Alan Plus is the founder and CEO of Lightning Network+, a marketplace for getting inbound and outbound liquidity by participating in channel swaps.
In our talk, Alan and I spoke about why he built LN+, how the platform works, and their business model, competition, and network effects on Lightning more broadly.
→ ZEBEDEE: https://zeb.gg/rooke
Before every show, I ask listeners on Twitter to send in their best questions for future guests. I read off all the questions for the guest, and pick one listener to receive a split of the sats earned for the episode.
To ask a question, send a message, or to support the show, download Fountain from the App Store and load your wallet with a few sats.
→ Fountain: https://www.fountain.fm/
→ More Episodes: https://play.fountain.fm/show/P6XXuSPg6f2rj4ECB0fT
→ Lightning Address: ⚡firstname.lastname@example.org
→ Twitter: https://twitter.com/kerooke
→ Blog: https://www.kevinrooke.com/blog
00:00 - Intro
02:10 - Alan Plus Intro
7:33 - How Do Liquidity Swaps Work?
18:30 - Filtering Nodes In Channel Swaps
22:54 - Competition Among LN Liquidity Marketplaces
28:24 - The Business Model for LN+
33:52 - Privacy on the Lightning Network
40:29 - What Is Slowing Down Lightning Network Adoption?
51:50 - Roadmap for LN+
53:20 - Alan Plus’ Favorite Lightning Apps
1:00:45 - The Lightning Round
Alan Plus - 00:00:00:
This is the biggest problem is that you can, as a new node operator, you can easily open a channel to any node on the network. But how do you ask somebody to open to you? Somebody came up with this smart idea to create Rings of Fire, they called it at the beginning, or swaps. Nobody has a perfect strategy, and it's a moving target. So everybody is trying to figure out what's the best way to optimize routing earnings. So by the time we go 10x and 100x, I think we'll have a lot of improvements. And I think your vision that we will just be able to send that pretty much privately, I think that's an achievable goal. Somebody should build, if they haven't already, a platform for streaming video and streaming sats in returns. It's kind of like a Netflix where you only pay for as many minutes as you watch.
Kevin Rooke - 00:01:01:
Alan Plus is the founder and CEO of Lightning Network Plus, commonly known as LN+, which is a platform for getting inbound and outbound liquidity using channel swaps on Lightning. In our conversation, Alan explains exactly why he built LN+, how it works. And then we got into the business model, we got into competition. There are a lot of Lightning Liquidity marketplaces around now. We got into the importance of network effects, and we got into Lightning adoption more broadly. I've also added Alan to today's show splits. So if you enjoy this show and if you learned something new, you can send sats in that reflect the value. You got out of today's episode. You can send these sats over the Lightning Network using any Podcasting 2.0 app. My favorite to use is Fountain, but there are many of them before we get into today's show, today's sponsor is Voltage. Voltage is the industry standard and next generation provider of Lightning Network infrastructure. Today's show is also sponsored by Zebedee, and Zebedee is your portal into the world of bitcoin gaming. We'll have more from Voltage and Zebedee later in the show. Alan, welcome to the show. We've got lots to discuss about the Lightning Network and the project you're working on, LN+, but before we get into any of that, let's start with your history in Lightning. When did you first discover the protocol and recognize the importance of it?
Alan Plus - 00:02:28:
Thank you for having me on this show. It's been a while. We spoke last time.
Kevin Rooke - 00:02:34:
Thanks for being here.
Alan Plus - 00:02:36:
Thank you. So I got into bitcoin quite early on, to be honest, but sometime 2013, so really early. And I was very excited. I tried it out. I talked to a friend of mine who was running, like, industrial shows, and I told him, this bitcoin thing is huge. It's going to be big, and we have to do something about it. And he got orange pilled, and he actually started the first global bitcoin show. It was called Inside Bitcoins. So that was my start. But then I visited a couple of these exhibitions and I wasn't a developer back then. It was a bit too steep of a learning curve to learn bitcoin and on a programming level. So I didn't get into bitcoin, I was into other professions. So for many years I didn't really work on bitcoin. I followed somewhat bitcoin, but that was it. And then when Lightning came about, maybe about how long that was, maybe six years ago, I tried Lightning immediately because I'm very excited about the payment part of the bitcoin story. Of course, the monetary system is very important, but most excited about the payment part. So anyway, I tried out Lightning and I think I thought that it's a great idea, but it wasn't working very reliably back then. So many payments failed, there weren't enough channels or nodes and the software wasn't there. It was quite hard to install and use at the beginning, and then I gave up again. And then about two years ago, maybe one and a half, two years ago with Umbrel, I restarted again my interest in bitcoin and I said, okay, this time I'm going all in because this is now working. It's amazing. And I could see there's so much going on in Lightning and bitcoin is getting really strong in every way. So this is it. I'm just going to quit my fiat job and I'm going to go full in. So that's my short story.
Kevin Rooke - 00:05:13:
Love it. Now, talk to me about the launch of LN+ then. When did that come about? Was that right when you decide to quit your job?
Alan Plus - 00:05:23:
Yeah, basically very early on, after I started LN+, I saw that this is going somewhere and I decided to quit. But basically LN+, the concept of Rings of Fire is not my idea. Lots of Rings of Fires were started back then on Telegram and Reddit, and I used them myself, but it was a little bit hard to coordinate. So I thought that there's an opportunity to have a sort of collaboration software, a web based collaboration software that people could use to coordinate these swaps easier and then they wouldn't have to provide all the information about their nodes every single time. And they wouldn't have to be like manually pinging everyone in the swap and coordinating and explaining. So I thought we could just do that once everybody logs in once and that's it, then we can start opening all the channels. And it took off really well, so I was really glad about that. And then lots of people sent in all kinds of ideas of how to improve LN+. We started private channels, I mean, private swaps, so people who didn't want to just invite anyone to their swaps could do swaps. And then we had dual swaps, which is basically between two people. It's not really a swap, it's more like a balanced channel agreement, but it's still called the swap, I guess. And we have many other features. Like you have an old Explorer and you can post your logo on your profile and put all kinds of other information about yourself. So, yeah, we have all these features support section where people can ask questions, and the sole whole site is growing basically since then.
