📖 Episode Transcript

Erik Cativo (00:00.226)
What the Pirate Bay learned was that in the game of Whack-a-Mole, the moles win. So that's kind of my inspiration with Cashew is that I see a system that allows for these mints to be easily spun up and deployed kind of very quickly, very rapidly. And it will give people options to use these as long as there's someone that's willing to do it.

Cody Ellingham (00:25.646)
Hello I am Cody Ellingham and this is the Transformation of Value, a place for asking questions about freedom, money and creativity. Today I'm joined by Erik Katival. In 2024 he left his design job at Ericsson in Sweden to start building on Bitcoin full time.

This year he received a grant from the Human Rights Foundation to work on improving the user experience of eCash, including both the CACHU and Fediment protocols. is also the lead designer at Hoseki, building proof of ownership infrastructure for Bitcoin. Erik, welcome to the show.

Yeah, thanks for having me. I'm excited to be here.

man, my pleasure. It was really great to meet with you the other day at the Tokyo Bitcoin base and now you're out here at the studio. I'm wondering if you could just tell me a little bit about where you grew up originally and how you found yourself in Sweden.

Yeah, so I grew up in Washington, DC originally, about seven miles south in Northern Virginia. And I lived there up until the time that I was 29, then I moved to Sweden. And then I guess a little bit before that, I studied in Scotland in 2017. So that was the first time I had an international trip where I came to Europe. So I stayed in Scotland for a couple of months and I traveled around Europe and I was just kind of...

Erik Cativo (01:47.01)
you know, starry-eyed, doe-eyed with that sense of wonder of the new world. I've always been... The old world, right? The old world, I'm sorry, yeah. The old world of Europe. And I've always been someone that's into kind of history and, my favorite subject in middle school is always geography and I spent a lot of time coloring the countries. And I remember as a kid playing like NES games, the Olympic games or whatever, I would always just be...

in all of all the different flags and stuff. So I've always had this kind of wonder for the world. I studied in Dundee, which is the fourth largest city. And then after a couple of months in Dundee, I kind of quickly got bored of it. And then I just started every weekend taking the train or the bus to Edinburgh and Glasgow.

What part of Scotland were you at?

Cody Ellingham (02:33.07)
Well, that's incredible. Yeah, think we're perhaps similar in a way there because my first time ever in the old world was last year actually and I went to Prague, went to BTC Prague, went to Germany, Austria, spent a day in France and that was eye opening because coming from New Zealand at bottom of the world, literally the antipodes of the old world, it was kind of...

incredible to come to a place that had the, there's this kind of layers of history. Yeah. And I mean, Japan's got its own history and I came here before that, but in terms of the, the Western tradition, something like, like Edinburgh, the Scottish enlightenment. Europe generally, there's, must've been quite a lot of inspiration there for you. Yeah.

Yes, exactly.

Erik Cativo (03:17.07)
Absolutely. So it was deeply inspiring to just be a part of that history and walk around and touch it feel it. But I guess long story short, that kind of lit the spark for me and I decided I want to see the world. Life is short and the world is big. So in 2020, I applied for job at Ericsson in Sweden. Got accepted. They relocated me. Worked there in Sweden for four years. Managed to get a Swedish permanent residency.

Then it was just, okay, I'm ready to work on Bitcoin all the time now.

So talk about Ericsson. This is quite interesting because they actually invented Bluetooth. They did, And you're a Bluetooth maximalist. tell me a bit about this, because you were designing with Ericsson, right?

I love Bluetooth technology,

Erik Cativo (04:03.304)
Yeah, I was a UX designer. So I didn't actually work on Bluetooth projects until I left Ericsson. It wasn't until recently that I discovered just how kind of amazing Bluetooth is and how kind of free it is. yeah, so at Ericsson I was just a product designer just working on kind of telecom acceptance software, nothing terribly interesting. But very recently I've been kind of like enchanted with Bluetooth as this method of

being able to send information totally offline in a very close proximity fashion. It works quite well. It works across different devices and platforms. It's just an interesting spec.

Yeah, yeah. I am keen to dive into eCash. I want to talk about eCash, but before we get into the details, maybe we can zoom out a little bit and just sort of what eCash is, a little bit of the history and sort of how it fits into the conversation with Bitcoin, please.

Yeah, so I think that the history of eCash is very, important. Before you start getting into like eCash on Bitcoin, I think it's useful to understand kind of why and when eCash was invented and why it failed and kind of what it represented. So to start, eCash was the first cryptocurrency. It was the first time that digital money was attempted and deployed at, I guess not at scale, but it was deployed. So this was first proposed by a cryptographer named David Chom.

in 1982, and he proposed a scheme for handling digital payments, electronic cash, in a way that mimics the properties of physical cash. So keep in mind, this is 1982. This is way before credit cards existed and people were using them for payments on the internet. This was before the internet was even a thing that people had, let alone people were buying goods and processing payments on the internet. But David Chom, he writes even back in those days,

Erik Cativo (05:59.928)
He understood that in the future, people are going to be using this network to make payments. And unless we build a system that preserves their privacy in a similar way to physical cash, then the people who are the architects of the payment system for this new world, this digital world, are going to have the ability to control and surveil people at scale. And he was deeply concerned about that. And he's writing about this in 1982. So he's a brilliant cryptographer and he proposes a system that uses

a mechanism called blinded signatures. You and I are around the same age, so I think you'll know what carbon paper is. Carbon paper. Without getting too technical, a blinded signature is a way, if you can imagine that you have this document, you don't know what it says, I put some carbon paper over it and I ask you to sign it. Then I take the sheet underneath it. I go away, I do something, then I put this document in front of you. You can now look at the document and you can determine, yeah, this is my signature, this is valid.

without ever knowing what was underneath the document through carbon paper. So a blinded signature kind of takes this concept using cartography and applies it to money in a way that I can explain in maybe more detail later. But that's the high level. So David Chom came up with this system called eCash. And he started a company called DigiCash. And in the 90s, he attempted to bring his vision of electronic money, of digital cash, to scale. And he got pretty close.

At one point, he was in talks with Microsoft to include DigiCache, this implementation of Ecache in every single Windows 95 machine. Ultimately, that deal failed, and Ecache is not the way that we use money on the internet today. We use credit cards, we use PayPal, we use intermediaries that have total control and a total lack of privacy for the end user. So the future that we got when it came to digital payments on the internet was not one of

digital bearer assets that were perfectly privacy preserving that you can just hand off and the merchant would have no idea who you are. Instead, we got a world where third parties approve every transaction and they see everything. So that's kind of the story of eCash. The technology and the mechanisms were beautiful. It failed. And I think a large part of it is that it was tethered to the fiat world. So David Chom had a company called DigiCash.

Erik Cativo (08:21.454)
that had a lot of patents and they were attempting to bring this to scale. But ultimately DigiCash was something that existed in the fiat world where they were exchanging fiat money for these, for e-cash, for digital cash. then DigiCash would have the licenses with the banks to give you the fiat when you get to the point of redemption. And it was kind of tied to the fiat world. And recently in the last couple of years, we've now managed to take the mechanisms of e-cash and apply them with a Bitcoin base.

So we're no longer tethered to the fiat world. And because now we're using Bitcoin as the base and eCash as the mechanism, I feel like we've unlocked the true potential of eCash now.

Yeah, that's incredible. It's sort of, as you say, it was before Bitcoin. And so it necessarily had to connect into something else. And that ended up being fiat money. Exactly. And that was sort of the Achilles heel of the system. And with DigiCash, I'm not quite sure the history there, but did that end up shutting down? Or what was the reason for that project not continuing?

