it’s like, “oh wow! Well, that’s cool”. And you buy an article for 0.006 US dollars and you’re like, “whoa, whoa, whoa! I couldn’t have done that 10 years ago. I couldn’t have done that one year ago.” So that would be cool. So buying a node using Pierre Rochard’s node launcher.

I mean if you want to experience it through something like Blue Wallet, I think that that’s okay as long as you’re fully aware of what you’re doing. So that would be where I point them to. There’s plenty of education out there too, it’s a very inviting community.

Peter McCormack: Did you have the trust chain?

Jack Mallers: I did! I had the trust chain while I was on a plane. I received it…

Peter McCormack: Yes, I knew that actually! Were you first or Fluffy?

Jack Mallers: I was before Fluffy. I think I was the first one to do… Honestly United should sponsor me. I mean what better advertisement for United Wifi then making micropayments while I’m hovering over an ocean.

Peter McCormack: Did you see my trust chain yesterday?

Jack Mallers: No. What did you do?

Peter McCormack: I was on a plane and I sent it to another guy on a plane!

Jack Mallers: Plane to plane! That’s awesome!

Peter McCormack: All right man. Well look, this was amazing. Tell everyone how to stay in touch, how they can follow Zap, who you want to hear from, who you don’t want to hear from?

Jack Mallers: Well, I generally hang out on the Internet pretty much my whole life. So I’m @jackmallers on Twitter. If I’m not Jack Mallers, I’m Jimmy Mow, which was my Xbox Gamer tag when I was a kid. Slack, Twitter, the whole thing is where I hang out. So it’s very easy to reach me. I don’t hide and yeah, I look forward to talking to everyone! Thank you for having me on man. It’s a pleasure!

Peter McCormack: Thanks for coming on. That was amazing. It’s a really good first one to get going with, so thank you!