Kevin Rooke - 00:07:32:
Nice. Yeah, there's a lot of interesting concepts on the LN+ website right now. One thing I specifically want to call out is you have this concept of liquidity triangles and liquidity squares and pentagons and different shapes for moving liquidity around the network. So can you explain how those structures work for people who aren't familiar?
Alan Plus - 00:07:57:
Sure. So let's start with the problem that node operators have. So if you start your node from zero, like you just started an embryo node, or embassy node or which ever implementation you prefer, your first problem will be you have to create channels on it. And you don't just have to open channels to other nodes to get outgoing liquidity. You also need channels that are open empty on your side. So somebody has to open channels to you. So you can empty these channels in many ways. But I wrote a blog post about like 13 or 17 different ways of creating incoming liquidity. So there's so many different ways to do it it. But the main way is basically that somebody opens a channel to you, and that way instantly through that node, you are able to receive money. And if you open a channel to somebody, you will be able to send money. And you are not just sending it to that one node, you can send it to the entire Lightning Network, right? So, to any node on the network. In the same way, if somebody opens to you, anyone can send to you with some limitations. It depends really, how well connected those nodes are that you are having channels with. But typically, if you are connected with another node with more than a dozen channels, then you're good. So anyway, the point is that this is the biggest problem, is that as a new node operator, you can easily open a channel to any node on the network. But how do you ask somebody to open to you? Because what is their incentive? They're going to be putting up satoshis towards you in that channel and you have incoming liquidity, but what is their incentive? So somebody came up with this smart idea to create rings of fire. They called In the beginning, or swaps. And the idea is that the simplest swap is a triangle. You have A, B and C, three node operators, and they agree to open channels to each other. So the simplest one, let's say all of us open a 1 million satoshi channel. So A open to B, opens to C, opens to A. So we have three channels. Everybody only opens one channel, but everybody receives a channel from somebody else. So this way you are opening a 1 million satoshi channel and you are receiving a 1 million satoshi channel. And therefore you can send and receive at the same time. And it's in everybody's benefit, and everybody is benefiting from the situation because we all grow our nodes twice as big. So the node capacity, so to say, is growing twice as fast because now you are showing 2 million as node capacity on your node rather than just 1 million because you have two channels of each 1 million. Right? And basically that's the whole idea. So this is just a simple way to organize people and make sure that everybody can have a node which is well balanced in a sense that has a lot of incoming and a lot of outgoing capacity, and it's roughly the same. So you can efficiently route money for others and you can also use the network efficiently. You will be able to receive and send.
Kevin Rooke - 00:11:53:
Right, that makes a ton of sense. Is there a way, how do you coordinate this kind of, let's use the triangle as an example. How do you get three nodes all at the same time to create channels with each other? Is there any sort of custody that has to happen of funds or what does that process look like?
Alan Plus - 00:12:12:
So right now it's very simple. It's based on reputation. So when three node operators agree to join a swap, they all have like a gentleman's agreement that they will open the channel that they need to open and they don't have to do it at the same time, just roughly at the same time, within the two days. We are giving people two days just because of time zones and possibly some technical issues, who knows? So we have two days to open a channel after the agreement started. And everybody does their own thing with their own node, their own way. So there's no standard way to like, you don't have to use Thunder, Hub or Boss. So I've sent some specific tool to open these channels. You use whatever you need and there is no enforcement of this contract other than the social aspect that if you don't do it, you will be voted down, and if you do it, you will be voted up. So every node now has reputation on LN+, and some people have dozens of upwards and zero down votes. So you can see that they're definitely a reputable player and it's a good idea to pair up with them. But this is today, in the future. We actually tested with Alex password the other day, a much cooler way to do the channel opening using his tool Boss, which is Balance of satoshi. It's an open source tool and basically on testnet, we could open very large channels between three nodes with basically one large transaction, which has a bunch of inputs and a bunch of outputs. And this is exciting on many levels. So one is that you can save a little bit of channel opening fees. The second is that it's trustless because everybody is opening at the same time. So this is something we're going to be using in the future on LN+ once it's ready, this is still work in progress and release, but it's coming soon. But the more important and more interesting thing is that once the Lightning Network starts using Tap route, we will be able to compact all these complex transactions into a simple transaction. And that's really good for fees and privacy. So at that point, right now, the triangles are the most efficient way to open swaps because it's the smallest shape, so it's easier to organize than a square or a pentagon. We can talk about why squares and pentagons make also sense even today, but that's a different story. But anyway, the point is that in the future, once we are able to open these channels all at once with one transaction, it's going to make sense to create larger swaps because it sort of obfuscates the whole situation. It will be harder to track with opening to whom and how and all that, right? Well, especially for private channels, because you could open private channels too. So there are some implications for privacy here.
Kevin Rooke - 00:15:59:
That's fascinating. The project you're working on now with Alex Bosworth, is this dependent on Tap route or is that a separate one you mentioned?