So it's kind of controversial. It depends who you ask. David Chom would, I don't want to put words in his mouth, but I would say like from what I've heard and from what I've read from various books, some people believe that there wasn't demand for it. That to me doesn't really make a lot of sense. Other individuals would say that David Chom as a businessman maybe didn't make some of the best decisions. I mentioned the Windows 95 deal. I've read some accounts that that deal was kind of ready to go. Then at the last minute,

The folks at DigiCash wanted maybe a little bit more money and then it ended up kind of failing. there was maybe some poor business decisions, lack of business acumen. Sometimes brilliant cryptographers aren't the best at business. It kind of depends who you ask about why that company failed. But what's interesting about DigiCash is that a lot of the cypher punks that were influential to Bitcoin, actually worked at DigiCash in the 90s. they were based in Amsterdam. So I think Nick Zappa was there at one point.

Erik Cativo (10:23.118)
And not to geek out too hard, DigiCache had its own version of digital, of Ecache that they promised to never mint more than a million. Again, I promise, so I trust base. I think it was called CyberBucks. And are you familiar with the RSA ProScript t-shirts that the cypher punks wore? At one point, Adam Back was actually selling those for CyberBucks.

wow, interesting. So there's this kind of lineage here which no doubt as well Satoshi would have been familiar with this story at the time.

He references it directly in the white paper.

So there's this kind of lineage that then perhaps the shortcomings of that project were seen in that there needed to be a base money underwriting this, which as we would come to know is Bitcoin. And then I guess at what point did the eCash concept come back into the Bitcoin conversation or was it there from the beginning in terms of the use as a

as a payment layer on top of Bitcoin. Do you know the history of that? Because in the early days, Bitcoin, you could use it very easily, low fees. You still can in a sense, but it seems as if that narrative has changed over time. We had the development of Lightning. We've had this move towards layered money on Bitcoin. Do you know, sort of the history of how eCash came back into the Bitcoin story?

Erik Cativo (11:50.318)
Yeah, not entirely, but I have a pretty good idea. So I think in around 2020, 2021, there was some cryptographers working at a protocol called Fediment, which was a way to do federated eCache. They first kind of came up with this concept, with this idea. And in, I believe, 2021,

There was another implementation of eCash, which is Cashew, which is kind of the other implementation that I spend most of my time focusing on, kind of came about. speaking from the Cashew side, the reason that eCash kind of is viable in today's Bitcoin ecosystem is because of the Lightning Network, is because we have the ability to, we have this kind of connective tissue to the underlying base chain and then the Lightning second layer.

Then we have eCache, which is kind of parallel to Lightning. It's like a way of using Lightning, at least with Cashew. So it kind of required these two layers to be built out before, in my opinion, eCache kind of fit. And the properties and the mechanisms of eCache, which I know I haven't explained, but I can explain later, make sense when it's kind of directly pegged to Lightning or when it gives the user the ability to kind of go out into Lightning instantly.

I'm to dive into these two major protocols of eCash. just before that, so lightning is a really key part of this story then. So we sort of see maybe a progression here where eCash was referenced in the white paper. It's a key part of the lineage of Bitcoin, but its reemergence into actual the Bitcoin stack kind of needed lightning to come along first and become established and well rounded before it could.

Yeah, in order to be used at scale, yeah, the FedEmin protocol does support on-chain, but we all know very well the issues with on-chain, a 10-minute confirmation time, it just kind of doesn't scale.

Cody Ellingham (13:55.598)
So looking at the two major protocols then, obviously cashew and infediment. so talking a little bit about these two and sort of the differences that they have and the commonalities, how would you sort of paint a picture of how they sit alongside each other, what, yeah, and how both of these work?

Yeah, so these are the two major implementations of eCash on Bitcoin. It's all using Bitcoin on the base layer, so there's no third party token that has its own value or anything like that. It's all denominated in SADs. The way that these two implementations differ is that Fediment approaches... Maybe I could take a step back and say in order for eCash to work, it requires a mint. It requires a centralized authority to issue the eCash units.

using blinded signatures that I mentioned earlier, which grant these units perfect privacy. Cryptographically, near perfect privacy is granted when users use eCash, but it requires an institution, a centralized entity, to issue these. So a user has to send Bitcoin to the Mint, and then the Mint does a blinded signatures, and it issues you a unit of eCash. And then you can use that unit with perfect privacy at scale a million times per second. There's no limit to the speed of it because it's a centralized database.

So with Fediment, what they do is they federate the management and the issuance of the Mint across multiple entities. So what that means is that there are multiple servers, ideally multiple individuals. So you could be, they call them guardians. So you can be a guardian, I can be a guardian, someone else could be a guardian, and you can have like five guardians. And collectively, we manage the centralized entity that issues eCache. And if you have five people,

It creates less of a risk of like a rug pull, of a theft, because you can have five trusted community members. You have kind of a multi-sig where a majority of these users have to be in agreement before the funds are moved or shifted. So, FedEment approaches it in a federated way. The benefits of that are the reasons I mentioned earlier. You have a little bit more resilience against theft.

Erik Cativo (16:07.63)
in order and because you have multiple servers running that are maintaining the centralized entity, one or two servers can go down, which might happen and then the Mint will still operate as long as the majority of the guardians are still online. So there's resilience against that. This makes the code base, as you can imagine, a lot more complex, a lot bigger, a lot more variables, but it is more resilient. So that's Fetty Mint's approach.

The other approach and the protocol that I spend most of my time on is a casual approach where it's using eCache mechanisms, but it's designed to be lean and easy for anyone to run. So you can spin up a mint right now on your computer with a couple lines of code. It can be up and running. You just have to plug in a Lightning node to it. And then you have an eCache mint and it's solely running on one computer on a very lean code base. So the benefits to that are that it's very easy to spin up.

Anyone can just get this up and running very, very easily, but then it creates a centralized point of failure where if your computer gets wrecked or if you are a malicious person who wants to steal everyone's money in the mint, then you can kind of do that.

Yeah, seems really the difference then is in the custody model, right? Because I imagine running a production cashew mint that's actually taking volume. I would imagine that on the actual server side you would have fallbacks and load balancing and things running potentially. It wouldn't necessarily be one machine running at home, right? If you're running something at scale, correct me if I'm wrong, my understanding is you would build redundancy.

percent.

Erik Cativo (17:43.64)
Yeah, you want to have some redundancy, so you want to have your backup in place, maybe like a power supply in case you lose power and stuff like that. You want to be very diligent about your lightning channel capacity and stuff like that.

Yeah, so fundamentally it seems to me that the on both sides of the fediment side and the cashier side, server redundancy, kind technical redundancy is one thing, but really it's more around maybe the social model and the custody model, right? And having the guardians, as you say, I've experimented with friends in New Zealand, we're trying to set up fediment and doing the key ceremony and that kind of process. So there's sort of a...

on a conceptual level it's an approach to the custody piece, But in terms of the two protocols, these are the major ones. I mean, is there any other projects of note or comment?

Not that I'm familiar with. I think those are the only two you catch up on.

How do they work in terms of, is there concepts, there ideas or things that are shared between these two protocols? How do they work together? Because certainly your Human Rights Foundation grant is around improving the UX or V-cash in general in terms of both. So do you seek, what are the commonalities or the shared aspects of both?

Erik Cativo (19:01.282)
Yes, so think from a design convention and thinking about kind of the end user who's interacting with these systems, there is some things that are applicable to both. Specifically things like how do you track the health or how do you judge the trustworthiness of a federation or of a cashew mint? How do you track the health of it? How do you display this information to the user in a way that is digestible? So I've worked on kind of design ideas and design best practice for both cashew and fetimen.

that take a look at what are the metadata, what is the information that we can display to the user that's relevant to this and how can we maybe organize it. Things like that are relevant. Things like taking a step back is how does the user even determine what Mint to use? How do they find them? How do they discover them? That's similar to both. That's kind of a user experience problem that whether you're using Fetty Mint or Cache or you're gonna encounter is how do you present the user, these are the Mint and then have them make an informed choice.

Do you even do that? Do you just abstract it away? What are the risks associated with that? So it's these kind of in the weeds kind of UX problems that are applicable to both that I spend a lot of time on.