Alan Plus - 00:16:07:
No, this doesn't depend on Tap route and I was just testing for him. So I am not involved in the development of that code. It's all him, just to make it clear. But it will be perfect fit for us once it's ready. And we actually already use Boss Vos for dual swaps, which is basically an agreement between two node operators, only A and B. And you can see on the site on Lightning Network plus that you can see these Lightning vault visuals. Those are those dual swaps. It's between two parties and basically what happens, it's already a smarter way to open a channel because both parties can put up a certain amount of satoshi. Let's say both parties put up 1 million satoshi, and then we open one channel between the two of them. And the channel is actually a 2 million satoshi channel and both have 1 million on each side. So it's by default, when you open it, it's already balanced and it's already twice as big and it works trustlessly. So it's a pretty cool way to open channels as well. And you can do it through LN+ you can find people who are willing to do this with you, right.
Kevin Rooke - 00:17:40:
So that may be even more efficient than the triangles, but just with the downside that instead of having two separate channels connected to two different nodes, you're only connected to one, right?
Alan Plus - 00:17:50:
Yes. So there are some upsides. Yes, because you can open a larger channel, but the downside is that you have less channels. So if you're a new node operator, it makes sense to participate in triangles first. But in some situations where you have very large node operator and maybe are looking to create very large channels for routing purposes and you know how to use Boss, then you could also try the dual swap. So all of these shapes have their place and they are useful in different situations.
Kevin Rooke - 00:18:30:
Now, I have a few questions here. One is in relation to the triangles, if you have three different nodes that let's say have a different level of status on the network, right, you have two really well connected routing nodes and then maybe I sneak in there with my beginner node and I've just got one or two channels open. Is there a challenge here? Do node operators want to select which nodes join these triangles? Does it matter if all of them are kind of like at the same level or routing the same amount of volume?
Alan Plus - 00:19:08:
Excellent, excellent question. So absolutely, this is why we introduced restrictions or like parameters that you can set for your swap. So when you open a swap, you could say, I only allow people with a node size of a certain size to join this swap, like you can set by Satoshis or by the number of channels. So this way you can prevent the situation that you just described, that you have two very large nodes and a small node joins. This is one thing, but I also noticed that there are different strategies of how to run a successful routing mode. And one of them is to have a good balance between smaller nodes and bigger nodes. Because if you are only connected to very large nodes, you are competing with other very large nodes who also have those channels or similar channels. But if you have a certain set of smaller nodes, they will come through you to the network, so they generate traffic for you and then you have those sats. So there are all kinds of routing nodes. Some of them emphasize connecting to a bunch of smaller nodes that are active. Some of them are only focused on very large ones. Some of them have a mix. So nobody has a perfect strategy and it's a moving target. So everybody is trying to figure out what's the best way to optimize routing earnings. And some people don't even care about routing earnings. Some people just go for being extremely well connected to the network and then sell channels. So that's also a business model.
Kevin Rooke - 00:21:02:
That's fair. I also want to refer back to a comment you made about the different swap projects that are being built to make these more efficient. So you mentioned Alex Boswell's project. He mentioned a project that is dependent on tap route. I spoke with Christian Decker from Blockstream the other day and he was talking about multiparty channels. How does the concept of multiparty channels fit into the two projects you just described? And the current triangle swap set up.
Alan Plus - 00:21:36:
So I have to admit that I heard about the multiparty channels, but I don't understand the details of it yet. So I don't want to talk about it just yet. But I think in general terms, I think there's an opportunity to implement that on LN+ as well. And I'm hoping that all of these special use cases and special ways to open channels will be cross implementation. So L and C Lightning and maybe others will all be able to participate in these more complex and smart surveys to open channels. So we are going towards that kind of future. But it takes time. It's a lot of coding that needs to happen and testing has to happen. So we'll get that eventually.
Kevin Rooke - 00:22:31:
Is it true today that anyone can use any implementations, can access these triangle and square and pentagon swaps on LN+?
Alan Plus - 00:22:40:
Yeah, that's right. You can have a swap with a mix of different implementations because we don't rely on a specific tool. So, as I said, you can just open channels in any way you want.
Kevin Rooke - 00:22:54:
Got it. This leads into a question about competition. Now, because you are a liquidity marketplace, there are other liquidity marketplaces. Every one of them has a different kind of different features and different characteristics. I know there's probably a handful. Now, there's liquidity ads on Core Lightning that I believe it's specific to Core Lightning right now. Maybe one other implementation.
Alan Plus - 00:23:24:
Yeah, we are trying to build it on LND as well. There is some funds being raised for that.
Kevin Rooke - 00:23:32:
Right, okay. So right now, mostly Core Lightning and maybe LND in the future. Lightning pool on LND. And then you have Amboss, which I believe is across all implementations. And then you guys there's four right there. What do you make of the landscape here? And when you think about competition, how do you differentiate yourself among these competitors?
Alan Plus - 00:24:00:
Yeah, and I want to mention that there are also single nodes who offer channels like that's right. Is a very famous, huge, I think, number two node in the network.
Kevin Rooke - 00:24:18:
Thats the point
Alan Plus - 00:24:23:
The synonym. They also offer a widget, which is a very cool little widget to buy. So there are so many other options. But also what's interesting is that you could also create incoming liquidity by opening a channel to something like Kraken and then sending all your sats to the exchange, basically emptying your channel and then sending back that money to yourself on chain. So that way you can basically, without using any service, you can create incoming liquidity for free. Not free, because there are some fees associated with the exchange rate. Plus at this point, they will know that that node belongs to you, I guess. So privacy is an issue, potentially. So where do we stand? We are the one that allows you to open or receive these incoming channels for free. So we have the free option basically. So for a new node operator who doesn't want to spend immediately money on getting incoming channels, we are a good option. We are also a good option for small merchants who don't want to spend money on incoming channels or maybe want a mix of buying some channels from one of these services and also having some incoming through the community. And just generally if you are building up your node like you're a routing node like you do this professionally and for profit, I think opening channels and triangles is definitely a good way to go because you want to have a good selection of channels, too many nodes and you want to have a balanced node. So at least some of your channels would be open through these triangles, if not all. But yeah, it depends. So I think we have a place in this ecosystem. I think you can see on our statistics that we opened a whole lot of channels. It's unbelievable, like tens of thousands and it's crazy in just one year. And the capacity is also insanely high, the amount of capacity we open. So it's very popular and we don't have like a monetization model here on the swaps and we do make money in some other ways. So just like in every business, like for example, I think Emboss, they make money on selling liquidity for other people, like they take a cut from that but their Explorer is free, they have a membership, I think. So in our case, our swaps are free, but we do make money by allowing people to highlight their node in the Node Explorer within Lightning Network Plus. So for a very small fee for a few sats you can promote your node and then people will notice you and more likely to open channels to you so you can get incoming liquidity through those people who notice your node. So I think all of these services make sense and in different situations people will use a different service or they could even try throughout the lifetime of their node and as their business grows they could use different services at different times.