Yeah, and I have a lot of respect for that because as a creative person myself, I understand that on one hand the engineering and the technical side is of course important, but conceptually how do you come into this system? How do you engage with it? What is the levels of abstraction as you say? one thing I wanted to discuss with you is the importance of NOSTA to this ecosystem because as far as I'm aware, there is...

with some of this UX around choosing a mint, NOSTA plays a key role. so could you tell me a little bit, maybe briefly explain NOSTA, but how NOSTA plays into the E-cache ecosystem.

Erik Cativo (20:47.298)
Yeah, so for the people that don't know, Nostr is a protocol that allows for decentralized information exchange and kind of like, what does that mean? What does that look like? So it runs on a system where a user generates a public and private key pair combination, kind of similar to Bitcoin. You have a public key and you have a private key. And then with this key, can broadcast or you can sign events of different kinds. So it's a kind of really kind of pretend like what that looks like. If you imagine you have a Twitter like

client and then you have a key which is like a long secret password. You can then broadcast an event that is a message that says, hey, my name is Eric. And then it can be signed with your key and then thrown out into not one central server, but a distributed network of servers called relays, which you can kind of pick or in some, in the ideal cases, the app picks for you. And then your message is then posted or broadcasted across these different relays.

So anyone that's following you or following any one of these multiple relays can then see the messages that you're broadcasting. And if someone tries to censor or cut off one relay, if you broadcast it to seven, it won't matter. One is shut down, you still have six. You can run your own relay. People can duplicate and forward it and relay the relays. So it creates this kind of redundant way of...

broadcasting information with having assurances that the person who is broadcasting it is using cryptography to make sure that it's the actual person. So that's kind of like a high level overview of Nostr. So right now I think the biggest kind of use case for Nostr has been applications that offer kind of like a Twitter like experience where you have the ability to have a timeline or have people communicating in real time.

in a way that is censorship resistant, that nobody can stop anyone from posting at any time. That's kind of been the primary application. There are others as well. But to go back to your question, how does kind of Noster tie into like what we're building at eCash? So one of the things I talked about mint discovery earlier. So one of the things that we've not leave, but Bob, Bob Scully has done is create a directory called BitcoinMints, bitcoinmints.com.

Erik Cativo (23:04.718)
And this runs on Nostr in the backend. It uses a kind of event type. I don't remember the exact event type off top of my head, but it uses an event type to have a list of different mints for both Cashew and Fetimen. And it allows the user to kind of index this, see a list of different mints. And it also allows users, I mentioned earlier that with Nostr users get a key.

It allows users to leave reviews and rate mints. Five stars, four stars, three stars, leave comments, et cetera, et In addition to that, what we've done is, so that's kind of the architecture of Bitcoin Mint. It's a decentralized way to list mints, and it's a censorship-resistant way for people to go in and review mints. So we have that kind of infrastructure set up. Now, what we've done on the Cashew side, and specifically on cashew.me very recently, a couple weeks ago, I actually redesigned this feature.

is we've created a way for you as an individual when you're getting set up, when you're running through it, or even when you're already in this cash wallet, you can search Mint, we'll index Bitcoin Mint, we'll display Mint along with their ratings, and we even give you an option to, when you're looking at Mint and their ratings, there's an option to filter by your own web of trust. And what this means is that you can take your Nostra Key,

you can plug it in and then you can only see mints that have been rated or reviewed by people that you've chosen to follow or people that you've chosen to delegate as I trust this user. So it could be you, could be Matt O'Dell, it could be my friend Jake who I know from Bitcoin Meetups, my friend Matthew from the Tokyo Bitcoin base, my friend Derek from PubKey, whatever, I follow all these people and I can only see mints that have been reviewed by people that I know. So that way I can avoid like...

you know, nonsense reviews or people that trying to game the system. So it's a very long-winded answer, but this is how we've kind of leveraged a mint discovery kind of UX and we were attempting to kind of seamlessly integrate it into Cashew.

Cody Ellingham (25:08.366)
Yeah, it's quite interesting because I want to talk a little bit about these layers of trust and the layers of money and how these play out conceptually. Because coming back to bearer tokens, is quite a powerful idea to really work with, as David Chalm originally imagined, these are cash-like instruments.

As you say, they are just these strings of numbers and strings of text that effectively if someone has that they then have the value.

The data is the money with cash. That's how it really differs from Bitcoin.

Yeah, and this is an interesting concept because at the same time, is, unlike Bitcoin, there is a trust element here where the mint is trusted to have the funds backed. Yes. So something to respond to redemptions and et cetera. So maybe just starting off there and then we'll get into the layered piece, elaborating a little bit more on this concept of cash like instruments and what this means.

not engage in fractional reserve.

Cody Ellingham (26:20.876)
in terms of the way we think about payments. And I think the language you used the other day was the idea of throwing payments versus catching payments. Yeah, exactly.

So I think that that was a good overview. So maybe we can talk a little bit about like the model of eCash and then talk about like why this model kind of opens the door for new UX. And so with eCash, I talked about the role of the mint. The mint is a trusted entity. are, when you are depositing Bitcoin into an eCash wallet and then you're getting the ability to use eCash, you are

giving up custody to the Mint and you are trusting that when you want to go to Lightning or when you want to go to on-chain, the Mint will process your withdrawal requests back to the second layer. So there is an element of trust. Now, what do you get by sacrificing custody? So I talked earlier about the perfect privacy that eCash offers. It's far more private than on-chain and it's more private than Lightning.

So for certain people in certain situations, particularly for human rights activists, which is kind of part of the reason why the HRF is investing in eCash, this can actually be of the utmost importance. It's perfect privacy. But it also unlocks the ability to have Bitcoin in the form of a bearer asset, Bitcoin in the form of data, which could be a string of text, could be a QR code. It could be...

piece of information that I transmit via Bluetooth, totally offline, which we've done. So it allows Bitcoin to have to take on this kind of bearer asset role. And when I think about, if we think about how we interact with physical cash, it's very much, I take out the physical cash and I push or I throw it to you, or I throw it to the merchant. And the merchant knows nothing about me. And the merchant also doesn't know this bill that I handed you.

Erik Cativo (28:25.838)
Who were the last 50 people to have it? It has no idea. It also knows nothing about you when you hand it over. So, eCash allows us to have these kind of properties with Bitcoin. And when we think about what this means from a UX point of view, so we've kind of really leaned into this unlock of now that we have Bitcoin and eCash, we can integrate eCash into the way that people kind of naturally communicate.

So when you communicate, you might do it through Signal or through Discord or through iMessage or through WhatsApp. So now what we can do is we can take eCash and we can embed it into these places where people are already using to communicate words. And now they can just communicate value. They can just throw money inside of WhatsApp, inside of Signal. An example of this is Bitcoin for Signal.org, where the developers have taken Signal, which is open source.

They forked it and they've replaced this. A lot of people don't know that Signal actually has a crypto wallet inside of it for mobile coin, which is not very well used. So, cashier developers took that, they ripped out all the mobile coin and then they replaced it with Bitcoin. And they kept Signal's UI for their own crypto wallet. So now within Signal, and I don't recommend anyone use it because it was a proof of concept, but if you want to see the proof of concept, you can go to bitcoinforsignal.org. So now within Signal, for example, you have this ability to just send

Bitcoin or send money in your signal chat. It can be denominated in US dollar. You cannot even know that you're using Bitcoin. And that can happen because of the push UX of Bitcoin with perfect privacy. So we also have the ability to transmit this via Bluetooth. So we can be on an airplane. can generate, you know, one dollar. I can hit airdrop. I can send to you. Then you'll receive a piece of data that's one dollar.

you know, fully offline because we're just throwing data around. So it's, it's real agnostic. It works on SMS, it works on Bluetooth. You don't need internet because again, you're just throwing a string of texts. Any, any way that you have to communicate, you can now do this with Ecash. You can obviously print it out in a QR code and hand it physically in. so that to me, that kind of UX that it unlocks is very exciting to me as a designer because it mimics the behavior that I see that people are already used to.