Kevin Rooke - 00:28:22:
Yeah, what makes that the right business model to allow people to advertise their nodes and to take a fee there rather than taking a feed directly on the swap? Or is that something that you may consider over time taking a fee on the swap as the network effect of LN+ grows?
Alan Plus - 00:28:45:
Well, I intend to keep the core products free so it's always going to be the very least it's a free meal model, right? And maybe for some advanced features, maybe for like promoted swaps or stuff like that, we could ask for some money. So I'm not saying it'd always be 100% free, but some advanced features could be paid and it's not even for the profit, it's more like helping basically certain node operators who need to stand out for some reason because let's say it's a merchant and they just need incoming liquidity as much as possible. So it's like an opportunity for us to help these nodes grow. I think at this point, all of us, everyone who was mentioned, is interested in really growing the whole ecosystem as big as possible and make the life of node operators as simple as possible and painless as possible, because that's how you can ten x and 100 x this whole ecosystem. And we don't have to really worry about making money at this stage for sure. I think we just have to be patient and help the network at this point.
Kevin Rooke - 00:30:14:
Now, when you think about the network growing 10x or 100x, what do you think of the strength of the network effect will be that you're building it LN+? Do you think when you look back, if we grow this network a hundred times, the Lightning ecosystem is 100 times larger and you've built up a network effect, is that going to have that strong staying power that we see in the network effects of things like Google and Facebook where people kind of get they're almost locked into a marketplace or an ecosystem? Is that going to be as strong in the Lightning space? Given that there's a lot of interoperability and there's not as many, it's not the closed ecosystem that web two is.
Alan Plus - 00:31:02:
Well, my goal is to make getting incoming liquidity as easy as possible and then I'll do my best I can and then if the market appreciates that, great, but I'm not going to break a sweat over it if somebody else wins. I'm still happy because I want this whole ecosystem to work. So I think what you're asking is what is the chance that Lightning Network Plus remains relevant once we are going 100 x? Right? So I have a bunch of ideas how that can happen. And one of them is something that is actually a first going to be on your show, is that we're going to launch an API soon. So I'm working really hard on that, testing the whole thing. And what it will allow us to do is basically certain wallets or certain tools will allow you to participate in swaps and friction. So you don't have to go to a website like Lightning Network Plus and manually apply and stuff and copy paste stuff. It will all just be done for you. So for example, if you have an Umbrel node, there will be an app and you just say, hey, I want to receive 1 million and I have 1 million to put up. And you just press a button and you just automatically join a swap and everything will be done for you, the openings and everything. So the system will be using LN+ backend, but you will not be using the website necessarily. And I expect that this could happen with other tools. And I've been talking to other Lightning developers who are already building Lightning Network plus back end into their system. So there will be multiple places where people come into this one central repository of swaps to cooperate. And these are ephemeral, right? So people use these swaps and then once they expire, they just go away. So it's not like a centralizing problem because people just use it and then they just forget about it. It's not like they're logged into something like with Google if you start using Gmail and you are stuck with the Gmail address. So we don't have any of that. We have to continuously provide some value to you to keep you interested, right?
Kevin Rooke - 00:33:53:
Yeah, that makes a lot of sense. I want to talk a little bit about privacy on Lightning because this is something that I think people initially look at Lightning and they go, okay, this is a more private version of bitcoin, but it's nuanced, right? It's not like Lightning is as soon as you go onto Lightning, everything is 100% private and no one can see anything about you ever. There's details and nuances that I think a lot of people miss. What do you think about the future of privacy on Lightning? If this ecosystem, as you say, scales ten x, 100 x and starts to incorporate a lot of global payment volume, is it reasonable to think that we're going to be able to be slinging these sats around the internet without any oversight or any regulation? Can we do this anonymously?
Alan Plus - 00:34:51:
Yeah. Obviously Lightning is more private than on chain in some ways because the transactions that you make on your channel are not publicly available. It's only available on the two nodes that have the channel open between the two nodes. Right. So it's more private. But there are ways to kind of figure out how much liquidity or how many sats you have on your side and how much is on the other side by probing channels. Unfortunately, that's a possibility and there are companies that even specialize in that, but even then they may figure out how much money you have on your node. They don't exactly know how many transactions you make and to whom. So it's still definitely more private. I think once that root comes onto the Lightning Network, which I think it's a little bit down the line because you basically have to rewrite the whole software, unfortunately, which is probably a hard work, but it's worth it because it's not just what Taproot brings. It gives you an opportunity to rethink your whole software. So it's a tough challenge, but it's really worth it. But anyway, that will make things much more private because channel openings will be and general closings will be more hidden. So one layer of the Lightning Network will become much more private. So I think I'm excited about that. But also I think in the future I envisioned that lots of people will open lots of channels at once and that. Could make it harder to track things as well, especially with these interesting ideas where you swap private keys. So there are some projects where you can it's kind of like open dime but done digitally, so you actually hand each other private because I'm not sure how that's going to happen for the Lightning Network, but there's so many developments in bitcoin and on Lightning that will help this situation. And we are in a very early stage. So by the time we go ten x and 100 x, I think we'll have a lot of improvements. And I think your vision that we will just be able to send that pretty much privately, I think that's an achievable goal. We don't have all the bricks in place yet, but it's coming together slowly.