Erik Cativo (30:47.554)
when they're paying in the real world. When I want to give someone money, I don't need them to pull out their wallet and go like this in order for me to insert it, right? I don't need, I just need to go like that. And I want Bitcoin to kind of feel like that.

Yeah, let me just get something. I've got, you've probably seen one of these before, but I've got the one of these like poker chip kind of thing. cool. Yeah, so this is from Jan 3. But this is. Yeah, kind of the difference with this is that. You know. You're in this. I mean, I became to maybe just get your thoughts on this because.

It's like a... kinda like a Cassatius coin.

Erik Cativo (31:18.23)
Yeah, it's on chain too.

Cody Ellingham (31:30.614)
you've got a private key in here that you have to kind of open this thing up and kind of peel it, peel the sticker off to get the private key. But it has a public key on the outside. And so it can trade as a Barrett instrument in a sense. How does that differ here though with these strings of text though? Because in a situation where you're both offline, you can give the other person the token, guess. But the redemption of that or the

the actual settlement of that, they need to connect and get it. Yeah, exactly. Ironed by the mint.

For the token to be redeemed, you need to be online and broadcasted to the mid.

But to trade it amongst yourselves, you don't need to do that.

No, but you still run the risk of a double spend, So imagine we're offline and there's two of you and I send you both the same token. You think you have $10. Well, the first one of you that goes online and redeems it gets a $10. Then you go online an hour later, you're going to be short. So there's the risk of double spend. So I can talk about some of the ways that we've built to mitigate that. within the Cashew protocol supports a

Erik Cativo (32:41.038)
P2PK, a paid to public key lock. And what this is is kind of what it sounds like where you have a unique ID, like a QR code, for example, that is a public key that you can share. So what I can do is if we're both online and I want to send something to you, I can get your public key and I can lock the ecache to your public key. So while I'm taking 21 Sats and I'm transforming it into ecache, I can then...

lock it to your public key so that when I send you the string of text or even more, let's say I lock it to your public key and then I put it on Twitter, an ecash string of text. Anyone who tries to copy and paste it and receive or redeem it, they will fail. It'll say you are not authorized to redeem this because this ecash has been locked to Cody's public key. So one of the ways to mitigate that is to lock the ecash to your public key and send it to you.

And then you can have assurances, okay, I'm offline, but I've received eCash that's locked to my public key. So I know that anyone that tries to spend this eCash will be unable to, because it's locked to me.

Okay, so I didn't know about that. That's actually quite incredible. The, almost like, it's not quite, but the analogy is, you know, it's a chick with not a blank name, but I have to put your name. Yes.

Exactly, exactly. it's you've taken the check and you've written that name on it. Yeah.

Cody Ellingham (34:11.009)
So it kind of, it's in this interesting space because.

It's great analogy.

Well, you know, cash money is, I mean, you never know. And I mean, this is the great battle that we fight as Bitcoiners. You never know if they've printed two of those notes or a billion of them. yeah. So we've kind of got, yeah, there's sort of like a double validation here because obviously you have, you know, these systems for verifying the mint and making sure that.

There's like a social level of trust there. then on the actual spend side and the ability to move that thing around, having this pay to public key thing, that's really cool. So yeah, I didn't know about that. So that sounds like an innovation that, is that's Cashew that's built that out or is?

Yeah, I'm not sure if the FedEmin protocol has it, but it is supported across the Cashew protocol. And there have been some instances where with Nostra you can actually just send the eCash directly to someone's end pub.

Cody Ellingham (35:13.642)
So I want to get into the layered money, Eric. I think, in fact, I have the book here. Yeah, got this book here somewhere. But this is always a concept I come back to because I think the engineering mind of Bitcoin often wants to think in absolutes, you know, what is self custody? You know, have you got your Bitcoin and cold storage, you know, somewhere in the earth? This is an absolute right. But what we find is the way money

in history flows, it's layers of abstraction, it's layers of convenience, the history of money, what is the velocity of money, what is the velocity of settlement. And often what ends up happening is you have these higher layers that don't very often get redeemed back into lower layers. And so they end up just sort of operating de facto as a higher layer. And only ever so often do they get

sort of checked and brought back down. And so maybe you could just elaborate a little bit more on that here because we're beginning to see that with Bitcoin and this is one of the, think, profound design choices of Bitcoin is to go for a layered approach. Yeah. Unlike other cryptocurrencies. And so what do layers mean in general? And then maybe we can get into how E-cash fits onto those layers.

Yeah, 100%. So I guess in the Nick Bhatia book, Laird Money, he very much touches on this concept. And one of the things that I remember about that book is he's describing kind of the evolution of, I think, and silver, and they had like gold and silver back certificates that people were using to trade. OK, there's this guy who has a vault full of gold that I deposit, and he issues certificates. Now I'm going to hand this certificate to this guy, and then he's going to hand that certificate to this guy and that. And I think the key lesson there is that trust scales.

when it comes to the velocity of money. Trust is something that has scaled, that we've known has scaled. And I want to say that anyone listening, should be self-custodying Bitcoin if you have the ability to. Self-custody is the gold standard of using Bitcoin for reasons that have been explained infinitely, right? So self-custody is definitely the way to go for any significant amount of Bitcoin. E-cash and cash-through and Fediment are not here.

Erik Cativo (37:33.518)
to replace anyone's life savings in terms of a custody model. So I want to get that, I want to be very clear about that. And when it comes to kind of the role of like layers in scaling, what I think, when we think about end users, you mentioned that engineers or even like Bitcoiners, you have to be engineers. I think we often can run into the fallacy of assuming that people value the same things that we value.

So we can talk about why being self-sovereign is a virtue, why managing your own keys is the optimal way to do this for these reasons, for those reasons. But we shouldn't make the mistake of assuming that other people feel or agree with that. Because I think that what we've seen when we look at the layers that are most often used for a medium of exchange, it's lightning.

and specifically within lightning, it's custodial lightning. So to me, it's very clear that the market, not everyone agrees that having total self-custody is the optimal way for every single use case. And we also shouldn't assume that everyone wants the responsibility of being a sovereign individual, or everyone wants the responsibility of holding their own money. Quite often people hear that

And they'll be like, you know what, I don't want that responsibility. I want to forgot my password button where I can forgot my password and then have my money sent back to me in case I lose it. People want that. So we can kind of put our head in the sand and say, okay, you have to do it like this. You have to do it like this. Or we can build solutions that respect the person's privacy at the highest degree and give them the ability to.

transact that skill and use Bitcoin with these properties, with these mechanisms. that's kind of how I approach this question.

Cody Ellingham (39:35.818)
It's interesting as well because I think we are still early in a sense and for those who are enthusiasts and passionate about self-custody and having lightning channels as well, running lightning nodes, that's kind of the other piece of it. mean, obviously it's not that difficult to self-custody your Bitcoin with your 12 or 24 words, but running a lightning node, I mean, it's slightly more involved.

But both of those things are something that, you know, I think most people who are able to use a computer, they're able to maybe do a few technical things on the computer, you know, it's within reach, it's not an impossible mission.

I might disagree on running your own lightning node. Self custody on chain. Yeah. think most people can.

Good point. Sometimes we forget how much we maybe know, right? But certainly it's gotten easier with something like Umbrol. you spin it up. But yeah, there's still a lot of knowledge required, but still, I don't consider myself a super technical person. I've been able to do that. in a sense, we've been able to do with that is seed enough people who are doing that, that it's not just a central bank. Yes.

I think, I don't mean to interrupt you, but I just want to like say I think the most important thing is that the user always has the ability to. So you always have the ability to go from ecache to lightning to on-chain and self-custody and that ability should never be restricted.