Kevin Rooke - 00:38:00:
I hope you're enjoying the show so far. I just want to give a quick shout out to our sponsor, Voltage. Voltage is the industry standard for Lightning Network infrastructure, creating layer two applications and services. On top of bitcoin starts with Voltage, where you can spin up nodes, get access to liquidity, optimize your node, and much more. Voltage is leading the way as the next generation provider of Lightning Network infrastructure. And if you want to get a free trial and start using Voltage today, you can do so at Voltage Cloud. If you could play devil's advocate now and talk about the opposite side of this issue, what is the case for regulators to be able to figure out who's sending all these transactions, figure out how to identify large nodes and exercise some regulatory power against them? What does that case look like? How might privacy on Lightning not be enough?
Alan Plus - 00:39:02:
Well, I think from the regulator's point of view, Lightning generally is designed to facilitate micropayments. So nobody really cares about those few satoshi streaming. What regulators care about is those 5000 bitcoin transactions that are potentially money laundering or whoever knows what those are. That's not going to happen on Lightning anytime soon. And therefore, I think for regulations, Lightning will take a back seat. And once we have very clear regulations for on chain bitcoin, maybe after that they will go after Lightning. But I think it's kind of like cash in every way. So nobody really cares about the $50 in your pocket. They care about the $2 million wire transfers that are coming from some island nation. So I think there is a limited time for regulators to get this industry regulated, so they will have to pick and choose their battles, and I don't think Lightning is going to be one.
Kevin Rooke - 00:40:27:
Right, okay. So now I want to go talk about Lightning adoption more broadly. A lot of your work here with LN+ is in helping people get on boarded with both inbound and outbound liquidity. What are some of the other challenges standing in the way of potential node operators that are inhibiting people and stopping them from joining the Lightning Network today.
Alan Plus - 00:40:54:
I think the number one thing is complexity of being on boarded to the Lightning Network. So getting incoming liquidity is one part of that complexity. But overall, just understanding what this means that you have to have liquidity, it's sort of a noble idea. Like you can compare it to like credit cards that once you get a credit card with a certain limit, now you have a liquidity up to that limit. So you can sort of explain it that way. But it's still a complex idea. So first they have to understand it and then second, they have to set it all up. So even if you go with the simplest solution, which is like, let's say you go with a cloud provider with voltage, you get bitcoin full node plus you get a Lightning node plus you get a BTC pay server and you just connect it all. You could literally do that in like 30 minutes or less. But you have to know what to connect to what and how does this all come together and what do you have to pay attention to. So if you are a merchant, you don't want to learn all of that complexity and you don't really want to trust a consultant who does it for you. And also, I don't really see many consultants doing this work anyway. They may not even know they need a consultant because they don't realize that that would make their life much easier. But anyway, so a merchant is interested in selling honey or selling gloves or whatever they are selling. They're not interested in learning the ins and outs of the Lightning Network. So if there was a solution where you literally can just go to a website, sign up and press a button and everything is built for you, that would be a huge help. And I think that is definitely possible and certain companies will work on that. So I think this is the biggest challenge. The learning curve is too steep for most people who are not technical. So I know that it's getting much better. So I'm very optimistic this will be resolved. So for an average user, something like a blue wallet or a moon wallet or one of those simplified wallets is already a great achievement because they don't have to learn all of the Lightning in order to just use Lightning. But for a merchant, you still have I think Breez is a pretty good solution right now. But they still need some work to do. So I think this is the biggest challenge to make it much simpler.
Kevin Rooke - 00:43:49:
Right? So this almost takes the approach of rather than trying to teach everyone and kind of like take them through this very steep learning curve, it's just make the product so simple they don't even have to learn about it, right? They don't have to know the intricacies of how Lightning works. Just like most people today don't really know the intricacies of how the Internet works. Is that the idea?
Alan Plus - 00:44:11:
Yes. And I think what should happen and what will happen is that first you use this super simplified experience, but then later you are like, but I want to have more control, so I'm willing to learn a little bit more in order to have that control. And over time, most intelligent people will be able to learn the details and even run their own Lightning Network on BTC based server, so they can be completely separate from these companies, these third party companies. But it cannot be the first step to be able to install Linux command line something, because that's just too hard, right?
Kevin Rooke - 00:44:59:
So it's there. If you want more complexity, you'll always have that option. But we need to start with that simple approach. Is stablecoins on Lightning also an inhibitor in your mind, something that's preventing, let's say, merchants from joining the Lightning Network today? Or is that kind of further down the road problem?
Alan Plus - 00:45:22:
Are you referring to Taro or just in general?
Kevin Rooke - 00:45:25:
Yeah, stablecoins in general, but yeah, Taro is one of the big ones. Do you think that's a problem, that merchants don't have that ability right now to accept payments in USD? I guess in some limited capacities they do through strike, but globally there's not that opportunity.