Cody Ellingham (41:04.87)
And I think this is perhaps the great innovation and why the fight for self-sovereignty is so important, even if it isn't necessarily going to be adopted by everybody in that way, is that it's always a forcing function that keeps the system honest. And this is the issue we've seen with gold historically, is that after a while people say, actually, we just get rid of the gold. We don't need it. No one's redeeming down into gold. And then when they do want to do it because of war or some exogenous

issue that actually the vaults are empty. And this is a time in the more of this issue, right? And so I think the idea that Bitcoin globally can run their own nodes certainly or self-custody their Bitcoin. they can also run things like cashew or fediment systems. They can run their own lightning nodes. There's a degree of honesty there.

which I think is quite a powerful function because it also, I'm keen to hear what you think, but it feels like it's a bit of a function that sort of pushes back on maybe exchanges being the new points of custody, having, know, because exchanges generally tend towards capture by the state and they tend towards a few big winners, something like Coinbase, having actually quite a lot of power in the ecosystem, but.

Having these mints, for the most part I imagine are just out there in the world, not under the view of the state, there's kind of more options for you to maybe be using those. There's more variety amongst the custodians you can choose from. You know what I mean? Yeah.

Yeah, so I think that one of the big inspirations when I think about the mint model, maybe I can just briefly talk a little bit about my history and how I of found myself with TCash and why I this is relevant. It'll make sense to your question in the end. But I come from a background of piracy, so I'm very much, you and I are the same age. We were kids of the 90s. I remember being on Napster, LimeWire, Morpheus, because I remember when...

Erik Cativo (43:17.954)
BitTorrent protocol was kind of unleashed in the world. And I remember downloading games and downloading movies. And I could very much come from this world of you can just get on the internet and download software and download music and download movies. And I learned very quickly that these systems are decentralized without even having a sophisticated understanding of why or how. I knew that there were multiple torrent trackers that I can look up when I couldn't find my stuff. And if one went down, I wasn't worried.

So I come from that background. And when I think about Cashew and eCash in specifically, and I think about the role of the centralize mint, which might seem kind of like antithetical to Bitcoin ethos because we're replacing Bitcoin with a trust in a third party that gives you an IOU that promises to redeem, that could be shut down in the case of Cashew, it's a single operator. One of the things that I think is really, really important for the point of decentralization is that

it is very, very easy to spin up one of these mitts. The world is big and there's a lot of jurisdictions out there. And we saw this with the Pirate Bay. Very much when that came out, the music industry executives were, and the movie executives were furious. They put significant pressure actually on Sweden to seize the Pirate Bay servers. And eventually they did. But what happened, right? It's just a game of whack-a-mole. Another tracker spins up, another tracker spins up.

you know, the bitsworn protocol and then the network is resilient in that regard because it's trivially easy to spin these things up. So I think Gigi had this good quote where he talks about what the Pirate Bay learned was that in the game of Whack-a-Mole, the moles win. So that's kind of my inspiration with Cashew is that I see a system that allows for these mints to be easily spun up and deployed kind of very quickly, very...

very rapidly and it will give people options to use these as long as there's someone that's willing to do it. And that to me is kind of the key point of the decentralization of cashew in spite of the fact that it's centralized.

Cody Ellingham (45:28.16)
So on that note, I'm not sure what the technical overhead is for running a BitTorrent tracker, but I imagine because you're not actually hosting any files, you're just hosting kind of the metadata and the tracking side of it. I imagine it's relatively lightweight, right? know, it's still maybe you have to have a database of the files that you're referencing, but it's almost like the cost of attacking perhaps is more than the cost of

Yeah.

Cody Ellingham (45:57.486)
defending in that case.

Yeah, yeah. I've never actually ran my own tracker. I have uploaded many torrents myself. Yeah, but I'm not too familiar with the mechanics of

The legal cost of going after someone, know, thousands, tens of thousands, hundreds of thousands of dollars to go after someone legally, whereas, you know, I'm sure there's one-click solutions to just spin something up and then get your tracker list from existing trackers, kind of a little bit like NOSTA or whatever. There's sort of like maybe a defender's advantage there. And I wonder, again, with Cashew, it's very easy to spin this up. There's perhaps a...

a cost differential there. But that does lead us to maybe talk about the idea that a mint will go down and then what is the interoperability between mints? And maybe you could talk a bit to that because if a mint goes down, sure, you can just spin it up again, but what happens to those coins that are locked, the actual Bitcoin that's connected to that mint and how do they talk to each other and then how would you spin that up again?

Yeah, so I guess the direct answer is that there's nothing you can do. If a mint goes down and you had your funds in it, the funds are inherently lost unless the mint spins back up and then it's maintaining the same database of spent tokens and your proofs or your secrets are valid. There's nothing you can do, which is why it's really important to state that.

Erik Cativo (47:33.868)
wallets should be thought of as the wallet that you carry around in your pocket. You shouldn't really have any more money on an e-cash or cash wallet than you're willing to lose. This is not for saving significant amounts of money. This is for unlocking better privacy and better properties when you're using Bitcoin as a medium of exchange. So in terms of the interoperability between mints, Lightning Network is the connective tissue that holds all this together. Without the Lightning Network, none of this would make sense.

So every single mint, mints are not interoperable between each other. So if you're on the Tokyo Bitcoin basement and I'm on the Taiwan Bitcoin's basement and I try to send you a token that was generated to the Taiwan Bitcoin's basement and you try to redeem it on the Tokyo Bitcoin basement, it won't work. What you'll need to do is perform what's called a melt where

You take that token, it routes it through the Lightning Network. It sends it to the Tokyo Mint and then you can kind of receive it through that. we've, through a UX point of view, all this is kind of done automatically. The user doesn't see any of this. It just looks kind of like a send. But there is no operability, interoperability between mints. It's all the Lightning Network handles that interoperability.

As a set though, if I'm on a different mint, am I still effectively able to send it to a different mint and that melt will happen in the background?

Yeah, the melt will happen in the background, but in the background you're doing a lightning transaction.

Cody Ellingham (49:13.376)
Yeah, but because lightning is essential to this anyway. So in effect though, it is possible to do these bends from a user perspective from any mint.

Yeah, and from a UX point of view, you can actually make it quite seamless. Because what you can do is receive from any mint and do an auto-melt. So you can just send me eCache, and then my system will detect, OK, you're sending me eCache from a mint that I don't know. What I'm going to do is melt that or just go to the Lightning network and then deposit it into your mint. So from a user point of view, you've sent me $10. I received $9.98. In the background, it went from mint to Lightning to mint. But all of that can be abstracted away from the user.

I'm also just wondering, I mean, I have played around with some of these cash-through wallets with the FedE wallet system and I guess this idea that, yeah, the funds are inherently lost. I wonder whether that is just because of where we're at right now or whether there is ways to bring back a mint in terms of, know, assuming there's a level of social trust.

that maybe something's gone wrong as a technical issue, a server issue. mean, longer term, is there a way to remove that idea of a catastrophic failure from mints, in the eyes of the public at least? mean, nefarious, actual rug pulls are one thing, but other kind of issues that happen? What do you think? Is there sort of like a backup way of?

fire or whatever.

Erik Cativo (50:49.184)
Yeah, so there is a way for the Mint operator to perform a backup that backs up the proofs or the secrets, are the things that comprise the cash tokens. I don't want to get too technical, but tokens are comprised of subunits of data. So there is a way for Mint to have a content backup of this. And I suppose maybe there is some decentralized way for a Mint operator to, you have to be very careful about this, but to transfer your backup to someone else.

But it'd be an all or nothing thing. I wonder if there is some kind of way to post a backup and then have the users who had funds on those mints say, hey, these are the secrets or these are the proofs or these are the subunits of the tokens of the eCash that I had. Can I show you these and then get Lightning back? Yeah. Yeah, I don't know.

speculation because I just again I think we are I miss we're very early right but I do I do think longer term the trust trusted institutions running myths and I'm thinking these could even be things like you know actual legacy banks or other companies having things in place where there's almost and maybe this relates to what you're doing with Hoseki but like the almost the ability to prove that the

the mint has redundancy and assuming you trust them to not be nefarious, but you know, just on a technical level, there's not, it's not like, whoops, we lost the coins. But I know like provably there is redundancy that's happened or there's redundancy in place, there's backups that have happened, et cetera. If that makes sense. I mean, I'm just hypothetically.

Yeah, yeah. I think the two strongest kind of things that we have for that would be like one, in the case of cash, you just have some institution that you trust is serious about the infrastructure, serious about their protocol. Imagine someone like a cash app or, yeah, don't know, strike or something, running a cash remit. And I think a more resilient, more decentralized solution would be something that some people in the Fediment protocol have thrown out, which is a multi-jurisdictional

Erik Cativo (52:54.03)
guardian model. We have a guardian in Norway, a guardian in Japan, a guardian in England, a guardian in Brazil, a guardian in Australia, New Zealand. There's a lot of different jurisdictions in play here. Maybe the Americans or you know someone's feeling very aggressive and they you know pull the plug on I don't know America, New Zealand, but the Brazilian one has some time. They have time to tell users to get them out or something.

I think, mean, this is obviously still very important. We're looking at things like the Samurai Wallet and then there is things happening now in the world that make us concerned. this has been a concern for some time on the, I guess, the state intervention side. But I do also think on the technical side and in particular, I look at lightning and it's not a production routing lightning node. I mean, it's not an insignificant amount of work to make sure that you've done it properly and not.

you know, lose access to the funds that are locked up on the channel. mean, there's, you know, me playing around with a few sets on a Lightning channel is one thing, but routing, you know, multiple Bitcoins, you know, like there's some real pressure there.

Well, thing is, would say that once you get the cache remit running and if people are using ECache, the scale and throughput is infinite in a way that with Lightning it isn't. Every Lightning payment requires routing, it requires bouncing between Lightning nodes to reach its end receiver. If people are in ECache and they're sending ECache to ECache, the redemption just happens in fractions of a second because it's just one database and the...

the amount of transactions I can have in the second order.

Cody Ellingham (54:37.454)
Because I also wonder, mean, again, coming back to layered money, I mean, this is speculation, but there's been a lot of fervor in the Bitcoin community around mass adoption and how do you onboard the world, et cetera. And eCash kind of does away with that argument because maybe the reality is not everyone has a UTXO. We don't try and make that happen. Most people end up using a service.

through eCash and then maybe eventually they have some funds that go to UTXO but there's not like a rush to have to open up all of these UTXOs, all these channels with people. so maybe, and because it's cash like, it's maybe easier to get access to. I wonder whether this is actually the route where if you wanna start using Bitcoin with people who don't really need to care about Bitcoin. Yeah. Yeah, so what do you think about that?

Yeah. Well, I think that I know that this conversation has been had and I know for some people that is what we would call a black pill. For some people, if you describe that vision of Bitcoin, they would say then the project has failed. really? Because they view Bitcoin as something that didn't require trusted third parties. And if the way that we quote unquote on board the world is through

e-cashments or federations which are inherently trusted third parties and they would see that as a failure of Bitcoin. I don't hold that position personally. So I think that it depends who you ask. I think that we have to be realistic about the trade-offs that Bitcoin has made as a protocol. And we know why these restrictions are in place. The reality is that not everyone in the world can have a UTXO. Not everyone in the world can even open up a lightning channel that requires an on-chain transaction.

So ultimately, I do think that the solution is that a significant amount of people are going to be using custodial services. And I think that the biggest impact that we can have is to build custodial services that respect privacy to the maximum. And that is very much kind of why I'm very excited about about Cashew.

Cody Ellingham (56:46.486)
On that note as well, trusted third parties, et cetera. I mean, there's narratives and there's, you could almost say a dogma or ideology around these kinds of questions. But I do think fundamentally there is a difference between central bank money printing and the expansion of base money and commercial bank lending of credit and productive investment. Because effectively most money is lent into existence via commercial banks.

And then underneath all of that, there is this pernicious, malicious expansion of the monetary supply that happens through central banks. And those two things can be conflated as the same thing, but actually they're a little bit different, right? And so I wondered, in a sense, even the idea of fractional e-cash, just sitting with the idea for a moment, if lent into existence for productive enterprise, for building of...

Ash.

Cody Ellingham (57:45.582)
building factories and this kind of thing. I mean, is this a black pill? Is this a heretical thing to say? How does that even work? Because ultimately, if it's lent into existence, the factory makes the money, it pays it back, the loan is dissolved, it finishes. There's increased economic productivity.

and the money supply, the base money hasn't changed. It's just that this small moment of credit has kind of finished its cycle and it's now gone back. How do you sort of think about that? What's your framing of all of that?

I would say that when you mentioned that the thing that came to my mind was the Helfand eQuote, where he talks about actually there's good reason for Bitcoin-backed banks to exist. And he describes kind of like a trust model where some banks could be engaged in fractional reserve and they can be very transparent, hey, we're 75 % backed. And as a result, their IOUs, their eCash, their whatever the case may be, may be valued in the market at a lower rate because we know their fractional reserve.

Others might be 100 % reserved. Individuals are free to make kind of their choices on what they want to accept or what they want to not accept at a premium and rate them kind of differently. And that is not inherently kind of centralized. There was an experiment like this in the United States called the Wildcat Banking Era. Yeah. Yeah, where as far as I know, it ended in disaster, but maybe I haven't dived into it Maybe like Alan Farrington or something like that. Maybe we can speak more intelligently too.

Wildcat Banking. But yeah, those are kind of two things that come to my mind in that regard. The actual economics of it are kind of above my head. I'm a technologist, I'm a product designer first and foremost, so I kind of stick to the land that I know.

Cody Ellingham (59:36.3)
Yeah, no, I understand. I think, I mean, these are just provocations. again, I think the Bitcoin basis is that those things are not OK and it shouldn't be fractionalized and all fear is bad. But then I think as more and more people start using Bitcoin without necessarily, I guess, believing in the ideology.

That's where the market dynamics play out. And if you've got lower cost options, non-custodial lightning wallets, for example, generally they're going to give you an easier UX and in many cases they're going to be a cheaper experience, cheaper fees. That starts winning out. But just by virtue of having other alternatives, there's always the alternative of going self-custodial and saying, fuck you, I'm going to self-custodial and do it my own way.

keeps tabs on the entire system. In the case of a single central bank in a single...

Exactly,

You have no recourse. you do a bank run. Which I learned recently that inciting a bank run is illegal in the United States. really? Yeah.

Cody Ellingham (01:00:47.522)
Interesting. So yeah, it's all very interesting. And I think from my perspective, sort of sketching out, I'm very interested in kind of longer term. You know, we went for this big walk the other night and you you walk through the city of Tokyo and you just see these monoliths of global capital, know, Mitsubishi Bank, JP Morgan, you know, there's huge structures and you think, okay, not even just the building itself, you know, how much money, how much capital went into that?

And then we look at the Bitcoin economy and we're a small fraction of that. Even though there is a monetary value to Bitcoin in terms of the productive economy, which is actually the economy, it's only productive economy that has any value, we're still a very long way away from having the factories, the farms, the businesses that are creating goods and services. And so perhaps longer term, eCash feeds into that where

It provides cheaper, better rails. But actually it also enables people to run banks and they can be their own bank, but they can also be banks for others. There's market forming, know, with NOSTA, what we discussed before, being able to rank and have a web of trust for a bank. And then I can do something like do a microloan and I could issue funds to my neighbor to help them with something. And you start having maybe this more decentralized approach

Yeah

Erik Cativo (01:02:16.366)
Yes, yes. And something I haven't touched on because it hasn't been deployed at scale, but it is supported in the cache of protocol is the ability to authenticate for a mint. So you can have private mints where I have to invite you through some authentication mechanism. It could be a password. It could be some, it's agnostic. You can have whatever kind of authentication mechanism you want. And we can have a mint that you have to be invited to use. And this is very similar to...

private trackers, I'm not sure if anyone there is familiar, but these are torrent communities that are of the highest quality, curated, you have to be invited, you have to show a history of sophistication with torrents and, you know, being a person who...