Alan Plus - 00:45:50:
I don't know, I did not think about this before. I'm very much thinking in a future where only bitcoin exists and lots of people will still use all kinds of other coins and other nation fiat currencies, but the global money will be Bitcoin. So it's like everyone will know Bitcoin. Everyone will use Bitcoin, but everyone will also use some local thing, either because they are belonging to a community or to a country or whatever. My thoughts on Taro is that I welcome the idea that the Lightning Network will get much more use because of tokens on Lightning. So hopefully that will make node operators more profitable, their nodes be more busy. Hopefully it will bring in more capital and more nodes in general, and more interest from everyone. So that I think is good, and then it will benefit the Bitcoin ecosystem. But I also think that, as I said, I think it's a temporary thing. So even if terrorist is extremely popular for US dollar, for example, it's probably temporary somewhat. I mean, I don't know how temporary is it going to be? Five years, 25 years? I don't know. But eventually I can't imagine that in 2050 we are still doing UST and stuff. It's unlikely to me, but I could be totally wrong, of course. I think what Taro will be very good for, though, is things like tokenizing companies and other assets. I'm really excited about this idea which we had since the beginning of Bitcoin is where let's say you have a car which is tokenized in some way, and it's actually the token represents your car for real. And then you can just exchange sats for that token and then that's how you actually buy a car legally, in a sense that would be acceptable by government and whatever authorities, the police. So this way you could just, with a smart contract, very easily buy things like land and companies or share in companies or anything else physical art. So I think that's pretty cool if you can get there. But obviously it all depends on a third party and articles. So it's the same problem that the whole defy kind of ecosystem has, is that you can't really tie tokens to the real world without some third party you have to trust. So it's exciting and there are use cases, but I don't think it's going to be the main use case of the Lightning Network going forward.
Kevin Rooke - 00:49:05:
Right. I was having this conversation as well with Alex Leashman at river and we were talking about the US dollar and whether or not the US dollar in Bitcoin is going to be a popular swap into the future 50 years from now. And I think the point he was making that was, I think, right on, was like, there's always going to be something to swap with Bitcoin. It may not be the US dollar and I think that was where I don't want to put words in his belt, but I think that was where his excitement from Taro was coming from. And I buy this as well, like this idea that Taro is going to enable new assets. We don't necessarily know what those successful assets will be. Maybe they're just companies, maybe companies. People have been trading companies for hundreds of years and maybe it's something else. But the fact that that can then feed into Bitcoin liquidity and give these node operators a boost to their earnings power I think is pretty interesting. Yeah. Do you see a future where you take part in some of these swaps and help facilitate some of the swaps through LN+?
Alan Plus - 00:50:23:
Yes, I think so. I think it's possible that we will have some features that build on top of Taro. I'm thinking about that for sure. Maybe in the distant future. The only transaction you will ever do swapping your Bitcoins for US dollars is when you pay taxes. Right. Because that's always going to be local fiat currency. It's unlikely that government will ever just switch to Bitcoin entirely because then there will be no point of the fiat currency at all. So they will keep that as the last thing that you can pay with Bitcoin, probably. But even if that's just the only case, that's still a huge amount of business, so people who are willing to give liquidity and provide liquidity will probably make a good business profit. So I am thinking about that. I just don't know how it's going to work yet. I need to actually physically use the tokens and get a good feel for it and then have an understanding of what kind of pain I can resolve. If I can at all for users, and if there is something I can do, I will do it.
Kevin Rooke - 00:51:49:
Yeah, what else? I'm curious to know more about the roadmap for LN+. So we talked about potentially adding Taro. You mentioned the API. What other things are you excited about on the roadmap for LN+?
Alan Plus - 00:52:03:
Well, the most important development I'm excited about is having an app for Umbrel and Embassy and all these recipe implementations. So it's much, much easier for people to use LN+, that's number one. And then there are lots of features that people requested which seem to be small. They may seem small, like not used that often, but whenever we need those features, they would be very useful. Things like, for example, more restrictions on swaps. So if you want to be able to open between only clear net nodes, you should be able to do that or any preference that you have. So those are things that I want to work on and improve generally the system to make sure that the UX is as simple as possible. So I'm always trying to simplify every element, and these are small things, but they add up to a better user experience overall.
Kevin Rooke - 00:53:20:
And when you broaden your horizon and look out at the rest of the Lightning ecosystem, all the different apps that are being built today, what are you most excited about across the board outside of LN+? Are there any particular Lightning ecosystem apps that have got you really excited today?
Alan Plus - 00:53:39:
Yeah, I think Stacker News is very cool. I got used to it. I love reading it. I think the content is great and the whole experience is amazing that you can earn back sats for participating and you can tip people with Sat. That's like way above Reddit experience right now. And I think Stacker News has a bright future and I understand that they just raised the whole bunch of money, so kudos to them. I hope it's very successful. I'm also very excited about the platform that you are using for your podcast, which is streaming sats. So I think somebody should build, if they haven't already, a platform for streaming video and streaming sats in return. So it's kind of like a Netflix where you only pay for as many minutes as you watch. Basically all this streaming is very exciting because I think the web changed dramatically to the better when media started streaming, when you could just start watching a video on YouTube and you didn't have to wait for half an hour to download the video. Right? So obviously it's bandwidth dependent, but also it was the experience of streaming music, streaming video. And I think streaming money this way is going to be a big, very cool thing. So I can envision a future where you can stream money for VPN services or just Internet access in general, or any kind of service that you need would be all paid by the minute rather than monthly subscriptions.
Kevin Rooke - 00:55:39:
Yeah, I agree. I'm super bullish on Media on Lightning right now. I've been using these products. So the two you mentioned, Stacker News and Fountain, I've been using it for about seven or eight months now. And now I'm getting to the point where every month on Fountain, I've been earning hundreds of thousands of sats from like I think now hundreds of people have sent in sats. And I'm noticing more and more that it's always new people. In the early stages, it was like the same five or ten people that were sending in a lot of sats. But now it's really blown up in every episode that I released. It's just new users that I've never seen send in SAS before that has staying power, for sure. That is real, and I have now seen it for enough months to be convinced that there's actual demand for that. And I know there's a bunch of people who are earning even far more than me. And like, Adam Curry, for example, is building his entire business on value for value. And recently I've seen the same with Stacker News. They made an update to their algorithm recently that rewards basically takes the reward from the job board and it rewards people who are commenting and posting and up voting in a given day. Actually, this morning I just checked my phone and I earned like 10,000 sats because I had a couple of posts that went to the top of the board. Now you start talking about earning 10,000 a day, and maybe that's not going to pay my rent, but there's someone in the world for which that is true, two, three, or $4 a day, all of a sudden that can be a meaningful contributor to someone. So I'm really bullish on these. I agree. I wonder if you think that there's a when you look at the payments that will flow through for LN+ and for routing nodes everywhere. Do you think the majority of payments are going to be and this is maybe at a mature Lightning state when everyone's using it. Will the majority of dollar volume or stat volume be for payments that we know in the fiat world. Like paying rent or paying a merchant. Or is it going to be for new kinds of payments? Is it going to be for this streaming media? Is it going to be for something that we don't even know of yet? How do you think the breakdown of the types of payments on Lightning will evolve?
Alan Plus - 00:58:21:
I feel like it's 50-50 because, for example, in gaming, I was very skeptical, like, how can Lightning be part of gaming? And then I gave in and I downloaded standard games. They have like four games. And I loved it because it doesn't matter how literally you can earn, but the fact that you can actually earn sats for playing that's very exciting and that's not something I have experienced before. Maybe I'm not a hardcore gamer enough, but I never earned money by playing and this is the first time I do that. So that's a completely new experience for me, at least. And also earning money for posting stuff on Stacker News or commenting. Like, you can actually earn money for just posting a great comment. That's really cool, too, that it should have done that years ago. So it's like, these are completely new things. But we will also be, I think, receiving our salaries and paying for our coffee. So those are very traditional, old school ways of using money. But I think Lightning definitely makes it so much easier to integrate it into all kinds of applications. And new ways of talk is cheap, right? Like, if you want to appreciate somebody, give them a tip. That's when you actually gave a part of your hard earned money to somebody else, that's real appreciation. Yes, thank you are also very welcome and sometimes very motivating. But when you give even very little money, that's a whole another level of appreciation. And I think Sets will be playing this role of kind of like standing around appreciation in the economy of not just entertainment, but in general.
Kevin Rooke - 01:00:23:
Yeah, I 100% agree. All right, I want to get into a final closing round. I call it the Lightning round. And this is an opportunity for listeners to send in questions and be potentially added to the show splits. I didn't get any listener questions for this episode, but I have a few of my own. So are you ready for the Lightning Round? Yes. Welcome to the Lightning Round, presented by. Zebedee, your portal into the world of bitcoin gaming. The Zebedee app offers a full featured. Lightning wallet, seamlessly integrated with your own personal gamer tag, so that you can. Earn bitcoin on all of Zebedee's games on mobile and desktop. It's never been more fun to earn. Bitcoin, and Zebedee is your key to it all, to claim your personal game or tag and start earning some bitcoin of your own. Download the Zebedee app today. All right, let's get into it. There's a saying in bitcoin, and I think this was started with Michael Sailor, that bitcoin is hope. Now, when you think about the impact bitcoin will have on the world, what are you most hopeful about?
Alan Plus - 01:01:34:
The most hopeful I'm about is equality of opportunity. So a person at the end of the world, compared to the developed world, right, can actually participate in the world economy. And whatever their skill is, whether they can do an illustration or do a voiceover or translate a piece of text, anything they can do, they can actually create a Lightning wallet or Bitcoin wallet for themselves and be paid for those services that they can provide over the Internet. And suddenly this just creates so much more equality in the world. There are so many billions of people who did not have this opportunity to be part of the global economy and now they can be. I think that's my biggest hope and this is what's going to create the most amount of well being in the world.
Kevin Rooke - 01:02:30:
That's fair. I like it. Are there any books that have meaningfully changed your view of the world?
Alan Plus - 01:02:40:
I like Ian Grand. I know it's like a typical libertarian, but actually I liked her first book, Vida Living the most and that's less popular. So if you haven't read that, I recommend it. It's about sort of a self autography, I think, but traumatized. But it's an amazing explanation or insight into how people in countries with authoritarian governments live and how they think and how the damages there saw and how they can get out of it. So it's like a really amazing book. It's a first book, so it's raw and it's amazing. So. I love that one. But there are other books that changed my world view a lot. For example, The Blind Watchmaker by Richard Dawkins where he how he explained and many other books explore this idea that basically he has that we are kind of vessels for our genetic code. So we think of ourselves as like these beings that run around the world and do our thing. But really what is happening at a very deep level is that we have a genetic code which wants to survive into the future and we are sort of their spaceship. We are making it possible for this genetic code to survive and be transplanted into another spaceship which is our kids. And this has been going on for so many millions of years and they are building better and better spaceships, which is basically evolution. So it's a fascinating different way of looking at the world. And from Sci-fi I really like the Chinese writer Leu Sisin. And he wrote The Three Body Problem. That's his most famous book, I think. And it takes you from the Chinese Cultural Revolution all the way to the end of the universe. So through those three books you have a huge span of time and I don't want to spoil any of it, but you're going to absolutely love it, especially if you haven't read any Asian Sci-Fi yet. That's a book that I think a lot about because in so many life situations it reminds me what I read in the books.
Kevin Rooke - 01:05:37:
Awesome recommendations. I like that if you could only hold your wealth in one asset for the next decade and it couldn't be bitcoin, what would it be?