Contributing? Seeding.

and that doesn't just snatch and you build up a resume in the sworn community then you get invited to these private trackers and you can have this kind of similar concept for for mints where you there's a vetting process and you can imagine a community can happen where you have a mint that we know who's running it it's invite only you know

What I like about that as well is it brings it back, I think another perhaps, I wouldn't say it's a folly, but a crutch that we sort of lean on in Bitcoin is the power of decentralization and like, know, player versus player, know, wild west kind of situations. But in fact, what you're describing in a way, this could be a meat space agreement. This could be a handshake. This could be a contract.

Erik Cativo (01:03:42.496)
Yeah, yeah, exactly.

under the law of a state, for example. And so yeah, we have an agreement if you may to join my mint. I mean, it could also be like a private tracker where it's digital, but by bringing it into the meat space of legal systems and being like, look, I've got your name. There's some recourse.

Exactly, yeah, and you can require like authentication to various degrees and this is actually something that you hear quite common where a lot of people are interested in in running a mint For their community like you I've heard this in in Madera where yeah, like we want to run a mint for our merchants I want to make it easy for these guys to start receiving Bitcoin and I want to run them in but I don't want the entire world to just get into it How can I do it? So only us?

So what I like about this, this is of digressing on this, so there's a couple of historical examples. What do call them? Mutual societies. Are you familiar with that? Mutual societies. before the widespread advent of social security and these kinds of things, prior to the New Deal in the US in particular, you had things where you would kind of buy into these mutual societies. And if you got sick, they would

It's kind of like private insurance in a way, before insurance was widespread. And you would help each other out. I mean, the classic one you see is like the Amish, right, helping each other out. Okay. You've got these kinds of groups, right? And you're sort of, and there's different layers. I mean, the Amish is more of a religious thing, but actual mutual society is where you contribute funds. And then, you know, if someone sort of gets sick or they're not able to work, you can help them out, right?

Erik Cativo (01:05:08.274)
yeah, yeah, yeah. Familiar, yes.

Cody Ellingham (01:05:25.62)
And you see, I see some opportunities here longer term, even like mutual buying, you see communities where they, isn't that like the origin of Costco? you become a member and then you get cheaper rates on things. In New Zealand, I'm sure in the US as well, there's credit unions where it's member owned. And what I'm thinking here just sort of longer term, and this is where I, taking a step away from wild west antagonism,

credit union

Exactly, yeah, then you get benefits.

Cody Ellingham (01:05:55.022)
towards, you know, I don't know who's out there. So actually like a local community credit union thing using eCash, you know, have a veracity of who's actually a member and then offering funds and offering these kinds of services, these banking services, which have real value. There's a reason banking's been around forever is because it has value, right? And so it's sort of dispelling the myth that bankers are the enemies, I think, in a sense. So sort of, again,

echoing how funny.

Yeah, people need to make that distinction. There's central banking and then there's bank.

Yeah, and in fact, you know banking is an incredible innovation where I say well actually I've got this group of friends a group of people I know this community. I'm trying to start a business Can you help me out and then you know you you sign on the line and you you have them sort of look at your business plan and you know there's like a meat space kind of thing going on there and I don't know man. I'm just sort of ruffling but I feel like I very much feel like e-cash sits in that world and then again like the the FETI model

or Kashri, to then engage with others, that's where lightning comes in. And so it's kind of within your community.

Erik Cativo (01:07:02.516)
Yeah, yeah, exactly. But then you guys have the ability to engage with the world, the entire global ecosystem at any time.

Yeah, so there's something really exciting about all of that, man. I guess just coming back as well, so you do live in Sweden. And I thought this could be an interesting point of comparison. Sweden's a very digital economy, right? What has been your experience been like? How do you sort of, as a Bitcoin, how do you look at that and understand that?

yeah i guess that's

Erik Cativo (01:07:31.67)
I mean, it's a high trust society, so I think in general, like Sweden is not corrupt. It's not corrupt until it is, right? But yeah, people, I guess the one white pill is that in Sweden, everything is cashless and peer-to-peer transactions are done through an application called Swish, where your ID is tied to this centralized application and it's linked to your phone number.

So if I want to send someone money, I just say, what's your swish? They rattle off a number, then I send it. And this application is so easy to use that it's across generational gaps where you see GenX, even some boomers, using it with no friction. So the one white pill is that people can learn to use peer-to-peer electronic cache. You know, with a huge aftertaste of what swish is. But nonetheless, they are doing that. So these things can be built in a way that people can.

used them in a way it's valuable for them

and that can be built without necessarily involving the state.

They can, yeah, exactly.

Cody Ellingham (01:08:32.894)
The final thing I wanted to talk about is Numo. Tell me about Numo and the point of sale system you guys have been working on.

Yeah, so this is something that we've been working on. We as the Cache developer community. And we really want to kind of bring the UX of Apple Pay, NFC tap to pay to Bitcoin. And this kind of stems from feeling like the way that people currently use Bitcoin payments to me feels a bit outdated. This idea of I have to like present you with a QR code.

or you have to pull out your phone and then I often see like a struggle to focus, then a look and then like an authorization. And if you observe, just observe people and how they pay. I see this happen all the time. And one of the things, one of the moments that I realized like we need to be competing on this level is I was at a Swedish coffee shop and I saw these two people, they were having a conversation and then they ordered the coffee and then it came time to pay. And the gentleman just, you know, pulled out his phone, double tapped it.

waited for the beep and the haptic and the whole time he's keeping eye contact with his friend and he doesn't break his stride. It was one kind of seamless motion. And it was just so natural to him. And then I kind of felt like Bitcoin payments don't feel that way. Bitcoin payments break you out of whatever you're doing and force you to execute a task. And I want Bitcoin to feel that way. think we need to be competing on that level in terms of Bitcoin as a medium of exchange. So in Numo, we've built

a POS or a system that allows a merchant that has an Android device to just download this application. They don't need to set up. They don't need to KYC. They don't need to do anything. They download it. They install it. They get a very simple POS, a point of sale system. They can put, you know, $1, whatever the case may be, they can add items, t-shirts, know, pictures, SKUs. It's a full-fledged POS system. But the big thing is that we support the ability to pay via NFC. So now across the cash wallets, we're going to launch some

Erik Cativo (01:10:35.278)
where the cash walls are going to have an option to pay contactless. So you can just, with anyone that's running Numo, this POS, and turn them out on your cash wall, you can just hit contactless. You just hover your phone over it and it mimics an Apple Pay-like experience. And I think I showed you a demo of it and it feels kind of more similar to like how we use payments. So I'm really excited to kind of get this out there.

Not because I think NUMO is going to take over, is going to be the POS everyone uses, but I hope it lights a fire under people to see like, hey, this is something that can be done. Let's start putting some brain power and some energy into embracing NFC. I think that QR codes, they work. They're a great fallback. We've built them. There's a lot of good things happening in QR code. BIP21 that's on chain and Lightning as a fallback. A lot of great innovation in QR codes, but I want to see the UX of Bitcoin.

as a medium of exchange, just attempt to meet people kind of where the standard already is. And that's what makes me really excited about NUMO.

Yeah, that's awesome. I look forward to that. more broadly, what can we expect in 2026, do you think, in the cash-through world or the e-cash world generally? What else are you looking forward to? Where's the excitement at?