Alan Plus - 01:05:51:
That's a really cool question and I listen to your show and every time this comes up I'm like, okay, I want to hear what the person will say. My first reaction is gold, but not really. So what I would actually do. And maybe this is not the correct way to answer this question because it's not really an asset. But what I would do is I would spend money on creating a database or a library of DNA code and I would hold sort of my money in creating this library and maintaining it because I'm always scared that we are losing certain genetic diversity which could be extremely useful in the future. So if you think about it, the whole world is kind of like a giant GitHub repository and we don't know 99.9% of what it does but in the future we will want to know and we will want to use it and it would be great if somebody created this repository. So once we have the technology to revive those long dead species and I'm not just talking about like mammals, I mean it's anything plants and mollusks and bugs and ants and everything, all kinds of things that have DNA, even scary stuff like viruses and stuff. So obviously it has to be done in a very safe way and I'm thinking only just the code itself, not the actual living things. So I don't know if that's a good answer but this is what I would do.
Kevin Rooke - 01:07:36:
I think you won for the word of most unique answer. You're the champ so far. That's an interesting one. I've been waiting for someone to suggest just what you're suggesting but in a more generalized way is just like investing in some project that you yourself want to build or like betting on yourself. I haven't heard anyone say that that's what they would choose to do but that's a very fair possibility as well. If you had to guess today how much dollar volume is flowing through the Lightning Network each year?
Alan Plus - 01:08:16:
Oh yeah. So I think it's similar to on chain. Okay, wait, not the volume, but in terms of transaction count, I think we have roughly as many transactions as on chain but the volume is much, much lower, maybe 100 of it only because it's micro transactions so it's very hard to know but I think it's maybe 100 even less than that in terms of volume.
Kevin Rooke - 01:08:46:
But so you think that right now the number of transactions happening on chain and on Lightning are roughly the same?
Alan Plus - 01:08:53:
I believe so I tried to calculate this from many different angles and I read all the research around it and this is like an average of all of that information because obviously we don't know it for sure but we have some insight into the amount of sats and number of transactions are done through made by large nodes. So we have that data either confidentially or publicly and we have some other insights into how many transactions certain wallets do and so on and so on. So I think we are reaching that point or already left, I mean already more than on chain, I think.
Kevin Rooke - 01:09:40:
Are you able to share any of the data or the metrics or the methodology you're using to come into that estimate? Because I've seen two data points that I thought were really interesting, that I had Roy Sheinfield on from Breez and I saw the wallet of Satoshi tracker on the website. I keep an eye on that. And both companies I believe, are doing about 7000 transactions a day on Lightning. And so there's 14,000 already. And I think the total number on Chain maybe around 250,000 a day. I was looking at that, I'm like, maybe that's possible. I could definitely see that. But I was wondering if you have any other data points or methodologies you've used to back into an estimate.
Alan Plus - 01:10:26:
So my methodology was just basically that like looking at these known amounts and then looking at the node sizes, and then seeing how many nodes there are of that size. And also asking node operators who run large routing nodes and asking them how much they route a day. Some of them are public about it. That's all I did. It's not very scientific or comprehensive, it's just a rough estimate. But I think the very least, you are doing as many as on chain already. Because if you just look at the streaming, that's like a stream of transactions, right? So you're not just making one for a show, you're making 40 per show. So it could be misleading because you're making so many transactions, but it's really just one donation, to be honest. But still, it doesn't matter. The point is that we are making these transactions.
Kevin Rooke - 01:11:33:
It's exciting and it's something that I think a lot of people still haven't clued into. I think if people like especially outside of the bitcoin space, I think if you ask them how much activity is happening on Lightning, they'd say, what's Lightning? Or maybe nothing like they think it's kind of like a ghost town. So it's cool to hear your perspective on this and that we may actually be beyond the number of bitcoin transactions that are happening already. My final question for you is a follow up on this one, and that is, in a decade, how many people will be making Lightning transactions?
Alan Plus - 01:12:15:
Right now we have maybe a million people already using Lightning. Not every day, but regularly, meaning more than once a year, let's say. But most of these users are using custodial solutions. And I think that's going to continue into the future. So I don't see that we're going to have more than a hundred thousand Lightning nodes in a few years. I think that's the most I can envision, but maybe my thinking is too small. But I think on custodial solutions we're going to have several more million. So that's my estimate. We're going to have 100,000 Lightning nodes and that I have active channels and we have maybe 5 million people using Lightning, which is still nothing compared to the world population. So we have a lot to do. But in the next five years, if we could achieve that, I think that would be amazing. And then we can. Grow even further. And at that point, there will be a tipping point where suddenly it just makes so much sense for everyone to accept Lightning payments and everyone to start using Lightning that it will be like an exponential growth suddenly. So I don't know what that tipping point is, but we are nowhere there yet. Obviously. We are just in that very early phase, almost flat, barely any growth. Like, the charts that you post on Twitter look really cool, but compared to what we will have in ten years, those charts. Yeah, I think that's my estimate.
Kevin Rooke - 01:13:59:
I like it. Thank you so much for taking the time today. I learned a ton. I know listeners will as well. Where can listeners go to learn more about you and the work you're doing?
Alan Plus - 01:14:11:
So if you go to Twitter, BTC is my handle. I post a lot about Lightning every day and I welcome everyone to join the conversation there. Sometimes we have very wild conversations, especially when some detractors join in.
Kevin Rooke - 01:14:37:
And then you're also, for Lightning Network Plus. Is it Lightning Network Plus? Is that the website.
Alan Plus - 01:14:44:
Lightningnetwork.plus that's the website.
Kevin Rooke - 01:14:48:
Got it. Well, thank you so much for taking the time.
Alan Plus - 01:14:50:
Thanks for having me.