Yeah, so one of the things that I want to do more than 2026 and we do plan on is more things like Bitcoin for Signal, where there are already a lot of cashew wallets, there's a lot of lightning wallets. I feel like that ecosystem is kind of robust as is. What I want to do is I want to see Bitcoin integrated where people are already hanging out into applications or spaces where people already do other things that

Erik Cativo (01:12:22.402)
that they don't necessarily use Bitcoin for. So I really want to take more initiatives like Bitcoin for Signal where we show people, hey, it's possible to integrate Bitcoin into an app that you're already using and it adds value to what you're already doing because sending money should be just as easy as communicating as to kind of where you already are. So I want to see not just Cashew, but I want to see more people kind of meet users in spaces that they're already at.

and find a way to fit Bitcoin in there without screaming Bitcoin at them and have it kind of fit more subtly and more elegantly into this. Bitcoin is the best way to send value digitally on the internet. And we're using digital services to conduct all kinds of operations, right? Like downloading music, streaming music, all this stuff. And I want to see Bitcoin integrated into kind of these applications in a more seamless way that isn't necessarily.

go and download this wallet or go and do this external thing. I want Bitcoin to come to them. And maybe I could talk about one other thing that is really exciting to me is I've been very heavily in vibe coding lately in deploying products and deploying websites. And I think vibe coding is still tremendously underrated. I don't think people have really unlocked the gravity of what this will do. And one of the things that makes me really exciting is like now anyone in the world can just spin up a website, a front end, a service.

and they could potentially start charging money for it. And what makes you really excited is when you think about most of the world is ineligible for a Stripe account. Most of the world is ineligible to go through the KYC hoops and hurdles of authenticating yourself so that people can start paying you with credit cards. But now with Vibe coding, it was not until a couple years ago that most of the world was unable to ship their own front-end website in a matter of hours, right? That required skills, required you to have to know HTML, CSS, a little bit of Next.js if you want to make it look good.

But now you can just deploy a website and now you can just have your products and you can throw them out there. And I'm really excited to have Bitcoin be integrated as this is the easiest way to receive payments on the Internet, period. Not just Bitcoin, but payments on the Internet, period. this is not my company and I'm not invested in them at all, but a company that I think is doing this is Money Dev Kit. They're basically building this infrastructure where if you're a Vibe coder in India or...

Erik Cativo (01:14:47.106)
Hong Kong or wherever, and you want to sell your products to the American market, well now there's a package that you can just deploy, install, and then on your website you can have a Pay with Cash app, Pay with Revolut, Pay with whatever kind fintech service that accepts Bitcoin. And now you're in India or whatever, you've launched the website, and now 58 million Americans can buy your products with Pay with Cash app, and they pull out their cash app and they scan it, and they don't know they're using Bitcoin, right?

And you've just monetized your products at 58 million Americans without an ID or anything and that that to me is really exciting because that to me is like Bitcoin is money for the internet and as the fintech services start integrating Bitcoin into their existing stack Soon that barrier will be broken down and then everyone in the world can just start receiving this rather easily So that that makes me really excited as well. Yeah

That's incredible, Eric. Thank you so much for your time. Yeah. If you want to send in one, what's the best place for them to check out your work?

Thanks for having me, been a blast.

Erik Cativo (01:15:47.342)
The best place is my website erik.day I'm also on Noster, primal.net slash erik, erik, erik Twitter as well if anyone wants to just hit me up to chat Design Bitcoin anything Twitter is uxerik underscore. So any of those places you can find me It's been real

Alright man, so thanks so much.

Cody Ellingham (01:16:18.104)
So you're an Evangelion fan? Yeah, yeah.

I'm not an anime head, but I do like Neon Genesis Evangelion and I actually got into it through kind of my interest in Christian theology because there were some people were telling me about all the Christian references in it. So like, okay, I'm intrigued. And then I got into it through that line.

Yeah, I think I've been quite into Akira.

Yeah, I saw it recently. I saw Acura and Ghost in the Shell before I came here.

Man, so there's something, there's just another level with Akira. And the manga is incredible, the film as well. I went out to Kanazawa, which is Western Japan, which if you ever get a chance, it's an incredible place. And my friend who did a book on anime architecture, I haven't got it here, it's back in New Zealand. He got some of the original background.

Cody Ellingham (01:17:10.03)
plates they call them, the painting, because you know have the cell animation of the characters but the background is usually painted and it's just squizzed. And Akira and Ghost in the Shell and I actually brought some prints, know, limited, you can't get these things, of the full plate which goes all the way to the edge with little notes and things. often it would be panned or zoomed in or something.

Yeah, I've seen a video of the making of it, so I'm familiar how they kind of flip back and forth between the plastic and like...

But there's just an incredible philosophy and Ghost in the Shell in particular has an incredible philosophy towards the ontology on being.

Yeah, the nature of consciousness and like the idea of shells and

And it's something that sat with me. And in fact, one of my most profound experiences probably in my life was obviously there's this imagery of Hong Kong referenced in the Ghost in the Shell. they call it Newport City, but effectively it's sort of like Tokyo times Hong Kong. And going to Victoria Peak on Hong Kong Island and climbing it in the middle of the night, watching out over Hong Kong sort of below me.

Cody Ellingham (01:18:21.486)
Which is very much like the final scene of Ghost in the Shell. Yeah, where she's sort of the woman emerges in this new body. Yeah, yeah, and she says something to the effect of Where does the newborn go from here? The net is vast and infinite. Yeah and Seeing that with my own eyes over this like incredible cityscape of millions of people It was just it was so profound and in a sense one of the high points of my photographic career was that

journey because the way we actually got there was there was this old mansion on this on Victoria Peak and you can't get into it now but at that time I had a friend who was into urban exploration and he helped me get into it there was a few of us we sort of snuck in and climbed up onto the roof of this like Victorian era of Victoria Peak Victorian era building watching out over the city and it was just yeah it was it one of those things like I couldn't repeat that again

It's a view you'll always remember.

So that was the Ghost in a Shell piece and then the Akira piece was quite profound because in the story, as you know, there's sort of this post-apocalyptic world, but they reference the 2020 Olympics. So there's the old stadium. Yeah, yeah, yeah. And it was quite profound because obviously we had the 2020 Olympics in Japan and they got delayed because of COVID. And I was involved with photographing the stadium and I did a small project with CNN like...

showing the 1964 Olympics and then the 2020 Olympics and how those spoke to each other. Because in 1964, if you're familiar, that was like Japan re-entering the world of... The globalized world. Yeah. Well, I think 1951, you had the San Francisco Treaty. They normalized relations with America and stuff. And then 64 was like, we're now back economically speaking as well.

Cody Ellingham (01:20:18.094)
The architecture was so profound. I don't know if you've seen, there's like the Yo-Yo-Gi Stadium and there's a few pieces of architecture and they're just so avant-garde. What was the architect's name? It might be Kinzo Tange. Yeah, I think it's Kinzo Tange who did the Yo-Yo-Gi Stadium and it's this kind of incredible kind of usage of concrete. And I never actually got to see the original main stadium because that got demolished a few years ago, but...

I photographed everything else if I could find it. And so I did this series on 1964. And then it was interesting because 2020 was like kind of a big disappointment. Like it didn't even happen on time. All of the buildings were kind of modernist copycat. think they were going to do, they weren't even going to use a Japanese architect originally. I think they had a Zaha Hidid Stadium originally and it was just so generic. And then they were like, we'll get, I think they ended up getting Ken Gokuma to redesign it.

It was just kind like the antithesis of what 64 meant. And then that connects in obviously with the Danchi project as well, because this is the same era. would you say it was like there was a moment when everything felt like there was like an optimism for the future. that's around about the same time. Do you remember that song Sukiyaki? And it's I'll give you the tune. It's something like

I'm not very good singer, but there's an English version of it as well, but it's like look up, move forward. There's like a very hopeful song. And this was maybe 64, 1960s at least. And Sakamoto, was his name? Kyu Sakamoto was the singer. Unfortunately, he ended up dying in an airplane crash, but...

There was just this moment in time in the 1960s and the 70s where Japan, I think, was an image of the future of a new way of being, of a peaceful redevelopment of economic revival, all of these things. And then that kind of finished and you had the bubble pop and then you had this lost decade.

Erik Cativo (01:22:29.952)
Yeah, and just becomes this kind of plateau. Whatever you hear about Japan economically or population wise, it's a plateau.

And so in a way, I think all of this work, it's of harkening back to, what would it have been to have, what would it have felt like to have hope for the future and to be looking forward?

‍